Document:

Exhibit 10.1

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

Execution version

 

 

 

AMENDED AND RESTATED DEVELOPMENT AND COMMERCIALIZATION AGREEMENT

 

THIS AMENDED AND RESTATED DEVELOPMENT AND COMMERCIALIZATION AGREEMENT (“Agreement”) dated as of December 2, 2015 (“Amended and Restated Date”), is entered into between Array BioPharma Inc., a company organized under the laws of Delaware and having its principal place of business at 3200 Walnut Street, Boulder, CO  80301 USA, (“Array”) and Pierre Fabre Medicament SAS, a company duly organized and existing under the laws of France, having offices and principal place of business at 45, Place Abel Gance 92100 Boulogne Billancourt, France (“PFM”).

 

BACKGROUND

 

A.                                 Array now owns or controls certain patents, know-how and other intellectual property relating to the Products (as defined below);

 

B.                                 PFM has experience in developing, marketing and distributing pharmaceutical products;

 

C.                                Array and PFM wish to collaborate on the further development, manufacture and commercialization of the Products, with PFM taking the lead role in such efforts in the PFM Territory (as defined below);

 

D.                            Array is willing to grant to PFM, and PFM desires to obtain, certain exclusive rights and licenses with respect to the development, manufacture, registration and commercialization of the Products in the PFM Territory.  Array will retain the right to develop and commercialize the Products for the Array Territory, all on the terms and conditions set forth herein;

 

E.                                 Array and PFM entered into the Development and Commercialization Agreement dated as of November 10, 2015 (“Signing Date”), with respect to the development and commercialization of Products (the “Original Agreement”); and

 

F.                                  Array and PFM desire to enter into this Amended and Restated Development and Commercialization Agreement in order to amend and restate the Original Agreement, on the terms and the conditions set forth below.  This Agreement supersedes the Original Agreement as of the Amended and Restated Date, without retroactive effect.

 

[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

 

ARTICLE I
 DEFINITIONS

 

1.1                          “Affiliate” of a Party shall mean any person, corporation or other entity that, directly or indirectly, controls, is controlled by, or is under common control with such Party, as the case may be.  As used in this Section 1.1, the word “control” (including, with correlative meaning, the terms “controlled by” or “under the common control with”) shall mean the actual power, either directly or indirectly through one or more intermediaries, to direct or cause the direction of the management and policies of such entity, whether by the ownership of more than fifty percent (50%) of the voting share capital in such person, corporation, or other entity, or by contract or otherwise.

 

1.2                          “Annual Royalty Bearing Net Sales” shall mean the Royalty Bearing Net Sales generated over any given calendar year, or the period comprised between the First Commercial Sale of a Product and December 31 of the year of the First Commercial Sale.

 

1.3                          “Array Cost of Goods” shall mean with respect to Material sourced by Array from a Third Party and supplied to PFM, the amount equal to (i) the price paid by Array for such Material to the Third Party, plus any other documented out-of-pocket costs incurred by Array directly in procuring such Materials, and (ii) any reasonable internal costs of Array pertaining to the procurement of such materials not to exceed (on an annual basis) [*].

 

1.4                          “Array Know-How” shall mean, subject to Section 4.4(e), all scientific, medical, technical, manufacturing, marketing, regulatory, market access and other information relating to a Product and any Companion Diagnostic useful with respect to the Development, registration or Commercialization of a Product (including the Data), to the extent Controlled by Array or its Affiliates as of the Effective Date or during the term of this Agreement, and needed by or reasonably useful to PFM in order for PFM to exercise its rights or perform its obligations under this Agreement.  Notwithstanding the foregoing or Section 1.19 (Data) above, but subject to Section 2.4 (Future Marketing Partners), Array Know-How shall in any case include all such items that are generated by or under authority of Array, or any of its Affiliates, in connection with Development and/or commercialization of the Product during the term of this Agreement.

 

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[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

1.5                          “Array Patents” shall mean the Patents Controlled by Array or its Affiliates  as of the Effective Date or during the term of this Agreement that:

 

(a)                                               are listed on Exhibit 1.5; or

 

(b)                                               but for the license granted under this Agreement, would be infringed by the Development, manufacturing, registration, packaging, or Commercialization of a Product  in the PFM Territory (including the identification of patients who would benefit from the Product based on the presence or absence of selected biomarkers); and

 

(c)all additions, divisions, continuations, substitutions, re-issues, re-examinations, registrations, patent term extensions, supplemental protection certificates, and renewals of any the Patents listed on Exhibit 1.5 or to the extent the same would satisfy the requirements of subsection (b) above.

 

1.6                          “Array Territory” shall mean the United States and its territories and protectorates (including Puerto Rico), Canada, Israel, Korea and Japan.

 

1.7                          “Background Agreements” means the agreements entered into between Array and any Third Party prior to the Effective Date pursuant to which Array has been granted or received ownership or Control of the Array Patents or the Array Know-How, as they have been disclosed to PFM in redacted form.

 

1.8                          “Binimetinib” means the compound known as MEK162, the chemical structure of which is depicted in Exhibit 1.8 as well as all salts, isomers, mixtures of isomers and non-covalent complexes thereof.

 

1.9                          “Business Days” shall mean any day other than Saturday, Sunday or any other day on which commercial banks in USA or France are authorized or required by law to remain closed.

 

1.10                 “Calendar Year” means any period of time commencing on January 1 and ending on the next December 31 unless otherwise noted.

 

1.11                 “Clinical Studies” shall mean any human clinical study of a Product, including without limitation Global Registration Studies and Post-Approval Marketing Clinical Studies.

 

1.12                 “Combination Product” means any pharmaceutical preparations, in any dosage strengths, formulations and methods of administration, that combine Binimetinib or Encorafenib

 

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[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

and one or more other active ingredients (other than Binimetinib or Encorafenib) in fixed dose combination, whether co-formulated or co-packaged.

 

1.13                 “Commercialization” shall mean all processes and activities conducted to establish and maintain sales for the Products, including offering for sale, distribution, detailing, selling (including launch), Market Access activities, all marketing activities (including education and advertising activities), branding, developing promotional materials, organizing speakers programs. “Commercialize” and “Commercializing” shall have the correlative meanings.

 

1.14                 “Committed Resource Level” shall mean the aggregate resources required to be applied to Commercialize the Products, as well as the resources dedicated to Medical Affairs activities to support the Products with respect to the EEA Market, as reflected in Exhibit 5.1 Part B hereto, as such resources may be adjusted from time to time by approval of the JSC.

 

1.15                 “Companion Diagnostic” shall mean an in vitro diagnostic medical device as defined in the European directive 98/79/EC; for the avoidance of doubt the term Companion Diagnostic includes companion diagnostics for a pharmaceutical product as defined in FDA’s “Draft Guidance for Industry and Food and Drug Administration Staff – In Vitro Companion Diagnostic Devices”.

 

1.16                 “Control” (including any variations such as “Controlled” and “Controlling”), in the context of intellectual property rights, data and/or other information, shall mean that such Party or its Affiliate owns or possesses rights to such intellectual property, data and/or information, as applicable, sufficient to grant the applicable license or sublicense under this Agreement, without violating the terms of an agreement with a Third Party in existence as of the time such Party or its Affiliates would first be required hereunder to grant the other Party such (sub)license, right to use or access.

 

1.17                 “CTA” shall mean a clinical trial application (including any amendments thereto) as provided for in European Community Directive 2001/20/EC and the regulations promulgated thereunder, filed with a Regulatory Authority in the European Union before the commencement of Clinical Studies for a Product, or any comparable filing with any Regulatory Authority in any other jurisdiction within or outside the PFM Territory (including any Investigational New Drug Application filed with a Regulatory Authority in the United States pursuant to 21 C.F.R. §321).

 

1.18                 “CTD” shall mean the common technical document for the registration of pharmaceuticals for human use, intended for submission to the FDA and the EMA.

 

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[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

1.19                 “Data” shall mean, subject to Section 1.66 (PFM Know-How) and Section 4.4(e), any and all research data, pharmacology data, preclinical data, clinical data and/or all Regulatory Filings and/or other regulatory documentation, information and submissions pertaining to, or made in association with a CTA, Marketing Approval Application, Marketing Approval or Pricing and Reimbursement Approvals, or any Post-Approval Marketing Clinical Study for each Product, in each case to the extent Controlled by a Party or its Affiliates as of the Effective Date or during the term of this Agreement.

 

1.20                 “Development” or “Develop” shall mean non-clinical and clinical research and drug development activities, including toxicology, pharmacology, statistical analysis, Clinical Studies (including pre- and post-approval studies and Investigator Sponsored Clinical Studies), stability testing, formulation, process development , quality assurance/control development, regulatory affairs, and regulatory activities pertaining to designing and carrying out Clinical Studies and obtaining and maintaining Marketing Approvals (including pre-marketing activities but excluding regulatory activities directed to obtaining Pricing and Reimbursement Approvals).

 

1.21                 “Development Budget” shall mean the budget for conducting Development pursuant to the GDP during a given Calendar Year and the succeeding Calendar Years.  The initial Development Budget has been finalized prior to the Signing Date, is included in the Initial GDP and shall be updated and amended concurrently with the GDP in accordance with Section 4.2(f).

 

1.22                 “Development Costs” shall mean FTE Costs and Out-of-Pocket Costs incurred by the Parties (including their Affiliates for such purpose) in carrying out their obligations under the GDP, in each case to the extent incurred in accordance with this Agreement, the GDP and the Development Budget.

 

1.23                 “Diligent Efforts” means, with respect to the efforts to be expended by a Party with respect to any objective, reasonable, good faith efforts to accomplish such objective as such Party would normally use to accomplish a similar objective under similar circumstances for such Party’s benefit.  Without limiting the foregoing, with respect to efforts relating to the Development of, obtaining Marketing Approval or Pricing and Reimbursement Approval for, or Commercialization of the Product, generally or with respect to any particular country, “Diligent Efforts” means a sustained, continued and active commitment of efforts and resources by a Party consistent with those normally applied in the pharmaceutical industry by companies of similar size as such Party with respect to a compound or product with similar market at a similar stage in the product life cycle that such Party is actively developing or commercializing (as applicable), taking into account the stage and risk of development or commercialization of the Product, issues of safety or efficacy, the cost effectiveness of efforts or resources while optimizing profitability, the

 

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[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

competitiveness of alternative Third Party compounds, products or generics that are or are expected to be in the marketplace, the scope and duration of Patents or other intellectual property rights related to the compound or product (including any Regulatory Exclusivity), the profitability of the Product (including pricing and reimbursement status achieved or likely to be achieved) or other relevant commercial factors, but not taking into account (a) any other pharmaceutical product such Party is then researching, developing or commercializing, alone or with one or more collaborators, or (b) any payments required to be made to the other Party hereunder.

 

1.24                 “DMF” shall mean a drug master file and all equivalents in any country or jurisdiction for a Product, and any components of such Product, submitted by a Party and/or its applicable Subcontractor(s) to Regulatory Authorities. For the avoidance of doubt, DMF shall include any active substance master files (ASMF).

 

1.25                 “EEA Market” shall mean the European Economic Area as of the Signing Date. The member states of the European Economic Area as of the Signing Date are listed on Exhibit 1.25 attached to this Agreement.

 

1.26                 “EC” shall mean the European Commission, or any successor entity thereto performing similar functions.

 

1.27                 “Effective Date” shall mean the date on which PFM receives notice that the decision by the European Commission approving this Agreement as well as PFM’s capabilities as a “Suitable Partner” as defined in the EC Decision.

 

1.28                 “EMA” shall mean the European Medicines Agency, or any successor entity thereto performing similar functions.

 

1.29                 “Encorafenib” means the compound known as LGX818, the chemical structure of which is depicted in Exhibit  1.29, as well as all salts, isomers, mixtures of isomers and non-covalent complexes thereof.

 

1.30                 “Exclusivity Period” shall mean, on a Compound by Compound basis, the period commencing on the Effective Date and continuing until ten (10) years from the first Marketing Approval of a Product containing such Compound in the Major Markets.  As used herein, “Compound” refers to the compounds Binimetinib or Encorafenib singly, and “Compounds” refers to the pair.

 

1.31                 “Field” shall mean the diagnosis, treatment and/or prevention of diseases and conditions in humans and animals.

 

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[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

1.32                 “First Commercial Sale” shall mean, with respect to a Product the first bona fide, arm’s length sale of such Product in the PFM Territory following receipt of the first Marketing Approval of such Product in the PFM Territory.

 

1.33                 “Fiscal Year” shall mean a Calendar Year.  Notwithstanding the foregoing, it is understood that the first Fiscal Year shall commence on the Effective Date and end on December 31, 2015.

 

1.34                 “Form” shall mean a Product in finished dosage form in accordance to the specification as defined more specifically in the Supply Agreement and in the Quality Agreement.

 

1.35                 “FTE” shall mean a full-time [*] equivalent person (i.e., one fully committed person or multiple partially committed persons aggregating to one full time person) employed by a Party or its Affiliates to directly perform Development activities under the GDP.

 

1.36                 “FTE Costs” means the product of: (a) that number of FTEs (proportionately, on a per-FTE basis) used by a Party or its Affiliates in directly performing activities assigned to such Party under and in accordance with the GDP, multiplied by (b) the applicable FTE Rate.

 

1.37                 “FTE Rate” means, unless otherwise agreed between the Parties, a rate per FTE of $ 250,000, which may be prorated on a daily or hourly basis as necessary and as may be adjusted from time to time by mutual agreement of the Parties.   The FTE Rate is “fully burdened” and will cover employee salaries, benefits, travel (airfare, mobile allowance, meal expenses, hotel expenses etc.) and other incidental expenses incurred by such personnel in the ordinary course of employment, and such facilities and equipment and other materials and services including ordinary laboratory and manufacturing consumables procured from distributors of relevant products as they may use.

 

1.38                 “Global Development Plan” or “GDP” shall mean  the Initial GDP, including the Development Budget, as amended from time to time in accordance with the terms Section 4.2(f) of this Agreement.  The Parties agree that the GDP shall consist of such Global Registration Studies and other studies as may be mutually agreed between the Parties.

 

1.39                 “Global Registration Study” shall mean a study of a Product conducted by or under authority of a Party that is intended to support the filing of an MAA for such Product with the FDA and the EMA, and that more generally satisfies the requirements of these Regulatory Authorities.  Global Registration Studies shall include human clinical studies designed as a pivotal study to confirm with statistical significance the efficacy and safety of the Product with respect to a given Indication, which study is performed for purposes of filing an MAA or similar application to

 

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[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

obtain Marketing Approval for a Product for such Indication from the FDA and the EC (regardless of whether such Clinical Study is identified as a Phase III clinical study on ClinicalTrials.gov), including a clinical study as described under 21 C.F.R. §312.21(c) with respect to the United States (or, with respect to a jurisdiction other than the United States, a similar clinical study).

 

1.40                 “Good Clinical Practice or “GCP” shall mean the current standards for clinical studies for pharmaceuticals, as set forth in the ICH guidelines and applicable regulations promulgated thereunder, as amended from time to time, and such standards of good clinical practice as are required by the European Union and other organizations and governmental agencies in countries in which a Product is intended to be sold to the extent such standards are not less stringent than United States Good Clinical Practice.

 

1.41                 “Good Laboratory Practice or “GLP” shall mean the current standards for laboratory activities for pharmaceuticals, as set forth in the FDA’s Good Laboratory Practice regulations or the Good Laboratory Practice principles of the Organization for Economic Co-Operation and Development, as amended from time to time, and such standards of good laboratory practice as are required by the European Union and other organizations and governmental agencies in countries in which a Product is intended to be sold, to the extent such standards are not less stringent than United States Good Laboratory Practice.

 

1.42                 “Good Manufacturing Practices or “GMP” shall mean current good manufacturing practices and standards as provided for (and as amended from time to time) in European Community Directive 91/356/EEC (Principles and Guidelines of Good Manufacturing Practice for Medicinal Products), subject to any arrangements, additions, or clarifications agreed in writing from time to time between the Parties.

 

1.43                 “Governmental Authority” means any domestic or foreign entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, including any governmental authority, agency, department, board, commission, court, tribunal, judicial body or instrumentality of any union of nations, federation, nation, state, municipality, county, locality or other political subdivision thereof.

 

1.44                 “Indication” shall mean an initial, expanded or additional patient population for which use of a Product is indicated, as reflected or to be reflected in the approved label for such Product.

 

1.45                 “Initial GDP” shall mean the plan for the Parties’ joint Development of the Product in the Field attached hereto as Exhibit 4.2.

 

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[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

1.46                 “Investigator Sponsored Clinical Study” shall mean a clinical study of a Product that is sponsored and conducted by a physician, physician group or other Third Party not acting on behalf of a Party or an Affiliate and who does not have a license from a Party or its Affiliate to commercialize such Product, pursuant to an CTA owned by such Third Party, and with respect to which a Party or its Affiliate provides clinical supplies of the Product, funding or other support for such clinical study.

 

1.47                 “Initial Royalty Term” shall mean, on a Product-by-Product and country-by-country basis within the PFM Territory, the period beginning on the date of the First Commercial Sale of such Product in a country until the last of: (i) ten (10) years thereafter; (ii) the expiration of all Valid Claims within the Array Patents Covering such Product in such country or (iii) the expiration of all Regulatory Exclusivity for such Product in such country.

 

1.48                 “IST Guidelines” shall mean the guidelines governing the conduct of Investigator Sponsored Clinical Studies of the Product, Appendix 1 of which is attached hereto as Exhibit  1.48.

 

1.49                 “Joint Invention” means all inventions arising during the term of the Agreement that are jointly created or reduced to practice by employees, consultants, or contractors of Array or its Affiliates and by employees, consultants, or contractors of PFM or its Affiliates.

 

1.50                 “Joint Know-How” mean all know-how arising during the term of the Agreement that is jointly generated by employees, consultants, or contractors of Array or its Affiliates and by employees, consultants, or contractors of PFM or its Affiliates.

 

1.51                 “Joint Patent” means a Patent that claims a Joint Invention and/or any Joint Know-How.

 

1.52                 “Key Countries” shall mean the Major Markets, Australia, Brazil, China, Mexico and Russia.

 

1.53                 “Law” shall mean any applicable national, supranational, federal, state, local or foreign law, statute, ordinance, principle of common law, or any rule, regulation, standard, judgment, order, writ, injunction, decree, arbitration award, agency requirement, license or permit of any Governmental Authority, including any rules, regulations, guidelines, directives or other requirements of Regulatory Authorities, including all GMP, GLP and GCP, and including all laws pertaining to the pharmaceutical industry or the healthcare industry and all anti-bribery or anti-corruption laws, as applicable.

 

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[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

1.54                 “Major Market” shall mean, individually, each of, [*]; and collectively, such countries the “Major Markets”.

 

1.55                 “Manufacturing Standards” shall mean all applicable GMP and any requirements of any Regulatory Authority.

 

1.56                 “Marketing Approval” (or “MA”) shall mean such approvals, licenses, registrations or authorizations of the Regulatory Authorities in a country, that are necessary to Commercialize a Product in such country.  Marketing Approval shall not be deemed to include Pricing and Reimbursement Approval.

 

1.57                 “Marketing Approval Application” (or “MAA”) shall mean an application requesting Marketing Approval for the Commercialization of a Product for a particular Indication in a particular jurisdiction filed with the relevant Regulatory Authorities in such jurisdiction.

 

1.58                 “Market Access” shall mean  any and all processes and activities conducted to establish and maintain national country reimbursement, as well as at country level, regional and local payor processes and activities to obtain and maintain local and regional patient access for the Products, including price setting, national mandatory rebate negotiations with Governmental Authorities  and preparing reimbursement and economic dossiers.

 

1.59                 “Medical Affairs” shall mean all medical affairs activities to support the Products, including handling all requests for medical information, fielding and maintaining a team of medical science liaisons, publication planning and execution, medical conference activities and forming and utilizing advisory boards, in each case involving the Products.

 

1.60                 “Net Sales” shall mean the gross amounts invoiced for sales of a Product by PFM, its Affiliates and/or Sublicensees, as the case may be, less reasonable and customary deductions for the following costs incurred on the sale to a customer:

 

(a)                                               trade, quantity and cash discounts actually granted to the customer;

 

(b)                                               credits, rebates and allowances to the customer on account of rejection or returns of such Product (including wholesaler and retailer returns) or on account of retroactive price reductions affecting the Product;

 

(c)                                                freight, postage, insurance, packing costs and duties, paid for and separately identified on the invoice or other documentation maintained in the ordinary course of business; and

 

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[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

(d)                                               sales and excise taxes, other consumption taxes, customs duties, any taxes (excluding income taxes) levied on the turnover of the Products and compulsory payments to Governmental Authorities and any other governmental, health insurance or other payers’ charges, rebates, or discounts, retroactive or otherwise, imposed by or negotiated with Governmental Authorities with respect to the sale of such Product to the customer actually paid and separately identified on the invoice or other documentation maintained in the ordinary course of business .

 

The parties agree that the deductions from gross sales in (a) to (d) above may be revised in the future (i.e., through the addition of new deductions or the elimination of existing deductions) to reflect  changes in the calculation of net sales that may become customary in the pharmaceutical industry based on changes in IFRS, but only to the extent such changes are consistently applied by PFM across all of its pharmaceutical product lines. For clarity PFM certifies that as of the Signing Date, there are no deductions other than those stated in (a) through (d) applied by PFM in its pharmaceutical business.

 

PFM shall ensure that all sales of Products are accurately invoiced and that Net Sales are calculated and accounted for in accordance with IFRS as consistently applied.  Sales between PFM and its Affiliates or Sublicensees for resale shall be excluded from the computation of Net Sales, but the subsequent resale of such Product shall be included within the computation of Net Sales.

 

For the purposes hereof, “Net Sales” shall not include any consideration received with respect to a sale, use or other disposition of any Product in a country for Development purposes or as samples or for charitable purposes, provided such consideration is no greater than the  cost of goods of the Product units so sold, used or distributed.

 

For the avoidance of doubt, in the countries where the Products are sold through wholesalers or distributors, Net Sales will be calculated on the basis of the gross amount invoiced by PFM, its Affiliates or Sub-licensees to such wholesalers or distributors.

 

In the event that the Product is sold as a Combination Product, the Net Sales will be calculated by multiplying the Net Sales of the Combination Product by the fraction, A/(A+B) where A is the weighted (by sales volume) average sale price in the relevant country of the Product containing Binimetinib or Encorafenib as the sole active ingredient in finished form, and B is the weighted average sale price (by sales volume) in that country of the product(s) containing the other component(s) as the sole active ingredient(s) in finished form.  Regarding prices comprised in the weighted average price when sold separately referred to above, if these are available for different dosages from the dosages of Binimetinib or Encorafenib and other active ingredient components

 

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[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

that are included in the Combination Product, then the applicable Party shall be entitled to make a proportional adjustment to such prices in calculating the Royalty-Bearing Net Sales of the Combination Product. If the weighted average sale price cannot be determined for the Product or other product(s) containing the single licensed compound or component(s), the calculation of Net Sales for Combination Products will be agreed by the Parties based on the relative value contributed by each component (each Party’s agreement not to be unreasonably withheld or delayed).

 

1.61                 “Novartis Agreements” means the agreements entered into between Array and Novartis in connection with Novartis’ divestiture of the Products, as they have been disclosed to PFM in a redacted form.

 

1.62                 “[*]” shall mean any [*] compounds referred to as [*] which have demonstrated utility in combination with MEK162 and any Novartis compounds referred to as [*], in each case which have demonstrated utility in combination with LGX818.

 

1.63                 “Out-of-Pocket Costs” means amounts paid to Third Party vendors, consultants, suppliers or contractors, for services or materials provided by them directly in the performance of activities under the GDP, to the extent such services or materials apply directly to a Product.  For clarity, Out-of-Pocket Costs do not include payments for internal: salaries or benefits; facilities (including leased facilities); utilities; general office or facility supplies; insurance; information technology, capital expenditures or the like; or items included in the determination of the FTE Rate.

 

1.64                 “Party” shall mean Array or PFM, individually; and “Parties” shall mean Array and PFM, collectively.

 

1.65                 “Patent(s)” shall mean any patents and patent applications, together with all additions, divisions, continuations, continuations-in-part, substitutions, reissues, re-examinations, registrations, patent term extensions, supplemental protection certificates, and renewals of any of the foregoing.

 

1.66                 “PFM Know-How” shall mean all scientific, medical, technical, marketing, regulatory and other information relating to a Product (including the Data), that (a) exists as of the Effective Date or is developed, acquired or otherwise comes within the Control of PFM during the term of this Agreement and (b) in each case is actually used by PFM in the Development or Commercialization of a Product, and is needed by or reasonably useful to Array in order for Array to exercise its rights (including the conduct of activities directed towards Developing the Product

 

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[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

for commercialization outside the PFM Territory and/or the commercialization of the Product outside the PFM Territory) or perform its obligations under this Agreement.   Notwithstanding the foregoing or Section 1.19 (Data) above, PFM Know-How shall in any case include all such items that are generated by or under authority of PFM, or any of its Affiliates or Sublicensees, in connection with Development and/or commercialization of the Product during the term of this Agreement.

 

1.67                 “PFM Territory” shall mean worldwide, excluding the Array Territory.

 

1.68                 “Post-Approval Marketing Clinical Study” means a Clinical Study that is a marketing study, epidemiological study, pharmacoeconomic study, or post-marketing surveillance study of a Product, in each case that is conducted after Marketing Approval has been obtained in the applicable territory and that is not intended for use as a basis for obtaining Marketing Approval (e.g., for a further Indication, label expansion or otherwise) with respect to the Product and that is not being conducted as a commitment made to a Regulatory Authority as a condition of, or in connection with obtaining or maintaining, a Marketing Approval).

 

1.69                 “Pricing and Reimbursement Approval” shall mean, with respect to any country or jurisdiction in the PFM Territory in which Governmental Authorities determine the pricing at which the Product will be reimbursed, the approval, agreement, determination or decision by the applicable Governmental Authorities establishing the pricing and reimbursement status for the Product.

 

1.70                 “Product” shall mean shall mean any pharmaceutical product containing, as an active ingredient, one or more of Binimetinib or Encorafenib, including, without limitation, any Combination Product.

 

1.71                 “Product Trademarks” shall mean: (a) the product-specific trademarks owned or Controlled by Array and designated by Array for use with Products containing Binimetinib, as reflected on Exhibit 1.71; and (b) any other product-specific trademark(s) and service mark(s) as may be proposed by either Party and reviewed by the JCC for use in connection with the distribution, marketing, promotion and sale of a Product in the PFM Territory, or accompanying logos, trade dress or indicia of origin.

 

1.72                 “Region” shall mean any cluster of countries set forth in Exhibit 1.72.

 

1.73                 “Regulatory Authority” shall mean the EMA, the EC, or a regulatory body with similar regulatory authority in any country/jurisdiction within the PFM Territory or in any

 

13

 

[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

jurisdiction outside the PFM Territory (e.g., the United States Food and Drug Administration (“FDA”) and the Pharmaceutical and Medical Devices Agency (“PMDA”).

 

1.74                 “Regulatory Exclusivity” shall mean any exclusive marketing rights or data exclusivity rights conferred by any applicable Regulatory Authority, other than an issued and unexpired Patent, including any regulatory data protection exclusivity (including, where applicable, pediatric exclusivity and/or orphan drug exclusivity) and/or any other exclusivity afforded by restrictions which prevent the granting by a Regulatory Authority of regulatory approval to market a Generic Version.

 

1.75                 “Regulatory Filing” shall mean all approvals, licenses, registrations, submissions and authorizations made to or received from a Regulatory Authority in a jurisdiction necessary for or in connection with the development, manufacture and/or commercialization of a pharmaceutical product, including any CTAs, Marketing Approval Applications, Marketing Approvals, and Pricing and Reimbursement Approvals.

 

1.76                 “Royalty Bearing Net Sales” shall mean the Net Sales generated in the PFM Territory during the term of this Agreement.

 

1.77                 “Secondary Royalty Term” shall mean on a Product-by-Product and country by country basis within the PFM Territory, the period commencing on the expiration of the Initial Royalty Term for such Product in such country.

 

1.78                 “Senior Executives” shall mean the Chief Executive Officers of each of PFM and Array.

 

1.79                 “Subcontractor” shall mean any Third Party to which a Party or its Affiliate may subcontract the performance of any activities undertaken in accordance with this Agreement, provided that for clarity any entity which is involved in the selling of Products and is responsible for booking sales of Products shall not be included within this definition.

 

1.80                 “Sublicensee” shall mean a Third Party that has been granted a right to sell, market, distribute and/or promote a Product in the PFM Territory pursuant to Section 2.2; and “Sublicense” shall mean an agreement or arrangement granting such rights.  As used in this Agreement, “Sublicensee” shall not include a wholesaler, distributor or reseller of such Product, to the extent that PFM sells to such person the Product at supply prices, and the arrangement does not include royalty payments  or other payments tied to the revenue such wholesaler, distributor or reseller receives upon resale of the Product, whether paid in arrears or as transfer price unless such

 

14

 

[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

payment structure is consistent to that applied by PFM for its other oncology products in the relevant country, and /or significant lump sum payments.

 

1.81                 “Third Party” shall mean any person, corporation, joint venture or other entity, other than Array, PFM and their respective Affiliates.

 

1.82                 “Third Party Partner” shall mean any Third Party to which Array may license or sublicense, as applicable, any Array Patent or Array Know How in connection with the Development, manufacture or Commercialization of the Products.

 

1.83                 “Valid Claim” shall mean a claim of an issued and unexpired Patent (including the term of any patent term extension, supplemental protection certificate, renewal or other extension) which has not been held unpatentable, invalid or unenforceable in a final decision of a court or other government agency of competent jurisdiction from which no appeal may be or has been taken, and which has not been admitted to be invalid or unenforceable through reissue, re-examination, disclaimer or otherwise.

 

1.84                 Additional Definitions.  Each of the following terms shall have the meaning described in the corresponding section of this Agreement indicated below:

 

	
Term

 
     	
Section Defined
     	
Term
     	
Section Defined
     
	
Acquirer
     	
18.10(a)
     	
Liabilities
     	
16.1
     
	
Additional Development Activities

Additional Development Opt-in Date

Additional Development Opt-In Notice
     	
4.2 (g)

4.2(g)(v)

4.2(g)(v)
     	
Non Electing Party

Marketing Materials
     	
8.2 (c)

5.1(c) 
     
	
Additional Development Party

Additional Development Proposal
     	
4.2 (g) (iii)

4.2(g)(i)
     	
Material
     	
9.1
     
	
Agreement
     	
Introduction
     	
Medical Journals
     	
10.4
     
	
Alliance Manager

Arbitration Tribunal
     	
3.9

17.2(a)
     	
Oversight/Quality Working Group
     	
4.3(f)
     
	
Audited Site

Array Indemnitees
     	
4.4(f)

16.1
     	
Product Materials
     	
14.2(e)
     
	
Blocking Patent
     	
6.6
     	
Patient Samples
     	
4.5(d)
     

 

15

 

[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

	
CAPA
     	
4.4(f)
     	
Overall Budget

Quality Agreement

PFM Indemnitees
     	
4.2.f (iii)

Exhibit 9.2

16.2
     
	
Commercialization Plan
     	
5.1(b)(i)
     	
 
     	
 
     
	
Commercializing Party
     	
2.3(a)
     	
Royalty Report(s)
     	
6.3(d)
     
	
Competing Product
     	
8.2 (a)
     	
Rules 
     	
17.2(a)
     
	
Competing Product Affiliation Transaction
     	
8.2(c)
     	
Safety Reasons

Scientific Paper
     	
13.5(b)

10.4
     
	
Compound

Confidential Information
     	
1.30

10.1
     	
Scientific Meeting 
     	
10.5
     
	
Development Reconciliation Procedures

Drug Substance

Drug Product

Educational Materials
     	
4.5 (b)

 

9.1 (b)

9.1 (b)

5.1(c)
     	
 
     	
 
     
	
Electing Party

Existing Clinical Study(ies)
     	
8.2 (c)

4.1(b)
     	
Specific Remedies

Signing Date

Subcontract

Sublicensing Party
     	
8.2 (b)

Introduction

 

2.3(a)
     
	
 
     	
 
     	
Supply Agreement
     	
9.3
     
	
 

Finished Product

Generic Version

Generic Market Share
     	
 

9.1 (b)

6.5 (c) (i)

6.5 (c) (ii)
     	
Third Party Technology

Third Party Claim

Wind-down Period
     	
2.3 (a)

16.1

 

14.2(a)(ii)
     
	
Government Official
     	
15.1(e)
     	
Working Group(s)
     	
3.8(a)
     
	
Improvements
     	
11.1(e)
     	
 
     	
 
     
	
Indemnitee

Indemnitor

 
     	
16.3

16.3

 
     	
 
     	
 
     
	
Joint Commercialization Committee / JCC
     	
3.4(a)
     	
 
     	
 
     
	
Joint Development Committee / JDC
     	
3.2(a)
     	
 
     	
 
     
	
Joint Manufacturing Committee/ JMC

Joint Steering Committee/ JSC
     	
3.3(a)

 

3.1(a)
     	
 
     	
 
     

 

ARTICLE II
 GRANT OF LICENSE

 

2.1                          Licenses.

 

16

 

[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

(a)                                               Development License.  Subject to the terms and conditions of this Agreement, Array hereby grants to PFM: (i) a worldwide co-exclusive (with Array subject to the provisions of  Section 4.2 below) license under the Array Patents and Array Know-How, to carry out the Development assigned to it under the GDP, (ii) an exclusive license in the PFM Territory under the Array Patents and Array Know-How, with the right to grant sublicenses as provided in Section 2.2, to carry out any Additional Development Activities or support or authorize any Investigator Sponsored Clinical Studies of a Product in the Field, subject to Section 2.1(c) below; and (iii) a non-exclusive license in the Array Territory under the Array Patents and Array Know-How, to carry out Additional Development Activities to the extent permitted under Sections 4.2(g)(iii)(A) below or support or authorize Investigator Sponsored Clinical Studies to the extent approved in Section 4.2 (g)(vi).

 

(b)                                               Commercialization License.  Subject to the terms and conditions of this Agreement, Array hereby grants to PFM an exclusive license, with the right to grant sublicenses as provided in Section 2.2, under the Array Patents and Array Know-How to make, have made, use, offer for sale, sell, import, export, market, promote and distribute Products; in each case, solely for use in the Field in the PFM Territory.

 

(c)                                                Certain Clarifications.  The rights and licenses granted to PFM in Section 2.1(a)(ii) and 2.1(b) shall be exclusive even as to Array, except that Array retains the right to (i) manufacture Products in the PFM Territory,  (ii) perform Development activities for Existing Clinical Studies or under the GDP; and (iii) to perform Additional Development Activities in countries of the PFM Territory to the extent permitted in accordance with Section 4.2(g)(iii)(A) below or support or authorize Investigator Sponsored Clinical Studies in the PFM Territory to the extent approved in Section 4.2 (g)(vi).

 

2.2                          Sublicensees.

 

(a)                                               PFM shall have the right, in accordance with this Section 2.2, to engage: (i) its Affiliates as sublicensees of the Product; or (ii) if neither PFM nor any of its Affiliates  that together with PFM, collectively comprise PFM’s oncology business, have direct sales operations in a particular country within the PFM Territory, to engage a Third Party as a Sublicensee of the Product for such country with Array’s express prior written consent, which shall not be unreasonably withheld or delayed. For clarity, it is understood and acknowledged that Array’s decision to select PFM to commercialize Products in the PFM Territory was based in part on the understanding that PFM currently markets pharmaceutical products in the countries identified in Exhibit 2.2(a) and that PFM intends to market Products in the same manner. In countries other than the countries identified in Exhibit 2.2(a), PFM

 

17

 

[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

shall be entitled to use distributors consistent with how PFM then Commercializes its other oncology products in such countries, provided that in such countries where PFM does not book the sales of a Product and elects to use distributors, PFM uses as the basis to calculating the Royalty Payments due to Array under Article 6 the greater of (A) the Net Sales received by PFM from such distributor with respect to such Product in such country, or (B) [*] of the Net Sales of such Product by such distributor (Net Sales being calculated mutatis mutandis) in such country as reported by the distributor to PFM.   Additionally, in the event that PFM elects in the future to transition to a direct sales force for one or more of its other oncology products in any country in which it is then relying on a Sublicensee or distributor to market Product, PFM shall transition the sales of such Product to its direct sales force in such country as soon as reasonably practicable, taking into account existing contractual obligations to which it may be subject vis-à-vis its Sublicensee(s) and/or distributor(s) in such country.  PFM may grant sublicenses under Section 2.1 to such Affiliates and Third Parties solely on the terms set forth in this Section 2.2(a) and Section 2.2(b) below and, in the case of an Affiliate, solely for so long as such entity remains an Affiliate.

 

(b)                                               In any event, PFM shall ensure that each of its Sublicensees is bound by a written agreement between PFM and such Sublicensee that does not conflict with, and contains provisions as protective of the Products and Array, as this Agreement.  Without limiting any of PFM’s obligations under this Agreement, PFM shall also ensure that each Sublicensee expressly agrees in writing to be bound by all of PFM’s obligations under this Agreement to the extent applicable to such Sublicensee, including without limitation, the following provisions of this Agreement (as if such Sublicensee were expressly named in each such provision, to the extent PFM’s Sublicensees are not so named therein):  Sections 2.3(a), 4.3(c)(ii)(exchange of Data and Know-How); 4.4(e) (right of reference to Regulatory Filings); 7.4(a)(Records), 8.2(a) (Exclusivity of Efforts), 11.1 (rights to Improvements), 11.5 (Patent Marking) and 14.2 (transition obligations on termination).

 

(c)                                                PFM shall not grant sublicenses or appoint sublicensees other than in accordance with this Section 2.2 and shall in all cases remain responsible for any actions of its Affiliates and Sublicensees exercising rights under a sublicense of the rights granted by Array to PFM under this Agreement to the same extent as if such actions had been taken by PFM itself, provided that in the event of an action or omission by a Sublicensee that would constitute a breach of Section 8.2(a), PFM shall not be deemed in breach of Section 8.2 so long as PFM immediately terminates its sublicense agreement with the Sublicensee (or if immediate termination is not possible because of applicable Law, then provided such termination is effected as soon as such agreement can be terminated under applicable Law).

 

18

 

[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

(d)                                               Promptly following the execution of each Sublicense to a Sublicensee, PFM shall provide Array with an executed copy of such Sublicense which may be redacted as described below (together with an English translation thereof, if such Sublicense was originally executed in a language other than English); and PFM shall also provide to Array an executed copy (which may be redacted as described below) of any amendment to a Sublicense that relates to a Product (together with an English translation thereof, if such amendment was originally executed in a language other than English), promptly following the execution of each such amendment. PFM may redact from copies of executed Sublicenses and Sublicense amendments to be provided hereunder any confidential terms that are not necessary to enable Array determine PFM’s compliance with its obligations under this Agreement.

 

2.3                          Third Party Technology Acquired after Signing Date.

 

(a)                                               Generally.  If after the Signing Date, Array or PFM (the “Sublicensing Party”) acquire rights from a Third Party that are to be licensed to the other Party under this Agreement, respectively (“Third Party Technology”), but that is subject to royalty or other payment obligations to the Third Party, then the following shall apply:  The licenses granted to the other Party (the “Commercializing Party”) hereunder with respect to such Third Party Technology shall be subject to the Commercializing Party’s agreeing to promptly reimburse and promptly reimbursing the Sublicensing Party for any milestone payments, royalties or other amounts that become owing to such Third Party by reason of the Commercializing Party’s exercise of such license or sublicense to the Third Party Technology.  To the extent that any such payments made by a Sublicensing Party under an agreement to acquire Third Party Technology are not attributable to either the Array Territory or PFM Territory, but are attributable to the acquisition of rights to a Third Party Technology used for the Product, such costs shall be allocated between Array and PFM prorata based on the respective value of the Product in the Array Territory or PFM Territory.  At the inception of the inclusion of any Third Party Technology in such license under this Agreement and thereafter upon request by the Commercializing Party, the Sublicensing Party shall disclose to the Commercializing Party a true, complete and correct written description of such payment obligations, and the Commercializing Party’s obligation to reimburse such amounts following such request shall be limited to those payment obligations as so disclosed by the Commercializing Party.  In the event that the Commercializing Party does not agree to reimburse or does not promptly reimburse the Sublicensing Party for such amounts upon request (such amounts as determined by the JSC in accordance with this Agreement, to the extent so provided above), then such Third Party Technology shall thereafter be deemed excluded from the licenses or other subject matter licensed hereunder.  Notwithstanding the

 

19

 

[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

foregoing, Array and PFM each agree that prior to acquiring rights from a Third Party with respect to any Blocking Party, the Party intending to acquire such rights shall consult with and give reasonable consideration to the comments of the other Party regarding the proposed terms of such acquisition of rights.

 

(b)                                               Right to Offset.  With respect to payments that PFM has agreed to reimburse to Array pursuant to subsection 2.3(a) above, PFM shall be entitled to treat such payments as payments made to Third Parties with respect to Blocking Patents for purposes of Section 6.6 below.

 

2.4                          Future Marketing Partners.  If after the Signing Date, Array grants commercial rights to the Product or otherwise retains a marketing partner for the Product in one or more countries in the Array Territory (other than Israel, Canada and the United States), Array shall use good faith efforts to gain such  marketing partner’s consent to allow Array to (a) share with PFM under Section 4.3(c)(ii)(exchange of Data and Know-How) the clinical data and know-how generated by such marketing partner, (b)  extend to PFM under Section 4.4(e) (right of reference to Regulatory Filings) a right to reference the Regulatory Filings of such marketing partner with respect to Products, and (c) extend to PFM a license under improvements made by such marketing partner, in each case:, (i) to the extent that such data, know-how, rights of reference and improvements are necessary or reasonably useful for PFM’s Development, preparation of MAAs and filing of MAAs with respect to Products in the PFM Territory or Commercialization of the Product in the PFM Territory and (ii) without charge,  however it is understood that a failure of Array to obtain such rights shall not be deemed a breach of this Section 2.4.  Notwithstanding any other provisions of this Agreement, Array agrees that it shall not provide such future marketing partner with access to data, know-how and improvements generated by PFM or a right of reference with respect to PFM’s Regulatory Filings except to the extent such marketing partner agrees to PFM with reciprocal access to such data, know-how, rights of reference and improvements generated by such marketing partner.  It is further agreed that to the extent that such future marketing partner conditions PFM’s access to such data, know-how, rights of reference and improvements on payment from PFM, PFM may require that Array condition such future marketing partner’s access to PFM’s data, know-how, rights of reference and improvements on receipt of similar payment. For the avoidance of doubt, if Array retains a marketing partner in Israel, Canada or the United States, Array shall cause such marketing partner to agree to (a) share with PFM under Section 4.3(c)(ii)(exchange of Data and Know-How) the clinical data and know-how generated by such marketing partner, (b)  extend to PFM under Section 4.4(e) (right of reference to Regulatory Filings) a right to reference the Regulatory Filings of such marketing partner with respect to Products, and (c) extend to PFM a license under improvements made by such marketing partner, in each case:(i) to the extent that such data, know-how, rights of reference

 

20

 

[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

and improvements are necessary or reasonably useful for PFM’s Development, preparation of MAAs and filing of MAAs with respect to Products or Commercialization of the Product in the PFM Territory and (ii) without charge (but without prejudice to the terms of Section 4.2(g)(iv)).

 

2.5       Activities Outside the Respective Territory.

 

(a)To the extent permitted under applicable Law, PFM agrees that neither it, nor any of its Affiliates, will sell or provide the Product to any Third Party, if PFM or its relevant Affiliate knows, or has reason to know, that Products sold or provided to such Third Party may be sold or transferred, directly or indirectly, for use in the Array Territory.

 

(b)                                               To the extent permitted under applicable Law, Array agrees that neither it, nor any of its Affiliates, will sell or provide the Product to any Third Party, if Array or its relevant Affiliate knows, or has reason to know, that Products sold or provided to such Third Party may be sold or transferred, directly or indirectly, for use in the PFM Territory.

 

2.6                          No Other Rights.  Except for the rights and licenses expressly granted in this Agreement, each Party retains all rights under its intellectual property, and no additional rights shall be deemed granted to the other Party by implication, estoppel or otherwise.  For clarity, the licenses and rights granted in this Agreement shall not be construed to convey any licenses or rights under the Array Patents or PFM Improvements with respect to any drug substances other than Binimetinib or Encorafenib or to any products other than Products.

 

ARTICLE III
 GOVERNANCE

 

3.1                          Joint Steering Committee.

 

(a)Establishment.  Within thirty (30) days following the Effective Date, Array and PFM shall establish a joint steering committee (“Joint Steering Committee” or “JSC”) to oversee, review and coordinate the activities of the Parties under this Agreement in and for their respective territories ( i.e., when used in this Agreement, the Array Territory and the PFM Territory respectively), including, the Development of the Product for registration, the Market Access, the Manufacture and the Commercialization of the Product, in the Field, as well as the Development of the Product under the GDP, subject to the provisions of this Article 3, and to otherwise serve as a forum for communication between the Parties regarding the Parties’ activities with respect to the Products in and for their respective territories.

 

(b)                                               Duties.  The JSC shall:

 

21

 

[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

(i)                                  Review and approve substantive amendments and updates to the GDP proposed by the JDC, including the Development Budget;

 

(ii)                              Review the regulatory and Market Access strategies for the Product across the Parties’ respective territories;

 

(iii)                          Review the Commercialization Plan (including any substantive amendments and updates thereto) and well as the commercialization plans in Array Territory;

 

(iv)                          Review and approve any change to the Committed Resource Level;

 

(v)                              Review strategies for obtaining and maintaining Patent protection for the Products;

 

(vi)                          Provide a forum for the Parties: (A) to discuss material issues pertaining to the Development, Manufacture, and Commercialization of the Product globally (i.e., across their respective territories) and other material issues affecting or that may affect the performance of the Parties’ obligations under this Agreement; and (B) to coordinate their respective activities with respect to the foregoing matters;

 

(vii)                      Provide a forum for resolving matters to be decided by the JDC or JCC under this Agreement, pursuant to the procedures set out in Section 3.7 below; and

 

(viii)                  Perform such other duties as are specifically assigned to the JSC in this Agreement.

 

3.2                          Joint Development Committee.

 

(a)                                               Establishment.  Within thirty (30) days following the Effective Date, PFM and Array shall establish a joint development committee (“Joint Development Committee” or “JDC”) to plan, oversee and coordinate the conduct of the Development activities necessary to obtain Marketing Approvals for the Product, as well as the Development of the Product under the GDP (including in the United States), as set forth in and subject to the provisions of this Article 3.

 

22

 

[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

(b)                                               Duties.  The JDC shall:

 

(i)         Oversee the implementation of the GDP within the JSC-approved Development Budget for the Development of the Product once they have been approved by the JSC and review each Party’s execution of its responsibilities under the GDP;

 

(ii)                         review and approve Clinical Study design and protocols for Clinical Studies included in the GDP, including Clinical Study endpoints, the countries and the number of patients to be included in the Clinical Study, clinical methodology and monitoring requirements for such Clinical Studies;

 

(iii)                     review and approve Clinical Study design for Clinical Studies within the Additional Development Activities;

 

(iv)                     review and approve Additional Development Activities directed to (a) development of new formulations, dosages or dosage forms of the Products, and (b) the development of Combination Products.

 

(v)                         Review and approve plans for any proposed Investigator Sponsored Clinical Studies that are not expressly authorized in the IST Guidelines;

 

(vi)                     Review, propose and update the GDP, including the Development Budget set forth therein and the allocation of Development responsibilities between the Parties, as needed, but no less frequently than once each calendar half-year, and, from time to time, present to the JSC for review and approval proposed substantive amendments to the GDP, including the Development Budget, in accordance with Section 4.2(f);

 

(vii)                                                                 Review  the regulatory strategies for the Product across the Parties’ respective territories;

 

(viii)                                                             With respect to PFM Territory, review technology transfer from Novartis to Almac and Catalent, including validation batches and Data required for MA submission to Regulatory Authorities, and monitor technology transfer of the analytical methods to PFM or a Third Party appointed by PFM for Product to be controlled and released in Europe or in countries where local testing and release is mandatory (e.g; Mexico and Brazil).

 

(ix)                     Perform such other duties as are specifically assigned to the JDC in this Agreement or delegated to the JDC by the JSC.

 

23

 

[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

3.3                          Joint Manufacturing Committee.

 

(a)                                               Establishment.  Within thirty (30) days following the Effective Date, PFM and Array shall establish a joint manufacturing committee (“Joint Manufacturing Committee” or “JMC”) to oversee manufacturing activities for the Product.

 

(b)                                               Duties.  The JMC shall:

 

(i)                             Review the transition of the manufacturing activities from Novartis to Almac and Catalent;

 

(ii)                         Until such time as the transfer of Array Know-How necessary or useful for the manufacture of Materials to a Third Party manufacturer engaged by PFM pursuant to Section 9.5 is complete:

 

(A) Review any changes to Array’s supply chain for the PFM Territory;

 

(B) Approve any changes to Array’s supply chain that would potentially materially adversely impact supply for the PFM Territory;

 

(C) Review and approve the selection of any contract manufacturing organizations to be substituted for Novartis, Almac, Novasep or Catalent or any new suppliers of Materials (to the extent such substitution would alter the source of supply for the PFM Territory or would require the approval of the Regulatory Authorities in the PFM Territory);

 

(iii)                     Coordinate the audit of any contract manufacturing organizations or other suppliers involved in the Product supply chain; and

 

(iv)                     Perform such other duties as are specifically assigned to the JMC in this Agreement or delegated to the JMC by the JSC.

 

3.4                          Joint Commercialization Committee.

 

(a)                                               Establishment.  Within thirty (30) days following the Effective Date, PFM and Array shall establish a joint commercialization committee (“Joint Commercialization Committee” or “JCC”) to oversee commercialization, marketing and promotion activities for the Product.

 

24

 

[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

(b)                                               Duties.  The JCC shall:

 

(i)                                  Review Market Access activities for the Products across the Parties’ respective territories;

 

(ii)                              Review the Commercialization Plan developed in accordance with Section 5.1(b) (including any subsequent substantive amendments and updates thereto) and, with respect to the Committed Resource Level, propose for approval by the JSC;

 

(iii)                          Oversee the implementation of the Commercialization Plan;

 

(iv)                          Review commercialization, marketing and promotion activities for the Product (A) by PFM in those countries of the PFM Territory not covered by the Commercialization Plan, and (B)  in the Array Territory; and

 

(v)                              Perform such other duties as are specifically assigned to the JCC in this Agreement or delegated to the JCC by the JSC.

 

3.5                          Committee Membership.  The JSC, JDC, JMC and JCC (each, a “Committee”) shall each be composed of an equal number of representatives from each of PFM and Array (or an Array Affiliate), selected by such Party.  Unless the Parties otherwise agree, the exact number of representatives for each of PFM and Array shall be:  (a) with respect to the JSC, two (2) representatives, each of whom shall be at a level which allows him/her to make decisions on behalf of the Party he/she represent with respect to the relevant matters; and (b) with respect to the JDC, JMC and JCC, three (3) representatives, at least one (1) of whom shall be at a level which allows him/her to make decisions on behalf of the Party they represent with respect to the relevant matters.  Either Party may replace its respective Committee representatives at any time with prior written notice to the other Party; provided that the criteria for composition of each Committee set forth in the preceding sentence continues to be satisfied following any such replacement of a Party’s representative on any such Committee.

 

3.6                          Committee Meetings.  The JSC shall meet at least twice each Calendar Year, or more or less often as otherwise agreed to by the Parties.  The JDC, JMC and JCC shall meet at least once each calendar quarter, or as more or less often as otherwise agreed to by the Parties.  All Committee meetings may be conducted by telephone, video-conference or in person as determined by the applicable Committee; provided that the JSC shall meet in person at least once each Calendar Year.  Unless otherwise agreed by the Parties, all in-person meetings for each Committee shall be held on an alternating basis between Array’s facilities and PFM’s facilities.  Each Party shall bear its own personnel and travel costs and expenses relating to Committee meetings.  With

 

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[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

the consent of the Parties (not to be withheld unreasonably), other employee representatives of the Parties may attend any Committee meeting as non-voting observers.

 

3.7                          Decision-Making.  Decisions of each Committee shall be made by unanimous vote, with at least one (1) representative from each Party participating in any vote.  In the event the JDC, JMC or JCC fails to reach unanimous agreement with respect to a particular matter which is subject to approval of the applicable committee, then upon request by either Party, such matter shall be referred to the JSC for resolution.  Decisions of the JSC shall be made by unanimous vote, with at least one (1) representative from each Party participating in any vote. In the event that the JSC fails to reach unanimous agreement with respect to a particular matter which is subject to approval of the JSC, then either Party may, by written notice to the other Party, have such matter referred to the Senior Executives, who shall meet promptly and negotiate in good faith. If despite such good faith efforts, the Senior Executives are unable to resolve such dispute, then:

 

(a)                                               if such dispute relates to the GDP or any amendment or update thereto pursuant to Sections 3.1(b)(i), (including allocation of responsibilities under the GDP), all changes to the previously approved version shall require mutual consent of the Parties;

 

(b)                                               if such dispute relates to any reduction to the Committed Resource Level under the Commercialization Plan, all changes to the previously approved version shall require mutual consent of the Parties, provided that Array’s consent shall not be unreasonably withheld or delayed if PFM can justify that such changes are commercially reasonable in light of a change in market or regulatory conditions beyond its reasonable control and not the result of any failure of PFM to use Diligent Efforts, including with respect to the launch of Generic Versions of any Product; or

 

(c)                                                if such dispute involves modifications to an ongoing Clinical Trial, then the sponsor of such Clinical Trial will have the right to make the decision to the extent such decision is reasonably required to ensure that such Clinical Trial achieves its intended objective, provided that in the case of Clinical Trials within the GDP, the implementation of such modifications shall not exceed ten percent (10%) of the amount budgeted in the GDP for such Clinical Trial without the consent of the other Party.

 

(d)                                                                                               if such dispute related to other matters than those set forth in subclauses (a) – (c), then:

 

(i)                                  PFM shall be entitled to make the final determination with respect

 

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[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

to all matters in PFM Territory provided that such determination is not likely to have a material adverse impact on the Development, registration or Commercialization of the Product in Array Territory;

 

(ii)                              Array shall be entitled to make the final determination with respect to all matters in Array Territory provided that such determination is not likely to have a material adverse impact on the Development, registration or Commercialization of the Product in PFM Territory.

 

For clarity, neither Party shall have the right to cast a deciding vote: (i) to excuse itself from any of its obligations specifically enumerated under this Agreement; or (ii) to approve or adopt any amendment, modification or update to the Global Development Plan or Development Budget (including any Study Budget and the Overall Budget), or to modify or deviate from any terms of this Agreement.

 

3.8                          Working Groups.

 

(a)Establishment.  From time to time, the JSC, JDC, JMC and JCC may establish and delegate duties to sub-committees or teams (each, a “Working Group”) to oversee particular projects or activities within their respective authority.  Each Working Group and its activities shall be subject to the oversight, review and approval of, and shall report to, the Committee that established such Working Group.  Any Working Group established by a Committee shall be composed of an equal number of representatives from each of Array and PFM, selected by such Party, and the total number of members of each Working Group will be determined by the Committee which establishes such Working Group.  Each Working Group shall meet at such times and in such places as directed by the Committee which establishes such Working Group.  In no event shall the authority of any Working Group exceed that specified for the Committee under which such Working Group is established, as set forth in this Article 3.

 

(b)                                               Specific Working Groups.  Without limiting Section 3.7(a) above, the Parties agree that: (i) the JDC may establish a Working Group to assist in the communication and resolution of issues with respect to each Party’s responsibilities under Section 4.6 below, and any pharmacovigilance agreement executed by the Parties in accordance with Section 4.6(b) below, relating to the exchange of safety data pertaining to the Product and the reporting of such data to applicable Regulatory Authorities; (ii) the JSC shall establish a Working Group in order to transition regulatory responsibilities from Array to PFM, and (iii) the JSC shall establish a Working Group in order to coordinate Market Access

 

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[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

activities to prepare the launch of the Products.  Each such Working Group shall meet as necessary to perform its responsibilities or as otherwise directed by the Committee that established such Working Group, and shall continue to exist only for so long as the Committee that established such Working Group determines it is reasonably necessary.

 

3.9                          Alliance Managers.  Within thirty (30) days following the Effective Date, each Party shall appoint a representative (“Alliance Manager”) to facilitate communications between the Parties (including, coordinating the exchange of Data and know-how of each Party as required under this Agreement) and to act as a liaison between the Parties with respect to such other matters as the Parties may mutually agree in order to maximize the efficiency of the collaboration.  Each Party may replace its Alliance Manager with an alternative representative at any time with prior written notice to the other Party. Each Party’s Alliance Managers shall be entitled to attend all Committee meetings, except if the other Party specifically requests the exclusion of Alliance Managers (including its own Alliance Managers) from a particular meeting. Each Alliance Manager may bring any matter to the attention of the Committees where such Alliance Manager reasonably believes that such matter requires attention of the Committees.  Each Alliance Manager shall be responsible with creating and maintaining a collaborative work environment within and among the Committees.

 

3.10                 Scope of Governance.  Notwithstanding the creation of the JSC, JDC, JMC, JCC and/or any Working Group, each Party shall retain the rights, powers and discretion granted to it hereunder, and no Committee shall be delegated or vested with rights, powers or discretion unless such delegation or vesting is expressly provided herein, or the Parties expressly so agree in writing.  No Committee shall have the power to amend or modify this Agreement, and no decision of any Committee shall be in contravention of any terms and conditions of this Agreement.  The Alliance Managers shall not have any rights, powers or discretion except as expressly granted to the Alliance Managers hereunder and in no event shall the Alliance Managers have any power to modify or amend this Agreement.  It is understood and agreed that issues to be formally decided by the JSC, JDC and JCC, as applicable, are only those specific issues that are expressly provided in this Agreement to be decided by the JSC, JDC and JCC, as applicable.  It is also understood that no Committee shall have any authority to take any decision over activities related to the registration and/or commercialization of the Product for use in the Array Territory.

 

 

3.11                 Cost of Governance.  The Parties agree that the costs incurred by each Party in connection with its participation at any meetings under this Section 3 shall be borne solely by such Party.

 

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[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

ARTICLE IV
 DEVELOPMENT AND REGULATORY ACTIVITIES

 

4.1                          General.

 

(a)                                               Objective.  The global Development of the Products, including Global Registration Studies and other studies that may be agreed between the Parties, shall be governed by the GDP, and the Parties agree to conduct, using Diligent Efforts, all their (and their Affiliates’) Development activities relating to the Products in accordance with the GDP, and to share the related Development efforts and costs within its allocated portion of the Overall Budget (as defined below), except to the extent otherwise set forth in Section 4.1(b) or as permitted pursuant to Section 4.2(g).

 

(b)                                               Current Development Status.  Prior to the Effective Date, Novartis and/or Array have independently initiated the following Clinical Studies of the Products: (i) a Phase III clinical trial in NRAS Melanoma (NEMO study), (ii) a Phase III clinical trial in BRAF Melanoma (COLUMBUS study), (iii) a Phase III clinical trial in low grade serous ovarian cancer (MILO study), (iv) the development of pediatric formulation of Binimetinib as required by EMA and (v) those additional Phase 1 and Phase 2 Clinical Studies and Investigator Sponsored Clinical Studies set forth in Exhibit 4.1 (collectively, the “Existing Clinical Studies”).  Array shall use Diligent Efforts to complete, at its expense, the Existing Clinical Studies (including all pharmacovigilance aspects), including contracting and managing any contract research organization(s) that may be involved in such Existing Clinical Studies, and Array shall keep the JDC informed of the status thereof.  As between the Parties: (and subject to applicable agreements and consent requirements):

 

(i)                                  PFM shall have the right to require Array to implement modifications to an Existing Clinical Study(ies) that are reasonably requested by the EMA, provided that such modifications do not prejudice Array as regards safety or reputational issues or material delay in such Existing Clinical Study(ies), and provided further that PFM agrees to reimburse Array for the reasonable costs and expenses incurred by Array in connection with such modification; and

 

(ii)                              Array shall have the right to implement modifications to any Existing Clinical Study(ies), provided that Array shall not implement any modification to any Existing Clinical Study(ies) that would prejudice PFM as regards safety or reputational issues, or the intended objectives for such Clinical Studies, or material delay in such Existing Clinical Study(ies).

 

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[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

(c)                                                JDC Oversight.  The JDC will, subject to the JSC’s oversight, direct the clinical and regulatory program for the Product reflected in the GDP as of the Effective Date and as updated from time to time thereafter.

 

4.2                          GDP; Amendments; Development Responsibilities.

 

(a)                                               Global Development Plan.  The Initial GDP is attached hereto as Exhibit 4.2 (which also includes overall total budget figures through the end of the period anticipated as of the Signing Date to be covered by the GDP as described in Section 4.2(d)).  The GDP shall allocate responsibility for each Development activity set forth in the GDP to a Party.  The GDP shall include general study design parameters, specific staffing requirements and the budget for Development Costs for each Indication and the related activities included in the GDP, and shall be consistent with the terms of this Agreement.  The terms of and activities set forth in the GDP shall at all times be designed to be in compliance with all applicable Laws and to be conducted in accordance with professional and ethical standards customary in the pharmaceutical industry, taking into account where applicable and to the extent appropriate each Party’s health care compliance policies and applicable SOPs.

 

(b)                                               Development Principles.  It is the intent of the Parties that Development of Products in the Field under the GDP will be conducted in accordance with the following principles except to the extent (if any) otherwise expressly provided in the then-current GDP established in accordance with Section 4.2 and the JDC (or the JSC, or the Senior Executives, as applicable) and shall take into account and attempt to implement the following principles in its decision-making, including preparation, review and approval of any updates to and amendments of the GDP:

 

(i)                                  Regardless of the specific division of responsibility between the Parties under the GDP for particular activities at any particular time, the JDC shall serve as a conduit for sharing information, knowledge and expertise relating to the Development of the Products.

 

(ii)                              Clinical Development of the Products under the GDP should be performed according to a closely coordinated global program designed to be of benefit to both Parties (with, for the avoidance of doubt, allowance of Additional Development Activities as provided in Section 4.2(g)).

 

(iii)                          The GDP should at all times include a meaningful role for both Parties, and in general will seek to allocate the Clinical Studies and the various other Development

 

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[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

activities addressed in the GDP between the Parties in such a manner as will ensure that each Party will have sponsorship responsibility for roughly equal numbers of Clinical Studies (on a total patient basis).  In allocating responsibilities between the Parties, the JDC (or the JSC, or the Senior Executives, if applicable) shall take into consideration each Party’s expertise, capabilities, staffing and available resources to take on such activities.

 

(c)                                                Mutual Benefit.  The GDP shall at all times only include Development activities that are intended to be of mutual benefit for both Parties.

 

(d)                                               Development Budget.  The Development Budget included in the GDP shall include the budgeted amounts through the completion of all studies then included in the GDP.  The GDP shall set forth the Development Costs with respect to activities allocated to the Parties under the GDP during the then-current Calendar Year and each successive Calendar Year thereafter, and shall include for each Party a budget for Development Costs for the Development activities allocated to such Party, broken down by Clinical Study (each, a “Study Budget”) and by calendar quarter with respect to the then-current Calendar Year.  The Development Budget shall also include a breakout of costs by functional area or category as determined by the JDC.  The budget amounts indicated in Exhibit 4.2 will constitute the initial budget amounts for the Development Budget through the end of the period anticipated (as of the Signing Date) to be required to complete all Clinical Studies included in the GDP.  Promptly following the Effective Date, the Parties will prepare a detailed budget for Development activities allocated to each Party, broken down by calendar quarter, through the end of Calendar Year 2016 and consistent with the overall total amounts allocated for 2016 under the Development Budget indicated in Exhibit 4.2.  Concurrently with the annual update of the GDP in accordance with Section 4.2(f), the JDC shall also prepare, and the JSC shall review and approve, an updated Development Budget covering the next Calendar Year and the succeeding Calendar Years through the completion of all studies then included in the GDP.

 

(e)                                               Allocation of Development Activities.

 

(i)                                  The GDP shall allocate responsibility between the Parties for the conduct of Clinical Studies and the various other Development activities addressed in the GDP.  The Parties shall discuss in good faith so as to determine which one of the Parties is best qualified to be the sponsor of each Clinical Study.

 

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[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

(ii)                              Neither Party nor its Affiliates shall conduct, or authorize any Third Party to conduct, any Development activities with respect to the Product in the Field, except as expressly permitted in this Article 4.

 

(f)                                                   Updating and Amending the GDP.

 

(i)                                  As soon as reasonably practicable, the Parties shall submit the Global Registration Studies included in the Initial GDP to the FDA and EMA.  The Parties agree that in the event that a Global Registration Study does not obtain a positive opinion of the EMA or the FDA (or both) pursuant to the preceding sentence, the GDP shall be amended, as determined by the JDC to adjust the clinical study design and protocols of such Global Registration Study such that it does obtain a positive opinion of both the EMA and the FDA, or, if no agreement cannot be reached between the Parties through the JDC, such Global Registration Study shall be excluded from the GDP. Notwithstanding the foregoing, either Party may decide to exclude [*] from the GDP within [*] following the receipt of the opinions of the EMA and the FDA,  in which case either Party may carry out such Clinical Study as an Additional Development Activity pursuant to section 4.2(g)(iii)(A).  The Parties shall use Diligent Efforts to redeploy the budget allocated to any excluded or modified Clinical Study under the Development Budget to support the addition of new Clinical Studies to the GDP and/or the expansion of Clinical Studies included within the Initial GDP, in a manner consistent with Section 4.2(f)(iii) below, over a period of [*] following the decision to exclude such Clinical Study from the GDP.  It is also understood that if the EMA, or FDA, respectively, require a study design that would not be appropriate for use in obtaining approval in, respectively, the United States, or in the European Union (as determined by the JDC), unless otherwise agreed, such study will not be included in the GDP.  For purposes of the foregoing, it is understood that if the FDA or EMA does not expressly provide a positive opinion as to a Clinical Study, the absence of express objections will be considered to be a positive opinion.

 

(ii)                              The JDC shall review the GDP not less frequently than annually and shall develop detailed and specific GDP updates, which shall include the Development Budget for the subsequent Calendar Year and the succeeding Calendar Years through the end of the period covered by the GDP.  The JDC shall submit all such updates to the JSC for review and approval, such that JSC preliminary approval would occur no later than September 1 of each Calendar Year.  Upon the JSC’s preliminary approval, such updates shall be submitted to each Party for its internal budgeting process with a target for final approval by the JSC no later than December 1 of each Calendar Year, at which time any updates shall be appended to the GDP.  The JDC may also develop and submit to the JSC from time to time other proposed substantive amendments to the GDP.  The JDC shall also review each Party’s (and its Affiliates’) performance under the

 

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[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

then-current GDP (including the Development Budget) on a quarterly basis, and shall develop detailed and specific updates and substantive amendments to the Development Budget that reflect such performance.  The JSC shall review proposed amendments presented by the JDC and may approve such proposed amendments or any other proposed amendments that may be proposed to the JSC from time to time and, upon such approval by the JSC, the GDP shall be amended accordingly.  Amendments and updates to the GDP, including the Development Budget, shall not be effective without the approval of the JSC (or the Senior Executives pursuant to Section 17.1, if applicable).  In the event that the JSC does not approve an updated GDP, including the Development Budget, prior to the start of the next Calendar Year, either Party may initiate procedures to resolve the issue pursuant to Section 17, and the then-current GDP, together with the budgeted amounts set forth in the Development Budget, shall continue to apply until the GDP is agreed by the JSC or the Senior Executives pursuant to Section 17.1.

 

(iii)                          Exhibit 4.2 includes the anticipated budget amounts and associated timelines for Development of the Product through the completion of all studies included in the GDP as of the Effective Date.  In reviewing and approving annual updates or amendments to the Development Budget, the JSC (or the Senior Executives pursuant to Section 17.1, if applicable) shall consider the budget amounts and timelines reflected in Exhibit 4.2 (the “Overall Budget”).  To the extent that (i) the price of clinical materials (other than a Product) to be used with a Product in Clinical Studies included in the GDP vary from the prices budgeted for such clinical materials in the then current Development Budget, or (ii) the quantities of clinical materials (a Product or other clinical materials to be used with a Product) actually used in carrying out Clinical Studies included in the GDP vary from the quantities budgeted for such clinical materials in the then current Development Budget, the Development Budget will be adjusted to reflect such updated costs and the amount of the Overall Budget will be adjusted accordingly.  Notwithstanding the foregoing, if as a result of changes required by the EMA or the FDA to the protocol of a Global Registration Study included in the GDP as of the Effective Date, the Parties through the JDC conclude that such Global Registration Study cannot reasonably be reconfigured in a manner that will satisfy the requirements of the EMA and the FDA and benefit the European Union and the United States then to the extent PFM pursues separate company sponsored territory-specific Additional Development Activities, the Overall Budget shall be reduced by the amount budgeted for such territory-specific Clinical Study, provided that such budgeted amount shall be reasonable and shall in no event exceed the amount of the Study Budget for the removed Global Registration Study, and provided further that PFM then uses Diligent Efforts to carry out such territory-specific Clinical Study.  In such case, each Party’s commitment to its share of the Overall Budget will be reduced by the same relative proportion as set forth in Section 4.5 (a) of the budgeted amount for territory-specific Clinical Study. Similarly, if PFM exercises its right pursuant to Section 4.2 (g) (iv) to use the Data

 

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[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

resulting from an Additional Development Study, at PFM’s written request the Overall Budget shall be reduced by an amount equal to [*].

 

(g)                                               Additional Development Activities.  Each Party shall be permitted to undertake Development activities in addition to those planned or in progress under the then-current GDP (collectively, “Additional Development Activities”), provided that such Party complies with the provisions of this Section 4.2(g).

 

(i)                                  Additional Development Proposals.  If a Party desires to undertake Additional Development Activities, such Party shall submit to the JDC a proposal for the addition of such Additional Development Activities to the GDP, including a proposed budget for such Activities (an “Additional Development Proposal”).  The JDC shall review each such Additional Development Proposal and shall provide the JSC with a recommendation as to whether such Additional Development Proposal should be approved or rejected.

 

(ii)                              Inclusion of Additional Development Activities in the GDP.

 

(A)                           The JSC shall review each Additional Development Proposal and the accompanying recommendation submitted by the JDC and may approve or reject such Additional Development Proposal in its discretion.  If the JSC approves an Additional Development Proposal, the GDP shall be deemed to be amended to include the Additional Development Activities and associated budget upon approval of such Additional Development Proposal by the JSC.  For the sake of clarity, all FTE Costs and Out-of-Pocket Costs incurred by the Parties and their Affiliates in performing such Additional Development Activities included in the GDP shall be treated as Development Costs and shared by the Parties in accordance with Section 4.5.

 

(B)                           If the JSC is divided as to whether to approve an Additional Development Proposal, then such Additional Development Activities will not be included in the GDP, and the provisions of Sections 4.2(g)(iii) through (vi) below shall apply.

 

(iii)                          Independent Performance of Additional Development Activities.

 

(A)                           If the JSC votes not to approve an Additional Development Proposal, or does not approve an Additional Development Proposal within sixty (60) days of its submission to the JSC, then the Party that submitted the Additional Development Proposal (the “Additional Development Party”) may, upon notice to the other Party, conduct the relevant Additional Development Activities in accordance with the Additional Development Proposal at its own expense, subject to Section 2.1 above; provided, however, that:

 

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[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

(1)                             the Additional Development Party shall keep the JDC informed as to the design of the studies within the Additional Development Activities to be conducted by or under authority of the Additional Development Party;

 

(2)                             if the other Party (the “Non-Additional Development Party”) determines reasonably and in good faith that any of the proposed Additional Development Activities are reasonably likely to adversely affect the Development or commercialization of the Products in the Field, then the Additional Development Party shall not undertake such Additional Development Activities unless and until the JDC or JSC determines that such Additional Development Activities should be permitted; and

 

(3)                         without limiting the Non-Additional Development Party’s rights under subsection (2) above, the Additional Development Party shall be entitled to conduct Additional Development Activities comprising Clinical Studies in countries of the other Party’s territory, provided that the Additional Development Party has informed and coordinated with the other Party prior to commencing such Additional Development Activities;

 

Except for Investigator Sponsored Clinical Studies included in the Existing Clinical Studies, no Party shall authorize or support an Investigator Sponsored Clinical Study or any Post-Approval Marketing Clinical Study in the other Party’s territory without obtaining prior written consent.

 

(B)                           The Additional Development Party shall provide formal written reports of the results and costs of the Additional Development Activities to the JDC during meetings of the JDC, upon request of the other Party but not more than twice a year during the period in which any study within the Additional Development Activities is being performed.  For clarity, Section 18.9 shall apply with respect to Additional Development Activities undertaken by either Party in accordance with this Section 4.2(g)(iii).

 

(iv)                          Costs of Additional Development Activities and Use of related Data.  The Additional Development Party shall bear all costs associated with the Additional Development Activities it undertakes and such costs shall not be taken into account as Development Costs for purposes of Section 4.5.  If a Party uses Data generated by the other Party pursuant to a Clinical Study included in the Additional Development Activities in a substantive manner by filing the same with a Regulatory Authority (either directly or by reference under Section 4.4(e) below) as the basis for obtaining new or expanded Marketing Approval for the Product for the same Indication that was the subject of study in such Additional Development Activities, the non-Additional Development Party shall reimburse the Additional Development Party an amount equal [*] (to the extent not previously reimbursed pursuant to subsection

 

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[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

4.2(g)(v)). Such costs will be determined using the same manner of calculating Development Costs under the GDP. In the event either Party undertakes Additional Development Activities comprising material non-clinical studies of the Product, the Parties will agree upon an equitable reimbursement strategy should the non-Additional Development Party wish to use such Data. For the avoidance of doubt, if the non-Additional Development Party does not elect to use the Data of such Additional Development Activities, such election shall not in and of itself be deemed in breach of its Diligent Efforts obligations pursuant to this Agreement.

 

(v)                              Opt-In for Additional Development Activities.  In the event that the non-Additional Development Party elects, in its sole discretion and upon written notice to the Additional Development Party (an “Additional Development Opt-In Notice”), on a study-by-study basis, to opt in with respect to a given Clinical Study within the Additional Development Activities, then (A) such Clinical Study shall be deemed to be included in the GDP from and after the date on which such Opt-In Notice is received by the Additional Development Party (the “Additional Development Opt-In Date”); (B) the then-current plan and budget of the Additional Development Party with respect to such Clinical Study shall be deemed to be included within and form part of the GDP from the Additional Development Opt-In Date, and shall control with respect to such Clinical Study unless and until an amendment to GDP providing for a different or modified plan and budget is approved by the JSC; (C) the Out-of-Pocket Costs and FTE Costs associated with such Clinical Study incurred after the Additional Development Opt-In Date shall be treated as Development Costs and shared by the Parties in accordance with Section 4.5; and (D) the non-Additional Development Party shall reimburse the Additional Development Party [*] (to the extent not previously reimbursed pursuant to subsection 4.2(g)(v)) before the Additional Development Opt-In Date ).  Such costs will be determined using the same manner of calculating Development Costs under the GDP.  For the avoidance of doubt, if the non-Additional Development Party does not elect to use the Data of such Additional Development Activities, such election shall not in and of itself be deemed in breach of its Diligent Efforts obligations pursuant to this Agreement.

 

(vi)                          Investigator Sponsored Clinical Studies.  Notwithstanding Section 4.2(g)(iii) above, a Party wishing to authorize an Investigator Sponsored Clinical Study in its territory shall not be required to obtain JDC approval of the protocol for such Investigator Sponsored Clinical Study so long as such study does not fall within one of the categories listed in the IST Guidelines, however each Party agrees to inform the other Party of such Investigator Sponsored Clinical Study through the JDC on a period basis.  In the event that a proposed Investigator Sponsored Clinical Study falls within one of the categories listed in the IST Guidelines, then authorization of such Investigator Sponsored Clinical Study shall require approval of the JDC.  Notwithstanding Section 4.2(g)(iii), neither Party shall authorize or

 

36

 

[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

contribute to any Investigator Sponsored Clinical Study within the other Party’s territory without the prior written approval of the other Party to be given in its sole discretion.

 

4.3                          Development Efforts; Manner of Performance; Reports.

 

(a)                                               Development Efforts.  Each of Array and PFM shall use Diligent Efforts to execute and to perform, or cause to be performed, the activities assigned to it in the GDP, and to cooperate with the other in carrying out the GDP, in accordance with the timetables therein.  Each Party and its Affiliates shall conduct its Development activities in good scientific manner and in compliance with applicable Law, including Laws regarding environmental, safety and industrial hygiene, Good Manufacturing Practice, Good Laboratory Practice and Good Clinical Practice, current standards for pharmacovigilance practice, and all applicable requirements relating to the protection of human subjects.  Before commencement of each Clinical Study pursuant to the GDP, the JDC shall define the common database format to be used, the owner of such database, the access of the other Party to the database, and the relevant clinical information to be contained within.  This will be done in a manner designed to address both FDA and EMA requirements.

 

(b)                                               Day-to- Day Responsibility.  Each Party shall be responsible for day-to-day implementation of the Development activities for which it (or its Affiliate) has or otherwise is assigned responsibility under this Agreement or the GDP and shall keep the other Party reasonably informed as to the progress of such activities, as determined by the JDC.

 

(c)                                                Exchange of Data and Know-How.

 

(i)                                  By Array.  Array or its Affiliates will make available to PFM, all additional Array Know-How relating to the Product (i.e., beyond that already made available to PFM as of the Effective Date) as PFM may reasonably request that exists as of the Effective Date, is reasonably available to Array and is necessary, or materially useful, for PFM to Develop, manufacture and/or commercialize the Product in accordance with this Agreement, including all Data and database from the Existing Clinical Studies and any other Clinical Studies and pre-Clinical Studies for the Product that have been conducted by or on behalf of Array prior to the Effective Date.  Array shall make any such Data available in the original language in which such Data was generated.  Without limiting the foregoing, Array shall provide to PFM within ten (10) Business Days of the Effective Date soft copies of all Data and other documents made available to PFM prior to the Effective Date in an electronic data room.

 

37

 

[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

(ii)                              By Either Party.  During the term of this Agreement, Array shall provide to PFM all Array Know-How, and PFM shall provide to Array all PFM Know-How, that is generated during the term of this Agreement and that has not previously been provided hereunder, in each case promptly upon request by the other Party.  The Party providing such Party’s know-how shall provide the same in electronic form to the extent the same exists in electronic form, and shall provide copies or an opportunity to inspect (and copy) for all other materials comprising such know-how (including, for example, original patient report forms and other original source data).  Any Data provided by one Party to the other under this Subsection 4.3(c)(ii) shall be provided in the original language in which such Data was generated, provided that, with respect to Data relating to the Global Development Plan, if such original language is not English, then the Party supplying such Data shall also provide English translations thereof.  The Parties will cooperate and reasonably agree upon formats and procedures to facilitate the orderly and efficient exchange of the Array Know-How and the PFM Know-How in accordance with the last sentence of Section 4.3 (a).

 

(iii)                          Provision of Data to JDC.  Upon request by the JDC, each Party shall promptly provide the JDC with summaries in reasonable detail of all Data generated or obtained in the course of such Party’s performance of its Development activities.

 

(d)                                                                                               Development Reports.  At each meeting of the JDC, each Party will report on the Development activities such Party and its Affiliates has performed or caused to be performed since the last meeting of the JDC, evaluate the work performed in relation to the goals of the GDP and provide such other information as may be reasonably requested by the JDC with respect to such Development activities.

 

(e)                                               Compliance Audits.  With respect to any facility or site at which a Party, its Affiliates or its Subcontractor conducts Development activities pursuant to this Agreement or the GDP, the other Party shall have the right, at its expense, upon reasonable written notice to such Party (and if applicable, such Affiliate or as described below, Subcontractor), and during normal business hours, to inspect such site and facility and any records relating thereto once per year, or more often with cause, to verify the other Party’s compliance with the terms of this Agreement relating to all applicable Laws, including Good Manufacturing Practice, Good Laboratory Practices, Good Clinical Practices and current standards for pharmacovigilance practice.  Such inspection shall be subject to the confidentiality provisions set forth in Article 10.  Each Party agrees to use Diligent Efforts, to include in any contract or other written arrangement with its Subcontractors, a clause permitting the other Party to exercise its rights under this Section 4.3(e).  In the event a Party is unable to secure such inspection rights from any of its Subcontractors, such Party agrees to

 

38

 

[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

secure such rights for itself and, if requested by the other Party, shall exercise such rights, at its own expense, on behalf of the other Party and fully report the results thereof to the other Party.

 

(f)                                                   Quality Assurance Audits. PFM’s quality assurance department will be responsible for establishing audit plans for the Development activities assigned to PFM in the GDP according to PFM’s internal SOP.  Array’s quality assurance department will be responsible for establishing audit plans for the Development activities assigned to Array in the GDP according to Array’s internal SOP. The JDC shall form a joint Oversight/Quality Working Group (the “Oversight/Quality Working Group”) and such Oversight/Quality Working Group may review and provide comments on the audit plans established by PFM’s and Array’s quality assurance personnel. PFM’s and Array’s quality assurance personnel will each consider in good faith all such comments submitted by the Oversight/Quality Working Group, but PFM’s and Array’s quality assurance personnel shall each have final decision-making authority with respect to the audit plans it develops.

 

4.4                          Regulatory Submissions and Marketing Approvals.

 

(a)                                               Regulatory Responsibilities.  PFM or its Affiliate shall be responsible in accordance with Section 8.1 for seeking and attempting to obtain all Marketing Approvals for the Product in the Field in the PFM Territory in accordance with the terms of this Agreement.

 

(b)                                               Ownership of Marketing Approvals.  PFM, a PFM Affiliate or Sublicensee shall own all regulatory submissions, including all applications, for Marketing Approvals for the Products in the Field in the PFM Territory.  As between the Parties, Array or an Array Affiliate shall own all regulatory submissions, including all applications, for Marketing Approvals for the Products in the Field in the Array Territory.

 

(c)                                                CTAs.  Each Party shall own the CTAs of the Clinical Studies for which it is the sponsor. To the extent PFM or its Affiliate is performing Development activities in the Array Territory pursuant to the GDP, or Array or its Affiliate is performing Development activities in the PFM Territory under the GDP, in each case in accordance with this Agreement, the other Party or its Affiliate shall cooperate fully, including by making such Regulatory Filings and submissions and undertaking such regulatory interactions as the Party performing (or whose Affiliate is performing) such Development activities may reasonably request for such purposes.

 

39

 

[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

(d)                                               Regulatory Cooperation.

 

(i)                             The JDC shall review the overall global regulatory strategy and positioning for the Product in the Parties’ respective territories.  In connection with such review, each Party shall provide to the JDC such information regarding a proposed filing as either Party may reasonably request.

 

(ii)                         To the extent consistent with applicable Law, Array shall have the right to participate in all material meetings, conferences and discussions by PFM or its Affiliates with the EMA pertaining to the Development of the Product or the obtaining of Marketing Approval in the European Union, by having up to two (2) Array representatives attending as silent observers under PFM’s supervision.  PFM shall provide Array with reasonable advance notice of all such meetings and other contact and advance copies of all related documents and other relevant information relating to such meetings or other contact.  PFM shall (A) provide the JDC with copies of all material submissions it makes to, and all material correspondence it receives from, a Regulatory Authority pertaining to Marketing Approvals in the Key Countries, and, (B) provide to Array copies of the proposed labeling for the Product in the local language to be filed in the Key Countries, and Array may provide comments regarding such documents, labeling and correspondence prior to their submission, which comments PFM shall consider in good faith.  Additionally, PFM shall provide Array with (1) a copy of the MAA in electronic format provided that in cases where the MAA was not filed electronically, PFM will provide the electronic files used to generate such submission, and (2) copies of the final labeling for the Product in the local language in all countries in the PFM Territory in which PFM obtains Marketing Approvals. Array shall assist PFM in PFM’s interactions with the Regulatory Authorities in PFM Territory, including by providing responses to the questions raised by such Regulatory Authorities.

 

(iii)                     To the extent practicable and consistent with applicable Law: (A) PFM shall have the right to have up to two PFM representatives attend, as silent observers and under Array’s supervision, all material meetings, conferences and discussions  by Array or its Affiliates with the FDA pertaining to the Development and registration of the Product in the United States by having up to two (2) PFM representatives attending as silent observers under Array’s supervision, and (B) Array shall provide PFM with reasonable advance notice of all such meetings and other contact and advance copies of all documents and other relevant information for discussion at such meetings to the extent relating to such meetings or other contact.  Array shall provide to the JDC, copies of all material submissions it makes to, and all material correspondence it receives from, a Regulatory Authority pertaining to Marketing Approvals in the U.S. and PFM may provide comments regarding such documents and correspondence prior to their submission, which comments Array shall consider in good faith.

 

40

 

[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

(iv)                     Notices, copies of submissions and correspondence, and other materials to be given in advance as provided in this Section 4.4(d) shall be provided at least five (5) Business Days in advance unless circumstances necessitate a shorter time period, and in any event not less than a reasonable time in advance under the circumstances.

 

(v)                         The Parties shall establish a process through a working group formed by the JDC to determine which documents and correspondence will be exchanged by the Parties pursuant to Section 4.4(d)(ii) and 4.4(d)(iii).

 

(vi)                     Each Party shall bear its own expenses in connection with its activities conducted in accordance with Sections 4.4(d)(ii) and (iii) above.

 

(e)                                               Rights of Reference and Access to Data.  Each Party shall have the right to cross-reference the other Party’s Regulatory Filings related to the Products (including each other’s, and their Affiliate’s or Subcontractor’s, DMF), and to access such Regulatory Filings and any Data therein and use such Data in connection with the performance of its obligations and exercise of its rights under this Agreement, including inclusion of such Data in its own Regulatory Filings for Product; provided, however, that (i) with respect to Data obtained from Additional Development Activities conducted at the other Party’s expense in accordance with Section 4.2(g), the non-funding Party’s right to cross-reference, or to include such Data in its Regulatory Filings for Product, shall be subject to compliance with the corresponding reimbursement obligation set forth in Section 4.2(g), and (ii) the definition of “Data” shall not include the closed portions of any DMF, nor any information contained in any such portions of a DMF and, notwithstanding any other provision of this Agreement, neither Party shall have any obligation to disclose to the other Party, or any of its Affiliates or Sublicensees, the closed portions of such DMFs or any information contained therein, but shall provide to the other Party all necessary or useful Right of Reference to such close portion. Each Party hereby grants to the other Party, its Affiliates and Sublicensees (or in the case of Array, its other licensees) a “Right of Reference,” as that term is defined in 21 C.F.R. § 314.3(b) in the United States, or an equivalent right of access/reference in any other country or region, to any Data, including such Party’s or its Affiliate’s clinical dossiers, Controlled by such Party or such Affiliate that relates to the Product for use by the other Party to Develop and Commercialize the Product in the Field pursuant to this Agreement, subject to Section 4.2(g) above.  Each Party or such Affiliate shall provide a signed statement to this effect, if requested by the other Party, in accordance with 21 C.F.R. § 314.50(g)(3) or the equivalent as required in any country or region or otherwise provide appropriate notification of such right of the other Party to the applicable Regulatory Authority.  Each Party will provide, and cause its Affiliates to provide, cooperation to the other Party to effect the foregoing.

 

41

 

[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

(f)   Regulatory Audits.  The Parties shall cooperate in good faith with respect to Regulatory Authority inspections of any site or facility where Clinical Studies, manufacturing or pharmacovigilance activities with respect to the Product are conducted by or on behalf a Party pursuant to this Agreement, whether such site or facility is such Party’s or its Affiliate’s or Subcontractor’s (each an “Audited Site”).  Each Party shall be given a reasonable opportunity (taking into account the timing and notice provided by the applicable Regulatory Authority) to assist in the preparation of the other Party’s Audited Sites for inspection, where appropriate, and to attend any inspection by any Regulatory Authority of the other Party’s Audited Sites, and the summary, or wrap-up, meeting with a Regulatory Authority at the conclusion of such inspection.  If such attendance would result in the disclosure to the other Party of Confidential Information unrelated to the subject matter of this Agreement, the Parties shall enter into a confidentiality agreement covering such unrelated subject matter.  In the event that any Audited Site is found to be non-compliant with one or more Good Laboratory Practice, Good Clinical Practice, Good Manufacturing Practice or current standards for pharmacovigilance practice, the non-compliant Party shall submit to the other Party a proposed recovery plan or Corrective and Preventative Actions (“CAPA”) within a reasonable period after such non-compliant Party, its Affiliate or its Subcontractor receives notification of such non-compliance from the relevant Regulatory Authority and such non-compliant Party shall use Diligent Efforts to implement such recovery plan or CAPA promptly after submission.  Each Party shall use Diligent Efforts to secure for the other Party the rights set forth in this Section 4.4(f) from its Subcontractors.  In the event a Party is unable to secure such inspection rights from any of its Subcontractors, such Party agrees to secure such rights for itself and, if requested by the other Party, shall exercise such rights, at its own expense, on behalf of the other Party and fully report the results thereof to the other Party.

 

(g)                                               Pricing and Reimbursement Approvals.  As between the Parties, PFM shall be responsible for and have the exclusive right to seek and attempt in accordance with Section 8.1 to obtain Pricing and Reimbursement Approval for the Products in the Field in the PFM Territory, provided that PFM shall keep Array reasonably informed with regard to any Pricing and Reimbursement Approval proceedings for the Product in the Field in the PFM Territory.  As between the Parties, Array shall be responsible for and have the exclusive right to seek and attempt to obtain Pricing and Reimbursement Approvals for the Product in the Field in the Array Territory, provided that Array shall keep PFM reasonably informed with regard to any Pricing and Reimbursement Approval proceedings for the Product in the Array Territory.

 

42

 

[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

4.5                          Costs of Joint Development.

 

(a)                                               Cost Sharing.  Development Costs incurred during the Term by the Parties in performing the GDP shall be borne by the Parties as follows: 60% by Array and 40% by PFM, provided that PFM’s share of the Development Costs with respect to [*].

 

(b)                                               Development Costs Reports.  Development Costs shall initially be borne by the Party incurring the cost or expense, subject to reimbursement as provided in Section 4.5(c).  Each Party shall calculate and maintain records of Development Costs incurred by it and its Affiliates in accordance with procedures to be established by the JDC, and the procedures for reporting of actual results, review and discussion of potential discrepancies, quarterly reconciliation, reasonable cost forecasting, and other finance and accounting matters related to Development Costs will be determined by the JDC (the “Development Reconciliation Procedures”).  Such procedures will provide the ability to comply with financial reporting requirements of each Party.  The Development Reconciliation Procedures shall provide that within [*] after the end of each calendar quarter, each Party shall submit to the other Party (through the JDC) a report, in such reasonable detail and format as is established by the JDC, of all Development Costs incurred by such Party during such calendar quarter.  Within [*] following the receipt of such report, each Party shall have the right to request reasonable additional information related to the other Party’s and its Affiliates’ Development Costs during such calendar quarter in order to confirm that such other Party’s spending is in conformance with the approved Development Budget.  The JDC shall establish reasonable procedures for the Parties to share estimated Development Costs for each calendar quarter prior to the end of such calendar quarter, to enable each Party to appropriately accrue its share of Development Costs for financial reporting purposes.

 

(c)Reimbursement of Development Costs.

 

(i)                             The Party (with its Affiliates) that incurs more than its share of the total actual Development Costs for the Products shall be paid by the other Party an amount of cash sufficient to reconcile to its agreed percentage of actual Development Costs in each calendar quarter.  Notwithstanding the foregoing, on a Calendar Year-to-date basis, the Parties shall not share any Development Costs in excess of the amounts allocated for such calendar quarter-to-date period in the Development Budget; provided, however, that Development Costs in excess of the Development Budget shall be included in the calculation of Development Costs to be shared by the Parties if (i) the JSC approves such excess Development Costs (either before or after they are incurred), which approval shall not be unreasonably withheld to the extent the Development Costs in excess of the Development Budget were not within the reasonable control of the Party (or

 

43

 

[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

Affiliate) incurring such expense or (ii) to the extent such excess Development Costs do not exceed [*]  the total Development Costs allocated to be incurred by such Party and its Affiliates in the applicable Calendar Year-to-date period in accordance with the applicable Development Budget for such Calendar Year.  If any excess Development Costs are excluded from sharing by the Parties for a particular Calendar Year-to-date period pursuant to the foregoing sentence, such excess Development Costs shall be carried forward to the subsequent calendar quarters  and, to the extent the total Development Costs incurred by such Party for the Calendar Year-to-date as of the end of such subsequent calendar quarter are less than [*] of the aggregate Development Costs allocated to such Party under the Development Budget for such Calendar Year-to-date period, such carried forward amounts shall be included in Development Costs to be shared by the Parties for such Calendar Year-to-date-period (i.e., so that the total Development Costs incurred by such Party and its Affiliates that are shared pursuant to this Section 4.5 during any Calendar Year do not exceed [*] of the Development Costs allocated to such Party under the Development Budget for such Calendar Year, unless otherwise approved by the JSC).  Notwithstanding the foregoing, excess Development Costs shared by the Parties in accordance with this Section 4.5(c)(i) shall not be deemed to increase the Overall Budget for purposes of Section 4.2(f)(iii) above.

 

(ii)                         The Development Reconciliation Procedures shall provide for the JDC to develop a written report setting forth in reasonable detail the calculation of any net amount owed by Array to PFM or by PFM to Array, as the case may be, as necessary to accomplish the sharing of Development Costs set forth in Section 4.5(a) and this Section 4.5(d).  The initial draft report shall be prepared by the JDC for review and comment by the Parties promptly following delivery of the reports described in Section 4.5(c) and the finalized version of such report shall be issued within [*] following the end of the calendar quarter.  The net amount payable to accomplish the sharing of Development Costs as provided under this Agreement shall be paid by PFM or Array, as the case may be, within [*] following issuance of the finalized report.

 

(d)                                               Patient Samples.   To the extent permitted by applicable Laws, each Party shall own or control any patient samples (together with compilations of Data comprising annotations, or correlating outcomes, with respect to such samples, “Patient Samples”) collected and retained in connection with Clinical Studies of which it is the sponsor (i.e., whether performed under the GDP or as Additional Development Activities).

 

4.6                          Reporting; Adverse Drug Reactions.

 

(a)                                               Array shall hold and maintain the global safety database with respect to the Products.  Array shall be responsible for core safety management of the Product, as provided in a pharmacovigilance agreement executed by the parties pursuant to section

 

44

 

[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

4.6(b), within and outside the PFM Territory; and PFM shall cooperate with and assist Array, as requested and/or as provided in the pharmacovigilance agreement executed by the Parties, to enable Array to meet its regulatory reporting requirements with respect to the core safety management for the Product within and outside the PFM Territory.  PFM shall be responsible for all other pharmacovigilance activities associated with the Product in the PFM Territory or with respect to Clinical Studies sponsored by PFM in Array Territory, including filing all reports required to be filed in order to maintain any CTA for the Product filed by or under the authority of PFM as the sponsor, and/or any Marketing Approvals granted for the Product, in the PFM Territory (including reporting of adverse drug experiences, product quality complaints and safety data relating to the Product in the PFM Territory).  Each Party shall promptly notify the other Party with respect to any material changes or material issues that may arise in connection with any CTA for the Product filed by or under the authority of such Party as the sponsor, and/or any Marketing Approvals for the Product, in any country within such Party’s territories.

 

(b)                                               Promptly following the Effective Date, and in any event prior to PFM commencing a Clinical Study, the Parties shall enter into a pharmacovigilance agreement on terms no less stringent than those required by applicable ICH Guidelines, including: (i) providing detailed procedures regarding the responsibilities for the creation and maintenance of core safety information  (e.g.,: Core Data Sheet, Risk Management Plan, Local Product Safety Labeling, Development and Product Safety Updates); the exchange of safety data relating to the Product within and outside the PFM Territory within appropriate time frames and in an appropriate format to enable each Party to meet its expedited and periodic regulatory reporting requirements; and (iii) ensuring compliance with the reporting requirements of all applicable Regulatory Authorities and all applicable legal and regulatory requirements for the management of safety data.

 

ARTICLE V
 COMMERCIALIZATION AND PROMOTION

 

5.1                          PFM Commercialization.

 

(a)                             PFM’s Responsibility.   Except as provided below, PFM shall be responsible for, and shall control the conduct of, the Commercialization of the Products in the PFM Territory, at its expense, in accordance with Section 8.1.

 

(b)                       Commercialization Plan.

 

45

 

[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

(i)                             The plan for the marketing, promotion and commercialization of the Product in the Key Countries is attached to this Agreement as Exhibit 5.1 Part A (“Commercialization Plan”). The portion of the Commercialization Plan addressing the EEA Markets shall be consistent with the Committed Resource Level.

 

(ii)                         The JCC shall review the Commercialization Plan (and any updates or revisions thereto submitted by PFM) on an ongoing basis, and in any event, the JCC shall review the then-current Commercialization Plan in June and December of each  year, which shall be substantially similar in format and level of detail as the Commercialization Plan attached as Exhibit 5.1 Part A. PFM shall submit revisions to the then-current Commercialization Plan to the JCC and the JSC for their review; provided, however, the Committed Resource Level in effect for any Fiscal Year shall not be materially modified except as approved by the JSC.

 

(iii)                     PFM shall use Diligent Efforts to carry out, and to cause its Affiliates and Sublicensees to carry out, all marketing, promotion and commercialization of the Products in the PFM Territory in accordance with the then-current Commercialization Plan and the provisions of this Agreement.

 

(c)                                                Marketing Materials.  Marketing, advertising and promotional materials (“Marketing Materials”) concerning the Products for use in the PFM Territory, as well as training manuals and education and communication materials (“Educational Materials”) for Sales Representatives in the PFM Territory shall be developed and prepared by PFM, at its own expense.  For sake of clarification it is understood that these Educational Materials are different from the additional minimization tools that could be required in Europe by EMA. Array shall provide reasonable assistance to PFM in connection with the foregoing, including supplying to PFM representative forms of Marketing Materials, training manuals and Educational Materials for the Product used by Array in the Array Territory, which PFM, its Affiliates and Sublicensees may adapt for use in the PFM Territory.  Any Marketing Materials, training manuals and/or Educational Materials developed and used by PFM, its Affiliates and Sublicensees for the Product in the PFM Territory shall be consistent with the Marketing Approval in the applicable country and with the reasonable trademark guidelines for use of the Binimetinib Product Trademark agreed upon by the JCC, and shall comply with all applicable Laws, rules and regulations.  PFM shall keep Array reasonably informed with respect to Marketing Materials and Educational Materials used in the in the PFM Territory and shall provide to Array copies (in electronic form) of any Marketing Materials and/or Educational Materials to be used in the Major Markets for the Product developed by PFM (and/or any of its Affiliates or Sublicensees) and any material changes to any such Marketing Materials and/or Educational Materials.

 

46

 

[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

ARTICLE VI
 PAYMENTS

 

6.1                          License Fee. PFM shall pay to Array a license fee equal to thirty million USD (US $30,000,000) within [*] following the Effective Date in accordance with the payment provisions of Article 7.  This license fee shall not be refundable or creditable against any future milestone payments, royalties or other payments by PFM to Array under this Agreement.

 

6.2                          Milestone Payments.

 

(a)                                               Milestone Payments.  In addition, PFM shall pay to Array the milestone payments set out below following the first achievement by PFM, and/or any of its Affiliates or Sublicensees, of the corresponding milestone events set out below with respect to the Product, in accordance with this Section 6.2 and the payment provisions in Article 7:

 

	
Milestone Event
    	
 
    	
Milestone Payment
    
	
 
    	
 
    	
 
    	
 
    
	
1.
    	
Receipt of Marketing Approval from   the EC [*] to treat an Indication [*]:
    	
 
    	
US$[*]
    
	
 
    	
 
    	
 
    	
 
    
	
2.
    	
Receipt of Marketing Approval from   the EC [*] to treat an Indication [*]
    	
 
    	
US$[*]
    
	
 
    	
 
    	
 
    	
 
    
	
3.
    	
Receipt of Marketing Approval from   the EC [*] to treat an Indication [*]:
    	
 
    	
US$[*]
    
	
 
    	
 
    	
 
    	
 
    
	
4.
    	
One time Sales Milestone when Annual   Royalty Bearing Net Sales [*]:
    	
 
    	
US$[*]
    
	
 
    	
 
    	
 
    	
 
    
	
5.
    	
One time Sales Milestone when Annual   Royalty Bearing Net Sales [*]:
    	
 
    	
US$[*]
    
	
 
    	
 
    	
 
    	
 
    
	
6.
    	
One time Sales Milestone when Annual   Royalty Bearing Net Sales [*]:
    	
 
    	
US$[*]
    
	
 
    	
 
    	
 
    	
 
    
	
7.
    	
One time Sales Milestone when Annual   Royalty Bearing Net Sales [*]:
    	
 
    	
US$[*]
    
	
 
    	
 
    	
 
    	
 
    
	
8.
    	
One time Sales Milestone when Annual   Royalty Bearing Net Sales [*]:
    	
 
    	
US$[*]
    

 

47

 

[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

	
Milestone Event
    	
 
    	
Milestone Payment
    
	
 
    	
 
    	
 
    	
 
    
	
9.
    	
One time Sales Milestone when Annual   Royalty Bearing Net Sales [*]:
    	
 
    	
US$[*]
    
	
 
    	
 
    	
 
    	
 
    
	
10.
    	
One time Sales Milestone when Annual Royalty   Bearing Net Sales [*]:
    	
 
    	
US$[*]
    

 

With respect to the milestones set forth in (1) through (3), the total amount of such milestones shall not exceed USD 35 Million.

 

With respect to the milestones set forth in (4) through (10), each such milestone payment shall be payable only once, provided that if more than one milestones are payable during the same calendar year, only the [*] would be payable during such calendar year and the payment of the [*] would be deferred to the subsequent calendar year in which no other milestone is otherwise payable. The total amount of such milestones shall not exceed USD 390 Million.

 

(b)                                               Reports and Payments. PFM shall notify Array in writing within [*] after the achievement of each milestone set out in Section 6.2(a) by PFM, or any of its Affiliates or Sublicensees.  The corresponding milestone payment shall be due within [*] of receipt by PFM of an invoice from Array and issued no earlier than the notice of achievement of the corresponding milestone event.

 

6.3                          Earned Royalties For Products.  During the term of this Agreement, PFM shall pay to Array, on a quarterly basis, a royalty on the Royalty Bearing Net Sales of Products by PFM, its Affiliates or Sublicensees.  Such royalty shall be paid quarterly, at the applicable rates set forth in Section 6.3 below, based on the Annual Royalty Bearing Net Sales of all Products, subject to the adjustments set forth in Sections 6.4 to 6.8 (the Royalty Payments”).

 

(a)                                                                             General.

 

(i)          Subject to the other provisions of Sections 6.4 to 6.8, the applicable royalty rate shall be as follows:

 

	
Annual   Royalty Bearing Net Sales in a
   Given Calendar Year
    	
Royalty   Rate
    

 

48

 

[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

	
 
    	
 
    
	
With respect to the portion of   Annual Royalty Bearing Net Sales lower than or equal to [*]
    	
[*]
    
	
With respect to the portion of   Annual Royalty Bearing Net Sales higher than [*]   and lower than or equal to [*]
    	
[*]
    
	
With respect to the portion of   Annual Royalty Bearing Net Sales higher than [*]   and lower than or equal to [*]
    	
[*]
    
	
With respect to the portion of   Annual Royalty Bearing Net Sales higher than [*]
    	
[*]
    

 

(ii)                         Notwithstanding Section 6.3(a)(i) and subject to the other provisions of Sections 6.4 to 6.8, the royalty rate applicable to an Annual Royalty Bearing Net Sale of a Product in a country during the Secondary Royalty Term shall be [*].

 

(b)                                               For purposes of determining the royalty rate(s) pursuant to Section 6.3 that is or are applicable hereunder on the Net Sales of Products and for determining Net Sales for the Commercial Milestones, all Annual Royalty Bearing Net Sales of all Products in all countries of the PFM Territory shall be aggregated on a calendar year basis and the applicable royalty rate shall be determined.

 

(c)                                                For purposes of determining the royalty rate applicable under Section 6.3(a)(i), the Annual Royalty Bearing Net Sales of Products for which the royalty rate is subject to adjustment under Sections 6.5 below (Reduction for Generic Competition) and of Products not subject to such adjustment shall be allocated [*].  Such allocation shall initially be made on a quarterly basis for each calendar quarter, but shall be reconciled in the royalty report under Section 6.3(c) above for the fourth quarter of each year, based on total Annual Royalty Bearing Net Sales for the full calendar year.   If as a result of such reconciliation, PFM has underpaid Array for the full calendar year, the shortfall shall be due with such final royalty payment for such calendar year.  If as a result of such reconciliation, PFM has overpaid Array for the full calendar year, PFM shall be entitled to credit such overpaid amounts against future royalties due hereunder.

 

(d)                                               Royalty Reports.  Within [*] after the end of each calendar quarter, commencing with the calendar quarter in which the First Commercial Sale occurs, PFM shall deliver to Array a report (each, a “Royalty Report”) setting out all details necessary to calculate the payments due under this Section 6.3, including:

 

49

 

[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

(i)                             gross sales of the Product in the PFM Territory in the relevant calendar quarter on a country-by-country basis;

 

(ii)                         Royalty Bearing Net Sales in the relevant calendar quarter on a country-by-country basis;

 

(iii)                     all relevant exchange rate conversions in accordance with Section 7.2;

 

(iv)                     all relevant deductions in accordance with Sections 1.60 and 6.6; and

 

(v)                         the amount of any payment due from PFM to Array, calculated in accordance with  this Article 6.

 

6.4                          Discounting.  In the event that PFM, its Affiliates or Sublicensees sell a Product to a Third Party who also purchases other products or services from PFM, its Affiliates or Sublicensees, and PFM, its Affiliates or Sublicensees discount (including rebates) the purchase price of such Product to a greater degree than PFM, its Affiliate or such Sublicensee, as applicable, generally discounts (including rebates) the price of their other products or services to such customer, or than PFM’s competitor(s) generally discount the price of Competing Products to similarly situated customers, then, the Net Sales for the sale of the Product to such Third Party shall be determined by the JSC to reflect a fair and reasonable arm’s length price  for the Product under the circumstances (taking into account the average discount given to the customer for such other products and services).

 

6.5                          Reduction for Generic Competition.

 

(a)                                               Initial Royalty Term.  During the Initial Royalty Term for a Product in a particular country of the PFM Territory, the royalty rate applicable to such Product in such country under Section 6.3(a) (i) above is subject to reduction in certain events, based on the level of competition from Generic Versions of such Product in such country as follows.   During the Initial Royalty Term for a Product in a country:

 

(i)                             If Generic Versions of such Product capture a Generic Market Share with respect to such Product in such country of [*] but [*], then for so long as Generic Version(s)

 

50

 

[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

maintain a Generic Market Share within such percentage range in such country, the royalty rate under Section 6.3(a) (i) applicable to the Annual Royalty Bearing Net Sales of such Product in such country shall be reduced by [*].

 

(ii)                         If Generic Versions of such Product capture a Generic Market Share with respect to such Product in such country of [*] or more, then for so long as Generic Versions maintain a Generic Market Share at or above such level in such country, in lieu of the royalty rate specified in Section 6.3(a) (i) above, the royalty rate applicable to Annual Royalty Bearing Net Sales of such Product in such country shall be equal to [*] plus any royalty due to by Array to [*], up to a limit of [*] of Annual Royalty Bearing Net Sales.

 

(iii)                     It is understood that the adjustment in this Section 6.5(a) shall apply to a particular Product in a particular country only during the Initial Royalty Term for such Product in such country.   After such Initial Royalty Term, any adjustment based on Generic Market Share of Generic Versions of such Product in such country will be governed by Section 6.5(b) below, if applicable.

 

(b)                                               Secondary Royalty Term.  If during the Secondary Royalty Term for a Product in a particular country, Generic Versions of such Product capture a Generic Market Share with respect to such Product in such country of [*] or more, then for so long as such Generic Versions maintain a Generic Market Share at or above such level in such country, in lieu of the royalty rate specified in Section 6.3(a)(ii) above, the royalty rate applicable to Annual Royalty Bearing Net Sales of such Product in such country shall be [*].  It is understood that the adjustment in this Section 6.5(b) shall apply to a particular Product in a particular country only during the Secondary Royalty Term for such Product in such country, and that no adjustment shall be made under this Section 6.5 to the royalty rate specified in Section 6.3(a)(ii) by reason of a Generic Market Share of [*] during the Secondary Royalty Term for a Product in a particular country.

 

(c)                                                Certain Terms.  For purposes of this Section 6.5:

 

(i)                             “Generic Version” shall mean, with respect to a Product, a non-proprietary product that: (A) is a generic medicinal version of such Product as defined in article 10(2)(b) of Directive 2001/83/EC, as amended by article 1(8) of Directive 2004/27/EC of March 31, 2004 or the equivalent Law in the applicable country; (B) is approved by the Regulatory Authorities of the applicable country and (B) is marketed in such country by an entity other than PFM, its Affiliates or its Sublicensees.

 

51

 

[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

(ii)      “Generic Market Share” means, with respect to a Product in a country, the total unit volume of Generic Version(s) of such Product sold in such country, as a percentage of the combined unit volume of such Product and such Generic Version(s), in the aggregate in such country, for the current calendar quarter (i.e., the calendar quarter for which royalties are being calculated under Section 6.3) and the preceding calendar quarter.  Such unit volumes shall be determined by the number of unit sales given for such Product and such Generic Version(s) in aggregate, during such period (based on data provided by a reputable Third Party data source generally accepted in the pharmaceutical industry in the relevant country and mutually agreed by the Parties).

 

6.6                          Third Party Licenses.  If PFM or any of its Affiliates or Sublicensees (i) becomes obliged to pay any amount to a Third Party with respect to any Blocking Patent or otherwise determines in its good faith judgment with advice from independent legal counsel that it is necessary or advisable to obtain a license from any Third Party with respect to any Blocking Patent in order to make, have made, use, sell, offer for sale or import the Product for any given country of the PFM Territory, PFM may deduct up to [*] of any such Third Party payments from the Royalty Payment; provided that such deduction shall not exceed in any calendar quarter [*] of the aggregate Royalty Payment otherwise payable in such calendar quarter, with any amounts in excess of the permitted deduction be carried forward to the subsequent calendar quarters until exhausted.  As used herein, “Blocking Patent” shall mean a Patent owned or controlled by a Third Party that covers the Product in the applicable country.

 

6.7                          Additional Studies.  In the event that one or more of the Existing Clinical Studies (i.e., NEMO, COLUMBUS or MILO) proves insufficient to obtain the  anticipated Marketing Approval for the Product for treatment of the applicable indication being pursued and additional studies are required (i) in order to obtain such Marketing Approval or (ii) as a post-approval condition for maintaining such Marketing Approval (including any study upon which the grant of a Marketing Approval is expressly conditioned, any specific study reflected in Annex II to the Marketing Approval, or any requirement to investigate a safety concern in the RMP or to evaluate the effectiveness of risk minimization activities), then, PFM shall be entitled to set off [*] of the cost of such additional studies against future Royalty Payments payable by PFM, subject to the following:  (a) PFM shall be entitled to offset the cost of such additional studies only if the [*] has been paid to Array for the indication that is the subject of such additional study, (b) such offset shall not exceed in any calendar quarter [*] of the aggregate Royalty Payment otherwise payable in such calendar (provided that any amounts in excess of the permitted deduction may be carried forward to the subsequent calendar quarters until exhausted), and (c) in no event shall the total aggregate amount of the offset with respect to any indication exceed [*].

 

52

 

[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

6.8                          Third Party Payments.  Array shall be solely responsible for all Third Party license payments, milestones and royalties owed with respect to the Product, on intellectual property that is owned or licensed by Array on or prior to the Signing Date, or any Blocking Patent of which Array was actually aware but did not disclose to PFM on or prior to the Signing Date.

 

6.9                          Aggregate Floor for Royalty Reductions.  Royalty Floor.  Notwithstanding Sections 6.5, 6.6, and 6.7, the Royalty Payment to Array shall not be reduced in any calendar quarter (a) during the Initial Royalty Term to less than [*] of the amount due under Section 6.3(a)(i) unless 6.5(a)(ii) applies in which case royalty shall be equal [*] plus any royalty due by Array to [*] of Annual Royalty Bearing Net Sales, and (b) during the Secondary Royalty Term to less than [*] of the amount due under Section 6.3(a)(ii) (provided that any amounts in excess of the permitted deduction shall be carried forward to the subsequent calendar quarters until exhausted), unless 6.5(b) applies in which case royalty shall be [*].

 

ARTICLE VII
 PAYMENTS; BOOKS AND RECORDS

 

7.1                          Payment Method.  All payments under this Agreement shall be made by bank wire transfer in immediately available funds to an account designated by the Party to which such payments are due.  Any payments or portions thereof due under this Agreement that are not paid by the date such payments are due under this Agreement shall bear interest at a rate equal Libor US Dollars one month with respect to payments in US Dollars, or the one month equivalent interbank offered rate with respect to payments in other currencies, plus in each case two percent (2%) per year, calculated on the number of days such payment is delinquent, compounded monthly and computed on the basis of a three hundred sixty five (365) day year.  This Section 7.1 shall in no way limit any other remedies available to the Parties.

 

7.2                          Currency Conversion.  Unless otherwise expressly stated in this Agreement, all amounts specified in this Agreement are in US Dollars, and all payments by one Party to the other Party under this Agreement shall be paid in US Dollars.  If any currency conversion shall be required in connection with the payment of royalties or other amounts under this Agreement, such conversion shall be calculated using the average exchange rate for the conversion of foreign currency into US Dollars, quoted for current transactions for both buying and selling US Dollars, as reported on the fixing page (“ECBREF”) published by the European Central Bank on Thomson Reuters Eikon for each Business Day of the calendar quarter to which such payment pertains.

 

7.3                          Taxes.

 

53

 

[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

(a)                                               Withholding Taxes.  If Laws or regulations require withholding by PFM of any taxes imposed upon Array on account of any royalties or other payments paid under this Agreement, such taxes shall be deducted by PFM as required by Law from such payment and shall be paid by PFM to the proper taxing authorities. PFM shall use Diligent Efforts to secure official receipts of payment of any withholding tax and shall send them to Array as evidence of such payment.  The Parties shall exercise their reasonable efforts to ensure that any withholding taxes imposed are reduced as far as possible under the provisions of any applicable tax treaty, and shall cooperate in filing any forms required for such reduction. Each Party shall cooperate with the other and furnish the other Party with appropriate documents, including Tax Documentation, to secure application of the most favorable rate of withholding tax under Applicable Law (or exemption from such withholding tax payments, as applicable).  “ Tax Documentation” means, to the extent required to alleviate withholding on payments made by PFM to Array under this Agreement, the applicable French tax forms number 5000 and 5003, as such forms may be amended from time to time in accordance with Applicable Law duly stamped and validated by the relevant governmental entity with responsibility for taxes in connection with any tax reduction or exemption under any applicable international tax treaty between France and USA.

 

(b)                                               Sales Taxes.  Any sales taxes (including any consumption tax or value added tax), use tax, transfer taxes, duties or similar governmental charges required to be paid in connection with the transfer to a Party of a Product (including for clarity, Drug Substance, Drug Product or Finished Product) produced by or on behalf of the supplying Party pursuant to this Agreement shall be the sole responsibility of the receiving Party.  In the event that the supplying Party is required to pay any such amounts, the receiving Party shall promptly remit payment to the supplying Party of such amounts.

 

7.4                          Records; Inspection.

 

(a)                                               PFM. PFM shall keep, and require its Affiliates and Sublicensees to keep, complete, true and accurate books of accounts and records (including, with respect to PFM’s FTEs and PFM’s Development Costs) for the purpose of determining the amounts payable to Array pursuant to this Agreement.  Such books and records shall be kept for at least three (3) years following the end of the calendar quarter to which they pertain.  Such records will be open for inspection by an independent auditor chosen by Array and reasonably acceptable to PFM for the purpose of verifying the amounts payable by PFM hereunder.  Such inspections may be made no more than once each Calendar Year, at reasonable times and on reasonable prior written notice.  Such records for any particular calendar quarter shall be subject to no more than one inspection.  The independent auditor shall be obligated to execute

 

54

 

[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

a reasonable confidentiality agreement prior to commencing any such inspection.  Inspections conducted under this Section 7.4(a) shall be at the expense of Array, unless a variation or error producing an underpayment in amounts payable exceeding [*] of the amount paid for a period covered by the inspection is established, in which case all reasonable costs relating to the inspection for such period and any unpaid amounts that are discovered shall be paid by PFM, together with interest on such unpaid amounts at the rate set forth in Section 7.1 above.  The Parties will endeavor in such inspection to minimize disruption of PFM’s normal business activities to the extent reasonably practicable.

 

(b)                                               Array.  Array shall keep complete, true and accurate books of accounts and records (including, with respect to Array’s FTEs and Array’s Development Costs) for the purpose of determining payments due from PFM pursuant to this Agreement.  Such books and records shall be kept for at least three (3) years following the end of the calendar quarter to which they pertain.  Such records will be open for inspection during such three (3) year period by an independent auditor chosen by PFM and reasonably acceptable to Array for the purpose of verifying the amounts payable by PFM hereunder.  Such inspections may be made no more than once each Calendar Year, at reasonable times and on reasonable prior written notice.  Such records for any particular calendar quarter shall be subject to no more than one inspection. PFM’s independent auditor shall be obligated to execute a reasonable confidentiality agreement prior to commencing any such inspection.  Inspections conducted under this Section 7.4(b) shall be at the expense of PFM, unless a variation or error producing an overpayment in amounts payable exceeding [*] of the amount paid for a period covered by the inspection is established, in which case all reasonable costs relating to the inspection for such period and any overpaid amounts that are discovered shall be paid by Array, together with interest on such overpaid amounts at the rate set forth in Section 7.1 above.  The Parties will endeavor in such inspection to minimize disruption of Array’s normal business activities to the extent reasonably practicable.

 

ARTICLE VIII
 CERTAIN COVENANTS

 

8.1                          General Diligence Obligations of PFM.

 

(a)                                               EEA Market.  PFM shall use Diligent Efforts (itself or through its Affiliates) to obtain Marketing Approvals and Pricing and Reimbursement Approvals in the countries of the EEA Market, taking into account for purposes of establishing the order in which to pursue Pricing and Reimbursement Approvals in the individual countries of the EEA Market, the sequence of approvals most likely to maximize value across the EEA Market as a

 

55

 

[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

whole, and thereafter shall use Diligent Efforts to Commercialize the Product in the EEA Market in a manner intended to maximize Net Sales in the EEA Market as a whole through a commitment of resources no less than that comprising the Committed Resource Level.

 

(b)                                               Key Countries other than the EEA Markets:  With respect to the Key Countries, other than the countries of the EEA Market, PFM shall use Diligent Efforts (itself or through its Affiliates) to obtain Marketing Approvals and Pricing and Reimbursement Approvals for and launch the Product in the Field, as promptly as practicable, taking into account for purposes of establishing the order in which to pursue Marketing Approvals and Pricing and Reimbursement Approvals in such Key Countries, the sequence of approvals most likely to maximize value in such countries as a whole, and thereafter shall use Diligent Efforts to Commercialize and maximize Net Sales of the Product in such countries as a whole.

 

(c)                                                Other Countries; Certain Limitations.  With respect to countries outside the Key Countries and EEA Markets, PFM shall use Diligent Efforts (itself or through its Affiliates or Sublicensees) to obtain Marketing Approvals and Pricing and Reimbursement Approvals for, and commercialize the Product in, the Field.

 

(d)                                               For clarity, it is understood Diligent Efforts under Section 8.1(c) above shall not require PFM to commercialize the Products in any country if it would be commercially unreasonable to do so.

 

8.2                          Exclusivity of Efforts.

 

(a)                                               To the extent permitted by applicable Laws, prior to the lapse of the Exclusivity Period, PFM and its Affiliates shall not directly distribute, sell or promote a Competing Product or grant the right to a licensee or distributor to distribute, sell or promote a Competing Product and such licensee or distributor actually starts to distribute, sell or promote such Competing Product, in any country of the PFM Territory. Without limiting any other remedies available to Array, if PFM does so, Array shall have the right to terminate this Agreement if PFM does not cure the breach within [*] of Array’s written notice to PFM.  As used herein, (i) “Competing Product” shall mean a product, other than any product containing Binimetinib or Encorafenib, that includes, as an active pharmaceutical ingredient, an agent that is a [*], (ii) “[*]” means a compound that [*], and (iii) “[*]” means a compound that [*].  For the avoidance of doubt, [*] and [*] shall not include a compound that is [*].

 

(b)                                               To the extent permitted by applicable Laws, prior to the lapse of the

 

56

 

[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

Exclusivity Period, Array or its Affiliates shall not, directly distribute, sell or promote a Competing Product or grant the right to a licensee or distributor to distribute, sell or promote a Competing Product in the PFM Territory. Without limiting any other remedies available to PFM, if Array does so and does not cure the breach within [*] of PFM’s written notice to Array, then (i) the JCC shall be dismantled, (ii)  the scope of oversight, review and coordination of the JDC, including without limitation obligations of the Parties with respect to information exchange, shall be limited to that required to continue the joint management of any ongoing Clinical Studies within the GDP; (iii) Array shall take appropriate steps and actions necessary (including by following commercially reasonable policies and procedures that are no less stringent than those customarily followed in the pharmaceutical industry when establishing firewalls) to ensure that, as applicable, (x) representatives of Array participating in the JDC meetings are not involved in any activities relating to the Competing Product and (y) there is no, direct or indirect, as applicable, disclosure, sharing or other use of any information obtained or discussed at the JDC meetings with the Competing Product program; (iv) PFM shall be released from its exclusivity obligations pursuant to Section 8.2 (a) as well as from its obligations to use Diligent Efforts to Develop and Commercialize the Product and with respect to the Committed Resource Level commitment, and (v) all payments due by PFM to Array pursuant to Article 6 shall be waived, provided that notwithstanding the foregoing, for so long as royalty payments continue to be due to [*] based on the activities of PFM, its Affiliates or Sublicensees, PFM shall be obligated pay Array the amount of such royalty payments (the remedies in subclauses (i) through (v) being together referred to as, “Specific Remedies”).

 

(c)                              Notwithstanding Section 8.2(a), if (i) PFM merges or consolidates with, is otherwise acquired by, or acquires, a Third Party, or (ii) if Array merges or consolidates with, or acquires a Third Party, and in each case if such Third Party (or any of its Affiliates) is as of the effective date of such transaction engaged in the marketing, sale, promotion or filing of (or holds) a MAA with respect to, a Competing Product, (a “Competing Product Affiliation Transaction”), and such Party or its relevant Affiliate (the “Electing Party”) notifies  the other Party (the “non-Electing Party”) in writing within ninety (90) days after the effective date (i.e., after any pre-clearance or similar regulatory approval periods have expired) of such Competing Product Affiliation Transaction that it has elected one of the two options set forth below, and thereafter complies with the provisions below relevant to such election, then if PFM is the Electing Party, Array’s right to terminate this Agreement pursuant to Section 8.2(a) by reason of such Competing Product  shall be suspended, and if Array is the Electing Party, PFM’s rights to the remedies described in Section 8.2(b) shall be suspended.

 

57

 

[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

(A)                           divest itself of rights to such Competing Product or terminate any marketing, sale, promotion or filing of an MAA with respect to such Competing Product (subject to any regulatory requirements to complete ongoing Clinical Studies) and notify the non-Electing Party in writing of such divestiture or termination within [*] months after the effective date of such Competing Product Affiliation Transaction, provided that if the Electing Party demonstrates to the non-Electing Party that it is diligently engaged in negotiations relating to any such divestiture, and such Competing Product is not affecting the Product or PFM’s activities with respect to the Product, such [*] month period may be extended with respect to the completion of such divestiture by mutual agreement for a period not to exceed [*] months from the closing date of such Competing Product Affiliation Transaction (it being understood that a divestiture may include an out-license of the rights to such Competing Product so long as the Electing Party does not retain any rights to itself or through Affiliates to Develop or commercialize the Competing Product); or

 

(B)                           offer to contribute such Competing Product to the collaboration contemplated hereunder, and, if the non-Electing Party agrees to include such Competing Product in the collaboration, the Parties shall negotiate in good faith the terms attaching to such Competing Product, provided that, unless otherwise agreed by the Parties, an agreement shall be reached within [*] months after the date of such Competing Product Affiliation Transaction is signed by the Electing Party.  If the non-Electing Party declines the Electing Party’s offer to include such Competing Product within the collaboration, or if having accepted such offer, the Parties are unable to agree upon terms for including such Competing Product in the collaboration, then if PFM is the Electing Party, Array shall have the right to terminate this Agreement upon [*] days written notice to PFM unless PFM notifies Array in writing within such [*] day period that it has elected to divest itself of rights to such Competing Product or terminate any marketing, sale, promotion or filing of an MAA with respect to such Competing Product,  and thereafter complies with the provisions of Section 8.2(c)(A) with respect to such divestiture, and if Array is the Electing Party, PFM shall be entitled to the rights to the remedies described in Section 8.2(b) upon [*] days written notice to Array unless Array notifies Array in writing within such [*] day period that it has elected to divest itself of rights to such Competing Product or terminate any marketing, sale, promotion or filing of an MAA with respect to such Competing Product,  and thereafter complies with the provisions of Section 8.2(c)(A) with respect to such divestiture.

 

(d)                             It is understood and agreed that Array’s grant of rights to AstraZeneca under the AZ Agreement shall not constitute a breach of Section 8.2(b).  In the event that the rights to the [*] Licensed to AstraZeneca are returned to Array by AstraZeneca pursuant to a termination of the AZ Agreement or otherwise and such return would result in a violation of Section 8.2(b), Array shall have a right to avail itself of the options described in Section 8.2(c) above by notifying

 

58

 

[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

PFM in writing within [*] days after the effective date of the transfer back to Array of all rights to the [*] Licensed to AstraZeneca, that it has elected one of the two options set forth in Section 8.2(c) above, in which case the terms of Section 8.2(c) shall apply mutatis mutandis, and thereafter provided that Array complies with the provisions in Section 8.2(c) relevant to such election, PFM’s rights to the remedies described in Section 8.2(b) shall be suspended.

 

ARTICLE IX
 PRODUCT MANUFACTURING AND SUPPLY

 

9.1                          General.

 

(a)                             It is understood that Array procures supplies of Drug Substance, Drug Product and Finished Product (collectively, the “Materials”) from Third Party contractors.  Subject to the terms and conditions of this Agreement, Array shall supply, or secure supply of, PFM’s requirements for Materials for the PFM Territory pursuant to one or more supply agreements to be entered into by the Parties as set forth below.

 

(b)                             For purposes of this Article 9, “Drug Substance” shall mean active ingredient containing Binimetinib or Encorafenib that is intended to furnish pharmacological activity or other direct effect in the diagnosis, cure, mitigation, treatment, or prevention of disease or to affect the structure or any function of the human body, but does not include intermediates used in the synthesis of such ingredient ; “Drug Product” shall mean a finished dosage form containing Drug Substance; and “Finished Product” shall mean finished (i.e., fully packaged and labelled) Drug Product for commercial supply.

 

9.2                          Clinical Supply.  The JDC and the JMC shall establish as soon as practicable following the Effective Date procedures for the supply of Products to PFM for use in performing PFM’s Development activities under the GDP or Additional Development Activities, and the Parties shall enter into a clinical supply agreement within three (3) months of the Effective Date pursuant to which:

 

(a)                             Array shall procure Materials on behalf of and as reasonably requested in writing by PFM, consistent with the key terms set forth in Exhibit 9.2 as well as any customary terms, which terms shall in all cases be consistent with Array’s contractual arrangements with its Third Party suppliers, and taking into account the regulatory requirements imposed on PFM;

 

(b)                             Array may place orders for Product with its Third Party supplier(s) on PFM’s behalf, or, subject to PFM and the Third Party supplier(s) entering into an agreement or other arrangement therefor, Array shall arrange with such supplier(s) for PFM to place such

 

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[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

orders, for shipment to PFM and for PFM to pay for such Product directly to the particular supplier.  Array shall not require PFM to place orders directly with a Third Party supplier if the Third Party supplier is unwilling to fulfill such orders on terms as favorable to PFM as the terms such Third Party supplier(s) have extended to Array.

 

9.3                          Commercial Supply.  Within [*] of the Effective Date, the Parties shall enter into a commercial supply agreement (a “Supply Agreement”) on commercially reasonable terms documenting the arrangement pursuant to which:

 

(a)                             Array shall supply PFM’s reasonable requirements for Materials for the PFM Territory, which Supply Agreement shall contain forecasting and ordering procedures (including lead times), product specifications, delivery terms and other appropriate provisions mutually acceptable, consistent with the key terms set forth in Exhibit 9.2 as well as any customary terms, which terms shall in all cases be consistent with Array’s contractual arrangements with its Third Party suppliers, and taking into account the regulatory requirements imposed on PFM as the holder the Marketing Approval;

 

(b)                             Array has made arrangements with Novartis to transfer and validate at no cost to PFM all technology reasonably necessary for the manufacturing of the Products by Almac, Novasep and Catalent so that commercial quantities of Product can be supplied to PFM and released for the PFM Territories.

 

(c)                              Materials supplied by Array to PFM for commercial sale of the Products shall be charged to PFM in an amount equal to Array Cost of Goods).

 

9.4                          Limitation; Manufacturing by PFM.  Array shall (a) cooperate fully with PFM to make available for the benefit of PFM the benefits of Array’s supply agreements and/or arrangements with its Third Party suppliers of Materials and (b) administer such agreements or arrangements diligently and pursue its rights and remedies thereunder.

 

9.5                          Possible Technology Transfer.  Notwithstanding anything in this Agreement, after receipt of Marketing Approval for a particular Product (i.e., either a Product containing Binimetinib or a Product containing Encorafenib), PFM shall have the right (but not the obligation) to manufacture and/or package, or engage a Third Party to manufacture and/or package, PFM’s requirements of particular Materials (e.g., PFM’s requirements of Drug Product or of Finished Product or PFM’s requirements of Drug Product of a particular Product) related to any Product for the PFM Territory.  Notwithstanding the above, with respect to the Product containing Encorafenib which will be manufactured by [*] in the US, prior to receipt of Marketing Approval for such

 

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[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

Product, PFM shall have the right (but not the obligation) to package or engage a Third Party to package PFM’s requirements of Drug Product and to control and release Finished Product containing Encorafenib.  Promptly following PFM’s request, Array shall transfer, or cause to be transferred, to PFM or such Third Party manufacturer all Array’s Know-How that is necessary, useful or actually used for such manufacture, packaging and/ or testing and release of Materials (and the cost of such transfer of Array Know-How shall be borne by PFM), and shall make personnel of Array reasonably available to assist PFM and/or its contractor in implementing the Array Know-How necessary to manufacture and/or control and release such Materials.  In any event the Parties shall cooperate to use the same process in manufacturing Materials for use in Development.  Upon completion of the technology transfer contemplated in this Section 9.5 with respect to any Material, Array’s supply obligations under Sections 9.2 and 9.3 with respect to such Material shall terminate and PFM shall assume all supply-related liability with respect to such Material which it manufactures or sources from Third Parties.

 

9.6                          Companion Diagnostics.  Each Party use Diligent Efforts to ensure availability in the other Party’s Territory any Companion Diagnostic developed by or on behalf of such Party for use with one or more Products.  In furtherance of the preceding sentence

 

(a)                                               Existing Clinical Studies.  It is understood that Array is contracting or has contracted with Third Parties to develop Companion Diagnostics (i) for use with Binimetinib for the treatment of NRAS melanoma and (ii) for use with Binimetinib and Encorafenib for the treatment of BRAF melanoma.  The Parties shall discuss and agree on the strategy to ensure such Third Party contractor makes such Companion Diagnostics available with respect to the Development, the registration and the Commercialization of the relevant Product(s) in such Indications in countries where the relevant Product will be Commercialized.  In the event such Third Party contractor(s) fails to commercialize or ceases commercialization of a Companion Diagnostic subject to this Section 9.6(a), Array shall cooperate with PFM either to obtain from such Third Party contractor(s) quantities of such Companion Diagnostic to supply PFM’s reasonable requirements for the PFM Territory or enable PFM to conclude appropriate agreements with such Third Party contractor for commercialization of such Companion Diagnostics in the PFM Territory.

 

(b)                                               Other.  It is anticipated that the development of any necessary Companion Diagnostics for use with one or more Products in a particular Indication, either under the GDP or under Additional Development Activities, will be outsourced to Third Party subcontractor(s) by the Party responsible for the relevant Clinical Study under the GDP or performing Additional Development Activities.  The Parties shall discuss and agree on the strategy to ensure such Third Party contractor makes such Companion Diagnostics available

 

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[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

with respect to the Development, the registration and the Commercialization of the relevant Product(s) in such Indications in countries where the relevant Product will be Commercialized.  In the event such Third Party contractor(s) fails to commercialize or ceases commercialization of a Companion Diagnostic subject to this Section 9.6(b), the Party contracting for such Companion Diagnostic development shall cooperate with the other Party either to obtain from such Third Party contractor(s) quantities of such Companion Diagnostic to supply the other Party’s reasonable requirements at the cost charged by the Third Party contractor to the contracting Party plus any other documented out-of-pocket costs and reasonable internal costs actually incurred by the contracting Party directly in procuring such Companion Diagnostic. or enable the other Party to conclude appropriate agreements with such Third Party contractor for commercialization of such Companion Diagnostics in the other Party’s Territory.

 

9.7                          [*].  It is understood that Array benefits from the right to use certain [*] in connection with the development of the Products.  Array shall (i) to the extent permitted under the [*], supply, or secure supply of, PFM’s requirements for the conduct of Clinical Studies of a Product(s) in combination with a [*] under the GDP or under Additional Development Activities; of (ii) enable PFM to conclude appropriate agreements with [*] for the conduct of such combination studies.  In the event of supply pursuant to (i) above, Array shall supply the relevant [*] to PFM at Array Cost of Goods.

 

ARTICLE X
 CONFIDENTIALITY

 

10.1                 Confidential Information.  Except as expressly provided in this Agreement, the Parties agree that the receiving Party shall not publish or otherwise disclose, and shall not use for any purpose, any information furnished to it by the other Party hereto pursuant to this Agreement (collectively, “Confidential Information”), without the prior written consent of the disclosing Party.  Notwithstanding the foregoing, Confidential Information shall not include information that, in each case as demonstrated by written documentation:

 

(a)was already known to the receiving Party, other than under an obligation of confidentiality, at the time of disclosure or, was developed by the receiving Party independent of disclosure by the disclosing Party;

 

(b)                                               was generally available to the public or otherwise part of the public domain at the time of its disclosure to the receiving Party;

 

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[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

(c)became generally available to the public or otherwise part of the public domain after its disclosure and other than through any act or omission of the receiving Party in breach of this Agreement;

 

(d)                                               was subsequently lawfully disclosed to the receiving Party on a non-confidential basis by a person other than the disclosing Party, and who did not directly or indirectly receive such information from disclosing Party; or

 

(e)is developed by the receiving Party without use of or reference to any information or materials disclosed by the disclosing Party.

 

The Parties agree that Data generated in the course of performing the Global Development Plan shall be deemed Confidential Information of both PFM and Array, it being understood that each Party may use such Confidential Information for any purpose, subject to the requirements of Sections 10.3, 10.4, 10.5 and 10.7.

 

10.2                 Permitted Disclosures.  Notwithstanding the provisions of Section 10.1 above and subject to Sections 10.3 and 10.4 below, a receiving Party hereto may disclose the disclosing Party’s Confidential Information to its Affiliates, licensees (with respect to Array), permitted Sublicensees (with respect to PFM) and any other Third Parties to the extent such disclosure is reasonably necessary to exercise the rights granted to it, or reserved by it, under this Agreement, prosecuting or defending litigation, complying with applicable governmental Laws or regulations or the rules of any public stock exchange, submitting information to tax or other Governmental Authorities or conducting Clinical Studies hereunder with respect to the Product.  If a receiving Party is required by Law or regulations to make any such disclosure of the disclosing Party’s Confidential Information, to the extent it may legally do so, it will give reasonable advance notice to the disclosing Party of such disclosure and, save to the extent inappropriate in the case of patent applications or otherwise, shall use diligent efforts to secure confidential treatment of such Confidential Information of the disclosing Party prior to its disclosure (whether through protective orders or otherwise).  For any other disclosures of the other Party’s Confidential Information, including to Affiliates, licensees (with respect to Array), permitted Sublicensees (with respect to PFM) and other Third Parties, a Party shall ensure that the recipient thereof is bound by a written confidentiality agreement as materially protective of such Confidential Information and the disclosing Party as this Article 10.  For clarity, it is understood that Array may use and disclose, in accordance with the foregoing, any PFM Know-How provided to Array by PFM to the extent reasonably necessary for the Development, commercialization, marketing, promotion and/or distribution of the Product for the Array Territory, subject to the requirements of Sections 10.3, 10.4, 10.5 and 10.7.

 

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[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

10.3                 Confidential Terms.  Each Party agrees not to disclose to any Third Party the terms of this Agreement without the prior written consent of the other Party hereto, except each Party may disclose the terms of this Agreement:  (a) to advisors (including financial advisors, attorneys and accountants), actual or potential acquisition partners or private investors, and others on a need to know basis, in each case under appropriate confidentiality provisions substantially equivalent to those in this Agreement; or (b) to the extent necessary to comply with applicable Laws and court orders, including securities Laws, regulations or guidances; provided that in the case of paragraph (b) the disclosing Party shall promptly notify the other Party and (other than in the case where such disclosure is necessary, in the reasonable opinion of the disclosing Party’s legal counsel, to comply with securities Laws, regulations or guidances) allow the other Party a reasonable opportunity to review the proposed disclosure and oppose with the body initiating the process and, to the extent allowable by Law, to seek limitations on the portion of the Agreement that is required to be disclosed.  In addition, with respect of the required disclosure of a redacted version of this Agreement pursuant to applicable securities Laws, regulations or guidance, the disclosing Party shall provide the other Party with a draft of any disclosure it intends to issue at least fifteen (15) Business Days in advance and take into account the other Party’s reasonable comments.

 

10.4                 Scientific Papers.  Each Party through the JDC or its designee shall provide to the other, prior to submission for publication, a draft of any articles and papers containing Confidential Information or concerning a Product which have been prepared by or on behalf of such Party (or by a Clinical Study site contracted by such Party as sponsor of the relevant Clinical Study) or under the GDP (each a “Scientific Paper”) to be published in indexed medical and scientific journals and similar publications (“Medical Journals”).  Commencing with the receipt of such draft Scientific Paper, the receiving Party shall have fifteen (15) Business Days to notify the sending Party of its observations and suggestions with respect thereto (it being understood that, during such fifteen (15) Business Day period, no submission for publication thereof shall take place) and the Parties shall discuss these observations and suggestions.  The Party proposing to publish such Scientific Paper shall, in good faith, consider the comments made by the other Party, particularly if disclosure may be prejudicial to the other Party’s opportunity to obtain any Patent.  The other Party may require that the publication be suspended for a period of time not exceeding sixty (60) days if a Patent may be filed using the Data or Know How covered in the proposed publication.  Neither Party will publish or present any Confidential Information of the other Party without such other Party’s prior written consent.  The sending Party shall provide to the Receiving Party copies of any final Scientific Paper accepted by a Medical Journal, within ten (10) Business Days after the approval thereof (upon availability and distribution of such information assuming that providing such information is acceptable taking into consideration the publishers’ need to comply with any healthcare compliance guidelines).  To enable free exchange of copyrighted material between the Parties, each Party agrees that it has or shall (i) obtain and maintain, at its

 

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[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

own expense, an annual copyright license or equivalent license from the copyright clearance center and (ii) list the other Party as a collaborator in an agreement with the copyright clearance center if required by such agreement.

 

10.5                 Abstracts, Posters and Slide Decks.  If a Party (or a Clinical Study site contracted by such Party as sponsor of the relevant Clinical Study) intends to present findings with respect to a Product at symposia or other meetings of healthcare professionals, or international and/or US or European congresses, conferences or meetings organized by a professional society or organization (any such occasion, a “Scientific Meeting”), such Party through the JDC or its designee shall provide to the other, within ten (10) Business Days prior to submission or presentation, as the case may be, copies of (i) all abstracts that will be submitted for publication (ii) all draft slide presentations for use in oral presentations, and (iii) all posters that will be presented at such Scientific Meeting, in each case, concerning the Product which have been prepared by or on behalf of one of the Parties, for submission or presentation.  Commencing with the receipt of any such abstract or poster, the receiving Party shall have six (6) Business Days to inform the sending Party of its observations and suggestions with respect thereto (it being understood that, during such review period, as applicable, no submission or presentation thereof shall take place) and the Parties shall discuss these observations and suggestions.  The Party proposing to publish such an abstract or make such a presentation shall, in good faith, consider the comments made by the other Party, particularly if disclosure may be prejudicial to the other Party’s opportunity to obtain any patent rights.  The other Party may require that the abstract or presentation be suspended for a period of time not exceeding sixty (60) days if a Patent may be filed using the Data or Know-How covered in the proposed abstract or presentation.  A Party will not publish or present any Confidential Information of the other Party without such other Party’s prior written consent.  The sending Party shall provide to the Receiving Party copies of (i) all final abstracts as soon as reasonably practicable after the approval of the Scientific Meeting, and (ii) all final posters accepted for publication or to be presented five (5) Business Days prior to the planned publication or presentation thereof (upon availability and distribution of such information assuming that providing such information is acceptable taking into consideration the publishers’ need to comply with any healthcare compliance guidelines).  The Parties shall use good faith and reasonable efforts to provide the other Party with draft slide presentations in accordance with the foregoing time periods.

 

10.6                 Registries.  Each Party shall be free to (a) register/publish the Clinical Studies they are sponsoring with respect to the Product, and (b) disclose any Data from such registered Clinical Trials concerning the Product, in each case on ClinicalTrials.gov or in similar clinical trial registries; provided, however, that the Party proposing to make such disclosure shall have provided the other Party a copy of the synopsis of the Clinical Study or a detailed description of

 

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[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

any other proposed disclosure, as applicable, that it proposes to have published in such clinical trial registry at least thirty (30) days prior to such registration or disclosure and shall, in good faith, consider the comments made by the other Party regarding the proposed registration or disclosure and the protection of any intellectual property contained therein.

 

10.7                 Press Releases.  Notwithstanding anything to the contrary in Section 10.3, the Parties have agreed on a mutual press release to announce the execution of this Agreement in the form attached in Exhibit 10.7, together with a corresponding Question & Answer outline for use in responding to inquiries about the Agreement; thereafter, each Party may each disclose to Third Parties the information contained in such press release and Question & Answer outline without the need for further approval by the other Party.  Each Party may also desire to issue subsequent press releases or other public statements relating to this Agreement or activities hereunder, including information which pertains to the development and regulatory progress of any Product.  Such disclosure may include, without limitation, the achievement of a Milestone and any payments received in respect of such Milestone, as well as periodic updates regarding the status of the development and/or regulatory affairs pertaining to such Product.  The Parties agree to consult with each other reasonably and in good faith with respect to the text of such press releases or other disclosures and obtain the approval of the other Party, no later than within five (5) Business Days prior to the issuance thereof; provided, however, that a Party may not unreasonably withhold or delay consent to such releases unless such release would adversely affect the rights or interests of such Party.  After release of a press release, each Party may each disclose to Third Parties the information contained in such press release without the need for further approval by the other.

 

10.8                 Prior Non-Disclosure Agreements.  Upon execution of this Agreement, the terms of this Article 10 shall supersede any prior non-disclosure, secrecy or confidentiality agreement between the Parties, including the Confidentiality Agreement between the Parties dated February 3, 2015. Any information disclosed under such prior agreements shall be deemed disclosed under this Agreement.

 

ARTICLE XI

 

PATENT PROSECUTION AND ENFORCEMENT

 

11.1                 Ownership of Inventions.

 

(a)Title to all inventions and other intellectual property made solely by PFM personnel (or that of any Affiliate) in connection with this Agreement shall be owned by PFM (or its respective Affiliate).

 

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[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

(b)                                               Title to all inventions and other intellectual property made solely by Array personnel in connection with this Agreement shall be owned by Array.

 

(c)                                                Title to all inventions and other intellectual property made jointly by personnel of Array and PFM in connection with this Agreement shall be jointly owned by Array and PFM.

 

(d)                                               Except to the extent any jointly-owned inventions or intellectual property are included in subject matter licensed by one Party to the other Party under this Agreement, each Party may only practice any such jointly-owned inventions or intellectual property for its own internal purposes, and neither Party shall have the right to enforce, license, or assign such jointly-owned inventions or intellectual property, without the prior written consent of the other Party.

 

(e)                                               PFM hereby grants to Array a non-exclusive, royalty free license, with the right to sublicense, under any Improvements to make, have made, use, sell, offer for sale, import, the Products for use in the Array Territory.  As used herein, “Improvements” means any Patent, invention or other intellectual property made by or under authority of PFM (including any PFM Know-How) using, or in connection with Development, Manufacture and/or Commercialization, of, the Product, in each case, to the extent the same is owned or Controlled by PFM or any of its Affiliates without any obligation to make a payment to a Third Party as a result of the grant of the license to Array.

 

11.2                 Prosecution and Maintenance of Array Patents.

 

(a)                                               Prosecution of Array Patents.  As between PFM and Array, Array shall, have responsibility for the filing, prosecution and maintenance of all Array Patents in the PFM Territory at Array’s costs.  Array agrees to inform with sufficient advance notice and coordinate with PFM with respect to patent prosecution or other proceedings with respect to the Array Patents.  Array shall provide PFM with copies of each draft patent application to be filed as well as copies of each office action received from the relevant patent offices in each country of the PFM Territory, in each case with enough lead time where reasonably practicable, to enable PFM to review and comment on such application or action; provided that Array shall have no obligation to delay any action or response pending receipt of such comments or suggestions.  Additionally, Array will provide PFM with copies of the patent applications and responses to offices actions it ultimately files with the patent offices in the EEA Markets and Key Countries Territories, and any additional country where PFM informs Array of its intent to Develop and register the Product. If Array determines not to file within

 

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[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

any jurisdiction requested by PFM, not to continue the prosecution of, or not to continue to maintain or defend, any Array Patent in any country in the PFM Territory, or if Array otherwise determines to abandon any such Array Patent, Array shall promptly notify PFM of such determination sufficiently in advance to permit PFM to undertake or continue the prosecution, maintenance or defense of such Array Patent without a loss of rights, and PFM shall have the right to undertake or continue such prosecution, maintenance or defense at its sole cost and expense, then PFM may deduct all such costs and expenses incurred in prosecuting such Array Patent from any payments due to Array under Section 6.4.   PFM shall hold all information disclosed to it under this Section 11.2 as confidential.

 

(b)                                             Prosecution of Joint Patents.  Prosecution of any Joint Patent shall be solely as mutually agreed.

 

(i)          Patent Term Extensions.  Array shall have the right, in consultation with PFM with respect to the Array Patents, and PFM shall have the right, with respect to any Patents owned or Controlled by PFM, its Affiliates of Sublicensees, related to the Product, to file all applications and take actions necessary to obtain patent term extensions, or similar additional or supplemental protection, with respect to the Product under statutes in any other country within the PFM Territory, which extensions shall be owned by the Party that owns or Controls the underlying Patent.  If such Party declines to pursue such patent term extensions, then the other Party shall have the right on behalf of such Party to file all such applications and take all such actions necessary to obtain such patent term extensions (or similar additional or supplemental protection) with respect to the Product.  In each case, the Parties shall fully cooperate to obtain such extensions and additional protection.

 

11.3                 Enforcement.

 

(a)                                               Enforcement Actions.

 

(i)          In the event that Array or PFM becomes aware of actual or threatened infringement or misappropriation of any Array Patent or Array Know-How in any country by the manufacture or sale or use of an unauthorized version of a Product (“Infringing Product”), that Party shall promptly notify the other Party in writing and the Parties shall consult with each other with respect to the strategy in response to such Infringing Product.  PFM shall have the first right, but not the obligation, to initiate proceedings or take other appropriate action in PFM Territory, at its own expense, against any such Third Party, and Array shall have the sole right, but not the obligation, to initiate proceedings or take other appropriate action in Array Territory, at its own expense, against any such Third Party.  If PFM does not initiate proceedings or take other

 

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[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

appropriate action within one hundred twenty (120) days of receipt of a request by Array to initiate an enforcement proceeding, or if a legal proceeding must be commenced earlier than such 120-day period to avoid a loss of rights, then no later than five (5) days prior to such deadline, then Array shall be entitled to initiate infringement proceedings or take other appropriate action against an Infringing Product at its own expense and to include PFM as a nominal party plaintiff.  The Party conducting such action shall have full control over its conduct, including settlement thereof; provided, however, that the Party conducting such action may not settle any such action, or make any admissions or assert any position in such action, in a manner that would materially adversely affect the rights or interests of the other Party, without the prior written consent of the other Party, which shall not be unreasonably withheld or delayed.  In any event, the Parties shall assist one another and cooperate in any such litigation at the other’s reasonable request.

 

(ii)      With respect to Infringing Products containing Binimetinib, PFM’s rights under Section 11.3(a)(i) are subject to the rights previously granted to AstraZeneca AB (“AZ”) pursuant to Sections 8.3.1 and 8.3.3 of that certain Collaboration and License Agreement between Array and AZ, effective as of December 18, 2003, as amended by that certain Amendment to Collaboration and License Agreement, between Array and AZ, effective as of June 1, 2009 (collectively, the “AZ Agreement”). For the avoidance of doubt, the rights granted to or retained by Array pursuant to Sections 8.3.1 and 8.3.3 of the AZ Agreement shall, to the extent relating to Infringing Products containing Binimetinib, be subject to this Agreement, including this Section 11.3.  Without limiting the preceding sentence, [*].  Any enforcement actions initiated by AZ with respect to an Infringing Product shall be deemed initiated by Array for purposes of Section 11.3(a)(i), and the costs and expenses incurred by Array in such enforcement action shall include any costs and expenses reimbursed or required to be reimbursed by Array to AZ in accordance with the AZ Agreement in such enforcement action. Additionally it is further understood that notwithstanding anything to the contrary in this Agreement, the AZ Agreement, and the rights granted to AZ thereunder, shall in no event constitute a breach of Sections 8.2(b) and 15.1.

 

(b)                                               Recovery.  Array and PFM shall recover their respective actual out-of-pocket expenses (including attorneys’ fees), or equitable proportions thereof, associated with any litigation against infringers undertaken pursuant to Section 11.3(a) above or settlement thereof from any resulting recovery made by either Party.  Any excess amount of such a recovery shall be allocated as follows: (i) if PFM initiated such litigation, [*] of such excess amount shall be retained by PFM and [*] by Array, and (ii) if Array initiated such litigation, Array shall retain [*] of such excess amount and PFM shall obtain [*] of such excess amount, to the extent such excess amount represents damages relating to manufacture or sale or use of an Infringing Product in the PFM Territory.

 

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[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

(c)                                                Cooperation.  The Parties shall keep one another informed of the status of their respective activities regarding any litigation or settlement thereof concerning the Array Patents or the Array Know-How within the PFM Territory and shall assist one another and cooperate in any such litigation at the other’s reasonable request (including joining as a party plaintiff to the extent necessary and requested by the other Party).

 

11.4                 Third Party Infringement Claims.  If the production, sale or use of any Product in the PFM Territory pursuant to this Agreement results in a claim, suit or proceeding alleging patent infringement against Array or PFM (or their respective Affiliates, licensees or Sublicensees) (collectively, “Infringement Actions”), such Party shall promptly notify the other Party hereto in writing.  The Party subject to such Infringement Action shall have the right to direct and control the defense thereof, at its own expense with counsel of its choice; provided, however, that the other Party may participate in the defense and/or settlement thereof, at its own expense with counsel of its choice.  In any event, the Party that is subject to the Infringement Action agrees to keep the other Party hereto reasonably informed of all material developments in connection with any such Infringement Action. PFM agrees not to settle such Infringement Action, or make any admissions or assert any position in such Infringement Action, in a manner that would adversely affect the allegedly infringing Product or the manufacture, use or sale of such Product within or outside the PFM Territory, without the prior written consent of Array; and Array agrees not to settle such Infringement Action, or make any admissions or assert any position in such Infringement Action, in a manner that would adversely affect the allegedly infringing Product, or the packaging, use or sale of such Product, within the PFM Territory, without the prior written consent of PFM, which shall not be unreasonably withheld or delayed.

 

11.5                 Patent Marking.  To the extent required by applicable Laws, PFM agrees to mark, and have its Affiliates and Sublicensees mark, all patented Products they sell or distribute pursuant to this Agreement in accordance with the applicable patent statutes or regulations in the country or countries of sale thereof.

 

11.6                 Recordation.   In those countries where PFM wishes to record its patent licenses, Array will provide to PFM, on PFM’s written request, a separate license for the Array Patents, and PFM will arrange for the recordation of such license with the appropriate governmental agency, at PFM’s expense, promptly following receipt of such license from Array.  The Parties shall cooperate in the preparation and execution of such documents and Array shall provide all reasonable assistance to PFM in this respect.

 

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[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

ARTICLE XII
 TRADEMARKS

 

12.1                 Display.

 

(a)                                               All packaging materials, labels and Marketing Materials for the Products shall display the Product Trademarks and no other product-specific trademarks or branding.

 

(i)          Products Containing Binimetinib.  Where possible, PFM shall utilize “[*]” as the Product Trademark for Products containing Binimetinib.  If the use of “[*]” is not advisable for legal, regulatory or other material reasons outside the Parties’ reasonable control, in one or more countries of the PFM Territory, PFM shall utilize “[*]” as such Product Trademark is such country or countries.  If neither “[*]i” not “[*]” can be used (or if it is not advisable to use them) for legal, regulatory or other material reasons outside the Parties’ reasonable control, in one or more countries of the PFM Territory, PFM may select an alternative Product Trademark reasonably acceptable to Array for use in such country or countries, with any disputes being referred to the JSC for resolution, it being understood that in resolving any such dispute the JSC shall give preference to the creation of a single brand for Products containing Binimetinib in countries where neither “[*]” or “[*]” can be used.

 

(ii)      Products Containing Encorafenib.  The JCC shall reasonably consider whether the Parties shall use a global Product Trademark in connection with the commercialization of Products containing Encorafenib.  If the JCC cannot reach consensus with regard to whether a global Product Trademark should be used or the JCC determines that the Parties should not use a global Product Trademark, then Array shall select and propose, and the JCC shall consider and approve, a Product Trademark for use in the Array Territory in connection with the commercialization of such Products, and PFM shall select and propose, and the JCC shall consider and approve, a Product Trademark(s) for use in the PFM Territory in connection with the commercialization of such Products.  The failure of the JCC to reach consensus with regard to whether a global Product Trademark should be used in connection with the commercialization of Products containing Encorafenib shall not be a matter subject to escalation and resolution under Sections 3.6,  17.1and 17.2.  Such Products shall be promoted and sold, in accordance with the provisions of this Agreement, in the PFM Territory and the Array Territory under such Product Trademarks unless any such Product Trademark cannot be legally used to promote and sell the Product in a country, in which case an alternative Product Trademark proposed by PFM, if such country is a country in the PFM Territory, or Array, if such country is in the Array Territory, and approved by the JCC shall be used in such country.  PFM (or its Affiliates, as appropriate) shall own and retain all rights to such Product Trademark(s) in the PFM Territory, and all goodwill

 

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[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

associated therewith throughout the PFM Territory, and Array (or its Affiliates, as appropriate) shall own and retain all rights to such Product Trademark(s) in the Array Territory, and all goodwill associated therewith throughout the Array Territory.

 

(b)                                               Each Product shall be sold in the PFM Territory under the trade name PFM or other trade name chosen by PFM and the logo of PFM; provided, however that to the extent permissible under applicable Law within the PFM Territory, such packaging materials, labels and Marketing Materials shall also display the trade name of Array in reasonable size and prominence, as reasonably approved by Array.  The trademarks of PFM, trade dress, style of packaging and the like with respect to the Product in the PFM Territory may be determined by PFM in a manner that is consistent with PFM’s standard trade dress and style, but shall be subject to the approval by the JCC to ensure the same are consistent with Array’s global trademark guidelines.

 

12.2                 Grant of License.  Subject to the terms and conditions of this Agreement, Array hereby grants, and shall cause its Affiliates to grant, to PFM a royalty-free, fully paid up, co-exclusive license to use the Product Trademark(s) and Internet domain names described in Section 12.1 solely for the purpose of commercializing the Products in the PFM Territory in accordance with this Agreement.  PFM hereby grants, and shall cause its Affiliates to grant, to Array a royalty-free, fully paid up, co-exclusive license to use the Product Trademark(s) and Internet domain names described in Section 12.1 solely for the purpose of conducting Development activities with respect to the Product in the Array Territory, in accordance with this Agreement.

 

12.3                 Registration of Trademarks and Trade Dress.

 

(a)                                               Products Containing Binimetinib.  If the Product Trademark for Products containing Binimetinib is [*] or [*], Array (or its designee) shall use Diligent Efforts to file and register at Array’s expense and in its own name (to the extent permitted by applicable Law), appropriate registrations for such Product Trademarks in the PFM Territory.  If, however, neither [*] nor [*] is available or desirable in a given country or countries, PFM agrees to file and register, at PFM’s expense and name, appropriate registrations for an alternative Product Trademark (selected in accordance with Section 12.1(a)(i)) in such country or countries of the PFM Territory.  As between the Parties, PFM shall have the sole right to file at its expense and in its own name, appropriate registrations for the trade dress utilized with the Product in the PFM Territory.

 

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[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

(b)                                               Products Containing Encorafenib.  If the JCC determines that the Parties shall use a global Product Trademark in connection with the commercialization of Products containing Encorafenib, registration and filing of such global Product Trademark shall be solely as mutually agreed.  Such trademark shall be filed and prosecuted at Array’s costs. If the JCC cannot reach consensus with regard to whether a global Product Trademark should be used or the JCC determines that the Parties should not use a global Product Trademark in connection with the commercialization of Products containing Encorafenib, then each Party will use Diligent Efforts to file and register at such Party’s expense and in its own name (to the extent permitted by applicable Law), appropriate registrations for such Product Trademarks (selected in accordance with Section 12.1(a)(i)) in its respective Territory. Each Party shall have the sole right to file at its expense and in its own name, appropriate registrations for the trade dress utilized with Products containing Encorafenib in such Party’s Territory.

 

12.4                 Recordation of Licenses.  In those countries where PFM wishes to record its trademark license, Array will provide to PFM, on PFM’s written request, a separate trademark license for the Product Trademarks licensed by Array to PFM, and PFM will arrange for the recordation of such trademark license with the appropriate governmental agency, at PFM’s expense, promptly following receipt of such license from Array.  The Parties shall cooperate in the preparation and execution of such documents and Array shall provide all reasonable assistance to PFM in this respect.

 

12.5                 Approval of Packaging and Promotional Materials.  The Parties agree that the quality of the Products packaging shall be consistent with the highest standards of quality in the pharmaceuticals industry.

 

(i)          [*]/Array.  Without limiting Section 5.1(c) above, to the extent necessary to preserve Array’s legal rights in the [*] or [*] Product Trademarks, PFM shall submit representative Marketing Materials, packaging and Product displaying the [*] or [*] Product Trademarks and/or Array’s trade name to Array for Array’s review and approval prior to the first use of such Marketing Materials, packaging or Product and prior to any subsequent change or addition to such Marketing Materials, packaging or Product; provided that if Array has not responded within thirty (30) days after the submission of such Marketing Materials, packaging or Product, Array’s approval will be deemed to have been received.

 

(ii)      Other.  With respect to all Product Trademarks other than [*] or [*], each Party shall, and shall cause its respective Affiliates and Sublicensees to, comply strictly with trademark style and usage standards approved by the Party licensing such Product Trademarks

 

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[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

from time to time in connection with use of the such Product Trademark(s).  Each Party shall, and shall cause its Affiliates to, at its own expense, submit representative Marketing Materials, packaging and Product displaying such Product Trademarks to the licensing Party for approval, which approval shall not be unreasonably withheld or delayed.  In the event that either Party reasonably objects to a proposed usage of the Product Trademark(s), it shall give written notice of such objection to the other Party within 60 days of receipt of such sample, specifying the way in which such usage of its Product Trademark(s) fails to meet the style, usage or quality standards for the Product or Product Trademark set forth in the first two sentences of this Section 12.5 (ii).  If such Party or its Affiliate wishes to use such representative Marketing Materials, it must remedy the failure and submit further samples to the licensing Party’s for approval.

 

12.6                 Enforcement.  If either Party becomes aware of any actual or threatened infringement of any Product Trademark in the PFM Territory, such Party shall promptly notify the other Party in writing. PFM shall have the first right, at its own expense, to initiate infringement proceedings or take other appropriate actions against an infringement of any Product Trademark in the PFM Territory and/or to defend any actions or proceedings involving the Product Trademarks in the PFM Territory, as the case may be.  If PFM does not initiate proceedings or take other appropriate action within ninety (90) days of receipt of a request by Array to do so, then Array shall be entitled, at its own expense, to initiate infringement proceedings or take other appropriate action against an infringement of a Product Trademark in the PFM Territory, or to defend any actions or proceedings involving or affecting a Product Trademarks in the PFM Territory, as the case may be.  The Party conducting such action shall have full control over the conduct of such action, including settlement thereof; provided, however, that the Party conducting such action may not settle any such action, or make any admissions or assert any position in such action, in a manner that would materially adversely affect the Product Trademarks in the PFM Territory nor the rights or interests of the other Party, without the prior written consent of the other Party, which shall not be unreasonably withheld or delayed.  In any event, the Parties shall keep one another informed of the status of their respective activities regarding any litigation in the PFM Territory involving a Product Trademark or settlement thereof and shall assist one another and cooperate in any such litigation at the other’s reasonable request (including joining as a party plaintiff to the extent necessary and requested by the other Party). PFM and Array shall recover their respective actual out-of-pocket expenses, or proportionate percentages thereof, associated with any litigation against infringers undertaken pursuant to this Section 12.6 or settlement thereof from any resulting recovery made by either Party.  Any excess amount of such a recovery shall be [*], to the extent such recovery represents damages pertaining to the infringement of a Product Trademark in the PFM Territory.

 

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[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

12.7                 Termination of Trademark License. PFM’s right to use the [*] and [*] Product Trademarks and the Array trade name shall terminate in the PFM Territory upon termination or expiration of PFM’s rights to distribute Products containing Binimetinib in accordance with Article 14 below.  PFM shall take all such steps as Array may reasonably request to give effect to the termination of the license to the Product Trademarks and Array trade name in such country and to record any documents that may be required to evidence the termination of such license and transfer to Array of all rights, registrations, recordations and the like for such Product Trademarks.

 

12.8                 Domain Names.  Array shall own rights to, and shall be responsible, at its own expense, for registering and maintaining, the Internet domain names listed on Exhibit 12.8 (each of the foregoing, a “Domain Name”) and agrees to grant, and hereby grants to PFM a royalty-free, fully paid-up exclusive license to use those particular Domain Names which PFM elects to use (and actually uses) in connection with PFM’s commercialization of the Product in the PFM Territory in accordance with this Agreement.  In the event PFM would like to use an available Internet domain name including the [*] or [*] Product Trademarks not previously registered to Array, Array grants PFM its consent to register and maintain such Internet domain names in PFM’s name and at PFM’s expense, provided that upon expiration or termination of this Agreement, PFM shall transfer full and exclusive ownership and control of such Internet domain names to Array, or if Array so requests, promptly withdraw registration of such Internet domain name(s), in each case at PFM’s sole cost and expense.  Each Party shall own rights to any Internet domain names incorporating the Product Trademark(s) owned by such Party under Section 12.1 or any variation or part of such Product Trademark(s) as its URL address or any part of such address, and agrees to grant, and hereby grants to the other Party a royalty-free, fully paid-up exclusive license to use those particular Internet domain names which the grantee Party elects to use (and actually uses) in connection with the grantee Party ‘s commercialization of the applicable Product in the grantee Party’s Territory in accordance with this Agreement.  The use rights granted to the Internet domain names under this Section 12.8 are limited to the grantee Party’s Territory, and neither Party shall actively make or authorize any use, direct or otherwise, of its Internet domain names outside its respective territory.  Each Party acknowledges and agrees that the Internet domain names and the goodwill pertaining to such Internet domain names shall belong exclusively to the Party owning such Internet domain name, who shall be registered as “Registrant” or “Owner” and as “Administrative Contact” of the relevant domain name. The Parties agree that any use of a Product Trademark in any content describing or referring to a Product: (i) on any internet page or web site operated by Array in the Array Territory shall be in the sole control of Array, and (ii) on any internet page or web site operated by PFM in the PFM Territory, subject to the terms of this Agreement, shall be in the sole control of PFM, and therefore PFM and Array, respectively, shall be responsible for any damage caused to the Product Trademarks as a result of their use of the Product Trademarks on any internet page or web site in their respective territories.

 

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[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

ARTICLE XIII

 

TERM AND TERMINATION

 

13.1                 Term.  This Agreement shall commence on the Effective Date and, unless terminated earlier pursuant to this Article 13, shall continue for so long as PFM, its Affiliates and Sublicensees continue to develop and Commercialize Products, provided that, without prejudice to any other provisions herein, after Regulatory Exclusivity for both Compounds has expired with respect to the Major Markets, PFM shall be released with respect to its obligations under the Committed Resource Level.

 

13.2                 Termination for Material Breach.  Either Party shall have the right to terminate this Agreement in the event the other Party has materially breached or defaulted in the performance of any of its material obligations hereunder which breach or default is material in the overall context of the Agreement, and has continued for  ninety  (90) days after written notice thereof was provided to the breaching Party by the non-breaching Party which clearly mentions the remedies that the non-breaching Party intends to apply should the breach remain uncured. Any such termination shall become effective (i) at the end of such ninety (90) day period if, prior to the expiration of the ninety  (90) day period, the breaching Party has not cured any such breach or default or has not communicated to the non-breaching Party a remediation plan reasonably designed to cure such breach or default, or (ii) if the breaching Party has communicated to the non-breaching Party during the ninety (90) day period such a remediation plan to cure such breach or default but has not cured such breach or default within one-hundred and eighty (180) days following notification of the remediation plan to the non-breaching Party, at the end of such one-hundred and eighty (180) day period.  If the allegedly breaching Party disputes the breach and provides written notice of that dispute to the other Party, the cure period shall be suspended until it has been determined under Article 17 that the Agreement was materially breached.  Except as set forth in the following sentence, any termination under this Section 13.2 shall be with respect to the entire Agreement.  In the event of a material breach by PFM with respect to its due diligence obligations under Section 8.1 above, to the extent such breach is localized to a particular country or group of countries within a single Region, then Array’s termination right arising from such breach shall be limited to the affected Region unless such Region is the EEA Market, in which case Array shall have the right to terminate the Agreement in its entirety.

 

13.3                 Termination for Bankruptcy.  Either Party shall have the right to terminate this Agreement upon written notice to the other Party: (a) if such other Party is declared insolvent or bankrupt by a court of competent jurisdiction; (b) if a voluntary or involuntary petition in bankruptcy is filed in any court of competent jurisdiction against such other Party and such petition

 

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[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

is not dismissed within ninety (90) days after filing; (c) if such other Party shall make or execute an assignment of substantially all of its assets for the benefit of creditors; or (d) substantially all of the assets of such other Party are seized or attached and not released within ninety (90) days thereafter.

 

13.4                 Termination by Region.  PFM shall be permitted to terminate the Agreement, on a Region-by-Region basis outside of the EEA Market with six (6) month prior notice.

 

13.5                 Termination for Safety Reasons.

 

(a)                                               PFM shall be permitted to terminate the Agreement, on a Product-by-Product basis, for Safety Reasons upon thirty (30) days written notice to Array or within a shorter period if required under applicable Law, but only after consulting with Array on PFM’s assessment with respect to such Safety Reasons.

 

(b)                                               “Safety Reasons” shall mean that, based upon all relevant scientific data, there are safety and public health issues relating to the Product such that the medical benefit/risk ratio of such Product is sufficiently unfavorable as to materially compromise the welfare of patients so that the use in patients is no longer justifiable.

 

13.6                 Condition Precedent.

 

(a)                                               This Agreement is entered into subject to the condition precedent that the European Commission approves this Agreement as well as PFM as a “Suitable Partner” as defined in the EC Decision. All rights and obligations set forth in the Agreement shall only become effective upon the Effective Date.

 

(b)                                               The Parties agree that neither Party shall appeal directly or indirectly the European Commission’s approval of this Agreement or of PFM as a “Suitable Partner” (as such term is defined in the EC decision).  If, notwithstanding the foregoing, such approval(s) are subsequently subject to a Third Party appeal, each Party will use its reasonable best efforts to 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 to overcome such appeal and obtain the final, unappealable approval of this Agreement and of PFM as a Suitable Partner in a reasonable period of time, for purposes of the EC decision (a “Final Approval”).   In connection with such efforts, the Parties shall cooperate in all respects, consult with each other, and keep each other fully informed, in connection with any filing or submission and in connection with any investigation or other inquiry or activity, related to such appeal and efforts to obtain such Final Approval.  If despite such efforts, such appeal is successful and the European Commission or any court reverses the European Commission’s approval of this

 

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[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

Agreement or of PFM as a “Suitable Partner” and Array and PFM are unable to reverse such decision within six  months of the Effective Date, then, at the request of either Party, Array shall return to PFM the license fee paid under Section 6.1 and this Agreement shall terminate.

 

(c)                                                The Parties further agree that if the Effective Date has not occurred by March 31, 2016, or any other date agreed upon between the Parties, this Agreement shall be null and void.

 

ARTICLE XIV

EFFECT OF TERMINATION

 

14.1                 Accrued Obligations.  The expiration or termination of this Agreement for any reason shall not release either Party from any liability which, at the time of such expiration or termination, has already accrued to the other Party or which is attributable to a period prior to such expiration or termination, nor will any termination of this Agreement preclude either Party from pursuing all rights and remedies it may have under this Agreement, or at law or in equity, with respect to breach of this Agreement, provided that any milestone payment that becomes due during the termination notice period with respect to milestones 1, 2 or 3 in Section 6.2(a) shall not be payable.

 

14.2                 Rights on Termination of Agreement.  In case of termination of this Agreement in its entirety (or on a Region by Region basis, as applicable) by either Party, this Section 14.2 shall apply, provided that when a Region is terminated, the provisions below shall only apply to the rights and activities related to the terminated Region:

 

(a)                                               Wind-down Period.

 

(i)          Development.  In the event PFM is the sponsor of or conducting any on-going Clinical Studies of the Product and/or any ongoing pre-clinical studies and/or formulation studies (e.g., stability studies) of the Product following the date a notice of termination has been issued by Array or PFM, as applicable, PFM agrees: (A) to continue to sponsor or conduct any such Clinical Studies, pre-clinical studies or formulation studies, or any portion thereof for a period not exceeding [*] following the effective date of termination with the costs thereof to be borne by PFM in the case of a termination  by Array pursuant to Section 8.2(a), 13.2 or 13.3 and by Array in all other cases  or (B) to the extent requested by Array, promptly transition to Array or its designee such sponsorship or Clinical Studies, pre-clinical studies or formulation studies, or portions thereof provided that in such case, Array shall take over such studies within [*]

 

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[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

with the costs thereof to be borne by PFM in the case of a termination  by Array pursuant to Section 8.2(a), 13.2 or 13.3 and by Array in all other cases.  Notwithstanding the foregoing, if PFM terminates this Agreement with respect to a Product pursuant to Section  13.5, PFM shall not be obligated to continue to sponsor or conduct any Clinical Studies with respect to such Product under Section 14.2(a)(i)(A) above; provided that in the event this Agreement is terminated under Section  13.5, PFM shall be obligated to promptly reimburse Array for [*] of the costs incurred by Array in accordance with the applicable Study Budget to complete any Clinical Studies that were initiated (first patient dosed) pursuant to the GDP prior to such termination, to the extent in the case of a termination under Section 13.5 such Clinical Studies are permitted to continue under applicable Law and by the applicable data safety monitoring and institutional review boards.

 

(ii)      Commercialization.  To avoid disruption in the availability of Product to patients, if this Agreement is terminated after the First Commercial Sale of the Product in the PFM Territory other than pursuant to Section 13.5, then to the extent requested by Array, PFM, its Affiliates and its Sublicensees shall continue to distribute the Product, in accordance with the terms and conditions of this Agreement, in each country of the PFM Territory for which Marketing Approval therefor has been obtained, until [*] after the date on which Array notifies PFM in writing that Array has secured an alternative distributor or licensee for the Product in such country, but in no event more for than  [*] months after the effective date of any expiration or termination of this Agreement (the “Wind-down Period”); provided that PFM, its Affiliates and its Sublicensees shall cease such activities, or any portion thereof, in a given country upon [*] notice by Array requesting that such activities (or portion thereof) be ceased.  Any Product sold or disposed by PFM, its Affiliates and, subject to Section 14.2(f) below, its Sublicensees in the PFM Territory during the Wind-down Period shall be subject to applicable payment obligations under Article 6 above.  Within thirty (30) days of expiration of the Wind-down Period, PFM shall notify Array of any quantity of the Product remaining in PFM’s inventory and Array shall have the option, upon notice to PFM, to purchase any such quantities of the Product from PFM at the price paid by PFM for such Product or to allow PFM to continue to sell such inventory.

 

(b)                                               Assignment of Regulatory Filings and Marketing Approvals. PFM shall assign (or cause to be assigned) to Array or its designee, at Array’s cost except in case of termination by Array pursuant to Section 13.2 or 13.3, in which case the expenses will be borne by PFM, (or to the extent not so assignable, PFM shall take all reasonable actions to make available to Array or its designee the benefits of) all Regulatory Filings for the Product in the PFM Territory, including any such Regulatory Filings made or owned by its Affiliates and/or Sublicensees. In each case, unless otherwise required by any applicable Law or regulation or requested by Array, the foregoing assignment (or availability) shall be made within a period of time agreed upon and consistent with PFM’s obligations during the Wind

 

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[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

Down Period.  In addition, PFM shall promptly provide to Array a copy of all Data and PFM Know-How pertaining to the Product in the PFM Territory to the extent not previously provided to Array and Array shall have a fully-paid-up right to use and disclose all Data and PFM Know-How pertaining to the Product, solely in connection with the Product, following expiration or termination of this Agreement, provided that except in the case of a termination by Array pursuant to Section 8.2(a), 13.2 or 13.3, Array’s right to use the Data and PFM Know-How generated under a Clinical Trails carried out by PFM as Additional Development Activities and for which Array did not opt-in  pursuant to Section 4.2 (g) (v) prior to the termination of the Agreement, in its MAA filings in the Array Territory shall remain subject to the payment obligations described in Section 4.2(g).  For clarity, following expiration or termination of this Agreement (i) in its entirety, Array shall be free use and disclose all Data and PFM Know-How in connection with the Development, registration and Commercialization of the Product in the PFM Territory without charge, and (ii) with respect to any particular Region(s), Array shall be free use and disclose all Data and PFM Know-How in connection with the Development, registration and Commercialization of the Product in such Region(s) without charge.  In addition, all such Data and PFM Know-How, to the extent solely related to the Product, shall be deemed Confidential Information of Array and not Confidential Information of PFM (and will not be subject to the exclusions under Sections 10.1(a) or (e) above).

 

(c)                                                Transition.  Each Party shall use Diligent Efforts to cooperate with the other and/or its designee to effect a smooth and orderly transition in the Development, sale and ongoing marketing, promotion and commercialization of the Product in the PFM Territory during the Wind-down Period and to conduct in an expeditious manner any activities to be conducted under this Section 14.2.

 

(d)                                               Licenses.  Effective as of the date of expiration of the Wind-down Period, PFM shall either (i) grant to Array an exclusive, worldwide, royalty-free license, with the right to grant sublicenses, (A) under any PFM Improvements for the sole purposes of making, using, developing, importing, selling, distributing, marketing and promoting Products, and (B) under any other Patents owned or Controlled by PFM related to any Product(s) for the sole purposes of making, using, developing, importing, selling, distributing, marketing and promoting such Product(s) in the form they exist as of the time the Agreement is terminated or (ii) at PFM’s election (on a Patent by Patent basis), assign such PFM Improvements and other Patents to Array, provided that to the extent PFM has payment obligations to a Third Party licensor based on the exercise by Array of such license, Array agrees to reimburse PFM for the amounts of such payments (and if Array does not agree to so

 

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[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

reimburse PFM for any such payment obligations with respect to any such Patent, Array shall not have a license).

 

(e)                                               Return of Materials.  Within thirty (30) days after the end of the Wind-down Period upon request by Array, PFM shall either return to Array or destroy all tangible items comprising, bearing or containing trademarks of Array (including the Product Trademarks), trade names, patents, copyrights, designs, drawings, formulas or other Data, photographs, samples, literature, sales and promotional aids (“Product Materials”) and Confidential Information of Array, that is in PFM’s possession, subject to PFM’s right to keep one copy for archiving purposes.  Effective upon the end of the Wind-down Period, PFM shall cease to use all trademarks and trade names of Array (including the Product Trademarks) in the PFM Territory, and all rights granted to PFM hereunder with respect to the Product in the PFM Territory shall terminate.

 

(f)                                                   Marks and Domains.  Effective upon the effective date of termination, PFM hereby assigns and shall cause to be assigned to Array all worldwide rights in and to (i) any Product Trademarks, other than Product Trademarks of Array, specific to one or more Products that PFM or any of its Affiliates used in connection with Product(s), and (ii) all Internet domain names incorporating the applicable Product Trademark(s) or any variation or part of such Product Trademark(s) as its URL address or any part of such address, for domains outside the Array Territory.  It is understood that such assignment shall not include the name of PFM or any of its Affiliates, nor the corporate logo, service mark, or trademark for PFM or for any of its Affiliates as a corporate entity.

 

(g)                                               Sublicensees.  Any contracts with Sublicensees in the PFM Territory engaged by PFM shall, at the request of Array in its discretion, be assigned to Array to the furthest extent possible; provided that such assignment is accepted by the Sublicensee(s) in any country or countries within the PFM Territory.  In the event such assignment is not requested by Array or is not accepted by such Sublicensee(s), then the rights of such Sublicensees with respect to the Product in relevant country or countries within the PFM Territory shall terminate upon the expiration or termination of PFM’s rights with respect to the PFM Territory.  Subject to PFM’s Affiliates’ and Sublicensees’ obligations under Section 14.2(a)(ii) above, PFM shall ensure that its Affiliates and such Sublicensees (if not assigned to Array pursuant to this Section 14.2(f)) shall transition all rights in and to the Product back to Array in the manner set forth in this Section 14.2 as if such Affiliate or Sublicensee were named herein.

 

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[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

(h)                                              Miscellaneous.  The grant by PFM to Array of the rights set forth in this Section 14.2 is conditioned upon the grant by Array of the indemnity set forth in Section 16.2 with respect to the Third Party Claims resulting from Array (or its designee’s) Development, registration and Commercialization of the Product in the PFM Territory following termination of this Agreement.

 

14.3                 No Renewal, Extension or Waiver.  Acceptance of any order from, or sale or license of, any Product to PFM after the notice or effective date of expiration or termination of this Agreement in its entirety shall not be construed as a renewal or extension hereof, or as a waiver of expiration or termination of this Agreement in its entirety.

 

14.4                 Survival.  Upon the expiration or termination of this Agreement, all rights and obligations of the Parties under this Agreement shall terminate except those described in the following Sections:  Sections 1 (Definitions); 4.5(b) and 4.5(c) (with respect to any Development Costs that have accrued but not yet been reconciled as of the effective date of termination); 6.3-6.6, 6.9 and 7.1-7.3 (with respect to milestone payments and Royalty payments accruing prior to, but not yet paid as of, the effective date of termination), 7.4 (for a period of three (3) years from the end of the calendar quarter in which termination or expiration occurs, or if later, (3) years from the end of the calendar quarter in which the last sale of Product by PFM, its Affiliate or Sublicensee occurs; 10.1-10.3 (Confidentiality, for a period of ten (10) years following the effective date of termination or expiration); 11.1 (Ownership of Inventions), 11.3 (with respect to any enforcement actions being prosecuted by PFM as of the effective date of termination); 11.4 (with respect to any Infringement Actions being defended by PFM as of the effective date of termination); 12.7 (Termination of Trademark License); 12.8 (with respect to PFM’s obligation to transfer or withdraw registration of Internet domain names registered by PFM pursuant to this section and Array’s ownership and other rights with respect to the Domain Names); 14 (Effect of Termination), 16 (Indemnification; Recalls), 17 (Dispute Resolution) and 18 (General Provisions); and, in addition, to the extent that any Product is sold during the Wind Down Period defined in Section 14.2(a) (ii) above, Sections 6.3 through 6.6 and 6.9 shall apply to such sales.

 

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[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

ARTICLE XV

 

REPRESENTATIONS, WARRANTIES AND COVENANTS

 

15.1                 Mutual Covenants, Representations and Warranties.  Each Party covenants, represents and warrants to the other Party that, as of the Signing Date:

 

(a)                                               it is a corporation duly organized, validly existing and is in good standing under its Laws or incorporation, is qualified to do business and is in good standing as a foreign corporation in each jurisdiction in which the conduct of its business or the ownership of its properties requires such qualification and failure to have such would prevent such Party from performing its obligations under this Agreement;

 

(b)                                               this Agreement is a legal and valid obligation binding upon such Party and enforceable in accordance with its terms.  The execution, delivery and performance of this Agreement by such Party has been duly authorized by all necessary corporate action and does not and will not: (i) require the consent or approval of such Party’s stockholders; (ii) to its knowledge, violate any Law, rule, regulation, order, writ, judgment, decree, determination or award of any court, governmental body or administrative or other agency having jurisdiction over PFM; nor (iii) conflict with, or constitute a default under, any agreement, instrument or understanding, oral or written, to which it is a party or by which it is bound;

 

(c)                                                it has the full right and authority to grant the rights and licenses granted herein;

 

(d)                                               all necessary consents, approvals and authorizations of all Regulatory Authorities, other Governmental Authorities and other persons or entities required to be obtained by it in order to enter into this Agreement have been obtained;

 

(e)                                               it, its subsidiaries, and its Affiliates are in compliance with, and at all times during the term of this Agreement shall remain in compliance with, all applicable antibribery or anticorruption Laws.  Neither such Party nor any of its subsidiaries, or Affiliates has, or will, authorize, offer, promise, or make payments or otherwise provide anything of value directly or indirectly to: (i) an executive, official, employee or agent of a government, governmental department, agency or instrumentality, (ii) a director, officer, employee or agent of a wholly or partially government-owned or controlled entity, (iii) a political party or official thereof, or candidate for political office, or (iv) an executive, official, employee or

 

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[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

agent of a public international organization (e.g., the International Monetary Fund or the World Bank) (“Government Official”) for purposes of (A) (i) improperly influencing any act or decision of such Government Official in his or her official capacity, (ii) inducing such Government Official to do or omit to do any act in violation of the lawful duty of such Government Official, or (iii) securing any improper advantage; or (B) inducing such Government Official improperly to use his or her influence in order to assist the Company or any of its subsidiaries in obtaining or retaining business or to direct business to any person.  Neither Party shall, during the term of this Agreement, provide anything of value to any person that may be considered a bribe, kickback, an illegal influence payment, or other illegal payment.

 

15.2                 Representations and Warranties of Array.  Array represents, warrants to PFM that, as of the Signing Date:

 

(a)                       Array has not previously granted any right, license or interest in or to the Array Patents, the Array Know-How, or the Product Trademarks or any portion thereof, that is in conflict with the rights or licenses granted to PFM under this Agreement;

 

(b)                       there are no actual, pending, or, to Array’s knowledge, alleged or threatened action, suits, claims, interference or governmental investigations involving a Product (including with respect to the manufacturing of a Product), the Array Patents, the Array Know-How or the Product Trademarks listed on Exhibit 1.71 by or against Array, or any of its Affiliates or, to Array’s knowledge, other licensees;

 

(c)                        Array has not brought a claim alleging an infringement by a Third Party of any of the Array Patents or the Array Know-How;

 

(d)                       to Array’s knowledge, there is no actual, alleged or threatened infringement by a Third Party of any of the Array Patents or the Array Know-How;

 

(e)                       to Array’s knowledge, none of the issued Array Patents are invalid or unenforceable;

 

(f)                           the Array Patents in the PFM Territory listed on Exhibit 1.5 constitute a true, accurate and complete list of all Patents in existence as of the Signing Date owned by Array and, to its knowledge, Controlled by Array in the PFM Territory relating to the Products in the PFM Territory, indicating the owner, licensor and/or co-owner(s) thereof if any such Array Patent is not, solely owned by Array;

 

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[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

(g)                       Array is the sole and exclusive owner, the co-owner, or exclusive licensee with respect to the Products of all of the Array Patents listed in Exhibit 1.5, or the Product Trademarks listed on Exhibit 1.71  free from encumbrances and, with respect to Patents owned or co-owned by Array, is, to Array’s knowledge, listed in the records of the appropriate Governmental Authorities as the sole and exclusive owner or the co-owner of the Array Patents and has the right to grant to PFM the rights granted herein with the respect to the Array Know-How;

 

(h)                      To Array’s knowledge, all individuals who participated in the invention of any of the inventions claimed in the Array Patents have made effective assignments of all ownership rights either pursuant to written agreement or by operation of applicable Law;

 

(i)                            except as provided under Section 11.2, all application and registration fees in respect of the Array Patents listed on Exhibit 1.5 and the Product Trademarks listed on Exhibit 1.71 have been paid and all necessary documents and certificates have been filed with the relevant agencies for the purpose of registering such Array Patents and such Product Trademarks;

 

(j)                             Array has not misappropriated any know-how relating to the manufacturing of the Product;

 

(k)                        Array has taken reasonable precautions to preserve the confidentiality of the Array Know-How;

 

(l)                            To Array’s knowledge, all Data with respect to Products that (i) is intended to be or was provided to a Regulatory Authority, or (ii) was provided by Array to PFM, was generated in compliance with applicable Laws;

 

(m)                   Array has disclosed or made available to PFM in writing, complete and correct copies of:  (i) any and all study reports and Data from Clinical Studies or GLP preclinical studies of the Product in its possession, and (ii) all filings and correspondence between Array and its Affiliates, on the one hand, and any Regulatory Authority, on the other hand, relating to clinical or preclinical studies of the Products.   In the course of the development of Product, Array has not used any employee or consultant who has been debarred by any Regulatory Authority, or was the subject of debarment proceedings by a Regulatory Authority, and to Array’s knowledge, no such employees or consultants have been used by any Third Party in connection with the development of the Product.  All studies conducted with respect to the Product or Product have been conducted in accordance with applicable Laws by persons with appropriate education, knowledge and experience;

 

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[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

(n)                      The documents containing Data and Know-How disclosed or made available to PFM by Array are true and accurate copies of such documents in Array’s possession;

 

(o)                       no information or materials provided by Array to PFM that were originally prepared by Array or to Array’s knowledge if originally prepared by any Third Party contain, any untrue or misleading statement of a material fact or to Array’s knowledge omit to state a material fact, with respect to the efficacy, side effects, formulation, stability, or preclinical or clinical testing of the Product and more generally, any pharmaceutical data;

 

(p)                       the Background Agreements are in full force and effect in accordance to their terms as disclosed to Array. No terms of the Background Agreements material to the rights granted to PFM hereunder have been redacted in the Background Agreements made available to PFM;

 

(q)                       all rights under the Background Agreements, other than the Novartis Agreements, required to grant the rights granted to PFM hereunder have been or will be fully assigned by Novartis to Array;

 

(r)                           no Third Party has any right under any Background Agreement, including a right of consent or a right of first negotiation, that could interfere with PFM’s exercise of its sublicensing rights under this Agreement ;

 

(s)                        the terms of each Background Agreement and any other agreement to which Array is a party as of the Signing Date do not obligate PFM to grant, assign or otherwise convey to Array, or to any Third Party, any rights under any Patents or Know How that PFM or its Affiliates may own or control (other than (i) such Array Technology licensed to PFM hereunder and (ii) as otherwise set forth in this Agreement) during or following the Term;

 

(t)                            PFM shall have no obligation to perform any obligation arising under any Background Agreement other than those obligations reflected in this Agreement; and

 

(u)                      Array has maintained and, unless otherwise agreed to by PFM, will maintain and keep in full force and effect all agreements (including the Background Agreements in accordance with their terms) and filings (including Patent filings) necessary to perform its obligations hereunder. Array and its Affiliates are in compliance with each Background Agreement, and have performed all material obligations required to be performed by them to date under the Background Agreement.  Neither Array nor its Affiliates are (with or without the lapse of time or the giving of notice, or both) in material breach in any respect under the Background Agreement and, to the knowledge of Array, no other party to any Background Agreement is (with

 

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[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

or without the lapse of time or the giving of notice, or both) in material breach in any respect thereunder.

 

(v)                        Array has no knowledge of any breach of the representations and warranties given by the parties to the Background Agreements.

 

15.3                 Certain Rights and Obligations under the Background Agreement.

 

(a)                             To the extent that any Background Agreement does not as of the Effective Date allow, upon any termination of such Background Agreement, for the licenses granted to Array and sublicensed to PFM to continue on substantially the same terms as were granted to Array, then, where requested by PFM, Array shall use Diligent Efforts at PFM’s expense, to enable PFM to secure such a separate agreement between PFM and the applicable Third Party to provide for the grant of such rights to PFM (with the objective that PFM shall not be required to pay to such Third Party any greater amounts than what Array was obligated to pay to such Third Party under the applicable Background Agreement).

 

(b)                             To the extent that a Third Party is obligated to indemnify sublicensees of Array and PFM desires to assert a claim for indemnification, PFM shall have the right, to the extent permitted by the applicable Background Agreement, to assert such claim for indemnification against such Third Party.  In the event PFM is not permitted by an Background Agreement to assert such claim directly against the applicable Third Party, Array shall cooperate with PFM (at PFM’ expense) to permit PFM to assert such claim, including, if necessary, allowing PFM to bring such claim in the name of Array; provided that PFM shall give Array written notice of any proposed settlement with any Third Party and a reasonable opportunity to review and comment on such proposed settlement, and PFM shall not enter into any settlement with a Third Party that could adversely affect the rights of Array hereunder or under the applicable Background Agreement without the prior written consent of Array.

 

(c)                              To the extent that Array is permitted to assert against a Third Party a claim on behalf of PFM (as Array’s sublicensee) for (i) indemnification and defense with respect to the breach of any representation, warranty or covenant of such Third Party contained in the applicable Background Agreement or (ii) for specific performance of any covenant of a Third Party contained in the applicable Background Agreement, Array shall cooperate in good faith with PFM (at PFM’ expense) to permit PFM to assert such claim or request for indemnification or specific performance by such Third Party; provided that PFM shall give Array written notice of any proposed settlement with such Third Party and a reasonable opportunity to review and comment on such proposed settlement, and PFM shall not enter into any settlement with such Third Party

 

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[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

that could reasonably be viewed as materially adversely affecting the rights of Array hereunder or under the applicable Background Agreement without the prior written consent of Array.

 

(d)                             To the extent relating to a Product whenever Array receives any report, notice or other communication from a Third Party with respect to the corresponding Background Agreement, Array shall promptly provide a copy of such report, notice or other communication to PFM, in each case if such report notice or communication would materially adversely affect the Product in the PFM Territory or PFM’s rights under such Background Agreement with respect to a Product in the PFM Territory.

 

(e)                             To the extent relating to a Product, Array shall not exercise any right or provide any consent or approval with respect to any right or obligation under any Background Agreement without PFM’ s prior written consent, which consent PFM shall not unreasonably withhold or delay, in each case if the exercise of such right, or such consent or approval, would materially adversely affect PFM’s rights under such Background Agreement with respect to a Product in the PFM Territory.

 

(f)                                 To the extent relating to a Product, Array shall, if reasonably requested by PFM, take reasonable efforts to exercise any of Array’s rights or enforce any material obligation of a Third Party, at PFM’s expense, under the applicable Background Agreement if such lack of exercise or enforcement would materially adversely affect PFM’s rights with respect to a Product in the PFM Territory.  In addition, to the extent Array seeks an indemnity from any party to a Background Agreement, and that party makes payment to Array pursuant to such indemnity claim for damages suffered in the PFM Territory by PFM, Array shall pay to PFM the portion of such payment corresponding to PFM’s damages suffered in PFM territory.

 

(g)                             To the extent relating to a Product in the PFM Territory, Array shall not agree or consent to any amendment, supplement or other modification to the Background Agreement or exercise any other right of agreement or consent thereunder, unless PFM shall have consented in writing to the same, which consent may not be unreasonably withheld or delayed, in each case if such amendment, supplement, modification, exercise or consent would materially adversely affect the Product in the PFM Territory or PFM’s rights under such Background Agreement.

 

(h)                            Array shall not terminate any Background Agreement and shall not take or fail to take any action that would permit the Third Party to terminate, (either unilaterally or by mutual agreement with the applicable Third Party), or any right thereunder relating to the Product, without the prior written consent of PFM, which consent may not be unreasonably withheld or

 

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[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

delayed, in each case if such termination would materially adversely affect the Product in the PFM Territory or PFM’s rights under such Background Agreement, and provided such termination is not caused in whole or in part by an action or inaction by or under authority of PFM.

 

(i)                                  Array shall not during the Term (i) grant any lien, pledge, encumbrance, mortgage, security interest, purchase option, call or similar right, conditional and installment sale agreements, charges or claims of any kind (excluding any license rights granted as of the Signing Date under the Background Agreements) (collectively “Liens”) with respect to this Agreement or any of the Array Patents or Array Know How or (ii) permit such a Lien, to attach to this Agreement or any of such rights, in each case if such Lien would conflict with the rights granted to PFM hereunder.

 

15.4                 Bankruptcy protection.  Within [*] of the Effective Date, the Parties shall determine what additional steps, if any, are necessary to ensure that PFM would continue to enjoy the licenses granted to it under this Agreement in the event of Array’s bankruptcy and take any such reasonable steps.

 

15.5                 Except as otherwise expressly set forth in this Agreement, neither Party makes any representation or extends any warranties of any kind either express or implied, including, but not limited to, warranties of merchantability, fitness for a particular purpose, noninfringement or validity of any patents issued or pending.  Notwithstanding Array’s representations and warranties set forth in Sections 15.1, 15.2 and 15.3, for any breach of such representations and warranties that arise from facts or circumstances during the time period that Binimetinib and/or Encorafenib, as applicable to such representations and warranties, was under the control of Novartis Pharma AG or any of its affiliates, or arise from the actions or inactions of Novartis Pharma AG or any of its affiliates or contractors, shall be limited to [*], in each case unless (A) Array was aware of such breach as of the Signing Date or (B) Array becomes aware of such breach after the Signing Date and does not notify PFM within three (3) Business Days.

 

 

ARTICLE XVI

 

INDEMNIFICATION; RECALLS

 

16.1                 Indemnification of Array.  PFM shall indemnify and hold harmless each of Array, its Affiliates and the directors, officers, shareholders and employees of such entities and the successors and assigns of any of the foregoing (the “Array Indemnitees”), from and against any and all liabilities, damages, penalties, fines, costs, expenses (including, reasonable attorneys’ fees and other expenses of litigation) (“Liabilities”) from any claims, actions, suits or proceedings

 

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[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

brought by a Third Party (a “Third Party Claim”) incurred by any Array Indemnitee, arising from, or occurring as a result of: (a) the use, marketing, distribution, importation or sale of any Product by PFM, its Affiliates or Sublicensees in the PFM Territory, including any Products Liability Claim arising therefrom; (b) injury or death of patients in all Additional Development Activities conducted by or on behalf of PFM anywhere in the world, including any Products Liability Claim arising therefrom, (c) injury or death of patients participating in Clinical Studies conducted under the GDP and sponsored by or on behalf of PFM, including any Products Liability Claim arising therefrom, and (d) any breach of any representations, warranties or covenants by PFM in Article 15 above; except to the extent such Third Party Claims result from the gross negligence or willful misconduct of a Array Indemnitee.

 

16.2                 Indemnification of PFM.  Array shall indemnify and hold harmless each of PFM, its Affiliates and Sublicensees and the directors, officers and employees of PFM, its Affiliates and Sublicensees and the successors and assigns of any of the foregoing (the “PFM Indemnitees”), from and against any and all Liabilities from any Third Party Claims incurred by any PFM Indemnitee, arising from, or occurring as a result of: (a) the use, marketing, distribution. importation or sale of any Product by Array, its Affiliates or licensees, sublicensees or assignees, in the Array Territory (or following termination of this Agreement, anywhere in the world), including any Products Liability Claim; (b) injury or death of patients in all Additional Development Activities conducted by or on behalf of Array anywhere in the world, including any Products Liability Claim arising therefrom, (c) injury or death of patients participating in Clinical Studies conducted under the GDP and sponsored by or on behalf of Array, including any Products Liability Claim arising therefrom, and (d) any breach of any representations, warranties or covenants by Array in Article 15 above, except to the extent such Third Party Claims result from the gross negligence or willful misconduct of a PFM Indemnitee.

 

16.3                 Procedure.  A Party that intends to claim indemnification under this Article 16 (the “Indemnitee”) shall promptly notify the other Party (the “Indemnitor”) in writing of any Third Party Claim, in respect of which the Indemnitee intends to claim such indemnification, and the Indemnitor shall have sole control of the defense and/or settlement thereof provided that the Indemnitor shall keep the Indemnitee regularly informed of the status of the defense of the Third Party Claim and shall take into consideration the Indemnitee’s reasonable comments thereon.  The indemnity arrangement in this Section 16.3 shall not apply to amounts paid in settlement of any action with respect to a Third Party Claim, if such settlement is effected without the consent of the Indemnitor, which consent shall not be withheld or delayed unreasonably.  The failure to deliver written notice to the Indemnitor within a reasonable time after the commencement of any action with respect to a Third Party Claim, if prejudicial to its ability to defend such action, shall relieve such Indemnitor of any liability to the Indemnitee under this Section 16.3, but the omission to so

 

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[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

deliver written notice to the Indemnitor shall not relieve the Indemnitor of any liability that it may have to any Indemnitee otherwise than under this Section 16.3.  The Indemnitee under this Section 16.3 shall cooperate fully with the Indemnitor and its legal representatives in the investigation of any action with respect to a Third Party Claim covered by this indemnification.

 

16.4                 Disclaimer of Liability for Consequential Damages.  UNLESS EXPRESSLY PROVIDED HEREUNDER, IN NO EVENT SHALL EITHER PARTY OR ANY OF ITS RESPECTIVE AFFILIATES AND THEIR RESPECTIVE OFFICERS, DIRECTORS AND EMPLOYEES BE LIABLE UNDER THIS AGREEMENT FOR SPECIAL, INDIRECT, PUNITIVE, INCIDENTAL OR CONSEQUENTIAL DAMAGES SUFFERED BY THE OTHER PARTY UNDER THIS AGREEMENT, OF ANY KIND WHATEVER AND HOWEVER CAUSED, AND WHETHER BASED ON AN ACTION OR CLAIM IN CONTRACT, TORT (INCLUDING NEGLIGENCE), BREACH OF STATUTORY DUTY OR OTHERWISE, AND EVEN IF FORESEEABLE OR SUFFERED IN CIRCUMSTANCES WHERE A PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH LOSSES.  NOTWITHSTANDING THE FOREGOING, NOTHING IN THIS SECTION 16.4 IS INTENDED TO OR SHALL LIMIT OR RESTRICT THE AMOUNTS PAYABLE TO THIRD PARTIES UNDER THE INDEMNITIES PROVIDED PURSUANT TO SECTIONS 16.1 AND 16.2 ABOVE.

 

16.5                 During the term of the Agreement as set forth in Section 13.1 and thereafter for a period of five (5) years, each Party shall procure and maintain adequate insurance coverage with international reputable company(ies) or a program of self-insurance (which shall be of types and amounts sufficient to cover the liabilities hereunder, contingent or otherwise of such Party and its Affiliates). It is understood that such insurances shall not be construed to create a limit of either Party’s liability with respect to its indemnification obligations under Article 16.  Each Party shall provide the other Party with written evidence of such insurance upon request.  Each Party shall provide the other Party with written notice at least thirty (30) days prior to the cancellation, non-renewal or material change in such insurance.

 

16.6                 Recalls.

 

Voluntary and Mandatory Recalls; Decision-Making.  To the extent that: (i) any Regulatory Authority in the PFM Territory issues a directive or order that the Product be recalled or withdrawn in any country within the PFM Territory; (ii) a court of competent jurisdiction orders a recall or withdrawal of the Product in any country within the PFM Territory, (iii) PFM determines the Product should be recalled or withdrawn voluntarily in any country within the PFM Territory, PFM will recall or withdraw the Product, at its expense, in such country as set forth in this Section 16.6.  As between the Parties, PFM shall

 

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[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

control and coordinate all activities that PFM reasonably believes to be necessary in connection with such recall or withdrawal of the Product in the PFM Territory, including making all contact with relevant Regulatory Authorities; provided, however, that PFM shall to the extent practicable consult with Array and consider in good faith any comments of Array in connection with any aspect of the management of any such recall.  Subject to Section 2.4, the provision of this Section 16.6 shall apply mutatis mutandis with respect to Array’s responsibilities for any recall in the Array Territory.

 

ARTICLE XVII
  DISPUTE RESOLUTION

 

17.1                 Referral to Senior Executives.  The Parties recognize that disputes as to certain matters relating to this Agreement may from time to time arise during the term of this Agreement.  Any such dispute which cannot be resolved by good faith negotiations shall be referred, by written notice from either Party to the other, to the Senior Executives (or their respective designees) for resolution.  The Senior Executives (or their respective designees) shall negotiate in good faith to resolve such dispute through discussions promptly following such written notice.  If the Senior Executives cannot resolve the dispute within forty-five (45) days of such written notice, or either Party concludes that the matter will not be so resolved, then, the provisions of Section 17.2 shall apply.  If the Parties should resolve such dispute pursuant to the procedures in this Section 17.1, a memorandum setting forth their agreement will be prepared and signed by both Parties, if requested by either Party.

 

17.2                 Arbitration.  Except with respect to any dispute between the Parties concerning the inventorship of intellectual property rights for which either Party may pursue such remedies as it may deem necessary or appropriate, any dispute arising out of or in connection with this Agreement shall be exclusively resolved by final and binding arbitration as follows:

 

(a)                                               Arbitration under the ICC Rules of Arbitration.  The arbitration shall be conducted by three (3) arbitrators according to the ICC Rules of Arbitration (“Rules”), and the panel of three arbitrators so selected is referred to herein as the “Arbitration Tribunal.”  The arbitration shall be seated in Geneva, Switzerland provided that, unless the Parties agree otherwise, the hearings shall be held in New York, NY.

 

(b)                                               Conduct of the proceedings. The language of arbitration shall be English. If so requested by the Arbitration Tribunal, any documents originally in a language other than English shall be submitted with an English translation. The Arbitration Tribunal shall have the authority to order document production taking guidance from the applicable

 

92

 

[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

rules under the Laws of the seat of the arbitration. The Parties wish to avoid a costly and time-consuming discovery exercise. The Arbitration Tribunal shall have the power to appoint one or more experts after having consulted with the Parties. For the avoidance of doubt, the governing law set forth in Section 18.2 shall not apply to determine any procedural issues. In particular, but without in any way restricting the generality of the foregoing, the Parties agree that the procedural rules of the governing law set forth in Section 18.2 shall not apply with respect to document production or other evidentiary issues, except that all privileges restricting disclosure established under such governing law shall apply and may be invoked by both Parties

 

(c)                                                Time limit for rendering the award.  The Parties and the Arbitration Tribunal shall endeavor to complete any arbitration within twelve (12) months following the full constitution of the Arbitration Tribunal.   However, this period is not a deadline and failure to render an award within them shall not be a ground for annulment of an award.

 

(d)                                               Decision of the Arbitration Tribunal.  Every award shall be binding on the Parties. By submitting the dispute to arbitration under the Rules, the Parties undertake to carry out any award without delay and shall be deemed to have waived their right to any form of recourse insofar as such waiver can validly be made. The Parties agree that they can seek recognition and enforcement of any order and/or award made by the Arbitration Tribunal before any competent court. The Arbitration Tribunal shall have no authority to award punitive damages or other damages exceeding the damages actually suffered by the prevailing Party, and may not, in any event, make any ruling, finding or award that does not conform to the provisions of this Agreement. The fees and expenses of the Arbitration Tribunal shall be shared equally by the Parties, and each Party shall bear its own expenses incurred in connection with the proceeding, in each case unless the Arbitration Tribunal in the award assesses such fees and/or expenses against one of the Parties or allocates such fees and expenses other than equally between the Parties.

 

(e)                                               Confidentiality. The existence and content of the Arbitration proceedings and any rulings or award shall be deemed Confidential Information of both Parties hereunder and kept confidential by the Parties and members of the Arbitration Tribunal except (i) where such disclosure is permitted under article 10 of this Agreement, (ii) to the extent that disclosure may be required of a Party to fulfil a legal duty, protect or pursue a legal right, or enforce or challenge an award in bona fide legal proceedings before a state court or other judicial authority, (iii) with the consent of all Parties made in writing subsequently to this Agreement, (iii) where needed for the preparation or presentation of a claim or defense in this arbitration, (iv) where such information is already in the public

 

93

 

[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

domain other than as a result of a breach of this clause, or (v) by order of the Arbitration Tribunal upon application of a Party.

 

(f)            Non-Disclosure of Communications with Internal Counsel. Notwithstanding any rights to the contrary under applicable procedural or substantive rules of Law, any communications exchanged between members of each Party’s respective legal department and directors, employees or agents in connection with any disputes, investigations, administrative or other proceedings, shall not be requested, produced or otherwise used, to the extent such communications would have been covered by legal privilege and not discloseable, had these communications been exchanged between such Party and its external attorneys.

 

(g)                                               Interim Relief.  The Arbitration Tribunal shall have the power to grant any remedy or relief that it deems appropriate, whether provisional or final, including but not limited to conservatory relief and injunctive relief, and any such measures ordered by the Arbitration Tribunal shall, not withstanding anything to the contrary in the governing Law selected by the Parties pursuant to Section 18.2, be deemed to be a final award on the subject matter of the measures and shall be enforceable as such. Each Party retains the right to apply to any court of competent jurisdiction for provisional and/or conservatory relief, including injunctions or temporary restraining orders before or after the constitution of the Arbitration Tribunal, and any such request shall not be deemed incompatible with the agreement to arbitrate or a waiver of the right to arbitrate.

 

ARTICLE XVIII

 

GENERAL PROVISIONS

 

18.1                 Force Majeure.  If the performance of any part of this Agreement (except for any payment obligation under this Agreement) by either Party is prevented, restricted, interfered with or delayed by reason of any cause beyond the reasonable control of such Party (including, fire, flood, earthquake, tsunami, embargo, power shortage or failure, acts of war, insurrection, riot, terrorism, strike, lockout or other labor disturbance, acts of God or any acts, omissions or delays in acting of the other Party), the Party so affected shall, upon giving written notice to the other Party, be excused from such performance to the extent of such prevention, restriction, interference or delay; provided that the affected Party shall use its reasonable efforts to avoid or remove such causes of non-performance and shall continue performance with the utmost dispatch whenever such causes are removed.

 

94

 

[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

18.2                 Governing Law.  This Agreement and all questions regarding its validity or interpretation, or the breach or performance of this Agreement, shall be governed by, and construed and enforced in accordance with, the Laws of England and Wales, without reference to conflict of law principles.  The Parties hereby agree that the provisions of the United Nations Convention on Contracts for the International Sale of Goods shall not apply to this Agreement and are strictly excluded.

 

18.3                 Waiver of Breach.  The failure of either Party at any time or times to require performance of any provision hereof shall in no manner affect its rights at a later time to enforce the same.  No waiver by either Party of any condition or term in any one or more instances shall be construed as a further or continuing waiver of such condition or term or of another condition or term.

 

18.4                 Modification.  No amendment or modification of any provision of this Agreement shall be effective unless in writing signed by both Parties hereto.  No provision of this Agreement shall be varied, contradicted or explained by any oral agreement, course of dealing or performance or any other matter not set forth in an agreement in writing and signed by both Parties hereto.

 

18.5                 Severability.  In the event any provision of this Agreement should be held invalid, illegal, or unenforceable in any jurisdiction, the Parties shall negotiate in good faith a valid, legal and enforceable substitute provision that most nearly reflects the original intent of the Parties and all other provisions of this Agreement shall remain in full force and effect in such jurisdiction.  Such invalidity, illegality or unenforceability shall not affect the validity, legality or enforceability of such provision in any other jurisdiction.  In the event a Party seeks to avoid a provision of this Agreement by asserting that such provision is invalid, illegal or otherwise unenforceable, the other Party shall have the right to terminate this Agreement upon sixty (60) days’ prior written notice to the asserting Party, unless such assertion is eliminated and the effect of such assertion cured within such sixty (60) day period.

 

18.6                 Entire Agreement; Amendments.  This Agreement (including the Exhibits attached hereto), together with the pharmacovigilance agreement specified in Section 4.6(b), the Quality Agreement, and the Supply Agreement (in each case, when executed) constitute the entire agreement between the Parties relating to the subject matter hereof and supersede all prior and contemporaneous agreements, representations and/or understandings, including the Confidentiality Agreement between the Parties dated June 11, 2014.  No terms or provisions of this Agreement shall be varied or modified by any prior or subsequent statement, conduct or act of either of the Parties, except that the Parties may amend this Agreement by written instruments specifically referring to and executed in the same manner as this Agreement.

 

95

 

[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

18.7                 Notices.  Unless otherwise agreed by the Parties or specified in this Agreement, all communications between the Parties relating to, and all written documentation to be prepared and provided under, this Agreement shall be in the English language.  Any notice required or permitted under this Agreement shall be in writing in the English language, and (a) delivered personally, (b) sent by air mail or express courier service providing evidence of receipt, postage pre-paid where applicable, or (c) by electronic transmission or facsimile (complete transmission confirmed and a copy promptly sent by another permissible method of providing notice described in paragraph (a) or (b) above), to the following addresses of the Parties (or such other address for a Party as may be specified by like notice):

 

	
To Array:

 

Array BioPharma Inc.

3200 Walnut Street

Boulder, CO 80301 USA

Attn:    Chief Operating Officer
    	
 
    	
To PFM:

 

Pierre Fabre Medicament SAS

45 place Abel Gance

92100 Boulogne Billancourt, France_

Attn:  Chief Executive Officer
    
	
 
    	
 
    	
 
    
	
With a copy to (which shall
   not constitute notice):

 

Array BioPharma Inc.

3200 Walnut Street

Boulder, CO 80301 USA

Attn:  General   Counsel
    	
 
    	
With a copy to (which shall
   not constitute notice):

 

Pierre Fabre Medicament   SAS

Parc Industiel La   Chartreuse

81106 Castres, France

Attn: General Counsel
    

 

 

Any notice required or permitted to be given concerning this Agreement shall be effective upon receipt by the Party to whom it is addressed.

 

18.8                 Assignment.  This Agreement shall not be assignable by either Party to any Third Party hereto without the written consent of the other Party hereto; except either Party may assign this Agreement without the other Party’s consent to an entity that acquires substantially all of the business or assets of the assigning Party, whether by merger, acquisition or otherwise; provided that the acquiring party agrees in a writing delivered to the non-assigning Party to assume all of the rights and obligations of the assigning Party under this Agreement.  In addition, either Party shall have the right to assign this Agreement to an Affiliate, with the prior written consent of the other Party (which shall not be unreasonably withheld or delayed); provided that the assigning Party guarantees the performance of this Agreement by such Affiliate and such Affiliate agrees in a

 

96

 

[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

writing delivered to the non-assigning Party to assume all of the rights and obligations of the assigning Party under this Agreement; and further provided that if the non-assigning Party reasonably believes such assignment could result in material adverse tax consequences to the non-assigning Party, the non-assigning Party shall have no obligation to consent to the proposed assignment.  For clarity, any assignment of this Agreement shall be without prejudice to any required review by the relevant competition law authorities.  Subject to the foregoing, this Agreement shall inure to the benefit of each Party, its successors and permitted assigns.  Any assignment of this Agreement in contravention of this Section 18.8 shall be null and void.

 

18.9    Performance.  Unless expressly otherwise provided hereunder, each Party or its Affiliates may perform its obligations hereunder through its Affiliates or Subcontractors, provided that such Party shall have entered into a written agreement (a “Subcontract”) with its Subcontractors which shall be consistent with the terms and conditions of this Agreement, shall contain confidentiality provisions no less restrictive than those set forth in Article 10.  Additionally, to the extent that such Subcontractor shall be responsible for performance of any Development activities undertaken in accordance with this Agreement, then the applicable Subcontract shall contain a certification that such Subcontractor has not been debarred, and is not subject to debarment, pursuant to Section 306 of the United States Federal Food, Drug and Cosmetics Act (or similar Laws of any other country), and is not the subject of a conviction described in such section.  Notwithstanding the foregoing, the subcontracting Party (or Party whose Affiliate enters into a Subcontract) shall remain liable under this Agreement for the performance of all its obligations under this Agreement and shall be responsible for and liable for compliance by its Subcontractors with the applicable provisions of this Agreement.

 

18.10        Array Change of Control.  In the event of the occurrence of a Array Change of Control during the term of this Agreement, the following provisions of this Section 18.10 shall apply:

 

(a)                             Certain Terms Regarding Array Know-How and Array Patents.  All Array Know-How and Array Patents Controlled by Array immediately prior to such Array Change of Control shall continue to be Array Know-How and Array Patents for purposes of this Agreement.  Patents and Know-How that were owned or controlled by the entity acquiring Array (the “Acquirer”) or a direct or indirect parent holding company of Array or the Acquirer’s Affiliates prior to such Array Change of Control shall not be included within the Array Know-How and Array Patents, unless they are actually used by Array in the Development or Commercialization of a Product, and are needed by or reasonably useful to PFM in order for PFM to exercise its rights or perform its obligations under this Agreement .  Similarly, Patents and Know-How that were developed or acquired by the Acquirer or its Affiliates (other than Array) shall not be included

 

97

 

[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

within the Array Know-How and Array Patents, unless they are actually used by Array in the Development or Commercialization of a Product, and are needed by or reasonably useful to PFM in order for PFM to exercise its rights or perform its obligations under this Agreement.

 

(b)                             Definitions.

 

(i)                    As used herein, “Array Change of Control” means (a) completion of a merger, reorganization, amalgamation, arrangement, share exchange, consolidation, tender or exchange offer, private purchase, business combination, recapitalization or other transaction involving Array as a result of which either (1) the stockholders of Array immediately preceding such transaction hold less than 50% of the outstanding shares, or less than 50% of the outstanding voting power, respectively, of the ultimate company or entity resulting from such transaction immediately after consummation thereof (including a company or entity which as a result of such transaction owns the then outstanding securities of Array or all or substantially all of Array’s assets, including Array’s assets related to the Binimetinib, Encorafenib and Products, either directly or through one or more subsidiaries), or (2) any single Third Party person or group (within the meaning of the U.S. Securities Exchange Act of 1934 and the rules of the SEC thereunder as in effect, referred to as a “Group”) holds 50% or more of the outstanding shares or voting power of the ultimate company or entity resulting from such transaction immediately after the consummation thereof (including a company or entity which as a result of such transaction owns the then outstanding securities of Array or all or substantially all of Array’s assets either directly or through one or more subsidiaries); or (b) the direct or indirect acquisition (including by means of a tender offer or an exchange offer) by any Third Party person or Group of beneficial ownership (within the meaning of the U.S. Securities Exchange Act of 1934 and the rules of the SEC thereunder as in effect), or the right to acquire beneficial ownership, or formation of any Third Party Group which beneficially owns or has the right to acquire beneficial ownership, of 50% or more of either the outstanding voting power or the then outstanding shares of Array, in each case on a fully diluted basis.

 

(ii)                As used herein, “Know-How” means any information and materials, whether proprietary or not and whether patentable or not, including ideas, concepts, formulas, methods, procedures, designs, compositions, plans, documents, data, inventions, discoveries, works of authorship, compounds and biological materials.

 

18.11        No Partnership or Joint Venture.  Nothing in this Agreement is intended, or shall be deemed, to establish a joint venture or partnership between PFM and Array.  Neither Party to this

 

98

 

[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

 

Agreement shall have any express or implied right or authority to assume or create any obligations on behalf of, or in the name of, the other Party, or to bind the other Party to any contract, agreement or undertaking with any Third Party.

 

18.12        Interpretation.  The captions to the several Articles and Sections of this Agreement are not a part of this Agreement, but are included for convenience of reference and shall not affect its meaning or interpretation.  In this Agreement: (a) the word “including” shall be deemed to be followed by the phrase “without limitation” or like expression; (b) the singular shall include the plural and vice versa; and (c) masculine, feminine and neuter pronouns and expressions shall be interchangeable.  Each accounting term used herein that is not specifically defined herein shall have the meaning given to it under generally accepted cost accounting principles, but only to the extent consistent with its usage and the other definitions in this Agreement.  This Agreement shall not confer any benefits on any third parties. No third party may enforce any term of this Agreement. The provisions of the Contracts (Rights of Third Parties) Act 1999 are hereby expressly excluded from this Agreement.

 

18.13        Export Laws; Anticorruption Policy.  Notwithstanding anything to the contrary contained herein, all obligations of Array and PFM are subject to prior compliance with export regulations of the European Union, or any other relevant country and such other Laws and regulations in effect in the European Union, or any other relevant country as may be applicable, and to obtaining all necessary approvals required by the applicable agencies of the governments of the countries within the European Union, and any other relevant countries.  Array and PFM shall cooperate with each other and shall provide assistance to the other as reasonably necessary to obtain any required approvals.

 

18.14        Counterparts; Other Matters.  This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument.  Signatures to this Agreement delivered by facsimile or similar electronic transmission will be deemed to be binding as originals.  This Agreement is established in the English language.  Any translation in another language shall be deemed for convenience only and shall never prevail over the original English version.

 

[Page Signature Follows]

 

99

 

[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

Execution version

 

 

IN WITNESS WHEREOF, the Parties have executed this Development and Commercialization Agreement as of the date first set forth above.

 

 

 

	
ARRAY   BIOPHARMA INC.
    	
 
    
	
 
    	
 
    
	
BY:
    	
/s/ John Moore
    	
 
    
	
 
    	
 
    	
 
    
	
NAME: 
    	
John MOORE
    	
 
    
	
 
    	
 
    	
 
    
	
TITLE: 
    	
General   Counsel & Secretary
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
PIERRE   FABRE MEDICAMENT SAS
    	
 
    
	
 
    	
 
    
	
BY:
    	
/s/ Frédéric Duchesne
    	
 
    
	
 
    	
 
    	
 
    
	
NAME: 
    	
Frédéric DUCHESNE
    	
 
    
	
 
    	
 
    	
 
    
	
TITLE: 
    	
President & Chief Executive Officer
    	
 
    

 

[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

Confidential

Execution Version

 

EXHIBIT 1.5

 

ARRAY PATENTS

 

 

[* Information contained in tables on pages 1 – 34 redacted.]

 

[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

Confidential

Execution Version

 

EXHIBIT 1.8

 

BINIMETINIB

 

 

 

 

MEK162

 

6-(4-Bromo-2-fluoro-phenylamino)-7-fluoro-3-methyl-3H-benzoimidazole-5-carboxylic acid (2-hydroxy-ethoxy)-amide

 

CAS 606143-89-9

 

[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

Confidential

Execution Version

 

EXHIBIT 1.25

 

EUROPEAN ECONOMIC AREA

 

 

Austria, Belgium, Bulgaria, Croatia, Republic of Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, the UK, Iceland, Liechtenstein and Norway.

 

[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

Confidential

Execution Version

 

EXHIBIT 1.29

 

ENCORAFENIB

 

 

 

LGX818

 

Methyl [(2S)-1-{[4-(3-{5-chloro-2-fluoro-3-[(methylsulfonyl)amino]phenyl}-1-isopropyl-1H-pyrazol-4-yl)-2-pyrimidinyl]amino}-2-propanyl]carbamate

 

CAS 1269440-17-6

 

[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

Confidential

Execution Version

 

EXHIBIT 1.48

 

IST GUIDELINES

 

[*]

 

[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

Confidential

Execution Version

 

EXHIBIT 1.71

 

PRODUCT TRADEMARKS

 

 

[* Information in tables contained on pages 39 – 41 redacted.]

 

[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

Confidential

Execution Version

 

EXHIBIT 1.72

 

REGIONS

 

 

[* Information contained in tables on pages 42 – 43 redacted.]

 

[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

Confidential

Execution Version

 

EXHIBIT 2.2 (a)

 

PIERRE FABRE CURRENT SALE STRUCTURES FOR ONCOLOGY PRODUCTS

 

 

[* Information in tables contained on pages 44 – 46 redacted.]

 

[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

Confidential

Execution Version

 

EXHIBIT 4.1

 

EXISTING CLINICAL STUDIES

 

 

[* Information contained in tables on pages 47 – 52 redacted.]

 

[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

Confidential

Execution Version

 

EXHIBIT 4.2

 

INITIAL GLOBAL DEVELOPMENT PLAN AND BUDGET

 

I- Initial Global Development Plan

 

Study 1:

 

	
Title
    	
Phase   III Global Registration Study of binimetinib with ribociclib in NRAS melanoma   patients
    
	
Design
    	
Randomized   trial comparing combination of binimetinib + ribociclib vs. binimetinib   monotherapy in NRAS-mutant melanoma patients who have received no prior   systemic chemotherapy or targeted therapy (prior immunotherapy allowed)
    
	
Contingencies
    	
1) NEMO   results, 2) Completion of ongoing Phase 1/2 trial of binimetinib + ribociclib   to determine appropriate regimen (dose & schedule)
    
	
Sponsor
    	
Pierre Fabre
    
	
Est. Patients
    	
n = 400
    
	
Budget
    	
€ 40 million, allocated 40% Pierre Fabre, 60%   Array
    

 

Study 2:

 

	
Title
    	
Phase   Ib/2 study of novel RAF-based triplets in BRAF-mutant colorectal cancer
    
	
Design
    	
Multi-arm   trial exploring combinations of encorafenib + cetuximab + binimetinib and/or   irinotecan in colorectal cancer patients with BRAF mutation who have received   limited (1st-line/2nd-line) prior systemic therapy
    
	
Contingencies
    	
n/a
    
	
Sponsor
    	
Array
    
	
Est. Patients
    	
n < 100
    
	
Budget
    	
€ 10 million,   allocated 40% Pierre Fabre, 60% Array
    

 

Study 3:

 

	
Title
    	
Phase   III Global Registration Study of encorafenib with cetuximab in BRAF   colorectal cancer patients
    
	
Design
    	
Randomized   trial comparing combination of encorafenib + cetuximab vs. irinotecan +   cetuximab in BRAF-mutant colorectal cancer patients who have progressed   following irinotecan-based therapy (eg. 2nd/3rd-line)
    
	
Contingencies
    	
90 day   decision period following feedback from FDA and EMA
    
	
Sponsor
    	
Array
    
	
Est. Patients
    	
n = 500
    
	
Budget
    	
€ 50 million,   allocated 40% Pierre Fabre, 60% Array. Pierre Fabre is capped at € 15 million   total contribution
    

 

[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

Confidential

Execution Version

 

EXHIBIT 5.1 – Part A

 

COMMERCIALIZATION PLAN

 

[* Information contained on pages 54 – 58 redacted.]

 

[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

Confidential

Execution Version

 

EXHIBIT 5.1 – Part B

 

COMMITTED RESOURCE LEVEL

 

[* Information contained on page 59 redacted.]

 

[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

Confidential

Execution Version

 

EXHIBIT 9.2

 

KEY SUPPLY TERMS

 

 

The following terms shall apply to the sourcing or supply of the Drug Product or Finished Product, as applicable by Array to PFM and shall be incorporated in a supply agreement to be entered between the Parties .  It is understood and agreed that (a) Array shall not be required under such Supply Agreement to grant to PFM greater rights or to incur additional obligations to PFM than exist under Array’s agreements with its suppliers which are entered into prior to the Effective Date and have been shared with PFM, and (b) Array’s supply obligations with respect to Finished Product shall be limited to the formulations, dosages and dosage forms that are (a) the subject of the Clinical Studies within the GDP, (ii) then being Developed and Commercialized by Array in the U.S., or (c) are otherwise agreed upon in writing by the Parties.

 

1.                                    Rolling Forecasts and Orders.  Customary terms to be agreed in the Supply Agreement

 

2.                                    Delivery.  Terms to be agreed in the Supply Agreement3.               Specifications and Manufacturing Standards.  Array shall only ship or have shipped Drug Product or Finished Product, as applicable to PFM which complies with: (i) the specifications for the Product (“Specifications”); and (ii) all Manufacturing Standards required by the FDA and EMA.  Array also agrees to meet the requirements of any Regulatory Authority in the PFM Territory, other than the EMA, as soon as reasonably practicable on the condition that: (A) PFM shall notify Array of such requirements with sufficient notice to allow Array to meet such requirements; and (B) any increased cost to Array associated with preparing for, coming into compliance with, and meeting such requirements shall be borne by PFM.  The Parties as well as any relevant suppliers or Subcontractors of Array shall, at an appropriate time before commencement of deliveries of the Product to PFM, conclude a separate quality agreement in a format suitable for submission to the Regulatory Authorities in all relevant countries of the PFM Territory, recording the agreed-upon Specifications and Manufacturing Standards and measures to assure compliance with Current Good Manufacturing Practices regarding manufacturing, storage, transportation and release of Product, including handling of deviations, complaints, product incidents, management of change control, and the related responsibilities of each Party thereto (“Quality Agreement”).

 

The responsibility for Product Release and Qualified Person will be agreed in the Supply Agreement and in the Quality Agreement provided that unless otherwise agreed by the Parties, Product containing Binimetinib will be supplied as Finished Product and will be released by Array’s manufacturer Almac for EU.

 

4.                                    Inspection; Product Rejection.  PFM shall, promptly upon receipt of each shipment of the Product, perform a customary inspection.

 

(a)                                                Each shipment of the Product to PFM shall be accompanied by the following written documentation:  (i) the date of manufacture; (ii) delivered amount of Product or Product units; (iii) a certificate of conformance issued by Array Quality Responsible Person, (iv) a certificate of analysis setting forth the results of tests performed by or on behalf of Array as required by the Specifications and Manufacturing Standards and (v) any other documentation set forth in the Quality Agreement.

 

(b)If the Product supplied under the Supply Agreement fails to conform to the applicable Specifications and Manufacturing Standards, PFM shall notify Array in writing no later than thirty (30) days (or such shorter time as may be required under Array’s agreement with its 

 

[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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supplier(s)) after its receipt of the Product of such non-conformity and PFM shall immediately present reasonable evidence to Array of such non-conformity.  Except as provided in subclause (c) below, if PFM fails to notify Array in writing within such thirty (30) day period of any non-conformity, the Product shall be deemed to conform to the applicable Specifications and Manufacturing Standards.

 

(c) Notwithstanding the last sentence of subclause (b) above, if PFM discovers any Latent Defects in such Product within the period prescribed in Array’s agreement with its suppliers(s), if any, PFM shall immediately notify Array in writing and shall present reasonable evidence to Array of such Latent Defects together with such notice.  In such case, PFM may request that Array replace Product in which such Latent Defects have been discovered in accordance subclause (d) below, it being understood that the foregoing shall not serve to limit Array’s obligations to indemnify PFM for a breach by Array of its Product warranties under the Supply Agreement.  “Latent Defect(s)” shall mean any non-conformity of Product to the applicable Specifications and/or Manufacturing Standards that PFM cannot reasonably be expected to have identified on its initial inspection of such Product.

 

(d) Array shall replace, or cause to be replaced, at no additional expense to PFM, any Product rejected by PFM pursuant to subclause (b), or any Product in respect of which PFM notifies Array a Latent Defect has been discovered pursuant to subclause (c), as applicable, with new Product which does conform with the Specifications and Manufacturing Standards as promptly as possible after receipt of PFM’s notification, provided that in the case of a rejection under subclause (c) that such Latent Defect is reported by PFM in compliance with the requirements (including applicable time limits, if any) of the latent defects provision of Array’s agreement with its supplier(s).  The Parties may appoint a Third Party to analyze any unit of the Product rejected by PFM under subclause (b), or in respect of which PFM notifies Array a Latent Defect has been discovered pursuant to subclause (c), and, if it is objectively established that the Product was conforming, then PFM shall be responsible for payment for any such units of Product and any replacement Product shipped by Array.  Array shall give PFM written instructions as to how PFM should, at Array’s expense, dispose of any non-conforming Product, and such instructions shall comply with all appropriate governmental requirements.

 

5.                                    Shelf Life.  Minimum shelf life of the Product supplied to PFM will be agreed in the Supply Agreement based on the total shelf life approved for each Product.

 

6.                                    Documentation.  Array or its CMO shall keep and maintain for a duration in accordance with applicable Laws: (i) reference samples and quality control records for each batch of raw material and packaging material used in the manufacture of the Product; and (ii) manufacturing and quality control records for each batch of the Product.

 

7.                                    PFM Right of Inspection.  Array shall, upon written request of PFM, permit PFM’s authorized representative to inspect (and if reasonably necessary, to copy) , during normal working hours and upon reasonable prior notice, the following:  (i) all manufacturing and quality control records for all manufacture of the Product; and (ii) quality control records of all API used in the manufacture of the Product.

 

8.                                    Quality Audit.  PFM shall be entitled, during normal working hours and upon reasonable prior notice to Array, to inspect Array’s facilities utilized for the manufacture of the Product (including any active ingredients therein), or such facilities of any Third Party manufacturer engaged by Array (or Novartis as applicable) in connection with the manufacture of the Product (including the supply of any active ingredients therein) (the “CMO”), not more than once every two years, provided that at any time PFM shall have the right to inspect Array or Array CMO facilities for cause. Array shall, to the extent practicable and legally permissible, give PFM prior notice of any inspections by the EMA or other Regulatory Authority in the PFM Territory of Array’s manufacturing facilities for the Product or any inspections of the facilities of any CMO engaged by Array.  PFM being the MA 

 

[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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holder, Array shall, to the extent legally permissible: (a)  permit a representative of PFM to be present at such inspections; (b) disclose to PFM the results of any such inspection by the EMA or any other Regulatory Authority in the PFM Territory to the extent related to the Product and/or (c) implement any measures necessary to respond to the Regulatory Authorities in a satisfactory manner.

 

9.                                    Suppliers.  It is understood that Array will satisfy its supply obligations to PFM hereunder either in whole or in part through arrangements with Third Parties engaged to perform services or supply facilities or goods in connection with the manufacture, testing, and/or packaging of Product. Array may place orders for Product with such suppliers on PFM’s behalf, or arrange with such supplier(s) for PFM to place such orders, for shipment to PFM; in such event PFM shall pay for such Product directly to the particular supplier.

 

10.                            Shortage of Supply.

 

(b)                              Procedures.  Parties will agree in the Supply Agreement on measures to put in place in a reasonable period of time in order to avoid shortage of supply (including PFM maintaining at PFM’s expense a buffer stock or alternative sources of supply of Material for use in the PFM Territory).  In addition, if at any time Array becomes unable, or concludes that it will be unable, to supply PFM’s requirements for the Product, Array shall immediately notify PFM in writing.  In such event, the Parties shall immediately convene to address the problem, including locating alternative suppliers and facilities to increase production and identifying other actions necessary to resolve the problem.  Based on such interactions, the Parties shall reasonably agree on appropriate measures to remedy the shortage and shall promptly implement such measures.  In any event, both Parties agree to respond with the level of speed and diligence commensurate with the severity of the problem.

 

Allocation.  If despite the measures taken Array is unable to supply PFM’s requirements of Product, Array shall allocate the quantities of the Product that (i) Array has in inventory prorata based upon sales history and realistic forecasted demand (on a worldwide basis), and (ii) Array is able to produce prorata based upon sales history and realistic forecasted demand (on a worldwide basis).

 

11.                            Representations and Warranties of Array as to Manufacture and Supply of Product.  Array covenants, represents and warrants to PFM that:

 

(a)                              All Product manufactured and delivered by or under the authority of Array to PFM under the Supply Agreement shall be manufactured in accordance with:  (i) the Specifications as will be set forth in the Quality Agreement; (ii) the Manufacturing Standards required by the EMA and FDA (iii) any further manufacturing, packaging or other standards agreed in writing by the Parties and (v) applicable Laws.

 

(b)                              All active ingredients used by Array or its designees in the manufacture of Product delivered to PFM under the Supply Agreement shall be manufactured in accordance with the manufacturing processes set forth in the relevant DMF referenced in the Product MA/MAA.

 

(c)                              The ownership and operation of the manufacturing facilities for the Product supplied to PFM under the Supply Agreement shall be in compliance with: (i) the Manufacturing Standards required by the EMA and FDA; (ii) any further manufacturing, packaging or other standards agreed in writing by the Parties and (iii) applicable Laws.

 

[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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EXHIBIT 10.2 –

 

INITIAL PRESS RELEASE

 

Array BioPharma and Pierre Fabre Announce Strategic Collaboration for Development and Commercialization of Two Novel Oncology Products, Binimetinib and Encorafenib

 

- Array BioPharma to receive $30 million in up-front payment and up to $425 million in additional development and commercialization milestones, including tiered double-digit royalties on future sales -

 

 

 

- Array BioPharma retains full commercialization rights to binimetinib and encorafenib in 
 United States, Canada, Japan, Korea and Israel

 

- Array BioPharma to host conference call November X, 2015 at X:XX am Eastern Time -

 

Boulder, Colo. and Castres, France, (November X, 2015) – Array BioPharma Inc. (Nasdaq: ARRY) and Pierre Fabre today announced a strategic collaboration to globally develop and commercialize Array’s late-stage novel oncology products, binimetinib and encorafenib. Binimetinib, a MEK inhibitor, and encorafenib, a BRAF inhibitor, are currently advancing in three, global Phase 3 trials for melanoma and ovarian cancer. Top-line results from NEMO, a Phase 3 study of binimetinib in patients with NRAS-mutant melanoma, are anticipated before the end of 2015.  Array plans to host a conference call on November X, 2015 at X:XX am ET to further discuss the collaboration.

 

 

Under the terms of the agreement, Array will receive an upfront payment of $30 million and retains full commercialization rights for binimetinib and encorafenib in the United States, Canada, Japan, Korea and Israel.  Pierre Fabre will have exclusive rights to commercialize both products in all other countries, including Europe, Asia and Latin America. Array is entitled to receive up to $425 million if certain development and commercialization milestones are achieved, and is eligible for tiered double-digit royalties. Array and Pierre Fabre will also jointly invest in worldwide development of the products on a 60:40 basis (Array:Pierre Fabre) to fund new clinical trials in colorectal cancer and melanoma.

 

 

Pierre Fabre Oncology, a franchise of the global 10 000-employee Pierre Fabre company includes over 500 employees dedicated to commercialization of oncology proprietary drugs.

In 2014, worldwide annual sales of Pierre Fabre Oncology products surpassed $200 million on the strength of the Oral Navelbine, Javlor and Busilvex brands. In addition, Pierre Fabre has a significant commitment in pharmaceutical R&D with 650 dedicated employees and a strong focus on advancing products for patients afflicted with lung, breast, colorectal, skin and hematologic cancers.

 

 

“In Pierre Fabre we have a uniquely positioned strategic partner with a focus on oncology to develop and commercialize binimetinib and encorafenib in Europe and key emerging markets around the 

 

[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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world,” said Ron Squarer, CEO Array BioPharma. “With Phase 3 trials approaching data readouts, and over 30 additional Phase 1/2 trials underway, we are confident that binimetinib and encorafenib are well positioned for near-term regulatory submissions and significant future growth.”

 

 

“Pierre Fabre is strongly committed in developing and commercializing oncology products.” said Frederic Duchesne, CEO Pierre Fabre Pharmaceuticals. “This partnership with Array is fully aligned with our growth strategy in Pharmaceuticals, our geographic footprint, and our corporate mission to bring to the market novel oncology products which address unmet patient needs. These two targeted small molecules will fit perfectly with our broad expertise in oncology and dermatology, and will strengthen our current portfolio and international presence”.

 

 

 

The effectiveness of the agreement remains subject to European Commission on Competition review and approval.

 

 

 

 

CONFERENCE CALL INFORMATION

 

Array will hold a conference call on Wednesday, November XX, 2015 at XX a.m. Eastern Time to discuss these results.  Ron Squarer, Chief Executive Officer, and Patricia Henahan, Chief Financial Officer, will lead the call.

 

	
Date:
    	
DAY,   November X, 2015
    
	
Time:
    	
X:00   a.m. Eastern Time
    
	
Toll-Free:
    	
(844)   464-3927
    
	
Toll:
    	
(765)   507-2598
    
	
Pass Code:
    	
###
    
	
Webcast, including Replay and Conference Call   Slides:  ADD LINK
    

 

 

About Binimetinib and Encorafenib

RAF and MEK are key protein kinases in the RAS/RAF/MEK/ERK pathway. Research has shown this pathway regulates several key cellular activities including proliferation, differentiation, migration, survival and angiogenesis. Inappropriate activation of proteins in this pathway has been shown to occur in many cancers, such as non-small cell lung cancer, melanoma, colorectal, ovarian and thyroid cancers. Binimetinib is a small molecule MEK inhibitor and encorafenib is a small molecule BRAF inhibitor, both of which target key enzymes in this pathway. Three Phase 3 trials in advanced cancer patients continue to advance: NRAS-mutant melanoma (NEMO, with binimetinib), low-grade serous ovarian cancer (MILO, with binimetinib) and BRAF-mutant melanoma (COLUMBUS, with binimetinib and encorafenib). NRAS-mutant melanoma represents the first potential indication for binimetinib, with a projected regulatory filing estimated in the first half of 2016. Array also projects a regulatory filing of binimetinib in combination with encorafenib in BRAF melanoma in 2016.

 

[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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About Pierre Fabre

Pierre Fabre is a French privately-owned health  and beauty care company created in 1961 by Mr. Pierre Fabre. In 2014, global sales reached € 2.1 billion across 130 countries. The company is structured around two divisions: Pharmaceuticals (Prescription drugs, Consumer Health Care) and Dermo-cosmetics (including the European and Asian market-leader Eau Thermale Avène brand). Pierre Fabre employs some 10,000 people worldwide and owns subsidiary in 43 countries. In 2014, the company allocated 17 percent of its pharmaceuticals sales to R&D with a focus on 4 therapeutic areas: oncology, dermatology, CNS and consumer health care.

 

 

Pierre Fabre’s oncology know-how is based on 3 decades of experience in the discovery, development and global commercialization of innovative cancer drugs including monoclonal antibodies and natural cytotoxic agents. The company performs its oncology R&D in two major research centres: the Pierre Fabre Immunology Centre (CIPF) based in Saint-Julien-en-Genevois (France) and the Pierre Fabre Research Institute (IRPF) located on the Toulouse-Oncopole campus. The latter is officially recognized by the French government as a National Center of Excellence for cancer research.

 

 

For more information on Pierre Fabre, please go to www.pierre-fabre.com.

 

About Array BioPharma

Array BioPharma Inc. is a biopharmaceutical company focused on the discovery, development and commercialization of targeted small molecule drugs to treat patients afflicted with cancer. Six registration studies are currently advancing related to three cancer drugs. These programs include binimetinib (MEK162 / wholly-owned), encorafenib (LGX818 / wholly-owned) and selumetinib (AstraZeneca). For more information on Array, please go to www.arraybiopharma.com.

 

 

Array BioPharma Forward-Looking Statement

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about the timing of the announcement of the results of clinical trials for our proprietary and our partnered programs, the timing of the completion or initiation of further development of our wholly-owned and our partnered programs, including the timing of regulatory filings, expectations that events will occur that will result in greater value for Array, the potential for the results of ongoing preclinical and clinical trials to support regulatory approval or the marketing success of a drug candidate, our ability to partner our proprietary drug candidates for up-front fees, milestone and/or royalty payments, our future plans to progress and develop our proprietary programs and the plans of our collaborators to progress and develop programs we have licensed to them, and our plans to build a late-stage development company. These statements involve significant risks and uncertainties, including those discussed in our most recent annual report filed on Form 10-K, in our quarterly reports filed on Form 10-Q, and in other reports filed by Array with 

 

[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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the Securities and Exchange Commission. Because these statements reflect our current expectations concerning future events, our actual results could differ materially from those anticipated in these forward-looking statements as a result of many factors. These factors include, but are not limited to, our ability to continue to fund and successfully progress internal research and development efforts and to create effective, commercially-viable drugs; risks associated with our dependence on our collaborators for the clinical development and commercialization of our out-licensed drug candidates; the ability of our collaborators and of Array to meet objectives tied to milestones and royalties; our ability to effectively and timely conduct clinical trials in light of increasing costs and difficulties in locating appropriate trial sites and in enrolling patients who meet the criteria for certain clinical trials; risks associated with our dependence on third-party service providers to successfully conduct clinical trials within and outside the United States; our ability to achieve and maintain profitability and maintain sufficient cash resources; the extent to which the pharmaceutical and biotechnology industries are willing to in-license drug candidates for their product pipelines and to collaborate with and fund third parties on their drug discovery activities; our ability to out-license our proprietary candidates on favorable terms; and our ability to attract and retain experienced scientists and management. We are providing this information as of November X, 2015. We undertake no duty to update any forward-looking statements to reflect the occurrence of events or circumstances after the date of such statements or of anticipated or unanticipated events that alter any assumptions underlying such statements.

 

[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.

 

 

Confidential treatment of certain confidential information contained in this document, marked in bold and brackets, is being sought pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

 

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EXHIBIT 12.8

 

DOMAIN NAMES

 

[* Information contained on page 67 redacted.]

 

[*] Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended. Confidential treatment has been requested with respect to this information.Exhibit 10.1

 

EXECUTION VERSION

 

 

 

CREDIT AGREEMENT

 

Dated as of June 8, 2016,

 

among

 

STATION CASINOS LLC,
 as Borrower,

 

THE SUBSIDIARIES OF BORROWER PARTY HERETO,
 as Guarantors,

 

THE LENDERS PARTY HERETO,

 

THE L/C LENDERS PARTY HERETO

 

and

 

DEUTSCHE BANK AG CAYMAN ISLANDS BRANCH,

as Administrative Agent and as Collateral Agent,

 

 

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,
 JPMORGAN CHASE BANK, N.A., DEUTSCHE BANK SECURITIES INC., FIFTH THIRD BANK,

GOLDMAN SACHS BANK USA, CITIGROUP GLOBAL MARKETS INC., 
 MACQUARIE CAPITAL (USA) INC., CITIZENS BANK, N.A. and UBS SECURITIES LLC,

as Lead Arrangers and Bookrunners for the Revolving Facility and the Term A Facility,

 

and

 

JPMORGAN CHASE BANK, N.A.,
 MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,
 DEUTSCHE BANK SECURITIES INC., FIFTH THIRD BANK,

GOLDMAN SACHS BANK USA, CITIGROUP GLOBAL MARKETS INC. and
 MACQUARIE CAPITAL (USA) INC., CITIZENS BANK, N.A., UBS SECURITIES LLC

as Lead Arrangers and Bookrunners for the Term B Facility,

 

and

 

JPMORGAN CHASE BANK, N.A., BANK OF AMERICA, N.A., 
 DEUTSCHE BANK AG CAYMAN ISLANDS BRANCH and FIFTH THIRD BANK,
 as Syndication Agents

 

and

 

GOLDMAN SACHS BANK USA, CITIGROUP GLOBAL MARKETS INC.,
 MACQUARIE CAPITAL (USA) INC., CITIZENS BANK, N.A., UBS SECURITIES LLC and 
 CREDIT SUISSE SECURITIES (USA) LLC,
 as Documentation Agents

 

 

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
ARTICLE I.
    
	
 
    
	
DEFINITIONS, ACCOUNTING MATTERS AND RULES OF CONSTRUCTION
    
	
 
    	
 
    	
 
    
	
SECTION 1.01.
    	
Certain Defined Terms
    	
1
    
	
SECTION 1.02.
    	
Accounting Terms and   Determinations
    	
63
    
	
SECTION 1.03.
    	
Classes and Types of   Loans
    	
64
    
	
SECTION 1.04.
    	
Rules of   Construction
    	
64
    
	
SECTION 1.05.
    	
Pro Forma Calculations
    	
65
    
	
SECTION 1.06.
    	
Letter of Credit   Amounts
    	
66
    
	
 
    	
 
    	
 
    
	
ARTICLE II.
    
	
 
    
	
CREDITS
    
	
 
    	
 
    	
 
    
	
SECTION 2.01.
    	
Loans
    	
66
    
	
SECTION 2.02.
    	
Borrowings
    	
69
    
	
SECTION 2.03.
    	
Letters of Credit
    	
69
    
	
SECTION 2.04.
    	
Termination and   Reductions of Commitment
    	
77
    
	
SECTION 2.05.
    	
Fees
    	
77
    
	
SECTION 2.06.
    	
Lending Offices
    	
78
    
	
SECTION 2.07.
    	
Several Obligations of   Lenders
    	
78
    
	
SECTION 2.08.
    	
Notes; Register
    	
78
    
	
SECTION 2.09.
    	
Optional Prepayments   and Conversions or Continuations of Loans
    	
79
    
	
SECTION 2.10.
    	
Mandatory Prepayments
    	
80
    
	
SECTION 2.11.
    	
Replacement of Lenders
    	
85
    
	
SECTION 2.12.
    	
Incremental Loan   Commitments
    	
86
    
	
SECTION 2.13.
    	
Extensions of Loans and   Commitments
    	
91
    
	
SECTION 2.14.
    	
Defaulting Lender   Provisions
    	
93
    
	
SECTION 2.15.
    	
Refinancing Amendments
    	
95
    
	
SECTION 2.16.
    	
Cash Collateral
    	
97
    
	
 
    	
 
    	
 
    
	
ARTICLE III.
    
	
 
    
	
PAYMENTS OF PRINCIPAL AND INTEREST
    
	
 
    	
 
    	
 
    
	
SECTION 3.01.
    	
Repayment of Loans
    	
98
    
	
SECTION 3.02.
    	
Interest
    	
99
    
	
 
    	
 
    	
 
    
	
ARTICLE IV.
    
	
 
    
	
PAYMENTS; PRO RATA TREATMENT; COMPUTATIONS; ETC.
    
	
 
    	
 
    	
 
    
	
SECTION 4.01.
    	
Payments
    	
100
    
	
SECTION 4.02.
    	
Pro Rata Treatment
    	
100
    
	
SECTION 4.03.
    	
Computations
    	
101
    

 

i

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
SECTION 4.04.
    	
Minimum Amounts
    	
101
    
	
SECTION 4.05.
    	
Certain Notices
    	
101
    
	
SECTION 4.06.
    	
Non-Receipt of Funds by   Administrative Agent
    	
102
    
	
SECTION 4.07.
    	
Right of Setoff,   Sharing of Payments; Etc.
    	
103
    
	
 
    	
 
    	
 
    
	
ARTICLE V.
    
	
 
    
	
YIELD PROTECTION, ETC.
    
	
 
    	
 
    	
 
    
	
SECTION 5.01.
    	
Additional Costs
    	
104
    
	
SECTION 5.02.
    	
Inability To Determine   Interest Rate
    	
105
    
	
SECTION 5.03.
    	
Illegality
    	
106
    
	
SECTION 5.04.
    	
Treatment of Affected   Loans
    	
106
    
	
SECTION 5.05.
    	
Compensation
    	
106
    
	
SECTION 5.06.
    	
Net Payments
    	
107
    
	
 
    	
 
    	
 
    
	
ARTICLE VI.
    
	
 
    
	
GUARANTEES
    
	
 
    	
 
    	
 
    
	
SECTION 6.01.
    	
The Guarantees
    	
109
    
	
SECTION 6.02.
    	
Obligations   Unconditional
    	
110
    
	
SECTION 6.03.
    	
Reinstatement
    	
112
    
	
SECTION 6.04.
    	
Subrogation;   Subordination
    	
112
    
	
SECTION 6.05.
    	
Remedies
    	
112
    
	
SECTION 6.06.
    	
Continuing Guarantee
    	
112
    
	
SECTION 6.07.
    	
General Limitation on   Guarantee Obligations
    	
112
    
	
SECTION 6.08.
    	
Release of Guarantors
    	
113
    
	
SECTION 6.09.
    	
Keepwell
    	
113
    
	
SECTION 6.10.
    	
Right of Contribution
    	
113
    
	
 
    	
 
    	
 
    
	
ARTICLE VII.
    
	
 
    
	
CONDITIONS PRECEDENT
    
	
 
    	
 
    	
 
    
	
SECTION 7.01.
    	
Conditions to Initial   Extensions of Credit
    	
114
    
	
SECTION 7.02.
    	
Conditions to All   Extensions of Credit
    	
117
    
	
 
    	
 
    	
 
    
	
ARTICLE VIII.
    
	
 
    
	
REPRESENTATIONS AND WARRANTIES
    
	
 
    	
 
    	
 
    
	
SECTION 8.01.
    	
Corporate Existence; Compliance   with Law
    	
118
    
	
SECTION 8.02.
    	
Financial Condition;   Etc.
    	
118
    
	
SECTION 8.03.
    	
Litigation
    	
119
    
	
SECTION 8.04.
    	
No Breach; No Default
    	
119
    
	
SECTION 8.05.
    	
Action
    	
119
    
	
SECTION 8.06.
    	
Approvals
    	
119
    
	
SECTION 8.07.
    	
ERISA and Foreign   Employee Benefit Matters
    	
120
    
	
SECTION 8.08.
    	
Taxes
    	
120
    
	
SECTION 8.09.
    	
Investment Company Act;   Other Restrictions
    	
121
    

 

ii

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
SECTION 8.10.
    	
Environmental Matters
    	
121
    
	
SECTION 8.11.
    	
Use of Proceeds
    	
122
    
	
SECTION 8.12.
    	
Subsidiaries
    	
122
    
	
SECTION 8.13.
    	
Ownership of Property;   Liens
    	
123
    
	
SECTION 8.14.
    	
Security Interest;   Absence of Financing Statements; Etc.
    	
123
    
	
SECTION 8.15.
    	
Licenses and Permits
    	
123
    
	
SECTION 8.16.
    	
Disclosure
    	
124
    
	
SECTION 8.17.
    	
Solvency
    	
124
    
	
SECTION 8.18.
    	
Senior Obligations
    	
124
    
	
SECTION 8.19.
    	
Intellectual Property
    	
124
    
	
SECTION 8.20.
    	
[Reserved]
    	
124
    
	
SECTION 8.21.
    	
Regulation H
    	
124
    
	
SECTION 8.22.
    	
Insurance
    	
125
    
	
SECTION 8.23.
    	
Real Estate
    	
125
    
	
SECTION 8.24.
    	
Leases
    	
125
    
	
SECTION 8.25.
    	
Mortgaged Real Property
    	
126
    
	
SECTION 8.26.
    	
Material Adverse Effect
    	
127
    
	
SECTION 8.27.
    	
Anti-Corruption Laws   and Sanctions
    	
127
    
	
 
    	
 
    	
 
    
	
ARTICLE IX.
    
	
 
    
	
AFFIRMATIVE COVENANTS
    
	
 
    	
 
    	
 
    
	
SECTION 9.01.
    	
Existence; Business   Properties
    	
127
    
	
SECTION 9.02.
    	
Insurance
    	
128
    
	
SECTION 9.03.
    	
Taxes; Performance of   Obligations
    	
129
    
	
SECTION 9.04.
    	
Financial Statements,   Etc.
    	
129
    
	
SECTION 9.05.
    	
Maintaining Records;   Access to Properties and Inspections
    	
132
    
	
SECTION 9.06.
    	
Use of Proceeds
    	
132
    
	
SECTION 9.07.
    	
Compliance with   Environmental Law
    	
133
    
	
SECTION 9.08.
    	
Pledge or Mortgage of   Real Property and Vessels
    	
133
    
	
SECTION 9.09.
    	
Security Interests;   Further Assurances
    	
135
    
	
SECTION 9.10.
    	
VoteCo SPE   Reorganization
    	
136
    
	
SECTION 9.11.
    	
Additional Credit   Parties
    	
136
    
	
SECTION 9.12.
    	
Limitation on   Designations of Unrestricted Subsidiaries
    	
137
    
	
SECTION 9.13.
    	
Limitation on   Designation of Immaterial Subsidiaries and Native American Subsidiaries
    	
138
    
	
SECTION 9.14.
    	
Ratings
    	
139
    
	
SECTION 9.15.
    	
Post-Closing Matters
    	
139
    
	
 
    	
 
    	
 
    
	
ARTICLE X.
    
	
 
    
	
NEGATIVE COVENANTS
    
	
 
    	
 
    	
 
    
	
SECTION 10.01.
    	
Indebtedness
    	
140
    
	
SECTION 10.02.
    	
Liens
    	
143
    
	
SECTION 10.03.
    	
[Reserved]
    	
146
    
	
SECTION 10.04.
    	
Investments, Loans and   Advances
    	
146
    
	
SECTION 10.05.
    	
Mergers, Consolidations   and Sales of Assets
    	
149
    
	
SECTION 10.06.
    	
Restricted Payments
    	
151
    
	
SECTION 10.07.
    	
Transactions with   Affiliates
    	
153
    
	
SECTION 10.08.
    	
Financial Covenants
    	
154
    

 

iii

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
SECTION 10.09.
    	
Certain Payments of   Indebtedness; Amendments to Certain Agreements
    	
154
    
	
SECTION 10.10.
    	
Limitation on Certain   Restrictions Affecting Subsidiaries
    	
156
    
	
SECTION 10.11.
    	
Limitation on Lines of   Business; Holding Companies; RRR
    	
158
    
	
SECTION 10.12.
    	
Limitation on Changes   to Fiscal Year
    	
158
    
	
 
    	
 
    	
 
    
	
ARTICLE XI.
    
	
 
    
	
EVENTS OF DEFAULT
    
	
 
    	
 
    	
 
    
	
SECTION 11.01.
    	
Events of Default
    	
158
    
	
SECTION 11.02.
    	
Application of Proceeds
    	
162
    
	
SECTION 11.03.
    	
Borrower’s Right to   Cure
    	
162
    
	
 
    	
 
    	
 
    
	
ARTICLE XII.
    
	
 
    
	
AGENTS
    
	
 
    	
 
    	
 
    
	
SECTION 12.01.
    	
Appointment
    	
163
    
	
SECTION 12.02.
    	
Rights
    	
163
    
	
SECTION 12.03.
    	
Exculpatory Provisions
    	
164
    
	
SECTION 12.04.
    	
Reliance by Agents
    	
165
    
	
SECTION 12.05.
    	
Delegation of Duties
    	
165
    
	
SECTION 12.06.
    	
Resignation of   Administrative Agent
    	
165
    
	
SECTION 12.07.
    	
Nonreliance on Agents   and Other Lenders
    	
166
    
	
SECTION 12.08.
    	
Indemnification
    	
167
    
	
SECTION 12.09.
    	
No Other Duties
    	
167
    
	
SECTION 12.10.
    	
Holders
    	
167
    
	
SECTION 12.11.
    	
Administrative Agent   May File Proofs of Claim
    	
168
    
	
SECTION 12.12.
    	
Collateral Matters
    	
168
    
	
SECTION 12.13.
    	
Withholding Tax
    	
169
    
	
SECTION 12.14.
    	
Secured Cash Management   Agreements and Swap Contracts
    	
169
    
	
 
    	
 
    	
 
    
	
ARTICLE XIII.
    
	
 
    
	
MISCELLANEOUS
    
	
 
    	
 
    	
 
    
	
SECTION 13.01.
    	
Waiver
    	
169
    
	
SECTION 13.02.
    	
Notices
    	
170
    
	
SECTION 13.03.
    	
Expenses, Indemnification,   Etc.
    	
171
    
	
SECTION 13.04.
    	
Amendments and Waiver
    	
173
    
	
SECTION 13.05.
    	
Benefit of Agreement; Assignments;   Participations
    	
180
    
	
SECTION 13.06.
    	
Survival
    	
186
    
	
SECTION 13.07.
    	
Captions
    	
186
    
	
SECTION 13.08.
    	
Counterparts;   Interpretation; Effectiveness
    	
186
    
	
SECTION 13.09.
    	
Governing Law;   Submission to Jurisdiction; Waivers; Etc.
    	
186
    
	
SECTION 13.10.
    	
Confidentiality
    	
187
    
	
SECTION 13.11.
    	
Independence of   Representations, Warranties and Covenants
    	
188
    
	
SECTION 13.12.
    	
Severability
    	
188
    
	
SECTION 13.13.
    	
Gaming Laws
    	
188
    
	
SECTION 13.14.
    	
USA Patriot Act
    	
189
    
	
SECTION 13.15.
    	
Waiver of Claims
    	
189
    

 

iv

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
SECTION 13.16.
    	
No Advisory or   Fiduciary Responsibility
    	
189
    
	
SECTION 13.17.
    	
Lender Action
    	
190
    
	
SECTION 13.18.
    	
Interest Rate   Limitation
    	
190
    
	
SECTION 13.19.
    	
Payments Set Aside
    	
191
    
	
SECTION 13.20.
    	
VoteCo SPE   Reorganization
    	
191
    
	
SECTION 13.21.
    	
Acknowledgement and   Consent to Bail-In of EEA Financial Institutions
    	
191
    

 

v

 

	
ANNEXES:
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
ANNEX A-1
    	
 
    	
-
    	
 
    	
Revolving Commitments
    
	
ANNEX A-2
    	
 
    	
-
    	
 
    	
Term A Facility Commitments
    
	
ANNEX A-3
    	
 
    	
-
    	
 
    	
Term B Facility Commitments
    
	
ANNEX B
    	
 
    	
-
    	
 
    	
Applicable Margin for Revolving Loans, Swingline   Loans and Term A Facility Loans
    
	
ANNEX C
    	
 
    	
-
    	
 
    	
Amortization Payments - Term A Facility Loans
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
SCHEDULES:
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
SCHEDULE 1.01(A)
    	
 
    	
-
    	
 
    	
Excluded Subsidiary Agreements
    
	
SCHEDULE 1.01(B)
    	
 
    	
-
    	
 
    	
Guarantors
    
	
SCHEDULE 1.01(C)
    	
 
    	
-
    	
 
    	
Initial Mortgaged Real Property
    
	
SCHEDULE 1.01(D)
    	
 
    	
-
    	
 
    	
Designated Lenders
    
	
SCHEDULE 1.01(E)
    	
 
    	
-
    	
 
    	
Native American Contracts
    
	
SCHEDULE 1.01(F)
    	
 
    	
-
    	
 
    	
Disqualified Lenders
    
	
SCHEDULE 2.03(n)
    	
 
    	
-
    	
 
    	
Existing Letters of Credit
    
	
SCHEDULE 7.01
    	
 
    	
-
    	
 
    	
Jurisdictions of Local Counsel Opinions
    
	
SCHEDULE 8.03
    	
 
    	
-
    	
 
    	
Litigation
    
	
SCHEDULE 8.07
    	
 
    	
-
    	
 
    	
ERISA
    
	
SCHEDULE 8.08
    	
 
    	
-
    	
 
    	
Taxes
    
	
SCHEDULE 8.10
    	
 
    	
-
    	
 
    	
Environmental Matters
    
	
SCHEDULE 8.12(a)
    	
 
    	
-
    	
 
    	
Subsidiaries
    
	
SCHEDULE 8.12(b)
    	
 
    	
-
    	
 
    	
Immaterial Subsidiaries
    
	
SCHEDULE 8.12(c)
    	
 
    	
-
    	
 
    	
Unrestricted Subsidiaries
    
	
SCHEDULE 8.12(d)
    	
 
    	
-
    	
 
    	
Native American Subsidiaries
    
	
SCHEDULE 8.13(a)
    	
 
    	
-
    	
 
    	
Ownership
    
	
SCHEDULE 8.15
    	
 
    	
-
    	
 
    	
Licenses and Permits
    
	
SCHEDULE 8.19
    	
 
    	
-
    	
 
    	
Intellectual Property
    
	
SCHEDULE 8.21
    	
 
    	
-
    	
 
    	
Regulation H
    
	
SCHEDULE 8.23(a)
    	
 
    	
-
    	
 
    	
Real Property
    
	
SCHEDULE 8.23(b)
    	
 
    	
-
    	
 
    	
Real Property Takings, Etc.
    
	
SCHEDULE 8.25(a)
    	
 
    	
-
    	
 
    	
No Certificates of Occupancy; Violations, Etc.
    
	
SCHEDULE 8.25(b)
    	
 
    	
-
    	
 
    	
Encroachment, Boundary, Location, Possession   Disputes
    
	
SCHEDULE 9.12
    	
 
    	
-
    	
 
    	
Designated Unrestricted Subsidiaries
    
	
SCHEDULE 9.15
    	
 
    	
-
    	
 
    	
Post-Closing Matters
    
	
SCHEDULE 10.01
    	
 
    	
-
    	
 
    	
Existing Indebtedness
    
	
SCHEDULE 10.02
    	
 
    	
-
    	
 
    	
Certain Existing Liens
    
	
SCHEDULE 10.04
    	
 
    	
-
    	
 
    	
Investments
    
	
SCHEDULE 10.04(u)
    	
 
    	
-
    	
 
    	
Native American Investments
    
	
SCHEDULE 10.04(w)
    	
 
    	
-
    	
 
    	
Real Estate to be Invested by Native American   Subsidiaries
    
	
SCHEDULE 10.07
    	
 
    	
-
    	
 
    	
Transactions with Affiliates
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
EXHIBITS:
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
EXHIBIT A-1
    	
 
    	
-
    	
 
    	
Form of Revolving Note
    
	
EXHIBIT A-2
    	
 
    	
-
    	
 
    	
Form of Term A Facility Note
    
	
EXHIBIT A-3
    	
 
    	
-
    	
 
    	
Form of Term B Facility Note
    

 

vi

 

	
EXHIBIT A-4
    	
 
    	
-
    	
 
    	
Form of Swingline Note
    
	
EXHIBIT B
    	
 
    	
-
    	
 
    	
Form of Notice of Borrowing
    
	
EXHIBIT C
    	
 
    	
-
    	
 
    	
Form of Notice of Continuation/Conversion
    
	
EXHIBIT D
    	
 
    	
-
    	
 
    	
Forms of U.S. Tax Compliance Certificate
    
	
EXHIBIT E
    	
 
    	
-
    	
 
    	
Form of Foreign Lender Certificate
    
	
EXHIBIT F
    	
 
    	
-
    	
 
    	
Form of Pledge Agreement
    
	
EXHIBIT G
    	
 
    	
-
    	
 
    	
Form of Solvency Certificate
    
	
EXHIBIT H
    	
 
    	
-
    	
 
    	
Form of Security Agreement
    
	
EXHIBIT I
    	
 
    	
-
    	
 
    	
Form of Mortgage
    
	
EXHIBIT J
    	
 
    	
-
    	
 
    	
[Reserved]
    
	
EXHIBIT K
    	
 
    	
-
    	
 
    	
Form of Assignment and Assumption Agreement
    
	
EXHIBIT L
    	
 
    	
-
    	
 
    	
Form of Letter of Credit Request
    
	
EXHIBIT M
    	
 
    	
-
    	
 
    	
Form of Joinder Agreement
    
	
EXHIBIT N
    	
 
    	
-
    	
 
    	
Form of Perfection Certificate
    
	
EXHIBIT O
    	
 
    	
-
    	
 
    	
Form of Auction Procedures
    
	
EXHIBIT P
    	
 
    	
-
    	
 
    	
Form of Open Market Assignment and Assumption   Agreement
    
	
EXHIBIT Q
    	
 
    	
-
    	
 
    	
Form of Term Loan Extension Amendment
    
	
EXHIBIT R
    	
 
    	
-
    	
 
    	
Form of Revolving Extension Amendment
    
	
EXHIBIT S
    	
 
    	
-
    	
 
    	
Form of Pari Passu   Intercreditor Agreement
    
	
EXHIBIT T
    	
 
    	
-
    	
 
    	
Form of Second Lien Intercreditor Agreement
    
	
EXHIBIT U
    	
 
    	
-
    	
 
    	
Form of Custodian Agreement
    
	
EXHIBIT V
    	
 
    	
-
    	
 
    	
Form of Compliance Certificate
    

 

vii

 

CREDIT AGREEMENT, dated as of June 8, 2016 (this “Agreement”), among STATION CASINOS LLC, a Nevada limited liability company (“Borrower”); the SUBSIDIARY GUARANTORS party hereto from time to time; the LENDERS from time to time party hereto; the L/C LENDERS party hereto; DEUTSCHE BANK AG CAYMAN ISLANDS BRANCH, as swingline lender (in such capacity, together with its successors in such capacity, “Swingline Lender”); DEUTSCHE BANK AG CAYMAN ISLANDS BRANCH, as administrative agent (in such capacity, together with its successors in such capacity, “Administrative Agent”); and DEUTSCHE BANK AG CAYMAN ISLANDS BRANCH, as collateral agent (in such capacity, together with its successors in such capacity, “Collateral Agent”).

 

WHEREAS, Borrower has requested that the Lenders provide first lien revolving credit and term loan facilities, and the Lenders have indicated their willingness to lend, and the L/C Lender has indicated its willingness to issue letters of credit, in each case, on the terms and subject to the conditions set forth herein.

 

NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained herein, the parties agree as follows:

 

ARTICLE I.

 

DEFINITIONS, ACCOUNTING MATTERS AND RULES OF CONSTRUCTION

 

SECTION 1.01.                      Certain Defined Terms.  As used herein, the following terms shall have the following meanings:

 

“ABR Loans” shall mean Loans that bear interest at rates based upon the Alternate Base Rate.

 

“Acquisition” shall mean, with respect to any Person, any transaction or series of related transactions for the (a) acquisition of all or substantially all of the Property of any other Person, or of any business or division of any other Person (other than any then-existing Company), (b) acquisition of more than 50% of the Equity Interests of any other Person, or otherwise causing any other Person to become a Subsidiary of such Person or (c) merger or consolidation of such Person or any other combination of such Person with any other Person (other than any of the foregoing between or among any then-existing Companies).

 

“Act” has the meaning set forth in Section 13.14.

 

“Additional Credit Party” has the meaning set forth in Section 9.11.

 

“Adjusted Maximum Amount” has the meaning set forth in Section 6.10.

 

“Administrative Agent” has the meaning set forth in the introductory paragraph hereof.

 

“Affected Classes” has the meaning set forth in Section 13.04(b)(A).

 

“Affiliate” shall mean(a) with respect to any Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified; provided that as to any Credit Party or any Subsidiary thereof, the term “Affiliate” shall expressly exclude the Persons constituting Lenders as of the Closing Date and their respective Affiliates (determined as provided herein without regard to this proviso) and (b) with respect to any Credit Party or any Subsidiary thereof, (i) Frank J. Fertitta III and his spouse, their respective parents and grandparents and any lineal descendants (including adopted children and their lineal descendants) of any of the foregoing, (ii) Lorenzo J. Fertitta and his spouse, their respective parents and grandparents and any lineal descendants (including adopted children and their lineal descendants) of any of the foregoing, (iii) any Affiliate (determined in accordance with this definition without regard to this clause (iii))

 

 

of any Person described in the foregoing clauses (i) and (ii), and (iv) any personal investment vehicle, trust or entity owned by, or established for the benefit of, or the estate of, any Person described in the foregoing clauses (i) and (ii).  “Control” means the possession, directly or indirectly, of the power to (x) vote more than fifty percent (50%) (or, for purposes of Section 10.07 and the definition of Station Permitted Assignee, ten percent (10%)) of the outstanding voting interests of a Person or (y) 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.  For purposes of this Agreement, each of Holdco, RRR and, from and after the VoteCo SPE Reorganization Date, the VoteCo SPE shall be deemed to Control the Borrower.

 

“Affiliated Lender” means a Lender that is a Station Permitted Assignee.

 

“Agent” shall mean any of Administrative Agent, Auction Manager, Collateral Agent, Lead Arrangers, Syndication Agent and/or Documentation Agent, as applicable.

 

“Agent Party” has the meaning set forth in Section 13.02(e).

 

“Agent Related Parties” shall mean each Agent and any sub-agent thereof and their respective Affiliates, directors, officers, employees, agents and advisors.

 

“Agreement” has the meaning set forth in the introductory paragraph hereof.

 

“All-In Yield” means, as to any Indebtedness, the yield thereof, whether in the form of interest rate, margin, original issue discount, upfront fees, a LIBO Rate floor (to the extent the LIBO Rate floor applicable to the applicable Incremental Term Loans is greater than the LIBO Rate floor for the Term B Facility and is in excess of the three-month LIBO Rate at the time of incurrence of such Incremental Term Loan) or Alternate Base Rate floor (to the extent the Alternate Base Rate floor applicable to the applicable Incremental Term Loans is greater than the Alternate Base Rate floor for the Term B Facility and is in excess of the Alternate Base Rate at the time of incurrence of such Incremental Term Loan) or otherwise, in each case, incurred or payable by Borrower generally to all lenders of such Indebtedness; provided that original issue discount and upfront fees shall be equated to interest rate assuming a 4-year life to maturity (or, if less, the stated life to maturity at the time of incurrence of the applicable Indebtedness); and provided, further, that “All-In Yield” shall not include arrangement, structuring, commitment, underwriting, amendment or other similar fees (regardless of whether paid in whole or in part to any or all lenders) or other fees not paid generally to all lenders of such Indebtedness.

 

“Alternate Base Rate” shall mean, for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the NYFRB Rate in effect on such day plus 1⁄2 of 1% and (c) the LIBO Rate for a one month Interest Period beginning on such day (or if such day is not a Business Day, the immediately preceding Business Day) plus 1.0%; provided that, the LIBO Rate for any day shall be based on the LIBO Rate at approximately 11:00 a.m. London time on such day; provided, further, that with respect to the Term B Facility Loans only, the Alternate Base Rate shall not be less than 1.75%.  Any change in the Alternate Base Rate due to a change in the Prime Rate, the NYFRB Rate or the LIBO Rate shall be effective from and including the effective date of such change in the Prime Rate, the NYFRB Rate or the LIBO Rate, respectively.

 

“Amortization Payment” shall mean each scheduled installment of payments on the Term Loans as set forth in Sections 3.01(b), 3.01(c) and 3.01(d).

 

“ANC” means the American Nevada Company, a Nevada corporation.

 

2

 

“Anti-Corruption Laws” shall mean the United States Foreign Corrupt Practices Act of 1977, as amended, the UK Bribery Act 2010, as amended, and all other laws, rules, and regulations of any jurisdiction applicable to Borrower or any of its Subsidiaries from time to time concerning or relating to bribery or corruption.

 

“Applicable ECF Percentage” shall mean, for any fiscal year, commencing with the fiscal year ended December 31, 2016, (a) 50% if the Consolidated Total Leverage Ratio as of the last day of such fiscal year is greater than 4.50 to 1.00, (b) 25% if the Consolidated Total Leverage Ratio as of the last day of such fiscal year is equal to or less than 4.50 to 1.00 and greater than 3.75 to 1.00 and (c) 0% if the Consolidated Total Leverage Ratio as of the last day of such fiscal year is equal to or less than 3.75 to 1.00.

 

“Applicable Fee Percentage” shall mean:  with respect to any Unutilized R/C Commitments in respect of any Tranche of Revolving Commitments, 0.50% (or the percentage per annum set forth in the applicable Incremental Joinder Agreement).

 

“Applicable Lending Office” shall mean, for each Lender and for each Type of Loan, the “Lending Office” of such Lender (or of an Affiliate of such Lender) (a) that is a lender on the Closing Date, designated for such Type of Loan on Annexes A-1 through A-3 hereof, (b) set forth on such Lender’s signature page to an Incremental Joinder Agreement for any Lender making any Incremental Commitment pursuant to Section 2.12, (c) set forth on such Lender’s signature page to any Refinancing Amendment for any Lender providing Credit Agreement Refinancing Indebtedness pursuant to Section 2.15, (d) set forth in the Assignment Agreement for any Person that becomes a “Lender” hereunder pursuant to an Assignment Agreement or (e) such other office of such Lender (or of an Affiliate of such Lender) as such Lender may from time to time specify to Administrative Agent and Borrower as the office by which its Loans of such Type are to be made and maintained.

 

“Applicable Margin” shall mean:

 

(a)         for each Type and Class of Loan, other than any Term B Facility Loan, (i) prior to the Initial Financial Statement Delivery Date, the respective percentage per annum set forth at Level II as set forth on Annex B (or the applicable Incremental Joinder Agreement) for such Type and Class of Loan; and (ii) on and after the Initial Financial Statement Delivery Date, the applicable percentage per annum as set forth on Annex B (or the applicable Incremental Joinder Agreement) for such Type and Class of Loan, set forth opposite the relevant Consolidated Total Leverage Ratio in Annex B (or the applicable Incremental Joinder Agreement) determined as of the most recent Calculation Date.  After the Initial Financial Statement Delivery Date, any change in the Consolidated Total Leverage Ratio shall be effective to adjust the Applicable Margin on and as of the date of receipt by Administrative Agent of the Section 9.04 Financials resulting in such change until the date immediately preceding the next date of delivery of Section 9.04 Financials resulting in another such change.  If (i) Borrower fails to deliver the Section 9.04 Financials within the times specified in Section 9.04(a) or 9.04(b), as applicable, or (ii) an Event of Default is continuing and the Required Pro Rata Lenders have directed the application of Level I, such ratio shall be deemed to be at Level I as set forth in Annex B (or the applicable Incremental Joinder Agreement) from the date of any such failure to deliver until Borrower delivers such Section 9.04 Financials in the case of clause (i) or the date of delivery of such direction in the case of clause (ii) until such Event of Default is no longer continuing or the Required Pro Rata Lenders have otherwise agreed that such Level I is no longer applicable, as applicable.  In the event that any financial statement or certification delivered pursuant to Section 9.04 is shown to be inaccurate (an “Inaccuracy Determination”), and such inaccuracy, if corrected, would have led to the application of a higher Applicable Margin for any period (an “Inaccurate Applicable Margin Period”) than the Applicable Margin applied for such Inaccurate Applicable Margin Period, then Borrower shall promptly (i) deliver to the Administrative Agent corrected Section 9.04 Financials for such Inaccurate Applicable Margin Period, (ii) determine the Applicable Margin for such Inaccurate Applicable Margin Period based upon the corrected Section 9.04 Financials and (iii) pay to the Administrative Agent the accrued additional interest owing as a result of such increased Applicable Margin for such Inaccurate Applicable Margin Period, which payment shall be promptly applied by the Administrative

 

3

 

Agent in accordance with Section 4.01.  It is acknowledged and agreed that nothing contained herein shall limit the rights of the Administrative Agent and the Lenders under the Credit Documents, including their rights under Section 3.02 and Article XI and their other respective rights under this Agreement; and

 

(b)         for each Term B Facility Loan, (i) 3.00% per annum, with respect to LIBOR Loans and (ii) 2.00% per annum, with respect to ABR Loans.

 

“Approved Fund” means any Fund that is administered, advised or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers, advises or manages a Lender.

 

“Asset Sale” shall mean (a) any conveyance, sale, lease, transfer or other disposition (including by way of merger or consolidation and including any sale and leaseback transaction) of any Property (including accounts receivable and Equity Interests of any Person owned by Borrower or any of its Restricted Subsidiaries but not any Equity Issuance) (whether owned on the Closing Date or thereafter acquired) by Borrower or any of its Restricted Subsidiaries to any Person (other than (i) with respect to any Credit Party, to any Credit Party, and (ii) with respect to any other Company, to any Company) and (b) any issuance or sale by any Restricted Subsidiary of its Equity Interests to any Person (other than to Borrower or any other Restricted Subsidiary); provided that the following shall not constitute an “Asset Sale”: (v) any conveyance, sale, lease, transfer or other disposition of inventory, in any case in the ordinary course of business, (w) Real Property leases and other leases, licenses, subleases or sublicenses, in each case, granted to others in the ordinary course of business and which do not materially interfere with the business of the Borrower or the Restricted Subsidiaries, (x) any conveyance, sale, lease, transfer or other disposition of obsolete or worn out assets or assets no longer useful in the business of the Credit Parties, (y) licenses of Intellectual Property entered into in the ordinary course of business and (z) any conveyance, sale, transfer or other disposition of cash and/or Cash Equivalents.

 

“Assignment Agreement” shall mean an Assignment and Assumption Agreement substantially in the form attached as Exhibit K hereto.

 

“Auction Amount” shall have the meaning provided in Exhibit O hereto.

 

“Auction Manager” shall mean Deutsche Bank, or another financial institution as shall be selected by Borrower in a written notice to Administrative Agent, in each case in its capacity as Auction Manager.

 

“Auction Procedures” shall mean, collectively, the auction procedures, auction notice, return bid and Borrower Assignment Agreement in substantially the form set forth as Exhibit O hereto or such other form as is reasonably acceptable to Auction Manager and Borrower so long as the same are consistent with the provisions hereof; provided, however, Auction Manager, with the prior written consent of Borrower, may amend or modify the procedures, notices, bids and Borrower Assignment Agreement in connection with any Borrower Loan Purchase (but excluding economic terms of a particular auction after any Lender has validly tendered Term Loans requested in an offer relating to such auction, other than to increase the Auction Amount or raise the Discount Range applicable to such auction); provided, further, that no such amendments or modifications may be implemented after 24 hours prior to the date and time return bids are due in such auction.

 

“Auto-Extension Letter of Credit” shall have the meaning provided by Section 2.03(b).

 

“Available Amount” shall mean, on any date, an amount not less than zero, equal to:

 

(a)         the aggregate amount of Excess Cash Flow for all fiscal years (or in the case of the fiscal year ending December 31, 2016, the aggregate amount of Excess Cash Flow attributable to the period from and including the first day of the first full fiscal quarter after the Closing Date through December 31, 2016) ending

 

4

 

after the Closing Date (not less than zero) (commencing with the fiscal year ending December 31, 2016) and prior to such date minus the portion of such Excess Cash Flow that has been (or is, or previously was, required to be) applied to prepay the Loans pursuant to Section 2.10(a)(iv) (except for the portion thereof constituting Declined Amounts) minus, without duplication, any voluntary prepayments of Loans referenced in Section 2.10(a)(iv)(y) that previously reduced the amount of the required prepayment pursuant to Section 2.10(a)(iv), minus, without duplication, any voluntary prepayments of the Other First Lien Indebtedness referenced in Section 2.10(a)(iv)(y) that previously reduced the amount of the required prepayment pursuant to Section 2.10(a)(iv), minus, without duplication, any reduction in the amount of Excess Cash Flow required to be prepaid pursuant to Section 2.10(a)(iv) by reason of Section 2.10(a)(vii), in each case, in the aggregate for all fiscal years (or in the case of the fiscal year ending December 31, 2016, for the period from the first day of the first full fiscal quarter after the Closing Date through December 31, 2016) ending after the Closing Date (commencing with the fiscal year ending December 31, 2016) and prior to such date; plus

 

(b)         in the event of (i) the Revocation of a Subsidiary that was designated as an Unrestricted Subsidiary, (ii) the merger, consolidation or amalgamation of an Unrestricted Subsidiary with or into Borrower or a Restricted Subsidiary (where the surviving entity is Borrower or a Restricted Subsidiary) or (iii) the transfer or other conveyance of assets of an Unrestricted Subsidiary to, or liquidation of an Unrestricted Subsidiary into, Borrower or a Restricted Subsidiary, an amount equal to the sum of (x) the fair market value of the Investments deemed made by Borrower and its Restricted Subsidiaries in such Unrestricted Subsidiary at the time such Subsidiary was designated as an Unrestricted Subsidiary, plus (y) the amount of the Investments of Borrower and its Restricted Subsidiaries in such Unrestricted Subsidiary made after such designation and prior to the time of such Revocation, merger, consolidation, amalgamation, conveyance or transfer (or of the assets transferred or conveyed, as applicable), other than, in the case of this clause (y), to the extent such Investments funded Investments by such Unrestricted Subsidiary into a Person that, after giving effect to the transaction described in clauses (i), (ii) or (iii) above, will be an Unrestricted Subsidiary; provided, that clauses (x) and (y) shall not be duplicative of any reductions in the amount of such Investments pursuant to the proviso to the definition of “Investments”; plus

 

(c)          an amount equal to the returns or refunds of Qualifying Investments (excluding (i) any interest, earnings, returns or other gains in respect of such Qualifying Investments determined in the manner set forth in Section 1.02(b) and (ii) Specified 10.04(k) Investment Returns) received by Borrower and its Restricted Subsidiaries from Persons other than Credit Parties after the Closing Date to the extent not included in Consolidated Net Income; plus

 

(d)         the aggregate amount of Equity Issuance Proceeds (including upon conversion or exchange of a debt instrument into or for any Equity Interests (other than Disqualified Capital Stock)) received by Borrower from Permitted Equity Issuances (other than Permitted Equity Issuances pursuant to Section 11.03) after the Closing Date and on or prior to such date; plus

 

(e)          the aggregate fair market value of assets or Property acquired in exchange for Equity Interests (other than Disqualified Capital Stock) of Borrower (other than Permitted Equity Issuances pursuant to Section 11.03) after the Closing Date and on or prior to such date; minus

 

(f)           the aggregate amount of any (i) Investments made pursuant to Section 10.04(l), (ii) Restricted Payments made pursuant to Section 10.06(j) and (iii) Junior Prepayments pursuant to Section 10.09(a)(ii) (in each case, in reliance on the then-outstanding Available Amount) made since the Closing Date and on or prior to such date; minus

 

(g)          the aggregate amount of any Restricted Payments made pursuant to Section 10.06(o).

 

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“Bail-In Action” shall mean the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.

 

“Bail-In Legislation” shall mean, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.

 

“Bankruptcy Code” shall mean the Title 11 of the United States Code entitled “Bankruptcy,” as now or hereinafter in effect, or any successor statute thereto.

 

“Bankruptcy Proceedings” has the meaning set forth in Section 13.07(i).

 

“Borrower” has the meaning set forth in the introductory paragraph hereof.

 

“Borrower Assignment Agreement” shall mean, with respect to any assignment to Borrower or one of its Subsidiaries pursuant to Section 13.05(d) consummated pursuant to the Auction Procedures, an Assignment and Acceptance Agreement substantially in the form of Annex C to the Auction Procedures (as may be modified from time to time as set forth in the definition of Auction Procedures).

 

“Borrower Loan Purchase” shall mean any purchase of Term Loans by Borrower or one of its Subsidiaries pursuant to Section 13.05(d).

 

“Borrower Materials” has the meaning set forth in Section 9.04.

 

“Borrowing” shall mean (a) Loans of the same Class and Type made, converted or continued on the same date and, in the case of LIBOR Loans, as to which a single Interest Period is in effect, or (b) a Swingline Loan.

 

“Business Day” shall mean any day, except a Saturday or Sunday, (a) on which commercial banks are not authorized or required to close in New York and (b) if such day relates to a borrowing of, a payment or prepayment of principal of or interest on, a continuation or conversion of or into, or an Interest Period for, a LIBOR Loan or a notice by Borrower with respect to any such borrowing, payment, prepayment, continuation, conversion or Interest Period, that is also a day on which dealings in Dollar deposits are carried out in the London interbank market.

 

“Calculation Date” means the last day of the most recent Test Period.

 

“Capital Expenditures” shall mean, for any period any expenditures by Borrower or its Restricted Subsidiaries for the acquisition or leasing of fixed or capital assets (including Capital Lease Obligations) that should be capitalized in accordance with GAAP and any expenditures by such Person for maintenance, repairs, restoration or refurbishment of the condition or usefulness of Property of such Person that should be capitalized in accordance with GAAP; provided that the following items shall not constitute Capital Expenditures: (a) expenditures made in connection with the replacement, substitution, restoration or repair of assets to the extent financed with (x) insurance proceeds paid on account of the loss of or damage to the assets being replaced, restored or repaired or (y) awards of compensation arising from the taking by eminent domain or condemnation (or transfers in lieu thereof) of the assets being replaced; (b) the purchase price of assets purchased simultaneously with the trade-in of existing assets solely to the extent that the gross amount of such purchase price is reduced by the credit granted by the seller of such assets for the asset being traded in at such time; (c) the purchase of property or equipment to the extent financed with the proceeds of asset sales or other dispositions outside the ordinary course of business that are not required to be applied to prepay the Term Loans pursuant to Section 2.10(a)(iii); (d) expenditures that constitute Permitted

 

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Acquisitions or other Acquisitions not prohibited hereunder; (e) any capitalized interest expense reflected as additions to property in the consolidated balance sheet of Borrower and its Restricted Subsidiaries (including in connection with sale-leaseback transactions not prohibited hereunder); (f) any non-cash compensation or other non-cash costs reflected as additions to property in the consolidated balance sheet of Borrower and its Restricted Subsidiaries; and (g) capital expenditures relating to the construction or acquisition of any property or equipment which has been transferred to a Person other than Borrower or any of its Restricted Subsidiaries pursuant to a sale-leaseback transaction not prohibited hereunder and capital expenditures arising pursuant to sale-leaseback transactions.

 

“Capital Lease” as applied to any Person, shall mean any lease of any Property by that Person as lessee that, in conformity with GAAP, is required to be classified and accounted for as a capital lease on the balance sheet of that Person; provided, however, that for the avoidance of doubt, any lease that is accounted for by any Person as an operating lease as of the Closing Date and any similar lease entered into after the Closing Date by any Person may, in the sole discretion of Borrower, be accounted for as an operating lease and not as a Capital Lease.

 

“Capital Lease Obligations” shall mean, for any Person, all obligations of such Person to pay rent or other amounts under a Capital Lease, and, for purposes of this Agreement, the amount of such obligations shall be the capitalized amount thereof, determined in accordance with GAAP; provided, however, that for the avoidance of doubt, any lease that is accounted for by any Person as an operating lease as of the Closing Date and any similar lease entered into after the Closing Date by any Person may, in the sole discretion of Borrower, be accounted for as an operating lease and not as a Capital Lease.

 

“Cash Collateralize” shall mean, in respect of an obligation, to provide and pledge (as a first priority perfected security interest) cash collateral in Dollars or other credit support, in each case, at a location and pursuant to documentation in form and substance reasonably satisfactory to (a) Administrative Agent, (b) in the case of obligations owing to an L/C Lender, such L/C Lender, and (c) in the case of obligations owing to the Swingline Lender, Swingline Lender (and “Cash Collateral” and “Cash Collateralization” have corresponding meanings).

 

“Cash Equivalents” shall mean, for any Person:  (a) direct obligations of the United States, or of any agency thereof, or obligations guaranteed as to principal and interest by the United States, or by any agency thereof, in either case maturing not more than one year from the date of acquisition thereof by such Person; (b) time deposits, certificates of deposit or bankers’ acceptances (including eurodollar deposits) issued by (i) any bank or trust company organized under the laws of the United States or any state thereof and having capital, surplus and undivided profits of at least $500.0 million that is assigned at least a “B” rating by Thomson Financial BankWatch or (ii) any Lender or bank holding company owning any Lender (in each case, at the time of acquisition); (c) commercial paper maturing not more than one year from the date of acquisition thereof by such Person and (i) issued by any Lender or bank holding company owning any Lender or (ii) rated at least “A-2” or the equivalent thereof by S&P or at least “P-2” or the equivalent thereof by Moody’s, respectively, (in each case, at the time of acquisition); (d) repurchase obligations with a term of not more than thirty (30) days for underlying securities of the types described in clause (a) above or (e) below entered into with a bank meeting the qualifications described in clause (b) above (in each case, at the time of acquisition); (e) securities with maturities of one year or less from the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States, or by any political subdivision or taxing authority thereof or by any foreign government, and rated at least “A” by S&P or “A” by Moody’s (in each case, at the time of acquisition); (f) securities with maturities of six months or less from the date of acquisition backed by standby letters of credit issued by any Lender or any commercial bank satisfying the requirements of clause (b) above (in each case, at the time of acquisition); (g) money market mutual funds that invest primarily in the foregoing items (determined at the time such investment in such fund is made); or (h) solely with respect to any Foreign Subsidiary, (i) marketable direct obligations issued by, or unconditionally guaranteed by, the country in which such Foreign Subsidiary maintains its chief executive office or principal place of business, or issued by any agency of such country and backed by the full faith and credit of such country, and rated at least “A” or the equivalent thereof by S&P or “A2” or the equivalent thereof by Moody’s (in each case, at the time of

 

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acquisition), (ii) time deposits, certificates of deposit or bankers’ acceptances issued by any commercial bank which is organized and existing under the laws of the country in which such Foreign Subsidiary maintains its chief executive office and principal place of business, or payable to a Company promptly following demand and maturing within one year of the date of acquisition and (iii) other customarily utilized high-quality or cash equivalent-type Investments in the country where such Foreign Subsidiary maintains its chief executive office or principal place of business.

 

“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” shall mean (a) any Person that is a party to a Cash Management Agreement with Borrower and/or any of its Restricted Subsidiaries if such Person was, at the date of entering into such Cash Management Agreement, an Agent, a Lender or an Affiliate of an Agent or a Lender and (b) any Person that is a party to a Cash Management Agreement with Borrower and/or any of its Restricted Subsidiaries that was in effect on the Closing Date, if such Person becomes an Agent, a Lender or an Affiliate of an Agent or a Lender within thirty (30) days of the Closing Date, and in the case of each of clauses (a) and (b), such Person executes and delivers to Administrative Agent a letter agreement in form and substance reasonably acceptable to Administrative Agent pursuant to which such Person (i) appoints Collateral Agent as its agent under the applicable Credit Documents and (ii) agrees to be bound by the provisions of Section 12.03.

 

“Casualty Event” shall mean any loss of title or any loss of or damage to or destruction of, or any condemnation or other taking (or settlement in lieu thereof) (including by any Governmental Authority) of, any Property.  “Casualty Event” shall include, but not be limited to, any taking of all or any part of any Real Property of Borrower or any of its Restricted Subsidiaries or any part thereof, in or by condemnation or other eminent domain proceedings pursuant to any Law (or settlement in lieu thereof), or by reason of the temporary requisition of the use or occupancy of all or any part of any Real Property of Borrower or any of its Restricted Subsidiaries or any part thereof by any Governmental Authority, civil or military.

 

“CERCLA” shall mean the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C. § 9601 et seq.

 

“Change in Law” means the occurrence, after the date of this 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, implementation or application thereof by any Governmental Authority or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided that notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines or directives 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 in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.

 

“Change of Control” shall be deemed to have occurred if:

 

(a)                                 Holdco and RRR at any time shall cease to own directly (or, with respect to RRR after the VoteCo SPE Reorganization Date, indirectly) one hundred percent (100%) of the Equity Interests in Borrower;

 

(b)                                 any “Person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act (but excluding (i) any employee benefit plan of such Person or its subsidiaries, any Person or

 

8

 

entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan, or any Person formed as a holding company for Borrower (in a transaction where the Voting Stock of Borrower outstanding prior to such transaction is converted into or exchanged for the Voting Stock of the surviving or transferee Person constituting all or substantially all of the outstanding shares of such Voting Stock of such surviving or transferee Person (immediately after giving effect to such issuance)) and (ii) the Fertitta Holders)), becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a Person or group shall be deemed to have “beneficial ownership” of all securities that such Person or group has the right to acquire, whether such right is exercisable immediately or only after the passage of time (such right, an “option right”)), directly or indirectly, of more than 35% of the Voting Stock of Borrower on a fully-diluted basis (and taking into account all such securities that such “Person” or “group” has the right to acquire pursuant to any option right) which Voting Stock represents, at any time, voting power that is equal to or more than the voting power represented by the Voting Stock “beneficially owned,” directly or indirectly (and taking into account all such securities that the Fertitta Holders have the right to acquire pursuant to any option right), by the Fertitta Holders at such time;

 

(c)                                  RRR shall cease to hold, directly (or after the VoteCo SPE Reorganization Date, indirectly through the VoteCo SPE) 100% of the voting power in Borrower;

 

(d)                                 any “change of control” (or any comparable term) in any document pertaining to (x) the Senior Unsecured Notes, (y) any other Junior Financing or (z) any other Indebtedness of any Holding Company, Borrower or any Restricted Subsidiary constituting Material Indebtedness;

 

(e)                                  at any time after the VoteCo SPE Reorganization Date, RRR at any time shall cease to own directly one hundred percent (100%) of the Equity Interests in the VoteCo SPE; or

 

(f)                                   at any time after the VoteCo SPE Reorganization Date, the VoteCo SPE shall cease to hold, directly or indirectly, one hundred percent (100%) of the voting power in Borrower.

 

“Charges” has the meaning set forth in Section 13.18.

 

“Claim” has the meaning set forth in Section 13.05(i)(i).

 

“Class” has the meaning set forth in Section 1.03.

 

“Closing Date” shall mean the date on which the initial extension of credit is made hereunder, which date is June 8, 2016.

 

“Closing Date Refinancing” shall mean the repayment and replacement of all loans and commitments under the Existing Credit Agreement.

 

“Closing Date Revolving Commitment” means a Revolving Commitment established on the Closing Date.

 

“Closing Date Revolving Facility” shall mean the credit facility comprising the Closing Date Revolving Commitments and any Incremental Revolving Commitments.

 

“Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.

 

“Collateral” shall mean all of the Pledged Collateral, the Mortgaged Real Property, the Mortgaged Vessels (if any), all Property encumbered pursuant to Sections 9.08, 9.11 and 9.15, and all other Property of a Credit Party,

 

9

 

Holding Company or RRR whether now owned or hereafter acquired, upon which a Lien securing the Obligations is granted or purported to be granted under any Security Document.  “Collateral” shall not include any assets or Property that has been released (in accordance with the Credit Documents) from the Lien granted to the Collateral Agent pursuant to the Collateral Documents, unless and until such time as such assets or Property are required by the Credit Documents to again become subject to a Lien in favor of the Collateral Agent.

 

“Collateral Account” shall mean (a) a Deposit Account (as defined in the UCC) of Borrower with respect to which Collateral Agent has “control” (as defined in Section 9-104 of the UCC) or (b) a Securities Account (as defined in the UCC) of Borrower with respect to which Collateral Agent has “control” (as defined in Section 9-106 of the UCC).

 

“Collateral Agent” has the meaning set forth in the introductory paragraph hereof.

 

“Commitments” shall mean the Revolving Commitments, the Term Loan Commitments, the Swingline Commitment, any Other Commitments and any New Term Loan Commitments.

 

“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.

 

“Companies” shall mean Borrower and its Subsidiaries; and “Company” shall mean any one of them.

 

“Consolidated Cash Interest Expense” shall mean, for any Test Period, Consolidated Interest Expense paid in cash with respect to such Test Period net of cash interest income (other than cash interest income in respect of notes receivable and similar items), of Borrower and its Restricted Subsidiaries for such Test Period as determined on a consolidated basis in accordance with GAAP, minus the sum (without duplication) of any of the following to the extent deemed to be included in Consolidated Interest Expense and paid in cash with respect to such Test Period: (a)  payments received under Swap Contracts relating to interest rates with respect to such Test Period, (b) arrangement, commitment or upfront fees and similar financing fees, original issue discount, and redemption or prepayment premiums payable during or with respect to such Test Period, (c) interest payable during or with respect to such Test Period with respect to Indebtedness that has been Discharged, (d) any cash costs associated with breakage or termination in respect of hedging agreements for interest rates payable during such Test Period and costs and fees associated with obtaining Swap Contracts and fees payable thereunder and (e) fees and expenses associated with the consummation of the Transactions.  Consolidated Cash Interest Expense shall exclude interest expense in respect of (a) Indebtedness that is excluded from Consolidated Indebtedness by reason of clause (ii), (iii) or (iv) of the proviso thereof, to the extent of such exclusion or (b) Indebtedness not in excess of $500.0 million at any one time outstanding, which constitutes Development Expenses, or the proceeds of which were applied to fund Development Expenses (but only for so long as such Indebtedness or such funded expenses, as the case may be, constitute Development Expenses). For purposes of determining Consolidated Cash Interest Expense for any Test Period that includes any period ending prior to the first anniversary of the Closing Date, Consolidated Cash Interest Expense shall be an amount equal to actual Consolidated Cash Interest Expense from the Closing Date through the date of determination multiplied by a fraction the numerator of which is 365 and the denominator of which is the number of days from the Closing Date through the date of determination.

 

“Consolidated Current Assets” means, with respect to any Person at any date, the total consolidated current assets of such Person and its Subsidiaries (other than Unrestricted Subsidiaries) that would, in accordance with GAAP, be classified as current assets on a consolidated balance sheet of such Person and its Subsidiaries (other than Unrestricted Subsidiaries), other than (x) cash and Cash Equivalents and (y) the current portion of deferred income tax assets.

 

“Consolidated Current Liabilities” means, with respect to any Person at any date, all liabilities of such Person and its Subsidiaries (other than Unrestricted Subsidiaries) at such date that would, in accordance with GAAP,

 

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be classified as current liabilities on a consolidated balance sheet of such Person and its Subsidiaries (other than Unrestricted Subsidiaries), other than (x) the current portion of any Indebtedness and (y) the current portion of deferred income taxes.

 

“Consolidated EBITDA” shall mean, for any Test Period, the sum (without duplication) of Consolidated Net Income for such Test Period; plus

 

(a)                   in each case to the extent deducted in calculating such Consolidated Net Income:

 

(i)                       provisions for taxes based on income or profits or capital gains, plus franchise or similar taxes, of Borrower and its Restricted Subsidiaries for such Test Period;

 

(ii)                    Consolidated Interest Expense (net of interest income (other than interest income in respect of notes receivable and similar items)) of Borrower and its Restricted Subsidiaries for such Test Period, whether paid or accrued and whether or not capitalized;

 

(iii)                 any cost, charge, fee or expense (including discounts and commissions and including fees and charges incurred in respect of letters of credit or bankers acceptance financings) (or any amortization of any of the foregoing) associated with any issuance (or proposed issuance) of debt, or equity or any refinancing transaction (or proposed refinancing transaction) or any amendment or other modification of any debt instrument;

 

(iv)                depreciation and amortization (including amortization of goodwill and other intangibles but excluding amortization of prepaid cash expenses that were paid in a prior Test Period);

 

(v)                   any Pre-Opening Expenses;

 

(vi)                the amount of any restructuring charges or reserve (including those relating to severance, relocation costs and one-time compensation charges), costs incurred in connection with any non-recurring strategic initiatives, other business optimization expenses (including incentive costs and expenses relating to business optimization programs and signing, retention and completion bonuses) and any unusual or non-recurring charges or items of loss or expense (including, without limitation, losses on asset sales (other than asset sales in the ordinary course of business));

 

(vii)             any charges, fees and expenses (or any amortization thereof) (including, without limitation, all legal, accounting, advisory or other transaction-related fees, charges, costs and expenses and any bonuses or success fee payments related to the Transactions) related to the Transactions, any Permitted Acquisition or Investment (including any other Acquisition) or disposition (or any such proposed acquisition, Investment or disposition) (including amortization or write offs of debt issuance or deferred financing costs, premiums and prepayment penalties), in each case, whether or not successful;

 

(viii)          any losses resulting from mark to market accounting of Swap Contracts or other derivative instruments;

 

(ix)                expenses actually reimbursed in cash to Borrower or a Restricted Subsidiary by an Unrestricted Subsidiary pursuant to a Subsidiary Cost Allocation Agreement;

 

(x)                   Restricted Payments made by Borrower and the Restricted Subsidiaries to Holdco pursuant to Section 10.06(p) (net of Subsidiary Tax Sharing Payments);

 

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(xi)                to the extent included in calculating such Consolidated Net Income, non-cash items decreasing such Consolidated Net Income for such Test Period, other than the accrual of revenue in the ordinary course of business, and other than any items which represent the reversal of any accrual of, or cash reserve for, anticipated cash charges for any prior Test Period subsequent to the issue date which was not added back to Consolidated EBITDA when accrued; minus

 

(b)         each of the following:

 

(i)             to the extent included in calculating such Consolidated Net Income, non-cash items increasing such Consolidated Net Income for such Test Period, other than the accrual of revenue in the ordinary course of business, and other than any items which represent the reversal of any accrual of, or cash reserve for, anticipated cash charges for any prior Test Period subsequent to the issue date which was not added back to Consolidated EBITDA when accrued;

 

(ii)          to the extent included in calculating such Consolidated Net Income, the amount of any gains resulting from mark to market accounting of Swap Contracts or other derivative instruments;

 

(iii)       to the extent included in calculating such Consolidated Net Income, any unusual or non-recurring items of income or gain to the extent increasing Consolidated Net Income for such Test Period; and

 

(iv)      distributions made by Borrower to the Holding Companies during such period pursuant to Sections 10.06(m) and (n); plus

 

(c)          the amount of cost savings, operating expense reductions and synergies projected by Borrower in good faith to be realized as a result of specified actions taken or with respect to which steps have been initiated (in the good faith determination of Borrower) during such Test Period (or with respect to (x) the Transactions, are reasonably expected to be initiated within twelve (12) months of the Closing Date, or (y) Specified Transactions, are reasonably expected to be initiated within twelve (12) months of the closing date of the Specified Transaction), including in connection with the Transactions or any Specified Transaction (calculated on a Pro Forma Basis as though such cost savings, operating expense reductions and synergies had been realized during the entirety of such Test Period), net of the amount of actual benefits realized during such Test Period from such actions; provided that (i) a duly completed Officer’s Certificate of Borrower shall be delivered to Administrative Agent together with the applicable Section 9.04 Financials, providing reasonable detail with respect to such cost savings, operating expense reductions and synergies and certifying that such savings, operating expense reductions and synergies are reasonably expected to be realized within twelve (12) months of the taking of such specified actions and are factually supportable in the good faith judgment of Borrower, (ii) such actions are to be taken within (A) in the case of any such cost savings, operating expense reductions and synergies in connection with the Transactions, twelve (12) months after the Closing Date and (B) in all other cases, within twelve (12) months after the consummation of such Specified Transaction, restructuring or implementation of an initiative that is expected to result in such cost savings, expense reductions or synergies, (iii) no cost savings, operating expense reductions and synergies shall be added pursuant to this clause (c) to the extent duplicative of any expenses or charges otherwise added to Consolidated EBITDA, whether through a pro forma adjustment or otherwise, for such Test Period, and (iv) projected amounts (and not yet realized) may no longer be added in calculating Consolidated EBITDA pursuant to this clause (c) to the extent more than twelve (12) months have elapsed after the specified action taken in order to realize such projected cost savings, operating expense reductions and synergies; provided, that the aggregate amount of additions made to Consolidated EBITDA for any Test Period pursuant to this clause (c) and Section 1.05(c) shall not (i) exceed 15.0% of Consolidated EBITDA for such Test Period (after giving effect to this clause (c) and Section 1.05(c)) or (ii) be duplicative of one another; plus

 

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(d)         to the extent not included in Consolidated Net Income or, if otherwise excluded from Consolidated EBITDA due to the operation of clause (b)(iii) above, the amount of insurance proceeds received during such Test Period or after such Test Period and on or prior to the date the calculation is made with respect to such Test Period, attributable to any property which has been closed or had operations curtailed for such Test Period; provided that such amount of insurance proceeds shall only be included pursuant to this clause (d) to the extent of the amount of insurance proceeds plus Consolidated EBITDA attributable to such property for such Test Period (without giving effect to this clause (d)) does not exceed Consolidated EBITDA attributable to such property during the most recently completed four fiscal quarters for which financial results are available that such property was fully operational (or if such property has not been fully operational for four consecutive fiscal quarters for which financial results are available prior to such closure or curtailment, the Consolidated EBITDA attributable to such property during the Test Period prior to such closure or curtailment (for which financial results are available) annualized over four fiscal quarters); plus

 

(e)          cash receipts (or any netting arrangements resulting in reduced cash expenditures) not representing Consolidated EBITDA or Consolidated Net Income in any Test Period to the extent non-cash gains relating to such income were deducted in the calculation of Consolidated EBITDA pursuant to paragraph (b) above for any previous Test Period and not added back.

 

Consolidated EBITDA shall be further adjusted:

 

(A)       to include the Consolidated EBITDA of (i) any Person, property, business or asset (including a management agreement or similar agreement) (other than an Unrestricted Subsidiary) acquired by Borrower or any Restricted Subsidiary during such Test Period and (ii) any Unrestricted Subsidiary that is revoked and converted into a Restricted Subsidiary during such Test Period, in each case, based on the Consolidated EBITDA of such Person (or attributable to such property, business or asset) for such period (including the portion thereof occurring prior to such acquisition or Revocation), determined as if references to Borrower and its Restricted Subsidiaries in Consolidated Net Income and other defined terms therein were to such Person and its Subsidiaries; provided, that, without duplication of clause (D) below, for purposes of determining Consolidated EBITDA for any period ending prior to the first anniversary of any Tribal Gaming Opening Date, the Tribal Management Fees (excluding any one time development fees) received by Borrower and its Restricted Subsidiaries from the corresponding Tribe after such Tribal Gaming Opening Date and during the applicable Test Period and included in Consolidated Net Income shall be multiplied by a fraction the numerator of which is 365 and the denominator of which is the number of days from the applicable Tribal Gaming Opening Date through the end of such Test Period;

 

(B)       to exclude the Consolidated EBITDA of (i) any Person, property, business or asset (other than an Unrestricted Subsidiary) sold, transferred or otherwise disposed of, closed or classified as discontinued operations by Borrower or any Restricted Subsidiary during such Test Period and (ii) any Restricted Subsidiary that is designated as an Unrestricted Subsidiary during such Test Period, in each case based on the actual Consolidated EBITDA of such Person for such period (including the portion thereof occurring prior to such sale, transfer, disposition, closing, classification or conversion), determined as if references to Borrower and its Restricted Subsidiaries in Consolidated Net Income and other defined terms therein were to such Person and its Subsidiaries;

 

(C)       in the event of any Expansion Capital Expenditures that were opened for business during such Test Period, by multiplying the Consolidated EBITDA attributable to such Expansion Capital Expenditures (as determined by Borrower) in respect of the first three (3) complete fiscal quarters following opening of the business representing such Expansion Capital Expenditures by: (x) 4 (with respect to the first such quarter), (y) 2 (with respect to the first two such quarters), and (z) 4/3 (with respect to the first three such quarters) and, for the avoidance of doubt, excluding Consolidated EBITDA attributable to such Expansion Capital Expenditures

 

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during the quarter in which the business representing such Expansion Capital Expenditure opened (unless such business opened on the first day of a fiscal quarter);

 

(D)       in the event of any Development Project that was opened for business during such Test Period, by multiplying the Consolidated EBITDA attributable to such Development Project (as determined by Borrower) in respect of the first three (3) complete fiscal quarters following opening of the business representing such Development Project by: (x) 4 (with respect to the first such quarter), (y) 2 (with respect to the first two such quarters), and (z) 4/3 (with respect to the first three such quarters) and, for the avoidance of doubt, excluding Consolidated EBITDA attributable to such Development Project during the quarter in which such Development Project opened (unless such business opened on the first day of a fiscal quarter); and

 

(E)        in any fiscal quarter during which a purchase of property that prior to such purchase was subject to any operating lease that will be terminated in connection with such purchase shall occur and during the three (3) following fiscal quarters, by increasing Consolidated EBITDA by an amount equal to the quarterly payment in respect of such lease (as if such purchase did not occur) times (a) four (4) (in the case of the quarter in which such purchase occurs), (b) three (3) (in the case of the quarter following such purchase), (c) two (2) (in the case of the second quarter following such purchase) and (d) one (1) (in the case of the third quarter following such purchase), all as determined on a consolidated basis for Borrower and its Restricted Subsidiaries.

 

Notwithstanding anything to the contrary contained herein, Consolidated EBITDA shall be deemed to be $111,116,277 for the fiscal quarter ended on June 30, 2015; $97,271,265 for the fiscal quarter ended on September 30, 2015; $124,148,274 for the fiscal quarter ended on December 31, 2015; and $133,825,737 for the fiscal quarter ended on March 31, 2016.

 

“Consolidated First Lien Leverage Ratio” shall mean, as of any date of determination, the ratio of (a)  Consolidated Indebtedness of Borrower and its Restricted Subsidiaries that is secured by Liens on property or assets of Borrower or its Restricted Subsidiaries as of such date that ranks pari passu or senior to the Liens securing the Obligations to (b) Consolidated EBITDA for the Test Period most recently ended prior to such date.

 

“Consolidated Indebtedness” shall mean, as at any date of determination, the aggregate amount of all Indebtedness of Borrower and its Restricted Subsidiaries (other than any such Indebtedness that has been Discharged) on such date, in an amount that would be reflected on a balance sheet on such date prepared on a consolidated basis in accordance with GAAP, consisting of Indebtedness for borrowed money, obligations in respect of Capital Leases, purchase money Indebtedness, Indebtedness of the kind described in clause (d) of the definition of “Indebtedness”, Indebtedness evidenced by promissory notes and similar instruments and Contingent Obligations in respect of any of the foregoing (to be included only to the extent set forth in clause (iii) below); provided that (i) Consolidated Indebtedness shall not include (A) Indebtedness in respect of letters of credit (including Letters of Credit), except to the extent of unreimbursed amounts thereunder or (B) Indebtedness of the type described in clause (i) of the definition thereof, (ii) the amount of Consolidated Indebtedness, in the case of Indebtedness of a Restricted Subsidiary that is not a Wholly Owned Subsidiary, shall be reduced by an amount directly proportional to the amount (if any) by which Consolidated EBITDA was reduced (including through the calculation of Consolidated Net Income) in respect of such non-controlling interest in such Restricted Subsidiary owned by a Person other than Borrower or any of its Restricted Subsidiaries, (iii) Consolidated Indebtedness shall not include Contingent Obligations (except for Contingent Obligations incurred pursuant to Section 10.01(s) constituting guarantees permitted by Section 10.04(v)), provided, however, that if and when any such Contingent Obligation that does not constitute Consolidated Indebtedness (other than the LandCo Support Agreement) is demanded for payment from Borrower or any of its Restricted Subsidiaries, then the amounts of such Contingent Obligation shall be included in such calculations of Consolidated Indebtedness, (iv) the amount of Consolidated Indebtedness, in the case of Indebtedness of a Subsidiary of Borrower that is not a Guarantor and which Indebtedness is not guaranteed by any Credit Party, any Holding Company or RRR shall be reduced by an amount directly proportional to the amount by which Consolidated EBITDA was reduced due to the undistributed earnings of such Subsidiary being excluded from

 

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Consolidated Net Income pursuant to clause (d) thereof and (v) Consolidated Indebtedness shall exclude Indebtedness not in excess of $500.0 million at any one time outstanding, which constitutes Development Expenses, or the proceeds of which were applied to fund Development Expenses (but only for so long as such Indebtedness constitutes Development Expenses).  Notwithstanding the foregoing, for purposes of determining compliance with Section 10.08 at any time a Default Quarter is included in the Test Period then most recently ended prior to a date of determination, the aggregate principal amount of the Loans repaid pursuant to Section 2.10(a)(v) with the proceeds of a Permitted Equity Issuance consummated in reliance on Section 11.03 during such Default Quarter shall be deemed to be outstanding and included as “Consolidated Indebtedness” at such time.

 

“Consolidated Interest Expense” shall mean, for any Test Period, the sum of interest expense of Borrower and its Restricted Subsidiaries for such Test Period as determined on a consolidated basis in accordance with GAAP, plus, to the extent deducted in arriving at Consolidated Net Income and without duplication, (a) the interest portion of payments on Capital Leases, (b) amortization of financing fees, debt issuance costs and interest or deferred financing or debt issuance costs, (c) arrangement, commitment or upfront fees, original issue discount, redemption or prepayment premiums, (d) commissions, discounts and other fees and charges owed with respect to letters of credit and bankers’ acceptance financing, (e) interest with respect to Indebtedness that has been Discharged, (f) the accretion or accrual of discounted liabilities during such period, (g) interest expense attributable to the movement of the mark-to-market valuation of obligations under Swap Contracts or other derivative instruments, (h) net payments made under Swap Contracts relating to interest rates with respect to such Test Period and any costs associated with breakage in respect of hedging agreements for interest rates, (i) all interest expense consisting of liquidated damages for failure to timely comply with registration rights obligations and financing fees, all as calculated on a consolidated basis in accordance with GAAP, (j) fees and expenses associated with the consummation of the Transactions, (k) annual or quarterly agency fees paid to Administrative Agent and (l) costs and fees associated with obtaining Swap Contracts and fees payable thereunder.

 

“Consolidated Net Income” shall mean, for any Test Period, the aggregate of the net income of Borrower and its Restricted Subsidiaries for such Test Period, on a consolidated basis, determined in accordance with GAAP; provided that, without duplication:

 

(a)         any gain or loss (together with any related provision for taxes thereon) realized in connection with (i) any asset sale or (ii) any disposition of any securities by such Person or any of its Restricted Subsidiaries shall be excluded;

 

(b)         any extraordinary gain or loss (together with any related provision for taxes thereon) shall be excluded;

 

(c)          the net income of any Person that (i) is not a Restricted Subsidiary, (ii) is accounted for by the equity method of accounting, (iii) is an Unrestricted Subsidiary or (iv) is a Restricted Subsidiary (or former Restricted Subsidiary) with respect to which a Trigger Event has occurred following the occurrence and during the continuance of such Trigger Event shall be excluded; provided that Consolidated Net Income of Borrower and its Restricted Subsidiaries shall be increased by the amount of dividends or distributions or other payments (including management fees) that are actually paid or are payable in cash to Borrower or a Restricted Subsidiary thereof in respect of such period by such Persons (or to the extent converted into cash) (other than, for avoidance of doubt, payments made by Unrestricted Subsidiaries pursuant to the Subsidiary Tax Sharing Agreements and the Subsidiary Cost Allocation Agreements, and Project Reimbursements and other Subsidiary Tax Sharing Payments);

 

(d)         the undistributed earnings of any Subsidiary of Borrower that is not a Guarantor (including, for the avoidance of doubt, any Unrestricted Subsidiary) or any Joint Venture that is not a Subsidiary to the extent that, on the date of determination the payment of cash dividends or similar cash distributions by such Subsidiary or Joint Venture (or loans or advances by such subsidiary to any parent company) are not permitted by the terms of

 

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any Contractual Obligation (other than under any Credit Document) or Requirement of Law applicable to such Subsidiary or Joint Venture shall be excluded, unless such restrictions with respect to the payment of cash dividends and other similar cash distributions have been waived; provided that Consolidated Net Income of Borrower and its Restricted Subsidiaries shall be increased by the amount of dividends or distributions or other payments (including management fees) that are actually paid or are payable in cash to Borrower or a Restricted Subsidiary (not subject to such restriction) thereof in respect of such period by such Subsidiaries or Joint Ventures (or to the extent converted into cash) (other than, for avoidance of doubt, payments made by Unrestricted Subsidiaries pursuant to the Subsidiary Tax Sharing Agreements and the Subsidiary Cost Allocation Agreements, and Project Reimbursements and other Subsidiary Tax Sharing Payments);

 

(e)          any goodwill or other asset impairment charges or other asset write-offs or write downs, including any resulting from the application of Accounting Standards Codification Nos. 350 and No. 360, and any expenses or charges relating to the amortization of intangibles as a result of the application of Accounting Standards Codification No. 805, shall be excluded;

 

(f)           any non-cash charges or expenses related to the repurchase of stock options to the extent not prohibited by this Agreement, and any non-cash charges or expenses related to the grant, issuance or repricing of, or any amendment or substitution with respect to, or otherwise in respect of, stock appreciation or similar rights, stock options, restricted stock, or other Equity Interests or other equity based awards or rights or equivalent instruments, shall be excluded;

 

(g)          the cumulative effect of a change in accounting principles shall be excluded;

 

(h)         any expenses or reserves for liabilities shall be excluded to the extent that Borrower or any of its Restricted Subsidiaries is entitled to indemnification therefor under binding agreements; provided that any such liabilities for which Borrower or any of its Restricted Subsidiaries is not actually indemnified shall reduce Consolidated Net Income for the period in which it is determined that Borrower or such Restricted Subsidiary will not be indemnified (to the extent such liabilities would otherwise reduce Consolidated Net Income without giving effect to this clause (h));

 

(i)             losses, to the extent covered by insurance and actually reimbursed, or, so long as Borrower has made a determination that there exists reasonable evidence that such amount will in fact be reimbursed by the insurer and only to the extent that such amount is (i) not denied by the applicable carrier in writing within 180 days and (ii) in fact reimbursed within 365 days of the date of such evidence (with a deduction for any amount so added back to the extent not so reimbursed within 365 days), expenses with respect to liability or casualty events or business interruption shall be excluded;

 

(j)            gains and losses resulting solely from fluctuations in currency values and the related tax effects shall be excluded, and charges relating to Accounting Standards Codification Nos. 815 and 820 shall be excluded;

 

(k)         the net income (or loss) of a Restricted Subsidiary that is not a Wholly Owned Subsidiary shall be included in an amount proportional to Borrower’s economic ownership interest therein; and

 

(l)             the amount of any Project Reimbursements received by Borrower or any of its Restricted Subsidiaries shall be excluded.

 

“Consolidated Total Leverage Ratio” shall mean, as at any date of determination, the ratio of (a) Consolidated Indebtedness as of such date to (b) Consolidated EBITDA for the Test Period most recently ended prior to such date; provided, however that for purposes of (i) Section 2.09(b)(ii), (ii) determining whether Borrower

 

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is in compliance on a Pro Forma Basis under the Financial Maintenance Covenants pursuant to Sections 10.04(m), 10.06(i), 10.06(j), 10.06(k), 10.09(a)(i), 10.09(a)(ii) and 10.09(a)(iii), (iii) determining whether the maximum permitted Consolidated Total Leverage Ratio is satisfied pursuant to Sections 10.04(m), 10.06(j), 10.06(k), 10.09(a)(ii) and 10.09(a)(iii) and (iv) determining the Applicable ECF Percentage for any fiscal year, the amount described in clause (a) above shall be calculated without giving effect to clause (v) of the second proviso of the definition of Consolidated Indebtedness.

 

“Contingent Obligation” shall mean, as to any Person, any obligation of such Person guaranteeing or intended to guarantee any Indebtedness (“primary obligations”) of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, including any obligation of such Person, whether or not contingent, (a) to purchase any such primary obligation or any property constituting direct or indirect security therefor; (b) to advance or supply funds (i) for the purchase or payment of any such primary obligation or (ii) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor; (c) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation; or (d) otherwise to assure or hold harmless the holder of such primary obligation against loss in respect thereof; provided, however, that the term Contingent Obligation shall not include endorsements of instruments for deposit or collection in the ordinary course of business and any lease guarantees executed by any Company in the ordinary course of business.  The amount of any Contingent Obligation shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation in respect of which such Contingent Obligation is made (or, if less, the maximum amount of such primary obligation for which such Person may be liable pursuant to the terms of the instrument evidencing such Contingent Obligation) or, if not stated or determinable, the maximum reasonably anticipated potential liability in respect thereof (assuming such Person is required to perform thereunder) as determined by such Person in good faith.

 

“Contractual Obligation” shall mean as to any Person, any provision of any security issued by such Person or of any mortgage, deed of trust, security agreement, pledge agreement, promissory note, indenture, credit or loan agreement, guaranty, securities purchase agreement, instrument, lease, contract, agreement or other contractual obligation to which such Person is a party or by which it or any of its Property is bound or subject.

 

“Core Property” means, collectively, (a) the hotel, resort and casino properties commonly known as Palace Station, Boulder Station, Sunset Station, Red Rock Casino, Resort and Spa, Green Valley Ranch Resort, Casino and Spa, Texas Station Gambling Hall & Hotel, Santa Fe Station Hotel & Casino and Fiesta Henderson Casino Hotel and (b) each casino or hotel property hereafter owned or operated by Borrower or a Restricted Subsidiary (but not any such property that is (i) owned by an Unrestricted Subsidiary or (ii) so long as not owned by Borrower or a Restricted Subsidiary, operated by an Unrestricted Subsidiary) whose individual Consolidated EBITDA (determined in a manner acceptable to the Administrative Agent) for the then most recently ended twelve-month period for which financial statements are then available exceeds $15,000,000, excluding any real property or improvements that have been released from the Liens of the Collateral Agent in accordance with the terms of the Credit Documents.

 

“Covered Taxes” shall mean (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of any Credit Party, any Holding Company or RRR under this Agreement, any Note, any Guarantee or any other Credit Document and (b) to the extent not otherwise described in the foregoing clause (a), Other Taxes.

 

“Credit Agreement Refinancing Indebtedness” means (a) Permitted First Priority Refinancing Debt, (b) Permitted Second Priority Refinancing Debt, (c) Permitted Unsecured Refinancing Debt or (d) other Indebtedness incurred pursuant to a Refinancing Amendment (including, without limitation, Other Term Loans and Other Revolving Loans), in each case, issued, incurred or otherwise obtained (including by means of the extension or renewal of existing Indebtedness) in exchange for, or to extend, renew, replace or refinance, in whole or part,

 

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then-existing Term Loans, Revolving Loans (and/or unused Revolving Commitments) and/or Credit Agreement Refinancing Indebtedness (“Refinanced Debt”); provided that (i) such Indebtedness has the same or a later maturity (provided that if such Indebtedness is subordinated to the Obligations or secured by a junior lien on the Collateral or is unsecured, then its maturity shall be no earlier than the 91st day after the Final Maturity Date) and, except in the case of any Indebtedness consisting of a revolving credit facility, a Weighted Average Life to Maturity equal to or greater than, the Refinanced Debt, (ii) such Indebtedness shall not have a greater principal amount than the principal amount of the Refinanced Debt, plus, accrued interest, fees and premiums (if any) thereon, plus, other fees and expenses associated with the refinancing (including any upfront fees and original issue discount), (iii) such Refinanced Debt shall be repaid, defeased or satisfied and discharged on a dollar-for-dollar basis, and all accrued interest, fees and premiums (if any) in connection therewith shall be paid, on the date such Credit Agreement Refinancing Indebtedness is issued, incurred or obtained, (iv) to the extent such Credit Agreement Refinancing Indebtedness consists of a revolving credit facility, the Revolving Commitments shall be reduced and/or terminated, as applicable, such that the Total Revolving Commitments (after giving effect to such Credit Agreement Refinancing Indebtedness and such reduction or termination) shall not exceed the Total Revolving Commitments immediately prior to the incurrence of such Credit Agreement Refinancing Indebtedness, plus, accrued interest, fees and premiums (if any) thereon, plus, other fees and expenses associated with the refinancing (including any upfront fees and original issue discount), (v) the terms (excluding pricing, fees, rate floors, premiums, optional prepayment or optional redemption provisions) of such Indebtedness are (as determined by Borrower in good faith), taken as a whole, no more restrictive in any material respect to Borrower and its Restricted Subsidiaries than the terms set forth in this Agreement, (vi) Borrower shall be the sole borrower thereunder and no Subsidiary of Borrower shall guaranty such Indebtedness unless such Subsidiary is also a Guarantor hereunder, and (vii) such Indebtedness shall not be secured by any Liens, except Liens on the Collateral.

 

“Credit Documents” shall mean (a) this Agreement, (b) the Notes, (c) the L/C Documents, (d) the Security Documents, (e) any Pari Passu Intercreditor Agreement, (f) any Second Lien Intercreditor Agreement, (g) any Incremental Joinder Agreement, (h) any Extension Amendment, (i) any Refinancing Amendment and (j) each other agreement entered into by any Credit Party, any Holding Company or RRR with Administrative Agent, Collateral Agent and/or any Lender, in connection herewith or therewith evidencing or governing the Obligations (other than the Engagement Letters), all as amended from time to time, but shall not include a Swap Contract or Cash Management Agreement.

 

“Credit Parties” shall mean Borrower and the Guarantors.

 

“Credit Swap Contracts” shall mean any Swap Contract between Borrower and/or any or all of its Restricted Subsidiaries and a Swap Provider (excluding any Swap Contract of the type described in the last sentence of the definition of Swap Contract).

 

“Creditor” shall mean each of (a) each Agent, (b) each L/C Lender and (c) each Lender.

 

“Custodian Agreement” means that certain Custodian Agreement dated as of the Closing Date among Wilmington Trust, National Association, as custodian, Collateral Agent and the Credit Parties and Holding Companies named therein, as the same may be amended in accordance with the terms thereof and hereof.

 

“Debt Issuance” shall mean the incurrence by Borrower or any Restricted Subsidiary of any Indebtedness after the Closing Date (other than as permitted by Section 10.01).  The issuance or sale of any debt instrument convertible into or exchangeable or exercisable for any Equity Interests shall be deemed a Debt Issuance for purposes of Section 2.10(a).

 

“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 jurisdiction from time to time in effect.

 

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“Declined Amounts” shall have the meaning provided in Section 2.10(b).

 

“Default” shall mean any event or condition that constitutes an Event of Default or that would become, with notice or lapse of time or both, an Event of Default.

 

“Default Quarter” shall have the meaning provided in Section 11.03.

 

“Default Rate” shall mean a per annum rate equal to, (i) in the case of principal on any Loan, the rate which is 2% in excess of the rate borne by such Loan immediately prior to the respective payment default or other Event of Default, and (ii) in the case of any other Obligations, the rate which is 2% in excess of the rate otherwise applicable to ABR Loans which are Revolving Loans from time to time (determined based on a weighted average if multiple Tranches of Revolving Commitments are then outstanding).

 

“Defaulting Lender” shall mean, subject to Section 2.14(b), any Lender that (i) has failed to (A) fund all or any portion of its Loans within two (2) Business Days of the date such Loans were required to be funded hereunder unless such Lender has notified Administrative Agent and Borrower in writing that such failure is the result of such Lender’s good faith determination that one or more conditions precedent to funding has not been satisfied (which conditions precedent, together with the applicable default, if any, will be specifically identified in such writing), or (B) comply with its obligations under this Agreement to make a payment to the L/C Lender in respect of a L/C Liability, make a payment to Swingline Lender in respect of a Swingline Loan, and/or make a payment to a Lender of any amount required to be paid to it hereunder, in each case within two (2) Business Days of the date when due, (ii) has notified Borrower, Administrative Agent, a L/C Lender or the Swingline Lender in writing, or has stated publicly, that it will not comply with any such funding obligation hereunder, unless such writing or statement states that such position is based on such Lender’s good faith determination that one or more conditions precedent to funding cannot be satisfied (which conditions precedent, together with the applicable default, if any, will be specifically identified in such writing or public statement), or has defaulted generally (excluding bona fide disputes) on its funding obligations under other loan agreements or credit agreements or other similar agreements, (iii) a Lender Insolvency Event has occurred and is continuing with respect to such Lender or its Parent Company, (iv) any Lender that has, for three or more Business Days after written request of Administrative Agent or Borrower, failed to confirm in writing to Administrative Agent and Borrower that it will comply with its prospective funding obligations hereunder (provided that such Lender will cease to be a Defaulting Lender pursuant to this clause (iv) upon Administrative Agent’s and Borrower’s receipt of such written confirmation) or (v) becomes the subject of a Bail-in Action.  Any determination of a Defaulting Lender under clauses (i) through (v) above will be conclusive and binding absent manifest error.

 

“Designated Lender” means a Station Permitted Assignee that is primarily engaged in, or advises funds or other investment vehicles that are engaged in, making, purchasing, holding or otherwise investing in commercial loans, bonds and similar extensions of credit or securities in the ordinary course and with respect to which no Affiliate of any Credit Party, directly or indirectly, possesses the power to direct or cause the direction of the investment policies of such Station Permitted Assignee; provided that such Station Permitted Assignee has been identified by Borrower on Schedule 1.01(D) or has been notified to Administrative Agent by Borrower and approved by Administrative Agent.

 

“Designated Non-Cash Consideration” shall mean the fair market value of non-cash consideration received by Borrower or any of its Restricted Subsidiaries in connection with an Asset Sale that is so designated as Designated Non-Cash Consideration pursuant to an Officers’ Certificate setting forth the basis of such valuation, executed by a financial officer of Borrower, minus the amount of cash or Cash Equivalents received in connection with a subsequent sale of or collection on such Designated Non-Cash Consideration.

 

“Designation” has the meaning set forth in Section 9.12(a).

 

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“Designation Amount” has the meaning set forth in Section 9.12(a)(ii).

 

“Development Expenses” means, without duplication, the aggregate principal amount, not to exceed $500 million at any time, of outstanding Indebtedness incurred after the Closing Date, the proceeds of which, at the time of determination, as certified by a Responsible Officer of Borrower, have been applied or are required or intended to be used to fund, (i) Expansion Capital Expenditures of Borrower or any Restricted Subsidiary, (ii) a Development Project or (iii) interest, fees or related charges with respect to such Indebtedness; provided that (A) Borrower or the Restricted Subsidiary or other Person that owns assets subject to the Expansion Capital Expenditure or Development Project, as applicable, is diligently pursuing the completion thereof and has not at any time ceased construction of such Expansion Capital Expenditure or Development Project, as applicable, for a period in excess of 90 consecutive days (other than as a result of a force majeure event or inability to obtain requisite Gaming Approvals or other governmental authorizations, so long as, in the case of any such Gaming Approvals or other governmental authorizations, Borrower or a Restricted Subsidiary or other applicable Person is diligently pursuing such Gaming Approvals or governmental authorizations) and (B) no such Indebtedness shall constitute Development Expenses with respect to an Expansion Capital Expenditure project or a Development Project from and after the end of the first full fiscal quarter after the earlier of (x) opening for business, and (y) completion of construction of the applicable Expansion Capital Expenditure project or Development Project.

 

“Development Project” shall mean Investments, directly or indirectly, (a) in any Joint Ventures in which Borrower or any of its Restricted Subsidiaries, directly or indirectly, has control or with whom it has a management or similar contract and in which Borrower or any of its Restricted Subsidiaries owns (directly or indirectly) at least 25% of the Equity Interest of such Joint Venture, or (b) in, or expenditures with respect to, casinos,  “racinos,” full service casino resorts or non-gaming resorts or Persons that own casinos, “racinos,” full-service casino resorts or non-gaming resorts (including casinos, “racinos,” full-service casino resorts or non-gaming resorts in development or under construction that are not presently opening or operating) with respect to which Borrower or any of its Restricted Subsidiaries will directly manage the development thereof or (directly or indirectly through Subsidiaries) Borrower or any of its Restricted Subsidiaries has entered into a management or similar contract (or an agreement to enter into such a management or similar contract) and such contract remains in full force and effect at the time of such Investment, though it may be subject to regulatory approvals, in each case, used to finance, or made for the purpose of allowing such Joint Venture, casino, “racino,” full-service casino resort or non-gaming resort, as the case may be, to finance, the purchase or other acquisition of any fixed or capital assets or the refurbishment of existing assets or properties that develops, adds to or significantly improves the property of such Joint Venture, casino, “racino,” full-service casino resort or non-gaming resort and assets ancillary or related thereto, or the construction and development of a casino, “racino,” full-service casino resort,  non-gaming resort or assets ancillary or related thereto and including Pre-Opening Expenses with respect to such Joint Venture, casino, “racino,” full-service casino resort or non-gaming resort and other fees and payments to be made to such Joint Venture or the owners of such casino, “racino,” full-service casino resort or non-gaming resort.

 

“Discharged” shall mean Indebtedness that has been defeased (pursuant to a contractual or legal defeasance) or discharged pursuant to the prepayment or deposit of amounts sufficient to satisfy such Indebtedness as it becomes due or irrevocably called for redemption (and regardless of whether such Indebtedness constitutes a liability on the balance sheet of the obligors thereof); provided, however, that the Indebtedness shall be deemed Discharged if the payment or deposit of all amounts required for defeasance or discharge or redemption thereof have been made even if certain conditions thereto have not been satisfied, so long as such conditions are reasonably expected to be satisfied within 95 days after such prepayment or deposit.

 

“Discount Range” shall have the meaning provided in Exhibit O hereto.

 

“Disqualified Capital Stock” shall mean, with respect to any Person, any Equity Interest of such Person that, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable), or upon the happening of any event, matures (excluding any maturity as the result of an optional redemption by the

 

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issuer thereof) or is mandatorily redeemable or redeemable at the sole option of the holder thereof (other than solely (x) for Qualified Capital Stock or upon a sale of assets, casualty event or a change of control, in each case, subject to the prior payment in full of the Obligations, (y) as a result of a redemption required by Gaming Law or (z) as a result of a redemption that by the terms of such Equity Interest is contingent upon such redemption not being prohibited by this Agreement), pursuant to a sinking fund obligation or otherwise (other than solely for Qualified Capital Stock) or exchangeable or convertible into debt securities of the issuer thereof at the sole option of the holder thereof, in whole or in part, on or prior to the date that is 181 days after the Final Maturity Date then in effect at the time of issuance thereof.

 

“Disqualified Lenders” shall mean any banks, financial institutions or other Persons separately identified by Borrower on Schedule 1.01(F).

 

“Documentation Agents” means Goldman Sachs Bank USA, Citigroup Global Markets Inc., Macquarie Capital (USA) Inc., Citizens Bank, N.A., UBS Securities LLC and Credit Suisse Securities (USA) LLC, in their capacities as documentation agents hereunder.

 

“Dollars” and “$” shall mean the lawful money of the United States.

 

“Domestic Subsidiary” of any Person shall mean any Subsidiary of such Person incorporated, organized or formed in the United States or any state or territory thereof or the District of Columbia.

 

“DQ List” shall have the meaning provided in Section 13.05(k)(iv).

 

“EEA Financial Institution” shall mean (a) any credit institution or investment firm 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 financial institution established in an 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” shall mean any of the member states of the European Union, Iceland, Liechtenstein, and Norway.

 

“EEA Resolution Authority” shall mean 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.

 

“Eligible Assignee” shall mean and include (i) a commercial bank, an insurance company, a finance company, a financial institution, any fund that invests in loans or any other “accredited investor” (as defined in Regulation D), (ii) solely for purposes of Borrower Loan Purchases, Borrower and its Restricted Subsidiaries and (iii) solely for purposes of Section 13.05(e), Station Permitted Assignees; provided, however, that (x) other than as set forth in clauses (ii) and (iii) of this definition, neither Borrower nor any of Borrower’s Affiliates or Subsidiaries shall be an Eligible Assignee, (y) Eligible Assignee shall not include any Person that is a Disqualified Lender as of the applicable Trade Date unless consented to in writing by Borrower and (z) Eligible Assignee shall not include any Person who is a Defaulting Lender.

 

“Employee Benefit Plan” shall mean an employee benefit plan (as defined in Section 3(3) of ERISA) that is maintained or contributed to by any ERISA Entity.

 

“Engagement Letters” shall mean, collectively, each of the engagement letters and fee letters entered into between Borrower and the Agents prior to the Closing Date relating to the Transactions.

 

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“Environment” shall mean ambient air, surface water and groundwater (including potable water, navigable water and wetlands), the land surface or subsurface strata, natural resources, the workplace or as otherwise defined in any Environmental Law.

 

“Environmental Action” shall mean (a) any notice, claim, demand or other written or, to the knowledge of any Responsible Officer of Borrower, oral communication alleging liability of Borrower or any of its Restricted Subsidiaries for investigation, remediation, removal, cleanup, response, corrective action or other costs, damages to natural resources, personal injury, property damage, fines or penalties resulting from, related to or arising out of (i) the presence, Release or threatened Release in or into the Environment of Hazardous Material at any location or (ii) any violation of Environmental Law, and shall include, without limitation, any claim seeking damages, contribution, indemnification, cost recovery, compensation or injunctive relief resulting from, related to or arising out of the presence, Release or threatened Release of Hazardous Material or alleged injury or threat of injury to human health, safety or the Environment arising under Environmental Law and (b) any investigation, monitoring, removal or remedial activities undertaken by or on behalf of Borrower or any of its Restricted Subsidiaries, arising under Environmental Law whether or not such activities are carried out voluntarily.

 

“Environmental Law” shall mean any and all applicable treaties, laws, statutes, ordinances, regulations, rules, decrees, judgments, orders, consent orders, consent decrees and other binding legal requirements, and the common law, relating to protection of public health or the Environment, the Release or threatened Release of Hazardous Material, natural resources or natural resource damages, or occupational safety or health.

 

“Equity Interests” shall mean, with respect to any Person, any and all shares, interests, participations or other equivalents, including membership interests (however designated, whether voting or non-voting), of equity of such Person, including, if such Person is a partnership, partnership interests (whether general or limited) and any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, such partnership, whether outstanding on the Closing Date or issued after the Closing Date; provided, however, that a debt instrument convertible into or exchangeable or exercisable for any Equity Interests or Swap Contracts entered into as a part of, or in connection with, an issuance of such debt instrument shall not be deemed an Equity Interest.

 

“Equity Issuance” shall mean (a) any issuance or sale after the Closing Date by Borrower of any Equity Interests (including any Equity Interests issued upon exercise of any Equity Rights) or any Equity Rights, or (b) the receipt by Borrower after the Closing Date of any capital contribution (whether or not evidenced by any Equity Interest issued by the recipient of such contribution).  The issuance or sale of any debt instrument convertible into or exchangeable or exercisable for any Equity Interests shall be deemed a Debt Issuance and not an Equity Issuance for purposes of the definition of Equity Issuance Proceeds; provided, however, that such issuance or sale shall be deemed an Equity Issuance upon the conversion or exchange of such debt instrument into Equity Interests.

 

“Equity Issuance Proceeds” shall mean, with respect to any Equity Issuance, the aggregate amount of all cash received in respect thereof by the Person consummating such Equity Issuance net of all investment banking fees, discounts and commissions, legal fees, consulting fees, accountants’ fees, underwriting discounts and commissions and other fees and expenses actually incurred in connection therewith; provided that, with respect to any Equity Interests issued upon exercise of any Equity Rights, the Equity Issuance Proceeds with respect thereto shall be determined without duplication of any Equity Issuance Proceeds received in respect of such Equity Rights.

 

“Equity Rights” shall mean, with respect to any Person, any then-outstanding subscriptions, options, warrants, commitments, preemptive rights or agreements of any kind (including any stockholders’ or voting trust agreements) for the issuance, sale, registration or voting of any additional Equity Interests of any class, or partnership or other ownership interests of any type in, such Person; provided, however, that a debt instrument convertible into or exchangeable or exercisable for any Equity Interests shall not be deemed an Equity Right.

 

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“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time.

 

“ERISA Entity” shall mean any member of an ERISA Group.

 

“ERISA Event” shall mean (a) any “reportable event,” as defined in Section 4043 of ERISA or the regulations issued thereunder, with respect to a Pension Plan (other than an event for which the 30-day notice requirement is waived); (b) with respect to any Pension Plan, the failure to satisfy the minimum funding standard under Section 412 of the Code and Section 302 of ERISA, whether or not waived, the failure by any ERISA Entity to make by its due date a required installment under Section 430(j) of the Code with respect to any Pension Plan or the failure to make any required contribution to a Multiemployer Plan; (c) the filing pursuant to Section 412(c) of the Code or Section 302(c) of ERISA of an application for a waiver of the minimum funding standard with respect to any Pension Plan; (d) the incurrence by any ERISA Entity of any liability under Title IV of ERISA with respect to the termination of any Pension Plan; (e) the receipt by any ERISA Entity from the PBGC or a plan administrator of any notice indicating an intent to terminate any Pension Plan or to appoint a trustee to administer any Pension Plan; (f) the occurrence of any event or condition which would reasonably constitute grounds under ERISA for the termination of or the appointment of a trustee to administer, any Pension Plan; (g) the incurrence by any ERISA Entity of any liability with respect to the withdrawal or partial withdrawal from any Pension Plan or Multiemployer Plan; (h) the receipt by an ERISA Entity of any notice, or the receipt by any Multiemployer Plan from any ERISA Entity of any notice, concerning the imposition of Withdrawal Liability on any ERISA Entity or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA; (i) the making of any amendment to any Pension Plan which would be reasonably likely to result in the imposition of a lien or the posting of a bond or other security; (j) the withdrawal of any ERISA Entity from a Pension Plan subject to Section 4063 of ERISA during a plan year in which such ERISA Entity was a “substantial employer” as defined in Section 4001(a)(2) of ERISA or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; or (k) the occurrence of a nonexempt prohibited transaction (within the meaning of Section 4975 of the Code or Section 406 of ERISA) which would reasonably be expected to result in liability to Borrower or any of its Restricted Subsidiaries.

 

“ERISA Group” shall mean Borrower or any of its Restricted Subsidiaries and all members of a controlled group of corporations and all trades or businesses (whether or not incorporated) under common control which, together with Borrower and its Restricted Subsidiaries, are treated as a single employer under Section 414(b) or (c) of the Code.

 

“EU Bail-In Legislation Schedule” shall mean the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor Person), as in effect from time to time.

 

“Events of Default” has the meaning set forth in Section 11.01.

 

“Excess Cash Flow” shall mean, for any fiscal year of Borrower (or in the case of the fiscal year ending December 31, 2016, the period from and including the first day of the first full quarter after the Closing Date through December 31, 2106), an amount, if positive, equal to (without duplication):

 

(a)   Consolidated Net Income; plus

 

(b)   an amount equal to the amount of all non-cash charges or losses (including write-offs or write-downs, depreciation expense and amortization expense including amortization of goodwill and other intangibles) to the extent deducted in arriving at such Consolidated Net Income (excluding any such non-cash expense to the extent that it represents an accrual or reserve for potential cash charge in any future period or amortization of a prepaid cash charge that was paid in a prior period and that did not reduce Excess Cash Flow at the time paid); plus

 

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(c)   the decrease, if any, in Working Capital from the beginning of such period to the end of such period (for the avoidance of doubt, an increase in negative Working Capital is a decrease in Working Capital); minus

 

(d)   all payments with respect to restricted stock units upon the Person to whom such restricted stock units were originally issued ceasing to be a director, officer, employee, consultant or advisor and net income or loss allocated to unvested participating restricted stock of Borrower; plus

 

(e)   any amounts received from the early extinguishment of Swap Contracts that are not included in Consolidated Net Income; minus

 

(f)    the increase, if any, of Working Capital from the beginning of such period to the end of such period; minus

 

(g)   any amounts paid in connection with the early extinguishment of Swap Contracts that are not included in Consolidated Net Income; minus

 

(h)   the amount of Capital Expenditures made in cash during such period, except to the extent financed with the proceeds of an Equity Issuance, Indebtedness, Asset Sales or Casualty Events (to the extent such proceeds did not increase Consolidated Net Income) of Borrower or its Restricted Subsidiaries; minus

 

(i)    the amount of principal payments of the Loans, Other Applicable Indebtedness and Other First Lien Indebtedness of Borrower and its Restricted Subsidiaries (excluding (i) repayments of Revolving Loans or Swingline Loans or other revolving indebtedness, except to the extent the Revolving Commitments or commitments in respect of such other revolving debt, as applicable, are permanently reduced in connection with such repayments, (ii) prepayments of Loans or other Indebtedness, in each case, that reduce the amount of Excess Cash Flow prepayment required to be made with respect to such fiscal year under Section 2.10(a)(iv)(y) (including as a result of Section 2.10(a)(vii)) and (iii) mandatory prepayments of Loans pursuant to Section 2.10(a)(i), 2.10(a)(ii), 2.10(a)(iii) or 2.10(a)(v), except to the extent the Net Available Proceeds from such Casualty Event or Asset Sale, as applicable, used to make such mandatory prepayments were included in the calculation of Consolidated Net Income), in each case, except to the extent financed with the proceeds of an Equity Issuance, Indebtedness, Asset Sales or Casualty Events (to the extent such proceeds did not increase Consolidated Net Income) of Borrower or its Restricted Subsidiaries; minus

 

(j)    without duplication of amounts deducted pursuant to clause (l) below in prior periods, the amount of Investments made during such period pursuant to Section 10.04 (other than Sections 10.04(a), (b), (c), (d), (e), (f) (except to the extent such amount increased Consolidated Net Income), (g) (except to the extent that the receipt of consideration described therein increased Consolidated Net Income), (h) (to the extent taken into account in arriving at Consolidated Net Income), (j), (k)(ii), (k)(iv), (l), (o), (q), (r) and (w)), except to the extent financed with the proceeds of an Equity Issuance, Indebtedness (other than Revolving Loans), Asset Sales or Casualty Events (to the extent such proceeds did not increase Consolidated Net Income) of Borrower or its Restricted Subsidiaries; minus

 

(k)   the amount of all non-cash gains to the extent included in arriving at such Consolidated Net Income (excluding any such non-cash gain to the extent it represents the reversal of an accrual or reserve for a potential cash loss in any prior period); minus

 

(l)    the amount of all Restricted Payments made during such period pursuant to Section 10.06(i)(i); minus

 

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(m)  the amount of all Junior Prepayments made during such period pursuant to Section 10.09(a)(i); minus

 

(n)   any expenses or reserves for liabilities to the extent that Borrower or any Restricted Subsidiary is entitled to indemnification or reimbursement therefor under binding agreements or insurance claims therefor to the extent Borrower has not received such indemnity or reimbursement payment, in each case, to the extent not taken into account in arriving at Consolidated Net Income; plus

 

(o)   the excess, if any, of (A) the aggregate amount of Subsidiary Tax Sharing Payments received by Borrower during such period over (B) the sum of (1) the amount of cash income taxes (if any) paid by Borrower and its Restricted Subsidiaries to Governmental Authorities in such period plus (2) the aggregate amount of Restricted Payments by Borrower to Holdco pursuant to Section 10.06(p) during such period; plus

 

(p)   the amount of cash payments received by Borrower from Unrestricted Subsidiaries pursuant to the Subsidiary Cost Allocation Agreements during such period with respect to expenses deducted in the determination of Consolidated Net Income; minus

 

(q)   the excess, if any, of (A) the sum of (1) the amount of cash taxes (if any) actually paid by Borrower and its Restricted Subsidiaries to Governmental Authorities during such period plus (2) the aggregate amount of Restricted Payments by Borrower to Holdco pursuant to Section 10.06(p) during such period over (B) the aggregate amount of Subsidiary Tax Sharing Payments received by Borrower during such period; minus

 

(r)    the amount of distributions made by Borrower to the Holding Companies pursuant to Sections 10.06(m) and (n); plus

 

(s)    the amount of income tax expense deducted in determining Consolidated Net Income for such fiscal year (if any); minus

 

(t)    to the extent included in Consolidated Net Income, Specified 10.04(k) Investment Returns received during such fiscal year.

 

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.

 

“Excluded Foreign Subsidiary” shall mean (a) any Subsidiary that is a “controlled foreign corporation” within the meaning of Section 957 of the Code, (b) any Subsidiary substantially all the assets of which consist of Equity Interests (or Equity Interests and Indebtedness) in one or more Subsidiaries described in clause (a) of this definition or (c) any Subsidiary the Equity Interests of which are directly or indirectly owned by any Subsidiary described in clause (a) of this definition.

 

“Excluded Information” shall have the meaning provided in Section 12.07(b).

 

“Excluded Subsidiary” shall mean (a) any Unrestricted Subsidiary, (b) any Immaterial Subsidiary, (c) any Foreign Subsidiary, (d) any Subsidiary that is prohibited by applicable law, rule or regulation (including, without limitation, any Gaming Laws) or by any agreement, instrument or other undertaking to which such Subsidiary is a party or by which it or any of its property or assets is bound from guaranteeing the Obligations; provided that any such agreement, instrument or other undertaking (i) is in existence on the Closing Date and listed on Schedule 1.01(A) (or, with respect to a Subsidiary acquired after the Closing Date, as of the date such acquisition) and (ii) in the case of a Subsidiary acquired after the Closing Date, was not entered into in connection with or anticipation of such acquisition, (e) any Subsidiary with respect to which guaranteeing the Obligations would require consent,

 

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approval, license or authorization from any Governmental Authority (including, without limitation, any Gaming Authority), unless such consent, approval, license or authorization has been received and is in effect and (f) any other Subsidiary with respect to which, in the reasonable judgment of Administrative Agent (which shall be confirmed in writing by notice to Borrower), the cost or other consequences (including any adverse tax consequences) of providing a guarantee shall be excessive in view of the benefits to be obtained by the Lenders therefrom.

 

“Excluded Swap Obligation” means, with respect to any Guarantor, (x) as it relates to all or a portion of the Guarantee of such Guarantor, any Swap Obligation if, and to the extent that, 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 becomes effective with respect to such Swap Obligation or (y) as it relates to all or a portion of the grant by such Guarantor of a security interest, any Swap Obligation if, and to the extent that, such Swap Obligation (or such security interest in respect 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 security interest of such Guarantor becomes effective with respect to such Swap Obligation. If a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such Guarantee or security interest is or becomes illegal.

 

“Excluded Taxes” shall mean, with respect to any Agent, any Lender, or any other recipient of any payment to be made by or on account of any obligation of any Credit Party, Holding Company or RRR hereunder and under the other Credit Documents, (a) income or franchise Taxes imposed on (or measured by) net income or net profits (however denominated), in each case, imposed by the jurisdiction under the laws of which such recipient is organized, in which its principal office is located or in which it is otherwise doing business (other than a business deemed to arise solely by virtue of the transactions contemplated by this Agreement) or, in the case of any Lender, in which its Applicable Lending Office is located, (b) any branch profits Taxes imposed by the United States under Section 884(a) of the Code or any similar Tax imposed by any other jurisdiction described in clause (a) above, (c) in the case of any Lender, other than an assignee pursuant to a request by Borrower under Section 2.11(a), any U.S. federal withholding tax that is imposed on amounts payable to such Person under the laws in effect at the time such Person becomes a party to this Agreement (or designates a new Applicable Lending Office), except to the extent that such Person (or its assignor, if any) was entitled, at the time of designation of a new Applicable Lending Office (or assignment), to receive additional amounts from Borrower with respect to such withholding Tax pursuant to Section 5.06(a), (d) Taxes attributable to such Person’s failure to comply with Section 5.06(b) or 5.06(c) and (e) any United States federal withholding tax imposed under FATCA.

 

“Existing Credit Agreement” shall mean the Credit Agreement, dated as of March 1, 2013 (as amended and otherwise modified prior to the date hereof), among Borrower, Deutsche Bank AG Cayman Islands Branch, as administrative agent, the lenders party thereto and the other agents party thereto.

 

“Existing Letter of Credit” has the meaning set forth in Section 2.03(n).

 

“Existing Revolving Loans” shall have the meaning provided in Section 2.13(b).

 

“Existing Revolving Tranche” shall have the meaning provided in Section 2.13(b).

 

“Existing Term Loan Tranche” shall have the meaning provided in Section 2.13(a).

 

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“Existing Tranche” shall mean any Existing Term Loan Tranche or Existing Revolving Tranche.

 

“Expansion Capital Expenditures” means any capital expenditure by Borrower or any of its Restricted Subsidiaries in respect of the purchase or other acquisition of any fixed or capital assets or the refurbishment of existing assets or properties that, in Borrower’s reasonable determination, adds to or significantly improves (or is reasonably expected to add to or significantly improve) the property of Borrower and its Restricted Subsidiaries, excluding any such capital expenditures financed with Net Available Proceeds of an Asset Sale or Casualty Event and excluding capital expenditures made in the ordinary course made to maintain, repair, restore or refurbish the property of Borrower and its Restricted Subsidiaries in its then existing state or to support the continuation of such Person’s day to day operations as then conducted.

 

“Extended Revolving Commitments” shall have the meaning provided in Section 2.13(b).

 

“Extended Revolving Loans” shall have the meaning provided in Section 2.13(b).

 

“Extended Term Loans” shall have the meaning provided in Section 2.13(a).

 

“Extending Lender” shall have the meaning provided in Section 2.13(c).

 

“Extension Amendment” shall have the meaning provided in Section 2.13(d).

 

“Extension Date” shall mean any date on which any Existing Term Loan Tranche or Existing Revolving Tranche is modified to extend the related scheduled maturity date(s) in accordance with Section 2.13 (with respect to the Lenders under such Existing Term Loan Tranche or Existing Revolving Tranche which agree to such modification).

 

“Extension Election” shall have the meaning provided in Section 2.13(c).

 

“Extension Request” shall mean any Term Loan Extension Request or Revolving Extension Request.

 

“Extension Tranche” shall mean all Extended Term Loans of the same tranche or Extended Revolving Commitments of the same tranche that are established pursuant to the same Extension Amendment (or any subsequent Extension Amendment to the extent such Extension Amendment expressly provides that the Extended Term Loans or Extended Revolving Commitments, as applicable, provided for therein are intended to be a part of any previously established Extension Tranche).

 

“fair market value” shall mean, with respect to any Property, a price (after taking into account any liabilities relating to such Property), as determined in good faith by Borrower, that could be negotiated in an arm’s-length free market transaction, for cash, between a willing seller and a willing and able buyer, neither of which is under any compulsion to complete the transaction.

 

“Fair Share” has the meaning set forth in Section 6.10.

 

“FATCA” means Sections 1471 through 1474 of the Code as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with) and any regulations thereunder or official interpretations thereof, any intergovernmental agreements entered into pursuant thereto, any non-U.S. legislation implementing any such intergovernmental agreement, and any agreements entered into pursuant to Section 1471(b) of the Code.

 

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“Federal Funds Effective Rate” means, for any day, the rate calculated by the NYFRB based on such day’s federal funds transactions by depositary institutions, as determined in such manner as the NYFRB shall set forth on its public website from time to time, and published on the next succeeding Business Day by the NYFRB as the federal funds effective rate; provided, further, that if the aforesaid rate shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.

 

“Fertitta Entertainment” means Fertitta Entertainment LLC, a Delaware limited liability company, and its successors.

 

“Fertitta Family Entity” means any trust or entity one hundred percent (100%) owned and Controlled by or established for the sole benefit of, or the estate of, any of Frank J. Fertitta III or Lorenzo J. Fertitta or their spouses or lineal descendants (including, without limitation, adopted children and their lineal descendants).

 

“Fertitta Holder” means (a) Frank J. Fertitta III or Lorenzo J. Fertitta or any of their spouses or lineal descendants (including without limitation, adopted children and their lineal descendants) or (b) a Fertitta Family Entity.

 

“Fertitta Interactive Tax Sharing Agreement” means the tax sharing agreement dated November 16, 2012 by and between Opco and Fertitta Interactive LLC.

 

“Final Maturity Date” shall mean the latest of the latest R/C Maturity Date, the Term A Facility Maturity Date, the Term B Facility Maturity Date, the latest New Term Loan Maturity Date, the latest final maturity date applicable to any Extended Term Loans, the latest final maturity date applicable to any Extended Revolving Commitments, the latest final maturity date applicable to any Other Term Loans and the latest final maturity date applicable to any Other Revolving Loans.

 

“Financial Maintenance Covenants” shall mean the covenants set forth in Section 10.08.

 

“FIRREA” shall mean the Financial Institutions Reform, Recovery and Enforcement Act of 1989, as amended.

 

“Flood Insurance Laws” means, collectively, (a) the National Flood Insurance Act of 1968 as now or hereafter in effect or any successor statute thereto, (b) the Flood Disaster Protection Act of 1973 as now or hereafter in effect or any successor statue thereto, (c) the National Flood Insurance Reform Act of 1994 as now or hereafter in effect or any successor statute thereto and (d) the Flood Insurance Reform Act of 2004 as now or hereafter in effect or any successor statute thereto.

 

“Foreign Lender Certificate” has the meaning set forth in Section 5.06(b).

 

“Foreign Plan” shall mean any employee benefit plan, program, policy, arrangement or agreement (excluding employment agreements) maintained or contributed to by, or entered into with, Borrower or any Restricted Subsidiary with respect to employees employed outside the United States.

 

“Foreign Subsidiary” shall mean (x) each Subsidiary that is organized under the laws of a jurisdiction other than the United States or any state thereof, or the District of Columbia and (y) each Excluded Foreign Subsidiary.

 

“Fund” means any Person (other than a natural person) that is engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course.

 

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“Funding Credit Party” has the meaning set forth in Section 6.10.

 

“Funding Date” shall mean the date of the making of any extension of credit (whether the making of a Loan or the issuance of a Letter of Credit) hereunder (including the Closing Date).

 

“GAAP” shall mean generally accepted accounting principles set forth as of the relevant date in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board (or agencies with similar functions of comparable stature and authority within the U.S. accounting profession), including, without limitation, any Accounting Standards Codifications, which are applicable to the circumstances as of the date of determination.

 

“Gaming Approval” shall mean any and all approvals, authorizations, permits, consents, rulings, orders or directives of any Governmental Authority (including, without limitation, any Gaming Authority) (a) necessary to enable Borrower or any of its Restricted Subsidiaries to engage in, operate or manage the casino, gambling, horse racing or gaming business or otherwise continue to conduct, operate or manage such business substantially as is presently conducted, operated or managed or contemplated to be conducted, operated or managed following the Closing Date (after giving effect to the Transactions), (b) required by any Gaming Law or (c) necessary as is contemplated on the Closing Date (after giving effect to the Transactions), to accomplish the financing and other transactions contemplated hereby after giving effect to the Transactions.

 

“Gaming Authority” shall mean any Governmental Authority with regulatory, licensing or permitting authority or jurisdiction over any gaming business or enterprise or horse racing business or enterprise or any Gaming Facility (including, without limitation, the following as of the Closing Date:  the Nevada Gaming Commission and the Nevada State Gaming Control Board), or with regulatory, licensing or permitting authority or jurisdiction over any gaming or racing operation (or proposed gaming or racing operation) owned, managed, leased or operated by Borrower or any of its Restricted Subsidiaries.

 

“Gaming Facility” shall mean any gaming establishment and other property or assets ancillary thereto or used in connection therewith, including, without limitation, any casinos, hotels, resorts, race tracks, off-track wagering sites, theaters, parking facilities, recreational vehicle parks, timeshare operations, retail shops, restaurants, other buildings, land, golf courses and other recreation and entertainment facilities, marinas, vessels, barges, ships and related equipment.

 

“Gaming Laws” shall mean all applicable provisions of all:  (a) constitutions, treaties, statutes or laws governing Gaming Facilities (including, without limitation, card club casinos and pari mutuel race tracks) and rules, regulations, codes and ordinances of, and all administrative or judicial orders or decrees or other laws pursuant to which, any Gaming Authority possesses regulatory, licensing or permit authority over gambling, gaming, racing or Gaming Facility activities conducted, operated or managed by Borrower or any of its Restricted Subsidiaries within its jurisdiction; (b) Gaming Approvals; and (c) orders, decisions, determinations, judgments, awards and decrees of any Gaming Authority.

 

“Gaming License” shall mean any Gaming Approval or other casino, gambling, horse racing or gaming license issued by any Gaming Authority covering any Gaming Facility.

 

“Governmental Authority” shall mean any government or political subdivision of the United States or any other country, whether federal, state, provincial or local, or any agency, authority, board, bureau, central bank, commission, office, division, department or instrumentality thereof or therein, including, without limitation, any court, tribunal, grand jury or arbitrator, in each case whether foreign or domestic, or any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to such government or political subdivision including, without limitation, any Gaming Authority.

 

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“Governmental Real Property Disclosure Requirements” shall mean any Requirement of Law requiring notification of the buyer, mortgagee or assignee of real property, or notification, registration or filing to or with any Governmental Authority, in connection with the sale, lease, mortgage, assignment or other transfer (including, without limitation, any transfer of control) of any real property, establishment or business, of the actual or threatened presence or release in or into the Environment, or the use, disposal or handling of Hazardous Material on, at, under or near the real property, facility or business to be sold, mortgaged, assigned or transferred.

 

“Guarantee” shall mean the guarantee of each Guarantor pursuant to Article VI.

 

“Guaranteed Obligations” has the meaning set forth in Section 6.01.

 

“Guarantors” shall mean each of the Persons listed on Schedule 1.01(B) attached hereto and each Restricted Subsidiary that may hereafter execute a Joinder Agreement pursuant to Section 9.11, together with their successors and permitted assigns, and “Guarantor” shall mean any one of them; provided, however, that notwithstanding the foregoing, Guarantors shall not include any Person that has been released as a Guarantor in accordance with the terms of the Credit Documents.

 

“GVR” means Station GVR Acquisition, LLC, a Nevada limited liability company.

 

“GVR/ANC License Agreement” means that certain License Agreement, dated as of March 2, 2011, by and between ANC and GVR, together with that certain Memorandum of License Agreement, dated as of June 16, 2011, by and between ANC and GVR.

 

“Hazardous Material” shall mean any material, substance, waste, constituent, compound, pollutant or contaminant including, without limitation, petroleum (including, without limitation, crude oil or any fraction thereof or any petroleum product or waste) subject to regulation or which could reasonably be expected to give rise to liability under Environmental Law.

 

“Holdco” shall mean Station Holdco LLC, a Delaware limited liability company.

 

“Holdco LLC Agreement” shall mean that certain Third Amended and Restated Limited Liability Company Agreement of Holdco, dated as of April 28, 2016.

 

“Holding Companies” shall mean (i) prior to the VoteCo SPE Reorganization Date, Holdco and (ii) from and after the VoteCo SPE Reorganization Date, Holdco and the VoteCo SPE.

 

“Holding Company Tax Sharing Agreement” means that certain Amended and Restated Tax Distribution Agreement, dated as of March 1, 2013, between the Borrower and Holdco.

 

“Immaterial Subsidiary” shall mean (a) as of the Closing Date, those Subsidiaries of Borrower which are designated as such on Schedule 8.12(b), and (b) each additional Subsidiary of Borrower which is hereafter designated as such from time to time by written notice to Administrative Agent in a manner consistent with the provisions of Section 9.13; provided that no Person shall be so designated (or in the case of clauses (a) and (b), remain) (i) if, as of the date of its designation, its Consolidated EBITDA for the then most recent period of twelve months is in excess of $5,000,000, (ii) if it owns any interest in any Core Property or any Equity Interests in Borrower or any Guarantor, (iii) if it owns any material assets which are used in connection with any gaming, lodging or hospitality business (other than a Tavern Business and other than gaming, lodging or hospitality businesses with 250 gaming machines or less), (iv) if it owns any Real Property required to be a Mortgaged Real Property hereunder, (v) if it is IP Holdco, or (vi) when any Default or Event of Default has occurred and remains continuing.

 

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“Impacted Loans” has the meaning set forth in Section 5.02.

 

“Inaccuracy Determination” has the meaning set forth in the definition of “Applicable Margin.”

 

“Inaccurate Applicable Margin Period” has the meaning set forth in the definition of “Applicable Margin.”

 

“Incremental Commitments” shall mean the Incremental Revolving Commitments and the Incremental Term Loan Commitments.

 

“Incremental Effective Date” has the meaning set forth in Section 2.12(b).

 

“Incremental Equivalent Debt” has the meaning set forth in Section 10.01(t).

 

“Incremental Joinder Agreement” has the meaning set forth in Section 2.12(b).

 

“Incremental Loan Amount” shall mean (a) $450.0 million, plus, (b) any additional or other amount, so long as, solely in this case of this clause (b), the Consolidated First Lien Leverage Ratio does not exceed 4.50 to 1.00, determined on a Pro Forma Basis as of the most recent Calculation Date; provided that, for such purpose, (w) at the option of Borrower, in the case of Incremental Revolving Commitments that constitute Acquisition Incremental Revolving Commitments or any Incremental Term Loans (and related Incremental Term Loan Commitments) or Incremental Equivalent Debt the proceeds of which are or are to be used primarily to fund a Permitted Acquisition or other Acquisition not prohibited hereunder (including repayment of Indebtedness of the Person acquired, or that is secured by the assets acquired, in such Permitted Acquisition or other Acquisition), such compliance may instead be determined on a Pro Forma Basis as of the Calculation Date immediately preceding the date on which a binding contract with respect to such Permitted Acquisition or other Acquisition is entered into between Borrower or a Restricted Subsidiary and the seller with respect thereto, giving effect to such Acquisition Incremental Revolving Commitments (in accordance with clause (z) below), Incremental Term Loans (and related Incremental Term Loan Commitments) and Incremental Equivalent Debt and such Permitted Acquisition or other Acquisition as if incurred and consummated on the first day of the applicable period, (x) Consolidated First Lien Leverage Ratio for such purpose shall treat any Incremental Equivalent Debt as first lien indebtedness, even if such Incremental Equivalent Debt was issued or incurred on an unsecured basis or on a junior basis to the Obligations, (y) in calculating the Consolidated First Lien Leverage Ratio, Consolidated Indebtedness shall not take into account any Loans under Incremental Commitments made under clause (a) concurrently with Loans made in reliance on clause (b) and (z) in the case of any Incremental Revolving Commitments and Incremental Equivalent Debt consisting of revolving credit facilities, pro forma effect shall be given to any Incremental Revolving Loans and any loans under any Incremental Equivalent Debt consisting of a revolving credit facility, in each case, to the extent actually made on such date, but any proposed Incremental Revolving Commitments or Incremental Equivalent Debt consisting of a revolving credit facility shall not otherwise be treated as drawn. In connection with any incurrence of Incremental Commitments or Incremental Equivalent Debt, Borrower may elect which of clauses (a) and/or (b) of the definition of “Incremental Loan Amount” it has opted to rely upon to incur such Indebtedness and Borrower shall notify Administrative Agent of such election.

 

“Incremental Revolving Commitments” shall have the meaning provided in Section 2.12(a).

 

“Incremental Revolving Loans” means any Revolving Loans made pursuant to Incremental Revolving Commitments.

 

“Incremental Term A Loan Commitments” shall have the meaning provided in Section 2.12(a).

 

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“Incremental Term A Loans” shall have the meaning provided in Section 2.12(a).

 

“Incremental Term B Loan Commitments” shall have the meaning provided in Section 2.12(a).

 

“Incremental Term B Loans” shall have the meaning provided in Section 2.12(a).

 

“Incremental Term Loan Commitments” shall mean the Incremental Term A Loan Commitments, the Incremental Term B Loan Commitments and the New Term Loan Commitments.

 

“Incremental Term Loans” shall mean the Incremental Term A Loans, the Incremental Term B Loans and any New Term Loans.

 

“incur” shall mean, with respect to any Indebtedness or other obligation of any Person, to create, issue, incur (including by conversion, exchange or otherwise), permit to exist, assume, guarantee or otherwise become liable in respect of such Indebtedness or other obligation (and “incurrence,” “incurred” and “incurring” shall have meanings correlative to the foregoing).

 

“Indebtedness” of any Person shall mean, without duplication, (a) all obligations of such Person for borrowed money; (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments; (c) all obligations of such Person under conditional sale or other title retention agreements relating to property purchased by such Person; (d) all obligations of such Person issued or assumed as the deferred purchase price of property or services (excluding (i) trade accounts payable and accrued obligations incurred in the ordinary course of business, (ii) the financing of insurance premiums, (iii) any such obligations payable solely through the issuance of Equity Interests and (iv) any earn-out obligation until such obligation appears in the liabilities section of the balance sheet of such Person in accordance with GAAP (excluding disclosure on the notes and footnotes thereto); provided that any earn-out obligation that appears in the liabilities section of the balance sheet of such Person shall be excluded, to the extent (x) such Person is indemnified for the payment thereof or (y) amounts to be applied to the payment therefor are in escrow); (e) all Indebtedness (excluding prepaid interest thereon) of others secured by any Lien on property owned or acquired by such Person, whether or not the obligations secured thereby have been assumed; provided, however, that if such obligations have not been assumed, the amount of such Indebtedness included for the purposes of this definition will be the amount equal to the lesser of the fair market value of such property and the amount of the Indebtedness secured; (f) with respect to any Capital Lease Obligations of such Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP; (g) all net obligations of such Person in respect of Swap Contracts; (h) all obligations of such Person as an account party in respect of letters of credit and bankers’ acceptances, except obligations in respect of letters of credit issued in support of obligations not otherwise constituting Indebtedness shall not constitute Indebtedness except to the extent such letter of credit is drawn and not reimbursed within three (3) Business Days of such drawing; (i) all obligations of such Person in respect of Disqualified Capital Stock; (j) obligations under Support Agreements; and (k) all Contingent Obligations of such Person in respect of Indebtedness of others of the kinds referred to in clauses (a) through (j) above. The Indebtedness of any Person shall (A) include the Indebtedness of any partnership in which such Person is a general partner unless recourse is limited, in which case the amount of such Indebtedness shall be the amount such Person is liable therefor (except to the extent the terms of such Indebtedness expressly provide that such Person is not liable therefor) and (B) exclude the obligations of Borrower under the LandCo Support Agreement.  The amount of Indebtedness of the type described in clause (d) shall be calculated based on the net present value thereof. The amount of Indebtedness of the type referred to in clause (g) above of any Person shall be zero unless and until such Indebtedness shall be terminated, in which case the amount of such Indebtedness shall be the then termination payment due thereunder by such Person.  For the avoidance of doubt, it is understood and agreed that (x) casino “chips” and gaming winnings of customers, (y) any obligations of such Person in respect of Cash Management Agreements and (z) any obligations of such Person in respect of employee deferred compensation and benefit plans (including Pension Plans acquired in the Palms Acquisition)

 

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shall not constitute Indebtedness. Operating leases shall not constitute Indebtedness hereunder regardless of whether required to be recharacterized as Capitalized Leases pursuant to GAAP.

 

“Indemnitee” has the meaning set forth in Section 13.03(b).

 

“Initial Financial Statement Delivery Date” shall mean the date on which Section 9.04 Financials are delivered to Administrative Agent under Section 9.04(a) or (b), as applicable, for the first full fiscal quarter ending after the Closing Date.

 

“Initial Perfection Certificate” has the meaning set forth in the definition of “Perfection Certificate.”

 

“Initial Restricted Payment Base Amount” shall mean, as of any date of determination, $250.0 million minus (x) the amount of Investments made under Section 10.04(k)(iii) on or prior to such date, (y) the amount of Restricted Payments made under Section 10.06(i)(i) on or prior to such date and (z) the amount of Junior Prepayments made under Section 10.09(a)(i)(i) on or prior to such date.

 

“Intellectual Property” has the meaning set forth in Section 8.19.

 

“Interest Coverage Ratio” shall mean, with respect to any Test Period, the ratio of (x) Consolidated EBITDA for such Test Period to (y) Consolidated Cash Interest Expense for such Test Period.

 

“Interest Period” shall mean, as to each LIBOR Loan, the period commencing on the date such LIBOR Loan is disbursed or converted to or continued as a LIBOR Loan and ending on the date one, two, three or six months thereafter, as selected by Borrower in its Notice of Borrowing or Notice of Continuation/Conversion, as applicable, or such other period that is twelve months or less requested by Borrower and consented to by all the applicable Lenders (and if less than one month, the consent of the Administrative Agent shall also be required); provided that:

 

(i)         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, in the case of a LIBOR Loan, such Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Business Day;

 

(ii)        any Interest Period pertaining to a LIBOR Loan 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

 

(iii)       no Interest Period for a Class shall extend beyond the maturity date for such Class.

 

“Interest Rate Protection Agreement” shall mean, for any Person, an interest rate swap, cap or collar agreement or similar arrangement between such Person and one or more financial institutions providing for the transfer or mitigation of interest risks either generally or under specific contingencies.

 

“Investments” of any Person shall mean (a) any loan or advance of funds or credit by such Person to any other Person, (b) any Contingent Obligation by such Person in respect of the Indebtedness or other obligation of any other Person (including, without limitation, any Support Agreement) (provided that upon termination of any such Contingent Obligation, no Investment in respect thereof shall be deemed outstanding, except as contemplated in clause (e) below), (c) any purchase or other acquisition of any Equity Interests or indebtedness or other securities of any other Person, (d) any capital contribution by such Person to any other Person, (e) without duplication of any

 

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amounts included under clause (b) above, any payment under any Contingent Obligation by such Person in respect of the Indebtedness or other obligation of any other Person (including, without limitation, any payment pursuant to any Support Agreement) or (f) the purchase or other acquisition (in one transaction or a series of transaction) of all or substantially all of the property and assets or business of another Person or assets constituting a business unit, line of business or division of such Person.  For purposes of the definition of “Unrestricted Subsidiary” and Section 10.04, “Investment” shall include the portion (proportionate to Borrower’s Equity Interest in such Subsidiary) of the fair market value of the net assets of any Subsidiary of Borrower at the time of Designation of such Subsidiary as an Unrestricted Subsidiary pursuant to Section 9.12 (excluding any Subsidiaries designated as Unrestricted Subsidiaries on the Closing Date and set forth on Schedule 9.12); provided, however, that upon the Revocation of a Subsidiary that was Designated as an Unrestricted Subsidiary after the Closing Date, the amount of outstanding Investments in Unrestricted Subsidiaries shall be deemed to be reduced by the lesser of (x) the fair market value of such Subsidiary at the time of such Revocation and (y) the amount of Investments in such Subsidiary deemed to have been made (directly or indirectly) at the time of, and made (directly or indirectly) since, the Designation of such Subsidiary as an Unrestricted Subsidiary, to the extent that such amount constitutes an outstanding Investment under clauses (d), (i), (k), (l), (m), (q) or (s) of Section 10.04 at the time of such Revocation.  For purpose hereof, the mere existence of the LandCo Support Agreement as in effect on the Closing Date shall not constitute an Investment but any payments made by Borrower pursuant to the LandCo Support Agreement shall constitute an Investment.

 

“IP Holdco” means NP IP Holdings LLC, a Nevada limited liability company.

 

“ISP” means, with respect to any Letter of Credit, the “International Standby Practices 1998” published by the Institute of International Banking Law & Practice, Inc. (or such later version thereof as may be in effect at the time of issuance).

 

“Joinder Agreements” shall mean each Joinder Agreement substantially in the form of Exhibit M attached hereto or such other form as is reasonably acceptable to Administrative Agent and each Joinder Agreement to be entered into pursuant to the Security Agreement.

 

“Joint Venture” shall mean any Person, other than an individual or a Wholly Owned Subsidiary of Borrower, in which Borrower or a Restricted Subsidiary of Borrower (directly or indirectly) holds or acquires an ownership interest (whether by way of capital stock, partnership or limited liability company interest, or other evidence of ownership).

 

“Junior Financing” shall mean unsecured Indebtedness (including unsecured Indebtedness convertible into or exchangeable or exercisable for any Equity Interests) of Borrower or all or any Restricted Subsidiaries (a) (i) that is subordinated in right of payment to the Loans and contains subordination provisions that are customary in the good faith determination of Borrower for senior subordinated notes or subordinated notes issued under Rule 144A of the Securities Act (or other corporate issuers in private placements or public offerings of securities) or (ii) that contains subordination provisions reasonably satisfactory to Administrative Agent, (b) that shall not have a scheduled maturity date or any scheduled principal payments or be subject to any mandatory redemption, prepayment, or sinking fund (except for customary change of control provisions and, in the case of bridge facilities, customary mandatory redemptions or prepayments with proceeds of Permitted Refinancings thereof (which Permitted Refinancings would constitute Junior Financing) or Equity Issuances, and customary asset sale provisions that permit application of the applicable proceeds to the payment of the Obligations prior to application to such Junior Financing) due prior to the date that is 91 days after the Final Maturity Date then in effect at the time of issuance (excluding bridge facilities allowing extensions on customary terms to at least 91 days after such Final Maturity Date) and (c) the terms (excluding pricing, fees, rate floors, premiums, optional prepayment or optional redemption provisions) of which are (as determined by Borrower in good faith), taken as a whole, no more restrictive in any material respect to Borrower and its Restricted Subsidiaries than the terms set forth in this Agreement (other than, in the case of any bridge facility, covenants, defaults and remedy provisions customary for bridge financings).

 

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“Junior Prepayments” shall have the meaning provided in Section 10.09.

 

“L/C Commitments” shall mean, with respect to each L/C Lender, the commitment of such L/C Lender to issue Letters of Credit pursuant to Section 2.03.  The amount of each L/C Lender’s L/C Commitment as of the Closing Date is set forth on Annex A-1 under the caption “L/C Commitment.”  The L/C Commitments are part of, and not in addition to, the Revolving Commitments.

 

“L/C Disbursements” shall mean a payment or disbursement made by any L/C Lender pursuant to a Letter of Credit.

 

“L/C Documents” shall mean, with respect to any Letter of Credit, collectively, any other agreements, instruments, guarantees or other documents (whether general in application or applicable only to such Letter of Credit) governing or providing for (a) the rights and obligations of the parties concerned or at risk with respect to such Letter of Credit or (b) any collateral security for any of such obligations, each as the same may be amended or modified and in effect from time to time.

 

“L/C Interest” shall mean, for each Revolving Lender, such Lender’s participation interest (or, in the case of each L/C Lender, such L/C Lender’s retained interest) in each L/C Lender’s liability under Letters of Credit and such Lender’s rights and interests in Reimbursement Obligations and fees, interest and other amounts payable in connection with Letters of Credit and Reimbursement Obligations.

 

“L/C Lender” shall mean, as the context may require:  (a) with respect to each Existing Letter of Credit, Deutsche Bank AG New York Branch, in its capacity as issuer of the Existing Letters of Credit, together with its successors and assigns in such capacity and (b) with respect to all other Letters of Credit, (i) Deutsche Bank AG New York Branch or any of its Affiliates, in its capacity as issuer of Letters of Credit issued by it hereunder, together with its successors and assigns in such capacity; (ii) Bank of America, N.A. or any of its Affiliates, in its capacity as issuer of Letters of Credit issued by it hereunder, together with its successors and assigns in such capacity; (iii) JPMorgan Chase Bank, N.A. or any of its Affiliates, in its capacity as issuer of Letters of Credit issued by it hereunder, together with its successors and assigns in such capacity; and/or (iv) any other Revolving Lender or Revolving Lenders selected by Borrower and reasonably acceptable to Administrative Agent (such approval not to be unreasonably withheld or delayed) that agrees to become an L/C Lender, in each case under this clause (ii) in its capacity as issuer of Letters of Credit issued by such Lender hereunder, together with its successors and assigns in such capacity.

 

“L/C Liability” shall mean, at any time, without duplication, the sum of (a) the Stated Amount of all outstanding Letters of Credit at such time plus (b) the aggregate amount of all L/C Disbursements that have not yet been reimbursed at such time in respect of all Letters of Credit.  The L/C Liability of any Revolving Lender at any time shall mean such Revolving Lender’s participations and obligations in respect of outstanding Letters of Credit at such time.

 

“L/C Payment Notice” has the meaning provided in Section 2.03(d).

 

“L/C Sublimit” shall mean an amount equal to the lesser of (a) $50.0 million and (b) the Total Revolving Commitments then in effect.  The L/C Sublimit is part of, and not in addition to, the Total Revolving Commitments.

 

“LandCo” means CV PropCo, LLC, a Nevada limited liability company.

 

“LandCo Cost Allocation Agreement” means that certain Cost Sharing Agreement, dated as of June 16, 2011, by and among Borrower, LandCo, LandCo Holdings, NP Tropicana LLC and any other parties signatory thereto.

 

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“LandCo Credit Agreement” means (a) that certain Amended and Restated Credit Agreement, dated as of June 16, 2011, among LandCo, the lenders party thereto and Deutsche Bank, as administrative agent and (b) any other credit agreement, loan agreement, note agreement, promissory note, indenture or other agreement or instrument evidencing or governing the terms of any Indebtedness or other financial accommodation that has been incurred to extend, renew, refinance or replace (whether by the same or different banks) in whole or in part (under one or more agreements) the Indebtedness and other obligations outstanding under the LandCo Credit Agreement referred to in clause (a) above or any other agreement or instrument referred to in this clause (b).

 

“LandCo Holdings” means NP Landco Holdco LLC, a Nevada limited liability company.

 

“LandCo Holdings LLC Agreement” means the Amended and Restated Limited Liability Company Agreement of NP Landco Holdco LLC dated June 16, 2011.

 

“LandCo Loan Documents” means the Loan Documents (as defined in the LandCo Credit Agreement).

 

“LandCo Support Agreement” means that certain Limited Support Agreement and Recourse Guaranty, dated as of June 16, 2011, executed by Borrower.

 

“Laws” shall mean, collectively, all common law and all international, foreign, federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents, including without limitation the interpretation thereof by any Governmental Authority charged with the enforcement thereof.

 

“Lead Arrangers” shall mean, collectively, the Pro Rata Lead Arrangers and the Term B Lead Arrangers, in their capacities as joint lead arrangers and joint bookrunners hereunder.

 

“Lease” shall mean any lease, sublease, franchise agreement, license, occupancy or concession agreement.

 

“Lender Insolvency Event” shall mean that (i) a Lender or its Parent Company is insolvent, or is generally unable to pay its debts as they become due, or admits in writing its inability to pay its debts as they become due, or makes a general assignment for the benefit of its creditors, or (ii) such Lender or its Parent Company is the subject of a proceeding under any Debtor Relief Law, or a receiver, trustee, conservator, intervenor, administrator, sequestrator, 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) has been appointed for such Lender or its Parent Company, or such Lender or its Parent Company has taken any action authorizing or indicating its consent to or acquiescence in any such proceeding or appointment; provided, however, that a Lender Insolvency Event shall not be deemed to exist solely as the result of the acquisition or maintenance of an ownership interest in such Lender or its Parent Company by a Governmental Authority or an instrumentality thereof 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.

 

“Lenders” shall mean (a) each Person listed on Annexes A-1, A-2 and A-3, (b) any Lender providing an Incremental Commitment pursuant to Section 2.12 and any Person that becomes a Lender from time to time party hereto pursuant to Section 2.15 and (c) any Person that becomes a “Lender” hereunder pursuant to an Assignment Agreement, in each case, other than any such Person that ceases to be a Lender pursuant to an Assignment Agreement or a Borrower Assignment Agreement.  Unless the context requires otherwise, the term “Lenders” shall include the Swingline Lender and the L/C Lender.

 

“Letter of Credit Request” has the meaning provided in Section 2.03(b).

 

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“Letters of Credit” shall have the meaning provided in Section 2.03(a) and shall include each Existing Letter of Credit.

 

“LIBO Base Rate” shall mean, with respect to any LIBOR Loan for any Interest Period therefor, the rate per annum equal to the London Interbank Offered Rate (“LIBOR”) or a comparable or successor rate, which rate is administered by ICE Benchmark Administration Limited (or any other Person that takes over the administration of such rate) for Dollars for a period equal in length to such Interest Period as displayed on page LIBOR01 of the Reuters Screen at or about 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period (for delivery on the first day of such Interest Period); provided that to the extent a comparable or successor rate is approved by the Administrative Agent in connection herewith, the approved rate shall be consistent with market practice for LIBOR-based loans (and the application of such rate shall also be in accordance with market practice); provided, further that to the extent such market practice is not administratively feasible for the Administrative Agent, such approved rate shall be applied in a manner as otherwise reasonably determined by the Administrative Agent.  Notwithstanding the foregoing, the LIBO Base Rate shall not be less than 0.00%.

 

“LIBO Rate” shall mean, for any LIBOR Loan for any Interest Period therefor, a rate per annum (rounded upwards, if necessary, to the nearest 1/100th of 1%) determined by Administrative Agent to be equal to the LIBO Base Rate for such Loan for such Interest Period divided by 1 minus the Reserve Requirement (if any) for such Loan for such Interest Period.  Notwithstanding the foregoing, (a) for purposes of clause (c) of the definition of Alternate Base Rate, the rates referred to above shall be the rates as of 11:00 a.m., London, England time, on the date of determination (rather than the second Business Day preceding the date of determination) and (b) the LIBO Rate for Term B Facility Loans shall not be less than 0.75%.

 

“LIBOR Loans” shall mean Loans that bear interest at rates based on rates referred to in the definition of “LIBO Rate.”

 

“License Revocation” shall mean the revocation, failure to renew or suspension of, or the appointment of a receiver, supervisor or similar official with respect to, any Gaming License covering any Gaming Facility owned, leased, operated or used by Borrower or any of its Restricted Subsidiaries, but excluding any such revocation, failure to renew, suspension or appointment to the extent such Gaming License relates to a Gaming Facility that (a) is located on a Native American Indian reservation and/or (b) is located in a jurisdiction (i) in which none of Borrower or its Subsidiaries owned, leased, operated or managed a Gaming Facility on the Closing Date and (ii) the Gaming Laws of which have permitted gambling in the form of slot machines and table games to be conducted by any person or persons who are not Native American Indians or are acting or managing gaming operations for or on behalf of Native American Indians for less than two (2) years at the time of any such revocation, failure to renew, suspension or appointment.

 

“Lien” shall mean, with respect to any Property, any mortgage, deed of trust, lien, pledge, security interest, or assignment, hypothecation or encumbrance for security of any kind, or any filing of any financing statement under the UCC or any other similar notice of lien under any similar notice or recording statute of any Governmental Authority (other than such financing statement or similar notices filed for informational or precautionary purposes only), or any conditional sale or other title retention agreement or any lease in the nature thereof.

 

“Liquor Authority” has the meaning set forth in Section 13.13(a).

 

“Liquor Laws” has the meaning set forth in Section 13.13(a).

 

“Loans” shall mean the Revolving Loans, the Swingline Loans and the Term Loans.

 

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“Losses” of any Person shall mean the losses, liabilities, claims (including those based upon negligence, strict or absolute liability and liability in tort), damages, reasonable expenses, obligations, penalties, actions, judgments, penalties, fines, suits, reasonable and documented costs or disbursements (including reasonable fees and expenses of one primary counsel for the Secured Parties collectively, and any local counsel reasonably required in any applicable jurisdiction (and solely in the case of an actual or perceived conflict of interest, where the Persons affected by such conflict inform Borrower in writing of the existence of an actual or perceived conflict of interest prior to retaining additional counsel, one additional of each such counsel for each group of similarly situated Secured Parties), in connection with any Proceeding commenced or threatened in writing, whether or not such Person shall be designated a party thereto) at any time (including following the payment of the Obligations) incurred by, imposed on or asserted against such Person.

 

“Manager Allocation Agreement” shall mean that certain Manager Allocation Agreement, dated June 16, 2011, by and among Fertitta Entertainment, Borrower, FE Landco Management LLC, and certain other Subsidiaries of Fertitta Entertainment (it being acknowledged that such agreement has been terminated as to FE Opco Management LLC, FE GVR Management LLC and FE PropCo Management LLC).

 

“Margin Stock” shall mean margin stock within the meaning of Regulation T, Regulation U and Regulation X.

 

“Material Adverse Effect” shall mean (a) a material adverse effect on the business, assets, financial condition or results of operations of Borrower and its Restricted Subsidiaries, taken as a whole and after giving effect to the Transactions, (b) a material adverse effect on the ability of the Credit Parties, the Holding Companies and RRR (taken as a whole) to satisfy their material payment Obligations under the Credit Documents or (c) a material adverse effect on the legality, binding effect or enforceability against any material Credit Party, Holding Company or RRR of the Credit Documents to which it is a party or any of the material rights and remedies of any Secured Party thereunder or the legality, priority or enforceability of the Liens on a material portion of the Collateral.

 

“Material Indebtedness” shall mean any Indebtedness the outstanding principal amount of which is in excess of $50.0 million.

 

“Maximum Rate” has the meaning set forth in Section 13.18.

 

“Minimum Collateral Amount” means, at any time, (i) with respect to Cash Collateral consisting of cash or deposit account balances provided to reduce or eliminate un-reallocated portions of L/C Liabilities during the existence of a Defaulting Lender, an amount equal to 103% of the un-reallocated L/C Liabilities at such time, (ii) with respect to Cash Collateral consisting of cash or deposit account balances provided in accordance with the provisions of Sections 2.01(e), 2.03, 2.10(b)(ii), 2.10(c), 2.10(e), 2.16(a)(i), 2.16(a)(ii) or 11.01 or 11.02, an amount equal to 103% of the aggregate L/C Liability, and (iii) otherwise, an amount determined by the Administrative Agent and the L/C Lenders in their reasonable discretion.

 

“Moody’s” shall mean Moody’s Investors Service, Inc., or any successor entity thereto.

 

“Mortgage” shall mean an agreement, including, but not limited to, a mortgage, deed of trust or any other document, creating and evidencing a first Lien (subject only to the Liens permitted thereunder) in favor of Collateral Agent on behalf of the Secured Parties on each Mortgaged Real Property, which shall be in substantially the form of Exhibit I or such other form as is reasonably acceptable to Administrative Agent, with such schedules and including such provisions as shall be necessary to conform such document to applicable or local law or as shall be customary under local law, as the same may at any time be amended in accordance with the terms thereof and hereof and such changes thereto as shall be reasonably acceptable to Administrative Agent.

 

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“Mortgaged Real Property” shall mean (a) each Real Property listed on Schedule 1.01(C) and (b) each Real Property, if any, which shall be subject to a Mortgage delivered on or after the Closing Date pursuant to Section 9.08, 9.11 or 9.15 (in each case, unless and until such Real Property is no longer subject to a Mortgage).

 

“Mortgaged Vessel” shall mean each Vessel or Replacement Vessel, if any, which shall be subject to a Ship Mortgage after the Closing Date pursuant to Section 9.08 or 9.11 (in each case, unless and until such Vessel or Replacement Vessel is no longer subject to a Ship Mortgage).

 

“Multiemployer Plan” shall mean a multiemployer plan within the meaning of Section 4001(a)(3) of ERISA (a) to which any ERISA Entity is then making or accruing an obligation to make contributions, (b) to which any ERISA Entity has within the preceding five plan years made contributions, including any Person which ceased to be an ERISA Entity during such five year period or (c) with respect to which any Company is reasonably likely to incur liability under Title IV of ERISA.

 

“NAIC” shall mean the National Association of Insurance Commissioners.

 

“Native American Contracts” means (a) each contract listed under the heading “Native American Contracts” on Schedule 1.01(E), and (b) any other agreements (including, without limitation, management agreements, development agreements and loan documents) with Tribes related to the development, construction, management or operation of gaming, lodging and other related businesses.

 

“Native American Investment Rollover Amount” shall have the meaning provided in Section 10.04(u).

 

“Native American Investments” means Investments in the form of (i) loans or advances or (ii) specified required payments, in any case by Native American Subsidiaries pursuant to a Native American Contract.

 

“Native American Subsidiary” means (a) as of the Closing Date, those Subsidiaries of the Borrower which are designated as such on Schedule 8.12(d) and (b) each additional Subsidiary of the Borrower which is hereafter designated as such from time to time by written notice to the Administrative Agent in a manner consistent with the provisions of Section 9.13(d); provided that no such Subsidiary shall be (or, in the case of clauses (i) and (ii), remain) so designated (i) unless at all times such Subsidiary is engaging exclusively in the business of managing, constructing, developing, servicing, and otherwise supporting gaming, lodging and other related businesses under the auspices of a Tribe in connection with a Native American Contract, (ii) unless at all times neither it nor any of its Subsidiaries owns (x) any interest in any Core Property or any Equity Interests in any Person that is not itself a Native American Subsidiary or (y) any other material asset other than Real Property (and improvements thereon), contracts and related contract rights and other general intangibles, promissory notes and cash and Cash Equivalents or (iii) when any Default has occurred and is continuing.  Solely for the purposes of the definition of “Excluded Assets” set forth in the Security Agreement and the Pledge Agreement, “Native American Subsidiary” shall include any Person (other than a Subsidiary) in which the Borrower or a Restricted Subsidiary holds an Equity Interest that is designated as such by the Borrower; provided that (A) no such Person shall be (or remain) so designated unless (x) at all times such Person is engaging exclusively in the business of managing, constructing, developing, servicing, and otherwise supporting gaming, lodging and other related businesses under the auspices of a Native American tribe, band or other forms of government, and (y) at all times neither it nor any of its Subsidiaries owns any Equity Interests in any Person that is not itself designated as a “Native American Subsidiary” pursuant to this sentence and (B) Borrower shall not make such designation if a Default has occurred and is continuing.

 

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“Net Available Proceeds” shall mean:

 

(i)         in the case of any Asset Sale pursuant to Section 10.05(c), the aggregate amount of all cash payments (including any cash payments received by way of deferred payment of principal pursuant to a note or otherwise, but only as and when received) received by Borrower or any Restricted Subsidiary directly or indirectly in connection with such Asset Sale, net (without duplication) of (A) the amount of all reasonable fees and expenses and transaction costs paid by or on behalf of Borrower or any Restricted Subsidiary in connection with such Asset Sale (including, without limitation, any underwriting, brokerage or other customary selling commissions and legal, advisory and other fees and expenses, including survey, title and recording expenses, transfer taxes and expenses incurred for preparing such assets for sale, associated therewith); (B) any Taxes paid or estimated in good faith to be payable by or on behalf of any Company as a result of such Asset Sale (including, without duplication, distributions pursuant to Section 10.06(p) as a result of such Asset Sale) (after application of all credits and other offsets that arise from such Asset Sale); (C) any repayments by or on behalf of any Company of Indebtedness (other than Indebtedness hereunder) to the extent such Indebtedness is secured by a Lien on such Property that is permitted by the Credit Documents and that is not junior to the Lien thereon securing the Obligations and such Indebtedness is required to be repaid as a condition to the purchase or sale of such Property; (D) amounts required to be paid to any Person (other than any Company) owning a beneficial interest in the subject Property; and (E) amounts reserved, in accordance with GAAP, against any liabilities associated with such Asset Sale and retained by Borrower or any of its Subsidiaries after such Asset Sale and related thereto, including pension and other post-employment benefit liabilities, purchase price adjustments, liabilities related to environmental matters and liabilities under any indemnification obligations associated with such Asset Sale, all as reflected in an Officer’s Certificate delivered to Administrative Agent; provided, that no such amounts shall constitute Net Available Proceeds under this clause (i) unless (x) the aggregate value of the Property sold in any single Asset Sale or related series of Asset Sales is greater than or equal to $15.0 million (and only net cash proceeds in excess of such amount shall constitute Net Available Proceeds under this clause (i)) or (y) the aggregate value of all Property sold in Asset Sales in any fiscal year exceeds $25.0 million (and thereafter only net cash proceeds in excess of such amount shall constitute Net Available Proceeds under this clause (i)); provided, further, that Net Available Proceeds shall include any cash payments received upon the reversal (without the satisfaction of any applicable liabilities in cash in a corresponding amount) of any reserve described in clause (E) of this clause (i) or, if such liabilities have not been satisfied in cash and such reserve is not reversed within eighteen (18) months after such Asset Sale, the amount of such reserve;

 

(ii)        in the case of any Casualty Event, the aggregate amount of cash proceeds of insurance, condemnation awards and other compensation (excluding proceeds constituting business interruption insurance or other similar compensation for loss of revenue, but including the proceeds of any disposition of Property pursuant to Section 10.05(l)) received by the Person whose Property was subject to such Casualty Event in respect of such Casualty Event net of (A) fees and expenses incurred by or on behalf of Borrower or any Restricted Subsidiary in connection with recovery thereof, (B) any repayments by or on behalf of any Company of Indebtedness (other than Indebtedness hereunder) to the extent such Indebtedness is secured by a Lien on such Property that is permitted by the Credit Documents and that is not junior to the Lien thereon securing the Obligations and such Indebtedness is required to be repaid as a result of such Casualty Event, and (C) any Taxes paid or payable by or on behalf of Borrower or any Restricted Subsidiary in respect of the amount so recovered (including, without duplication, distributions pursuant to Section 10.06(p) as a result of such amount) (after application of all credits and other offsets arising from such Casualty Event) and amounts required to be paid to any Person (other than any Company) owning a beneficial interest in the subject Property; provided, that no such amounts shall constitute Net Available Proceeds under this clause (ii) unless (x) the aggregate proceeds or other compensation in respect of any single Casualty Event is greater than or equal to $15.0 million (and only net cash proceeds in excess of such amount shall constitute Net Available Proceeds under this clause (ii)) or (y)

 

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the aggregate proceeds or other compensation in respect of all Casualty Events in any fiscal year exceeds $25.0 million (and thereafter only net cash proceeds in excess of such amount shall constitute Net Available Proceeds under this clause (ii)); provided that, in the case of a Casualty Event with respect to property that is subject to a lease entered into for the purpose of, or with respect to, operating or managing gaming facilities and related assets, such cash proceeds shall not constitute Net Available Proceeds to the extent, and for so long as, such cash proceeds are required, by the terms of such lease, (x) to be paid to the holder of any mortgage, deed of trust or other security agreement securing indebtedness of the lessor or (y) to be paid to, or for the account of, the lessor or deposited in an escrow account to fund rent and other amounts due with respect to such property and costs to preserve, stabilize, repair, replace or restore such property (in accordance with the provisions of the applicable lease);  and

 

(iii)                               in the case of any Debt Issuance or Equity Issuance, the aggregate amount of all cash received in respect thereof by the Person consummating such Debt Issuance or Equity Issuance in respect thereof net of all investment banking fees, discounts and commissions, legal fees, consulting fees, accountants’ fees, underwriting discounts and commissions and other fees and expenses, actually incurred in connection therewith.

 

“New Term Loan Commitments” has the meaning set forth in Section 2.12(a).

 

“New Term Loan Facility” shall mean each credit facility comprising New Term Loan Commitments and New Term Loans of a particular Tranche, if any.

 

“New Term Loan Maturity Date” shall mean, with respect to any New Term Loans to be made pursuant to the related Incremental Joinder Agreement, the maturity date thereof as determined in accordance with Section 2.12(b).

 

“New Term Loan Notes” shall mean the promissory notes executed and delivered in connection with any New Term Loan Commitments and the related New Term Loans.

 

“New Term Loans” has the meaning set forth in Section 2.12(a).

 

“Non-Defaulting Lender” shall mean each Lender other than a Defaulting Lender.

 

“Non-Extension Notice Date” shall have the meaning provided by Section 2.03(b).

 

“Non-U.S. Lender” has the meaning set forth in Section 5.06(b).

 

“North Fork Project” shall mean the development by SC Madera Development, LLC of Native American gaming opportunities pursuant to the Second Amended and Restated Development Agreement dated August 11, 2014 (as amended from time to time) between The North Fork Rancheria of Mono Indians of California and SC Madera Development, LLC and the management by SC Madera Management, LLC of any Native American gaming enterprise so developed pursuant to the Second Amended and Restated Management Agreement dated August 11, 2014 (as amended from time to time) between The North Fork Rancheria of Mono Indians of California and SC Madera Management, LLC.

 

“Notes” shall mean the Revolving Notes, the Swingline Note and the Term Loan Notes.

 

“Notice of Borrowing” shall mean a notice of borrowing substantially in the form of Exhibit B or such other form as is reasonably acceptable to Administrative Agent.

 

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“Notice of Continuation/Conversion” shall mean a notice of continuation/conversion substantially in the form of Exhibit C or such other form as is reasonably acceptable to Administrative Agent.

 

“Notice of Intent to Cure” has the meaning set forth in Section 9.04(c).

 

“NYFRB” shall mean the Federal Reserve Bank of New York.

 

“NYFRB Rate” shall mean, 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 none of such rates are published for any day that is a Business Day, the term “NYFRB Rate” means the rate for a federal funds transaction quoted 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 Agreement.

 

“Obligations” shall mean all amounts, liabilities and obligations, direct or indirect, contingent or absolute, of every type or description, and at any time existing, owing by any Credit Party, Holding Company or RRR to any Secured Party or any of its Agent Related Parties or their respective successors, transferees or assignees pursuant to the terms of any Credit Document, any Credit Swap Contract or any Secured Cash Management Agreement (including in each case interest accruing or obligations incurred during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding), whether or not the right of such Person to payment in respect of such obligations and liabilities is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured and whether or not such claim is discharged, stayed or otherwise affected by any bankruptcy case or insolvency or liquidation proceeding.

 

“Officer’s Certificate” shall mean, as applied to any entity, a certificate executed on behalf of such entity (or such entity’s manager or member or general partner, as applicable) by its chairman of the board of directors (or functional equivalent) (if an officer), its chief executive officer, its president, any of its vice presidents, its chief financial officer, its chief accounting officer or its treasurer or controller (in each case, or an equivalent officer) in their official (and not individual) capacities.

 

“Opco” means NP Opco LLC, a Nevada limited liability company.

 

“Open Market Assignment and Assumption Agreement” shall mean an Open Market Assignment and Assumption Agreement substantially in the form attached as Exhibit P hereto or such other form as is reasonably acceptable to Administrative Agent.

 

“Organizational Document” shall mean, relative to any Person, its certificate of incorporation, its certificate of formation, its certificate of partnership, its by-laws, its partnership agreement, its limited liability company agreement, its memorandum or articles of association, share designations or similar organization documents and all shareholder agreements, voting trusts and similar arrangements applicable to any of its authorized Equity Interests.

 

“Other Applicable Indebtedness” shall mean Indebtedness incurred pursuant to Section 10.01(c), (h), (k), (n), (q), (u) and (v).

 

“Other Commitments” means the Other Term Loan Commitments and Other Revolving Commitments.

 

“Other Debt” has the meaning set forth in the definition of “Repricing Transaction.”

 

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“Other First Lien Indebtedness” shall mean outstanding Indebtedness that is not incurred under this Agreement and that (a) is secured by the Collateral on a pari passu basis with the Obligations and (b) is Permitted First Priority Refinancing Debt, Permitted First Lien Indebtedness or Incremental Equivalent Debt.

 

“Other Junior Indebtedness” shall mean the Senior Unsecured Notes (and any Permitted Refinancing thereof), Permitted Unsecured Indebtedness, Permitted Second Lien Indebtedness, Permitted Unsecured Refinancing Debt, Permitted Second Priority Refinancing Debt, Indebtedness incurred pursuant to Section 10.01(p), Indebtedness incurred pursuant to Section 10.01(q) or Incremental Equivalent Debt that is secured by a Lien on Collateral junior to the Liens securing the Obligations or that is unsecured.

 

“Other Junior Indebtedness Documentation” shall mean the documentation governing any Other Junior Indebtedness.

 

“Other Revolving Commitments” means one or more Tranches of revolving credit commitments hereunder that result from a Refinancing Amendment.

 

“Other Revolving Loans” means one or more Tranches of Revolving Loans that result from a Refinancing Amendment.

 

“Other Taxes” has the meaning set forth in Section 5.06(e).

 

“Other Term Loan Commitments” means one or more Tranches of term loan commitments hereunder that result from a Refinancing Amendment.

 

“Other Term Loans” means one or more Tranches of Term Loans that result from a Refinancing Amendment.

 

“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 NYFRB as set forth on its public website from time to time), and published on the next succeeding Business Day by the NYFRB as an overnight bank funding rate (from and after such date as the NYFRB shall commence to publish such composite rate).

 

“Paid in Full” or “Payment in Full” and any other similar terms, expressions or phrases shall mean, at any time, (a) with respect to obligations other than the Obligations or the Secured Obligations (as defined in the Security Agreement), the payment in full of all of such obligations and (b) with respect to the Obligations or the Secured Obligations (as defined in the Security Agreement), the irrevocable termination of all Commitments, the payment in full in cash of all Obligations (except undrawn Letters of Credit and Unasserted Obligations), including principal, interest, fees, costs (including post-petition interest, fees and costs even if such interest, fees and costs are not an allowed claim enforceable against any Credit Party, any Holding Company or RRR in a bankruptcy case under applicable law) and premium (if any), and the discharge or Cash Collateralization of all Letters of Credit outstanding in an amount equal to 103% of the greatest amount for which such Letters of Credit may be drawn (or receipt of backstop letters of credit reasonably satisfactory to the applicable L/C Lender and the Administrative Agent).  For purposes of this definition, “Unasserted Obligations” means, at any time, contingent indemnity obligations in respect of which no claim or demand for payment has been made at such time.

 

“Palms Acquisition” shall mean the anticipated or consummated acquisition of the Palms Casino Resort by a Restricted Subsidiary of Borrower pursuant to that certain Interest Purchase Agreement, dated May 10, 2016 (as the same may be amended or modified from time to time), entered into by and among Borrower, FP Holdings, L.P., a Nevada limited partnership, FP VoteCo, L.L.C., a Delaware limited liability company and FP ParentCo, L.P.,

 

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a Delaware limited partnership, pursuant to which a Restricted Subsidiary will acquire the outstanding limited liability company interests and partnership interests issued by Fiesta ParentCo, L.L.C, FP HoldCo, L.L.C., and FP Holdings, L.P.

 

“Parent Company” shall mean, with respect to a Lender, the bank holding company (as defined in Federal Reserve Board Regulation Y), if any, of such Lender, and/or any Person owning, beneficially or of record, directly or indirectly, a majority of the shares of such Lender.

 

“Pari Passu Intercreditor Agreement” means an intercreditor agreement substantially in the form of Exhibit S hereto or such other form as is reasonably acceptable to Administrative Agent.

 

“PBGC” shall mean the Pension Benefit Guaranty Corporation referred to and defined in ERISA, or any successor thereto.

 

“Pension Plan” shall mean an employee pension benefit plan (other than a Multiemployer Plan) that is covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Code or Section 302 of ERISA and is maintained or contributed to by any ERISA Entity or with respect to which any Company is reasonably likely to incur liability under Title IV of ERISA.

 

“Perfection Certificate” shall mean that certain Perfection Certificate, dated as of the Closing Date (the “Initial Perfection Certificate”), executed and delivered by Borrower on behalf of Borrower and each of the Guarantors existing on the initial Funding Date, and each other Perfection Certificate (which shall be substantially in the form of Exhibit N or such other form as is reasonably acceptable to Administrative Agent) executed and delivered by the applicable Credit Party from time to time, in each case, as the same may be amended, amended and restated, supplemented or otherwise modified from time to time in accordance with Section 9.04(h)(ii).

 

“Permits” has the meaning set forth in Section 8.15.

 

“Permitted Acquisition” shall mean any acquisition, whether by purchase, merger, consolidation or otherwise, by Borrower or any of its Restricted Subsidiaries of all or substantially all of the business, property or assets of, or Equity Interests in, a Person or any division or line of business of a Person so long as (a) immediately after a binding contract with respect thereto is entered into between Borrower or one of its Restricted Subsidiaries and the seller with respect thereto and after giving pro forma effect to such acquisition and related transactions, no Event of Default has occurred and is continuing or would result therefrom and Borrower and its Restricted Subsidiaries shall be in compliance on a Pro Forma Basis (regardless of whether the Revolving Facility or the Term A Facility are then in effect) with the Financial Maintenance Covenants as of the most recent Calculation Date (giving effect to such acquisition and any related anticipated incurrences and repayments of Indebtedness as if consummated on the first day of relevant Test Period), (b) immediately after giving effect thereto, Borrower shall be in compliance with Section 10.11, (c) in the case of a Permitted Acquisition consisting of a purchase or acquisition of the Equity Interests in any Person that does not become a Guarantor hereunder (except to the extent becoming a Guarantor is prohibited by applicable Gaming Laws) or of an acquisition by a Person that is not a Guarantor (and does not become a Guarantor) hereunder, the consideration paid in all such Permitted Acquisitions shall not exceed an aggregate amount equal to the sum of (i) $35.0 million during the term of this Agreement plus (ii) the amounts available for Investments set forth in Section 10.04(k) and (d) with respect to a Permitted Acquisition in excess of $50.0 million, Borrower has delivered to Administrative Agent an Officer’s Certificate to the effect set forth in clauses (a), (b) and (c) above, together with all relevant financial information for the Person or assets to be acquired.

 

“Permitted Business” means any business of the type in which Borrower and its Restricted Subsidiaries are engaged or proposed to be engaged on the date of this Agreement, or any business reasonably related, incidental or ancillary thereto (including assets or businesses complementary thereto).

 

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“Permitted Business Assets” means (a) one or more Permitted Businesses, (b) a controlling equity interest in any Person whose assets consist primarily of one or more Permitted Businesses, (c) assets that are used or useful in a Permitted Business or (d) any combination of the preceding clauses (a), (b) and (c), in each case, as determined by Borrower’s Board of Directors or a Responsible Officer or other management of Borrower or the Restricted Subsidiary acquiring such assets, in each case, in its good faith judgment.

 

“Permitted Equity Issuance” means any issuance of Equity Interests (other than Disqualified Capital Stock) by any one or more of Borrower, the Holding Companies or RRR

 

“Permitted First Lien Indebtedness” means any Indebtedness of Borrower (and Contingent Obligations of the Guarantors in respect thereof) that (a) is secured by the Collateral on a pari passu basis (but without regard to the control of remedies) to the Liens securing the Obligations and the obligations in respect of any Permitted First Priority Refinancing Debt and is not secured by any property or assets of Borrower or any Restricted Subsidiary other than the Collateral, (b) the holders of such Indebtedness (or their representative) and Administrative Agent shall be party to the Pari Passu Intercreditor Agreement, (c) is not scheduled to mature prior to the Final Maturity Date then in effect at the time of issuance (excluding bridge facilities allowing extensions on customary terms to at least such Final Maturity Date), (d) is not at any time guaranteed by any Subsidiaries other than Subsidiaries that are Guarantors, (e) the terms (excluding pricing, fees, rate floors, premiums, optional prepayment or optional redemption provisions) of which are (as determined by Borrower in good faith), taken as a whole, no more restrictive in any material respect to Borrower and its Restricted Subsidiaries than the terms set forth in this Agreement (other than, in the case of any bridge facility, covenants, defaults and remedy provisions customary for bridge financings) and (f) other than in the case of a revolving credit facility, does not have a Weighted Average Life to Maturity (excluding the effects of any prepayments of Term Loans reducing amortization) that is shorter than that of any outstanding Term Loans (excluding bridge facilities allowing extensions on customary terms at least to such Final Maturity Date).

 

“Permitted First Priority Refinancing Debt” means any secured Indebtedness incurred by Borrower (and Contingent Obligations of the Guarantors in respect thereof) in the form of one or more series of senior secured notes or loans; provided that (a) such Indebtedness is secured by the Collateral on a pari passu basis (but without regard to the control of remedies) with the Obligations and is not secured by any property or assets of Borrower or any Restricted Subsidiary other than the Collateral, (b) such Indebtedness constitutes Credit Agreement Refinancing Indebtedness, (c) such Indebtedness is not at any time guaranteed by any Subsidiaries other than Subsidiaries that are Guarantors, and (d) the holders of such Indebtedness (or their representative) and Administrative Agent shall be party to the Pari Passu Intercreditor Agreement.

 

“Permitted Junior Debt Conditions” means that such applicable debt (i) does not have a scheduled maturity date prior to the date that is 91 days after the Final Maturity Date then in effect at the time of issuance (excluding bridge facilities allowing extensions on customary terms to at least 91 days after such Final Maturity Date), (ii) does not have a Weighted Average Life to Maturity (excluding the effects of any prepayments of Term Loans reducing amortization) that is shorter than that of any outstanding Term Loans (excluding bridge facilities allowing extensions on customary terms to at least ninety-one (91) days after the Final Maturity Date), (iii) shall not have any scheduled principal payments or be subject to any mandatory redemption, prepayment, or sinking fund (except for customary change of control (and, in the case of convertible or exchangeable debt instruments, delisting) provisions and, in the case of bridge facilities, customary mandatory redemptions or prepayments with proceeds of Permitted Refinancings thereof (which Permitted Refinancings would constitute Junior Financing) or Equity Issuances, and customary asset sale provisions that permit application of the applicable proceeds to the payment of the Obligations prior to application to such Junior Financing) due prior to the date that is ninety-one (91) days after the Final Maturity Date then in effect at the time of issuance (excluding bridge facilities allowing extensions on customary terms to at least ninety-one (91) days after such Final Maturity Date), (iv) is not at any time guaranteed by any Subsidiaries other than Subsidiaries that are Guarantors and (v) has terms (excluding pricing, fees, rate floors, premiums, optional prepayment or optional redemption provisions) that are (as determined by Borrower in

 

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good faith), taken as a whole, no more restrictive in any material respect to Borrower and its Restricted Subsidiaries than the terms set forth in this Agreement (other than, in the case of any bridge facility, covenants, defaults and remedy provisions customary for bridge financings).  For the avoidance of doubt, the usual and customary terms of convertible or exchangeable debt instruments issued in a registered offering or under Rule 144A of the Securities Act shall be deemed to be no more restrictive in any material respect to Borrower and its Restricted Subsidiaries than the terms set forth in this Agreement.

 

“Permitted Liens” has the meaning set forth in Section 10.02.

 

“Permitted Refinancing” shall mean, with respect to any Indebtedness, any refinancing thereof; provided that:  (a) no Default or Event of Default shall have occurred and be continuing or would arise therefrom; (b) any such refinancing Indebtedness shall (i) not have a stated maturity or, other than in the case of a revolving credit facility, a Weighted Average Life to Maturity that is shorter than that of the Indebtedness being refinanced, (ii) if the Indebtedness being refinanced is subordinated to the Obligations by its terms or by the terms of any agreement or instrument relating to such Indebtedness, be at least as subordinate to the Obligations as the Indebtedness being refinanced (and unsecured if the refinanced Indebtedness is unsecured) and (iii) be in a principal amount that does not exceed the principal amount so refinanced, plus, accrued interest, plus, any premium or other payment required to be paid in connection with such refinancing, plus, the amount of fees and expenses of Borrower or any of its Restricted Subsidiaries incurred in connection with such refinancing, plus, any unutilized commitments thereunder; and (c) the obligors on such refinancing Indebtedness shall be the obligors on such Indebtedness being refinanced; provided, however, that (i) the borrower of the refinancing indebtedness shall be Borrower or the borrower of the indebtedness being refinanced and (ii) any Credit Party shall be permitted to guarantee any such refinancing Indebtedness of any other Credit Party.

 

“Permitted Second Lien Indebtedness” means any Indebtedness of Borrower (and Contingent Obligations of the Guarantors in respect thereof) that (a) is secured by the Collateral on a second priority (or other junior priority) basis to the Liens securing the Obligations and the obligations in respect of any Permitted First Priority Refinancing Debt and any Permitted First Lien Indebtedness and is not secured by any property or assets of Borrower or any Restricted Subsidiary other than the Collateral, (b) meets the Permitted Junior Debt Conditions and (c) the holders of such Indebtedness (or their representative) shall be party to the Second Lien Intercreditor Agreement (as “Second Priority Debt Parties”) with the Administrative Agent.

 

“Permitted Second Priority Refinancing Debt” means secured Indebtedness incurred by Borrower (and Contingent Obligations of the Guarantors in respect thereof) in the form of one or more series of second lien (or other junior lien) secured notes or second lien (or other junior lien) secured loans; provided that (a) such Indebtedness is secured by the Collateral on a second priority (or other junior priority) basis to the liens securing the Obligations and the obligations in respect of any Permitted First Priority Refinancing Debt and any Permitted First Lien Indebtedness and is not secured by any property or assets of Borrower or any Restricted Subsidiary other than the Collateral, (b) such Indebtedness constitutes Credit Agreement Refinancing Indebtedness (provided, that such Indebtedness may be secured by a Lien on the Collateral that is junior to the Liens securing the Obligations and the obligations in respect of any Permitted First Priority Refinancing Debt and Permitted First Lien Indebtedness, notwithstanding any provision to the contrary contained in the definition of “Credit Agreement Refinancing Indebtedness”), (c) the holders of such Indebtedness (or their representative) shall be party to the Second Lien Intercreditor Agreement (as “Second Priority Debt Parties”) with the Administrative Agent and (d) such Indebtedness meets the Permitted Junior Debt Conditions.

 

“Permitted Unsecured Indebtedness” means any unsecured Indebtedness of Borrower (and Contingent Obligations of the Guarantors in respect thereof) that meets the Permitted Junior Debt Conditions or is Junior Financing.  For the avoidance of doubt, Disqualified Capital Stock shall not constitute Permitted Unsecured Indebtedness.

 

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“Permitted Unsecured Refinancing Debt” means unsecured Indebtedness incurred by Borrower or its Restricted Subsidiaries in the form of one or more series of senior unsecured notes or loans; provided that such Indebtedness (a) constitutes Credit Agreement Refinancing Indebtedness and (b) meets the Permitted Junior Debt Conditions.

 

“Permitted Vessel Liens” shall mean maritime Liens on ships, barges or other vessels for damages arising out of a maritime tort, wages of a stevedore, when employed directly by a Person listed in 46 U.S.C. § 31341, crew’s wages, salvage and general average, whether now existing or hereafter arising and other maritime Liens which arise by operation of law during normal operations of such ships, barges or other vessels.

 

“Person” shall mean any individual, corporation, company, association, partnership, limited liability company, joint venture, trust, unincorporated organization or Governmental Authority or any other entity.

 

“Pledge Agreement” means the Pledge Agreement executed by the Holding Companies and RRR, substantially in the form of Exhibit F, as may be amended or supplemented by the VoteCo SPE Pledge Joinder, as the same may be amended in accordance with the terms thereof and hereof.

 

“Pledged Collateral” shall mean, collectively, the “Pledged Collateral” as defined in the Security Agreement and the “Pledged Collateral” as defined in the Pledge Agreement.

 

“Post-Increase Revolving Lenders” has the meaning set forth in Section 2.12(d).

 

“Post-Refinancing Revolving Lenders” has the meaning set forth in Section 2.15(f).

 

“Pre-Increase Revolving Lenders” has the meaning set forth in Section 2.12(d).

 

“Pre-Opening Expenses” shall mean, with respect to any fiscal period, the amount of expenses (including Consolidated Interest Expense) incurred with respect to capital projects which are appropriately classified as “pre-opening expenses” on the applicable financial statements of Borrower and its Subsidiaries for such period.

 

“Pre-Refinancing Revolving Lenders” has the meaning set forth in Section 2.15(f).

 

“Prime Rate” shall mean the rate of interest per annum publicly announced from time to time by Deutsche Bank as its prime rate in effect at its office located at 60 Wall Street New York, NY 10005; each change in the Prime Rate shall be effective from and including the date such change is publicly announced as being effective.

 

“Principal BlockerCos” means PB Investor I LLC, a Delaware limited liability company, PB Investor II LLC, a Delaware limited liability company, Serengeti SC Blockerco LLC, a Delaware limited liability company, ADVSTRA SC Holdings, LLC, a Delaware limited liability company, CAPINC SC Holdings, LLC, a Delaware limited liability company, PAIN SC Holdings, LLC, a Delaware limited liability company, PRTN SC Holdings, LLC, a Delaware limited liability company, and STRAINC SC Holdings, LLC, a Delaware limited liability company.

 

“Principal Office” shall mean the principal office of Administrative Agent, located on the Closing Date at 60 Wall Street New York, NY 10005, or such other office as may be designated in writing by Administrative Agent.

 

“Principal Subsidiaries” shall mean GVR, NP Lake Mead LLC, NP Santa Fe LLC, NP Texas LLC, Boulder LLC, Red Rock LLC, Palace LLC, Sunset LLC or IP Holdco or any other Restricted Subsidiary into which any portion of the assets (other than de minimis assets) of any of the foregoing entities are transferred on or after the Closing Date (by Investment, disposition, merger, consolidation or otherwise).

 

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“Prior Mortgage Liens” shall mean, with respect to each Mortgaged Real Property, the Liens identified in Schedule B annexed to the applicable Mortgage as such Schedule B may be amended from time to time to the reasonable satisfaction of Administrative Agent.

 

“Pro Forma Basis” shall mean, with respect to compliance with any test or covenant or calculation of any ratio hereunder, the determination or calculation of such test, covenant or ratio (including in connection with Specified Transactions) in accordance with Section 1.05.

 

“Pro Rata Lead Arrangers” shall mean Merrill Lynch, Pierce, Fenner & Smith Incorporated (or any other registered broker-dealer wholly-owned by Bank of America Corporation to which all or substantially all of Bank of America Corporation’s or any of its subsidiaries’ investment banking, commercial lending services or related businesses may be transferred following the date of this Agreement), JPMorgan Chase Bank, N.A., Deutsche Bank Securities Inc., Fifth Third Bank, Goldman Sachs Bank USA, Citigroup Global Markets Inc., Macquarie Capital (USA) Inc., Citizens Bank, N.A. and UBS Securities LLC, in their capacities as joint bookrunners and joint lead arrangers for the Term B Facility.

 

“Proceeding” shall mean any claim, counterclaim, action, judgment, suit, hearing, governmental investigation, arbitration or proceeding, including by or before any Governmental Authority and whether judicial or administrative.

 

“Project Reimbursement Amount” shall mean, as of any date of determination, an amount equal to the Project Reimbursements received by the Borrower and its Restricted Subsidiaries from Persons other than Credit Parties after the Closing Date minus (x) the amount of Investments made under Section 10.04(k)(ii) on or prior to such date, (y) the amount of Restricted Payments made under Section 10.06(i)(ii) on or prior to such date and (z) the amount of Junior Prepayments made under Section 10.09(a)(i)(ii) on or prior to such date.

 

“Project Reimbursements” means any amounts received by Borrower or any of Borrower’s Restricted Subsidiaries after the Closing Date in repayment of any loan or advance made by it to the Federated Indians of Graton Rancheria, the North Fork Rancheria of Mono Indians or any other Tribe (or any instrumentality of any such Tribe) pursuant to any Native American Contract relating to a project and, for the avoidance of doubt, including any interest, earnings or other returns on such loan or advance paid by the applicable Tribe or instrumentality thereof.

 

“Property” shall mean any right, title or interest in or to property or assets of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible and including all contract rights, income or revenue rights, real property interests, trademarks, trade names, equipment and proceeds of the foregoing and, with respect to any Person, Equity Interests or other ownership interests of any other Person.

 

“Public Lender” has the meaning set forth in Section 9.04.

 

“Purchase Money Obligation” shall mean, for any Person, the obligations of such Person in respect of Indebtedness incurred for the purpose of financing all or any part of the purchase price of any Property (including Equity Interests of any Person) or the cost of installation, construction or improvement of any property or assets and any refinancing thereof; provided, however, that such Indebtedness is incurred (except in the case of a refinancing) within 270 days after such acquisition of such Property or the incurrence of such costs by such Person.

 

“Qualified Capital Stock” shall mean, with respect to any Person, any Equity Interests of such Person which is not Disqualified Capital Stock.

 

“Qualified Contingent Obligation” shall mean Contingent Obligations permitted by Section 10.04 in respect of (a) Indebtedness of any Joint Venture in which Borrower or any of its Restricted Subsidiaries owns

 

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(directly or indirectly) at least 25% of the Equity Interest of such Joint Venture or (b) Indebtedness of casinos and “racinos” (and properties ancillary or related thereto (or owners of casino and “racinos”)) with respect to which Borrower or any of its Restricted Subsidiaries has (directly or indirectly through Subsidiaries) entered into a management or similar contract and such contract remains in full force and effect at the time such Contingent Obligations are incurred.

 

“Qualified ECP Guarantor” means, in respect of any Swap Obligations, each Guarantor 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 1a(18)(A)(v)(II) of the Commodity Exchange Act.

 

“Qualifying Investments” shall mean Investments made by Borrower and its Restricted Subsidiaries and either outstanding on the Closing Date or made after the Closing Date in accordance with Section 10.04 hereof, provided however, that Qualifying Investments shall exclude Investments in Cash and Cash Equivalents and any Investments made in or to the Federated Indians of the Graton Rancheria, the North Fork Rancheria of Mono Indians or any other Tribe or any instrumentality of any such Tribe.

 

“Quarter” shall mean each three month period ending on March 31, June 30, September 30 and December 31.

 

“Quarterly Dates” shall mean the last Business Day of each Quarter in each year, commencing with the last Business Day of the first full Quarter after the Closing Date.

 

“R/C Maturity Date” shall mean, (a) with respect to the Closing Date Revolving Commitments and any Incremental Revolving Commitments and any Revolving Loans thereunder, the date that is the fifth anniversary of the Closing Date and (b) with respect to any other Tranche of Revolving Commitments and Revolving Loans, the maturity date set forth therefor in the applicable Extension Amendment or Refinancing Amendment.

 

“R/C Percentage” of any Revolving Lender at any time shall mean a fraction (expressed as a percentage) the numerator of which is the Revolving Commitment of such Revolving Lender at such time and the denominator of which is the Total Revolving Commitments at such time; provided, however, that if the R/C Percentage of any Revolving Lender is to be determined after the Total Revolving Commitments have been terminated, then the R/C Percentage of such Revolving Lender shall be determined immediately prior (and without giving effect) to such termination but after giving effect to any assignments after termination of the Revolving Commitments.

 

“Real Property” shall mean, as to any Person, all the right, title and interest of such Person in and to land, improvements and appurtenant fixtures, including leaseholds (it being understood that for purposes of Schedule 8.23(a), Borrower shall not be required to describe such improvements and appurtenant fixtures in such Schedule).

 

“redeem” shall mean redeem, repurchase, repay, defease (covenant or legal), Discharge or otherwise acquire or retire for value; and “redemption” and “redeemed” have correlative meanings.

 

“refinance” shall mean refinance, renew, extend, exchange, replace, defease (covenant or legal) (with proceeds of Indebtedness), Discharge (with proceeds of Indebtedness) or refund (with proceeds of Indebtedness), in whole or in part, including successively; and “refinancing” and “refinanced” have correlative meanings.

 

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“Refinancing Amendment” means an amendment to this Agreement in form and substance reasonably satisfactory to Administrative Agent and Borrower executed by each of (a) Borrower, (b) Administrative Agent, (c) each additional Lender and each existing Lender that agrees to provide any portion of the Credit Agreement Refinancing Indebtedness being incurred pursuant thereto, in accordance with Section 2.15.

 

“Register” has the meaning set forth in Section 2.08(c).

 

“Regulation D” shall mean Regulation D (12 C.F.R. Part 204) of the Board of Governors of the Federal Reserve System of the United States (or any successor), as the same may be amended, modified or supplemented and in effect from time to time and all official rulings and interpretations thereunder or thereof.

 

“Regulation T” shall mean Regulation T (12 C.F.R. Part 220) of the Board of Governors of the Federal Reserve System of the United States (or any successor), as the same may be amended, modified or supplemented and in effect from time to time and all official rulings and interpretations thereunder or thereof.

 

“Regulation U” shall mean Regulation U (12 C.F.R. Part 221) of the Board of Governors of the Federal Reserve System of the United States (or any successor), as the same may be amended, modified or supplemented and in effect from time to time and all official rulings and interpretations thereunder or thereof.

 

“Regulation X” shall mean Regulation X (12 C.F.R. Part 224) of the Board of Governors of the Federal Reserve System of the United States (or any successor), as the same may be amended, modified or supplemented and in effect from time to time and all official rulings and interpretations thereunder or thereof.

 

“Reimbursement Obligations” shall mean the obligations of Borrower to reimburse L/C Disbursements in respect of any Letter of Credit.

 

“Related Indemnified Person” has the meaning set forth in Section 13.03(b).

 

“Related Parties” shall mean, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents, trustees, administrators, managers, advisors and representatives of such Person and of such Person’s Affiliates.

 

“Release” shall mean any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, disposing, depositing, dispersing, emanating or migrating of any Hazardous Material in, into, onto or through the Environment.

 

“Removal Effective Date” has the meaning set forth in Section 12.06(b).

 

“Replaced Lender” has the meaning set forth in Section 2.11(a).

 

“Replacement Lender” has the meaning set forth in Section 2.11(a).

 

“Replacement Vessel” shall mean the replacement of any existing Mortgaged Vessel with a vessel, ship, riverboat, barge or improvement on real property, whether such vessel, riverboat, barge or improvement is acquired or constructed and whether or not such vessel, ship, riverboat, barge or improvement is temporarily or permanently moored or affixed to any real property.

 

“Repricing Transaction” shall mean (i) the incurrence by Borrower of a new tranche of replacement term loans under this Agreement (including by way of conversion of Term B Facility Loans into any such new tranche of replacement term loans) (x) having an effective interest rate margin for the respective Type of such replacement

 

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term loan that is less than the Applicable Margin for Term B Facility Loans of the respective Type (with the comparative determinations of such margins to be reasonably determined by Administrative Agent in consultation with Borrower (consistent with generally acceptable financial practices) and to be made after taking into account all interest rate floors and all upfront or similar fees or original issue discount (amortized assuming a 4-year life to maturity (or, if less, the stated life to maturity at the time of incurrence of the applicable Indebtedness) of such tranche of replacement term loans or Term B Facility Loans, as the case may be) payable to all Lenders holding such replacement term loans or Term B Facility Loans, as the case may be, but exclusive of any arrangement, structuring or other fees payable in connection therewith that are not shared with all Lenders (in their capacity as such) holding such tranche of replacement term loans or Term B Facility Loans, as the case may be, after giving effect to the syndication thereof) (excluding any such loans incurred in connection with a Change of Control or an Acquisition and any such loan that is not made for the primary purposes of reducing overall yield) and (y) the proceeds of which are used to repay, in whole or in part, principal of outstanding Term B Facility Loans (it being understood that a conversion of Term B Facility Loans into any such new tranche of replacement term loans shall constitute a repayment of principal of outstanding Term B Facility Loans), (ii) any amendment, waiver or other modification to this Agreement which would have the effect of reducing the Applicable Margin for Term B Facility Loans (with the determination of such effective reduction to be made in accordance with the applicable provisions set forth in the parenthetical appearing in preceding clause (i)(x)), excluding any such amendment, waiver or modification entered into in connection with a Change of Control or an Acquisition and/or (iii) the incurrence by Borrower or any of its Subsidiaries of (x) any Incremental Term Loans, (y) any other term loans (which, for the avoidance of doubt, does not include bonds) other than under this Agreement or (z) any other bank debt other than under this Agreement (such other term loans referred to in clause (y) above in this clause (iii) and such other bank debt referred to in clause (z) above in this clause (iii) are individually referred to as “Other Debt”), the proceeds of which are used in whole or in part to prepay outstanding Term B Facility Loans (except to the extent any such Incremental Term Loans or Other Debt is incurred in connection with a Change of Control or an Acquisition) if such Incremental Term Loans or Other Debt has an effective interest rate margin for the respective Type of such replacement term loan that is less than the Applicable Margin for Term B Facility Loans at the time of the prepayment thereof (with the comparative determination of such margins to be reasonably determined by Administrative Agent in consultation with Borrower (consistent with generally acceptable financial practices) taking into account all interest rate floors and all upfront or similar fees or original issue discount (amortized assuming a 4-year life to maturity (or, if less, the stated life to maturity at the time of incurrence of the applicable Indebtedness) of such Incremental Term Loans or Other Debt) payable to all lenders holding such Incremental Term Loans or Other Debt, as the case may be, but exclusive of any arrangement, structuring or other fees payable in connection therewith that are not shared with all Lenders (in their capacity as such) holding such Incremental Term Loans or Other Debt, as the case may be, after giving effect to the syndication thereof).  Any such determination by Administrative Agent as contemplated by preceding clauses (i)(x), (ii) and (iii) shall be conclusive and binding on all Lenders holding or Term B Facility Loans.

 

“Required Lenders” shall mean, as of any date of determination: (a) prior to the Closing Date, Lenders holding more than 50% of the aggregate amount of the Commitments; and (b) thereafter, Non-Defaulting Lenders the sum of whose outstanding Term Loans, unutilized Term Loan Commitments, Revolving Loans, Unutilized R/C Commitments, Swingline Exposure and L/C Liabilities then outstanding represents more than 50% of the aggregate sum (without duplication) of (i) all outstanding Term Loans of all Non-Defaulting Lenders and all unutilized Term Loan Commitments of all Non-Defaulting Lenders, (ii) all outstanding Revolving Loans of all Non-Defaulting Lenders, (iii) the aggregate Unutilized R/C Commitments of all Non-Defaulting Lenders, (iv) the Swingline Exposure of all Non-Defaulting Lenders and (v) the L/C Liabilities of all Non-Defaulting Lenders.

 

“Required Pro Rata Lenders” shall mean, as of any date of determination: (a) prior to the Closing Date, Lenders holding more than 50% of the aggregate amount of the Revolving Commitments and the Term A Facility Commitments and (b) thereafter, Non-Defaulting Lenders holding more than 50% of the aggregate sum (without duplication) of the (a) (i) the aggregate Unutilized R/C Commitments of all Non-Defaulting Lenders, (ii) the aggregate outstanding Revolving Loans of all Non-Defaulting Lenders, (iii) the Swingline Exposure of all Non-

 

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Defaulting Lenders, (iv) the L/C Liabilities of all Non-Defaulting Lenders and (v) aggregate outstanding Term A Facility Loans held by Non-Defaulting Lenders.

 

“Required Revolving Lenders” shall mean, as of any date of determination: (a) at any time prior to the Closing Date, Lenders holding more than 50% of the aggregate amount of the Revolving Commitments and (b) thereafter, Non-Defaulting Lenders holding more than 50% of the aggregate sum of (without duplication) (i) the aggregate principal amount of outstanding Revolving Loans of all Non-Defaulting Lenders, (ii) the aggregate Unutilized R/C Commitments of all Non-Defaulting Lenders, (iii) the Swingline Exposure of all Non-Defaulting Lenders, and (iv) the L/C Liabilities of all Non-Defaulting Lenders.

 

“Required Tranche Lenders” shall mean:  (a) with respect to Lenders having Revolving Commitments or Revolving Loans of any particular Tranche, Non-Defaulting Lenders having more than 50% of the aggregate sum of the Unutilized R/C Commitments, Revolving Loans, Swingline Exposure and L/C Liabilities, in each case, of Non-Defaulting Lenders in respect of such Tranche and then outstanding; (b) with respect to Lenders having Term A Facility Loans, Term A Facility Commitments or Incremental Term A Loan Commitments, Non-Defaulting Lenders having more than 50% of the aggregate sum of the Term A Facility Loans, unutilized Term A Facility Commitments and unutilized Incremental Term A Loan Commitments of the Non-Defaulting Lenders then outstanding; (c) with respect to Lenders having Term B Facility Loans, Term B Facility Commitments or Incremental Term B Loan Commitments, Non-Defaulting Lenders having more than 50% of the aggregate sum of the Term B Facility Loans, unutilized Term B Facility Commitments and unutilized Incremental Term B Loan Commitments of Non-Defaulting Lenders then outstanding; (d) for each New Term Loan Facility, if applicable, with respect to Lenders having New Term Loans or New Term Loan Commitments, in each case, in respect of such New Term Loan Facility, Non-Defaulting Lenders having more than 50% of the aggregate sum of such New Term Loans and unutilized New Term Loan Commitments of Non-Defaulting Lenders then outstanding; (e) for each Extension Tranche, if applicable, with respect to Lenders having Extended Revolving Loans or Extended Revolving Commitments or Extended Term Loans or commitments in respect of Extended Term Loans, in each case, in respect of such Extension Tranche, Non-Defaulting Lenders having more than 50% of the aggregate sum of such Extended Revolving Loans and Extended Revolving Commitments or Extended Term Loans and commitments in respect thereof, as applicable, then outstanding; and (f) for each Tranche of Other Term Loans, Non-Defaulting Lenders having more than 50% of the aggregate sum of such Other Term Loans and unutilized Other Term Loan Commitments of Non-Defaulting Lenders then outstanding.

 

“Requirement of Law” shall mean, as to any Person, any Law or determination of an arbitrator or any Governmental Authority, in each case applicable to or binding upon such Person or any of its Property or to which such Person or any of its Property is subject.

 

“Reserve Requirement” shall mean, 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 Board of Governors of the Federal Reserve System of the United States for determining the maximum reserve requirement (including any emergency, supplemental or other marginal reserve requirement) with respect to LIBOR funding by member banks (currently referred to as “Eurocurrency liabilities”).  The LIBO Rate for each outstanding LIBOR Loan shall be adjusted automatically as of the effective date of any change in the Reserve Requirement.

 

“Resignation Effective Date” has the meaning set forth in Section 12.06(a).

 

“Response Action” shall mean (a) “response” as such term is defined in CERCLA, 42 U.S.C. § 9601(24), and (b) all other actions required by any Governmental Authority or voluntarily undertaken to:  (i) clean up, remove, treat, abate or in any other way address any Hazardous Material in the Environment, (ii) prevent the Release or threatened Release, or minimize the further Release, of any Hazardous Material or (iii) perform studies and investigations in connection with, or as a precondition to, clause (i) or (ii) above.

 

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“Responsible Officer” shall mean (i) the chief executive officer of Borrower, the president of Borrower (if not the chief executive officer), any senior or executive vice president of Borrower, the chief financial officer, the chief accounting officer or treasurer of Borrower or, with respect to financial matters, the chief financial officer, the chief accounting officer, senior financial officer or treasurer of Borrower and (ii) as to any document delivered by a Subsidiary, any Person authorized by all necessary corporate, limited liability company and/or other action of such Subsidiary to act on behalf of such Subsidiary.

 

“Restricted Payment” shall mean dividends (in cash, Property or obligations) on, or other payments or distributions (including return of capital) on account of, or the setting apart of money for a sinking or other analogous fund for, or the purchase, redemption, retirement, defeasance, termination, repurchase or other acquisition of, any Equity Interests or Equity Rights (other than any payment made relating to any Transfer Agreement) in any Holding Company, Borrower or any of its Restricted Subsidiaries or in an direct or indirect parent or other direct or indirect holder of Equity Interests or Equity Rights in Borrower, but excluding dividends, payments or distributions paid through the issuance of additional shares of Qualified Capital Stock and any redemption, retirement or exchange of any Qualified Capital Stock in Borrower or such Restricted Subsidiary through, or with the proceeds of, the issuance of Qualified Capital Stock in Borrower or any of its Restricted Subsidiaries; provided that any Qualified Capital Stock so issued is pledged to the Collateral Agent to secure the Obligations in accordance with the Collateral Documents.

 

“Restricted Subsidiaries” shall mean all existing and future Subsidiaries of Borrower other than the Unrestricted Subsidiaries.

 

“Reverse Trigger Event” shall mean the transfer of Equity Interests of any Restricted Subsidiary or any Gaming Facility from trust or other similar arrangement to Borrower or any of its Restricted Subsidiaries from time to time.

 

“Revocation” has the meaning set forth in Section 9.12(b).

 

“Revolving Availability Period” shall mean, (i) with respect to the Revolving Commitments under the Closing Date Revolving Facility, the period from and including the Closing Date to but excluding the earlier of the applicable R/C Maturity Date and the date of termination of such Revolving Commitments, and (ii) with respect to any other Tranche of Revolving Commitments, the period from and including the date such Tranche of Revolving Commitments is established to but excluding the earlier of the applicable R/C Maturity Date and the date of termination of such Tranche of Revolving Commitments.  Unless the context otherwise requires, references in this Agreement to the Revolving Availability Period shall mean with respect to each Tranche of Revolving Commitments, the Revolving Availability Period applicable to such Tranche.

 

“Revolving Borrowing” shall mean a Borrowing comprised of Revolving Loans.

 

“Revolving Commitment” shall mean, for each Revolving Lender, the obligation of such Lender to make Revolving Loans in an aggregate principal amount at any one time outstanding up to but not exceeding the amount set forth opposite the name of such Lender on Annex A-1 under the caption “Revolving Commitment,” or in the Assignment Agreement pursuant to which such Lender assumed its Revolving Commitment or in any Incremental Joinder Agreement or Refinancing Amendment, as applicable, as the same may be (a) changed pursuant to Section 13.05(b), (b) reduced or terminated from time to time pursuant to Sections 2.04 and/or 11.01, as applicable, or (c) increased or otherwise adjusted from time to time in accordance with this Agreement, including pursuant to Section 2.12 and Section 2.15; it being understood that a Revolving Lender’s Revolving Commitment shall include any Incremental Revolving Commitments, Extended Revolving Commitments and Other Revolving Commitments of such Revolving Lender.

 

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“Revolving Exposure” shall mean, with respect to any Lender at any time, the aggregate principal amount at such time of all outstanding Revolving Loans of such Lender, plus the aggregate amount at such time of such Lender’s L/C Liability, plus the aggregate amount at such time of such Lender’s Swingline Exposure.

 

“Revolving Extension Request” shall have the meaning provided in Section 2.13(b).

 

“Revolving Facility” shall mean each credit facility comprising Revolving Commitments of a particular Tranche.

 

“Revolving Lenders” shall mean (a) on the Closing Date, the Lenders having a Revolving Commitment on Annex A-1 hereof and (b) thereafter, the Lenders from time to time holding Revolving Loans and/or a Revolving Commitment as in effect from time to time.

 

“Revolving Loans” has the meaning set forth in Section 2.01(a).

 

“Revolving Notes” shall mean the promissory notes substantially in the form of Exhibit A-1.

 

“Revolving Tranche Exposure” shall mean with respect to any Lender and Tranche of Revolving Commitments at any time, the aggregate principal amount at such time of all outstanding Revolving Loans of such Tranche of such Lender, plus the aggregate amount at such time of such Lender’s L/C Liability under its Revolving Commitment of such Tranche, plus the aggregate amount at such time of such Lender’s Swingline Exposure under its Revolving Commitment of such Tranche.

 

“RRR” means Red Rock Resorts, Inc., a Delaware corporation.

 

“S&P” shall mean Standard & Poor’s Rating Services, a division of The McGraw-Hill Companies, or any successor thereto.

 

“Sanction(s)” means all economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by (a) the U.S. government, including those administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State, (b) the United Nations Security Council, the European Union, or Her Majesty’s Treasury of the United Kingdom or (c) or other relevant sanctions authority.

 

“Sanctioned Country” means, at any time, a country, region or territory which is itself the subject or target of any comprehensive Sanctions (at the time of this Agreement, Crimea, Cuba, Iran, North Korea, Sudan and Syria).

 

“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, the United Nations Security Council, the European Union, or Her Majesty’s Treasury of the United Kingdom, (b) any Person located, organized or resident in a Sanctioned Country or (c) any Person owned 50% or more or controlled by any such Person or Persons described in the foregoing clauses (a) or (b).

 

“SEC” shall mean the Securities and Exchange Commission of the United States or any successor thereto.

 

“Second Lien Intercreditor Agreement” shall mean an intercreditor agreement substantially in the form of Exhibit T hereto or such other form as is reasonably acceptable to Administrative Agent.

 

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“Section 9.04 Financials” shall mean the financial statements delivered, or required to be delivered, pursuant to Section 9.04(a) or (b), together with the accompanying certificate of a Responsible Officer of Borrower delivered, or required to be delivered, pursuant to Section 9.04(c).

 

“Secured Cash Management Agreement” means any Cash Management Agreement that is entered into by and between Borrower and/or any or all of its Restricted Subsidiaries and any Cash Management Bank.

 

“Secured Parties” shall mean the Agents, the Lenders, any Swap Provider that is party to a Credit Swap Contract and any Cash Management Bank that is a party to a Secured Cash Management Agreement.

 

“Securities Act” shall mean the Securities Act of 1933, as amended, and all rules and regulations of the SEC promulgated thereunder.

 

“Security Agreement” shall mean a security agreement substantially in the form of Exhibit H among the Credit Parties and Collateral Agent, as the same may be amended in accordance with the terms thereof and hereof.

 

“Security Documents” shall mean the Security Agreement, the Pledge Agreement, the Custodian Agreement, the Mortgages, the Ship Mortgages and each other security document or pledge agreement, instrument or other document required by applicable local law or otherwise executed and delivered by a Credit Party, a Holding Company or RRR to grant or perfect a security interest in any Property acquired or developed that is of the kind and nature that would constitute Collateral on the Closing Date, and any other document, agreement or instrument utilized to pledge or grant as collateral (or perfect any Lien thereon) for the Obligations any Property of whatever kind or nature.

 

“Senior Unsecured Notes” shall mean the outstanding 7.50% senior unsecured notes due 2021 of Borrower in the original aggregate principal amount of $500.0 million.

 

“Senior Unsecured Notes Tax Transition” shall mean the effective date of the first to occur of: (i) the modification of Section 4.07(b)(14) of the Indenture dated as of March 1, 2013 entered into by Borrower, as issuer, in respect of the Senior Unsecured Notes (the “Senior Unsecured Notes Indenture”) to remove references to the “Holding Company Tax Distribution Agreement” and replace the same with an exception permitting Restricted Payments to Holdco in amounts sufficient to enable Holdco to make Tax Distributions (as defined in the Holdco LLC Agreement as in effect on the Closing Date) to its members pursuant to Section 5.4 of the Holdco LLC Agreement (as in effect on the Closing Date); and (ii) the termination, defeasance or discharge of (x) the Senior Unsecured Notes Indenture in its entirety or Section 4.07(b)(14) thereof in particular and (y) any Indebtedness refinancing such Senior Unsecured Notes (or such refinancing Indebtedness) that references the Holding Company Tax Sharing Agreement.

 

“Ship Mortgage” shall mean a Ship Mortgage in form reasonably acceptable to Administrative Agent and Borrower made by the applicable Credit Parties in favor of Collateral Agent for the benefit of the Secured Parties, as the same may be amended in accordance with the terms thereof and hereof, or such other agreements reasonably acceptable to Collateral Agent as shall be necessary to comply with applicable Requirements of Law and effective to grant in favor of Collateral Agent for the benefit of the Secured Parties a first preferred mortgage on the Mortgaged Vessel covered thereby, subject only to Permitted Liens.

 

“SNDAs” shall have meaning provided in Section 8.24(e).

 

“Solvent” and “Solvency” shall mean, for any Person on a particular date, that on such date (a) the fair value of the Property of such Person is greater than the total amount of liabilities, including, without limitation, contingent liabilities, of such Person, (b) the present fair salable value of the Property of such Person is not less than

 

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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 and liabilities beyond such Person’s ability to pay as such debts and liabilities mature, (d) such Person is not engaged in a business or a transaction, and is not about to engage in a business or a transaction, for which such Person’s Property would constitute an unreasonably small capital and (e) such Person is able to pay its debts as they become due and payable.  For purposes of this definition, 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, without duplication.

 

“Specified 10.04(k) Investment Returns” shall mean the amounts other than Project Reimbursements received by Borrower and its Restricted Subsidiaries with respect to Investments made pursuant to Section 10.04(k) (including with respect to contracts related to such Investments and including principal, dividends, interest, distributions, sale proceeds, payments under contracts relating to such Investments, repayments or other amounts) that are designated by Borrower as Specified 10.04(k) Investment Returns in the Compliance Certificate delivered to Administrative Agent in respect of the fiscal quarter (or fiscal year) in which such amounts were received.

 

“Specified Transaction” means (a) any incurrence or repayment of Indebtedness (other than for working capital purposes or under a Revolving Facility), (b) any Investment that results in a Person becoming a Restricted Subsidiary or an Unrestricted Subsidiary, (c) any Permitted Acquisition or other Acquisition, (d) any Asset Sale or designation of a Restricted Subsidiary that results in a Restricted Subsidiary ceasing to be a Restricted Subsidiary of Borrower or redesignation of an Unrestricted Subsidiary that results in an Unrestricted Subsidiary becoming a Restricted Subsidiary and (e) any Acquisition or Investment constituting an acquisition of assets constituting a business unit, line of business or division of another Person.

 

“Stated Amount” of each Letter of Credit shall mean, at any time, the maximum amount available to be drawn thereunder (in each case determined without regard to whether any conditions to drawing could then be met).

 

“Station Permitted Assignees” shall mean any Affiliate of any Credit Party (other than the Holding Companies, the Borrower and their respective Subsidiaries).

 

“Subsidiary” shall mean, as to any Person, (i) any corporation more than 50% of whose stock of any class or classes having by the terms thereof ordinary voting power to elect a majority of the directors of such corporation (irrespective of whether or not at the time stock of any class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency) is at the time owned by such Person and/or one or more Subsidiaries of such Person and (ii) any partnership, limited liability company, association, joint venture or other entity in which such Person and/or one or more Subsidiaries of such Person has more than a 50% equity interest at the time.  Unless otherwise qualified, all references to a “Subsidiary” or to “Subsidiaries” in this Agreement shall refer to a Subsidiary or Subsidiaries of Borrower.

 

“Subsidiary Cost Allocation Agreement” shall mean each of (i) the LandCo Cost Allocation Agreement and (ii) each other cost allocation agreement entered into after the Closing Date between Borrower and an Unrestricted Subsidiary in the form of the Manager Allocation Agreement (with such changes as are reasonably requested by or are acceptable to Administrative Agent).

 

“Subsidiary Tax Sharing Agreement” shall mean (1) the LandCo Holdings LLC Agreement, (2) the Fertitta Interactive Tax Sharing Agreement and (3) each tax sharing agreement between Borrower and an Unrestricted Subsidiary entered into after the Closing Date in accordance with this Agreement.

 

“Subsidiary Tax Sharing Payments” shall mean (i) all payments received by Borrower from Unrestricted Subsidiaries pursuant to Subsidiary Tax Sharing Agreements and (ii) all payments received by Borrower from LandCo Holdings pursuant to Section 5.1(b) of the LandCo Holdings LLC Agreement.

 

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“Support Agreement” shall mean (a) the guaranty by Borrower or a Restricted Subsidiary of the completion of the development, construction and opening of a new gaming facility by any Native American Subsidiary pursuant to a Native American Contract or of any gaming facility owned by others which is to be managed exclusively by any such Native American Subsidiary pursuant to a Native American Contract and/or (b) the agreement by Borrower or a Restricted Subsidiary to advance funds, property or services to or on behalf of a Native American Subsidiary in order to maintain the financial condition or level of any balance sheet item of such Native American Subsidiary pursuant to a Native American Contract (including “keep well” or “make well” agreements) in connection with the development, construction and operations of a new gaming facility by such Native American Subsidiary pursuant to a Native American Contract (or of any gaming facility owned by others which is to be managed exclusively by such Native American Subsidiary pursuant to a Native American Contract); provided that such guaranty or agreement is entered into in connection with obtaining financing for such gaming facility or is required by a Governmental Authority.  The amount of any Support Agreement shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation in respect of which such Support Agreement is made (or, if less, the maximum amount of such primary obligation for which such Person may be liable pursuant to the terms of the instrument evidencing such Support Agreement) or, if not stated or determinable, the maximum reasonably anticipated potential liability in respect thereof (assuming such Person is required to perform thereunder) as determined by such Person in good faith.

 

“Swap Contract” shall mean any agreement entered into in the ordinary course of business (as a bona fide hedge and not for speculative purposes) (including any master agreement and any schedule or agreement, whether or not in writing, relating to any single transaction) that is an interest rate swap agreement, basis swap, forward rate agreement, commodity swap, commodity option, equity or equity index swap or option, bond option, interest rate option, foreign exchange agreement, rate cap, collar or floor agreement, currency swap agreement, cross-currency rate swap agreement, swap option, currency option or any other similar agreement (including any option to enter into any of the foregoing) and is designed to protect any Company against fluctuations in interest rates, currency exchange rates, commodity prices, or similar risks (including any Interest Rate Protection Agreement).  For the avoidance of doubt, the term “Swap Contract” includes, without limitation, any call options, warrants and capped calls entered into as part of, or in connection with, an issuance of convertible or exchangeable debt by Borrower or its Restricted Subsidiaries.

 

“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.

 

“Swap Provider” shall mean any Person that is a party to a Swap Contract with Borrower and/or any of its Restricted Subsidiaries if such Person was, at the date of entering into such Swap Contract, a Lender or Agent or Affiliate of a Lender or Agent, and such Person executes and delivers to Administrative Agent a letter agreement in form and substance reasonably acceptable to Administrative Agent pursuant to which such Person (a) appoints Collateral Agent as its agent under the applicable Credit Documents and (b) agrees to be bound by the provisions of Section 12.03.

 

“Swingline Commitment” shall mean the commitment of the Swingline Lender to make loans pursuant to Section 2.01(e).  The Swingline Commitment is part of, and not in addition to, the Revolving Commitments.

 

“Swingline Exposure” shall mean at any time the aggregate principal amount at such time of all outstanding Swingline Loans.  The Swingline Exposure of any Revolving Lender at any time shall equal its R/C Percentage of the aggregate Swingline Exposure at such time.

 

“Swingline Lender” shall have the meaning assigned to such term in the preamble hereto.

 

“Swingline Loan” shall mean any loan made by the Swingline Lender pursuant to Section 2.01(e).

 

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“Swingline Note” shall mean the promissory note substantially in the form of Exhibit A-4.

 

“Swingline Sublimit” shall mean the lesser of (a) 25.0 million and (b) the Total Revolving Commitments then in effect.  The Swingline Sublimit is part of, not in addition to, the Total Revolving Commitments.

 

“Syndication Agents” shall mean JPMorgan Chase Bank, N.A., Bank of America, N.A., Deutsche Bank AG Cayman Islands Branch and Fifth Third Bank, in their capacities as syndication agents hereunder.

 

“Taking” shall mean a taking or voluntary conveyance during the term of this Agreement of all or part of any Mortgaged Real Property or Mortgaged Vessel, or any interest therein or right accruing thereto or use thereof, as the result of, or in settlement of, any condemnation or other eminent domain proceeding by any Governmental Authority affecting any Mortgaged Real Property or Mortgaged Vessel or any portion thereof, whether or not the same shall have actually been commenced.

 

“Tavern Business” shall mean a “restricted gaming location” as defined pursuant to Nevada Revised Statutes 463.0189.

 

“Tax Benefit” has the meaning set forth in Section 5.06(g).

 

“Tax Returns” has the meaning set forth in Section 8.08.

 

“Taxes” shall mean any and all taxes, imposts, duties, charges, fees, levies or other charges or assessments of whatever nature, including income, gross receipts, excise, real or personal property, sales, withholding, social security, retirement, unemployment, occupation, use, service, license, net worth, payroll, franchise, and transfer and recording, imposed by the Internal Revenue Service or any taxing authority (whether domestic or foreign, including any federal, state, U.S. possession, county, local or foreign government or any subdivision or taxing agency thereof) including interest, fines, penalties or additions to tax attributable to or imposed on or with respect to any such taxes, charges, fees, levies or other assessments.

 

“Technology Systems” shall mean the computers, software, databases, systems (including reservations systems), servers, workstations, routers, hubs, switches, circuits, networks, Internet sites and all other information technology equipment (owned by Borrower or any Restricted Subsidiary).

 

“Term A Facility” shall mean the credit facility comprising the Term A Facility Commitments, any Incremental Term A Loan Commitments and the Term A Facility Loans.

 

“Term A Facility Commitment” shall mean, for each Term A Facility Lender, the obligation of such Lender to make a Term A Facility Loan in a principal amount not to exceed the amount set forth opposite the name of such Lender on Annex A-2 under the caption “Term A Facility Commitment,” or in the Assignment Agreement pursuant to which such Lender assumed its Term A Facility Commitment, as applicable, as the same may be (a) changed pursuant to Section 13.05(b) or (b) reduced or terminated from time to time pursuant to Section 2.04 or Section 11.01.  The aggregate principal amount of the Term A Facility Commitments of all Term A Facility Lenders on the Closing Date is $225.0 million.

 

“Term A Facility Lenders” shall mean (a) on the Closing Date, the Lenders having Term A Facility Commitments on Annex A-2 hereof and (b) thereafter, the Lenders from time to time holding any Incremental Term A Loan Commitments and/or Term A Facility Loans, as the case may be, after giving effect to any assignments thereof permitted by Section 13.05(b).

 

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“Term A Facility Loans” shall mean (a) collectively, term loans made pursuant to Section 2.01(b) and (b) term loans made pursuant to any Incremental Term A Loan Commitments.

 

“Term A Facility Maturity Date” shall mean the date that is the fifth anniversary of the Closing Date.

 

“Term A Facility Notes” shall mean the promissory notes substantially in the form of Exhibit A-2.

 

“Term B Facility” shall mean the credit facility comprising the Term B Facility Commitments, any Incremental Term B Loan Commitments and the Term B Facility Loans.

 

“Term B Facility Commitment” shall mean, for each Term B Facility Lender, the obligation of such Lender, if any, to make a Term B Facility Loan to Borrower on the Closing Date in a principal amount not to exceed the amount set forth opposite such Lender’s name under the heading “Term B Facility Commitment” on Annex A-3, or in the Assignment Agreement pursuant to which such Lender assumed its Term B Facility Commitment, as applicable, as the same may be (i) changed pursuant to Section 13.05(b) or (ii) reduced or terminated from time to time pursuant to Section 2.04 or Section 11.01.  The aggregate principal amount of the Term B Facility Commitments of all Term B Facility Lenders on the Closing Date is $1,500.0 million.

 

“Term B Facility Lenders” shall mean (a) on the Closing Date, the Lenders having Term B Facility Commitments on Annex A-3 hereof and (b) thereafter, the Lenders from time to time holding any Incremental Term B Loan Commitments and/or Term B Facility Loans, as the case may be, after giving effect to any assignments thereof permitted by Section 13.05(b).

 

“Term B Facility Loans” shall mean (a) the term loans made pursuant to Section 2.01(c) and (b) term loans made pursuant to any Incremental Term B Loan Commitments.

 

“Term B Facility Maturity Date” shall mean the date that is the seventh anniversary of the Closing Date.

 

“Term B Facility Notes” shall mean the promissory notes substantially in the form of Exhibit A-3.

 

“Term B Lead Arrangers” shall mean JPMorgan Chase Bank, N.A., Merrill Lynch, Pierce, Fenner & Smith Incorporated (or any other registered broker-dealer wholly-owned by Bank of America Corporation to which all or substantially all of Bank of America Corporation’s or any of its subsidiaries’ investment banking, commercial lending services or related businesses may be transferred following the date of this Agreement), Deutsche Bank Securities Inc., Fifth Third Bank, Goldman Sachs Bank USA, Citigroup Global Markets Inc., Macquarie Capital (USA) Inc., Citizens Bank, N.A. and UBS Securities LLC, in their capacities as joint bookrunners and joint lead arrangers for the Term B Facility.

 

“Term Facilities” shall mean, collectively, the credit facilities comprising the Term A Facility, the Term B Facility, any New Term Loan Facilities, the credit facilities comprising the Extended Term Loans, if any, and the credit facilities comprising Other Term Loans, if any.

 

“Term Loan Commitments” shall mean, collectively, (a) the Term A Facility Commitments, (b) the Term B Facility Commitments, (c) any Incremental Term Loan Commitments and (d) any Other Term Loan Commitments.

 

“Term Loan Extension Request” shall have the meaning provided in Section 2.13(a).

 

“Term Loan Notes” shall mean, collectively, the Term A Facility Notes, the Term B Facility Notes and any New Term Loan Notes.

 

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“Term Loans” shall mean, collectively, the Term A Facility Loans, the Term B Facility Loans, any Extended Term Loans, any Other Term Loans and any New Term Loans.

 

“Test Period” shall mean, for any date of determination, the period of the four most recently ended consecutive fiscal quarters of Borrower and its Restricted Subsidiaries for which quarterly or annual financial statements have been delivered or are required to have been delivered to Administrative Agent or have been filed with the SEC.

 

“Total Revolving Commitments” shall mean, at any time, the Revolving Commitments of all the Revolving Lenders at such time. The Total Revolving Commitments on the Closing Date are $685.0 million.

 

“Trade Date” shall have the meaning provided in Section 13.05(k)(i).

 

“Tranche” shall mean (i) when used with respect to the Lenders, each of the following classes of Lenders:  (a) Lenders having Revolving Loans incurred pursuant to the Closing Date Revolving Commitment or any Incremental Revolving Commitments or Closing Date Revolving Commitments and any Incremental Revolving Commitments, (b) Lenders having such other Tranche of Revolving Loans or Revolving Commitments created pursuant to an Extension Amendment or Refinancing Amendment, (c) Lenders having Term A Facility Loans or Term A Facility Commitments and Incremental Term A Loan Commitments, (d) Lenders having Term B Facility Loans or Term B Facility Commitments and Incremental Term B Loan Commitments and (e) Lenders having such other Tranche of Term Loans or Term Loan Commitments created pursuant to an Extension Amendment, Incremental Joinder Agreement or Refinancing Amendment, and (ii) when used with respect to Loans or Commitments, each of the following classes of Loans or Commitments:  (a) Revolving Loans incurred pursuant to the Closing Date Revolving Commitment or any Incremental Revolving Commitments or Closing Date Revolving Commitments and any Incremental Revolving Commitments, (b) such other Tranche of Revolving Loans or Revolving Commitments created pursuant to an Extension Amendment or Refinancing Amendment, (c) Term A Facility Loans or Term A Facility Commitments and Incremental Term A Loan Commitments, (d) Term B Facility Loans or Term B Facility Commitments and Incremental Term B Loan Commitments and (e) such other Tranche of Term Loans or Term Loan Commitments created pursuant to an Extension Amendment, Incremental Joinder Agreement or Refinancing Amendment.

 

“Transactions” shall mean, collectively, (a) the Closing Date Refinancing, (b) the entering into of this Agreement and the other Credit Documents and the borrowings hereunder on the Closing Date and (c) the payment of fees and expenses in connection with the foregoing.

 

“Transfer Agreement” shall mean any trust or similar arrangement required by any Gaming Authority from time to time with respect to the Equity Interests of any Restricted Subsidiary (or any Person that was a Restricted Subsidiary) or any Gaming Facility.

 

“Tribal Gaming Opening Date” means the date on which the casino being constructed by a Tribe party to a Tribal Management Agreement opens for business.

 

“Tribal Management Agreements” means, collectively, (i) the Amended and Restated Gaming Management Agreement, dated as of July 27, 2012, between the Federated Indians of Graton Rancheria, the Graton Economic Development Authority and SC Sonoma Management, LLC, a California limited liability company, (ii) the Amended and Restated Non-Gaming Management Agreement, dated as of August 6, 2012, between the Federated Indians of Graton Rancheria, the Graton Economic Development Authority and NP Sonoma Land Holdings LLC, a California limited liability company, and (iii) any other management agreement entered into between a Tribe (or an instrumentality thereof) and Borrower or a Restricted Subsidiary pursuant to which Borrower or such Restricted Subsidiary manages the gaming operations of such Tribe.

 

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“Tribal Management Fees” means all management fees received by Borrower or its Restricted Subsidiaries under the Tribal Management Agreements.

 

“Tribal Trust Property” has the meaning specified in the definition of “Tribal Trust Property Release Conditions”.

 

“Tribal Trust Property Release Conditions” means, in the event that title to a Real Property is to be conveyed to the United States of America in trust for a Tribe pursuant to a Native American Contract (a “Tribal Trust Property”), the satisfaction of each of the following conditions:

 

(i)            not less than three (3) days prior to the desired release date, Borrower shall have given to the Administrative Agent a written request for the release accompanied, if such Real Property is a Mortgaged Real Property, by a release of Lien for the applicable Mortgaged Real Property for execution by the Administrative Agent, which release document shall be in a form appropriate in the applicable state and otherwise reasonably satisfactory to the Administrative Agent;

 

(ii)           title to the Tribal Trust Property shall be simultaneously conveyed to the United States of America in trust for the relevant Tribe; and

 

(iii)          simultaneously with such transfer to the United States of America in trust for the relevant Tribe, Borrower shall cause the Administrative Agent to receive for the benefit of the Secured Parties, such documentation as is provided for in the applicable Native American Contract evidencing the obligation of the relevant Tribe to pay the agreed consideration for such Tribal Trust Property as is provided for in such Native American Contract and pledged to Collateral  Agent pursuant to the Security Agreement.

 

“Tribe” means a Native American tribe, band or other form of government which is federally recognized as an Indian Tribe pursuant to a determination of the Secretary of the Interior, and as an Indian Tribal government pursuant to Sections 7701(a)(40)(A) and 7871(a) of the Internal Revenue Code, Title 26 U.S.C., and/or its agencies and instrumentalities.

 

“Trigger Event” shall mean the transfer of shares of Equity Interests of any Restricted Subsidiary or any Gaming Facility into trust or other similar arrangement required by any Gaming Authority from time to time.

 

“Type” has the meaning set forth in Section 1.03.

 

“U.S. Person” shall mean a “United States person” as defined in Section 7701(a)(30) of the Code.

 

“UCC” shall mean the Uniform Commercial Code as from time to time in effect in the applicable state or other jurisdiction.

 

“UCP” means, with respect to any Letter of Credit, the Uniform Customs and Practice for Documentary Credits, International Chamber of Commerce (“ICC”) Publication No. 600 (or such later version thereof as may be in effect at the time of issuance).

 

“un-reallocated portion” has the meaning set forth in Section 2.14(a).

 

“Unaffiliated Joint Ventures” shall mean any joint venture of Borrower or any of its Subsidiaries; provided, however, that (i) all Investments in, and other transactions entered into with, such joint venture by

 

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Borrower or any of its Restricted Subsidiaries were made in compliance with this Agreement and (ii) no Affiliate (other than Borrower or any Subsidiary or any other Unaffiliated Joint Venture) or officer or director of Borrower or any of its Subsidiaries owns any Equity Interest, or has any material economic interest, in such joint venture (other than through Borrower (directly or indirectly through its Subsidiaries)).  No Subsidiary of Borrower shall be an Unaffiliated Joint Venture.

 

“United States” shall mean the United States of America.

 

“Unreimbursed Amount” has the meaning set forth in Section 2.03(e).

 

“Unrestricted Subsidiaries” shall mean (a) as of the Closing Date, the Subsidiaries listed on Schedule 8.12(c), (b) any Subsidiary of Borrower designated as an “Unrestricted Subsidiary” pursuant to and in compliance with Section 9.12 and (c) any Subsidiary of an Unrestricted Subsidiary (in each case, unless such Subsidiary is no longer a Subsidiary of Borrower or is subsequently designated as a Restricted Subsidiary pursuant to this Agreement).

 

“Unutilized R/C Commitment” shall mean, for any Revolving Lender, at any time, the excess of such Revolving Lender’s Revolving Commitment at such time over the sum of (i) the aggregate outstanding principal amount of all Revolving Loans made by such Revolving Lender, (ii) such Revolving Lender’s L/C Liability at such time and (iii) such Revolving Lender’s Swingline Exposure at such time.

 

“Vessel” shall mean a gaming vessel, barge or riverboat and the fixtures and equipment located thereon.

 

“VoteCo SPE” shall mean the entity that is identified to the Administrative Agent by Borrower in connection with the VoteCo SPE Reorganization as the holder of all of the Voting Stock in Borrower.

 

“VoteCo SPE Assignment Agreement” has the meaning set forth in Section 9.10.

 

“VoteCo SPE Pledge Joinder” has the meaning set forth in Section 9.10.

 

“VoteCo SPE Reorganization” shall mean the formation of the VoteCo SPE and the transfer of all of the Voting Stock in Borrower to the VoteCo SPE.

 

“VoteCo SPE Reorganization Date” shall mean the date that the VoteCo SPE Reorganization occurs.

 

“Voting Stock” shall mean, with respect to any Person, the Equity Interests, participations, rights in, or other equivalents of, such Equity Interests, and any and all rights, warrants or options exchangeable for or convertible into such Equity Interests of such Person, in each case, that ordinarily has voting power for the election of directors (or Persons performing similar functions) of such Person, whether at all times or only as long as no senior class of Equity Interests has such voting power by reason of any contingency.

 

“Weighted Average Life to Maturity” shall mean, on any date and with respect to the aggregate amount of the Term Loans (or any applicable portion thereof), an amount equal to (a) the scheduled repayments of such Term Loans to be made after such date, multiplied by the number of days from such date to the date of such scheduled repayments divided by (b) the aggregate principal amount of such Term Loans.

 

“Wells Fargo Indemnification Agreement” means that certain letter agreement relating to the “Assumption of Liability by Post-Bankruptcy Entity for Pre-Bankruptcy Deposit Accounts”, by and between Wells Fargo Bank, N.A., Borrower and the Restricted Subsidiaries party thereto and others (as in effect on the June 16, 2011 and as amended, supplemented or otherwise modified from time to time but without giving effect to any

 

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modification thereto that is adverse to the interests of the Lenders in any material respect without the prior consent of the Administrative Agent).

 

“Wholly Owned Subsidiary” shall mean, with respect to any Person, any corporation, partnership, limited liability company or other entity of which all of the Equity Interests (other than, in the case of a corporation, directors’ qualifying shares or nominee shares required under applicable law) are directly or indirectly owned or controlled by such Person and/or one or more Wholly Owned Subsidiaries of such Person.  Unless the context clearly requires otherwise, all references to any Wholly Owned Subsidiary shall mean a Wholly Owned Subsidiary of Borrower.

 

“Withdrawal Liability” shall mean liability by an ERISA Entity to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part 1 of Subtitle E of Title IV of ERISA.

 

“Working Capital” shall mean, for any Person at any date, the amount (which may be a negative number) of the Consolidated Current Assets of such Person minus the Consolidated Current Liabilities of such Person at such date; provided that, for purposes of calculating Working Capital, increases or decreases in Working Capital shall be calculated without regard to any changes in Consolidated Current Assets or Consolidated Current Liabilities as a result of (a) any reclassification in accordance with GAAP of assets or liabilities, as applicable, between current and noncurrent, (b) the effects of purchase accounting or (c) the impact of non-cash items on Consolidated Current Assets and Consolidated Current Liabilities.  For purposes of calculating Working Capital (i) for any period in which a Permitted Acquisition or other Acquisition, or the opening of a Development Project or Expansion Capital Expenditure, occurs (other than with respect to any Unrestricted Subsidiary) or any Unrestricted Subsidiary is revoked and converted into a Restricted Subsidiary, the “consolidated current assets” and “consolidated current liabilities” of any Person, property, business or asset so acquired, of any Person that owns or leases such Development Project or Expansion Capital Expenditure (to the extent related to such Development Project or Expansion Capital Expenditure), or of any Unrestricted Subsidiary so revoked, as the case may be (determined on a basis consistent with the corresponding definitions herein, with appropriate reference changes) shall be excluded and (ii) for any period in which any Person, property, business or asset (other than an Unrestricted Subsidiary) is sold, transferred or otherwise disposed of, closed or classified as discontinued operations by Borrower or any Restricted Subsidiary or any Restricted Subsidiary is designated as an Unrestricted Subsidiary, the “consolidated current assets” and “consolidated current liabilities” of any Person, property, business or asset so sold, transferred or otherwise disposed of, closed or classified as discontinued operations or Restricted Subsidiary so designated, as the case may be (determined on a basis consistent with the corresponding definitions herein, with appropriate reference changes) shall be excluded.

 

“Write-Down and Conversion Powers” means, with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.

 

SECTION 1.02.       Accounting Terms and Determinations.  Except as otherwise provided in this Agreement, all computations and determinations as to accounting or financial matters (including financial covenants) shall be made in accordance with GAAP as in effect on the Closing Date consistently applied for all applicable periods, and all accounting or financial terms shall have the meanings ascribed to such terms by GAAP.  If at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in any Credit Document, and Borrower notifies Administrative Agent that Borrower requests an amendment to any provision hereof to eliminate the effect of any change occurring after the date hereof in GAAP or in the application thereof on the operation of such provision (or if Administrative Agent notifies Borrower that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the

 

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basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith.  If at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in any Credit Document, and Borrower, Administrative Agent or the Required Lenders shall so request, Administrative Agent, the Lenders and Borrower 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, not to be unreasonably withheld).

 

SECTION 1.03.       Classes and Types of Loans.  Loans hereunder are distinguished by “Class” and by “Type.”  The “Class” of a Loan (or of a Commitment to make a Loan) refers to whether such Loan is a Revolving Loan of any particular Tranche, a Term A Facility Loan, a Term B Facility Loan, a New Term Loan of any particular Tranche, or a Term Loan of any particular Tranche of Term Loans created pursuant to an Extension Amendment or a Refinancing Amendment or a Swingline Loan, each of which constitutes a Class.  The “Type” of a Loan refers to whether such Loan is an ABR Loan or a LIBOR Loan, each of which constitutes a Type.  Loans may be identified by both Class and Type.

 

SECTION 1.04.       Rules of Construction.

 

(a)           In each Credit Document, unless the context clearly requires otherwise (or such other Credit Document clearly provides otherwise), references to (i) the plural include the singular, the singular include the plural and the part include the whole; (ii) Persons include their respective permitted successors and assigns or, in the case of governmental Persons, Persons succeeding to the relevant functions of such Persons; (iii) statutes and regulations include any amendments, supplements or modifications of the same from time to time and any successor statutes and regulations; (iv) unless otherwise expressly provided, any reference to any action of any Secured Party by way of consent, approval or waiver shall be deemed modified by the phrase “in its/their reasonable discretion”; (v) time shall be a reference to time of day in New York, New York; (vi) Obligations (other than L/C Liabilities) shall not be deemed “outstanding” if such Obligations have been Paid in Full; and (vii) except as expressly provided in any Credit Document any item required to be delivered or performed on a day that is not a Business Day shall not be required until the next succeeding Business Day.

 

(b)           In each Credit Document, unless the context clearly requires otherwise (or such other Credit Document clearly provides otherwise), (i) “amend” shall mean “amend, restate, amend and restate, supplement or modify”; and “amended,” “amending” and “amendment” shall have meanings correlative to the foregoing; (ii) in the computation of periods of time from a specified date to a later specified date, “from” shall mean “from and including”; “to” and “until” shall mean “to but excluding”; and “through” shall mean “to and including”; (iii) “hereof,” “herein” and “hereunder” (and similar terms) in any Credit Document refer to such Credit Document as a whole and not to any particular provision of such Credit Document; (iv) “including” (and similar terms) shall mean “including without limitation” (and similarly for similar terms); (v) “or” has the inclusive meaning represented by the phrase “and/or”; (vi) references to “the date hereof” shall mean the date first set forth above; (vii) “asset” and “property” shall have the same meaning and effect and refer to all Property; and (viii) a “fiscal year” or a “fiscal quarter” is a reference to a fiscal year or fiscal quarter of Borrower.

 

(c)           In this Agreement unless the context clearly requires otherwise, any reference to (i) an Annex, Exhibit or Schedule is to an Annex, Exhibit or Schedule, as the case may be, attached to this Agreement and constituting a part hereof, and (ii) a Section or other subdivision is to a Section or such other subdivision of this Agreement.

 

(d)           Unless otherwise expressly provided herein, (i) references to Organizational Documents, agreements (including the Credit Documents) and other contractual instruments shall be deemed to include all subsequent amendments, restatements, amendments and restatements, extensions, supplements, reaffirmations and other modifications thereto, but only to the extent that such amendments, restatements, amendments and restatements, extensions, supplements, reaffirmations and other modifications are permitted by the Credit

 

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Documents; (ii) references to any Requirement of Law shall include all statutory and regulatory provisions consolidating, amending, replacing, supplementing or interpreting such Requirement of Law, and (iii) for the avoidance of doubt, any reference herein to “the date hereof” or words of similar import shall refer to the date that the Credit Agreement was initially entered into (June 8, 2016).

 

(e)           This Agreement and the other Credit Documents are the result of negotiations among and have been reviewed by counsel to Agents, Borrower and the other parties, and are the products of all parties.  Accordingly, they shall not be construed against the Lenders or Agents merely because of Agents’ or the Lenders’ involvement in their preparation.

 

SECTION 1.05.       Pro Forma Calculations.

 

(a)           Notwithstanding anything to the contrary herein, the Consolidated Total Leverage Ratio, the Consolidated First Lien Leverage Ratio and the Interest Coverage Ratio shall be calculated in the manner prescribed by this Section 1.05; provided that notwithstanding anything to the contrary in clauses (b), (c) or (d) of this Section 1.05, when calculating the Consolidated Total Leverage Ratio and the Interest Coverage Ratio, as applicable, for purposes of determining actual compliance (and not compliance on a Pro Forma Basis) with any covenant pursuant to Section 10.08, the events described in this Section 1.05 that occurred subsequent to the end of the applicable Test Period shall not be given pro forma effect.

 

(b)           For purposes of calculating the Consolidated Total Leverage Ratio, the Consolidated First Lien Leverage Ratio and the Interest Coverage Ratio, Specified Transactions (and the incurrence or repayment of any Indebtedness in connection therewith) that have been made (i) during the applicable Test Period and (ii) subsequent to such Test Period and prior to or simultaneously with the event for which the calculation of any such ratio is made shall be calculated on a pro forma basis assuming that all such Specified Transactions (and any increase or decrease in Consolidated EBITDA and the component financial definitions used therein attributable to any Specified Transaction) had occurred on the first day of the applicable Test Period.  If, since the beginning of any applicable Test Period, any Person that subsequently became a Restricted Subsidiary or was merged, amalgamated or consolidated with or into Borrower or any of its Restricted Subsidiaries since the beginning of such Test Period shall have made any Specified Transaction that would have required adjustment pursuant to this Section 1.05, then the Consolidated Total Leverage Ratio, the Consolidated First Lien Leverage Ratio and the Interest Coverage Ratio shall be calculated to give pro forma effect thereto in accordance with this Section 1.05.

 

(c)           Whenever pro forma effect is to be given to the Transactions or a Specified Transaction, the pro forma calculations shall be made in good faith by a Responsible Officer of Borrower and include, for the avoidance of doubt, the amount of cost savings, operating expense reductions and synergies projected by Borrower in good faith to be realized as a result of specified actions taken or with respect to which steps have been initiated, or are reasonably expected to be initiated, within twelve (12) months of the Closing Date, in the case of the Transactions, and in the case of any other Specified Transaction, within twelve (12) months of the closing date of such Specified Transaction (in the good faith determination of Borrower) (calculated on a pro forma basis as though such cost savings, operating expense reductions and synergies had been realized during the entirety of the applicable period), net of the amount of actual benefits realized during such period from such actions; provided that, with respect to any such cost savings, operating expense reductions and synergies, the limitations and requirements set forth in clause (c) of the definitions of Consolidated EBITDA (other than the requirement set forth in clause (c) of Consolidated EBITDA that steps have been initiated or taken) shall apply; provided, further, that the aggregate amount of additions made to Consolidated EBITDA for any Test Period pursuant to this clause (c) and clause (c) of the definition of “Consolidated EBITDA” shall not (i) exceed 15.0% of Consolidated EBITDA for such Test Period (after giving effect to this clause (c) and clause (c) of the definition of “Consolidated EBITDA”) or (ii) be duplicative of one another.

 

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(d)           In the event that Borrower or any Restricted Subsidiary incurs (including by assumption or guarantees) or repays (including by redemption, repayment, prepayment, retirement, exchange or extinguishment) any Indebtedness included in the calculations of the Consolidated Total Leverage Ratio, the Consolidated First Lien Leverage Ratio and the Interest Coverage Ratio, as the case may be (in each case, other than Indebtedness incurred or repaid under any revolving credit facility), (i) during the applicable Test Period and/or (ii) subsequent to the end of the applicable Test Period and prior to or simultaneously with the event for which the calculation of any such ratio is made, then the Consolidated Total Leverage Ratio, the Consolidated First Lien Leverage Ratio and the Interest Coverage Ratio shall be calculated giving pro forma effect to such incurrence or repayment of Indebtedness, to the extent required, as if the same had occurred on (A) the last day of the applicable Test Period in the case of the Consolidated Total Leverage Ratio or the Consolidated First Lien Leverage Ratio and (B) the first day of the applicable Test Period in the case of the Interest Coverage Ratio. If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on such Indebtedness shall be calculated as if the rate in effect on the date of the event for which the calculation of the Interest Coverage Ratio is made had been the applicable rate for the entire period (taking into account any hedging obligations applicable to such Indebtedness); provided that, in the case of repayment of any Indebtedness, to the extent actual interest related thereto was included during all or any portion of the applicable Test Period, the actual interest may be used for the applicable portion of such Test Period. Interest on a Capital Lease shall be deemed to accrue at an interest rate reasonably determined by a responsible financial or accounting officer of Borrower to be the rate of interest implicit in such Capital Lease in accordance with GAAP. Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a London interbank offered rate, or other rate, shall be determined to have been based upon the rate actually chosen, or if none, then based upon such optional rate chosen as Borrower may designate.

 

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 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.

 

ARTICLE II.

 

CREDITS

 

SECTION 2.01.       Loans.

 

(a)           Revolving Loans.  Each Revolving Lender agrees, severally and not jointly, on the terms and conditions of this Agreement, to make revolving loans (the “Revolving Loans”) to Borrower in Dollars from time to time, on any Business Day during, with respect to any Revolving Commitment of such Revolving Lender, the Revolving Availability Period applicable to such Revolving Commitment, in an aggregate principal amount at any one time outstanding not exceeding the amount of the Revolving Commitment of such Revolving Lender as in effect from time to time; provided, however, that, after giving effect to any Borrowing of Revolving Loans, (i) the sum of the aggregate principal amount of (without duplication) all Revolving Loans and Swingline Loans then outstanding plus the aggregate amount of all L/C Liabilities shall not exceed the Total Revolving Commitments as in effect at such time, (ii) the Revolving Exposure of such Revolving Lender shall not exceed such Revolving Lender’s Revolving Commitments in effect at such time, (iii) the Revolving Tranche Exposure of such Revolving Lender in respect of each Tranche of Revolving Commitments of such Lender shall not exceed such Revolving Lender’s Revolving Commitment of such Tranche in effect at such time and (iv) the Revolving Tranche Exposure of all Revolving Lenders in respect of each Tranche of Revolving Commitments shall not exceed the aggregate Revolving Commitments of such Tranche in effect at such time;  provided, further, that Borrower may not borrow Revolving Loans in excess of $250.0 million on the Closing Date.  Subject to the terms and conditions of this Agreement,

 

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during the applicable Revolving Availability Period, Borrower may borrow, repay and re-borrow the amount of the Revolving Commitments by means of ABR Loans and LIBOR Loans.

 

(b)           Term A Facility Loans.  Each Lender with a Term A Facility Commitment on the Closing Date agrees, severally and not jointly, on the terms and conditions of this Agreement, to make a Term A Facility Loan to Borrower in Dollars on the Closing Date in an aggregate principal amount equal to the Term A Facility Commitment of such Lender on the Closing Date.  Term A Facility Loans that are repaid or prepaid may not be reborrowed.

 

(c)           Term B Facility Loans.  Each Lender with a Term B Facility Commitment agrees, severally and not jointly, on the terms and conditions of this Agreement, to make a Term B Facility Loan to Borrower in Dollars on the Closing Date in an aggregate principal amount equal to the Term B Facility Commitment of such Lender.  Term B Facility Loans that are repaid or prepaid may not be reborrowed.

 

(d)           Limit on LIBOR Loans.  No more than eight (8) separate Interest Periods in respect of LIBOR Loans may be outstanding at any one time in the aggregate under all of the facilities.

 

(e)           Swingline Loans.

 

(i)      Swingline Commitment.  Subject to the terms and conditions set forth herein and in reliance upon the agreements of the other Lenders set forth in this Section 2.01(e), the Swingline Lender at the request of Borrower may, in the Swingline Lender’s sole discretion, make Swingline Loans to Borrower in Dollars from time to time during any Revolving Availability Period, in an aggregate principal amount at any time outstanding that will not result in (x) the aggregate principal amount of outstanding Swingline Loans exceeding the Swingline Sublimit or (y) (1) the sum of the total Revolving Exposures exceeding the Total Revolving Commitments or (2) the Revolving Exposure of any Revolving Lender exceeding the Revolving Commitments of such Lender then in effect; provided, however, that the Swingline Lender shall not be required to make a Swingline Loan to refinance an outstanding Swingline Loan.  Within the foregoing limits and subject to the terms and conditions set forth herein, Borrower may borrow, repay and re-borrow Swingline Loans.  Notwithstanding anything to the contrary contained in this Section 2.01(e) or elsewhere in this Agreement, the Swingline Lender shall not be obligated to make any Swingline Loan at a time when a Revolving Lender is a Defaulting Lender if such Defaulting Lender’s participation in Swingline Loans cannot be reallocated to Non-Defaulting Lenders pursuant to Section 2.14(a) unless arrangements reasonably satisfactory to the Swingline Lender and Borrower have been made to eliminate the Swingline Lender’s risk with respect to the Defaulting Lender’s or Defaulting Lenders’ participation in such Swingline Loans, including by Cash Collateralizing in an amount equal to the Minimum Collateral Amount, or obtaining a backstop letter of credit from an issuer reasonably satisfactory to the Swingline Lender to support, such Defaulting Lender’s or Defaulting Lenders’ Commitment percentage of outstanding Swingline Loans.

 

(ii)     Swingline Loans.  To request a Swingline Loan, Borrower shall notify Administrative Agent of such request by telephone (promptly confirmed in writing in the form of a Notice of Borrowing by facsimile or electronic mail), not later than 1:00 p.m., New York time, on the day of a proposed Swingline Loan (which day shall be a Business Day).  Each such notice shall be irrevocable and shall specify the requested date (which shall be a Business Day) and amount of the requested Swingline Loan.  Administrative Agent will promptly advise the Swingline Lender of any such notice received from Borrower.  Unless the Swingline Lender has received notice (by telephone or in writing) from the Administrative Agent (including at the request of any Lender) prior to 2:00 p.m. on the date of the proposed Swingline Loan (A) directing the Swingline Lender not to make such Swingline Loan as a result of the limitations set forth in the first sentence of Section 2.01(e)(i) or (B) that one or more of the applicable conditions specified in Section 7.02 is not then satisfied, then, subject to the terms and

 

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conditions hereof, the Swingline Lender shall make each Swingline Loan available to Borrower by depositing the same by wire transfer of immediately available funds in (or, in the case of an account of Borrower maintained with the Swingline Lender, by crediting the same to) the account of Borrower as directed by Borrower in the applicable Notice of Borrowing for such Swingline Loan by 4:00 p.m., New York time, on the requested date of such Swingline Loan.  Swingline Loans shall only be incurred and maintained as ABR Loans.  Borrower shall not request a Swingline Loan if at the time of or immediately after giving effect to such request a Default or an Event of Default has occurred and is continuing.  Swingline Loans shall be made in minimum amounts of $500,000 and integral multiples of $250,000 above such amount.  Immediately upon the making of a Swingline Loan, each Revolving Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Swingline Lender a risk participation in such Swingline Loan in an amount equal to the product of such Lender’s R/C Percentage of such Swingline Loan.

 

(iii)    Prepayment.  Borrower shall have the right at any time and from time to time to repay any Swingline Loan, in whole or in part, and without any penalty or premium, upon giving written or telecopy notice (or telephone notice promptly confirmed by written, or telecopy notice) to the Swingline Lender and to Administrative Agent before 12:00 p.m. (Noon), New York time, on the date of repayment at the Swingline Lender’s office as the Swingline Lender may from time to time specify to Borrower and Administrative Agent.

 

(iv)    Refinancing; Participations.

 

(A)          The Swingline Lender at any time in its sole discretion may request, on behalf of Borrower (which hereby irrevocably authorizes the Swingline Lender to so request on its behalf), that each Revolving Lender make a ABR Loan in an amount equal to such Lender’s R/C Percentage of the amount of Swingline Loans then outstanding.  Such request shall be made in writing and in accordance with the requirements of Section 2.02, without regard to the minimum and multiples specified in this Agreement for the principal amount of ABR Loans, but subject to the unutilized portion of the Revolving Commitments and the conditions set forth in Section 7.02.  The Swingline Lender shall furnish Borrower with a copy of the applicable notice promptly after delivering such notice to the Administrative Agent.  Each Revolving Lender shall make an amount equal to its R/C Percentage of the amount specified in such notice available to the Administrative Agent in immediately available funds (and the Administrative Agent may apply Cash Collateral available with respect to the applicable Swingline Loan) for the account of the Swingline Lender at the Administrative Agent’s Office for Dollar-denominated payments not later than 1:00 p.m. on the day specified in such notice, whereupon, subject to Section 2.01(e)(iv)(B), each Revolving Lender that so makes funds available shall be deemed to have made a ABR Loan to Borrower in such amount.  The Administrative Agent shall remit the funds so received to the Swingline Lender.

 

(B)          If for any reason any Swingline Loan cannot be refinanced by such a Borrowing in accordance with Section 2.01(e)(iv)(A), the request for ABR Loans submitted by the Swingline Lender as set forth herein shall be deemed to be a request by the Swingline Lender that each of the Revolving Lenders fund its risk participation in the relevant Swingline Loan and each Revolving Lender’s payment to the Administrative Agent for the account of the Swingline Lender pursuant to Section 2.01(e)(iv)(A) shall be deemed payment in respect of such participation.

 

(C)          If any Revolving Lender fails to make available to the Administrative Agent for the account of the Swingline Lender any amount required to be paid by such Revolving Lender pursuant to Section 2.01(e)(iv)(A) by the time specified in such Section, the Swingline Lender shall be entitled to recover from such Revolving Lender (acting through the Administrative

 

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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 Swingline Lender, at a rate per annum equal to the greater of the Federal Funds Effective Rate and a rate determined by the Swingline Lender in accordance with banking industry rules on interbank compensation, plus any administrative, processing or similar fees customarily charged by the Swingline Lender in connection with the foregoing. If such Revolving Lender pays such amount (with interest and fees as aforesaid), the amount so paid (other than any such interest or fees) shall constitute such Lender’s Revolving Loan included in the relevant Borrowing or funded participation in the relevant Swingline Loan, as the case may be.  A certificate of the Swingline Lender submitted to any Revolving Lender (through the Administrative Agent) with respect to any amounts owing under this clause (C) shall be conclusive absent manifest error.

 

(D)          Each Revolving Lender’s obligation to make Revolving Loans or to purchase and fund risk participations in Swingline Loans pursuant to this Section 2.01(e)(iv) 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 Revolving Lender may have against the Swingline Lender, Borrower 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 Lender’s obligation to make Revolving Loans pursuant to this Section 2.01(e)(iv) is subject to the conditions set forth in Section 7.02.  No such funding of risk participations shall relieve or otherwise impair the obligation of Borrower to repay Swingline Loans, together with interest as provided herein.

 

(E)           The Swingline Lender shall be responsible for invoicing Borrower for interest on the Swingline Loans.  Until each Revolving Lender funds its Revolving Loan or risk participation pursuant to this Section 2.01(e) to refinance such Revolving Lender’s R/C Percentage of any Swingline Loan, interest in respect of such R/C Percentage shall be solely for the account of the Swingline Lender.

 

SECTION 2.02.       Borrowings.  Borrower shall give Administrative Agent notice of each borrowing hereunder as provided in Section 4.05 in the form of a Notice of Borrowing.  Unless otherwise agreed to by Administrative Agent in its sole discretion, not later than 12:00 p.m. (Noon), New York time, on the date specified for each borrowing in Section 4.05, each Lender shall make available the amount of the Loan or Loans to be made by it on such date to Administrative Agent, at an account specified by Administrative Agent maintained at the Principal Office, in immediately available funds, for the account of Borrower.  Each borrowing of Revolving Loans shall be made by each Revolving Lender pro rata based on its R/C Percentage.  The amounts so received by Administrative Agent shall, subject to the terms and conditions of this Agreement, be made available to Borrower not later than 4:00 p.m., New York time, on the actual applicable Funding Date, by depositing the same by wire transfer of immediately available funds in (or, in the case of an account of Borrower maintained with Administrative Agent at the Principal Office, by crediting the same to) the account or accounts of Borrower or any other account or accounts in each case as directed by Borrower in the applicable Notice of Borrowing.

 

SECTION 2.03.       Letters of Credit.

 

(a)           Subject to the terms and conditions hereof, the Revolving Commitments may be utilized, upon the request of Borrower, in addition to the Revolving Loans provided for by Section 2.01(a), for standby and commercial documentary letters of credit (herein collectively called “Letters of Credit”) issued by the applicable L/C Lender (which L/C Lenders agree to the terms and provisions of this Section 2.03 in reliance upon the agreements of the other Lenders set forth herein) for the account of Borrower or its Subsidiaries; provided, however, that in no event shall

 

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(i)      the aggregate amount of all L/C Liabilities, plus the aggregate principal amount of all the Revolving Loans and Swingline Loans then outstanding, exceed at any time the Total Revolving Commitments as in effect at such time,

 

(ii)     the sum of the aggregate principal amount of all Revolving Loans of any Revolving Lender then outstanding, plus such Revolving Lender’s L/C Liability plus such Revolving Lender’s Swingline Exposure exceed at any time such Revolving Lender’s Revolving Commitment as in effect at such time,

 

(iii)    (x) the outstanding aggregate amount of all L/C Liabilities exceed the L/C Sublimit or (y) unless the applicable L/C Lender consents, the Stated Amount of all Letters of Credit issued by such L/C Lender plus the aggregate amount of all L/C Disbursements of such L/C Lender that have not yet been reimbursed in respect of all Letters of Credit issued by such L/C Lender exceed such L/C Lender’s L/C Commitment,

 

(iv)    the Stated Amount of any Letter of Credit be less than $100,000 or such lesser amount as is acceptable to the L/C Lender,

 

(v)     the expiration date of any Letter of Credit extend beyond the earlier of (x) the third Business Day preceding the latest R/C Maturity Date then in effect and (y) the date twelve (12) months following the date of such issuance, unless in the case of this clause (y) the Required Revolving Lenders have approved such expiry date in writing (but never beyond the third Business Day prior to the latest R/C Maturity Date then in effect), except for any Letter of Credit that Borrower has agreed to Cash Collateralize in an amount equal to the Minimum Collateral Amount or otherwise backstop (with a letter of credit on customary terms) to the applicable L/C Lender’s and the Administrative Agent’s reasonable satisfaction, on or prior to the third Business Day preceding the latest R/C Maturity Date then in effect, subject to the ability of Borrower to request Auto-Extension Letters of Credit in accordance with Section 2.03(b); provided that in the case of any such Letter of Credit that is so Cash Collateralized, the obligations of the Revolving Lenders to participate in such Letters of Credit pursuant to Section 2.03(f) shall terminate on the third Business Day preceding the latest R/C Maturity Date then in effect,

 

(vi)    any L/C Lender issue any Letter of Credit after it has received notice from Borrower or the Required Revolving Lenders stating that a Default exists until such time as such L/C Lender shall have received written notice of (x) rescission of such notice from the Required Revolving Lenders, (y) waiver or cure of such Default in accordance with this Agreement or (z) Administrative Agent’s good faith determination that such Default has ceased to exist,

 

(vii)   any Letter of Credit be issued in a currency other than Dollars nor at a tenor other than sight; or

 

(viii)  the L/C Lender be obligated to issue any Letter of Credit, amend or modify any outstanding Letter of Credit or extend the expiry date of any outstanding Letter of Credit at any time when a Revolving Lender is a Defaulting Lender if such Defaulting Lender’s L/C Liability cannot be reallocated to Non-Defaulting Lenders pursuant to Section 2.14(a) unless arrangements reasonably satisfactory to the L/C Lender and Borrower have been made to eliminate the L/C Lender’s risk with respect to the participation in Letters of Credit by all such Defaulting Lenders, including by Cash Collateralizing in an amount equal to the Minimum Collateral Amount, or obtaining a backstop letter of credit from an issuer reasonably satisfactory to the L/C Lender to support, each such Defaulting Lender’s L/C Liability.

 

(b)           Whenever Borrower requires the issuance of a Letter of Credit it shall give the applicable L/C Lender and Administrative Agent at least three (3) Business Days written notice (or such shorter period of notice

 

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acceptable to the L/C Lender).  Such Letter of Credit application may be sent by facsimile, by United States mail, by overnight courier, by electronic transmission using the system agreed to by the applicable L/C Lender, by personal delivery or by any other means acceptable to the applicable L/C Lender.   Each notice shall be in the form of Exhibit L or such other form as is reasonably acceptable to the applicable L/C Lender appropriately completed (each a “Letter of Credit Request”) and shall specify a date of issuance not beyond the fifth Business Day prior to the latest R/C Maturity Date then in effect.  Each Letter of Credit Request must be accompanied by documentation describing in reasonable detail the proposed terms, conditions and format of the Letter of Credit to be issued, and if so requested by any L/C Lender each Letter of Credit Request shall be accompanied by such L/C Lender’s form of application but which application shall not contain any operating or financial covenants or any provisions inconsistent with this Agreement.  If Borrower so requests in any applicable Letter of Credit Request, the applicable L/C Lender may, in its sole discretion, agree to issue a Letter of Credit that has automatic extension provisions (each, an “Auto-Extension Letter of Credit”); provided that any such Auto-Extension Letter of Credit must permit the L/C Lender to decline any such extension at least once in each twelve-month period (commencing with the date of issuance of such Letter of Credit) by giving prior notice to the beneficiary thereof not later than a day (the “Non-Extension Notice Date”) in each such twelve-month period to be agreed upon at the time such Letter of Credit is issued.  Unless otherwise directed by the L/C Lender at the time of the original issuance or automatic extension of a Letter of Credit, Borrower shall not be required to make a specific request to the L/C Lender for any such extension.  Once an Auto-Extension Letter of Credit has been issued, the Lenders shall be deemed to have authorized (but may not require) the L/C Lender to permit the extension of such Letter of Credit at any time to an expiry date not later than the third Business Day preceding the latest R/C Maturity Date then in effect (provided, that such three (3) Business Day limitation shall not apply to any Letter of Credit that Borrower has agreed to Cash Collateralize in an amount equal to the Minimum Collateral Amount or otherwise backstop (with a letter of credit on customary terms) to the applicable L/C Lender’s and the Administrative Agent’s reasonable satisfaction); provided, however, that the L/C Lender shall not permit any such extension if (A) the L/C Lender has determined that it would not be permitted, or would have no obligation, at such time to issue such Letter of Credit in its revised form (as extended) under the terms hereof (by reason of the provisions of Section 2.03(a) or otherwise), or (B) it has received notice (which may be by telephone or in writing) on or before the day that is seven Business Days before the Non-Extension Notice Date (1) from the Administrative Agent that the Required Revolving Lenders have elected not to permit such extension or (2) from the Administrative Agent, any Lender or Borrower that one or more of the applicable conditions specified in Section 7.02 is not then satisfied, and in each such case directing the L/C Lender  not to permit such extension. If there is any conflict between the terms and conditions of this Agreement and the terms and condition of any application, the terms and conditions of this Agreement shall govern.  Each Lender hereby authorizes each L/C Lender to issue and perform its obligations with respect to Letters of Credit and each Letter of Credit shall be issued in accordance with the customary procedures of such L/C Lender.  Borrower acknowledges and agrees that the failure of any L/C Lender to require an application at any time and from time to time shall not restrict or impair such L/C Lender’s right to require such an application or agreement as a condition to the issuance of any subsequent Letter of Credit.

 

(c)                                  On each day during the period commencing with the issuance by the applicable L/C Lender of any Letter of Credit and until such Letter of Credit shall have expired or been terminated, the Revolving Commitment of each Revolving Lender shall be deemed to be utilized for all purposes hereof in an amount equal to such Lender’s R/C Percentage of the then Stated Amount of such Letter of Credit plus the amount of any unreimbursed drawings thereunder.  Each Revolving Lender (other than the applicable L/C Lender) severally agrees that, upon the issuance of any Letter of Credit hereunder, it shall automatically acquire from the L/C Lender that issued such Letter of Credit, without recourse, a participation in such L/C Lender’s obligation to fund drawings and rights under such Letter of Credit in an amount equal to such Lender’s R/C Percentage of such obligation and rights, and each Revolving Lender (other than such L/C Lender) thereby shall absolutely, unconditionally and irrevocably assume, as primary obligor and not as surety, and shall be unconditionally obligated to such L/C Lender to pay and discharge when due, its R/C Percentage of such L/C Lender’s obligation to fund drawings under such Letter of Credit.  Such L/C Lender shall be deemed to hold an L/C Liability in an amount equal to its retained interest in the related Letter

 

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of Credit after giving effect to such acquisition by the Revolving Lenders other than such L/C Lender of their participation interests.

 

(d)                                 In the event that any L/C Lender has determined to honor a drawing under a Letter of Credit, such L/C Lender shall promptly notify (the “L/C Payment Notice”) Administrative Agent and Borrower of the amount paid by such L/C Lender and the date on which payment is to be made to such beneficiary.  Borrower hereby unconditionally agrees to pay and reimburse such L/C Lender, through the Administrative Agent, for the amount of payment under such Letter of Credit in Dollars, together with interest thereon at a rate per annum equal to the Alternate Base Rate in effect from time to time plus the Applicable Margin applicable to Revolving Loans that are maintained as ABR Loans as are in effect from time to time (determined based on a weighted average if multiple Tranches of Revolving Commitments are then outstanding) from the date payment was made to such beneficiary to the date on which payment is due, such payment to be made not later than the second Business Day after the date on which Borrower receives the applicable L/C Payment Notice (or the third Business Day thereafter if such L/C Payment Notice is received on a date that is not a Business Day or after 1:00 p.m., New York time, on a Business Day).  Any such payment due from Borrower and not paid on the required date shall thereafter bear interest at rates specified in Section 3.02(b) until paid.  Promptly upon receipt of the amount paid by Borrower pursuant to the immediately prior sentence, the applicable L/C Lender shall notify Administrative Agent of such payment and whether or not such payment constitutes payment in full of the Reimbursement Obligation under the applicable Letter of Credit.

 

(e)                                  Promptly upon its receipt of a L/C Payment Notice referred to in Section 2.03(d), Borrower shall advise the applicable L/C Lender and Administrative Agent whether or not Borrower intends to borrow hereunder to finance its obligation to reimburse such L/C Lender for the amount of the related demand for payment under the applicable Letter of Credit and, if it does so intend, submit a Notice of Borrowing for such borrowing to Administrative Agent as provided in Section 4.05.  In the event that Borrower fails to reimburse any L/C Lender, through the Administrative Agent, for a demand for payment under a Letter of Credit by the second Business Day after the date of the applicable L/C Payment Notice (or the third Business Day thereafter if such L/C Payment Notice is received on a date that is not a Business Day or after 1:00 p.m., New York time on a Business Day), such L/C Lender shall promptly notify Administrative Agent of such failure by Borrower to so reimburse and of the amount of the demand for payment.  In the event that Borrower fails to either submit a Notice of Borrowing to Administrative Agent as provided above or reimburse such L/C Lender, through the Administrative Agent, for a demand for payment under a Letter of Credit by the second Business Day after the date of the applicable L/C Payment Notice (or the third Business Day thereafter if such L/C Payment Notice is received on a date that is not a Business Day or after 1:00 p.m., New York time, on a Business Day), Administrative Agent shall give each Revolving Lender prompt notice of the amount of the demand for payment including the interest therein owed by Borrower (the “Unreimbursed Amount”), specifying such Lender’s R/C Percentage thereof and requesting payment of such amount.

 

(f)                                   Each Revolving Lender (other than the applicable L/C Lender) shall pay to Administrative Agent for account of the applicable L/C Lender at the Principal Office in Dollars and in immediately available funds, an amount equal to such Revolving Lender’s R/C Percentage of the Unreimbursed Amount upon not less than one Business Day’s actual notice by Administrative Agent as described in Section 2.03(e) to such Revolving Lender requesting such payment and specifying such amount.  Administrative Agent will promptly remit the funds so received to the applicable L/C Lender in Dollars.  Each such Revolving Lender’s obligation to make such payments to Administrative Agent for the account of L/C Lender under this Section 2.03(f), and the applicable L/C Lender’s right to receive the same, shall be absolute and unconditional and shall not be affected by any circumstance whatsoever, including (i) the failure of any other Revolving Lender to make its payment under this Section 2.03(f), (ii) the financial condition of Borrower or the existence of any Default or (iii) the termination of the Commitments.  Each such payment to any L/C Lender shall be made without any offset, abatement, withholding or reduction whatsoever.

 

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(g)                                  Upon the making of each payment by a Revolving Lender, through the Administrative Agent, to an L/C Lender pursuant to Section 2.03(f) in respect of any Letter of Credit, such Revolving Lender shall, automatically and without any further action on the part of Administrative Agent, such L/C Lender or such Revolving Lender, acquire (i) a participation in an amount equal to such payment in the Reimbursement Obligation owing to such L/C Lender by Borrower hereunder and under the L/C Documents relating to such Letter of Credit and (ii) a participation equal to such Revolving Lender’s R/C Percentage in any interest or other amounts (other than cost reimbursements) payable by Borrower hereunder and under such L/C Documents in respect of such Reimbursement Obligation.  If any L/C Lender receives directly from or for the account of Borrower any payment in respect of any Reimbursement Obligation or any such interest or other amounts (including by way of setoff or application of proceeds of any collateral security), such L/C Lender shall promptly pay to Administrative Agent for the account of each Revolving Lender which has satisfied its obligations under Section 2.03(f), such Revolving Lender’s R/C Percentage of such payment, each such payment by such L/C Lender to be made in Dollars.  In the event any payment received by such L/C Lender and so paid to the Revolving Lenders hereunder is rescinded or must otherwise be returned by such L/C Lender, each Revolving Lender shall, upon the request of such L/C Lender (through Administrative Agent), repay to such L/C Lender (through Administrative Agent) the amount of such payment paid to such Revolving Lender, with interest at the rate specified in Section 2.03(j).

 

(h)                                 Borrower shall pay to Administrative Agent, for the account of each Revolving Lender, and with respect to each Tranche of Revolving Commitments, in respect of each Letter of Credit and each Tranche of Revolving Commitments for which such Revolving Lender has a L/C Liability, a letter of credit commission equal to (x) the rate per annum equal to the Applicable Margin for Revolving Loans of such Tranche made by such Revolving Lender that are LIBOR Loans in effect from time to time, multiplied by (y) the daily Stated Amount of such Letter of Credit allocable to such Revolving Lender’s Revolving Commitments of such Tranche for the period from and including the date of issuance of such Letter of Credit (i) in the case of a Letter of Credit which expires in accordance with its terms, to and including such expiration date and (ii) in the case of a Letter of Credit which is drawn in full or is otherwise terminated other than on the stated expiration date of such Letter of Credit, to and excluding the date such Letter of Credit is drawn in full or is terminated.  Such commission will be non-refundable and is to be paid (1) quarterly in arrears on each Quarterly Date and (2) on each R/C Maturity Date.  In addition, Borrower shall pay to each L/C Lender, for such L/C Lender’s account a fronting fee (i) with respect to each commercial Letter of Credit, at the rate separately agreed to with such L/C Lender, computed on the amount of such Letter of Credit, and payable upon the issuance thereof, (ii) with respect to any amendment of a commercial Letter of Credit increasing the amount of such Letter of Credit, at a rate separately agreed between Borrower and such L/C Lender, computed on the amount of such increase, and payable upon the effectiveness of such amendment, and (iii) with respect to each standby Letter of Credit, at the rate equal to the greater of (i) $500 per quarter or (ii) 0.25% per annum, computed on the daily amount available to be drawn under such Letter of Credit on a quarterly basis in arrears.  Such fronting fee shall be due and payable on each Quarterly Date 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 latest R/C Maturity 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 Borrower agrees to pay to each L/C Lender all charges, costs and expenses in the amounts customarily charged by such L/C Lender, from time to time in like circumstances, with respect to the issuance, amendment, transfer, payment of drawings, and other transactions relating thereto.

 

(i)                                     Upon the issuance of or amendment or modification to a Letter of Credit, the applicable L/C Lender shall promptly deliver to Administrative Agent and Borrower a written notice of such issuance, amendment or modification and such notice shall be accompanied by a copy of such Letter of Credit or the respective amendment or modification thereto, as the case may be.  Promptly upon receipt of such notice, Administrative Agent shall deliver to each Revolving Lender a written notice regarding such issuance, amendment or modification, as the case may be, and, if so requested by a Revolving Lender, Administrative Agent shall deliver to such Revolving Lender a copy of such Letter of Credit or amendment or modification, as the case may be.

 

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(j)                                    If and to the extent that any Revolving Lender fails to pay an amount required to be paid pursuant to Section 2.03(f) or 2.03(g) on the due date therefor, such Revolving Lender shall pay to the applicable L/C Lender (through Administrative Agent) interest on such amount with respect to each Tranche of Revolving Commitments held by such Revolving Lender for each day from and including such due date to but excluding the date such payment is made at a rate per annum equal to the Federal Funds Effective Rate (as in effect from time to time) for the first three days and at the interest rate (in effect from time to time) applicable to Revolving Loans under such Tranche made by such Revolving Lender that are maintained as ABR Loans for each date thereafter.  If any Revolving Lender holds Revolving Commitments of more than one Tranche and such Revolving Lender makes a partial payment of amounts due by it under Section 2.03(f) or 2.03(g), such partial payment shall be allocated pro rata to each Tranche based on the amount of Revolving Commitments of each Tranche held by such Revolving Lender.

 

(k)                                 The issuance by any L/C Lender of any amendment or modification to any Letter of Credit hereunder that would extend the expiry date or increase the Stated Amount thereof shall be subject to the same conditions applicable under this Section 2.03 to the issuance of new Letters of Credit, and no such amendment or modification shall be issued hereunder (i) unless either (x) the respective Letter of Credit affected thereby would have complied with such conditions had it originally been issued hereunder in such amended or modified form or (y) the Required Revolving Lenders (or other specified Revolving Lenders to the extent required by Section 13.04) shall have consented thereto or (ii) if the beneficiary of the Letter of Credit does not accept the proposed terms of the Letter of Credit.

 

(l)                                     Notwithstanding the foregoing, no L/C Lender shall be under any obligation to issue any Letter of Credit if at the time of such issuance, (i) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain such L/C Lender from issuing the Letter of Credit, or any Law applicable to such L/C Lender or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over such L/C Lender shall prohibit, or request that such L/C Lender refrain from, the issuance of letters of credit generally or the Letter of Credit in particular or shall impose upon such L/C Lender with respect to the Letter of Credit any restriction, reserve or capital requirement (for which such L/C Lender is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon such L/C Lender any unreimbursed loss, cost or expense which was not applicable on the Closing Date and which such L/C Lender in good faith deems material to it or (ii) the issuance of the Letter of Credit would violate one or more policies of such L/C Lender applicable to letters of credit generally.

 

(m)                             The obligations of Borrower under this Agreement and any L/C Document to reimburse any L/C Lender for a drawing under a Letter of Credit, and to repay any drawing under a Letter of Credit converted into Revolving Loans or Swingline Loans, shall be absolute, unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement and each such other L/C Document under all circumstances, including the following:

 

(i)                           any lack of validity or enforceability of this Agreement, any Credit Document or any L/C Document;

 

(ii)                        the existence of any claim, setoff, defense or other right that Borrower may have at any time against any beneficiary or any transferee of any Letter of Credit (or any Person for whom any such beneficiary or any such transferee may be acting), any L/C Lender or any other Person, whether in connection with this Agreement, the transactions contemplated hereby or by the L/C Documents or any unrelated transaction;

 

(iii)                     any draft, demand, certificate or other document presented under any 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

 

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in order to make a drawing under any Letter of Credit; or any defense based upon the failure of any drawing under a Letter of Credit to conform to the terms of the Letter of Credit or any non-application or misapplication by the beneficiary of the proceeds of such drawing;

 

(iv)                    waiver by a L/C Lender of any requirement that exists for the L/C Lender’s protection and not the protection of Borrower or any waiver by the L/C Lender which does not in fact materially prejudice Borrower;

 

(v)                       honor of a demand for payment presented electronically even if such Letter of Credit requires that demand be in the form of a draft;

 

(vi)                    any payment made by a L/C Lender in respect of an otherwise complying item presented after the date specified as the expiration date of, or the date by which documents must be received under such Letter of Credit if presentation after such date is authorized by the UCC, the ISP or the UCP, as applicable;

 

(vii)                 any payment by a 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 a L/C Lender 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; or

 

(viii)              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, Borrower or a Guarantor.

 

To the extent that any provision of any L/C Document is inconsistent with the provisions of this Section 2.03, the provisions of this Section 2.03 shall control.

 

(n)                                 Borrower, Administrative Agent and Revolving Lenders hereby agree that, as of the Closing Date, each letter of credit identified on Schedule 2.03(n) (each, an “Existing Letter of Credit”) shall be a Letter of Credit as if originally issued under this Agreement, and that the fees and other provisions set forth in this Section 2.03 shall be applicable to each Existing Letter of Credit as of the Closing Date.

 

(o)                                 On the last Business Day of each month, each L/C Lender shall provide to Administrative Agent such information regarding the outstanding Letters of Credit as Administrative Agent shall reasonably request, in form and substance reasonably satisfactory to Administrative Agent (and in such standard electronic format as Administrative Agent shall reasonably specify), for purposes of Administrative Agent’s ongoing tracking and reporting of outstanding Letters of Credit.  Administrative Agent shall maintain a record of all outstanding Letters of Credit based upon information provided by the L/C Lenders pursuant to this Section 2.03(o), and such record of Administrative Agent shall, absent manifest error, be deemed a correct and conclusive record of all Letters of Credit outstanding from time to time hereunder.  Notwithstanding the foregoing, if and to the extent Administrative Agent determines that there are one or more discrepancies between information provided by any L/C Lender hereunder, Administrative Agent will notify such L/C Lender thereof and such L/C Lender shall endeavor to reconcile any such discrepancy.  In addition to and without limiting the foregoing, with respect to commercial documentary Letters of Credit, on the first Business Day of each week the applicable L/C Lender shall deliver to Administrative Agent, by facsimile or electronic mail, a report detailing the daily outstanding commercial documentary Letters of Credit for the previous week for such Letters of Credit.

 

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(p)                                 Each Lender and Borrower agree that, in paying any drawing under a Letter of Credit, the L/C Lender shall not 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 Lenders, the Administrative Agent, any of their respective Affiliates, directors, officers, employees, agents and advisors nor any correspondent, participant or assignee of any L/C Lender 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 Lenders, the Required Revolving Lenders or the Required Lenders, as applicable; (ii) any action taken or omitted in the absence of gross negligence, bad faith or willful misconduct or material breach of any Credit Document as determined by a court of competent jurisdiction by final and non-appealable judgment; or (iii) the due execution, effectiveness, validity or enforceability of any document or instrument related to any Letter of Credit.  Borrower 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 Borrower’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 Lenders, the Administrative Agent, any of their respective Affiliates, directors, officers, employees, agents and advisors nor any correspondent, participant or assignee of the L/C Lenders shall be liable or responsible for any of the matters described in clauses (i) through (viii) of Section 2.03(m); provided, however, that anything in such clauses to the contrary notwithstanding, Borrower may have a claim against a L/C Lender, and a L/C Lender may be liable to Borrower, to the extent, but only to the extent, of any direct, as opposed to indirect, special, punitive, consequential or exemplary, damages suffered by Borrower which Borrower proves were caused by such L/C Lender’s willful misconduct, bad faith or gross negligence or material breach of any Credit Document or such L/C Lender’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 each case, as determined by a court of competent jurisdiction by final and non-appealable judgment.  In furtherance and not in limitation of the foregoing, the L/C Lenders 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 the L/C Lenders shall not 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 Lenders 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.

 

(q)                                 Unless otherwise expressly agreed by the applicable L/C Lender and Borrower 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 shall apply to each commercial Letter of Credit.  Notwithstanding the foregoing, the L/C Lenders shall not be responsible to Borrower for, and the L/C Lenders’ rights and remedies against Borrower shall not be impaired by, any action or inaction of the L/C Lenders required or permitted under any law, order, or practice that is required or permitted to be applied to any Letter of Credit or this Agreement, including the law or any order of a jurisdiction where such L/C Lender or the beneficiary is located, the practice stated in the ISP or UCP, as applicable, or in the decisions, opinions, practice statements, or official commentary of the ICC Banking Commission, the Bankers Association for Finance and Trade - International Financial Services Association (BAFT-IFSA), or the Institute of International Banking Law & Practice, whether or not any Letter of Credit chooses such law or practice.

 

(r)                                    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, Borrower shall be obligated to reimburse the applicable L/C Lender hereunder for any and all drawings under such Letter of Credit.  Borrower hereby acknowledges that the issuance of Letters of Credit for the account of Subsidiaries inures to the benefit of Borrower, and that Borrower’s business derives substantial benefits from the businesses of such Subsidiaries.

 

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(s)                                   A Revolving Lender may become an additional L/C Lender hereunder with the approval of the Administrative Agent (such approval not to be unreasonably withheld or delayed), Borrower and such Revolving Lender, pursuant to an agreement with, and in form and substance reasonably satisfactory to, the Administrative Agent, Borrower and such Revolving Lender.  The Administrative Agent shall notify the Revolving Lenders of any such additional L/C Lender.

 

SECTION 2.04.                      Termination and Reductions of Commitment.

 

(a)                                 (i)                                     In addition to any other mandatory commitment reductions pursuant to this Section 2.04, the aggregate amount of the Term A Facility Commitments outstanding on the Closing Date shall be automatically and permanently reduced to zero at 5:00 p.m., New York time, on the Closing Date (after giving effect to the making of the Term A Facility Loans on such date).

 

(ii)                                  In addition to any other mandatory commitment reductions pursuant to this Section 2.04, the aggregate amount of the Term B Facility Commitments shall be automatically and permanently reduced to zero at 5:00 p.m., New York time, on the Closing Date (after giving effect to the making of the Term B Facility Loans on such date).

 

(iii)                               In addition to any other mandatory commitment reductions pursuant to this Section 2.04, the aggregate amount of any Incremental Term Loan Commitments shall be automatically and permanently reduced by the amount of Incremental Term Loans made in respect hereof from time to time.

 

(iv)                              The aggregate amount of the Revolving Commitments of any Tranche shall be automatically and permanently reduced to zero on the R/C Maturity Date applicable to such Tranche, and the L/C Commitments and the Swingline Commitment shall be automatically and permanently reduced to zero on the last R/C Maturity Date.

 

(b)                                 Borrower shall have the right at any time or from time to time (without premium or penalty except breakage costs (if any) pursuant to Section 5.05) (i) so long as no Revolving Loans, Swingline Loans or L/C Liabilities will be outstanding as of the date specified for termination (after giving effect to all transactions occurring on such date), to terminate the Revolving Commitments in their entirety and (ii) so long as the remaining Total Revolving Commitments will equal or exceed the aggregate amount of outstanding Revolving Loans, Swingline Exposure and L/C Liabilities, to reduce the aggregate amount of the Revolving Commitments (which shall be pro rata among the Revolving Lenders); provided, however, that (x) Borrower shall give notice of each such termination or reduction as provided in Section 4.05, and (y) each partial reduction shall be in an aggregate amount at least equal to $5.0 million (or any whole multiple of $1.0 million in excess thereof) or, if less, the remaining Unutilized R/C Commitments.

 

(c)                                  Any Commitment once terminated or reduced may not be reinstated.

 

(d)                                 Each reduction or termination of any of the Commitments applicable to any Tranche pursuant to this Section 2.04 shall be applied ratably among the Lenders with such a Commitment, as the case may be, in accordance with their respective Commitment, as applicable.

 

SECTION 2.05.                      Fees.

 

(a)                                 Borrower shall pay to Administrative Agent for the account of each Revolving Lender (other than a Defaulting Lender), with respect to such Revolving Lender’s Revolving Commitments of each Tranche, a commitment fee for the period from and including the Closing Date (or, following the conversion of such Revolving Commitment into another Tranche, the applicable Extension Date) to but not including the earlier of (i) the date such

 

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Revolving Commitment is terminated or expires (or is modified to constitute another Tranche) and (ii) the R/C Maturity Date applicable to such Revolving Commitment, in each case, computed at a rate per annum equal to the Applicable Fee Percentage in respect of such Tranche in effect from time to time during such period on the actual daily amount of such Revolving Lender’s Unutilized R/C Commitment in respect of such Tranche.  Notwithstanding anything to the contrary in the definition of “Unutilized R/C Commitments,” for purposes of determining Unutilized R/C Commitments in connection with computing commitment fees with respect to Revolving Commitments, a Revolving Commitment of a Revolving Lender shall be deemed to be used to the extent of the outstanding Revolving Loans and L/C Liability of such Revolving Lender (and the Swingline Exposure of such Revolving Lender shall be disregarded for such purpose).  Any accrued commitment fee under this Section 2.05(a) in respect of any Revolving Commitment shall be payable in arrears on each Quarterly Date and on the earlier of (i) the date such Revolving Commitment is terminated or expires (or is modified to constitute another Tranche) and (ii) the R/C Maturity Date applicable to such Revolving Commitment.

 

(b)                                 Borrower shall pay to Administrative Agent for its own account the administrative fee separately agreed to.

 

(c)                                  At the time of the effectiveness of a Repricing Transaction prior to the date that is twelve (12) months after the Closing Date, Borrower agrees to pay to Administrative Agent, for the ratable account of each Lender with outstanding Term B Facility Loans (including each Lender that withholds its consent to such Repricing Transaction and is replaced or is removed as a Lender or is repaid under Section 2.11 or 13.04(b), as the case may be), a fee in an amount equal to 1.0% of the aggregate principal amount of Term B Facility Loans that are refinanced, converted, replaced, amended, modified or otherwise repriced in such Repricing Transaction.  Such fee shall be due and payable upon the date of the effectiveness of such Repricing Transaction.

 

(d)                                 Borrower shall pay to Auction Manager for its own account, in connection with any Borrower Loan Purchase, such fees as may be agreed between Borrower and Auction Manager.

 

(e)                                  Borrower shall pay to each Term B Facility Lender, on the Closing Date, upfront fees equal to 0.50% of such Term B Facility Lender’s Term B Facility Loan funded on the Closing Date.

 

SECTION 2.06.                      Lending Offices.  The Loans of each Type made by each Lender shall be made and maintained at such Lender’s Applicable Lending Office for Loans of such Type.

 

SECTION 2.07.                      Several Obligations of Lenders.  The failure of any Lender to make any Loan to be made by it on the date specified therefor shall not relieve any other Lender of its obligation to make its Loan on such date, but neither any Lender nor Administrative Agent shall be responsible for the failure of any other Lender to make a Loan to be made by such other Lender, and no Lender shall have any obligation to Administrative Agent or any other Lender for the failure by such Lender to make any Loan required to be made by such Lender.  No Revolving Lender will be responsible for failure of any other Lender to fund its participation in Letters of Credit.

 

SECTION 2.08.                      Notes; Register.

 

(a)                                 At the request of any Lender, its Loans of a particular Class shall be evidenced by a promissory note, payable to such Lender (or its nominee) and otherwise duly completed, substantially in the form of Exhibits A-1, A-2, A-3 and A-4 of such Lender’s Revolving Loans, Term A Facility Loans, Term B Facility Loans and Swingline Loans, respectively; and in the case of any New Term Loans, such form of promissory note provided pursuant to the applicable Incremental Joinder Agreement; provided that any promissory notes issued in respect of New Term Loans, Other Term Loans, Extended Term Loans or Extended Revolving Loans shall be in such form as mutually agreed by Borrower and Administrative Agent.

 

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(b)                                 The date, amount, Type, interest rate and duration of the Interest Period (if applicable) of each Loan of each Class made by each Lender to Borrower and each payment made on account of the principal thereof, shall be recorded by such Lender (or its nominee) on its books and, prior to any transfer of any Note evidencing the Loans of such Class held by it, endorsed by such Lender (or its nominee) on the schedule attached to such Note or any continuation thereof; provided, however, that the failure of such Lender (or its nominee) to make any such recordation or endorsement or any error in such recordation or endorsement shall not affect the obligations of Borrower to make a payment when due of any amount owing hereunder or under such Note.

 

(c)                                  Borrower hereby designates Administrative Agent to serve as its nonfiduciary agent, solely for purposes of this Section 2.08, to maintain a register (the “Register”) on which it will record the name and address of each Lender, the Commitment from time to time of each of the Lenders, the principal amount of the Loans made by each of the Lenders (and the stated interest thereon) and each repayment in respect of the principal amount of the Loans of each Lender.  Failure to make any such recordation or any error in such recordation shall not affect Borrower’s obligations in respect of such Loans.  The entries in the Register shall be prima facie evidence of the information noted therein (absent manifest error), and the parties hereto shall treat each Person whose name is recorded in the Register as the owner of a Loan or other obligation hereunder as the owner thereof for all purposes of the Credit Documents, notwithstanding any notice to the contrary.  The Register shall be available for inspection by Borrower or any Lender at any reasonable time and from time to time upon reasonable prior notice.  No assignment shall be effective unless recorded in the Register; provided, however, that Administrative Agent agrees to record in the Register any assignment entered into pursuant to the term hereof promptly after the effectiveness of such assignment.

 

SECTION 2.09.                      Optional Prepayments and Conversions or Continuations of Loans.

 

(a)                                 Subject to Section 4.04, Borrower shall have the right to prepay Loans (without premium or penalty, except as provided in Section 2.09(c)), or to convert Loans of one Type into Loans of another Type or to continue Loans of one Type as Loans of the same Type, at any time or from time to time.  Borrower shall give Administrative Agent notice of each such prepayment, conversion or continuation as provided in Section 4.05 (and, upon the date specified in any such notice of prepayment, the amount to be prepaid shall become due and payable hereunder; provided that Borrower may make any such notice conditional upon the occurrence of a Person’s acquisition or sale or any incurrence of indebtedness or issuance of Equity Interests).  Each Notice of Continuation/Conversion shall be substantially in the form of Exhibit C.  If LIBOR Loans are prepaid or converted other than on the last day of an Interest Period therefor, Borrower shall at such time pay all expenses and costs required by Section 5.05.  Notwithstanding the foregoing, and without limiting the rights and remedies of the Lenders under Article XI, in the event that any Event of Default shall have occurred and be continuing, Administrative Agent may (and, at the request of the Required Lenders, shall), upon written notice to Borrower, have the right to suspend the right of Borrower to convert any Loan into a LIBOR Loan, or to continue any Loan as a LIBOR Loan, in which event all Loans shall be converted (on the last day(s) of the respective Interest Periods therefor) or continued, as the case may be, as ABR Loans.  Swingline Loans may not be converted or continued.

 

(b)                                 Application.

 

(i)                                The amount of any optional prepayments described in Section 2.09(a) shall be applied to prepay Loans outstanding in order of amortization, in amounts and to Tranches, all as determined by Borrower.

 

(ii)                             In addition to the foregoing, and provided that the Consolidated Total Leverage Ratio is less than or equal to 3.75 to 1.00, Borrower shall have the right to elect to offer to prepay the Loans pro rata to the Term A Facility Loans, the Term B Facility Loans, the New Term Loans, the Extended Term Loans and the Other Term Loans then outstanding and apply any amounts rejected for such prepayment to repurchase, prepay, redeem, retire, acquire, defease or cancel Indebtedness or to make Restricted Payments

 

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notwithstanding any then applicable limitations set forth in Section 10.09 or 10.06, respectively.  If Borrower makes such an election, it shall provide notice thereof to Administrative Agent, who shall promptly, and in any event within one Business Day of receipt, provide such notice to the holders of the Term Loans.  Any such notice shall specify the aggregate amount offered to prepay the Term Loans.  Each holder of a Term A Facility Loan, a Term B Facility Loan, a New Term Loan, an Other Term Loan or an Extended Term Loan may elect, in its sole discretion, to reject such prepayment offer with respect to an amount equal to or less than (v) with respect to holders of Term A Facility Loans, an amount equal to the aggregate amount so offered to prepay Term A Facility Loans times a fraction, the numerator of which is the principal amount of Term A Facility Loans owed to such holder and the denominator of which is the principal amount of Term A Facility Loans outstanding, (w) with respect to holders of Term B Facility Loans, an amount equal to the aggregate amount so offered to prepay Term B Facility Loans times a fraction, the numerator of which is the principal amount of Term B Facility Loans owed to such holder and the denominator of which is the principal amount of Term B Facility Loans outstanding, (x) with respect to holders of New Term Loans, an amount equal to the aggregate amount so offered to prepay New Term Loans times a fraction, the numerator of which is the principal amount of New Term Loans owed to such holder and the denominator of which is the principal amount of New Term Loans outstanding, (y) with respect to holders of Other Term Loans, an amount equal to the aggregate amount so offered to prepay Other Term Loans times a fraction, the numerator of which is the principal amount of Other Term Loans owed to such holder and the denominator of which is the principal amount of Other Term Loans outstanding and (z) with respect to holders of Extended Term Loans, an amount equal to the aggregate amount so offered to prepay Extended Term Loans times a fraction, the numerator of which is the principal amount of Extended Term Loans owed to such holder and the denominator of which is the principal amount of Extended Term Loans outstanding.  Any rejection of such offer must be evidenced by written notice delivered to Administrative Agent within five Business Days of receipt of the offer for prepayment, specifying an amount of such prepayment offer rejected by such holder, if any.  Failure to give such notice will constitute an election to accept such offer.  Any portion of such prepayment offer so accepted will be used to prepay the Term Loans held by the applicable holders within ten Business Days of the date of receipt of the offer to prepay.  Any portion of such prepayment rejected may be used by Borrower and its Restricted Subsidiaries to repurchase, prepay, redeem, retire, acquire, defease or cancel Indebtedness or to make Restricted Payments notwithstanding any then applicable limitations set forth in Section 10.09 or 10.06, respectively.

 

(c)                                  Any prepayment of Term B Facility Loans pursuant to this Section 2.09 or Section 13.04(b) made prior to the date that is twelve (12) months after the Closing Date in connection with any Repricing Transaction shall be subject to the fee described in Section 2.05(c).

 

SECTION 2.10.                      Mandatory Prepayments.

 

(a)                                 Borrower shall prepay the Loans as follows (each such prepayment to be effected in each case in the manner, order and to the extent specified in Section 2.10(b) below):

 

(i)                                     Casualty Events.  Within five (5) Business Days after Borrower or any Restricted Subsidiary receives any Net Available Proceeds from any Casualty Event or any disposition pursuant to Section 10.05(l) (or notice of collection by Administrative Agent of the same), in an aggregate principal amount equal to 100% of such Net Available Proceeds (it being understood that applications pursuant to this Section 2.10(a)(i) shall not be duplicative of Section 2.10(a)(iii) below); provided, however, that:

 

(x)                                 if no Event of Default then exists or would arise therefrom, the Net Available Proceeds thereof shall not be required to be so applied on such date to the extent that Borrower delivers an Officer’s Certificate to Administrative Agent stating that an amount equal to such proceeds is intended to be used to fund the acquisition of Property used or usable in the business

 

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of any Credit Party or repair, replace or restore the Property or other Property used or usable in the business of any Credit Party (in accordance with the provisions of the applicable Security Document in respect of which such Casualty Event has occurred, to the extent applicable), in each case within (A) twelve (12) months following receipt of such Net Available Proceeds or (B) if Borrower or the relevant Restricted Subsidiary enters into a legally binding commitment to reinvest such Net Available Proceeds within twelve (12) months following receipt thereof, within the later of (1) one hundred and eighty (180) days following the date of such legally binding commitment and (2) twelve (12) months following receipt of such Net Available Proceeds, and

 

(y)                                 if all or any portion of such Net Available Proceeds not required to be applied to the prepayment of Loans pursuant to this Section 2.10(a)(i) is not so used within the period specified by clause (x) above, such remaining portion shall be applied on the last day of such period as specified in Section 2.10(b).

 

(ii)                                  Debt Issuance.  Within five (5) Business Days after any Debt Issuance on or after the Closing Date, in an aggregate principal amount equal to 100% of the Net Available Proceeds of such Debt Issuance.

 

(iii)                               Asset Sales.  Within five (5) Business Days after receipt by Borrower or any of its Restricted Subsidiaries of any Net Available Proceeds from any Asset Sale pursuant to Section 10.05(c), in an aggregate principal amount equal to 100% of the Net Available Proceeds from such Asset Sale or other disposition (it being understood that applications pursuant to this Section 2.10(a)(iii) shall not be duplicative of Section 2.10(a)(i) above); provided, however, that:

 

(x)                                 an amount equal to the Net Available Proceeds from any Asset Sale pursuant to Section 10.05(c) shall not be required to be applied as provided above on such date if (1) no Event of Default then exists or would arise therefrom and (2) Borrower delivers an Officer’s Certificate to Administrative Agent stating that an amount equal to such Net Available Proceeds is intended to be reinvested, directly or indirectly, in assets (which may be pursuant to an acquisition of Equity Interests of a Person that directly or indirectly owns such assets) otherwise permitted under this Agreement of (A) if such Asset Sale was effected by any Credit Party, any Credit Party, and (B) if such Asset Sale was effected by any other Company, any Company, in each case within (x) twelve (12) months following receipt of such Net Available Proceeds or (y) if Borrower or the relevant Restricted Subsidiary enters into a legally binding commitment to reinvest such Net Available Proceeds within twelve (12) months following receipt thereof, within the later of (A) one hundred and eighty (180) days following the date of such legally binding commitment and (B) twelve (12) months following receipt of such Net Available Proceeds (which certificate shall set forth the estimates of the proceeds to be so expended); and

 

(y)                                 if all or any portion of such Net Available Proceeds is not reinvested in assets in accordance with the Officer’s Certificate referred to in clause (x) above within the period specified by clause (x) above, such remaining portion shall be applied on the last day of such period as specified in Section 2.10(b).

 

(iv)                              Excess Cash Flow.  For each fiscal year (commencing with the fiscal year ending December 31, 2016), not later than five (5) Business Days after the date on which the financial statements of Borrower referred to in Section 9.04(b) for such fiscal year are required to be delivered to Administrative Agent, Borrower shall prepay, in accordance with subsection (b) below, the principal amount of the Loans in an amount equal to (x) the Applicable ECF Percentage of Excess Cash Flow for such fiscal year, minus (y) the principal amount of (i) Term Loans voluntarily prepaid pursuant to Section 2.09 during such fiscal year plus (ii) Revolving Loans voluntarily prepaid pursuant to Section 2.09 to the

 

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extent accompanied by an equivalent permanent reduction of the Total Revolving Commitments during such fiscal year, plus (iii) Other First Lien Indebtedness voluntarily prepaid (and, to the extent consisting of revolving loans, so long as accompanied by a permanent reduction of the underlying commitments) during such fiscal year to the extent the amount of such Other First Lien Indebtedness so prepaid is not proportionally larger than the amount of Term Loans so prepaid according to the respective principal amounts of Other First Lien Indebtedness and Term Loans as of the beginning of the applicable fiscal year plus the principal amount of any additional Other First Lien Indebtedness or Term Loans incurred during the applicable fiscal year or other applicable period, in each case, except to the extent financed with the proceeds of Indebtedness of Borrower or its Restricted Subsidiaries.

 

(v)                                 Equity Issuance Proceeds.  If Borrower receives any cash proceeds from any capital contribution or any sale or issuance of its Equity Interests that increases the Borrower’s Consolidated EBITDA as provided in Section 11.03, 100% of all Equity Issuance Proceeds received therefrom on or prior to the date which is five (5) Business Days after the receipt of such Net Available Proceeds.

 

(vi)                              Prepayments Not Required.   Notwithstanding any other provisions of this Section 2.10(a), to the extent that any of or all the Net Available Proceeds of any Asset Sale or Casualty Event with respect to any property or assets of Foreign Subsidiaries or any Excess Cash Flow attributable to Foreign Subsidiaries, are prohibited or delayed by applicable local law from being repatriated to the United States, the portion of such Net Available Proceeds or Excess Cash Flow so affected will not be required to be applied to repay Term Loans at the times provided in this Section 2.10(a) but may be retained by the applicable Foreign Subsidiary so long as applicable local law does not permit repatriation to the United States (Borrower hereby agreeing to cause the applicable Foreign Subsidiary to promptly take all commercially reasonable actions required by the applicable local law to permit such repatriation), and once such repatriation of any of such affected Net Available Proceeds or Excess Cash Flow is permitted under the applicable local law, (x) any such Net Available Proceeds shall be reinvested pursuant to Section 2.10(a)(i) or (iii), as applicable, or applied pursuant to Section 2.10(b) within five (5) Business Days of such repatriation, and (y) any such Excess Cash Flow shall be applied pursuant to Section 2.10(b) within five (5) Business Days of such repatriation.  To the extent Borrower determines in good faith that repatriation of any of or all the Net Available Proceeds of any Asset Sale or Casualty Event with respect to any property or assets of Foreign Subsidiaries or any Excess Cash Flow attributable to Foreign Subsidiaries would have a material adverse tax cost to Borrower or any of its Subsidiaries, such Net Available Proceeds or Excess Cash Flow so affected may be retained by the applicable Foreign Subsidiary; provided that, on or before the date on which the Net Available Proceeds so retained would otherwise have been required to be applied to reinvestments or prepayments pursuant to Section 2.10(a)(i) or (iii), as applicable (or, in the case of Excess Cash Flow, a date on or before the date that is twelve (12) months after the date such Excess Cash Flow would have been so required to be applied to prepayments pursuant to Section 2.10(a)(iv)), unless previously repatriated (in which case, (x) any such Net Available Proceeds shall be reinvested pursuant to Section 2.10(a)(i) or (iii), as applicable, or applied pursuant to Section 2.10(b) within five (5) Business Days of such repatriation, and (y) any such Excess Cash Flow shall be applied pursuant to Section 2.10(b) within five (5) Business Days of such repatriation), (A) Borrower shall apply an amount equal to such Net Available Proceeds or Excess Cash Flow to such reinvestments or prepayments as if such Net Available Proceeds or Excess Cash Flow had been received by Borrower rather than such Foreign Subsidiary, minus, the amount of additional taxes that would have been payable or reserved against if such Net Available Proceeds or Excess Cash Flow had been repatriated (or, if less, the Net Available Proceeds or Excess Cash Flow that would be calculated if received by such Foreign Subsidiary) pursuant to Section 2.10(b) or (B) such Net Available Proceeds or Excess Cash Flow shall be applied to the repayment of Indebtedness of any Foreign Subsidiary.

 

(vii)                           Prepayments of Other First Lien Indebtedness.  Notwithstanding the foregoing provisions of Section 2.10(a)(i), (ii), (iii), (iv), (v) or otherwise, any Net Available Proceeds from any such

 

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Casualty Event, Debt Issuance or Asset Sale, any Equity Issuance Proceeds from any such issuance or sale of Equity Interests or capital contribution and any such Excess Cash Flow otherwise required to be applied to prepay the Loans may, at Borrower’s option, be applied to prepay the principal amount of Other First Lien Indebtedness only to (and not in excess of) the extent to which a mandatory prepayment in respect of such Casualty Event, Debt Issuance, Asset Sale, issuance or sale of Equity Interests or capital contribution or Excess Cash Flow is required under the terms of such Other First Lien Indebtedness (with any remaining Net Available Proceeds, Equity Issuance Proceeds or Excess Cash Flow, as applicable, applied to prepay outstanding Loans in accordance with the terms hereof), unless such application would result in the holders of Other First Lien Indebtedness receiving in excess of their pro rata share (determined on the basis of the aggregate outstanding principal amount of Term Loans and Other First Lien Indebtedness at such time) of such Net Available Proceeds, Equity Issuance Proceeds or Excess Cash Flow, as applicable, relative to Lenders, in which case such Net Available Proceeds, Equity Issuance Proceeds or Excess Cash Flow, as applicable, may only be applied to prepay the principal amount of Other First Lien Indebtedness on a pro rata basis with outstanding Term Loans.  To the extent the holders of Other First Lien Indebtedness decline to have such indebtedness repurchased, repaid or prepaid with any such Net Available Proceeds, Equity Issuance Proceeds or Excess Cash Flow, as applicable, the declined amount of such Net Available Proceeds, Equity Issuance Proceeds or Excess Cash Flow, as applicable, shall promptly (and, in any event, within ten (10) Business Days after the date of such rejection) be applied to prepay Loans in accordance with the terms hereof (to the extent such Net Available Proceeds, Equity Issuance Proceeds or Excess Cash Flow, as applicable, would otherwise have been required to be applied if such Other First Lien Indebtedness was not then outstanding).  Any such application to Other First Lien Indebtedness shall reduce any prepayments otherwise required hereunder by an equivalent amount.

 

(b)                                 Application.  The amount of any required prepayments described in Section 2.10(a) shall be applied to prepay Loans as follows:

 

(i)                                     First, to the reduction of Amortization Payments on the Term Loans required by Sections 3.01(b), 3.01(c) and 3.01(d) (on a pro rata basis among each Tranche of Term Loans, subject to any Declined Amounts) and, in the case of the Term Facilities, to the remaining principal installments with respect thereto in direct order of maturity over the next succeeding four (4) quarterly installments and, thereafter, on a pro rata basis; provided that, each such prepayment shall, subject to the last paragraph of this Section 2.10(b), be applied to such Term Loans that are ABR Loans to the fullest extent thereof before application to Loans that are LIBOR Loans, and such prepayments of LIBOR Loans shall be applied in a manner that minimizes the amount of any payments required to be made by Borrower pursuant to Section 5.05;

 

(ii)                                  Second, after such time as no Term Loans or Permitted First Priority Refinancing Debt in respect of Term Loans remain outstanding, (x) to repay all outstanding Swingline Loans, (y) after such time as no Swingline Loans are outstanding, to prepay all outstanding Revolving Loans (in each case, with a corresponding permanent reduction in Revolving Commitments) and (z) after such time as no Revolving Loans are outstanding, to Cash Collateralize all outstanding Letters of Credit in an amount equal to the Minimum Collateral Amount; and

 

(iii)                               Third, after application of prepayments in accordance with clauses (i) and (ii) above, Borrower shall be permitted to retain any such remaining excess.

 

Notwithstanding the foregoing, any Lender holding Term Loans may elect, by written notice to Administrative Agent at least one (1) Business Day prior to the prepayment date, to decline all or any portion of any prepayment of its Term Loans, pursuant to this Section 2.10, in which case the aggregate amount of the prepayment that would have been applied to prepay such Term Loans, but was so declined shall be ratably offered to each

 

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Lender holding Term Loans that initially accepted such prepayment.  Any such re-offered amounts rejected by such Lenders shall be retained by Borrower (any such retained amounts, “Declined Amounts”).

 

Notwithstanding the foregoing, if the amount of any prepayment of Loans required under this Section 2.10 shall be in excess of the amount of the ABR Loans at the time outstanding, only the portion of the amount of such prepayment as is equal to the amount of such outstanding ABR Loans shall be immediately prepaid and, at the election of Borrower, the balance of such required prepayment shall be either (i) deposited in the Collateral Account and applied to the prepayment of LIBOR Loans on the last day of the then next-expiring Interest Period for LIBOR Loans (with all interest accruing thereon for the account of Borrower) or (ii) prepaid immediately, together with any amounts owing to the Lenders under Section 5.05.  Notwithstanding any such deposit in the Collateral Account, interest shall continue to accrue on such Loans until prepayment.

 

(c)                                  Revolving Credit Extension Reductions.  Until the final R/C Maturity Date, Borrower shall from time to time immediately prepay the Revolving Loans (and/or provide Cash Collateral in an amount equal to the Minimum Collateral Amount for, or otherwise backstop (with a letter of credit on customary terms reasonably acceptable to the applicable L/C Lender and the Administrative Agent), outstanding L/C Liabilities) in such amounts as shall be necessary so that at all times (a) the aggregate outstanding amount of the Revolving Loans and the Swingline Loans, plus, the aggregate outstanding L/C Liabilities shall not exceed the Total Revolving Commitments as in effect at such time and (b) the aggregate outstanding amount of the Revolving Loans of any Tranche and Swingline Loans allocable to such Tranche, plus the aggregate outstanding L/C Liabilities under such Tranche shall not exceed the aggregate Revolving Commitments of such Tranche as in effect at such time.

 

(d)                                 Prepayment of Term B Facility Loans.  Any prepayment of Term B Facility Loans pursuant to Section 2.10(a)(ii) made prior to the date that is twelve (12) months after the Closing Date in connection with any Repricing Transaction shall be subject to the fee described in Section 2.05(c).

 

(e)                                  Outstanding Letters of Credit.  If any Letter of Credit is outstanding on the 30th day prior to the next succeeding R/C Maturity Date which has an expiry date later than the third Business Day preceding such R/C Maturity Date (or which, pursuant to its terms, may be extended to a date later than the third Business Day preceding such R/C Maturity Date), then (i) if one or more Tranches of Revolving Commitments with a R/C Maturity Date after such R/C Maturity Date are then in effect, such Letters of Credit shall automatically be deemed to have been issued (including for purposes of the obligations of the Lenders with Revolving Commitments to purchase participations therein and to make Revolving Loans and payments in respect thereof and the commissions applicable thereto), effective as of such R/C Maturity Date, solely under (and ratably participated by Revolving Lenders pursuant to) the Revolving Commitments in respect of such non-terminating Tranches of Revolving Commitments, if any, up to an aggregate amount not to exceed the aggregate principal amount of the unutilized Revolving Commitments thereunder at such time, and (ii) to the extent not capable of being reallocated pursuant to clause (i) above, Borrower shall, on such 30th day (or on such later day as such Letters of Credit become incapable of being reallocated pursuant to clause (i) above due to the termination, reduction or utilization of any relevant Revolving Commitments), either (x) Cash Collateralize all such Letters of Credit in an amount not less than the Minimum Collateral Amount with respect to such Letters of Credit (it being understood that such Cash Collateral shall be released to the extent that the aggregate Stated Amount of such Letters of Credit is reduced upon the expiration or termination of such Letters of Credit, so that the Cash Collateral shall not exceed the Minimum Collateral Amount with respect to such Letters of Credit outstanding at any particular time) or (y) deliver to the applicable L/C Lender a standby letter of credit (other than a Letter of Credit) in favor of such L/C Lender in a stated amount not less than the Minimum Collateral Amount with respect to such Letters of Credit, which standby letter of credit shall be in form and substance, and issued by a financially sound financial institution, reasonably acceptable to such L/C Lender and the Administrative Agent.  Except to the extent of reallocations of participations pursuant to clause (i) above, the occurrence of a R/C Maturity Date shall have no effect upon (and shall not diminish) the percentage participations of the Revolving Lenders of the relevant Tranche in any Letter of Credit issued before such R/C Maturity Date.  For the avoidance of doubt, the parties hereto agree that upon the occurrence

 

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of any reallocations of participations pursuant to clause (i) above and, if necessary, the taking of the actions in described clause (ii) above, all participations in Letters of Credit under the terminated Revolving Commitments shall terminate.

 

SECTION 2.11.                      Replacement of Lenders.

 

(a)                                 Borrower shall have the right to replace any Lender (the “Replaced Lender”) with one or more other Eligible Assignees (collectively, the “Replacement Lender”), if (x) such Lender is charging Borrower increased costs pursuant to Section 5.01 or 5.06 or such Lender becomes incapable of making LIBOR Loans as provided in Section 5.03 when other Lenders are generally able to do so, (y) such Lender is a Defaulting Lender or (z) Borrower receives a notice from any applicable Gaming Authority that any lender is not qualified to make or hold Loans to, or owed by, Borrower under applicable Gaming Laws (and such Lender is notified by Borrower and Administrative Agent in writing of such disqualification); provided, however, that (i) at the time of any such replacement, the Replacement Lender shall enter into one or more Assignment Agreements (and with all fees payable pursuant to Section 13.05(b) to be paid by the Replacement Lender or Borrower) pursuant to which the Replacement Lender shall acquire all of the Commitments and outstanding Loans of, and in each case L/C Interests of, the Replaced Lender (or if the Replaced Lender is being replaced as a result of being a Defaulting Lender, then the Replacement Lender shall acquire all Revolving Commitments, Revolving Loans and L/C Interests of such Replaced Lender under one or more Tranches of Revolving Commitments or, at the option of Borrower and such Replacement Lender, all other Loans and Commitments held by such Defaulting Lender), (ii) at the time of any such replacement, the Replaced Lender shall receive an amount equal to the sum of (A) the principal of, and all accrued interest on, all outstanding Loans of such Lender (other than any Loans not being acquired by a Replacement Lender), (B) all Reimbursement Obligations owing to such Lender, together with all then unpaid interest with respect thereto at such time, in the event Revolving Loans or Revolving Commitments owing to such Lender are being repaid and terminated or acquired, as the case may be, and (C) all accrued, but theretofore unpaid, fees owing to the Lender pursuant to Section 2.05 with respect to the Loans being assigned, as the case may be and (iii) all obligations of Borrower owing to such Replaced Lender (other than those specifically described in clause (i) above in respect of Replaced Lenders for which the assignment purchase price has been, or is concurrently being, paid, and other than those relating to Loans or Commitments not being acquired by a Replacement Lender, but including any amounts which would be paid to a Lender pursuant to Section 5.05 if Borrower were prepaying a LIBOR Loan), as applicable, shall be paid in full to such Replaced Lender, as applicable, concurrently with such replacement, as the case may be.  Upon the execution of the respective Assignment Agreement, the payment of amounts referred to in clauses (i), (ii) and (iii) above, as applicable, the receipt of any consents that would be required for an assignment of the subject Loans and Commitments to such Replacement Lender in accordance with Section 13.05, the Replacement Lender, if any, shall become a Lender hereunder and the Replaced Lender, as applicable, shall cease to constitute a Lender hereunder and be released of all its obligations as a Lender, except with respect to indemnification provisions applicable to such Lender under this Agreement, which shall survive as to such Lender and, in the case of any Replaced Lender, except with respect to Loans, Commitments and L/C Interests of such Replaced Lender not being acquired by the Replacement Lender; provided, that if the applicable Replaced Lender does not execute the Assignment Agreement within three (3) Business Days after Borrower’s request, execution of such Assignment Agreement by the Replaced Lender shall not be required to effect such assignment.

 

(b)                                 If Borrower receives a notice from any applicable Gaming Authority that any Lender is not qualified to make or hold Loans to, or owed by, Borrower under applicable Gaming Laws (and such Lender is notified by Borrower and Administrative Agent in writing of such disqualification), Borrower shall have the right to replace such Lender with a Replacement Lender in accordance with Section 2.11(a) or prepay the Loans held by such Lender, in each case, in accordance with any applicable provisions of Section 2.11(a), even if a Default or an Event of Default exists (notwithstanding anything contained in such Section 2.11(a) to the contrary).  Any such prepayment shall be deemed an optional prepayment, as set forth in Section 2.09 and shall not be required to be made on a pro rata basis with respect to Loans of the same Tranche as the Loans held by such Lender (and in any event shall not be deemed to be a Repricing Transaction).  Notice to such Lender shall be given at least ten (10) days

 

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before the required date of transfer or prepayment (unless a shorter period is required by any Requirement of Law), as the case may be, and shall be accompanied by evidence demonstrating that such transfer or redemption is required pursuant to Gaming Laws.  Upon receipt of a notice in accordance with the foregoing, the Replaced Lender shall cooperate with Borrower in effectuating the required transfer or prepayment within the time period set forth in such notice, not to be less than the minimum notice period set forth in the foregoing sentence (unless a shorter period is required under any Requirement of Law).  Further, if the transfer or prepayment is triggered by notice from the Gaming Authority that the Lender is disqualified, commencing on the date the Gaming Authority serves the disqualification notice upon Borrower, to the extent prohibited by law:  (i) such Lender shall no longer receive any interest on the Loans; (ii) such Lender shall no longer exercise, directly or through any trustee or nominee, any right conferred by the Loans; and (iii) such Lender shall not receive any remuneration in any form from Borrower for services or otherwise in respect of the Loans.

 

SECTION 2.12.                      Incremental Loan Commitments.

 

(a)                                 Borrower Request.  Borrower may, at any time, by written notice to Administrative Agent, request (i) an increase to the Closing Date Revolving Commitments (“Incremental Revolving Commitments”), (ii) the establishment of additional Term A Facility Loans with terms and conditions identical to the terms and conditions of existing Term A Facility Loans hereunder (“Incremental Term A Loans” and the related commitments, “Incremental Term A Loan Commitments”), (iii) the establishment of additional Term B Facility Loans with terms and conditions identical to the terms and conditions of existing Term B Facility Loans hereunder (“Incremental Term B Loans” and the related commitments, “Incremental Term B Loan Commitments”), and/or (iv) the establishment of one or more new Tranches of term loans (“New Term Loans” and the related commitments, “New Term Loan Commitments”); provided, however, that (x) the aggregate amount of all Incremental Revolving Commitments, New Term Loans, Incremental Term A Loans, Incremental Term B Loans and Incremental Equivalent Debt issued or incurred (but excluding any such Incremental Term Loan Commitments that have been terminated prior to such date of determination without being funded) on or prior to such date shall not exceed the Incremental Loan Amount and (y) any such request for Incremental Commitments shall be in a minimum amount of $25.0 million and integral multiples of $1.0 million above such amount.  Borrower may request Incremental Commitments from existing Lenders and from Eligible Assignees; provided, however, that (A) any existing Lender approached to provide all or a portion of the Incremental Commitments may elect or decline, in its sole discretion, to provide all or any portion of such Incremental Commitments offered to it and (B) any potential Lender that is not an existing Lender and agrees to make available an Incremental Commitment shall be required to be an Eligible Assignee and shall require approval by Administrative Agent (such approval not to be unreasonably withheld or delayed).

 

(b)                                 Incremental Effective Date.  The Incremental Commitments shall be effected by a joinder agreement to this Agreement (the “Incremental Joinder Agreement”) executed by Borrower, Administrative Agent and each Lender making or providing such Incremental Commitment, in form and substance reasonably satisfactory to each of them, subject, however, to the satisfaction of the conditions precedent set forth in this Section 2.12.  The Incremental Joinder Agreement may, without the consent of any other Lenders, effect such amendments to this Agreement and the other Credit Documents as may be necessary or appropriate, in the opinion of Administrative Agent, to effect the provisions of this Section 2.12.  Administrative Agent and Borrower shall determine the effective date (each, an “Incremental Effective Date”) of any Incremental Commitments and the final allocation of such Incremental Commitments.  The effectiveness of any such Incremental Commitments shall be subject solely to the satisfaction of the following conditions to the reasonable satisfaction of Administrative Agent:

 

(i)                                     Borrower shall deliver or cause to be delivered any legal opinions or other documents reasonably requested by Administrative Agent in connection with any such Incremental Commitments;

 

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(ii)                                  an Incremental Joinder Agreement shall have been duly executed and delivered by Borrower, Administrative Agent and each Lender making or providing such Incremental Commitment;

 

(iii)                               no Event of Default shall have occurred and be continuing or would exist immediately after giving effect to such Incremental Commitments; provided that, with respect to any Incremental Term Loans (and any related Incremental Term Loan Commitments) the proceeds of which are used primarily to fund a Permitted Acquisition or other Acquisition not prohibited hereunder (including repayment of Indebtedness of the Person acquired, or that is secured by the assets acquired, in such Permitted Acquisition or other Acquisition) substantially concurrently upon the receipt thereof, the absence of an Event of Default (other than an Event of Default specified in Section 11.01(b) or 11.01(c) or an Event of Default specified in Section 11.01(g) or 11.01(h) with respect to Borrower) shall not constitute a condition to the effectiveness of such Incremental Term Loans (and any related Incremental Term Loan Commitments), or the funding of such Incremental Term Loans, unless otherwise agreed by Borrower and the Lenders providing such Incremental Term Loans or Incremental Term Loan Commitments;

 

(iv)                              the representations and warranties set forth herein and in the other Credit Documents shall be true and correct in all material respects on and as of such Incremental Effective Date as if made on and as of such date (except where such representations and warranties expressly relate to an earlier date, in which case such representations and warranties shall have been 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 dates; and provided, further, that, with respect to any Incremental Term Loans and related Incremental Term Loan Commitments the proceeds of which are used primarily to fund a Permitted Acquisition or other Acquisition not prohibited hereunder (including repayment of Indebtedness of the Person acquired, or that is secured by the assets acquired, in such Permitted Acquisition or other Acquisition) substantially concurrently upon the receipt thereof, the only representations and warranties the making of which shall be a condition to the effectiveness of such Incremental Term Loans and related Incremental Term Loan Commitments and the funding of such Incremental Term Loans shall be (except as otherwise agreed by Borrower and the Lenders providing such Incremental Term Loans or Incremental Commitments) (x) the representations and warranties set forth in Sections 8.01(a) (but only with respect to Credit Parties, Holding Companies and RRR), 8.04(a)(i), 8.05 (but only as it relates to the Credit Documents), 8.09, 8.11(b), 8.14 (but only as it relates to security interests that may be perfected solely through the filing of UCC financing statements, filing of intellectual property security agreements with the United States Patent and Trademark Office and United States Copyright Office and delivery of certificated securities collateral representing Equity Interests in United States Persons), 8.17, 8.21 and 8.27 and (y) the representations and warranties contained in the acquisition agreement relating to such Permitted Acquisition or other Acquisition as are material to the interests of the Lenders, but only to the extent that Borrower or any of its Affiliates have the right to terminate its or their obligations under such acquisition agreement as a result of a breach of such representations and warranties in such acquisition agreement;

 

(v)                                 in the case of any Incremental Revolving Commitments, New Term Loans, Incremental Term A Loans and Incremental Term B Loans, unless otherwise agreed in writing by the Required Pro Rata Lenders, Borrower shall be in compliance with the Financial Maintenance Covenants on a Pro Forma Basis as of the most recent Calculation Date  (provided that, for such purpose, (w) at the option of Borrower, to the extent that the proceeds of any such Incremental Term Loans (and related Incremental Term Loan Commitments) are or are to be used primarily to fund a Permitted Acquisition or other Acquisition not prohibited hereunder (including repayment of Indebtedness of the Person acquired, or that is secured by the assets acquired, in such Permitted Acquisition or other Acquisition), such compliance shall be determined on a Pro Forma Basis as of the Calculation Date immediately preceding the date on which a binding contract with respect to such Permitted Acquisition or other Acquisition is entered into between Borrower or a Restricted Subsidiary and the seller with respect thereto, giving effect to such Incremental Term Loans

 

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(and related Incremental Term Loan Commitments) and such Permitted Acquisition or other Acquisition as if incurred and consummated on the first day of the applicable period, (x) Consolidated Indebtedness shall treat any Incremental Equivalent Debt as first lien indebtedness, even if such Incremental Equivalent Debt was issued or incurred on an unsecured basis or on a junior basis to the Obligations, and (y) in the case of any Incremental Revolving Commitments and Incremental Equivalent Debt consisting of revolving credit facilities, pro forma effect shall be given to any Incremental Revolving Loans and any loans under any Incremental Equivalent Debt consisting of a revolving credit facility, in each case, to the extent actually made on such date (or in the case of Incremental Equivalent Debt consisting of a revolving credit facility, the proceeds of which are or are to be used primarily to fund a Permitted Acquisition or other Acquisition not prohibited hereunder, to the extent reasonably expected to be drawn on the closing date of such Permitted Acquisition or other Acquisition), but any proposed Incremental Revolving Commitments or Incremental Equivalent Debt consisting of a revolving credit facility shall not otherwise be treated as drawn);

 

(vi)                              in order to receive an initial extension of credit under any Incremental Revolving Commitment, Borrower shall, unless otherwise agreed by the Required Revolving Lenders, be in compliance with the Financial Maintenance Covenants on a Pro Forma Basis as of the most recent Calculation Date prior to such initial extension;

 

(vii)                           [Reserved];

 

(viii)                        without the written consent of (x) the Required Tranche Lenders with respect to any Tranches of then-existing Term Loans that have a maturity date after the proposed maturity date of any New Term Loans, the final stated maturity of any New Term Loans shall not be earlier than the then-existing Final Maturity Date with respect to any then-exiting Tranche of Term Loans, and (y) the Required Tranche Lenders with respect to any Tranches of then-existing Term Loans that have a Weighted Average Life to Maturity that is longer than the proposed Weighted Average Life to Maturity of any New Term Loans, the Weighted Average Life to Maturity of any New Term Loans shall be no shorter than the Weighted Average Life to Maturity of any then-existing Tranche of Term Loans (without giving effect to the effect of prepayments made under any existing Tranche of Term Loans on amortization); provided  that (A) Borrower may establish one or more Tranches of New Term Loans that are “term A loans” such that the Weighted Average Life to Maturity of such Tranche of New Term Loans may be shorter than the Weighted Average Life to Maturity of the then-existing Term B Facility Loans (but, for the avoidance of doubt, not any Term A Facility Loans) (without giving effect to the effect of prepayments made under any existing Tranche of Term Loans on amortization) and (B) the maturity date of such Tranche of New Term Loans that are “term A loans” may be earlier than the maturity date of the then-existing Term B Facility Loans (but, for the avoidance of doubt, not any Term A Facility Loans); it being understood that, subject to the foregoing, the amortization schedule applicable to such New Term Loans shall be determined by Borrower and the lenders of such New Term Loans and set forth in applicable Incremental Joinder Agreement;

 

(ix)                              the yields and interest rate margins and, except as set forth in clause (viii) of this Section 2.12(b), amortization schedule, applicable to any New Term Loans shall be as determined by Borrower and the holders of such Indebtedness;

 

(x)                                 except as set forth in Section 2.12(a) and in clauses (i) — (ix) of this Section 2.12(b), the terms applicable to any New Term Loans shall be consistent with those applicable to any then-existing Term Loans; provided that, any applicable Incremental Joinder Agreement may provide for (x) any additional or more or less restrictive covenants that are applicable only after the then-existing Final Maturity Date with respect to any then-existing Term Loans or (y) any other terms that are reasonably satisfactory to Administrative Agent;

 

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(xi)                              any Incremental Term A Loans and Incremental Term B Loans (and the corresponding Incremental Term Loan Commitments) shall have terms identical to the terms of the existing Term Loans (and the existing Term Loan Commitments) of the relevant Tranche hereunder; provided, however, that upfront fees or original issue discount may be paid to Lenders providing such Incremental Term A Loans or Incremental Term B Loans as agreed by such Lenders and Borrower, and the conditions applicable to the incurrence of such Incremental Term A Loans and Incremental Term B Loans (and the corresponding Incremental Term Loan Commitments) shall be as provided in this Section 2.12; provided, further, that the applicable Incremental Joinder Agreement shall make appropriate adjustments to Annex C to address such Incremental Term A Loans or Section 3.01(c) to address such Incremental Term B Loans, as applicable, including such adjustments as are necessary to provide for the “fungibility” of such Incremental Term A Loans with the existing Term A Loans or such Incremental Term B Loans with the existing Term B Facility Loans, as the case may be; and

 

(xii)                           any Incremental Revolving Commitments shall have terms identical to the terms of the Closing Date Revolving Commitments; provided, however, that upfront fees may be paid to Lenders providing such Incremental Revolving Commitments as agreed by such Lenders and Borrower, and the conditions applicable to the incurrence of such Incremental Revolving Commitments shall be as provided in this Section 2.12.

 

Upon the effectiveness of any Incremental Commitment pursuant to this Section 2.12, any Person providing an Incremental Commitment that was not a Lender hereunder immediately prior to such time shall become a Lender hereunder.  Administrative Agent shall promptly notify each Lender as to the effectiveness of any Incremental Commitments, and (i) in the case of Incremental Revolving Commitments, the Total Revolving Commitments under, and for all purpose of this Agreement, shall be increased by the aggregate amount of such Incremental Revolving Commitments, (ii) any Revolving Loans made under Incremental Revolving Commitments shall be deemed to be Revolving Loans of the relevant Tranche hereunder, (iii) any Incremental Term A Loans (to the extent funded) shall be deemed to be Term A Facility Loans hereunder, (iv) any Incremental Term B Loans (to the extent funded) shall be deemed to be Term B Facility Loans hereunder and (v) any New Term Loans shall be deemed to be additional Term Loans hereunder.  Notwithstanding anything to the contrary contained herein, Borrower, Collateral Agent and Administrative Agent may (and each of Collateral Agent and Administrative Agent are authorized by each other Secured Party to) execute such amendments and/or amendments and restatements of any Credit Documents as may be necessary or advisable to effectuate the provisions of this Section 2.12.  Such amendments may include provisions allowing any Incremental Term B Loans or New Term Loans to be treated on the same basis as Term B Facility Loans in connection with declining prepayments or allowing any Incremental Term A Loans or New Term Loans that are “term A loans” to be treated on the same basis as Term A Facility Loans in connection with declining prepayments, as applicable.  In connection with the incurrence of any Incremental Term A Loans, Borrower shall be permitted to terminate any Interest Period applicable to Term A Loans on the date such Incremental Term A Loans are incurred.  In connection with the incurrence of any Incremental Term B Loans, Borrower shall be permitted to terminate any Interest Period applicable to Term B Facility Loans on the date such Incremental Term B Loans are incurred.  In connection with the incurrence of any Incremental Revolving Commitments and related Revolving Loans, Borrower shall be permitted to terminate any Interest Period applicable to Revolving Loans under the Closing Date Revolving Commitments on the date such Revolving Loans are first incurred under such Incremental Revolving Commitments.

 

(c)                                  Terms of Incremental Commitments and Loans.

 

(i)                                     Except as set forth herein, the yield applicable to the Incremental Term Loans shall be determined by Borrower and the applicable new Lenders and shall be set forth in each applicable Incremental Joinder Agreement; provided, however, that in the case of any Incremental Term A Loans, Incremental Term B Loans or New Term Loans, if the All-In Yield applicable to such Incremental Term A Loans, Incremental Term B Loans or New Term Loans is greater than the All-In Yield payable pursuant to

 

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the terms of this Agreement as amended through the date of such calculation with respect to Term B Facility Loans, plus 50 basis points per annum, then the interest rate with respect to the Term B Facility Loans shall be increased (pursuant to the applicable Incremental Joinder Agreement) so as to cause the then applicable All-In Yield under this Agreement on the Term B Facility Loans to equal the All-In Yield then applicable to the Incremental Term A Loans, Incremental Term B Loans or New Term Loans, minus 50 basis points.

 

(ii)                                  Except as set forth herein, the yield applicable to the Incremental Revolving Commitments shall be determined by Borrower and the applicable new Lenders and shall be set forth in each applicable Incremental Joinder Agreement; provided, however, that if the All-In Yield or commitment fees applicable to such Incremental Revolving Commitments (and the Revolving Loans thereunder) is greater than the All-In Yield or commitment fees, respectively, payable pursuant to the terms of this Agreement as amended through the date of such calculation with respect to Closing Date Revolving Commitments (and the Revolving Loans thereunder), then the interest rate or commitment fees, as applicable, with respect to the Closing Date Revolving Commitments (and the Revolving Loans thereunder) shall be increased (pursuant to the applicable Incremental Joinder Agreement) so as to cause the then applicable All-In Yield and commitment fees under this Agreement on the Closing Date Revolving Commitments (and the Revolving Loans thereunder) to equal the All-In Yield and commitment fees, respectively, then applicable to the Incremental Revolving Commitments (and the Revolving Loans thereunder).

 

(d)                                 Adjustment of Revolving Loans.  To the extent the Revolving Commitments are being increased on the relevant Incremental Effective Date, then each of the Revolving Lenders having a Revolving Commitment prior to such Incremental Effective Date (such Revolving Lenders the “Pre-Increase Revolving Lenders”) shall assign or transfer to any Revolving Lender which is acquiring a new or additional Revolving Commitment on the Incremental Effective Date (the “Post-Increase Revolving Lenders”), and such Post-Increase Revolving Lenders shall purchase from each such Pre-Increase Revolving Lender, at the principal amount thereof, such interests in the Revolving Loans and participation interests in L/C Liabilities and Swingline Loans (but not, for the avoidance of doubt, the related Revolving Commitments) outstanding on such Incremental Effective Date as shall be necessary in order that, after giving effect to all such assignments or transfers and purchases, such Revolving Loans and participation interests in L/C Liabilities and Swingline Loans will be held by Pre-Increase Revolving Lenders and Post-Increase Revolving Lenders ratably in accordance with their Revolving Commitments after giving effect to such Incremental Revolving Commitments (and after giving effect to any Revolving Loans made on the relevant Incremental Effective Date).  Such assignments or transfers and purchases shall be made pursuant to such procedures as may be designated by Administrative Agent and shall not be required to be effectuated in accordance with Section 13.05.  For the avoidance of doubt, Revolving Loans and participation interests in L/C Liabilities and Swingline Loans assigned or transferred and purchased (or re-allocated) pursuant to this Section 2.12(d) shall, upon receipt thereof by the relevant Post-Increase Revolving Lenders, be deemed to be Revolving Loans and participation interests in L/C Liabilities and Swingline Loans in respect of the relevant new or additional Revolving Commitments acquired by such Post-Increase Revolving Lenders on the relevant Incremental Effective Date and the terms of such Revolving Loans and participation interests (including, without limitation, the interest rate and maturity applicable thereto) shall be adjusted accordingly.  In addition, the L/C Sublimit may be increased by an amount not to exceed the amount of any increase in Revolving Commitments with the consent of the applicable L/C Lenders that agreed to provide Letters of Credit under such increase in the L/C Sublimit and the holders of Incremental Revolving Commitments providing such increase in Revolving Commitments.

 

(e)                                  Equal and Ratable Benefit.  The Loans and Commitments established pursuant to this Section 2.12 shall constitute Loans and Commitments under, and shall be entitled to all the benefits afforded by, this Agreement and the other Credit Documents, and shall, without limiting the foregoing, benefit equally and ratably from the Guarantees and security interests created by the Security Documents.  The Credit Parties, Holding Companies and RRR shall take any actions reasonably required by Administrative Agent to ensure and/or

 

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demonstrate that the Lien and security interests granted by the Security Documents continue to secure all the Obligations and continue to be perfected under the UCC or otherwise after giving effect to the establishment of any Incremental Commitments or the funding of Loans thereunder, including, without limitation, the procurement of title insurance endorsements reasonably requested by and satisfactory to the Administrative Agent.

 

(f)                                   Incremental Joinder Agreements.  An Incremental Joinder Agreement may, subject to Section 2.12(b), without the consent of any other Lenders, effect such amendments to this Agreement and the other Credit Documents as may be necessary or advisable, in the reasonable opinion of Administrative Agent and Borrower, to effect the provisions of this Section 2.12 (including, without limitation, such other technical amendments as may be necessary or advisable, in the reasonable opinion of Administrative Agent and Borrower, to give effect to the terms and provisions of any Incremental Commitments (and any Loans made in respect thereof)).

 

(g)                                  Supersede.  This Section 2.12 shall supersede any provisions in Section 13.04 to the contrary.

 

SECTION 2.13.                      Extensions of Loans and Commitments.

 

(a)                                 Borrower may, at any time request that all or a portion of the Term Loans of any Tranche (an “Existing Term Loan Tranche”) be modified to constitute another Tranche of Term Loans in order to extend the scheduled final maturity date thereof (any such Term Loans which have been so modified, “Extended Term Loans”) and to provide for other terms consistent with this Section 2.13.  In order to establish any Extended Term Loans, Borrower shall provide a notice to Administrative Agent (who shall provide a copy of such notice to each of the Lenders of the applicable Existing Term Loan Tranche) (a “Term Loan Extension Request”) setting forth the proposed terms of the Extended Term Loans to be established, which terms shall be identical to those applicable to the Term Loans of the Existing Term Loan Tranche from which they are to be modified except (i) the scheduled final maturity date shall be extended to the date set forth in the applicable Extension Amendment and the amortization shall be as set forth in the Extension Amendment, (ii) (A) the Applicable Margins with respect to the Extended Term Loans may be higher or lower than the Applicable Margins for the Term Loans of such Existing Term Loan Tranche and/or (B) additional fees (including prepayment or termination premiums) may be payable to the Lenders providing such Extended Term Loans in addition to or in lieu of any increased Applicable Margins contemplated by the preceding clause (A), in each case, to the extent provided in the applicable Extension Amendment, (iii) any Extended Term Loans may participate on a pro rata basis or a less than pro rata basis (but not greater than a pro rata basis) in any optional or mandatory prepayments or prepayment of Term Loans hereunder in each case as specified in the respective Term Loan Extension Request, (iv) the final maturity date and the scheduled amortization applicable to the Extended Term Loans shall be set forth in the applicable Extension Amendment and the scheduled amortization of such Existing Term Loan Tranche shall be adjusted to reflect the amortization schedule (including the principal amounts payable pursuant thereto) in respect of the Term Loans under such Existing Term Loan Tranche that have been extended as Extended Term Loans as set forth in the applicable Extension Amendment; provided, however, that the Weighted Average Life to Maturity of such Extended Term Loans shall be no shorter than the Weighted Average Life to Maturity of the Term Loans of such Existing Term Loan Tranche and (v) the covenants set forth in Section 10.08 may be modified in a manner acceptable to Borrower, Administrative Agent and the Lenders party to the applicable Extension Amendment, such modifications to become effective only after the Final Maturity Date in effect immediately prior to giving effect to such Extension Amendment (it being understood that each Lender providing Extended Term Loans, by executing an Extension Amendment, agrees to be bound by such provisions and waives any inconsistent provisions set forth in Section 4.02, 4.07(b) or 13.04).  Except as provided above, each Lender holding Extended Term Loans shall be entitled to all the benefits afforded by this Agreement (including, without limitation, the provisions set forth in Section 2.09(b) and 2.10(b) applicable to Term Loans) and the other Credit Documents, and shall, without limiting the foregoing, benefit equally and ratably from the Guarantees and security interests created by the Security Documents.  The Credit Parties, Holding Companies and RRR shall take any actions reasonably required by Administrative Agent to ensure and/or demonstrate that the Lien and security interests granted by the Security Documents continue to secure all the Obligations and continue to be perfected under the UCC or otherwise after giving effect to the extension of any

 

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Term Loans, including, without limitation, the procurement of title insurance endorsements reasonably requested by and satisfactory to the Administrative Agent. No Lender shall have any obligation to agree to have any of its Term Loans of any Existing Term Loan Tranche modified to constitute Extended Term Loans pursuant to any Term Loan Extension Request.  Any Extended Term Loans of any Extension Tranche shall constitute a separate Tranche and Class of Term Loans from the Existing Term Loan Tranche from which they were modified.

 

(b)                                 Borrower may, at any time request that all or a portion of the Revolving Commitments of any Tranche (an “Existing Revolving Tranche” and any related Revolving Loans thereunder, “Existing Revolving Loans”) be modified to constitute another Tranche of Revolving Commitments in order to extend the termination date thereof (any such Revolving Commitments which have been so modified, “Extended Revolving Commitments” and any related Revolving Loans, “Extended Revolving Loans”) and to provide for other terms consistent with this Section 2.13.  In order to establish any Extended Revolving Commitments, Borrower shall provide a notice to Administrative Agent (who shall provide a copy of such notice to each of the Lenders of the applicable Existing Revolving Tranche) (a “Revolving Extension Request”) setting forth the proposed terms of the Extended Revolving Commitments to be established, which terms shall be identical to those applicable to the Revolving Commitments of the Existing Revolving Tranche from which they are to be modified except (i) the scheduled termination date of the Extended Revolving Commitments and the related scheduled maturity date of the related Extended Revolving Loans shall be extended to the date set forth in the applicable Extension Amendment, (ii) (A) the Applicable Margins with respect to the Extended Revolving Loans may be higher or lower than the Applicable Margins for the Revolving Loans of such Existing Revolving Tranche and/or (B) additional fees may be payable to the Lenders providing such Extended Revolving Commitments in addition to or in lieu of any increased Applicable Margins contemplated by the preceding clause (A), in each case, to the extent provided in the applicable Extension Amendment, (iii) the Applicable Fee Percentage with respect to the Extended Revolving Commitments may be higher or lower than the Applicable Fee Percentage for the Revolving Commitments of such Existing Revolving Tranche, (iv) the covenants set forth in Section 10.08 may be modified in a manner acceptable to Borrower, Administrative Agent and the Lenders party to the applicable Extension Amendment, such modifications to become effective only after the Final Maturity Date in effect immediately prior to giving effect to such Extension Amendment and (v) the L/C Commitments of any L/C Lender that is providing such Extended Revolving Commitments may be extended and the L/C Sublimit may be increased, subject to clause (d) below (it being understood that each Lender providing Extended Revolving Commitments, by executing an Extension Amendment, agrees to be bound by such provisions and waives any inconsistent provisions set forth in Section 4.02, 4.07(b) or 13.04).  Except as provided above, each Lender holding Extended Revolving Commitments shall be entitled to all the benefits afforded by this Agreement (including, without limitation, the provisions set forth in Sections 2.09(b) and 2.10(b) applicable to existing Revolving Loans) and the other Credit Documents, and shall, without limiting the foregoing, benefit equally and ratably from the Guarantees and security interests created by the Security Documents.  The Credit Parties, Holding Companies and RRR shall take any actions reasonably required by Administrative Agent to ensure and/or demonstrate that the Lien and security interests granted by the Security Documents continue to secure all the Obligations and continue to be perfected under the UCC or otherwise after giving effect to the extension of any Revolving Commitments, including, without limitation, the procurement of title insurance endorsements reasonably requested by and satisfactory to the Administrative Agent.  No Lender shall have any obligation to agree to have any of its Revolving Commitments of any Existing Revolving Tranche modified to constitute Extended Revolving Commitments pursuant to any Revolving Extension Request.  Any Extended Revolving Commitments of any Extension Tranche shall constitute a separate Tranche and Class of Revolving Commitments from the Existing Revolving Tranche from which they were modified.  If, on any Extension Date, any Revolving Loans of any Extending Lender are outstanding under the applicable Existing Revolving Tranche, such Revolving Loans (and any related participations) shall be deemed to be allocated as Extended Revolving Loans (and related participations) and Existing Revolving Loans (and related participations) in the same proportion as such Extending Lender’s Extended Revolving Commitments bear to its remaining Revolving Commitments of the Existing Revolving Tranche.

 

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(c)                                  Borrower shall provide the applicable Extension Request at least five (5) Business Days prior to the date on which Lenders under the Existing Tranche are requested to respond (or such shorter period as is agreed to by Administrative Agent in its sole discretion).  Any Lender (an “Extending Lender”) wishing to have all or a portion of its Term Loans or Revolving Commitments of the Existing Tranche subject to such Extension Request modified to constitute Extended Term Loans or Extended Revolving Commitments, as applicable, shall notify Administrative Agent (an “Extension Election”) on or prior to the date specified in such Extension Request of the amount of its Term Loans or Revolving Commitments of the Existing Tranche that it has elected to modify to constitute Extended Term Loans or Extended Revolving Commitments, as applicable.  In the event that the aggregate amount of Term Loans or Revolving Commitments of the Existing Tranche subject to Extension Elections exceeds the amount of Extended Term Loans or Extended Revolving Commitments, as applicable, requested pursuant to the Extension Request, Term Loans or Revolving Commitments subject to such Extension Elections shall be modified to constitute Extended Term Loans or Extended Revolving Commitments, as applicable, on a pro rata basis based on the amount of Term Loans or Revolving Commitments included in such Extension Elections.  Borrower shall have the right to withdraw any Extension Request upon written notice to Administrative Agent in the event that the aggregate amount of Term Loans or Revolving Commitments of the Existing Tranche subject to such Extension Request is less than the amount of Extended Term Loans or Extended Revolving Commitments, as applicable, requested pursuant to such Election Request.

 

(d)                                 Extended Term Loans or Extended Revolving Commitments, as applicable, shall be established pursuant to an amendment (an “Extension Amendment”) to this Agreement (which shall be substantially in the form of Exhibit Q or Exhibit R to this Agreement, as applicable, or, in each case, such other form as is reasonably acceptable to Administrative Agent).  Each Extension Amendment shall be executed by Borrower, Administrative Agent and the Extending Lenders (it being understood that such Extension Amendment shall not require the consent of any Lender other than (A) the Extending Lenders with respect to the Extended Term Loans or Extended Revolving Commitments, as applicable, established thereby, (B) with respect to any extension of the Revolving Commitments that results in an extension of an L/C Lender’s obligations with respect to Letters of Credit, the consent of such L/C Lender and (C) with respect to any extension of the Revolving Commitments that results in an extension of the Swingline Lender’s obligations with respect to Swingline Loans, the Swingline Lender).  An Extension Amendment may, subject to Sections 2.13(a) and (b), without the consent of any other Lenders, effect such amendments to this Agreement and the other Credit Documents as may be necessary or advisable, in the reasonable opinion of Administrative Agent and Borrower, to effect the provisions of this Section 2.13 (including, without limitation, (A) amendments to Section 2.04(b)(iii) and Section 2.09(b)(i) to permit reductions of Tranches of Revolving Commitments (and prepayments of the related Revolving Loans) with an R/C Maturity Date prior to the R/C Maturity Date applicable to a Tranche of Extended Revolving Commitments without a concurrent reduction of such Tranche of Extended Revolving Commitments and (B) such other technical amendments as may be necessary or advisable, in the reasonable opinion of Administrative Agent and Borrower, to give effect to the terms and provisions of any Extended Term Loans or Extended Revolving Commitments, as applicable).

 

SECTION 2.14.                      Defaulting Lender Provisions.

 

(a)                                 Notwithstanding anything to the contrary in this Agreement, if a Lender becomes, and during the period it remains, a Defaulting Lender, the following provisions shall apply:

 

(i)                           the L/C Liabilities and the participations in outstanding Swingline Loan of such Defaulting Lender will, subject to the limitation in the first proviso below, automatically be reallocated (effective on the day such Lender becomes a Defaulting Lender) among the Non-Defaulting Lenders pro rata in accordance with their respective Revolving Commitments; provided that (i) the sum of each Non-Defaulting Lender’s total Revolving Exposure may not in any event exceed the Revolving Commitment of such Non-Defaulting Lender as in effect at the time of such reallocation, (ii) subject to Section 13.21, neither such reallocation nor any payment by a Non-Defaulting Lender pursuant thereto will constitute a waiver or release of any claim Borrower, Administrative Agent, any L/C Lender, the Swingline Lender or

 

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any other Lender may have against such Defaulting Lender or cause such Defaulting Lender to be a Non-Defaulting Lender and (iii) the conditions set forth in Section 7.02(a) are satisfied at the time of such reallocation (and, unless Borrower shall have otherwise notified the Administrative Agent at such time, Borrower shall be deemed to have represented and warranted that such conditions are satisfied at such time);

 

(ii)                        to the extent that any portion (the “un-reallocated portion”) of the Defaulting Lender’s L/C Liabilities and participations in outstanding Swingline Loan cannot be so reallocated, whether by reason of the first proviso in clause (a) above or otherwise, Borrower will, not later than three (3) Business Days after demand by Administrative Agent (at the direction of any L/C Lender and/or the Swingline Lender, as the case may be), (i) Cash Collateralize the obligations of Borrower to the L/C Lender and the Swingline Lender in respect of such L/C Liabilities or participations in outstanding Swingline Loans, as the case may be, in an amount at least equal to the aggregate amount of the un-reallocated portion of such L/C Liabilities or participations in any outstanding Swingline Loans, or (ii) in the case of such participations in any outstanding Swingline Loans, prepay (subject to clause (c) below) and/or Cash Collateralize in full the un-reallocated portion thereof, or (iii) make other arrangements satisfactory to Administrative Agent, and to the applicable L/C Lender and the Swingline Lender, as the case may be, in their sole discretion to protect them against the risk of non-payment by such Defaulting Lender;

 

(iii)                     Borrower shall not be required to pay any fees to such Defaulting Lender under Section 2.05(a); and

 

(iv)                    any payment of principal, interest, fees or other amounts received by Administrative Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Article 11 or otherwise) or received by Administrative Agent from a Defaulting Lender pursuant to Section 4.07 shall be applied at such time or times as may be determined by Administrative Agent as follows: first, to the payment of any amounts owing by such Defaulting Lender to Administrative Agent hereunder; second, to the payment on a pro rata basis of any amounts owing by such Defaulting Lender to any L/C Lender or Swingline Lender hereunder; third, if so determined by Administrative Agent or requested by the applicable L/C Lender or Swingline Lender, to be held as Cash Collateral for future funding obligations of that Defaulting Lender of any participation in any Letter of Credit or any Swingline Loan, as applicable; fourth, as Borrower 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 Agreement, as determined by Administrative Agent; fifth, if so determined by Administrative Agent and Borrower, to be held in a non-interest bearing deposit account and released pro rata in order to satisfy such Defaulting Lender’s potential future funding obligations with respect to Loans under this Agreement; sixth, to the payment of any amounts owing to the Lenders, the L/C Lender or Swingline Lenders as a result of any judgment of a court of competent jurisdiction obtained by any Lender, any L/C Lender or the Swingline Lender against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; seventh, so long as no Default or Event of Default exists, to the payment of any amounts owing to Borrower as a result of any judgment of a court of competent jurisdiction obtained by Borrower against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this 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 Liabilities 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 7.02 were satisfied or waived, such payment shall be applied solely to pay the Loans of, and L/C Liabilities 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 Liabilities owed to, such Defaulting Lender. 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

 

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to this Section 2.14(a)(iv) shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.

 

(b)                                 Cure.  If Borrower, Administrative Agent, each L/C Lender and the Swingline Lender agree in writing in their discretion that a Lender is no longer a Defaulting Lender, 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 amounts then held in the segregated account referred to in Section 2.14(a)), (x) such Lender will, to the extent applicable, purchase at par such portion of outstanding Loans of the other Lenders and/or make such other adjustments as Administrative Agent may determine to be necessary to cause the Revolving Exposure, L/C Liabilities and participations in any outstanding Swingline Loans of the Lenders to be on a pro rata basis in accordance with their respective Commitments, whereupon such Lender will cease to be a Defaulting Lender and will be a Non-Defaulting Lender (and such exposure of each Lender will automatically be adjusted on a prospective basis to reflect the foregoing); provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of Borrower while such Lender was a Defaulting Lender; and provided, further, that no change hereunder from Defaulting Lender to Non-Defaulting Lender will constitute a waiver or release of any claim of any party hereunder arising from such Lender’s having been a Defaulting Lender, and (y) all Cash Collateral provided pursuant to Section 2.14(a)(ii) shall thereafter be promptly returned to Borrower.

 

(c)                                  Certain Fees.  Anything herein to the contrary notwithstanding, during such period as a Lender is a Defaulting Lender, such Defaulting Lender will not be entitled to any fees accruing during such period pursuant to Section 2.05 or Section 2.03(h) (without prejudice to the rights of the Non-Defaulting Lenders in respect of such fees), provided that (i) to the extent that all or a portion of the L/C Liability or the participations in outstanding Swingline Loans of such Defaulting Lender is reallocated to the Non-Defaulting Lenders pursuant to Section 2.14, such fees that would have accrued for the benefit of such Defaulting Lender will instead accrue for the benefit of and be payable to such Non-Defaulting Lenders, pro rata in accordance with their respective Commitments, and (ii) to the extent that all or any portion of such L/C Liability or participations in any outstanding Swingline Loans cannot be so reallocated, such fees will instead accrue for the benefit of and be payable to the L/C Lender and the Swingline Lender, as applicable, except to the extent of any un-reallocated portion that is Cash Collateralized (and the pro rata payment provisions of Section 4.02 will automatically be deemed adjusted to reflect the provisions of this Section 2.14(c)).

 

SECTION 2.15.                      Refinancing Amendments.

 

(a)                                 At any time after the Closing Date, Borrower may obtain Credit Agreement Refinancing Indebtedness in respect of all or any portion of the Term Loans and the Revolving Loans (or unused Revolving Commitments) then outstanding under this Agreement (which for purposes of this clause (a) will be deemed to include any then outstanding Other Term Loans, Incremental Term Loans, Other Revolving Loans or Incremental Revolving Loans), in the form of Other Term Loans, Other Term Loan Commitments, Other Revolving Loans or Other Revolving Commitments pursuant to a Refinancing Amendment; provided that, notwithstanding anything to the contrary in this Section 2.15 or otherwise, (1) the borrowing and repayment (except for (A) payments of interest and fees at different rates on Other Revolving Commitments (and related outstandings), (B) repayments required upon the maturity date of the Other Revolving Commitments or any other Tranche of Revolving Commitments and (C) repayment made in connection with a permanent repayment and termination of commitments (subject to clause (3) below)) of Loans with respect to Other Revolving Commitments after the date of obtaining any Other Revolving Commitments shall be made on a pro rata basis with all other Revolving Commitments (subject to clause (3) below), (2) the permanent repayment of Revolving Loans with respect to, and termination of, Other Revolving Commitments after the date of obtaining any Other Revolving Commitments shall be made on a pro rata basis with all other Revolving Commitments, except that Borrower shall be permitted to permanently repay and terminate commitments of any Class with an earlier maturity date on a better than a pro rata basis as compared to any other Class with a later maturity date than such Class and (3) assignments and participations of Other Revolving

 

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Commitments and Other Revolving Loans shall be governed by the same assignment and participation provisions applicable to other Revolving Commitments and Revolving Loans.  Each issuance of Credit Agreement Refinancing Indebtedness under this Section 2.15(a) shall be in an aggregate principal amount that is (x) not less than $5.0 million and (y) an integral multiple of $1.0 million in excess thereof.

 

(b)                                 The effectiveness of any such Credit Agreement Refinancing Indebtedness shall be subject solely to the satisfaction of the following conditions to the reasonable satisfaction of Administrative Agent: (i) any Credit Agreement Refinancing Indebtedness in respect of Revolving Commitments or Other Revolving Commitments will have a maturity date that is not prior to the maturity date of the Revolving Loans (or unused Revolving Commitments) being refinanced; (ii) any Credit Agreement Refinancing Indebtedness in respect of Term Loans will have a maturity date that is not prior to the maturity date of, and a Weighted Average Life to Maturity that is not shorter than the Weighted Average Life to Maturity of, the Term Loans being refinanced (determined without giving effect to the impact of prepayments on amortization of Term Loans being refinanced); (iii) the aggregate principal amount of any Credit Agreement Refinancing Indebtedness shall not exceed the principal amount so refinanced, plus, accrued interest, plus, any premium or other payment required to be paid in connection with such refinancing, plus, the amount of reasonable and customary fees and expenses of Borrower or any of its Restricted Subsidiaries incurred in connection with such refinancing, plus, any unutilized commitments thereunder; (iv) to the extent reasonably requested by the Administrative Agent, receipt by the Administrative Agent and the Lenders of customary legal opinions and other documents; (v) to the extent reasonably requested by the Administrative Agent, execution of amendments to the Mortgages by the applicable Credit Parties and Collateral Agent, in form and substance reasonably satisfactory to the Administrative Agent and the Collateral Agent; (vi) to the extent reasonably requested by the Administrative Agent, delivery to the Administrative Agent of title insurance endorsements reasonably satisfactory to the Administrative Agent; and (vii) execution of a Refinancing Amendment by the Credit Parties, Administrative Agent and Lenders providing such Credit Agreement Refinancing Indebtedness.

 

(c)                                  The Loans and Commitments established pursuant to this Section 2.15 shall constitute Loans and Commitments under, and shall be entitled to all the benefits afforded by, this Agreement and the other Credit Documents, and shall, without limiting the foregoing, benefit equally and ratably from the Guarantees and security interests created by the Security Documents.  The Credit Parties, Holding Companies and RRR shall take any actions reasonably required by Administrative Agent to ensure and/or demonstrate that the Lien and security interests granted by the Security Documents continue to secure all the Obligations and continue to be perfected under the UCC or otherwise after giving effect to the applicable Refinancing Amendment.

 

(d)                                 Upon the effectiveness of any Refinancing Amendment pursuant to this Section 2.15, any Person providing the corresponding Credit Agreement Refinancing Indebtedness that was not a Lender hereunder immediately prior to such time shall become a Lender hereunder.  Administrative Agent shall promptly notify each Lender as to the effectiveness of such Refinancing Amendment, and (i) in the case of any Other Revolving Commitments resulting from such Refinancing Amendment, the Total Revolving Commitments under, and for all purpose of this Agreement, shall be increased by the aggregate amount of such Other Revolving Commitments (net of any existing Revolving Commitments being refinanced by such Refinancing Amendment), (ii) any Other Revolving Loans resulting from such Refinancing Amendment shall be deemed to be additional Revolving Loans hereunder, (iii) any Other Term Loans resulting from such Refinancing Amendment shall be deemed to be Term Loans hereunder (to the extent funded) and (iv) any Other Term Loan Commitments resulting from such Refinancing Amendment shall be deemed to be Term Loan Commitments hereunder.  Notwithstanding anything to the contrary contained herein, Borrower, Collateral Agent and Administrative Agent may (and each of Collateral Agent and Administrative Agent are authorized by each other Secured Party to) execute such amendments and/or amendments and restatements of any Credit Documents as may be necessary or advisable to effectuate the provisions of this Section 2.15.  Such amendments may include provisions allowing any Other Term Loans to be treated on the same basis as Term B Facility Loans in connection with declining prepayments.

 

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(e)                                  Each of the parties hereto hereby agrees that, upon the effectiveness of any Refinancing Amendment, this Agreement shall be deemed amended to the extent (but only to the extent) necessary to reflect the existence and terms of the Credit Agreement Refinancing Indebtedness incurred pursuant thereto (including any amendments necessary to treat the Loans and Commitments subject thereto as Other Term Loans, Other Term Loan Commitments, Other Revolving Loans and/or Other Revolving Commitments).  Any Refinancing Amendment may, without the consent of any other Lenders, effect such amendments to this Agreement and the other Credit Documents as may be necessary or appropriate, in the reasonable opinion of Administrative Agent and Borrower, to effect the provisions of this Section 2.15.  This Section 2.15 shall supersede any provisions in Section 4.02, 4.07(b) or 13.04 to the contrary.

 

(f)                                   To the extent the Revolving Commitments are being refinanced on the effective date of any Refinancing Amendment, then each of the Revolving Lenders having a Revolving Commitment prior to the effective date of such Refinancing Amendment (such Revolving Lenders the “Pre-Refinancing Revolving Lenders”) shall assign or transfer to any Revolving Lender which is acquiring an Other Revolving Commitment on the effective date of such amendment (the “Post-Refinancing Revolving Lenders”), and such Post-Refinancing Revolving Lenders shall purchase from each such Pre-Refinancing Revolving Lender, at the principal amount thereof, such interests in Revolving Loans and participation interests in L/C Liabilities and Swingline Loans (but not, for the avoidance of doubt, the related Revolving Commitments) outstanding on the effective date of such Refinancing Amendment as shall be necessary in order that, after giving effect to all such assignments or transfers and purchases, such Revolving Loans and participation interests in L/C Liabilities and Swingline Loans will be held by Pre-Refinancing Revolving Lenders and Post-Refinancing Revolving Lenders ratably in accordance with their Revolving Commitments and Other Revolving Commitments, as applicable, after giving effect to such Refinancing Amendment (and after giving effect to any Revolving Loans made on the effective date of such Refinancing Amendment).  Such assignments or transfers and purchases shall be made pursuant to such procedures as may be designated by Administrative Agent and shall not be required to be effectuated in accordance with Section 13.05.  For the avoidance of doubt, Revolving Loans and participation interests in L/C Liabilities and Swingline Loans assigned or transferred and purchased pursuant to this Section 2.15(f) shall, upon receipt thereof by the relevant Post-Increase Revolving Lenders, be deemed to be Other Revolving Loans and participation interests in L/C Liabilities and Swingline Loans in respect of the relevant Other Revolving Commitments acquired by such Post-Increase Revolving Lenders on the relevant amendment effective date and the terms of such Revolving Loans and participation interests (including, without limitation, the interest rate and maturity applicable thereto) shall be adjusted accordingly.

 

SECTION 2.16.                      Cash Collateral.

 

(a)                                 Certain Credit Support Events.  Without limiting any other requirements herein to provide Cash Collateral, if (i) any L/C Lender has honored any full or partial drawing request under any Letter of Credit and such drawing has resulted in an extension of credit hereunder which has not been refinanced as a Revolving Loan or reimbursed, in each case, in accordance with Section 2.03(d) or (ii) Borrower shall be required to provide Cash Collateral pursuant to Section 11.01, Borrower shall, within one (1) Business Day (in the case of clause (i) above) or immediately (in the case of clause (ii) above) following any request by the Administrative Agent or the applicable L/C Lender, provide Cash Collateral in an amount not less than the applicable Minimum Collateral Amount.

 

(b)                                 Grant of Security Interest.  Borrower, and to the extent provided by any Defaulting Lender, such Defaulting Lender, hereby grants to (and subjects to the control of) the Administrative Agent, for the benefit of the Administrative Agent, the L/C Lenders and the Lenders, and agrees to maintain, a first priority security interest in all such cash, deposit accounts and all balances therein, and all other property so provided as Cash Collateral pursuant hereto, and in all proceeds of the foregoing, all as security for the obligations to which such Cash Collateral (including Cash Collateral provided in accordance with Sections 2.01(e), 2.03, 2.10(b)(ii), 2.10(c), 2.10(e), 2.14, 2.16 or 11.01) may be applied pursuant to Section 2.16(c).  If at any time the Administrative Agent determines that Cash Collateral is subject to any right or claim of any Person prior to the right or claim of the Administrative Agent

 

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or the L/C Lenders as herein provided, or that the total amount of such Cash Collateral is less than the Minimum Collateral Amount, Borrower will, promptly upon demand by the Administrative Agent, pay or provide to the Administrative Agent additional Cash Collateral in an amount sufficient to eliminate such deficiency (after giving effect to any Cash Collateral provided by any Defaulting Lenders). All Cash Collateral (other than credit support not constituting funds subject to deposit) shall be maintained in blocked, non-interest bearing deposit accounts at the Administrative Agent or as otherwise agreed to by the Administrative Agent.  Borrower shall pay on demand therefor from time to time all customary account opening, activity and other administrative fees and charges in connection with the maintenance and disbursement of Cash Collateral in accordance with the account agreement governing such deposit account.

 

(c)                                  Application.  Notwithstanding anything to the contrary contained in this Agreement, Cash Collateral provided under any of this Section 2.16 or Sections 2.01(e), 2.03, 2.10(c), 2.10(e), 2.14 or 11.01 in respect of Letters of Credit shall be held and applied to the satisfaction of the specific L/C Liabilities, obligations to fund participations therein (including, as to Cash Collateral provided by a Defaulting Lender, any interest accrued on such obligation), participations in Swingline Loans and other obligations for which the Cash Collateral was so provided, prior to any other application of such property as may otherwise be provided for herein.

 

(d)                                 Release.  Cash Collateral (or the appropriate portion thereof) provided to reduce un-reallocated portions or to secure other obligations shall, so long as no Event of Default then exists, be released promptly following (i) the elimination of the applicable un-reallocated portion or other obligations giving rise thereto (including by the termination of Defaulting Lender status of the applicable Lender (or, as appropriate, the assignment of such Defaulting Lender’s Loans and Commitments to a Replacement Lender)) or (ii) the determination by the Administrative Agent and the L/C Lenders that there exists excess Cash Collateral (which, in any event, shall exist at any time that the aggregate amount of Cash Collateral exceeds the Minimum Collateral Amount); provided, however, (x) any such release shall be without prejudice to, and any disbursement or other transfer of Cash Collateral shall be and remain subject to, any other Lien conferred under the Credit Documents and the other applicable provisions of the Credit Documents, and (y) Borrower and the L/C Issuer may agree that Cash Collateral shall not be released but instead held to support future anticipated un-reallocated portions or other obligations.

 

ARTICLE III.

 

PAYMENTS OF PRINCIPAL AND INTEREST

 

SECTION 3.01.                      Repayment of Loans.

 

(a)                                 Revolving Loans and Swingline Loans.  Borrower hereby promises to pay (i) to Administrative Agent for the account of each applicable Revolving Lender on each R/C Maturity Date, the entire outstanding principal amount of such Revolving Lender’s Revolving Loans of the applicable Tranche, and each such Revolving Loan shall mature on the R/C Maturity Date applicable to such Tranche and (ii) to the Swingline Lender the then unpaid principal amount of each Swingline Loan on the earlier of the first R/C Maturity Date after such Swingline Loan is made and the first date after such Swingline Loan is made that is the 15th or last day of a calendar month and is at least two Business Days after such Swingline Loan is made; provided, however, that on each date that a Revolving Borrowing is made, Borrower shall repay all Swingline Loans that were outstanding on the date such Borrowing was requested.

 

(b)                                 Term A Facility Loans.  Borrower hereby promises to pay to Administrative Agent for the account of the Lenders with Term A Facility Loans made on the Closing Date in repayment of the principal of such Term A Facility Loans, on each date set forth on Annex C, that principal amount of such Term A Facility Loans, to the extent then outstanding, as is set forth opposite such date (subject to adjustment for any prepayments made under Section 2.09 or Section 2.10 or Section 2.11(b) or Section 13.04(b)(B) or as provided in Section 2.12, in Section

 

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2.13 or in Section 2.15), and the remaining principal amount of such Term A Facility Loans on the Term A Facility Maturity Date.

 

(c)                                  Term B Facility Loans.  Borrower hereby promises to pay to Administrative Agent for the account of the Lenders with Term B Facility Loans in repayment of the principal of such Term B Facility Loans, (i) on the last Business Day of each fiscal quarter (commencing with the first full fiscal quarter following the Closing Date), an aggregate amount equal to 0.25% of the aggregate principal amount of all Term B Facility Loans outstanding on the Closing Date (subject to adjustment for any prepayments made under Section 2.09 or Section 2.10 or Section 2.11(b) or Section 13.04(b)(B) or as provided in Section 2.12, in Section 2.13 or in Section 2.15) and (ii) the remaining principal amount of Term B Facility Loans on the Term B Facility Maturity Date.

 

(d)                                 New Term Loans; Extended Term Loans; Other Term Loans.  New Term Loans shall mature in installments as specified in the related Incremental Joinder Agreement pursuant to which such New Term Loans were made, subject, however, to Section 2.12(b).  Extended Term Loans shall mature in installments as specified in the applicable Extension Amendment pursuant to which such Extended Term Loans were established, subject, however, to Section 2.13(a).  Other Term Loans shall mature in installments as specified in the applicable Refinancing Amendment pursuant to which such Other Term Loans were established, subject, however, to Section 2.15(a).

 

SECTION 3.02.                      Interest.

 

(a)                                 Borrower hereby promises to pay to Administrative Agent for the account of each Lender interest on the unpaid principal amount of each Loan made or maintained by such Lender to Borrower for the period from and including the date of such Loan to but excluding the date such Loan shall be paid in full at the following rates per annum:

 

(i)                           during such periods as such Loan (including each Swingline Loan) is an ABR Loan, the Alternate Base Rate (as in effect from time to time), plus the Applicable Margin applicable to such Loan, and

 

(ii)                        during such periods as such Loan is a LIBOR Loan, for each Interest Period relating thereto, the LIBO Rate for such Loan for such Interest Period, plus the Applicable Margin applicable to such Loan.

 

(b)                                 To the extent permitted by Law:

 

(i)                           upon the occurrence and during the continuance of an Event of Default under Section 11.01(b), 11.01(c), 11.01(g) or Section 11.01(h), all Obligations shall automatically and without any action by any Person, bear interest at the Default Rate; and

 

(ii)                        upon the occurrence and during the continuance of any other Event of Default, at the written direction of the Required Lenders, all Obligations shall bear interest at the Default Rate.

 

Interest which accrues under this paragraph shall be payable on demand.

 

(c)                                  Accrued interest on each Loan shall be payable (i) in the case of each ABR Loan (including Swingline Loans), (x) quarterly in arrears on each Quarterly Date, (y) on the date of any repayment or prepayment in full of all outstanding ABR Loans of any Tranche of Loans (or of any Swingline Loan) (but only on the principal amount so repaid or prepaid), and (z) at maturity (whether by acceleration or otherwise) and, after such maturity, on demand, and (ii) in the case of each LIBOR Loan, (x) on the last day of each Interest Period applicable thereto and,

 

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if such Interest Period is longer than three months, on each date occurring at three-month intervals after the first day of such Interest Period, (y) on the date of any repayment or prepayment thereof or the conversion of such Loan to a Loan of another Type (but only on the principal amount so paid, prepaid or converted) and (z) at maturity (whether by acceleration or otherwise) and, after such maturity, on demand.  Promptly after the determination of any interest rate provided for herein or any change therein, Administrative Agent shall give notice thereof to the Lenders to which such interest is payable and to Borrower.

 

ARTICLE IV.

 

PAYMENTS; PRO RATA TREATMENT; COMPUTATIONS; ETC.

 

SECTION 4.01.                      Payments.

 

(a)                                 All payments of principal, interest, Reimbursement Obligations and other amounts to be made by Borrower under this Agreement and the Notes, and, except to the extent otherwise provided therein, all payments to be made by the Credit Parties, Holding Companies and RRR under any other Credit Document, shall be made in Dollars, in immediately available funds, without deduction, set-off or counterclaim, to Administrative Agent at its account at the Principal Office, not later than 2:00 p.m., New York time, on the date on which such payment shall become due (each such payment made after such time on such due date may, at the discretion of Administrative Agent, be deemed to have been made on the next succeeding Business Day).  Administrative Agent shall distribute any such payments received by it for the account of any other Person to the appropriate recipient promptly following receipt thereof.

 

(b)                                 Borrower shall, at the time of making each payment under this Agreement or any Note for the account of any Lender, specify (in accordance with Sections 2.09 and 2.10, if applicable) to Administrative Agent (which shall so notify the intended recipient(s) thereof) or, in the case of Swingline Loans, to the Swingline Lender, the Class and Type of Loans, Reimbursement Obligations or other amounts payable by Borrower hereunder to which such payment is to be applied.

 

(c)                                  Except to the extent otherwise provided in the third sentence of Section 2.03(h), each payment received by Administrative Agent or by any L/C Lender (directly or through Administrative Agent) under this Agreement or any Note for the account of any Lender shall be paid by Administrative Agent or by such L/C Lender (through Administrative Agent), as the case may be, to such Lender, in immediately available funds, (x) if the payment was actually received by Administrative Agent or by such L/C Lender (directly or through Administrative Agent), as the case may be, prior to 12:00 p.m. (Noon), New York time on any day, on such day and (y) if the payment was actually received by Administrative Agent or by such L/C Lender (directly or through Administrative Agent), as the case may be, after 12:00 p.m. (Noon), New York time, on any day, by 1:00 p.m., New York time, on the following Business Day (it being understood that to the extent that any such payment is not made in full by Administrative Agent or by such L/C Lender (through Administrative Agent), as the case may be, Administrative Agent or such Lender (through Administrative Agent), as applicable, shall pay to such Lender, upon demand, interest at the Federal Funds Effective Rate from the date such amount was required to be paid to such Lender pursuant to the foregoing clauses until the date Administrative Agent or such L/C Lender (through Administrative Agent), as applicable, pays such Lender the full amount).

 

(d)                                 If the due date of any payment under this Agreement or any Note would otherwise fall on a day that is not a Business Day, such date shall be extended to the next succeeding Business Day, and interest shall be payable for any principal so extended for the period of such extension at the rate then borne by such principal.

 

SECTION 4.02.                      Pro Rata Treatment.  Except to the extent otherwise provided herein:  (a) each borrowing of Loans of a particular Class from the Lenders under Section 2.01 shall be made from the relevant Lenders, each payment of commitment fees under Section 2.05 in respect of Commitments of a particular Class shall

 

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be made for the account of the relevant Lenders, and each termination or reduction of the amount of the Commitments of a particular Class under Section 2.04 shall be applied to the respective Commitments of such Class of the relevant Lenders pro rata according to the amounts of their respective Commitments of such Class; (b) except as otherwise provided in Section 5.04, LIBOR Loans of any Class having the same Interest Period shall be allocated pro rata among the relevant Lenders according to the amounts of their respective Revolving Commitments and Term Loan Commitments (in the case of the making of Loans) or their respective Revolving Loans and Term Loans (in the case of conversions and continuations of Loans); (c) except as otherwise provided in Section 2.09(b), Section 2.10(b), Section 2.12, Section 2.13, Section 2.14, Section 2.15, Section 13.04 or Section 13.05(d), each payment or prepayment of principal of any Class of Revolving Loans or of any particular Class of Term Loans shall be made for the account of the relevant Lenders pro rata in accordance with the respective unpaid outstanding principal amounts of the Loans of such Class held by them; and (d) except as otherwise provided in Section 2.09(b), Section 2.10(b), Section 2.12, Section 2.13, Section 2.14, Section 2.15, Section 13.04 or Section 13.05(d), each payment of interest on Revolving Loans and Term Loans shall be made for the account of the relevant Lenders pro rata in accordance with the amounts of interest on such Loans then due and payable to the respective Lenders.

 

SECTION 4.03.       Computations.  Interest on LIBOR Loans, commitment fees and Letter of Credit fees shall be computed on the basis of a year of 360 days and actual days elapsed (including the first day but excluding the last day) occurring in the period for which such amounts are payable and interest on ABR Loans and Reimbursement Obligations shall be computed on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed (including the first day but excluding the last day) occurring in the period for which such amounts are payable.

 

SECTION 4.04.       Minimum Amounts.  Except for mandatory prepayments made pursuant to Section 2.10 and conversions or prepayments made pursuant to Section 5.04, and Borrowings made to pay Reimbursement Obligations, each Borrowing, conversion and partial prepayment of principal of Loans shall be in an amount at least equal to (a) in the case of Term Loans, $5.0 million with respect to ABR Loans and $5.0 million with respect to LIBOR Loans and in multiples of $100,000 in excess thereof or, if less, the remaining Term Loans and (b) in the case of Revolving Loans and Swingline Loans, $2.5 million with respect to ABR Loans and $2.5 million with respect to LIBOR Loans and in multiples of $100,000 in excess thereof (borrowings, conversions or prepayments of or into Loans of different Types or, in the case of LIBOR Loans, having different Interest Periods at the same time hereunder to be deemed separate borrowings, conversions and prepayments for purposes of the foregoing, one for each Type or Interest Period) or, if less, the remaining Revolving Loans.  Anything in this Agreement to the contrary notwithstanding, the aggregate principal amount of LIBOR Loans having the same Interest Period shall be in an amount at least equal to $1.0 million and in multiples of $100,000 in excess thereof and, if any LIBOR Loans or portions thereof would otherwise be in a lesser principal amount for any period, such Loans or portions, as the case may be, shall be ABR Loans during such period.

 

SECTION 4.05.       Certain Notices.  Notices by Borrower to Administrative Agent (or, in the case of repayment of the Swingline Loans, to the Swingline Lender) of terminations or reductions of the Commitments, of Borrowings, conversions, continuations and optional prepayments of Loans and of Classes of Loans, of Types of Loans and of the duration of Interest Periods shall be irrevocable and shall be effective only if received by Administrative Agent (or, in the case of Swingline Loans, the Swingline Lender) by telephone not later than 1:00 p.m., New York time (promptly followed by written notice via facsimile or electronic mail), on at least the number of Business Days prior to the date of the relevant termination, reduction, Borrowing, conversion, continuation or prepayment or the first day of such Interest Period specified in the table below (unless otherwise agreed to by Administrative Agent in its sole discretion), provided that Borrower may make any such notice conditional upon the occurrence of a Person’s acquisition or sale or any incurrence of indebtedness or issuance of Equity Interests.

 

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NOTICE PERIODS

 

	
Notice
    	
 
    	
Number of
   Business Days Prior
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Termination or   reduction of Commitments
    	
 
    	
3
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Borrowing or   optional prepayment of, or conversions into, ABR Loans
    	
 
    	
1
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Borrowing or optional prepayment of, conversions   into, continuations as, or duration of Interest Periods for, LIBOR Loans
    	
 
    	
3
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Borrowing or   repayment of Swingline Loans
    	
 
    	
same day
    	
 
    

 

Each such notice of termination or reduction shall specify the amount and the Class of the Commitments to be terminated or reduced.  Each such notice of Borrowing, conversion, continuation or prepayment shall specify the Class of Loans to be borrowed, converted, continued or prepaid and the amount (subject to Section 4.04) and Type of each Loan to be borrowed, converted, continued or prepaid and the date of borrowing, conversion, continuation or prepayment (which shall be a Business Day).  Each such notice of the duration of an Interest Period shall specify the Loans to which such Interest Period is to relate.  Administrative Agent shall promptly notify the Lenders of the contents of each such notice.  In the event that Borrower fails to select the Type of Loan within the time period and otherwise as provided in this Section 4.05, such Loan (if outstanding as a LIBOR Loan) will be automatically converted into an ABR Loan on the last day of the then current Interest Period for such Loan or (if outstanding as an ABR Loan) will remain as, or (if not then outstanding) will be made as, an ABR Loan.  In the event that Borrower has elected to borrow or convert Loans into LIBOR Loans but fails to select the duration of any Interest Period for any LIBOR Loans within the time period and otherwise as provided in this Section 4.05, such LIBOR Loan shall have an Interest Period of one month.

 

SECTION 4.06.       Non-Receipt of Funds by Administrative Agent.

 

(a)           Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing of LIBOR Loans (or, in the case of any Borrowing of ABR 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 ABR 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 Borrower 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 Borrower 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 Borrower 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 Federal Funds Effective Rate, plus any administrative, processing or similar fees customarily charged by the Administrative Agent in connection with the foregoing, and (B) in the case of a payment to be made by Borrower, the interest rate applicable to ABR Loans.  If Borrower 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 Borrower the amount of such interest paid by Borrower 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 Borrower shall be without prejudice to any claim Borrower may have against a Lender that shall have failed to make such payment to the Administrative Agent.

 

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(b)           Unless the Administrative Agent shall have received notice from Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders or the L/C Lenders hereunder that Borrower will not make such payment, the Administrative Agent may assume that Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders or the L/C Lenders, as the case may be, the amount due.  In such event, if Borrower has not in fact made such payment, then each of the Lenders or the L/C Lenders, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender or L/C Lender, 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 Federal Funds Effective Rate. A notice of the Administrative Agent to any Lender or Borrower with respect to any amount owing under this subsection (b) shall be conclusive, absent manifest error.

 

SECTION 4.07.       Right of Setoff, Sharing of Payments; Etc.

 

(a)           If any Event of Default shall have occurred and be continuing, each Credit Party agrees that, in addition to (and without limitation of) any right of setoff, banker’s lien or counterclaim a Lender may otherwise have, each Lender shall be entitled, at its option (to the fullest extent permitted by law), subject to obtaining the prior written consent of the Administrative Agent, to set off and apply any deposit (general or special, time or demand, provisional or final), or other indebtedness, held by it for the credit or account of such Credit Party at any of its offices, in Dollars or in any other currency, against any principal of or interest on any of such Lender’s Loans, Reimbursement Obligations or any other amount payable to such Lender hereunder that is not paid when due (regardless of whether such deposit or other indebtedness is then due to such Credit Party), in which case it shall promptly notify such Credit Party thereof; provided, however, that such Lender’s failure to give such notice shall not affect the validity thereof; and provided further that no such right of setoff, banker’s lien or counterclaim shall apply to any funds held for further distribution to any Governmental Authority.

 

(b)           Each of the Lenders agrees that, if it should receive (other than pursuant to Section 2.09(b), Section 2.10(b), Section 2.11, Section 2.12, Section 2.13, Section 2.15, Article V, Section 13.04 or Section 13.05(d) or as otherwise specifically provided herein or in the Engagement Letters) any amount hereunder (whether by voluntary payment, by realization upon security, by the exercise of the right of setoff or banker’s lien, by counterclaim or cross action, by the enforcement of any right under the Credit Documents (including any guarantee), or otherwise) which is applicable to the payment of the principal of, or interest on, the Loans, Reimbursement Obligations or fees, the sum of which with respect to the related sum or sums received by other Lenders is in a greater proportion than the total of such amounts then owed and due to such Lender bears to the total of such amounts then owed and due to all of the Lenders immediately prior to such receipt, then such Lender receiving such excess payment shall purchase for cash without recourse or warranty from the other Lenders an interest in the Obligations to such Lenders in such amount as shall result in a proportional participation by all of the Lenders in such amount; provided, however, that if all or any portion of such excess amount is thereafter recovered from such Lender, such purchase shall be rescinded and the purchase price restored to the extent of such recovery, but without interest.  Borrower consents to the foregoing arrangements.

 

(c)           Borrower agrees that any Lender so purchasing such a participation may exercise all rights of setoff, banker’s lien, counterclaim or similar rights with respect to such participation as fully as if such Lender were a direct holder of Loans or other amounts (as the case may be) owing to such Lender in the amount of such participation.

 

(d)           Nothing contained herein shall require any Lender to exercise any such right or shall affect the right of any Lender to exercise, and retain the benefits of exercising, any such right with respect to any other Indebtedness or obligation of any Credit Party, Holding Company or RRR.  If, under any applicable bankruptcy, insolvency or other similar law, any Lender receives a secured claim in lieu of a setoff to which this Section 4.07 applies, such Lender shall, to the extent practicable, exercise its rights in respect of such secured claim in a manner

 

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consistent with the rights of the Lenders entitled under this Section 4.07 to share in the benefits of any recovery on such secured claim.

 

(e)           Notwithstanding anything to the contrary contained in this Section 4.07, in the event that any Defaulting Lender exercises any right of setoff, (i) all amounts so set off will be paid over immediately to Administrative Agent for further application in accordance with the provisions of Section 2.14 and, pending such payment, will be segregated by such Defaulting Lender from its other funds and deemed held in trust for the benefit of Administrative Agent, each L/C Lender, the Swingline Lender and the Lenders and (ii) the Defaulting Lender will provide promptly to Administrative Agent a statement describing in reasonable detail the Obligations owing to such Defaulting Lender as to which it exercised such right of setoff.

 

ARTICLE V.

 

YIELD PROTECTION, ETC.

 

SECTION 5.01.       Additional Costs.

 

(a)           If any Change in Law shall:

 

(i)      subject any Lender to any tax of any kind whatsoever with respect to this Agreement, any Note, any Letter of Credit or any Lender’s participation therein, any L/C Document or any Loan made by it, any deposits, reserves, other liabilities or capital attributable thereto or change the basis of taxation of payments to such Lender in respect thereof by any Governmental Authority (except for any Covered Taxes or Excluded Taxes);

 

(ii)     impose, modify or hold applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets held by, deposits or other liabilities in or for the account of, advances, loans or other extensions of credit by, or any other acquisition of funds by, any office of such Lender, in each case, that is not otherwise included in the determination of the LIBO Rate hereunder; or

 

(iii)    impose on any Lender or the London interbank market any other condition, cost or expense (other than Taxes) affecting this Agreement or LIBOR Loans made by such Lender or any Letter of Credit or participation therein;

 

and the result of any of the foregoing is to materially increase the cost to such Lender or L/C Lender of making, converting into, continuing or maintaining LIBOR Loans (or of maintaining its obligation to make any LIBOR Loans) or issuing, maintaining or participating in Letters of Credit (or maintaining its obligation to participate in or to issue any Letter of Credit), then, in any such case, Borrower shall, within 10 days of written demand therefor, pay such Lender or L/C Lender any additional amounts necessary to compensate such Lender or L/C Lender for such increased cost.  If any Lender or L/C Lender becomes entitled to claim any additional amounts pursuant to this subsection, it shall promptly notify Borrower, through Administrative Agent, of the event by reason of which it has become so entitled.

 

(b)           A certificate as to any additional amounts setting forth the calculation of such additional amounts pursuant to this Section 5.01 submitted by such Lender or L/C Lender, through Administrative Agent, to Borrower shall be conclusive in the absence of clearly demonstrable error.  Without limiting the survival of any other covenant hereunder, this Section 5.01 shall survive the termination of this Agreement and the payment of the Notes and all other Obligations payable hereunder.

 

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(c)           In the event that any Lender shall have determined that any Change in Law affecting such Lender or any Lending Office of such Lender or the Lender’s holding company with regard to capital or liquidity requirements, does or shall have the effect of reducing the rate of return on such Lender’s or such holding company’s capital as a consequence of its obligations hereunder, the Commitments of such Lender, the Loans made by, or participations in Letters of Credit and Swingline Loans held by such Lender, or the Letters of Credit issued by such L/C Lender, to a level below that which such Lender or such holding company could have achieved but for such Change in Law (taking into consideration such Lender’s policies and the policies of such Lender’s holding company with respect to capital adequacy), then from time to time, after submission by such Lender or Borrower (with a copy to Administrative Agent) of a written request therefor (setting forth in reasonable detail the amount payable to the affected Lender and the basis for such request), Borrower shall promptly pay to such Lender such additional amount or amounts as will compensate such Lender for such reduction.

 

(d)           Failure or delay on the part of any Lender to demand compensation pursuant to this Section 5.01 shall not constitute a waiver of such Lender’s right to demand such compensation; provided, however, that Borrower shall not be required to compensate a Lender pursuant to this Section 5.01 for any increased costs or reductions incurred more than ninety (90) days prior to the date that such Lender notifies Borrower of the change in law giving rise to such increased costs incurred or reductions suffered and of such Lender’s intention to claim compensation therefor; provided, further, that if the Change in Law giving rise to such increased costs or reductions is retroactive, then the 90-day period referred to above shall be extended to include the period of retroactive effect thereof.

 

SECTION 5.02.       Inability To Determine Interest Rate.  If prior to the first day of any Interest Period:  (a) Administrative Agent shall have determined (which determination shall be conclusive and binding upon Borrower) that, by reason of circumstances affecting the relevant market, adequate and reasonable means do not exist for ascertaining the LIBO Base Rate for such Interest Period or (b) Administrative Agent shall have received notice from the Required Lenders that Dollar deposits are not available in the relevant amount and for the relevant Interest Period available to the Required Lenders in the London interbank market or (c) the Required Lenders determine that the LIBO Rate for any requested Interest Period with respect to a proposed LIBOR Loan does not adequately and fairly reflect the cost to such Lenders of funding such LIBOR Loans (in each case, “Impacted Loans”), Administrative Agent shall give electronic mail or telephonic notice thereof to Borrower and the Lenders as soon as practicable thereof.  If such notice is given, (x) any LIBOR Loans requested to be made on the first day of such Interest Period shall be made as ABR Loans, (y) any Loans that were to have been converted on the first day of such Interest Period to LIBOR Loans shall be converted to, or continued as, ABR Loans and (z) any outstanding LIBOR Loans shall be converted, on the first day of such Interest Period, to ABR Loans.  Until such notice has been withdrawn by Administrative Agent (which the Administrative Agent agrees to do if the circumstances giving rise to such notice cease to exist), no further LIBOR Loans shall be made, or continued as such, nor shall Borrower have the right to convert Loans to, LIBOR Loans.

 

Notwithstanding the foregoing, if there are Impacted Loans as provided above, the Administrative Agent, in consultation with Borrower and the affected Lenders, may establish an alternative interest rate for the Impacted Loans, in which case, such alternative rate of interest shall apply with respect to the Impacted Loans (to the extent Borrower does not elect to maintain such Impacted Loans as ABR Loans) until (1) the Administrative Agent revokes the notice delivered with respect to the Impacted Loans (which the Administrative Agent agrees to do if the circumstances giving rise to Impacted Loans cease to exist), (2) the Administrative Agent or the Required Lenders notify the Administrative Agent and Borrower that such alternative interest rate does not adequately and fairly reflect the cost to such Lenders of funding the Impacted Loans, or (3) any Lender determines that any Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for such Lender or its applicable Lending Office to make, maintain or fund Loans whose interest is determined by reference to such alternative rate of interest or to determine or charge interest rates based upon such rate or any Governmental Authority has imposed material restrictions on the authority of such Lender to do any of the foregoing and provides the Administrative Agent and Borrower written notice thereof.

 

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SECTION 5.03.       Illegality.  Notwithstanding any other provision of this Agreement, in the event that any change after the date hereof in any Requirement of Law or in the interpretation or application thereof shall make it unlawful for any Lender or its Applicable Lending Office to honor its obligation to make or maintain LIBOR Loans or issue Letters of Credit hereunder (and, in the sole opinion of such Lender, the designation of a different Applicable Lending Office would either not avoid such unlawfulness or would be disadvantageous to such Lender), then such Lender shall promptly notify Borrower thereof (with a copy to Administrative Agent) and such Lender’s obligation to make or continue, or to convert Loans of any other Type into, LIBOR Loans or issue Letters of Credit shall be suspended until such time as such Lender or L/C Lender may again make and maintain LIBOR Loans or issue Letters of Credit (in which case the provisions of Section 5.04 shall be applicable).

 

SECTION 5.04.       Treatment of Affected Loans.  If the obligation of any Lender to make LIBOR Loans or to continue, or to convert ABR Loans into, LIBOR Loans shall be suspended pursuant to Section 5.03, such Lender’s LIBOR Loans shall be automatically converted into ABR Loans on the last day(s) of the then current Interest Period(s) for such LIBOR Loans (or on such earlier date as such Lender may specify to Borrower with a copy to Administrative Agent as is required by law) and, unless and until such Lender gives notice as provided below that the circumstances specified in Section 5.03 which gave rise to such conversion no longer exist:

 

(i)      to the extent that such Lender’s LIBOR Loans have been so converted, all payments and prepayments of principal which would otherwise be applied to such Lender’s LIBOR Loans shall be applied instead to its ABR Loans; and

 

(ii)     all Loans which would otherwise be made or continued by such Lender as LIBOR Loans shall be made or continued instead as ABR Loans and all ABR Loans of such Lender which would otherwise be converted into LIBOR Loans shall remain as ABR Loans.

 

If such Lender gives notice to Borrower with a copy to Administrative Agent that the circumstances specified in Section 5.03 which gave rise to the conversion of such Lender’s LIBOR Loans pursuant to this Section 5.04 no longer exist (which such Lender agrees to do promptly upon such circumstances ceasing to exist) at a time when LIBOR Loans are outstanding, such Lender’s ABR Loans shall be automatically converted, on the first day(s) of the next succeeding Interest Period(s) for such outstanding LIBOR Loans, to the extent necessary so that, after giving effect thereto, all Loans held by the Lenders holding LIBOR Loans and by such Lender are held pro rata (as to principal amounts, Types and Interest Periods) in accordance with their respective Commitments.

 

SECTION 5.05.       Compensation.

 

(a)           Borrower agrees to indemnify each Lender and to hold each Lender harmless from any loss or expense (excluding any loss of profits or margin) which such Lender may sustain or incur as a consequence of (1) default by Borrower in payment when due of the principal amount of or interest on any LIBOR Loan, (2) default by Borrower in making a borrowing of, conversion into or continuation of LIBOR Loans after Borrower has given a notice requesting the same in accordance with the provisions of this Agreement, (3) Borrower making any prepayment other than on the date specified in the relevant prepayment notice, or (4) the conversion or the making of a payment or a prepayment (including any repayments or prepayments made pursuant to Sections 2.09 or 2.10 or as a result of an acceleration of Loans pursuant to Section 11.01 or as a result of the replacement of a Lender pursuant to Section 2.11 or 13.04(b)) of LIBOR Loans on a day which is not the last day of an Interest Period with respect thereto, including in each case, any such loss (excluding any loss of profits or margin) or expense arising from the reemployment of funds obtained by it or from fees payable to terminate the deposits from which such funds were obtained; provided that no such amounts under this Section 5.05(a) shall be payable by Borrower in connection with any termination in accordance with Section 2.12(b) of any Interest Period of one month or shorter.

 

(b)           For the purpose of calculation of all amounts payable to a Lender under this Section 5.05 each Lender shall be deemed to have actually funded its relevant LIBOR Loan through the purchase of a deposit bearing

 

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interest at the LIBO Base Rate in an amount equal to the amount of the LIBOR Loan and having a maturity comparable to the relevant Interest Period; provided, however, that each Lender may fund each of its LIBOR Loans in any manner it sees fit, and the foregoing assumption shall be utilized only for the calculation of amounts payable under this subsection.  Any Lender requesting compensation pursuant to this Section 5.05 will furnish to Administrative Agent and Borrower a certificate setting forth the basis and amount of such request and such certificate, absent manifest error, shall be conclusive.  Without limiting the survival of any other covenant hereunder, this covenant shall survive the termination of this Agreement and the payment of the Obligations and all other amounts payable hereunder.

 

SECTION 5.06.       Net Payments.

 

(a)           Except as provided in this Section 5.06(a), all payments made by any Credit Party, each Holding Company and RRR hereunder or under any Note or any Guarantee will be made without setoff, counterclaim or other defense.  Except as required by law, all such payments will be made free and clear of, and without deduction or withholding for, any present or future Taxes now or hereafter imposed by any Governmental Authority or taxing authority with respect to such payments (including Taxes imposed or asserted on amounts payable under this Section).  If any Covered Taxes are so deducted or withheld, then the applicable Credit Party, each Holding Company and RRR agrees to increase the sum payable by such Credit Party, each Holding Company or RRR so that, after such deduction or withholding (including such deduction or withholding on account of Covered Taxes applicable to additional sums payable under this Section), such payment will not be less than the amount provided for herein or in such other Credit Document.  The applicable withholding agent shall timely pay the amount of any Taxes deducted or withheld from a payment made by a Credit Party, each Holding Company or RRR hereunder or under any note or any Guarantee to the relevant Governmental Authority in accordance with applicable law.  Borrower shall furnish to the Administrative Agent within 45 days after the date the payment of any Taxes is due pursuant to applicable law documentation reasonably satisfactory to the Administrative Agent evidencing such payment by the applicable Credit Party, each Holding Company or RRR.  The Credit Parties, each Holding Company and RRR agree to jointly and severally indemnify and hold harmless the Administrative Agent and each Lender, and reimburse such Lender upon its written request, for the amount of any Covered Taxes so levied or imposed and paid by such Lender (including Covered Taxes imposed or asserted on amounts payable under this Section) and for any other reasonable expenses arising therefrom, in each case, whether or not such Covered Taxes were correctly or legally imposed.  Such written request shall include a certificate of such Lender setting forth in reasonable detail the basis of such request and such certificate, absent manifest error, shall be conclusive.

 

(b)           (i)            Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Credit Document shall deliver to Borrower and the Administrative Agent, at the time or times reasonably requested by Borrower or the Administrative Agent, such properly completed and executed documentation reasonably requested by Borrower or the Administrative Agent as will permit such payments to be made without withholding or at a reduced rate of withholding.  In addition, any Lender, if reasonably requested by Borrower or the Administrative Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by Borrower or the Administrative Agent as will enable Borrower 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 Section 5.06(b)(ii), (c), and (d) below) shall not be required if in the Lender’s reasonable judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender.  If Administrative Agent is a U.S. Person, it shall deliver two executed originals of Internal Revenue Service Form W-9 certifying that it is exempt from U.S. federal backup withholding tax.  Otherwise, Administrative Agent (including any successor Administrative Agent that is not a U.S. Person) shall deliver two duly completed copies of Internal Revenue Service Form W-8ECI (with respect to any payments to be received on its own behalf) and Internal Revenue Service Form W-8IMY (for all other payments) certifying that it is a “U.S. branch” and that the payments it receives for the account of others are not effectively connected with the

 

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conduct of its trade or business in the United States and that it is using such form as evidence of its agreement with the Credit Parties to be treated as a U.S. Person with respect to such payments (and the Credit Parties and Administrative Agent agree to so treat Administrative Agent as a U.S. Person with respect to such payments), with the effect that the Credit Parties can make payments to Administrative Agent without deduction or withholding of any Taxes imposed by the United States.

 

(ii)           Each Lender that is not a U.S. Person (a “Non-U.S. Lender”) agrees to the extent it is legally entitled to do so to deliver to Borrower and Administrative Agent on or prior to the Closing Date or, in the case of a Lender that is an assignee or transferee of an interest under this Agreement pursuant to Section 13.05 (unless the assigned or transferee Lender was already a Lender hereunder immediately prior to such assignment or transfer and was in compliance with this Section 5.06(b) as of the date of such assignment or transfer), on the date of such assignment or transfer to such Lender, (i) two accurate and complete original signed copies of the applicable Internal Revenue Service Form W-8 together with any applicable attachments certifying to such Lender’s entitlement to exemption from or reduction in the rate of United States withholding tax with respect to payments to be made under this Agreement, any other Credit Document or any Guarantee, or (ii) if the Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, (x) a certificate substantially in the form of Exhibit E (any such certificate, a “Foreign Lender Certificate”) and (y) two accurate and complete original signed copies of the applicable Internal Revenue Service Form W-8 certifying to such Lender’s entitlement to the benefits of the exemption for portfolio interest under Section 871(h) or 881(c) of the Code.  Each Non-U.S. Lender, to the extent it is not the beneficial owner, shall deliver to Administrative Agent and to Borrower, on or prior to the Closing Date (in the case of each Lender listed on the signature pages hereof), on or prior to the date of the Assignment Agreement pursuant to which it becomes a Lender (in the case of each other Lender), or on such later date when such Lender ceases to act for its own account with respect to any portion of such sums paid or payable, and at such other times as may be necessary in the determination of Borrower or Administrative Agent, (i) two original copies of the forms or statements required to be provided by such Lender under this Section 5.06(b), properly completed and duly executed by such Lender, to establish the portion of any such sums paid or payable with respect to which such Lender acts for its own account and is not subject to United States withholding tax, and (ii) two original copies of Internal Revenue Service Form W-8IMY (or any successor forms) properly completed and duly executed by such Lender, together with the applicable Internal Revenue Service Form W-8, a U.S. Tax Compliance Certificate substantially in the form of Exhibit D-1, D-2 or D-3, as applicable, and/or any other certification documents from each beneficial owner.  In addition, each Lender agrees that from time to time after the Closing Date, when a lapse in time or change in circumstances renders the previous certification obsolete or inaccurate in any material respect, it will deliver to Borrower and Administrative Agent two new accurate and complete original signed copies of the applicable Internal Revenue Service Form W-8 and, as applicable, a Foreign Lender Certificate, as the case may be, and such other forms as may be required by applicable law in order to confirm or establish the entitlement of such Lender to a continued exemption from or reduction in United States withholding tax with respect to payments under this Agreement and any Note or any Guarantee.  Notwithstanding the foregoing, no Lender shall be required to deliver any such form or certificate if a change in treaty, law or regulation has occurred prior to the date on which such delivery would otherwise be required that renders any such form or certificate inapplicable or would prevent the Lender from duly completing and delivering any such form or certificate with respect to it and such Lender so advises Borrower.

 

(c)           Each Lender and Administrative Agent that is a “United States person” (as such term is defined in Section 7701(a)(30) of the Code) shall deliver at the time(s) and in the manner(s) prescribed by applicable law, to Borrower and Administrative Agent (as applicable), a properly completed and duly executed Internal Revenue Service Form W-9, or any successor form, certifying that such Person is exempt from United States backup withholding Tax on payments made hereunder.

 

(d)           If a payment made to a Lender under any Credit Document would be subject to United States federal withholding tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such

 

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Lender shall deliver to Borrower and Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by Borrower or Administrative Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by Borrower or Administrative Agent as may be necessary for Borrower and Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. For purposes of this Section 5.06(d), FATCA shall include any amendments made to FATCA after the date of this Agreement.

 

(e)           In addition, Borrower agrees to (and shall timely) pay any present or future stamp or documentary taxes or any other similar charges or similar levies which arise from any payment made hereunder or under the Notes or from the execution, delivery, filing, recordation or registration of, or otherwise with respect to, this Agreement or the Notes (hereinafter referred to as “Other Taxes”).

 

(f)            Any Lender claiming any additional amounts payable pursuant to this Section 5.06 agrees to use (at the Credit Parties’ expense) reasonable efforts (consistent with its internal policy and legal and regulatory restrictions) to change the jurisdiction of its Applicable Lending Office if the making of such change would avoid the need for, or in the opinion of such Lender, materially reduce the amount of, any such additional amounts that may thereafter accrue and would not, in the sole judgment of such Lender, be otherwise disadvantageous to such Lender.

 

(g)           If (i) Administrative Agent or any Lender receives a cash refund in respect of an overpayment of Taxes from a Governmental Authority with respect to, and actually resulting from, an amount of Taxes actually paid to or on behalf of Administrative Agent or such Lender by Borrower or any other Credit Party, each Holding Company or RRR (a “Tax Benefit”) and (ii) Administrative Agent or such Lender determines in its good faith sole discretion that such Tax Benefit has been correctly paid by such Governmental Authority, and will not be required to be repaid to such Governmental Authority, then Administrative Agent or such Lender shall notify Borrower of such Tax Benefit and forward the proceeds of such Tax Benefit (or relevant portion thereof) to Borrower as reduced by any reasonable expense or liability incurred by Administrative Agent or such Lender in connection with obtaining such Tax Benefit; provided, however, that Borrower, upon the request of Administrative Agent or such Lender, agrees to repay the amount paid over to Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to Administrative Agent or such Lender in the event Administrative Agent or such Lender is required to repay such refund to such Governmental Authority.  This Section 5.06(g) shall not be construed to require Administrative Agent or any Lender to make available its tax returns (or any other information relating to its taxes that it deems confidential) to Borrower or any other Person.  Notwithstanding anything to the contrary, in no event will any Lender be required to pay any amount to Borrower the payment of which would place such Lender in a less favorable net after-tax position than such Lender would have been in if the additional amounts giving rise to such refund of any Taxes had never been paid.

 

(h)           For purposes of this Section 5.06, the term “applicable law” includes FATCA.

 

ARTICLE VI.

 

GUARANTEES

 

SECTION 6.01.       The Guarantees.  Each (a) Guarantor, jointly and severally with each other Guarantor, hereby guarantees as primary obligor and not as surety to each Secured Party and its successors and assigns the prompt payment and performance in full when due (whether at stated maturity, by acceleration, demand or otherwise) of the principal of and interest (including any interest, fees, costs or charges that would accrue but for the provisions of the Bankruptcy Code after any bankruptcy or insolvency petition under the Bankruptcy Code) on the Loans made by the Lenders to, and the Notes held by each Lender of, Borrower, and (b) Credit Party, jointly and severally with each other Credit Party, hereby guarantees as primary obligor and not as surety to each Secured Party

 

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and its successors and assigns the prompt payment and performance in full when due (whether at stated maturity, by acceleration or otherwise) of the principal of and interest (including any interest, fees, costs or charges that would accrue but for the provisions of the Bankruptcy Code after any bankruptcy or insolvency petition under the Bankruptcy Code) of all other Obligations from time to time owing to the Secured Parties by any other Credit Party under any Credit Document, any Swap Contract entered into with a Swap Provider or any Cash Management Agreement entered into with a Cash Management Bank, in each case now or hereinafter created, incurred or made, whether absolute or contingent, liquidated or unliquidated and strictly in accordance with the terms thereof; provided, that (i) the obligations guaranteed shall exclude obligations under any Swap Contract or Cash Management Agreements with respect to which the applicable Swap Provider or Cash Management Bank, as applicable, provides notice to Borrower that it does not want such Swap Contract or Cash Management Agreement, as applicable, to be secured, and (ii) as to each Guarantor the obligations guaranteed by such Guarantor hereunder shall not include any Excluded Swap Obligations in respect of such Guarantor (such obligations being guaranteed pursuant to clauses (a) and (b) above being herein collectively called the “Guaranteed Obligations” (it being understood that the Guaranteed Obligations of Borrower shall be limited to those referred to in clause (b) above)).  Each Credit Party, jointly and severally with each other Credit Party, hereby agrees that if any other Credit Party shall fail to pay in full when due (whether at stated maturity, by acceleration or otherwise) any of the Guaranteed Obligations, such Credit Party will promptly pay the same, without any demand or notice whatsoever, and that in the case of any extension of time of payment or renewal of any of the Guaranteed Obligations, the same will be promptly paid in full when due (whether at extended maturity, by acceleration or otherwise) in accordance with the terms of such extension or renewal.

 

SECTION 6.02.       Obligations Unconditional.  The obligations of the Credit Parties under Section 6.01 shall constitute a guaranty of payment (and not of collection) and are absolute, irrevocable and unconditional, joint and several, irrespective of the value, genuineness, validity, regularity or enforceability of the Guaranteed Obligations under this Agreement, the Notes or any other agreement or instrument referred to herein or therein, or any substitution, release or exchange of any other guarantee of or security for any of the Guaranteed Obligations, and, to the fullest extent permitted by applicable law, irrespective of any other circumstance whatsoever that might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor (except for Payment in Full).  Without limiting the generality of the foregoing, it is agreed that the occurrence of any one or more of the following shall not alter or impair the liability of any of the Credit Parties with respect to its respective guaranty of the Guaranteed Obligations which shall remain absolute, irrevocable and unconditional under any and all circumstances as described above:

 

(i)      at any time or from time to time, without notice to the Credit Parties, the time for any performance of or compliance with any of the Guaranteed Obligations shall be extended, or such performance or compliance shall be waived;

 

(ii)     the maturity of any of the Guaranteed Obligations shall be accelerated, or any of the Guaranteed Obligations shall be amended in any respect, or any right under the Credit Documents or any other agreement or instrument referred to herein or therein shall be amended or waived in any respect or any other guarantee of any of the Guaranteed Obligations or any security therefor shall be released or exchanged in whole or in part or otherwise dealt with;

 

(iii)    the release of any other Credit Party pursuant to Section 6.08;

 

(iv)    any renewal, extension or acceleration of, or any increase in the amount of the Guaranteed Obligations, or any amendment, supplement, modification or waiver of, or any consent to departure from, the Credit Documents;

 

(v)     any failure or omission to assert or enforce or agreement or election not to assert or enforce, delay in enforcement, or the stay or enjoining, by order of court, by operation of law or otherwise,

 

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of the exercise or enforcement of, any claim or demand or any right, power or remedy (whether arising under any Credit Documents, at law, in equity or otherwise) with respect to the Guaranteed Obligations or any agreement relating thereto, or with respect to any other guaranty of or security for the payment of the Guaranteed Obligations;

 

(vi)    any settlement, compromise, release, or discharge of, or acceptance or refusal of any offer of payment or performance with respect to, or any substitutions for, the Guaranteed Obligations or any subordination of the Guaranteed Obligations to any other obligations;

 

(vii)   the validity, perfection, non-perfection or lapse in perfection, priority or avoidance of any security interest or lien, the release of any or all collateral securing, or purporting to secure, the Guaranteed Obligations or any other impairment of such collateral;

 

(viii)  any exercise of remedies with respect to any security for the Guaranteed Obligations (including, without limitation, any collateral, including the Collateral securing or purporting to secure any of the Guaranteed Obligations) at such time and in such order and in such manner as the Administrative Agent and the Secured Parties may decide and whether or not every aspect thereof is commercially reasonable and whether or not such action constitutes an election of remedies and even if such action operates to impair or extinguish any right of reimbursement or subrogation or other right or remedy that any Credit Party would otherwise have and without limiting the generality of the foregoing or any other provisions hereof, each Credit Party hereby expressly waives any and all benefits which might otherwise be available to such Credit Party as a surety under applicable law, including, without limitation, California Civil Code Sections 2809, 2810, 2819, 2939, 2845, 2848, 2849, 2850, 2855, 2899 and 3433; or

 

(ix)    any other circumstance whatsoever which may or might in any manner or to any extent vary the risk of any Credit Party as a guarantor in respect of the Guaranteed Obligations or which constitutes, or might be construed to constitute, an equitable or legal discharge of any Credit Party as a guarantor of the Guaranteed Obligations, or of such Credit Party under the guarantee contained in this Article 6 or of any security interest granted by any Credit Party in its capacity as a guarantor of the Guaranteed Obligations, whether in a proceeding under the Bankruptcy Code or under any other federal, state or foreign bankruptcy, insolvency, receivership, or similar law, or in any other instance.

 

The Credit Parties hereby expressly waive diligence, presentment, demand of payment, protest, marshaling and all notices whatsoever, and any requirement that any Secured Party thereof exhaust any right, power or remedy or proceed against any Credit Party under this Agreement, the Notes, the Swap Contracts or the Cash Management Agreements or any other agreement or instrument referred to herein or therein, or against any other Person under any other guarantee of, or security for, any of the Guaranteed Obligations.  The Credit Parties waive any and all notice of the creation, renewal, extension, waiver, termination or accrual of any of the Guaranteed Obligations and notice of or proof of reliance by any Secured Party thereof upon this guarantee or acceptance of this guarantee, and the Guaranteed Obligations, and any of them, shall conclusively be deemed to have been created, contracted or incurred in reliance upon this guarantee, and all dealings between the Credit Parties and the Secured Parties shall likewise be conclusively presumed to have been had or consummated in reliance upon this guarantee.  This guarantee shall be construed as a continuing, absolute, irrevocable and unconditional guarantee of payment and performance without regard to any right of offset with respect to the Guaranteed Obligations at any time or from time to time held by the Secured Parties, and the obligations and liabilities of the Credit Parties hereunder shall not be conditioned or contingent upon the pursuit by the Secured Parties or any other Person at any time of any right or remedy against any Credit Party or against any other Person which may be or become liable in respect of all or any part of the Guaranteed Obligations or against any collateral security or guarantee therefor or right of offset with respect thereto.  This guarantee shall remain in full force and effect and be binding in accordance with and to the extent of its terms upon the Credit Parties and the successors and assigns thereof, and shall inure to the benefit of the

 

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Secured Parties, and their respective successors and assigns, notwithstanding that from time to time during the term of this Agreement there may be no Guaranteed Obligations outstanding.

 

For the avoidance of doubt, nothing in this Section 6.02 shall permit amendments to the Credit Documents or an acceleration of the Obligations other than as set forth in the Credit Documents.

 

SECTION 6.03.       Reinstatement.  The obligations of the Credit Parties under this Article VI shall be automatically reinstated if and to the extent that for any reason any payment by or on behalf of any Credit Party in respect of the Guaranteed Obligations is rescinded or must be otherwise restored by any holder of any of the Guaranteed Obligations, whether as a result of any proceedings in bankruptcy or reorganization or otherwise.  The Credit Parties jointly and severally agree that they will indemnify each Secured Party on demand for all reasonable costs and expenses (including reasonable fees of counsel) incurred by such Secured Party in connection with such rescission or restoration, including any such costs and expenses incurred in defending against any claim alleging that such payment constituted a preference, fraudulent transfer or similar payment under any bankruptcy, insolvency or similar law, other than any costs or expenses resulting from the gross negligence, bad faith or willful misconduct of, or material breach by, such Secured Party.

 

SECTION 6.04.       Subrogation; Subordination.  Each Credit Party hereby agrees that until the payment and satisfaction in full in cash of all Guaranteed Obligations and the expiration and termination of the Commitments of the Lenders under this Agreement it shall not exercise any right or remedy arising by reason of any performance by it of its guarantee in Section 6.01, whether by subrogation, contribution or otherwise, against any Credit Party of any of the Guaranteed Obligations or any security for any of the Guaranteed Obligations.  The payment of any amounts due with respect to any indebtedness of any Credit Party now or hereafter owing to any Credit Party by reason of any payment by such Credit Party under the Guarantee in this Article VI is hereby subordinated to the prior Payment in Full in cash of the Guaranteed Obligations.  Upon the occurrence and during the continuance of an Event of Default, each Credit Party agrees that it will not demand, sue for or otherwise attempt to collect any such indebtedness of any other Credit Party to such Credit Party until the Obligations shall have been Paid in Full in cash.  If an Event of Default has occurred and is continuing, and any amounts are paid to the Credit Parties in violation of the foregoing limitation, such amounts shall be collected, enforced and received by such Credit Party as trustee for the Secured Parties and be paid over to Administrative Agent on account of the Guaranteed Obligations without affecting in any manner the liability of such Credit Party under the other provisions of the guaranty contained herein.

 

SECTION 6.05.       Remedies.  The Credit Parties jointly and severally agree that, as between the Credit Parties and the Lenders, the obligations of any Credit Party under this Agreement and the Notes may be declared to be forthwith due and payable as provided in Article XI (and shall be deemed to have become automatically due and payable in the circumstances provided in said Article XI) for purposes of Section 6.01, notwithstanding any stay, injunction or other prohibition preventing such declaration (or such obligations from becoming automatically due and payable arising under the Bankruptcy Code or any other federal or state bankruptcy, insolvency or other law providing for protection from creditors) as against such other Credit Parties and that, in the event of such declaration (or such obligations being deemed to have become automatically due and payable), such obligations (whether or not due and payable by Borrower) shall forthwith become due and payable by the other Credit Parties for purposes of Section 6.01.

 

SECTION 6.06.       Continuing Guarantee.  The guarantee in this Article VI is a continuing guarantee of payment and performance, and shall apply to all Guaranteed Obligations whenever arising.

 

SECTION 6.07.       General Limitation on Guarantee Obligations.  In any action or proceeding involving any state corporate law, or any state, federal or foreign bankruptcy, insolvency, reorganization or other law affecting the rights of creditors generally, if the obligations of any Credit Party under Section 6.01 would otherwise be held or determined to be void, voidable, invalid or unenforceable, or subordinated to the claims of any other creditors, on account of the amount of its liability under Section 6.01, then, notwithstanding any other

 

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provision to the contrary, the amount of such liability shall, without any further action by such Credit Party, any Secured Party or any other Person, be automatically limited and reduced to the highest amount that is valid and enforceable and not subordinated to the claims of other creditors as determined in such action or proceeding.

 

SECTION 6.08.       Release of Guarantors.  If, in compliance with the terms and provisions of the Credit Documents, (i) the Equity Interests of any Guarantor are directly or indirectly sold or otherwise transferred such that such Guarantor no longer constitutes a Restricted Subsidiary (a “Transferred Guarantor”) to a Person or Persons, none of which is Borrower or a Restricted Subsidiary, or (ii) any Restricted Subsidiary is designated as or becomes an Unrestricted Subsidiary, upon the consummation of such sale or transfer, Transferred Guarantor, and upon such designation, such Person so designated or which becomes such an Unrestricted Subsidiary, as the case may be, shall be automatically released from its obligations under this Agreement (including under Section 13.03 hereof) and the other Credit Documents, and its obligations to pledge and grant any Collateral owned by it pursuant to any Security Document, and the pledge of Equity Interests in any Transferred Guarantor or any Unrestricted Subsidiary to Collateral Agent pursuant to the Security Documents shall be automatically released, and, so long as Borrower shall have provided the Agents such certifications or documents as any Agent shall reasonably request, Collateral Agent shall take such actions as are necessary to effect and evidence each release described in this Section 6.08 in accordance with the relevant provisions of the Security Documents and this Agreement.

 

SECTION 6.09.       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 Credit Party to honor all of its obligations under the Guarantee in respect of Swap Obligations (provided, however, that each Qualified ECP Guarantor shall only be liable under this Section 6.09 for the maximum amount of such liability that can be hereby incurred without rendering its obligations under this Section 6.09, or otherwise under the Guarantee, as it relates to such Credit 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 until the Payment in Full of the Guaranteed Obligations.  Each Qualified ECP Guarantor intends that this Section 6.09 constitute, and this Section 6.09 shall be deemed to constitute, a “keepwell, support, or other agreement” for the benefit of each other Credit Party for all purposes of Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

 

SECTION 6.10.       Right of Contribution.  Each Credit Party hereby agrees that to the extent that a Credit Party (a “Funding Credit Party”) shall have paid more than its Fair Share (as defined below) of any payment made hereunder, such Credit Party shall be entitled to seek and receive contribution from and against any other Credit Party hereunder which has not paid its Fair Share of such payment.  Each Credit Party’s right of contribution shall be subject to the terms and conditions of Section 6.04.  The provisions of this Section 6.10 shall in no respect limit the obligations and liabilities of any Credit Party to the Secured Parties, and each Credit Party shall remain liable to the Secured Parties for the full amount guaranteed by such Credit Party hereunder.  “Fair Share” means, with respect to a Credit Party as of any date of determination, an amount equal to (i) the ratio of (A) the Adjusted Maximum Amount (as defined below) with respect to such Credit Party to (B) the aggregate of the Adjusted Maximum Amounts with respect to all Credit Parties multiplied by (ii) the aggregate amount paid or distributed on or before such date by all Funding Credit Parties under this Article VI in respect of the Guaranteed Obligations.  “Adjusted Maximum Amount” means, with respect to a Credit Party as of any date of determination, the maximum aggregate amount of the obligations of such Credit Party under this Article VI; provided that, solely for purposes of calculating the “Adjusted Maximum Amount” with respect to any Credit Party for purposes of this Section 6.10, any assets or liabilities of such Credit Party arising by virtue of any rights to subrogation, reimbursement or indemnification or any rights to or obligations of contribution hereunder shall not be considered as assets or liabilities of such Credit Party.  The amounts payable as contributions hereunder shall be determined as of the date on which the related payment or distribution is made by the applicable Funding Credit Party.

 

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ARTICLE VII.

 

CONDITIONS PRECEDENT

 

SECTION 7.01.       Conditions to Initial Extensions of Credit.

 

The obligations of Lenders to make any initial extension of credit hereunder (whether by making a Loan or issuing a replacement and/or new Letter of Credit) are subject to the satisfaction of the following:

 

(a)           Corporate Documents.

 

(i)      Administrative Agent shall have received copies of the Organizational Documents of each Credit Party, each Holding Company and RRR and evidence of all corporate or other applicable authority for each Credit Party, each Holding Company and RRR (including resolutions or written consents and incumbency certificates) with respect to the execution, delivery and performance of such of the Credit Documents to which each such Credit Party, Holding Company and RRR is intended to be a party as of the Closing Date, certified as of the Closing Date as complete and correct copies thereof by a Responsible Officer of each Credit Party, Holding Company and RRR (or the member or manager or general partner of such Credit Party, Holding Company and RRR, as applicable).

 

(ii)     Administrative Agent shall have received:

 

(A)          certified copies of the GVR/ANC License Agreement, each Native American Contract (or, in the case of Native American Contracts, forms of such contracts), the Holding Company Tax Sharing Agreement, the LandCo Support Agreement and the LandCo Credit Agreement, duly executed by the parties thereto, each including certification by a Responsible Officer of the Borrower that such documents are in full force and effect as of the Closing Date; and

 

(B)          certified copies of the documentation governing the Senior Unsecured Notes, duly executed by all parties thereto, which is in full force and effect on the Closing Date.

 

(b)           Officer’s Certificate.  Administrative Agent shall have received an Officer’s Certificate of Borrower, dated the Closing Date, certifying that the conditions set forth in Sections 7.01(t), 7.02(a)(i) and 7.02(a)(ii) (giving effect to the provisions contained therein) have been satisfied.

 

(c)           Opinions of Counsel.  Administrative Agent shall have received the following opinions, each of which shall be addressed to the Administrative Agent, the Collateral Agent and the Lenders, dated the Closing Date and covering such matters as the Administrative Agent shall reasonably request in a manner customary for transactions of this type:

 

(i)      an opinion of Milbank, Tweed, Hadley & McCloy LLP, special counsel to the Credit Parties; and

 

(ii)     opinions of local counsel to the Credit Parties in such jurisdictions as are set forth in Schedule 7.01.

 

(d)           Notes.  Administrative Agent shall have received copies of the Notes, duly completed and executed, for each Lender that requested a Note at least three (3) Business Days prior to the Closing Date.

 

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(e)           Credit Agreement.  Administrative Agent shall have received this Agreement (a) executed and delivered by a duly authorized officer of each Credit Party and (b) executed and delivered by a duly authorized officer of each Person that is a Lender on the Closing Date.

 

(f)            Filings and Lien Searches.  Administrative Agent shall have received (i) UCC financing statements in form appropriate for filing in the jurisdiction of organization of each Credit Party, (ii) results of lien searches conducted in the jurisdictions in which Borrower and its Restricted Subsidiaries are organized and (iii) security agreements or other agreements in appropriate form for filing in the United States Patent and Trademark Office and United States Copyright Office with respect to intellectual property of Borrower to the extent required pursuant to the Security Agreement.

 

(g)           Security Documents.  (i) Administrative Agent shall have received the Security Agreement, the Pledge Agreement, the Custodian Agreement and the Initial Perfection Certificate, in each case duly authorized, executed and delivered by the applicable Credit Parties, Holding Companies and RRR, and (ii) Collateral Agent shall have received, to the extent required pursuant to the Security Agreement or the Pledge Agreement and not prohibited by applicable Requirements of Law (including, without limitation, any Gaming Laws), (1) original certificates representing the certificated Pledged Securities (as defined in the Security Agreement or the Pledge Agreement) required to be delivered to Collateral Agent pursuant to the Security Agreement or the Pledge Agreement, accompanied by original undated stock powers executed in blank (except as set forth on Schedule 9.15) (provided that, the pledge of any Equity Interests of any Person that is subject to the jurisdiction of the Nevada Gaming Authorities as a licensee or registered company under the Nevada Gaming Laws will require the approval of the Nevada Gaming Authorities in order to be effective, and no certificates evidencing the Equity Interests of such Person or any undated stock powers or assignments separate from certificate relating thereto shall be delivered to Administrative Agent or any custodial agent thereof until such approval has been obtained; provided further that, all certificates representing such Equity Interests (and the corresponding undated stock powers or assignments separate from certificate) shall be held in the State of Nevada by a bailee reasonably agreed to by Administrative Agent pursuant to a Custodian Agreement in the form of Exhibit U attached hereto), and (2) the promissory notes, intercompany notes, instruments, and chattel paper identified under the name of such Credit Parties in Schedule 6 to the Initial Perfection Certificate (other than such certificates, promissory notes, intercompany notes, instruments and chattel paper that constitute “Excluded Property” (as such term is defined in the Security Agreement)), accompanied by undated notations or instruments of assignment executed in blank, and all of the foregoing shall be reasonably satisfactory to Administrative Agent in form and substance (in each case to the extent required to be delivered to Collateral Agent pursuant to the terms of the Security Agreement or the Pledge Agreement).

 

(h)           Capitalization.  The pro forma capitalization (after giving effect to the Transactions), cash management systems, structure and equity ownership of Borrower and its Subsidiaries that have been provided to Administrative Agent in writing shall be acceptable to Administrative Agent.

 

(i)            Financial Statements.  Administrative Agent shall have received (i) the audited consolidated balance sheets of Borrower and its Subsidiaries (before giving effect to the Transactions) as of December 31, 2015, and the related statements of income, changes in members’ equity and cash flows for the fiscal year ended on such date, together with reports thereon by Ernst & Young LLP, certified public accountants; provided, that Administrative Agent acknowledges that it has received such balance sheets and related statements of earnings, changes in members’ equity and cash flows and reports thereon and (ii) the unaudited interim consolidated and (to the extent available) consolidating balance sheet of Borrower and its Subsidiaries (before giving effect to the Transactions) and the related statements of income, changes in members’ equity and cash flows for the fiscal quarter ended March 31, 2016, in each case which financial statements have been prepared in accordance with GAAP.

 

(j)            [Reserved].

 

(k)           [Reserved].

 

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(l)            Insurance.  Administrative Agent shall have received evidence of insurance complying with the requirements of Section 9.02 and certificates naming Collateral Agent as an additional insured and/or loss payee to the extent required pursuant to such Section 9.02.

 

(m)          Credit Documents in Full Force and Effect; Engagement Letters.  The Credit Documents required to be executed and delivered on or prior to the Closing Date shall be in full force and effect.  Borrower shall have complied, or shall comply substantially concurrently with the funding of the Loans hereunder, in all respects with its payment obligations under the Engagement Letters required to be performed on the Closing Date.

 

(n)           Repayment of Indebtedness.

 

(i)      Borrower and its Restricted Subsidiaries shall have effected (or will, on the Closing Date, effect) the repayment in full of all obligations and indebtedness of Borrower and its Restricted Subsidiaries in respect of the Existing Credit Agreement, including, without limitation, the termination of all outstanding commitments in effect under the Existing Credit Agreement (with the exception of obligations relating to each applicable Existing Letter of Credit issued thereunder), on customary terms and conditions and pursuant to documentation reasonably satisfactory to Administrative Agent.  All Liens and guarantees in respect of such obligations shall have been terminated or released (or arrangements for such termination or release reasonably satisfactory to Administrative Agent shall have been made) (with the exception of obligations relating to each applicable Existing Letter of Credit issued thereunder), and Administrative Agent shall have received (or will, on the Closing Date, receive) evidence thereof reasonably satisfactory to Administrative Agent and a “pay-off” letter or letters reasonably satisfactory to Administrative Agent with respect to such obligations and such UCC termination statements, mortgage releases and other instruments, in each case in proper form for recording, as Administrative Agent shall have reasonably requested to release and terminate of record the Liens securing such obligations (or arrangements for such termination or release reasonably satisfactory to Administrative Agent shall have been made).

 

(ii)     After giving effect to the Transactions, Borrower and its Restricted Subsidiaries shall have outstanding no Indebtedness for borrowed money or Disqualified Capital Stock other than (x) the Obligations under the Credit Documents, (ii) Indebtedness set forth on Schedule 10.01, (iii) the Senior Unsecured Notes in an aggregate principal amount of $500.0 million and (iv) other Indebtedness permitted by Section 10.01 and agreed by Administrative Agent.

 

(o)           Consummation of Transactions.  The Transactions and the consummation thereof shall be in compliance in all material respects with all applicable Laws (including Gaming Laws and Regulation T, Regulation U and Regulation X) and all applicable Gaming Approvals and other applicable regulatory approvals.  After giving effect to the Transactions, there shall be no conflict with, or default under, any material Contractual Obligation of Borrower and its Restricted Subsidiaries (including any such material Contractual Obligations (i) entered into pursuant to the Transactions and (ii) in respect of Senior Unsecured Notes) (except as Administrative Agent shall otherwise agree)).

 

(p)           Approvals.  Other than as set forth in Section 8.06, Section 8.15 and on Schedule 9.15, all necessary Gaming Approvals and Governmental Authority and third party approvals and/or consents in connection with the Transactions, including without limitation, the transactions contemplated by the Credit Documents (excluding consents from third parties pertaining to collateral and security for the Loans which are addressed elsewhere in this Article VII) shall have been obtained and shall remain in full force and effect, and all applicable waiting periods shall have expired without any action being taken by any competent authority which restrains, enjoins, prevents or imposes materially adverse conditions upon the consummation of the Transactions.  In addition, there shall not exist any judgment, order, injunction or other restraint, and there shall be no pending litigation or proceeding by any Governmental Authority, prohibiting, enjoining or imposing materially adverse conditions upon the Transactions, or on the consummation thereof.

 

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(q)           Solvency.  Administrative Agent shall have received a certificate in the form of Exhibit G from a Responsible Officer of Borrower with respect to the Solvency of Borrower (on a consolidated basis with its Restricted Subsidiaries), immediately after giving effect to the consummation of the Transactions.

 

(r)            Payment of Fees and Expenses.  To the extent invoiced at least three (3) Business Days prior to the Closing Date, all costs, fees, expenses (including, without limitation, reasonable legal fees and expenses of Latham & Watkins LLP, and of local counsel in any applicable jurisdiction, if any) of Administrative Agent, Lead Arrangers and (in the case of fees only) the Lenders required to be paid by this Agreement or by the Engagement Letters, in each case, payable to Administrative Agent, Lead Arrangers and/or Lenders in respect of the Transactions, shall have been paid to the extent due.

 

(s)            Patriot Act.  On or prior to the Closing Date, Administrative Agent shall have received at least five (5) days prior to the Closing Date all documentation and other information reasonably requested in writing at least ten (10) days prior to the Closing Date by Administrative Agent that Administrative Agent reasonably determines is required by regulatory authorities from the Credit Parties under applicable “know your customer” and anti-money laundering rules and regulations, including without limitation the Act.

 

(t)            Material Adverse Changes. Since December 31, 2015, there has been no event, change or condition that has had or could reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect.

 

SECTION 7.02.       Conditions to All Extensions of Credit.  Subject to the limitations set forth in Section 2.12 and the applicable Incremental Joinder Agreement, the obligations of the Lenders to make any Loan or otherwise extend any credit to Borrower upon the occasion of each Borrowing or other extension of credit (whether by making a Loan or issuing a Letter of Credit) hereunder (including the initial borrowing) is subject to the further conditions precedent that:

 

(a)           No Default or Event of Default; Representations and Warranties True.  Both immediately prior to the making of such Loan or other extension of credit and also after giving effect thereto and to the intended use thereof:

 

(i)      no Default or Event of Default shall have occurred and be continuing (provided that this clause (i) shall not apply to any extensions of credit pursuant to an Incremental Term Loan to the extent provided in Section 2.12 and the applicable Incremental Joinder Agreement);

 

(ii)     each of the representations and warranties made by the Credit Parties in Article VIII and by each Credit Party, each Holding Company and RRR in each of the other Credit Documents to which it is a party shall be true and correct in all material respects on and as of the date of the making of such Loan or other extension of credit with the same force and effect as if made on and as of such date (it being understood and agreed that any such representation or warranty which by its terms is made as of an earlier date shall be required to be true and correct in all material respects only as such earlier date, and 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 applicable date) (provided that this clause (ii) shall not apply to any extensions of credit pursuant to an Incremental Term Loan to the extent provided in Section 2.12 and the applicable Incremental Joinder Agreement); and

 

(iii)    the sum of the aggregate amount of the outstanding Revolving Loans, plus the aggregate amount of the outstanding Swingline Loans plus the aggregate outstanding L/C Liabilities shall not exceed the Total Revolving Commitments then in effect.

 

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(b)           Notice of Borrowing.  Administrative Agent shall have received a Notice of Borrowing and/or Letter of Credit Request, as applicable, duly completed and complying with Section 4.05.  Each Notice of Borrowing or Letter of Credit Request delivered by Borrower hereunder shall constitute a representation and warranty by Borrower that on and as of the date of such notice and on and as of the relevant borrowing date or date of issuance of a Letter of Credit (both immediately before and after giving effect to such borrowing or issuance and the application of the proceeds thereof) that the applicable conditions in Sections 7.01 or 7.02, as the case may be, have been satisfied.

 

ARTICLE VIII.

 

REPRESENTATIONS AND WARRANTIES

 

Each Credit Party represents and warrants to Administrative Agent, the Collateral Agent and Lenders that, at and as of each Funding Date, in each case immediately before and immediately after giving effect to the transactions to occur on such date (provided, that such representations and warranties made on the Closing Date shall be made giving effect to the Transactions):

 

SECTION 8.01.       Corporate Existence; Compliance with Law.

 

(a)           Borrower, each Holding Company, RRR and each Restricted Subsidiary (a) is a corporation, partnership, limited liability company or other entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization; (b)(i) has all requisite corporate or other power and authority, and (ii) has all governmental licenses, authorizations, consents and approvals necessary to own its Property and carry on its business as now being conducted; and (c) is qualified to do business and is in good standing in all jurisdictions in which the nature of the business conducted by it makes such qualification necessary; except, in the case of clauses (b)(ii) and (c) where the failure thereof individually or in the aggregate would not reasonably be expected to have a Material Adverse Effect.

 

(b)           Neither Borrower, any Holding Company, RRR nor any Restricted Subsidiary nor any of its Property is in violation of, nor will the continued operation of Borrower’s, such Holding Company’s, RRR’s or such Restricted Subsidiary’s Property as currently conducted violate, any Requirement of Law (including, without limitation, the Act and any zoning or building ordinance, code or approval or permits or any restrictions of record or agreements affecting the Real Property) or is in default with respect to any judgment, writ, injunction, decree or order of any Governmental Authority, where such violations or defaults would reasonably be expected to have a Material Adverse Effect.

 

(c)           Neither Borrower, any Guarantor, RRR nor any Holding Company is an EEA Financial Institution.

 

SECTION 8.02.       Financial Condition; Etc.  Borrower has delivered to the Administrative Agent or made publically available (a) the audited consolidated balance sheets of Borrower and its Subsidiaries (before giving effect to the Transactions) as of December 31, 2015, and the related statements of earnings, changes in stockholders’ equity and cash flows for the fiscal years ended on those dates, together with reports thereon by Ernst & Young LLP, certified public accountants and (b) the unaudited interim consolidated balance sheet of Borrower and its Subsidiaries (before giving effect to the Transactions) and the related statements of earnings, changes in stockholders’ equity and cash flows for the most recent fiscal quarter ending after December 31, 2015 (other than the fourth fiscal quarter of any fiscal year) and at least 45 days prior to the Closing Date.  All of said financial statements, including in each case the related schedules and notes, are true, complete and correct in all material respects and have been prepared in accordance with GAAP consistently applied and present fairly in all material respects the financial position of Borrower and its Subsidiaries as of the respective dates of said balance sheets and

 

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the results of their operations for the respective periods covered thereby, subject (in the case of interim statements) to normal period-end audit adjustments and the absence of footnotes.

 

SECTION 8.03.       Litigation.  Except as set forth on Schedule 8.03, there is no Proceeding (other than any normal overseeing reviews of the Gaming Authorities) pending against, or to the knowledge of any Responsible Officer of Borrower, threatened in writing against, Borrower, any Holding Company or any of the Restricted Subsidiaries or any of their respective Properties before any Governmental Authority or private arbitrator that (i) either individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect or (ii) as of the Closing Date only, challenges the validity or enforceability of any of the Credit Documents.

 

SECTION 8.04.       No Breach; No Default.

 

(a)           None of the execution, delivery and performance by any Credit Party, any Holding Company or RRR of any Credit Document to which it is a party nor the consummation of the transactions herein and therein contemplated (including the Transactions) do or will (i) conflict with or result in a breach of, or require any consent (which has not been obtained and is in full force and effect) under (x) any Organizational Document of any Credit Party, any Holding Company or RRR or (y) any applicable Requirement of Law (including, without limitation, any Gaming Law) or (z) any order, writ, injunction or decree of any Governmental Authority binding on any Credit Party, any Holding Company or RRR or tortiously interfere with, result in a breach of, or require termination of, any term or provision of any Contractual Obligation of any Credit Party, any Holding Company or RRR or (ii) constitute (with due notice or lapse of time or both) a default under any such Contractual Obligation or (iii) result in or require the creation or imposition of any Lien (except for the Liens created pursuant to the Security Documents) upon any Property of any Credit Party, any Holding Company or RRR pursuant to the terms of any such Contractual Obligation, except with respect to (i)(y), (i)(z), (ii) or (iii) which would not reasonably be expected to result in a Material Adverse Effect.

 

(b)           No Default or Event of Default has occurred and is continuing.

 

SECTION 8.05.       Action.  Borrower, each Holding Company, RRR and each Restricted Subsidiary has all necessary corporate or other organizational power, authority and legal right to execute, deliver and perform its obligations under each Credit Document to which it is a party and to consummate the transactions herein and therein contemplated; the execution, delivery and performance by Borrower, each Holding Company, RRR and each Restricted Subsidiary of each Credit Document to which it is a party and the consummation of the transactions herein and therein contemplated have been duly authorized by all necessary corporate, partnership or other organizational action on its part; and this Agreement has been duly and validly executed and delivered by each Credit Party and constitutes, and each of the Credit Documents to which it is a party when executed and delivered by such Credit Party, such Holding Company or RRR will constitute, its legal, valid and binding obligation, enforceable against each Credit Party, each Holding Company and RRR, as applicable, in accordance with its terms, except as such enforceability may be limited by (a) bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or similar laws of general applicability from time to time in effect affecting the enforcement of creditors’ rights and remedies and (b) the application of general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

 

SECTION 8.06.       Approvals.  No authorizations, approvals or consents of, and no filings or registrations with, any Governmental Authority or any securities exchange are necessary for the execution, delivery or performance by Borrower, any Holding Company, RRR or any Restricted Subsidiary of the Credit Documents to which it is a party or for the legality, validity or enforceability hereof or thereof or for the consummation of the Transactions, except for: (i) authorizations, approvals or consents of, and filings or registrations with any Governmental Authority or any securities exchange previously obtained, made, received or issued, (ii) filings and recordings in respect of the Liens created pursuant to the Security Documents, (iii) the filings referred to in Section 8.14, (iv) waiver by the Gaming Authorities of any qualification requirement on the part of the Lenders who do not

 

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otherwise qualify and are not banks or licensed lending institutions, (v) consents, authorizations and filings that have been obtained or made and are in full force and effect or the failure of which to obtain would not reasonably be expected to have a Material Adverse Effect, (vi) any required approvals (including prior approvals) of the requisite Gaming Authorities that any Agent, Lender or participant is required to obtain from, or any required filings with, requisite Gaming Authorities to exercise their respective rights and remedies under this Agreement and the other Credit Documents (as set forth in Section 13.13) and (vii) prior approval from the Nevada Gaming Commission of the Pledge Agreement, the Security Agreement and the pledge of any Pledged Nevada Gaming Interests (as defined in the Pledge Agreement and the Security Agreement).

 

SECTION 8.07.       ERISA and Foreign Employee Benefit Matters.

 

(a)           Except as set forth on Schedule 8.07, no ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Events for which liability is reasonably expected to occur, would reasonably be expected to result in a Material Adverse Effect.  Except as set forth on Schedule 8.07, as of the Closing Date, no member of the ERISA Group maintains or contributes to any Pension Plan.  Except as set forth on Schedule 8.07, each Company is in compliance with the presently applicable provisions of ERISA and the Code with respect to each Employee Benefit Plan (other than to the extent such failure to comply would not reasonably be expected to have a Material Adverse Effect).  Except as disclosed on Schedule 8.07, using actuarial assumptions and computation methods consistent with Part 1 of Subtitle E of Title IV of ERISA, the aggregate liabilities of any ERISA Entity to all Multiemployer Plans in the event of a complete withdrawal therefrom, as of the close of the most recent fiscal year of each such Multiemployer Plan that precedes the Closing Date, would not reasonably be expected to result in a Material Adverse Effect.

 

(b)           Each Foreign Plan is in compliance with all laws, regulations and rules applicable thereto and the respective requirements of the governing documents for such Foreign Plan (other than to the extent such failure to comply would not reasonably be expected to have a Material Adverse Effect).  The aggregate of the liabilities to provide all of the accrued benefits under any funded Foreign Plan (based on reasonable assumptions used by such Foreign Plan) does not as of the most recent valuation report (or as of the end of the most recent plan year if there is no recent valuation report) exceed the current fair market value of the assets held in the trust or other funding vehicle for such Foreign Plan by an amount that would reasonably be expected to have a Material Adverse Effect.  Other than to the extent such failure to comply would not reasonably be expected to have a Material Adverse Effect, with respect to any unfunded Foreign Plan, reasonable reserves have been established in accordance with prudent business practice or where required by ordinary accounting practices in the jurisdiction in which such Foreign Plan is maintained.  There are no actions, suits or claims (other than routine claims for benefits) pending or to the knowledge of any Responsible Officer of Borrower, threatened against Borrower or any of its Restricted Subsidiaries or any ERISA Entity with respect to any Foreign Plan that would reasonably be expected to result in a Material Adverse Effect.

 

SECTION 8.08.       Taxes.  Except as set forth on Schedule 8.08 or as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, (i) all tax returns, statements, reports and forms or other documents (including estimated Tax or information returns and including any required, related or supporting information) (collectively, the “Tax Returns”) required to be filed with any taxing authority by, or with respect to, Borrower, each Holding Company, RRR and each of the Restricted Subsidiaries have been timely filed in accordance with all applicable laws; (ii) Borrower, each Holding Company, RRR and each of the Restricted Subsidiaries has timely paid or made provision for payment of all Taxes shown as due and payable on Tax Returns that have been so filed or that are otherwise due and payable (other than Taxes which are being contested in good faith by appropriate proceedings and for which adequate reserves have been provided in accordance with GAAP and such proceedings operate to suspend collection of the contested Taxes and enforcement of a Lien in respect thereof) and each Tax Return is accurate and complete; and (iii) Borrower, each Holding Company, RRR and each of the Restricted Subsidiaries has made adequate provision in accordance with GAAP for all Taxes payable by Borrower, such Holding Company, RRR or such Restricted Subsidiary for which no Tax Return has yet been filed.  Neither

 

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Borrower, any Holding Company, RRR nor any of the Restricted Subsidiaries has received written notice of any proposed or pending tax assessment, audit or deficiency against Borrower, such Holding Company, RRR or such Restricted Subsidiary that would in the aggregate reasonably be expected to have a Material Adverse Effect.  Neither of Holdco nor Borrower is treated as a corporation for U.S. federal income tax purposes.

 

SECTION 8.09.       Investment Company Act; Other Restrictions.  Neither Borrower nor any Holding Company, RRR or any of the Restricted Subsidiaries is an “investment company,” or a company “controlled” by an “investment company” required to be regulated under the Investment Company Act of 1940, as amended.  Neither Borrower nor any Holding Company, RRR of any of the Restricted Subsidiaries is subject to regulation under any law or regulation which limits its ability to incur Indebtedness, other than Regulation X and the Gaming Laws.

 

SECTION 8.10.       Environmental Matters.  Except as set forth on Schedule 8.10 or as would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect:  (i) each of Borrower, each Holding Company and the Restricted Subsidiaries and each of their businesses, operations and Real Property is and in the last five years has been in material compliance with, and each has no liability under any Environmental Law; (ii) each of Borrower, each Holding Company and the Restricted Subsidiaries has obtained all Permits material to, and required for, the conduct of their businesses and operations, and the ownership, operation and use of their assets, all as currently conducted, under any Environmental Law, all such Permits are valid and in good standing and, under the currently effective business plans of Borrower, the Holding Companies and the Restricted Subsidiaries, no material expenditures or operational adjustments would reasonably be expected to be required during the next five years in order to renew or modify such Permits; (iii) there has been no Release or threatened Release of Hazardous Material on, at, under or from any real property or facility presently or formerly owned, leased, operated or, to the knowledge of any Responsible Officer of Borrower, any Holding Company or any of the Restricted Subsidiaries, used for waste disposal by Borrower, any Holding Company or any of the Restricted Subsidiaries, or any of their respective predecessors in interest that would reasonably be expected to result in liability to Borrower, the Holding Companies or any of the Restricted Subsidiaries under any Environmental Law; (iv) there is no Environmental Action pending or, to the knowledge of any Responsible Officer of Borrower, any Holding Company or any of the Restricted Subsidiaries, threatened, against Borrower, any Holding Company or any of the Restricted Subsidiaries or, relating to real property currently or formerly owned, leased, operated or, to the knowledge of any Responsible Officer of Borrower, any Holding Company or any of the Restricted Subsidiaries, used for waste disposal, by Borrower, any Holding Company or any of the Restricted Subsidiaries or relating to the operations of Borrower, the Holding Companies or the Restricted Subsidiaries; (v) none of Borrower, any Holding Company or any of the Restricted Subsidiaries is obligated to perform any action or otherwise incur any expense under any Environmental Law pursuant to any legally binding order, decree, judgment or agreement by which it is bound or has assumed by contract or agreement, and none of Borrower, any Holding Company or any of the Restricted Subsidiaries is conducting or financing any Response Action pursuant to any Environmental Law with respect to any location; (vi) no circumstances exist that would reasonably be expected to (a) form the basis of an Environmental Action against Borrower, any Holding Company or any of the Restricted Subsidiaries, or any of their Real Property, facilities or assets or (b) cause any such Real Property, facilities or assets to be subject to any restriction on ownership, occupancy, use or transferability under any Environmental Law; (vii) no real property or facility presently or formerly owned, operated or leased by Borrower, any Holding Company or any of the Restricted Subsidiaries and, to the knowledge of any Responsible Officer of Borrower, any Holding Company or any of the Restricted Subsidiaries, no real property or facility presently or formerly used for waste disposal by Borrower, any Holding Company or any of the Restricted Subsidiaries or owned, leased, operated or used for waste disposal by any of their respective predecessors in interests is (a) listed or proposed for listing on the National Priorities List promulgated pursuant to CERCLA or (b) included on any similar list maintained by any Governmental Authority including, without limitation, any such list relating to petroleum; (viii) no real property or facility presently or formerly owned, or presently leased or operated by Borrower, any Holding Company or any of the Restricted Subsidiaries and, to the knowledge of any Responsible Officer of Borrower, any Holding Company or any of the Restricted Subsidiaries, no real property or facility formerly leased or operated by Borrower, any Holding Company or any of the Restricted Subsidiaries is listed on the Comprehensive Environmental Response,

 

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Compensation, and Liability Information System promulgated pursuant to CERCLA as potentially requiring future Response Action; (ix) no Lien has been recorded or, to the knowledge of any Responsible Officer of Borrower, any Holding Company or any of the Restricted Subsidiaries, threatened under any Environmental Law with respect to any Real Property or other assets of Borrower, any Holding Company or any of the Restricted Subsidiaries; and (x) the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby will not affect the validity or require the transfer of any Permit held by Borrower, any Holding Company or any of the Restricted Subsidiaries under any Environmental Law, and will not require any notification, registration, filing, reporting, disclosure, investigation, remediation or cleanup pursuant to any Governmental Real Property Disclosure Requirements with respect to each of Borrower, each Holding Company and the Restricted Subsidiaries or any of their respective predecessors in interest.

 

SECTION 8.11.       Use of Proceeds.

 

(a)           Borrower will use the proceeds of:

 

(i)      Term A Facility Loans, Term B Facility Loans and Revolving Loans made on the Closing Date to finance the Transactions and for general corporate purposes, and

 

(ii)     Revolving Loans and Term Loans made after the Closing Date for working capital, capital expenditures, Permitted Acquisitions (and other Acquisitions not prohibited hereunder) and general corporate purposes and for any other purposes not prohibited by this Agreement.

 

(b)           Neither Borrower, any Holding Company, RRR nor any of the Restricted Subsidiaries is engaged principally, or as one of its important activities, in the business of extending credit for the purpose, whether immediate, incidental or ultimate, of buying or carrying Margin Stock.  No part of the proceeds of any extension of credit (including any Loans and Letters of Credit) hereunder will be used directly or indirectly and whether immediately, incidentally or ultimately to purchase or carry any Margin Stock or to extend credit to others for such purpose or to refund Indebtedness originally incurred for such purpose or for any other purpose, in each case, that entails a violation of, or is inconsistent with, the provisions of Regulation T, Regulation U or Regulation X.  The pledge of any Equity Interests by any Credit Party, Holding Company or RRR pursuant to the Security Agreement and the Pledge Agreement does not violate such regulations.

 

SECTION 8.12.       Subsidiaries.

 

(a)           Schedule 8.12(a) sets forth a true and complete list of the following:  (i) all the Subsidiaries of Borrower, each Holding Company and RRR as of the Closing Date; (ii) the name and jurisdiction of incorporation or organization of each such Subsidiary as of the Closing Date; and (iii) as to each such Subsidiary, the percentage and number of each class of Equity Interests of such Subsidiary owned by Borrower, the Holding Companies, RRR and their respective Subsidiaries as of the Closing Date.

 

(b)           Schedule 8.12(b) sets forth a true and complete list of all the Immaterial Subsidiaries as of the Closing Date.

 

(c)           Schedule 8.12(c) sets forth a true and complete list of all the Unrestricted Subsidiaries as of the Closing Date.

 

(d)           Schedule 8.12(d) sets forth a true and complete list of all of the Native American Subsidiaries as of the Closing Date.

 

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SECTION 8.13.       Ownership of Property; Liens.

 

(a)           Except as set forth on Schedule 8.13(a), (a) Borrower, each Holding Company and each of the Restricted Subsidiaries has good and valid title to, or a valid (with respect to Real Property and Vessels) leasehold interest in (or subleasehold interest in or other right to occupy), all material assets and Property (including Mortgaged Real Property and Mortgaged Vessels) (tangible and intangible) owned or occupied by it (except insofar as marketability may be limited by any laws or regulations of any Governmental Authority affecting such assets), and (b) all such assets and Property are subject to no Liens other than Permitted Liens.  All of the assets and Property owned by, leased to or used by Borrower, each Holding Company and each of the Restricted Subsidiaries in its respective businesses are in good operating condition and repair in all material respects (ordinary wear and tear and casualty and force majeure excepted) except in each case where the failure of such asset to meet such requirements would not reasonably be expected to result in a Material Adverse Effect.

 

(b)           RRR has good and marketable title to the Voting Stock issued to it by Borrower, free and clear of all Liens whatsoever except Permitted Liens.

 

SECTION 8.14.       Security Interest; Absence of Financing Statements; Etc.

 

(a)           Subject to applicable Gaming Laws, the Security Documents, once executed and delivered, will create, in favor of Collateral Agent for the benefit of the Secured Parties, as security for the obligations purported to be secured thereby, a valid and enforceable security interest in and Lien upon all of the Collateral (subject to any applicable provisions set forth in the Security Documents with respect to limitations or exclusions from the requirement to perfect the security interests and Liens on the collateral described therein), and upon (i) filing, recording, registering or taking such other actions as may be necessary with the appropriate Governmental Authorities (including payment of applicable filing and recording taxes), (ii) the taking of possession or control by Collateral Agent of the Pledged Collateral with respect to which a security interest may be perfected only by possession or control which possession or control shall be given to Collateral Agent to the extent possession or control by Collateral Agent is required by the Security Agreement and (iii) delivery of the applicable documents to Collateral Agent in accordance with the provisions of the applicable Security Documents, for the benefit of the Secured Parties, such security interest shall be a perfected security interest in and Lien upon all of the Collateral (subject to any applicable provisions set forth in the Security Documents with respect to limitations or exclusions from the requirement to perfect the security interests and Liens on the collateral described therein) superior to and prior to the rights of all third Persons and subject to no Liens other than Permitted Liens.

 

(b)           Each Ship Mortgage, once executed and delivered, will create, upon filing and recording in the National Vessel Documentation Center of the United States Coast Guard, in favor of Collateral Agent for the benefit of the Secured Parties a legal, valid and enforceable preferred mortgage upon the applicable Mortgaged Vessel under Chapter 313 of Title 46 of the United States Code, subject to no Liens other than Permitted Liens.

 

SECTION 8.15.       Licenses and Permits.  Except as set forth on Schedule 8.15, Borrower and each of its Restricted Subsidiaries hold all material governmental permits, licenses, authorizations, consents and approvals (including Gaming Approvals) necessary for Borrower and its Restricted Subsidiaries to own, lease, and operate their respective Properties and to operate their respective businesses as now being conducted (collectively, the “Permits”), except for Permits the failure of which to obtain would not reasonably be expected to have a Material Adverse Effect.  None of the Permits has been modified in any way since the Closing Date that would reasonably be expected to have a Material Adverse Effect.  Except as set forth on Schedule 8.15, all Permits are in full force and effect except where the failure to be in full force and effect would not reasonably be expected to have a Material Adverse Effect.  Except as set forth on Schedule 8.15, neither Borrower nor any of its Restricted Subsidiaries has received written notice that any Gaming Authority has commenced proceedings to suspend, revoke or not renew any such Permits where such suspensions, revocations or failure to renew would reasonably be expected to have a Material Adverse Effect.

 

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SECTION 8.16.       Disclosure.  The information, reports, financial statements, exhibits and schedules furnished in writing by or on behalf of any Credit Party, any Holding Company or RRR to any Secured Party in connection with this Agreement and the other Credit Documents or included or delivered pursuant thereto, but in each case excluding all projections and general industry or economic data, whether prior to or after the date of this Agreement, when taken as a whole and giving effect to all supplements and updates, do not contain any untrue statement of material fact or omit to state a material fact necessary in order to make the statements herein or therein, in light of the circumstances under which they were made, not materially misleading.  The projections and pro forma financial information furnished at any time by any Credit Party, any Holding Company or RRR to any Secured Party pursuant to this Agreement have been prepared in good faith based on assumptions believed by Borrower to be reasonable at the time made, it being recognized by the Lenders that such financial information as it relates to future events is not to be viewed as fact and that actual results during the period or periods covered by such financial information may differ from the projected results set forth therein by a material amount and no Credit Party, however, makes any representation as to the ability of any Company to achieve the results set forth in any such projections.

 

SECTION 8.17.       Solvency.  As of each Funding Date, immediately prior to and immediately following the extensions of credit to occur on such Funding Date, Borrower (on a consolidated basis with its Restricted Subsidiaries) is and will be Solvent (after giving effect to Section 6.07).

 

SECTION 8.18.       Senior Obligations.  The Obligations are “Senior Debt,” “Senior Indebtedness,” “Priority Lien Debt,” or “Senior Secured Financing” (or any comparable term) under, and as defined in, and entitled to the subordination and/or intercreditor, as applicable, provisions of any documentation governing the Senior Unsecured Notes (and any Permitted Refinancing thereof), any Permitted Second Lien Indebtedness, Permitted Second Priority Refinancing Debt, Permitted Unsecured Indebtedness, Permitted Unsecured Refinancing Debt and Incremental Equivalent Debt that is purported to be subordinated to the Obligations.

 

SECTION 8.19.       Intellectual Property.  Except as set forth on Schedule 8.19, Borrower and each of its Restricted Subsidiaries owns or possesses adequate licenses or otherwise has the right to use all of the patents, patent applications, trademarks, trademark applications, service marks, service mark applications, trade names, copyrights, trade secrets, know-how and processes (collectively, “Intellectual Property”) (including, as of the Closing Date, all Intellectual Property listed in Schedules 8(a), 8(b) and 8(c) to the Initial Perfection Certificate) that are necessary for the operation of its business as presently conducted except where failure to own or have such right would not reasonably be expected to have a Material Adverse Effect and, as of the Closing Date, all registrations listed in Schedules 8(a), 8(b) and 8(c) to the Initial Perfection Certificate are valid and in full force and effect, except where the invalidity of such registrations would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  Except as set forth on Schedule 8.19, as of the Closing Date, no claim is pending or, to the knowledge of any Responsible Officer of Borrower, threatened to the effect that Borrower or any of its Restricted Subsidiaries infringes or conflicts with the asserted rights of any other Person under any material Intellectual Property, except for such claims that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  Except as set forth on Schedule 8.19, as of the Closing Date, no claim is pending or, to the knowledge of any Responsible Officer of Borrower, threatened to the effect that any such material Intellectual Property owned or licensed by Borrower or any of its Restricted Subsidiaries or which Borrower or any of its Restricted Subsidiaries otherwise has the right to use is invalid or unenforceable, except for such claims that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

SECTION 8.20.       [Reserved].

 

SECTION 8.21.       Regulation H.  Except for the Real Property listed on Schedule 8.21 attached hereto, as of the Closing Date, no Mortgage encumbers improved real property which is located in an area that has been identified by the Secretary of Housing and Urban Development as an area having special flood hazards and in which flood insurance has been made available under the National Flood Insurance Act of 1968.

 

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SECTION 8.22.       Insurance.  Borrower and each of its Restricted Subsidiaries are insured by insurers of recognized financial responsibility (determined as of the date such insurance was obtained) against such losses and risks (other than wind and flood damage) and in such amounts as are prudent and customary in the businesses in which it is engaged, except to the extent that such insurance is not available on commercially reasonable terms.  Borrower and each of its Restricted Subsidiaries maintain all insurance required by Flood Insurance Laws (but shall not, for the avoidance of doubt, be required to obtain insurance with respect to wind and flood damage unless and to the extent required by such Flood Insurance Laws).

 

SECTION 8.23.       Real Estate.

 

(a)           Schedule 8.23(a) sets forth a true, complete and correct list of all material Real Property owned and all material Real Property leased by Borrower or any of its Restricted Subsidiaries as of the Closing Date, including a brief description thereof, including, in the case of leases, the street address (to the extent available) and landlord name.  Borrower has delivered to Collateral Agent true, complete and correct copies of all such leases.

 

(b)           Except as set forth on Schedule 8.23(b), as of the Closing Date, to the best of knowledge of any Responsible Officer of Borrower no Taking has been commenced or is contemplated with respect to all or any portion of the Real Property or for the relocation of roadways providing access to such Real Property that either individually or in the aggregate would reasonably be expected to have a Material Adverse Effect.

 

SECTION 8.24.       Leases.

 

(a)           [Reserved].

 

(b)           Borrower and its Restricted Subsidiaries have paid all material payments required to be made by it under all leases of Real Property where any of the Collateral is or may be located from time to time (other than any amount the validity of which is currently being contested in good faith by appropriate proceedings and with respect to which reserves in conformity with GAAP have been provided on the books of Borrower or such Restricted Subsidiary, as the case may be, and any amounts that are due but not yet delinquent), except where failure to make such payments would not reasonably be expected to have a Material Adverse Effect.

 

(c)           As of the Closing Date and thereafter, each of the material leases of Real Property is in full force and effect and will be or is, as applicable, legal, valid, binding and enforceable against the Credit Party party thereto, in accordance with its terms, in each case, except as such enforceability may be limited by (x) bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or similar laws of general applicability from time to time in effect affecting the enforcement of creditors’ rights and remedies and (y) the application of general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law), except as would not reasonably be expected to have a Material Adverse Effect.

 

(d)           None of the material leases of Real Property have been amended, modified or assigned in any manner that would reasonably be expected to result in a Material Adverse Effect.  Borrower has not received written notice of any existing breach, default, event of default or, to the best of knowledge of any Responsible Officer of Borrower, event that, with or without notice or lapse of time or both, would constitute a breach, default or an event of default by any Credit Party party to any of the material leases of Real Property that would reasonably be expected to have a Material Adverse Effect.

 

(e)           Borrower will, and will cause each applicable Restricted Subsidiary to, use its commercially reasonable efforts (which shall not include the payment of consideration (other than reasonable attorneys’ fees and other expenses reasonably incidental thereto)) to (x) obtain duly executed and delivered subordination, non-disturbance and attornment agreements (“SNDAs”) in form and substance reasonably satisfactory to Administrative

 

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Agent by the “lessors” and the “fee mortgagees”, in each case, under each lease as to which Borrower or any Restricted Subsidiary has granted or is required to grant a Mortgage on its interest thereunder (or under any sublease thereof) and (y) obtain the agreement of the lessors under each lease as to which Borrower or any Restricted Subsidiary has granted or is required to grant a Mortgage on its interest thereunder (or under any sublease thereof) that such lessor will use commercially reasonable efforts to obtain SNDAs from any future fee mortgagees (as defined above) and cause any existing or future fee mortgagee on all or any part of the ground lessor’s interest in any Real Property under a lease then in effect with respect to which Borrower or a Restricted Subsidiary has granted a Mortgage on its leasehold interest thereunder to be at all times subject and subordinate to, and not attach to or encumber or otherwise affect, the lien of the applicable Mortgages.  If, at any time after the Closing Date, Borrower or any Restricted Subsidiary enters into a lease of real property as tenant which is required to be subject to a Mortgage or obtains knowledge of or receives written notice from a lessor under a lease with respect to which Borrower or any Restricted Subsidiary has granted a Mortgage on its interest thereunder that a fee mortgage is encumbering the fee interest underlying such lease, Borrower will, and will cause each applicable Restricted Subsidiary to, use its commercially reasonable efforts (which shall not include the payment of consideration (other than attorneys’ fees and other expenses reasonably incidental thereto)) to obtain a duly executed and delivered SNDA by the lessor and/or fee mortgagee, as applicable.

 

SECTION 8.25.       Mortgaged Real Property.  Except as set forth on Schedule 8.25(a) or as would not reasonably be expected to have a Material Adverse Effect, with respect to each Mortgaged Real Property, as of the Closing Date (a) there has been issued a valid and proper certificate of occupancy or other local equivalent, if any, for the use then being made of such Mortgaged Real Property to the extent required by applicable Requirements of Law and there is no outstanding citation, notice of violation or similar notice indicating that the Mortgaged Real Property contains conditions which are not in compliance with local codes or ordinances relating to building or fire safety or structural soundness and (b) except as set forth on Schedule 8.25(b), there are no material disputes regarding boundary lines, location, encroachment or possession of such Mortgaged Real Property and no Responsible Officer of Borrower has actual knowledge of any state of facts existing which could give rise to any such claim other than those that would not reasonably be expected to have a Material Adverse Effect; provided, however, that with respect to any Mortgaged Real Property in which Borrower or a Restricted Subsidiary has a leasehold estate, the foregoing certifications shall be to Borrower’s knowledge only.

 

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SECTION 8.26.       Material Adverse Effect.  Since December 31, 2015, there shall not have occurred any event or circumstance that has had or would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect.

 

SECTION 8.27.       Anti-Corruption Laws and Sanctions. Borrower has implemented and maintains in effect policies and procedures reasonably designed to promote material compliance by the Holding Companies, RRR, Borrower, their respective Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions, and the Holding Companies, RRR, Borrower, their respective Subsidiaries and to the knowledge of Borrower its and the Holding Companies’, RRR’s and their respective Subsidiaries’ respective officers, directors and employees, are in compliance with Anti-Corruption Laws and applicable Sanctions in all material respects and are not knowingly engaged in any activity that would reasonably be expected to result in the Holding Companies, RRR, Borrower or their respective Subsidiaries being designated as a Sanctioned Person.  None of (a) any Holding Company, RRR, Borrower, any Subsidiary or to the knowledge of the Holding Companies, RRR, Borrower or such Subsidiary any of their respective directors, officers or employees, or (b) to the knowledge of Borrower, any agent of the Holding Companies, RRR, Borrower or any of their respective Subsidiaries 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 this Agreement will violate any Anti-Corruption Law or applicable Sanctions.

 

ARTICLE IX.

 

AFFIRMATIVE COVENANTS

 

Each Credit Party, for itself and on behalf of its Restricted Subsidiaries, covenants and agrees with Administrative Agent, Collateral Agent and Lenders that until the Obligations have been Paid in Full, (and each Credit Party covenants and agrees that it will cause its Restricted Subsidiaries to observe and perform the covenants herein set forth applicable to any such Restricted Subsidiary):

 

SECTION 9.01.       Existence; Business Properties.

 

(a)           Borrower and each of its Restricted Subsidiaries shall do or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence (in the case of Borrower, in the United States), except in a transaction permitted by Section 10.05 or, in the case of any Restricted Subsidiary, where the failure to perform such obligations, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect.

 

(b)           Borrower and each of its Restricted Subsidiaries shall do or cause to be done all things necessary to obtain, preserve, renew, extend and keep in full force and effect the rights, licenses, permits, franchises, authorizations, approvals, patents, copyrights, trademarks and trade names (including Gaming Approvals) material to the conduct of its business except where the failure to do so, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect; comply with all applicable Requirements of Law (including any and all Gaming Laws and any and all zoning, building, ordinance, code or approval or any building permits or any restrictions of record or agreements affecting the Real Property) and decrees and orders of any Governmental Authority, whether now in effect or hereafter enacted, except where the failure to comply, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect and at all times maintain and preserve all of its property and keep such property in good repair, working order and condition (ordinary wear and tear and casualty and force majeure excepted) except where the failure to do so individually or in the aggregate would not reasonably be expected to result in a Material Adverse Effect; provided, however, that nothing in this Section 9.01(b) shall prevent (i) sales, conveyances, transfers or other dispositions of assets, consolidations or mergers by or involving any Company or any other transaction in accordance with Section 10.05; (ii) the withdrawal by any Company of its qualification as a foreign corporation in any jurisdiction where such

 

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withdrawal, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect; or (iii) the abandonment by any Company of any rights, Permits, authorizations, copyrights, trademarks, trade names, franchises, licenses and patents that such Company reasonably determines are not useful to its business.

 

(c)           Borrower will maintain in effect and enforce policies and procedures reasonably designed to promote material compliance by Borrower, its Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions.

 

SECTION 9.02.       Insurance.

 

(a)           Borrower and its Restricted Subsidiaries shall maintain with insurers of recognized financial responsibility (determined at the time such insurance is obtained) not Affiliates of Borrower insurance on its Property in at least such amounts and against at least such risks as are customarily insured against by companies engaged in the same or a similar business and operating similar properties in localities where Borrower or the applicable Restricted Subsidiary operates; and furnish to Administrative Agent, upon written request, information as to the insurance carried; provided that Borrower and its Restricted Subsidiaries shall not be required to maintain insurance with respect to wind and flood damage on any property for any insurance coverage period unless, and to the extent, such insurance is required by an applicable Requirement of Law.  Subject to Section 9.15, Collateral Agent shall be named as an additional insured on all third-party liability insurance policies of Borrower and each of its Restricted Subsidiaries (other than directors and officers liability insurance, insurance policies relating to employment practices liability, crime or fiduciary duties, kidnap and ransom insurance policies, and insurance as to fraud, errors and omissions), and Collateral Agent shall be named as mortgagee/loss payee on all property insurance policies of each such Person.

 

(b)           Borrower and each of its Restricted Subsidiaries shall deliver to Administrative Agent on behalf of the Secured Parties, (i) on or prior to the Closing Date, a certificate dated on or prior (but close) to the Closing Date showing the amount and types of insurance coverage as of such date, (ii) promptly following receipt of any notice from any insurer of cancellation of a material policy or material change in coverage from that existing on the Closing Date, a copy of such notice (or, if no copy is available, notice thereof), and (iii) promptly after such information has been received in written form by Borrower or any of its Restricted Subsidiaries, information as to any claim for an amount in excess of $25.0 million with respect to any property and casualty insurance policy maintained by Borrower or any of its Restricted Subsidiaries.

 

(c)           If any portion of any Mortgaged Real Property is at any time is located in an area identified by the Federal Emergency Management Agency (or any successor agency) as a special flood hazard area with respect to which flood insurance has been made available under the National Flood Insurance Act of 1968 (as now or hereafter in effect or successor act thereto), then Borrower shall, or shall cause the applicable Credit Party to (i) to the extent required pursuant to Flood Insurance Laws, maintain, or cause to be maintained, with a financially sound and reputable insurer (determined at the time such insurance is obtained), flood insurance in an amount and otherwise sufficient to comply with all applicable rules and regulations promulgated pursuant to such Flood Insurance Laws and (ii) deliver to Administrative Agent evidence of such compliance in form and substance reasonably acceptable to Administrative Agent.

 

(d)           In the event that the proceeds of any insurance claim are paid after Collateral Agent has exercised its right to foreclose after an Event of Default, such proceeds shall be paid to Collateral Agent to satisfy any deficiency remaining after such foreclosure.  Collateral Agent shall retain its interest in the policies required to be maintained pursuant to this Section 9.02 during any redemption period.

 

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SECTION 9.03.       Taxes; Performance of Obligations.

 

Borrower and each of its Restricted Subsidiaries shall timely file all material Tax Returns required to be filed by it and pay and discharge promptly when due all material taxes, assessments and governmental charges or levies imposed upon it or upon its income or profits or in respect of its property, before the same shall become delinquent or in default; provided, however, that such payment and discharge shall not be required with respect to any such tax, assessment, charge, levy or claim so long as the validity or amount thereof shall be contested in good faith by appropriate proceedings and Borrower and each of its Subsidiaries shall have set aside on its books adequate reserves with respect thereto in accordance with GAAP and such contest operates to suspend collection of the contested obligation, tax, assessment or charge and, in the case of Liens on the Collateral, enforcement of such Lien.

 

SECTION 9.04.       Financial Statements, Etc.  Borrower shall deliver to Administrative Agent for distribution by Administrative Agent to the Lenders (unless a Lender expressly declines in writing to accept):

 

(a)           Quarterly Financials.  As soon as available, but in any event within forty-five (45) days after the end of each fiscal quarter of Borrower beginning with the fiscal quarter ended June 30, 2016 (other than the last fiscal quarter in any fiscal year), (x) a consolidated balance sheet of Borrower and its Restricted Subsidiaries (or (1) if the VoteCo SPE Reorganization has not occurred and the financials for Borrower and its Subsidiaries are consolidated with the financials for RRR, RRR and its Subsidiaries or (2) Borrower and its Subsidiaries, in which case such financial statements shall include supplemental schedules listing the consolidating results of (A) Borrower and its Restricted Subsidiaries and (B) any Unrestricted Subsidiaries) as at the end of such fiscal quarter, and the related (i) consolidated statements of income or operations for such fiscal quarter and for the portion of the fiscal year then ended and (ii) consolidated statements of cash flows for such fiscal quarter and the portion of the fiscal year then ended, setting forth in each case in comparative form (A) the figures for the corresponding fiscal quarter of the previous fiscal year and the corresponding portion of the previous fiscal year and (B) in the case of such statements of income or operations, the budget for such fiscal quarter and the portion of the fiscal year then ended, for the elapsed portion of the fiscal year then ended and for the Test Period ended on the last day of such fiscal quarter, all in reasonable detail and certified by a Responsible Officer of Borrower as fairly presenting in all material respects the financial condition, results of operations and cash flows of Borrower and its Restricted Subsidiaries in accordance with GAAP, subject only to normal year-end audit adjustments and the absence of footnotes and (y) management’s discussion and analysis of the important operational and financial developments of Borrower and the Restricted Subsidiaries during such fiscal quarter;

 

(b)           Annual Financials.  As soon as available, but in any event within ninety (90) days after the end of each fiscal year of Borrower beginning with the fiscal year ended December 31, 2016, (x) consolidated balance sheets of Borrower and its Subsidiaries (or, if the VoteCo SPE Reorganization has not occurred and the financials for Borrower and its Subsidiaries are consolidated with the financials for RRR, RRR and its Subsidiaries) as at the end of such fiscal year, and the related consolidated statements of income or operations, members’ equity and cash flows for such fiscal year, together with supplemental schedules listing the consolidating results of (i) Borrower and its Restricted Subsidiaries and (ii) any Unrestricted Subsidiaries, setting forth in each case in comparative form (A) the figures for the previous fiscal year and (B) in the case of such statements of income or operations, beginning with the fiscal year ended December 31, 2017, the budget for such fiscal year, all in reasonable detail and prepared in accordance with GAAP, and, (1) in the case of each such consolidated financial statements, audited and accompanied by a report and opinion of Ernst & Young LLP or any other independent registered public accounting firm of nationally recognized standing, which report and opinion shall be prepared in accordance with generally accepted auditing standards and shall not be subject to any “going concern” or like qualification or exception or any qualification or exception as to the scope of such audit, and (2) in the case of such consolidated and consolidating financial statements certified by a Responsible Officer of Borrower as fairly presenting in all material respects the financial condition, results of operations, members’ equity and cash flows of Borrower and each of its Restricted Subsidiaries in accordance with GAAP and (y) management’s discussion and analysis of the important operational and financial developments of Borrower and the Restricted Subsidiaries during such fiscal year;

 

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(c)           Auditor’s Certificates; Compliance Certificate.  (i) Concurrently with the delivery of the financial statements referred to in Section 9.04(b), a certificate (which certificate may be limited or eliminated to the extent required by accounting rules or guidelines or to the extent not available on commercially reasonable terms as determined in consultation with the Administrative Agent) of the independent certified public accountants reporting on such financial statements stating that in making the examination necessary therefor no knowledge was obtained of any Event of Default relating to the Financial Maintenance Covenants, except as specified in such certificate; and (ii) at the time it furnishes each set of financial statements pursuant to Section 9.04(a) or Section 9.04(b), a certificate of a Responsible Officer of Borrower in the form of Exhibit V hereto (I) to the effect that no Default has occurred and is continuing (or, if any Default has occurred and is continuing, describing the same in reasonable detail and describing the action that the Companies have taken and propose to take with respect thereto) and (II) setting forth in reasonable detail the computations necessary to determine whether Borrower and its Restricted Subsidiaries are in compliance with Section 10.08 as of the end of the respective fiscal quarter or fiscal year and, if such Compliance Certificate demonstrates an Event of Default of any covenant under Section 10.08, Holdco may deliver, together with such Compliance Certificate, notice of its intent to cure (a “Notice of Intent to Cure”) such Event of Default pursuant to Section 11.03; provided that the delivery of a Notice of Intent to Cure shall in no way affect or alter the occurrence, existence or continuation of any such Event of Default or the rights, benefits, powers and remedies of the Administrative Agent, Collateral Agent and the Lenders under any Credit Document;

 

(d)           Notice of Default.  Promptly after any Responsible Officer of any Company knows that any Default has occurred, a notice of such Default, breach or violation describing the same in reasonable detail and a description of the action that the Companies have taken and propose to take with respect thereto;

 

(e)           Environmental Matters.  Written notice of any claim, release of Hazardous Material, condition, circumstance, occurrence or event arising under Environmental Law which would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect;

 

(f)            Annual Budgets.  As soon as available, and in any event no later than ninety (90) days after the end of each fiscal year of Borrower, a detailed consolidated budget for the following fiscal year (including a projected consolidated balance sheet of Borrower and its Restricted Subsidiaries as of the end of the following fiscal year, the related consolidated statements of projected cash flow and projected income and a summary of the material underlying assumptions applicable thereto), and, as soon as available, significant revisions, if any, of such budget and projections with respect to such fiscal year, which shall in each case be accompanied by a certificate of a Responsible Officer stating that such projections are based on reasonable estimates, information and assumptions and that such Responsible Officer has no reason to believe that such projections are incorrect or misleading in any material respect;

 

(g)           Auditors’ Reports.  Promptly upon receipt thereof, copies of all annual, interim or special reports issued to Borrower or any Restricted Subsidiary by independent certified public accountants in connection with each annual, interim or special audit of Borrower’s or such Restricted Subsidiary’s books made by such accountants, including any management letter commenting on Borrower’s or such Restricted Subsidiary’s internal controls issued by such accountants to management in connection with their annual audit; provided, however, that such reports shall only be made available to Administrative Agent and to those Lenders who request such reports through Administrative Agent;

 

(h)           Lien Matters; Casualty and Damage to Collateral.

 

(i)      Prompt written notice of (i) the incurrence of any Lien (other than a Permitted Lien (but excluding Liens incurred pursuant to Section 10.02(l))) on the Collateral or any part thereof, (ii) any Casualty Event or other insured damage to any material portion of the Collateral or (iii) the occurrence of any other event that in Borrower’s judgment is reasonably likely to materially adversely affect the aggregate value of the Collateral; and

 

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(ii)                        Each year, at the time of delivery of annual financial statements with respect to the preceding fiscal year pursuant to Section 9.04(b), a certificate of a Responsible Officer of Borrower setting forth the information required pursuant to Schedules 1(a), 1(b), 2, 3(a), 3(b), 4, 5, 6, 7, 8(a), 8(b), 8(c), 9, 10, and 11 to the Perfection Certificate or confirming that there has been no change in such information since the date of the Initial Perfection Certificate or the date of the most recent certificate delivered pursuant to this Section 9.04(h)(ii);

 

(i)                                     Notice of Material Adverse Effect.  Written notice of the occurrence of any event or occurrence that has had or would reasonably be expected to have a Material Adverse Effect;

 

(j)                                    ERISA Information.  Promptly after the occurrence of any ERISA Event that, alone or together with any other ERISA Events that have occurred, would reasonably be expected to result in a Material Adverse Effect, a written notice specifying the nature thereof, what action the Companies or other ERISA Entity have taken, are taking or propose to take with respect thereto, and, when known, any action taken or threatened by the IRS, Department of Labor, PBGC or Multiemployer Plan sponsor with respect thereto;

 

(k)                                 Amendments to Certain Material Contracts.

 

(i)                           No later than five (5) days after the delivery of each Compliance Certificate pursuant to Section 9.04(c) (or, if not received by Borrower or the applicable Subsidiary prior to the date of such delivery, promptly after receipt thereof), a copy of each amendment, modification, consent or waiver to any Subsidiary Cost Allocation Agreement, the GVR/ANC License Agreement, the Holding Company Tax Sharing Agreement or any Subsidiary Tax Sharing Agreement entered into during such fiscal period not previously delivered pursuant to Section 9.04(c);

 

(ii)                        promptly after obtaining knowledge thereof, any material amendment, waiver or other material modification made to, or delivery of any notice of default or termination of, or the entry into, any LandCo Loan Document or the LandCo Support Agreement (together with a copy of any such amendment, waiver, modification or notice);

 

(iii)                     promptly after the occurrence thereof (and in any event prior to making any Restricted payment pursuant to Section 10.06(p)(ii)), notice of the occurrence of the Senior Unsecured Notes Tax Transition;

 

(l)                                     Patriot Act.  promptly following the Administrative Agent’s or any Lender’s request therefor, all documentation and other information that the Administrative Agent or such Lender reasonably requests in order to comply with its ongoing obligations under the applicable “know your customer” and anti-money laundering rules and regulations, including the Patriot Act; and

 

(m)                             Miscellaneous.  Promptly, such financial information, reports, documents and other information with respect to Borrower or any of its Restricted Subsidiaries as Administrative Agent or the Required Lenders may from time to time reasonably request; provided that, notwithstanding the foregoing, nothing in this Section 9.04 shall require delivery of financial information, reports, documents or other information which constitutes attorney work product or is subject to confidentiality agreements or to the extent disclosure thereof would reasonably be expected to result in loss of attorney client privilege with respect thereto.

 

Reports and documents required to be delivered pursuant to Section 9.04 may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (i) on which Borrower posts such reports and/or documents, or provides a link thereto on Borrower’s website on the Internet at the website address specified below Borrower’s name on the signature hereof or such other website address as provided in accordance with

 

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Section 13.02; or (ii) on which such reports and/or documents are posted on Borrower’s behalf on an Internet or intranet website, if any, to which each Lender and Administrative Agent have access (whether a commercial, third-party website (including the website of the SEC) or whether sponsored by Administrative Agent); provided that: Borrower shall provide to Administrative Agent by electronic mail electronic versions (i.e., soft copies) of such reports and/or documents and Administrative Agent shall post such reports and/or documents and notify (which may be by facsimile or electronic mail) each Lender of the posting of any such reports and/or documents.  Notwithstanding anything contained herein, in every instance Borrower shall be required to provide the compliance certificate required by Section 9.04(c)(ii) to Administrative Agent in the form of an original paper copy or a .pdf or facsimile copy of the original paper copy.

 

Borrower hereby acknowledges that (a)  Administrative Agent will make available to the Lenders and the L/C Lenders materials and/or information provided by or on behalf of Borrower hereunder (collectively, “Borrower Materials”) by posting the Borrower Materials on IntraLinks/IntraAgency or another similar electronic system (the “Platform”) and (b) certain of the Lenders (each, a “Public Lender”) may have personnel who do not wish to receive material non-public information with respect to Borrower or its Affiliates, or the respective securities of any of the foregoing, and who may be engaged in investment and other market-related activities with respect to such Persons’ securities.  Borrower hereby agrees that it will use commercially reasonable efforts to identify that portion of the Borrower Materials that may be distributed to the Public Lenders and that (w) all such Borrower Materials shall be clearly and conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall appear prominently on the first page thereof; (x) by marking Borrower Materials “PUBLIC,” Borrower shall be deemed to have authorized Administrative Agent, the L/C Lenders and the Lenders to treat such Borrower Materials as not containing any material non-public information (although it may be sensitive and proprietary) with respect to Borrower or its securities for purposes of United States Federal and state securities laws (provided however, that to the extent such Borrower Materials constitute information of the type subject to Section 13.10, they shall be treated as set forth in Section 13.10); (y) all Borrower Materials marked “PUBLIC” are permitted to be made available through a portion of the Platform designated “Public Side Information;” and (z) Administrative Agent shall be entitled to treat any Borrower Materials that are not marked “PUBLIC” as being suitable only for posting on a portion of the Platform not designated “Public Side Information.”

 

SECTION 9.05.                      Maintaining Records; Access to Properties and Inspections.  Borrower and its Restricted Subsidiaries shall keep proper books of record and account in which entries true and correct in all material respects and in material conformity with GAAP and all material Requirements of Law are made.  Borrower and its Restricted Subsidiaries will, subject to applicable Gaming Laws, permit any representatives designated by Administrative Agent or any Lender to visit and inspect the financial records and the property of Borrower or such Restricted Subsidiary at reasonable times, upon reasonable notice and as often as reasonably requested, and permit any representatives designated by Administrative Agent or any Lender to discuss the affairs, finances and condition of such Restricted Subsidiaries with the officers thereof and independent accountants therefor (provided Borrower has the opportunity to participate in such meetings); provided that, in the absence of a continuing Default or Event of Default, only one such inspection by such representatives (on behalf of Administrative Agent and/or any Lender) shall be permitted in any fiscal year (and such inspection shall be at Administrative Agent and/or such Lenders’ expense, as applicable).  Notwithstanding anything to the contrary in this Agreement, no Company will be required to disclose, permit the inspection, examination or making of extracts, or discussion of, any document, information or other matter that (i) in respect of which disclosure to Administrative Agent (or its designated representative) or any Lender is then prohibited by law or contract or (ii) is subject to attorney-client or similar privilege or constitutes attorney work product.

 

SECTION 9.06.                      Use of Proceeds.  Borrower shall use the proceeds of the Loans only for the purposes set forth in Section 8.11. Borrower will not request any Borrowing or Letter of Credit, and Borrower shall not use, and shall procure 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-

 

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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, to the extent such activities, business or transaction would be prohibited by Sanctions if conducted by a corporation incorporated in the United States or in a European Union member state, or (C) in any manner that would result in the violation of any Sanctions applicable to any party hereto.

 

SECTION 9.07.                      Compliance with Environmental Law.  Borrower and its Restricted Subsidiaries shall (a) comply with Environmental Law, and will keep or cause all Real Property to be kept free of any Liens imposed under Environmental Law, unless, in each case, failure to do so would not reasonably be expected to have a Material Adverse Effect; (b) in the event of any Hazardous Material at, on, under or emanating from any Real Property which could result in liability under or a violation of any Environmental Law, in each case which would reasonably be expected to have a Material Adverse Effect, undertake, and/or cause any of their respective tenants or occupants to undertake, at no cost or expense to Administrative Agent, Collateral Agent or any Lender, any action required pursuant to Environmental Law to mitigate and eliminate such condition; provided, however, that no Company shall be required to comply with any order or directive which is being contested in good faith and by proper proceedings so long as it has maintained adequate reserves with respect to such compliance to the extent required in accordance with GAAP; and (c) at the written request of Administrative Agent, in its reasonable discretion, provide, at no cost or expense to Administrative Agent, Collateral Agent or any Lender, an environmental site assessment (including, without limitation, the results of any soil or groundwater or other testing conducted at Administrative Agent’s request) concerning any Real Property now or hereafter owned, leased or operated by Borrower or any of its Restricted Subsidiaries, conducted by an environmental consulting firm proposed by such Credit Party and approved by Administrative Agent in its reasonable discretion indicating the presence or absence of Hazardous Material and the potential cost of any required action in connection with any Hazardous Material on, at, under or emanating from such Real Property; provided, however, that such request may be made only if (i) there has occurred and is continuing an Event of Default, or (ii) circumstances exist that reasonably could be expected to form the basis of an Environmental Action against Borrower or any Restricted Subsidiary or any Real Property of Borrower or any of its Restricted Subsidiaries which would reasonably be expected to have a Material Adverse Effect; if Borrower or any of its Restricted Subsidiaries fails to provide the same within sixty (60) days after such request was made (or in such longer period as may be approved by Administrative Agent, in its reasonable discretion), Administrative Agent may but is under no obligation to conduct the same, and Borrower or its Restricted Subsidiary shall grant and hereby grants to Administrative Agent and its agents, advisors and consultants access at reasonable times, and upon reasonable notice to Borrower, to such Real Property and specifically grants Administrative Agent and its agents, advisors and consultants an irrevocable non-exclusive license, subject to the rights of tenants, to undertake such an assessment, all at no cost or expense to Administrative Agent, Collateral Agent or any Lender.  Administrative Agent will use its commercially reasonable efforts to obtain from the firm conducting any such assessment usual and customary agreements to secure liability insurance and to treat its work as confidential and shall promptly provide Borrower with all documents relating to such assessment.

 

SECTION 9.08.                      Pledge or Mortgage of Real Property and Vessels.

 

(a)                                 Subject to compliance with applicable Gaming Laws, if, after the Closing Date any Credit Party shall acquire any Property (other than any Real Property, any Vessel or Replacement Vessel (other than leasehold interests in any Vessel or Replacement Vessel) or any Property that is subject to a Lien permitted under Section 10.02(i) or Section 10.02(k) to the extent and for so long as the contract or other agreement in which such Lien is granted validly prohibits the creation of Liens securing the Obligations on such Property and to the extent such prohibition is not superseded by the applicable provisions of the UCC), including, without limitation, pursuant to any Permitted Acquisition, or as to which Collateral Agent, for the benefit of the Secured Parties, does not have a perfected Lien and as to which the Security Documents are intended to cover, such Credit Party shall (subject to any applicable provisions set forth in the Security Agreement with respect to limitations on grant of security interests in certain types of assets or Pledged Collateral and limitations or exclusions from the requirement to perfect Liens on such assets or Pledged Collateral) promptly (i) execute and deliver to Collateral Agent such amendments to the

 

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Security Documents or such other documents as Collateral Agent deems necessary or advisable in order to grant to Collateral Agent, for the benefit of the Secured Parties, security interests in such Property and (ii) take all actions necessary or advisable to grant to Collateral Agent, for the benefit of the Secured Parties, a perfected first priority security interest (except to the extent limited by applicable Requirements of Law (including, without limitation, any Gaming Laws)), subject to no Liens other than Permitted Liens, in each case, to the extent such actions are required by the Security Agreement; provided, that notwithstanding the foregoing, the Credit Parties shall not be required to take such actions with respect to any leasehold interest in any Vessel or Replacement Vessel entered into after the date hereof that has a fair market value (including the reasonably anticipated fair market value of the Gaming Facility or other improvements to be developed thereon) of less than $25.0 million.

 

(b)                                 If, after the Closing Date, any Credit Party (x) acquires, including, without limitation, pursuant to any Permitted Acquisition, a fee or leasehold interest in Real Property located in the United States which Real Property has a fair market value in excess of $25.0 million or (y) develops a Gaming Facility on any fee or leasehold interest in Real Property located in the United States which Real Property (including the reasonably anticipated fair market value of the Gaming Facility or other improvements to be developed thereon) has a fair market value in excess of $25.0 million, determined on an as-developed basis, in each case, with respect to which a Mortgage was not previously entered into in favor of Collateral Agent (in each case, other than to the extent such Real Property is subject to a Lien permitted under Section 10.02(i) or 10.02(k) securing Indebtedness to the extent and for so long as the contract or other agreement in which such Lien is granted validly prohibits the creation of Liens securing the Obligations on such Real Property), such Credit Party shall promptly notify Collateral Agent and, if requested by the Required Lenders or Collateral Agent, within sixty (60) days of such request (in each case, or such longer period that is reasonably acceptable to Administrative Agent), (i) take such actions and execute such documents as Collateral Agent shall reasonably require to confirm the Lien of an existing Mortgage, if applicable, or to create a new Mortgage on such additional Real Property and (ii) cause to be delivered to Collateral Agent, for the benefit of the Secured Parties, all documents and instruments reasonably requested by Collateral Agent or as shall be necessary in the opinion of counsel to Collateral Agent to create on behalf of the Secured Parties a valid, perfected, mortgage Lien, subject only to Permitted Liens, including the following:

 

(1)                                 a Mortgage in favor of Collateral Agent, for the benefit of the Secured Parties, in form for recording in the recording office of the jurisdiction where such Mortgaged Real Property is situated, together with such other documentation as shall be required to create a valid mortgage Lien under applicable law, which Mortgage and other documentation shall be reasonably satisfactory to Collateral Agent and shall be effective to create in favor of Collateral Agent for the benefit of the Secured Parties a valid, perfected, Mortgage Lien on such Mortgaged Real Property subject to no Liens other than Permitted Liens; and

 

(2)                                 with respect to each Mortgage and each Mortgaged Real Property, each of the items set forth in Sections 7.01(l) and 9.15(b) and, in each case to the extent reasonably requested by the Required Lenders or Collateral Agent, each of the items set forth in Sections 9.15(a)(i)(2) and 9.15(a)(i)(3);

 

provided, that, notwithstanding the foregoing, the delivery of the items required under this Section 9.08(b) shall not be required prior to the date that is sixty (60) days after the Closing Date (or such later date as agreed by Administrative Agent).

 

(c)                                  If, after the Closing Date, any Credit Party (x) acquires, including, without limitation, pursuant to any Permitted Acquisition, the entire fee interest in any Vessel or a Replacement Vessel with a fair market value in excess of $25.0 million located or otherwise maintained in the United States and registered with the United States Coast Guard or (y) develops a Gaming Facility with a fair market value in excess of $25.0 million, determined on an as-developed basis, on any Vessel or a Replacement Vessel on which a Credit Party owns the entire fee interest, located or otherwise maintained in the United States and registered with the United States Coast Guard, in each case, with respect to which a Ship Mortgage was not previously entered into in favor of Collateral Agent (other than to the

 

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extent such other Vessel or Replacement Vessel is subject to a Lien permitted under Section 10.02(i) or 10.02(k) securing Indebtedness to the extent and for so long as the contract or other agreement in which such Lien is granted validly prohibits the creation of Liens securing the Obligations on such Vessel or Replacement Vessel), such Credit Party shall promptly notify Collateral Agent and, if requested by the Required Lenders or Collateral Agent, within sixty (60) days of such request (or such longer period that is reasonably acceptable to Administrative Agent), (i) take such actions and execute such documents as Collateral Agent shall reasonably require to confirm the Lien of an existing Ship Mortgage, if applicable, or to create a new Ship Mortgage on such other Vessel or Replacement Vessel and (ii) cause to be delivered to Collateral Agent, for the benefit of the Secured Parties, all documents and instruments reasonably requested by Collateral Agent or as shall be necessary in the opinion of counsel to Collateral Agent to create on behalf of the Secured Parties a legal, valid and enforceable first preferred ship mortgage under Chapter 313 of Title 46 of the United States Code subject to Permitted Liens, including the following:

 

(1)                                 a Ship Mortgage reasonably satisfactory to Collateral Agent, granting in favor of Collateral Agent for the benefit of the Secured Parties a legal, valid and enforceable first preferred ship mortgage on each such other Vessel or Replacement Vessel under Chapter 313 of Title 46 of the United States Code subject to Permitted Liens, executed and delivered by a duly authorized officer of the appropriate Credit Party, together with such certificates, affidavits and instruments as shall be reasonably required in connection with filing or recordation thereof and to grant a Lien on each such other Vessel or Replacement Vessel; and

 

(2)                                 with respect to each Ship Mortgage and each such other Vessel or Replacement Vessel, in each case to the extent reasonably requested by the Required Lenders or Collateral Agent, certificates of insurance as required by each Ship Mortgage, which certificates shall comply with the insurance requirements contained in Section 9.02 and the applicable Ship Mortgage;

 

provided, further, that, notwithstanding the foregoing, the delivery of the items required under this Section 9.08(c) shall not be required prior to the date that is sixty (60) days after the Closing Date (or such later date as agreed by Administrative Agent).

 

(d)                                 Notwithstanding anything contained in Sections 9.08(a), 9.08(b) and 9.08(c) to the contrary, in each case, it is understood and agreed that no Lien(s), Mortgage(s) and/or Ship Mortgage(s) in favor of Collateral Agent on any after acquired Property of the applicable Credit Party shall be required to be granted or delivered at such time as provided in such Sections (as applicable) as a result of such Lien(s), Mortgage(s) and/or Ship Mortgage(s) being prohibited by the applicable Gaming Authorities or applicable Law; provided, however, that Borrower has used its commercially reasonable efforts to obtain such approvals.

 

(e)                                  With respect to Lien(s), Mortgage(s) and/or Ship Mortgage(s) relating to any Property acquired (or leased) by any Credit Party after the Closing Date or any Property of any Additional Credit Party or with respect to any Guarantee of any Additional Credit Party, in each case that were not granted or delivered pursuant to Section 9.08(d) or to the second paragraph in Section 9.11, as the case may be, at such time as Borrower reasonably believes such prohibition no longer exists, Borrower shall (and with respect to any items requiring approval from Gaming Authorities, Borrower shall use commercially reasonable efforts to seek the approval from the applicable Gaming Authorities for such Lien(s), Mortgage(s), Ship Mortgage(s) and/or Guarantee and, if such approval is so obtained), comply with Sections 9.08(a), 9.08(b) and/or 9.08(c) or with Section 9.11, as the case may be.

 

SECTION 9.09.                      Security Interests; Further Assurances. Each Credit Party shall, promptly, upon the reasonable request of Collateral Agent, and so long as such request (or compliance with such request) does not violate any Gaming Law or, if necessary, is approved by the Gaming Authority (which Borrower hereby agrees to use commercially reasonable efforts to obtain), at Borrower’s expense, execute, acknowledge and deliver, or cause the execution, acknowledgment and delivery of, and thereafter register, file or record, or cause to be registered, filed or recorded, in an appropriate governmental office, any document or instrument supplemental to or confirmatory of

 

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the Security Documents or otherwise deemed by Collateral Agent reasonably necessary or desirable to create, protect or perfect or for the continued validity, perfection and priority of the Liens on the Collateral covered or purported to be covered thereby (subject to any applicable provisions set forth in the Security Agreement or Pledge Agreement with respect to limitations on grant of security interests in certain types of Pledged Collateral and limitations or exclusions from the requirement to perfect Liens on such Pledged Collateral and any applicable Requirements of Law including, without limitation, any Gaming Laws) subject to no Liens other than Permitted Liens; provided that, notwithstanding anything to the contrary herein or in any other Credit Document, in no event shall any Company be required to enter into control agreements with respect to its deposit accounts, securities accounts or commodity accounts.  In the case of the exercise by Collateral Agent or the Lenders or any other Secured Party of any power, right, privilege or remedy pursuant to any Credit Document following the occurrence and during the continuation of an Event of Default which requires any consent, approval, registration, qualification or authorization of any Governmental Authority, Borrower and each of its Restricted Subsidiaries shall use commercially reasonable efforts to execute and deliver all applications, certifications, instruments and other documents and papers that Collateral Agent or the Lenders may be so required to obtain.  If Collateral Agent reasonably determines that it is required by applicable Requirement of Law to have appraisals prepared in respect of the Real Property of any Credit Party constituting Collateral, Borrower shall provide to Collateral Agent appraisals that satisfy the applicable requirements of the Real Estate Appraisal Reform Amendments of FIRREA.

 

SECTION 9.10.                      VoteCo SPE Reorganization. Borrower shall provide Administrative Agent with at least 15 Business Days’ prior written notice of the consummation of the VoteCo SPE Reorganization, and concurrently with the consummation thereof, deliver to Administrative Agent (i) an assignment agreement, in form and substance satisfactory to Administrative Agent (the “VoteCo SPE Assignment Agreement”), executed by RRR and the VoteCo SPE pursuant to which RRR assigns all of its Equity Interests in Borrower to the VoteCo SPE, (ii) a joinder to the Pledge Agreement, in form and substance reasonably satisfactory to Administrative Agent (the “VoteCo SPE Pledge Joinder”), executed by the VoteCo SPE, (iii) corporate documentation (including resolutions, articles of incorporation and bylaws), together with such opinions of counsel to RRR, the VoteCo SPE and the Credit Parties, as may be reasonably requested by Administrative Agent in respect of the VoteCo SPE Assignment Agreement, the VoteCo SPE Pledge Joinder, the VoteCo SPE, RRR and the Credit Parties, (iv) such supplements to the schedules to this Agreement and the Pledge Agreement as may be necessary to reflect the consummation of the VoteCo SPE Reorganization and (v) evidence of the completion of all actions, recordings and filings (including delivery of stock certificates, transfer powers, UCC financing statements and amendments or joinders to the Custodian Agreement) of or with respect to the VoteCo SPE Pledge Joinder that Administrative Agent may deem necessary or desirable in order to perfect the Liens created thereby (with a first priority, except as otherwise provided for in the Pledge Agreement), including payment of all fees and taxes relating thereto.

 

SECTION 9.11.                      Additional Credit Parties.  Upon (i) any Credit Party creating or acquiring any Subsidiary that is a Restricted Subsidiary (other than any Excluded Subsidiary) after the Closing Date, (ii) any Restricted Subsidiary of a Credit Party ceasing to be an Excluded Subsidiary or (iii) any Revocation that results in an Unrestricted Subsidiary becoming a Restricted Subsidiary (other than any Excluded Subsidiary) of a Credit Party (such Restricted Subsidiary referenced in clause (i), (ii) or (iii) above, an “Additional Credit Party”), such Credit Party shall, assuming and to the extent that it does not violate any Gaming Law or assuming and to the extent it obtains the approval of the Gaming Authority to the extent such approval is required by applicable Gaming Laws (which Borrower hereby agrees to use commercially reasonable efforts to obtain), (A) cause each such Restricted Subsidiary to promptly (but in any event within 45 days (or 95 days, in the event of any Discharge of any Indebtedness in connection with the acquisition of any such Subsidiary) after the later of such event described in clause (i), (ii) or (iii) above or receipt of such approval (or such longer period of time as Administrative Agent may agree to in its sole discretion), execute and deliver all such agreements, guarantees, documents and certificates (including Joinder Agreements, any amendments to the Credit Documents and a Perfection Certificate)) as Administrative Agent may reasonably request in order to have such Restricted Subsidiary become a Guarantor and (B) promptly (I) execute and deliver to Collateral Agent such amendments to or additional Security Documents as Collateral Agent deems necessary or advisable in order to grant to Collateral Agent for the benefit of the Secured

 

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Parties, a perfected security interest in the Equity Interests of such new Restricted Subsidiary which are owned by any Credit Party and required to be pledged pursuant to the Security Agreement, (II) deliver to Collateral Agent the certificates (if any) representing such Equity Interests together with in the case of such Equity Interests, undated stock powers endorsed in blank, (III) cause such new Restricted Subsidiary to take such actions necessary or advisable (including executing and delivering a Joinder Agreement) to grant to Collateral Agent for the benefit of the Secured Parties, a perfected security interest in the collateral described in (subject to any requirements set forth in the Security Agreement with respect to limitations on grant of security interests in certain types of assets or Pledged Collateral and limitations or exclusions from the requirement to perfect Liens on such Pledged Collateral and excluding acts with respect to perfection of security interests and Liens not required under, or excluded from the requirements under, the Security Agreement) the Security Agreement and all other Property (limited, in the case of Foreign Subsidiaries, to 65% of the voting Equity Interests and 100% of the non-voting Equity Interests of such Foreign Subsidiaries) of such Restricted Subsidiary in accordance with the provisions of Section 9.08 hereof with respect to such new Restricted Subsidiary, or by law or as may be reasonably requested by Collateral Agent, and (IV) deliver to Collateral Agent all legal opinions reasonably requested relating to the matters described above covering matters similar to those covered in the opinions delivered on the Closing Date with respect to such Guarantor; provided, however, that Borrower shall use its commercially reasonable efforts to obtain such approvals for any Mortgage(s), Ship Mortgage(s) and Lien(s) (including pledge of the Equity Interests of such Subsidiary) to be granted by such Restricted Subsidiary and for the Guarantee of such Restricted Subsidiary as soon as reasonably practicable.  All of the foregoing actions shall be at the sole cost and expense of the Credit Parties.

 

Notwithstanding the foregoing in this Section 9.11 to the contrary, it is understood and agreed that no Lien(s), Mortgage(s), Ship Mortgage(s) and/or Guarantee of the applicable Additional Credit Party shall be required to be granted or delivered at such time as provided in the paragraph above in this Section 9.11 as a result of such Lien(s), Mortgage(s), Ship Mortgage(s) and/or Guarantee being prohibited by the applicable Gaming Authorities, any other applicable Governmental Authorities or applicable Law; provided, however, that Borrower has used its commercially reasonable efforts to obtain such approvals for such Lien(s), Mortgage(s), Ship Mortgage(s) and/or Guarantee or.

 

SECTION 9.12.                      Limitation on Designations of Unrestricted Subsidiaries.

 

(a)                                 Borrower may, on or after the Closing Date, designate any Subsidiary of Borrower (other than a Principal Subsidiary) as an “Unrestricted Subsidiary” under this Agreement (a “Designation”) only if:

 

(i)                  no Default or Event of Default shall have occurred and be continuing at the time of or immediately after giving effect to such Designation;

 

(ii)               Borrower would be permitted under this Agreement to make an Investment at the time of Designation (assuming the effectiveness of such Designation) in an amount (the “Designation Amount”) equal to the sum of (A) the fair market value of the Equity Interest of such Subsidiary owned by Borrower and/or any of the Restricted Subsidiaries on such date and (B) the aggregate amount of Indebtedness of such Subsidiary owed to Borrower and the Restricted Subsidiaries on such date;

 

(iii)            after giving effect to such Designation, Borrower shall be in compliance with the Financial Maintenance Covenants on a Pro Forma Basis (regardless of whether the Revolving Facility or the Term A Facility are then in effect) as of the most recent Calculation Date.

 

Upon any such Designation after the Closing Date, Borrower and its Restricted Subsidiaries shall be deemed to have made an Investment in such Unrestricted Subsidiary in an amount equal to the Designation Amount.

 

(b)                                 Borrower may revoke any Designation of a Subsidiary as an Unrestricted Subsidiary (a “Revocation”), whereupon such Subsidiary shall then constitute a Restricted Subsidiary, if:

 

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(i)                  no Default or Event of Default shall have occurred and be continuing at the time and immediately after giving effect to such Revocation;

 

(ii)               after giving effect to such Revocation, Borrower shall be in compliance with the Financial Maintenance Covenants on a Pro Forma Basis (regardless of whether the Revolving Facility or the Term A Facility are then in effect) as of the most recent Calculation Date; and

 

(iii)            all Liens and Indebtedness of such Unrestricted Subsidiary and its Subsidiaries outstanding immediately following such Revocation would, if incurred at the time of such Revocation, have been permitted to be incurred for all purposes of this Agreement;

 

provided, that neither LandCo Holdings nor any of its Subsidiaries may be designated as a Restricted Subsidiary unless and until all commitments and letters of credit under the LandCo Credit Agreement and the LandCo Loan Documents have been terminated and all loans and other obligations thereunder (other than customary indemnification and expense reimbursement obligations not then due and payable that expressly survive the termination thereof) have been paid in full in cash

 

(c)                                  All Designations and Revocations occurring after the Closing Date must be evidenced by an Officer’s Certificate of Borrower delivered to Administrative Agent with the Responsible Officer so executing such certificate certifying compliance with the foregoing provisions of Section 9.12(a) (in the case of any such Designations) and of Section 9.12(b) (in the case of any such Revocations).

 

(d)                                 If Borrower designates a Guarantor as an Unrestricted Subsidiary in accordance with this Section 9.12, the Obligations of such Guarantor under the Credit Documents shall terminate and be of no further force and effect and all Liens granted by such Guarantor under the applicable Security Documents shall terminate and be released and be of no further force and effect, and all Liens on the Equity Interests and debt obligations of such Guarantor shall be terminated and released and of no further force and effect, in each case, without any action required by Administrative Agent or Collateral Agent.  At Borrower’s request, Administrative Agent and Collateral Agent will execute and deliver any instrument evidencing such termination and Collateral Agent shall take all actions appropriate in order to effect such termination and release of such Liens and without recourse or warranty by Collateral Agent (including the execution and delivery of appropriate UCC termination statements and such other instruments and releases as may be necessary and appropriate to effect such release).  Any such foregoing actions taken by Administrative Agent and/or Collateral Agent shall be at the sole cost and expense of Borrower.

 

SECTION 9.13.                      Limitation on Designation of Immaterial Subsidiaries and Native American Subsidiaries.

 

(a)                                 At Borrower’s election, Borrower may at any time, designate a Restricted Subsidiary as an Immaterial Subsidiary, but only to the extent that such designation is consistent with the definition of “Immaterial Subsidiary,” or as a Native American Subsidiary, but only to the extent that such designation is consistent with the definition of “Native American Subsidiary”.  Upon any Immaterial Subsidiary’s or Native American Subsidiary’s (whether designated as such on the Closing Date or thereafter pursuant to the preceding sentence) ceasing to satisfy any of the requirements set forth in the definition of such term, the Borrower shall notify the Administrative Agent thereof and shall take the actions required pursuant to Section 9.11 and such Subsidiary shall cease to be an Immaterial Subsidiary or Native American Subsidiary, as the case may be.  Notwithstanding the foregoing, after the Closing Date Borrower may not designate any Subsidiary as an Immaterial Subsidiary if (i) the Fair Market Value of the assets of such Subsidiary at the time of designation exceeds $25,000,000 or (ii) the sum of the Fair Market Value of the assets of such Subsidiary and all other Subsidiaries so designated after the Closing Date (determined at the time of designation), plus the aggregate amount of Investments made by the Credit Parties in Immaterial Subsidiaries exceeds $75,000,000.

 

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(b)                                 Any designation of a Subsidiary as an Immaterial Subsidiary or Native American Subsidiary, or revocation of any such designation, must be evidenced by an Officer’s Certificate of Borrower delivered to Administrative Agent with the Responsible Officer executing such certificate certifying compliance with the foregoing provisions of Section 9.13(a).

 

SECTION 9.14.                      Ratings.  Borrower shall use commercially reasonable efforts to obtain and maintain at all times on and after the Closing Date (i) a public corporate family rating of Borrower (or, if the VoteCo SPE Reorganization has not occurred and the financials for Borrower and its Subsidiaries are consolidated with the financials for RRR, RRR) and a rating of the Loans, in each case from Moody’s, and (ii) a public corporate credit rating of Borrower (or, if the VoteCo SPE Reorganization has not occurred and the financials for Borrower and its Subsidiaries are consolidated with the financials for RRR, RRR) and a rating of the Loans, in each case from S&P (it being understood and agreed that “commercially reasonable efforts” shall in any event include the payment by Borrower (or RRR, as the case may be) of customary rating agency fees, cooperation with information and data requests by Moody’s and S&P in connection with their ratings process and the participation by senior management of Borrower and RR in a ratings presentation to Moody’s and S&P).

 

SECTION 9.15.                      Post-Closing Matters.  Borrower will cause to be delivered or performed, as applicable, each of the following:

 

(a)                                 Mortgage Matters.  On or before the date that is sixty (60) days after the Closing Date (or such later date as is permitted by Administrative Agent in its sole discretion):

 

(i)                  Mortgaged Real Property.  Administrative Agent shall have received with respect to each Mortgaged Real Property identified on Schedule 1.01(C): (1) a Mortgage reasonably satisfactory to Administrative Agent and in form for recording in the recording office of each political subdivision where each such Mortgaged Real Property is situated, which Mortgage shall, when recorded, be effective to create in favor of Collateral Agent on behalf of the Secured Parties a valid, enforceable and perfected first priority Lien (except to the extent limited by applicable Requirements of Law (including, without limitation, any Gaming Laws)) on such Mortgaged Real Property subordinate to no Liens other than Permitted Liens, (2) with respect to each Mortgage, legal opinions, each of which shall be addressed to Administrative Agent, Collateral Agent and the Lenders, dated the effective date of such Mortgage and covering such matters as the Administrative Agent shall reasonably request in a manner customary for transactions of this type and (3) with respect to each Mortgaged Real Property and Mortgage, such fixture filings, title insurance policies, insurance certificates, surveys, consents, estoppels, Governmental Real Property Disclosure Requirements, certificates, affidavits, instruments, returns and other documents delivered in connection with the Existing Credit Agreement substantially in the form delivered thereunder with such changes thereto as shall be necessary to reflect the Transactions and all of the foregoing shall be reasonably satisfactory to Administrative Agent in form and substance.

 

(b)                                 Flood Area.  Administrative Agent shall have received a completed “Life-of-Loan” Federal Emergency Management Agency standard flood hazard determination with respect to each Mortgaged Real Property for which a Mortgage is granted pursuant to Section 9.15(a)(i) on or before the date the related Mortgage is delivered to Administrative Agent (together with a notice about special flood hazard area status and flood disaster assistance duly executed by Borrower and the applicable Credit Party relating thereto).

 

(c)                                  Additional Post-Closing Deliverables. Each of the documents and other agreements set forth on Schedule 9.15 shall be delivered or performed, as applicable, within the respective time frames specified therein.

 

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ARTICLE X.

 

NEGATIVE COVENANTS

 

Each Credit Party, for itself and on behalf of its Restricted Subsidiaries, covenants and agrees with the Administrative Agent, Collateral Agent and Lenders (or in the case of Section 10.08, with the Required Pro Rata Lenders) that until the Obligations have been Paid in Full (and each Credit Party covenants and agrees that it will cause its Restricted Subsidiaries to observe and perform the covenants herein set forth applicable to any such Restricted Subsidiary):

 

SECTION 10.01.               Indebtedness.  Borrower and its Restricted Subsidiaries will not incur any Indebtedness, except:

 

(a)                                 Indebtedness incurred pursuant to this Agreement and the other Credit Documents;

 

(b)                                 Indebtedness outstanding on the Closing Date and listed on Schedule 10.01, and any Permitted Refinancings thereof;

 

(c)                                  Indebtedness under any Swap Contracts (including, without limitation, any Interest Rate Protection Agreements); provided that such Swap Contracts are entered into for bona fide hedging activities and not for speculative purposes;

 

(d)                                 intercompany Indebtedness of Borrower and the Restricted Subsidiaries to Borrower or other Restricted Subsidiaries;

 

(e)                                  Indebtedness representing deferred compensation to employees of the Borrower and the Restricted Subsidiaries incurred in the ordinary course of business;

 

(f)                                   Indebtedness in respect of workers’ compensation claims, self-insurance obligations, performance bonds, surety, appeal or similar bonds, completion guarantees and letters of credit provided by Borrower or any of its Restricted Subsidiaries in the ordinary course of its business (including to support Borrower’s or any of its Restricted Subsidiaries’ applications for Gaming Licenses or for the purposes referenced in this clause (f));

 

(g)                                  Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business; provided, however, that such Indebtedness is extinguished within five (5) Business Days of its incurrence;

 

(h)                                 Indebtedness (other than Indebtedness referred to in Section 10.01(b)) in respect of Purchase Money Obligations and Capital Lease Obligations and refinancings or renewals thereof, in an aggregate principal amount not to exceed at any time outstanding, $75.0 million;

 

(i)                                     Indebtedness arising in connection with endorsement of instruments for deposit in the ordinary course of business;

 

(j)                                    guarantees by Borrower or Restricted Subsidiaries of Indebtedness otherwise permitted to be incurred by Borrower or any Restricted Subsidiary under this Section 10.01;

 

(k)                                 Indebtedness of a Person that becomes a Subsidiary of Borrower or any of its Restricted Subsidiaries after the date hereof in connection with a Permitted Acquisition or other Acquisition permitted

 

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hereunder; provided, however, that such Indebtedness existed at the time such Person became a Subsidiary and was not created in anticipation or contemplation thereof, and Permitted Refinancings thereof;

 

(l)                                     (i) Permitted Unsecured Indebtedness, so long as (x) Borrower and its Restricted Subsidiaries shall be in compliance with the Financial Maintenance Covenants on a Pro Forma Basis as of the most recent Calculation Date, (y) the Interest Coverage Ratio shall not be less than 2.50 to 1.00 on a Pro Forma Basis as of the most recent Calculation Date and (z) no Event of Default shall have occurred and be continuing after giving effect thereto, (ii) Permitted Second Lien Indebtedness, so long as (x) Borrower and its Restricted Subsidiaries shall be in compliance with the Financial Maintenance Covenants on a Pro Forma Basis as of the most recent Calculation Date, (y) the Consolidated Total Leverage Ratio shall not exceed 6.00 to 1.00 on a Pro Forma Basis as of the most recent Calculation Date and the Interest Coverage Ratio shall not be less than 2.50 to 1.00 on a Pro Forma Basis as of the most recent Calculation Date and (z) no Event of Default shall have occurred and be continuing after giving effect thereto and (iii) Permitted Refinancings of any Indebtedness incurred pursuant to clause (i) or (ii) so long as (x) in the case of Permitted Refinancings of Permitted Second Lien Indebtedness, such Permitted Refinancings qualify as either Permitted Second Lien Indebtedness or Permitted Unsecured Indebtedness or (y) in the case of Permitted Refinancings of Permitted Unsecured Indebtedness, such Permitted Refinancings qualify as Permitted Unsecured Indebtedness;

 

(m)                             (i) Permitted First Lien Indebtedness, so long as (w) the Consolidated First Lien Leverage Ratio shall not exceed 4.50 to 1.00 on a Pro Forma Basis as of the most recent Calculation Date, (x) Borrower and its Restricted Subsidiaries shall be in compliance with the Financial Maintenance Covenants on a Pro Forma Basis  as of the most recent Calculation Date, (y) no Event of Default shall have occurred and be continuing after giving effect thereto, and (z) in the reasonable judgment of Borrower, the terms of such Indebtedness, when taken as a whole, are no more restrictive in any material respect to Borrower and its Restricted Subsidiaries than the terms of this Agreement and (ii) Permitted Refinancings of any Indebtedness incurred pursuant to clause (i) so long as such Permitted Refinancings qualify as Permitted First Lien Indebtedness, Permitted Second Lien Indebtedness or Permitted Unsecured Indebtedness;

 

(n)                                 unsecured Indebtedness of the kind described in clause (d) of the definition of “Indebtedness” so long, in the case of any such Indebtedness other than earn-out obligations, at the time of incurrence thereof, (i) no Event of Default shall have occurred and be continuing after giving effect thereto and (ii) Borrower and its Restricted Subsidiaries shall be in compliance with the Financial Maintenance Covenants on a Pro Forma Basis (regardless of whether the Revolving Facility or the Term A Facility are then in effect) as of the most recent Calculation Date;

 

(o)                                 Permitted Unsecured Refinancing Debt, Permitted First Priority Refinancing Debt and Permitted Second Priority Refinancing Debt;

 

(p)                                 Indebtedness of Borrower under the Senior Unsecured Notes, and Permitted Refinancings thereof;

 

(q)                                 unsecured Indebtedness of Borrower or any Restricted Subsidiary in an aggregate principal amount not to exceed $50.0 million outstanding at any time;

 

(r)                                    Indebtedness consisting of the financing of insurance premiums in the ordinary course of business; and

 

(s)                                   Investments under Section 10.04(k), 10.04(l), 10.04(m) and 10.04(v) consisting of guarantees and Support Agreements in an aggregate amount not to exceed $75.0 million at any time;

 

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(t)                                    (A)                               Indebtedness of Borrower in respect of one or more series of senior unsecured notes or loans, senior secured first lien or junior lien notes or loans or subordinated notes or loans that may be secured by the Collateral on a pari passu or junior basis with the Obligations, that are issued or made in lieu of Incremental Revolving Commitments and/or New Term Loan Commitments pursuant to an indenture, a loan agreement or a note purchase agreement or otherwise (any such Indebtedness, “Incremental Equivalent Debt”); provided that (i) the aggregate principal amount of all Incremental Equivalent Debt issued or incurred pursuant to this Section 10.01(t) shall not, together with any Incremental Revolving Commitments, New Term Loan Commitments (and, without duplication, New Term Loans), Incremental Term A Loan Commitments (and, without duplication, Incremental Term A Loans), and/or Incremental Term B Loan Commitments (and, without duplication, Incremental Term B Loans) issued or incurred (but excluding any such Incremental Term Loan Commitments that have been terminated prior to such date without being funded) on or prior to such date exceed the Incremental Loan Amount (with the Incremental Loan Amount to be determined as if any Incremental Equivalent Debt is senior secured indebtedness even if such Incremental Equivalent Debt is unsecured); (ii) no Event of Default shall have occurred and be continuing or would exist immediately after giving effect to such incurrence or issuance; provided that, with respect to any Incremental Equivalent Debt the proceeds of which are used primarily to fund a Permitted Acquisition or other Acquisition substantially concurrently upon the receipt thereof, the absence of an Event of Default (other than an Event of Default specified in Section 11.01(b) or 11.01(c) or an Event of Default specified in Section 11.01(g) or 11.01(h) with respect to Borrower) shall not constitute a condition to the issuance or incurrence of such Incremental Equivalent Debt; (iii) unless otherwise agreed in writing by the Required Pro Rata Lenders, Borrower shall be in compliance with the Financial Maintenance Covenants on a Pro Forma Basis as of the most recent Calculation Date (provided that, for such purpose, (y) at the option of Borrower, to the extent that the proceeds of any such Incremental Equivalent Debt are or are to be used primarily to fund a Permitted Acquisition or other Acquisition not prohibited hereunder (including repayment of Indebtedness of the Person acquired, or that is secured by the assets acquired, in such Permitted Acquisition or other Acquisition), such compliance shall be determined on a Pro Forma Basis as of the Calculation Date immediately preceding the date on which a binding contract with respect to such Permitted Acquisition or other Acquisition is entered into between Borrower or a Restricted Subsidiary and the seller with respect thereto, giving effect to such Incremental Equivalent Debt and such Permitted Acquisition or other Acquisition as if incurred and consummated on the first day of the applicable period and (z) in the case of any Incremental Revolving Commitments and Incremental Equivalent Debt consisting of revolving credit facilities, pro forma effect shall be given to any Revolving Loans under Incremental Revolving Commitments and any loans under any Incremental Equivalent Debt consisting of a revolving credit facility, in each case, to the extent actually made on such date, but any proposed Incremental Revolving Commitments or Incremental Equivalent Debt to be incurred on such date consisting of a revolving credit facility shall not otherwise be treated as drawn); (iv) if such Incremental Equivalent Debt is (x) secured on a pari passu basis with the Obligations, such Incremental Equivalent Debt shall have a maturity date and Weighted Average Life to Maturity (without giving effect to prepayments that reduce scheduled amortization) no shorter than any then-existing Tranche of Term Loans or (y) secured on a second lien (or other junior basis) or is unsecured, such Incremental Equivalent Debt shall satisfy the definition of Permitted Junior Debt Conditions; (v) if such Incremental Equivalent Debt is secured (x) on pari passu basis with the Obligations, the holders of such Indebtedness (or their representative) and Administrative Agent shall be party to the Pari Passu Intercreditor Agreement or (y) or second lien (or other junior) basis to the Obligations, the holders of such Indebtedness (or their representative) shall be party to the Second Lien Intercreditor Agreement (as “Second Priority Debt Parties”) with the Administrative Agent; (vi) except as set forth in clauses (i) — (v) of this paragraph (t), the terms (excluding pricing, fees, rate floors, premiums, optional prepayment or optional redemption provisions) of such Incremental Equivalent Debt are (as determined by Borrower in good faith), taken as a whole, no more restrictive in any material respect to Borrower and its Restricted Subsidiaries than the terms set forth in this Agreement; and (B) any Permitted Refinancing in respect thereof that satisfies clause (A)(v) and (A)(vi) above;

 

(u)                                 Indebtedness (including, without limitation, Support Agreements) used to finance, or incurred or issued for the purpose of (or in the case of Support Agreements, incurred in connection with) financing, Expansion Capital Expenditures or Development Projects (including Permitted Refinancings thereof) in an aggregate principal

 

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amount not to exceed $500.0 million at any time outstanding so long as no Event of Default shall have occurred and be continuing after giving effect thereto;

 

(v)                                 Indebtedness of Restricted Subsidiaries that are Foreign Subsidiaries in an aggregate amount not to exceed $25.0 million at any time outstanding, so long as such Indebtedness is not guaranteed by any Credit Party;

 

(w)                               Indebtedness consisting of promissory notes issued by Borrower to recent or former officers, directors or employees (or heirs of, estates of or trusts formed by such Persons) to finance the purchase or redemption of Equity Interests of Holdco or Borrower permitted by Section 10.06(f); provided that (i) such Indebtedness shall be subordinated in right of payment to the Obligations on terms reasonably satisfactory to the Administrative Agent (it being understood that, subject to the dollar limitation described below, such subordination provisions shall permit the payment of interest and principal in cash if no Event of Default has occurred and is continuing) and (ii) the aggregate amount of all cash payments (whether principal or interest) made by the Borrower in respect of such notes, when combined with the aggregate amount of Restricted Payments made pursuant to Section 10.06(f), shall not exceed $10.0 million in any fiscal year of Borrower;

 

(x)                                 Indebtedness incurred by Borrower or the Restricted Subsidiaries in (i) a Permitted Acquisition, (ii) any other Investment expressly permitted hereunder or (iii) any Asset Sale, in the case of each of the foregoing clauses (i), (ii) and (iii), constituting customary indemnification obligations or customary obligations in respect of purchase price or other similar adjustments;

 

(y)                                 Indebtedness of the Borrower and its Restricted Subsidiaries arising under the Wells Fargo Indemnification Agreement; and

 

(z)                                  Indebtedness of the Borrower under the LandCo Support Agreement.

 

In the event that any item of Indebtedness meets more than one of the categories set forth above in this Section 10.01, Borrower may classify such item of Indebtedness and only be required to include the amount and type of such Indebtedness in one or more of such clauses, at its election.

 

SECTION 10.02.               Liens.  Neither Borrower nor any Restricted Subsidiary shall create, incur, grant, assume or permit to exist, directly or indirectly, any Lien on any Property now owned or hereafter acquired by it or on any income or revenues or rights in respect of any thereof, except (the “Permitted Liens”):

 

(a)                                 Liens for taxes, assessments or governmental charges or levies not yet due and payable or delinquent and Liens for taxes, assessments or governmental charges or levies, which are being contested in good faith by appropriate proceedings and for which adequate reserves have been established in accordance with GAAP;

 

(b)                                 Liens in respect of property of Borrower or any Restricted Subsidiary imposed by law, which were incurred in the ordinary course of business and do not secure Indebtedness for borrowed money, such as carriers’, warehousemen’s, materialmen’s, landlord’s and mechanics’ liens, maritime liens and other similar Liens arising in the ordinary course of business (i) for amounts not yet overdue for a period of sixty (60) days or (ii) for amounts that are overdue for a period in excess of sixty (60) days that are being contested in good faith by appropriate proceedings (inclusive of amounts that remain unpaid as a result of bona fide disputes with contractors, including where the amount unpaid is greater than the amount in dispute), so long as adequate reserves have been established in accordance with GAAP;

 

(c)                                  Liens securing Indebtedness incurred pursuant to Section 10.01(b) and listed on Schedule 10.02; provided, however, that (i) such Liens do not encumber any Property of Borrower or any Restricted Subsidiary other than (x) any such Property subject thereto on the Closing Date, (y) after-acquired property that is affixed or

 

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incorporated into Property covered by such Lien and (z) proceeds and products thereof, and (ii) the amount of Indebtedness secured by such Liens does not increase, except as contemplated by Section 10.01(b);

 

(d)                                 easements, rights-of-way, restrictions (including zoning restrictions), covenants, encroachments, protrusions and other similar charges or encumbrances, and minor title deficiencies on or with respect to any Real Property, in each case whether now or hereafter in existence, not (i) securing Indebtedness and (ii) individually or in the aggregate materially interfering with the conduct of the business of Borrower and its Restricted Subsidiaries, taken as a whole;

 

(e)                                  Liens arising out of judgments or awards not resulting in an Event of Default;

 

(f)                                   Liens (other than any Lien imposed by ERISA) (i) imposed by law or deposits made in connection therewith in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other types of social security, (ii) incurred in the ordinary course of business to secure the performance of tenders, statutory obligations (other than excise taxes), surety, stay, customs and appeal bonds, statutory bonds, bids, leases, government contracts, trade contracts, rental obligations (limited, in the case of rental obligations, to security deposits and deposits to secure obligations for taxes, insurance, maintenance and similar obligations), utility services, performance and return of money bonds and other similar obligations (exclusive of obligations for the payment of borrowed money), (iii) arising by virtue of deposits made in the ordinary course of business to secure liability for premiums to insurance carriers or (iv) Liens on deposits made to secure Borrower’s or any of its Subsidiaries’ Gaming License applications or to secure the performance of surety or other bonds issued in connection therewith; provided, however, that to the extent such Liens are not imposed by Law, such Liens shall in no event encumber any Property other than cash and Cash Equivalents or, in the case of clause (iii), proceeds of insurance policies;

 

(g)                                  Leases with respect to the assets or properties of any Credit Party or its respective Subsidiaries, in each case entered into in the ordinary course of such Credit Party’s or Subsidiary’s business so long as each of the Leases entered into after the date hereof with respect to Real Property constituting Collateral are subordinate in all respects to the Liens granted and evidenced by the Security Documents and do not, individually or in the aggregate, (x) interfere in any material respect with the ordinary conduct of the business of the Credit Parties and their respective Subsidiaries, taken as a whole, or (y) materially impair the use (for its intended purposes) or the value of the Properties of the Credit Parties and their respective Subsidiaries, taken as a whole; provided that upon the request of Borrower, the Collateral Agent shall enter into a customary subordination and non-disturbance and attornment agreement in connection with any such Lease;

 

(h)                                 Liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale of goods entered into by Borrower or such Restricted Subsidiary in the ordinary course of business;

 

(i)                                     Liens arising pursuant to Purchase Money Obligations or Capital Lease Obligations (and refinancings or renewals thereof), in each case, incurred pursuant to Section 10.01(h); provided, however, that (i) the Indebtedness secured by any such Lien (including refinancings thereof) does not exceed 100% of the cost of the property being acquired, constructed, improved or leased at the time of the incurrence of such Indebtedness (plus, in the case of refinancings, accrued interest on the Indebtedness refinanced and fees and expenses relating thereto) and (ii) any such Liens attach only to the property being financed pursuant to such Purchase Money Obligations or Capital Lease Obligations (or in the case of refinancings which were previously financed pursuant to such Purchase Money Obligations or Capital Lease Obligations) (and directly related assets, including proceeds and replacements thereof) and do not encumber any other Property of Borrower or any Restricted Subsidiary (it being understood that all Indebtedness to a single lender shall be considered to be a single Purchase Money Obligation, whether drawn at one time or from time to time);

 

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(j)                                    bankers’ Liens, rights of setoff and other similar Liens existing solely with respect to cash and Cash Equivalents on deposit in one or more accounts maintained by Borrower or any Restricted Subsidiary, in each case granted in the ordinary course of business in favor of the bank or banks with which such accounts are maintained, securing amounts owing to such bank with respect to cash management and operating account arrangements, including those involving pooled accounts and netting arrangements, and Liens in favor of Wells Fargo Bank, N.A. in the form of debit and set-off rights arising under the Wells Fargo Indemnification Agreement; provided, however, that, unless such Liens are non-consensual and arise by operation of law, in no case shall any such Liens secure (either directly or indirectly) the repayment of any Indebtedness;

 

(k)                                 Liens on assets of a Person existing at the time such Person is acquired or merged with or into or consolidated with Borrower or any Restricted Subsidiary (and not created in connection with or in anticipation or contemplation thereof); provided, however, that such Liens do not extend to assets not subject to such Liens at the time of acquisition (other than improvements and attachments thereon, accessions thereto and proceeds thereof) and are no more favorable to the lienholders than the existing Lien;

 

(l)                                     in addition to Liens otherwise permitted by this Section 10.02, other Liens incurred with respect to any Indebtedness or other obligations of Borrower or any of its Subsidiaries; provided, however, that (x) the aggregate principal amount of such Indebtedness secured by such Liens shall not exceed $25.0 million at any time outstanding, and (y) any such Liens on Collateral shall be junior or otherwise subordinated in all respects to any Liens in favor of Collateral Agent on any of the Collateral to the reasonable satisfaction of Administrative Agent;

 

(m)                             licenses of Intellectual Property granted by Borrower or any Restricted Subsidiary in the ordinary course of business and not interfering in any material respect with the ordinary conduct of the business of Borrower and its Restricted Subsidiaries, taken as a whole;

 

(n)                                 Liens pursuant to the Credit Documents, including, without limitation, Liens related to Cash Collateralizations;

 

(o)                                 Permitted Vessel Liens;

 

(p)                                 Liens arising under applicable Gaming Laws; provided, however, that no such Lien constitutes a Lien securing repayment of Indebtedness for borrowed money;

 

(q)                                 (i) Liens pursuant to leases entered into for the purpose of, or with respect to, operating or managing gaming facilities and related assets, which Liens are limited to the leased property under the applicable lease and granted to the landlord under such lease for the purpose of securing the obligations of the tenant under such lease to such landlord and (ii) Liens on cash and Cash Equivalents (and on the related escrow accounts or similar accounts, if any) required to be paid to the lessors (or lenders to such lessors) under such leases or maintained in an escrow account or similar account pending application of such proceeds in accordance with the applicable lease;

 

(r)                                    Liens to secure Indebtedness incurred pursuant to Section 10.01(v); provided that such Liens do not encumber any Property of Borrower or any Restricted Subsidiary other than any Foreign Subsidiary;

 

(s)                                   Prior Mortgage Liens with respect to the applicable Mortgaged Real Property;

 

(t)                                    Liens on cash and Cash Equivalents deposited to Discharge, redeem or defease Indebtedness that was permitted to so be repaid;

 

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(u)                                 Liens arising from precautionary UCC financing statements filings regarding operating leases or consignment of goods entered into in the ordinary course of business;

 

(v)                                 Liens on the Collateral securing (i) Permitted First Lien Indebtedness permitted under Section 10.01(m) or Permitted First Priority Refinancing Debt and, in each case, subject to the Pari Passu Intercreditor Agreement or (ii) Permitted Second Lien Indebtedness permitted under Sections 10.01(l) or 10.01(m) or Permitted Second Priority Refinancing Debt and, in each case, subject to the Second Lien Intercreditor Agreement (as “Second Priority Liens”);

 

(w)                               Liens on the Collateral securing Incremental Equivalent Debt, and Permitted Refinancings thereof, in each case, permitted under Section 10.01(t) and subject to the Pari Passu Intercreditor Agreement or the Second Lien Intercreditor Agreement (in the case of Liens intended to be subordinated to the Liens securing the Obligations, as “Second Priority Liens”), as and to the extent applicable;

 

(x)                                 Liens solely on any cash earnest money deposits made by Borrower or any of its Subsidiaries in connection with any letter of intent or purchase agreement in respect of a Permitted Acquisition or Investment (including any other Acquisition) not prohibited by this Agreement;

 

(y)                                 in the case of any non-Wholly Owned Subsidiary or Joint Venture, any put and call arrangements or restrictions on disposition related to its Equity Interests set forth in its organizational documents or any related joint venture or similar agreement;

 

(z)                                  Liens arising in connection with transactions relating to the selling or discounting of accounts receivable in the ordinary course of business;

 

(aa)                          licenses, leases or subleases granted to other Persons not materially interfering with the conduct of the business of Borrower and its Subsidiaries taken as a whole;

 

(bb)                          any interest or title of a lessor, sublessor, licensee or licensor under any lease or license agreement permitted by this Agreement;

 

(cc)                            Liens created by the applicable Transfer Agreement;

 

(dd)                          Liens securing obligations of any Person in respect of employee deferred compensation and benefit plans in connection with “rabbi trusts” or other similar arrangements; and

 

(ee)                            Liens arising pursuant to Indebtedness incurred pursuant to Section 10.01(u).

 

In connection with the granting of Liens of the types described in clauses (c), (g), (i), (k), (l), (r), (s), (t), (v) and (w) of this Section 10.02 by Borrower of any of its Restricted Subsidiaries, Administrative Agent and Collateral Agent shall be authorized to take any actions deemed appropriate by it in connection therewith (including, without limitation, by entering into or amending appropriate lien subordination or intercreditor agreements).

 

SECTION 10.03.               [Reserved].

 

SECTION 10.04.               Investments, Loans and Advances.  Neither Borrower nor any Restricted Subsidiary will, directly or indirectly, make any Investment, except for the following:

 

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(a)                                 Investments outstanding on the Closing Date and identified on Schedule 10.04 and any Investments received in respect thereof without the payment of additional consideration (other than through the issuance of or exchange of Qualified Capital Stock);

 

(b)                                 Investments in cash and Cash Equivalents;

 

(c)                                  Borrower may enter into Swap Contracts to the extent permitted by Section 10.01(c);

 

(d)                                 Investments (i) by Borrower in any Restricted Subsidiary, (ii) by any Restricted Subsidiary in Borrower and (iii) by a Restricted Subsidiary in another Restricted Subsidiary (provided that Investments pursuant to clause (iii) in Immaterial Subsidiaries shall not exceed $25.0 million in the aggregate outstanding at any time); provided that, in each case, any intercompany loan (it being understood and agreed that intercompany receivables or advances made in the ordinary course of business do not constitute loans) in excess of $10.0 million individually shall be evidenced by a promissory note and, to the extent that the payee, holder or lender of such intercompany loan is a Credit Party, such promissory note shall be pledged (and delivered) by such Credit Party to Collateral Agent on behalf of the Secured Parties;

 

(e)                                  Borrower and its Restricted Subsidiaries may sell or transfer assets to the extent permitted by Section 10.05;

 

(f)                                   Investments in securities of trade creditors or customers received pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of such trade creditors or customers or in settlement of delinquent or overdue accounts in the ordinary course of business;

 

(g)                                  Investments made by Borrower or any Restricted Subsidiary as a result of consideration received in connection with an Asset Sale made in compliance with Section 10.05;

 

(h)                                 Investments consisting of (i) moving, entertainment and travel expenses, drawing accounts and similar expenditures made to officers, directors and employees in the ordinary course of business and (ii) loans or advances to officers, directors and employees in connection with such Persons’ purchase of Equity Interests of Holdco (provided that the amount of such loans and advances described in this clause (h)(ii) shall be contributed to the Borrower in cash as common equity), not to exceed $10.0 million in the aggregate under this clause (h) at any time outstanding;

 

(i)                                     Permitted Acquisitions;

 

(j)                                    extensions of trade credit (including to gaming customers) in the ordinary course of business;

 

(k)                                 in addition to Investments otherwise permitted by this Section 10.04, other Investments by Borrower or any of its Restricted Subsidiaries in an amount not to exceed the sum of (i) $350.0 million during the term of this Agreement plus (ii) the Project Reimbursement Amount as of such date plus (iii) the Initial Restricted Payment Base Amount as of such date plus (iv) the Specified 10.04(k) Investment Returns received on or prior to such date plus (v) any reduction in the amount of such Investments as provided in the definition of “Investment”; and,  provided further, that (x) at the time of making such Investment and after giving effect thereto, no Event of Default shall have occurred and be continuing, (y) immediately after giving effect thereto Borrower shall be in compliance on a Pro Forma Basis with the Financial Maintenance Covenants as of the most recent Calculation Date and (z) Borrower shall designate each such Investment as having been made pursuant to the relevant clause of this Section 10.04(k) in the Compliance Certificate for the fiscal quarter in which such Investment is made;

 

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(l)                                     in addition to Investments otherwise permitted by this Section 10.04, Investments by Borrower or any of its Restricted Subsidiaries; provided that (i) the amount of such Investments to be made pursuant to this Section 10.04(l) do not exceed the Available Amount determined at the time such Investment is made, (ii) immediately before and after giving effect thereto, no Event of Default has occurred and is continuing and (iii) immediately after giving effect thereto Borrower shall be in compliance on a Pro Forma Basis with the Financial Maintenance Covenants as of the most recent Calculation Date;

 

(m)                             additional Investments so long as, at the time such Investment is made and after giving effect thereto, (x) no Event of Default has occurred and is continuing, (y) the Consolidated Total Leverage Ratio is less than or equal to 4.00 to 1.00 on a Pro Forma Basis as of the most recent Calculation Date and (z) immediately after giving effect to such Investment Borrower shall be in compliance on a Pro Forma Basis with the Financial Maintenance Covenants as of the most recent Calculation Date;

 

(n)                                 payments with respect to any Qualified Contingent Obligations, so long as, at the time such Qualified Contingent Obligation was incurred or, if earlier, the agreement to incur such Qualified Contingent Obligations was entered into, such Investment was permitted under this Agreement;

 

(o)                                 Investments of a Restricted Subsidiary acquired after the Closing Date or of a Person merged or consolidated with or into Borrower or a Restricted Subsidiary, in each case in accordance with the terms of this Agreement to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;

 

(p)                                 Investments in the nature of pledges or deposits with respect to leases or utilities provided to third parties in the ordinary course of business;

 

(q)                                 advances of payroll payments to employees of Borrower and the Restricted Subsidiaries in the ordinary course of business;

 

(r)                                    the occurrence of a Reverse Trigger Event under any applicable Transfer Agreement;

 

(s)                                   loans and advances to the Holding Companies (or any direct or indirect parent thereof) in lieu of, and not in excess of the amount of (after giving effect to any other loans, advances or Restricted Payments in respect thereof), Restricted Payments to the extent permitted to be made to the Holding Companies in accordance with Section 10.06(m) and (n);

 

(t)                                    Investments in the North Fork Project not to exceed $5.0 million per fiscal year of Borrower;

 

(u)                                 so long as no Event of Default has occurred and is continuing or would result therefrom, (x) Native American Investments of the type described in clause (ii) of the definition thereof as set forth in Schedule 10.04(u) and (y) Native American Investments of the type described in clause (i) of the definition thereof; provided that the aggregate amount of all such Native American Investments made in reliance on this clause (u) in any fiscal year shall not exceed $5,000,000; provided further, that (i) to the extent the aggregate amount of all such Native American Investments made in any fiscal year in reliance on this clause (u) is less than $5,000,000, the amount of such difference (the “Native American Investment Rollover Amount”) may be carried forward one time and used to make Native American Investments under this clause (u) in the next succeeding fiscal year and (ii) any such Native American Investments made in any fiscal year shall be counted against the $5,000,000 base amount with respect to such fiscal year after being counted against any Native American Investment Rollover Amount available with respect to such fiscal year;

 

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(v)                                 so long as immediately after giving effect thereto Borrower shall be in compliance on a Pro Forma Basis with the Financial Maintenance Covenants as of the most recent Calculation Date, additional Investments in LandCo Holdings for the purpose of (and not in excess of the amount required for) repaying or guaranteeing LandCo Holdings’ existing credit agreement obligations and retire or guarantee certain warrants issued by it; provided that immediately upon the making of such Investments and the consequent repayment or guarantee of such credit agreement obligations and retirement or guarantee of such warrants, Borrower shall Revoke the designation of LandCo Holdings as an Unrestricted Subsidiary and cause it to be a Restricted Subsidiary; and

 

(w)                               Investments consisting of the contribution or other transfer of (i) real estate described on Part 1 of Schedule 10.04(w) (and owned by a Native American Subsidiary on the Closing Date) pursuant to a Native American Contract, so long as the Tribal Trust Property Release Conditions are satisfied at the time of such contribution or transfer, (ii) the real property described in Item 2 of Part 2 of Schedule 10.04(w), so long as title to such real property is transferred to the Federated Indians of Graton Rancheria or its nominee and (iii) real estate described in Item 1 of Part 2 of Schedule 10.04(w) to a joint venture, so long as no Default then exists.

 

SECTION 10.05.               Mergers, Consolidations and Sales of Assets.  Neither Borrower nor any Restricted Subsidiary will wind up, liquidate or dissolve its affairs or enter into any transaction of merger or consolidation (other than solely to change the jurisdiction of organization or type of organization (to the extent in compliance with the applicable provisions of the Security Agreement)), or convey, sell, lease or sublease (as lessor or sublessor), transfer or otherwise dispose of any substantial part of its business, property or assets, except for:

 

(a)                                 Capital Expenditures, Expansion Capital Expenditures and expenditures of Development Expenses by Borrower and the Restricted Subsidiaries;

 

(b)                                 Sales or dispositions of used, worn out, obsolete or surplus Property or Property no longer useful in the business of Borrower by Borrower and the Restricted Subsidiaries in the ordinary course of business and the abandonment or other sale of Intellectual Property that is, in the reasonable judgment of Borrower, no longer economically practicable to maintain or useful in the conduct of the business of Borrower and its Restricted Subsidiaries taken as a whole; and the termination or assignment of Contractual Obligations to the extent such termination or assignment does not have a Material Adverse Effect;

 

(c)                                  Asset Sales by Borrower or any Restricted Subsidiary; provided that (i) at the time of such Asset Sale, no Event of Default then exists or would arise therefrom, (ii) Borrower or any of its Restricted Subsidiaries shall receive not less than 75% of such consideration in the form of (x) cash or Cash Equivalents or (y) Permitted Business Assets (in each case, free and clear of all Liens at the time received other than Permitted Liens) (it being understood that for the purposes of clause (c)(ii)(x), the following shall be deemed to be cash:  (A) any liabilities (as shown on Borrower’s or such Restricted Subsidiary’s most recent balance sheet provided hereunder or in the footnotes thereto) of Borrower or such Restricted Subsidiary, other than liabilities that are by their terms subordinated to the payment in cash of the Obligations, that are assumed by the transferee with respect to the applicable Asset Sale and for which all of its Restricted Subsidiaries shall have been validly released by all applicable creditors in writing, (B) any securities received by such Restricted Subsidiary from such transferee that are converted by such Restricted Subsidiary into cash or Cash Equivalents (to the extent of the cash or Cash Equivalents received) within one hundred and eighty (180) days following the closing of the applicable disposition, (C) any Designated Non-Cash Consideration received in respect of such disposition having an aggregate fair market value, taken together with all other Designated Non-Cash Consideration received pursuant to this clause (C) that is at that time outstanding, not in excess of $75.0 million, with the fair market value of each item of Designated Non-Cash Consideration being measured at such date of receipt or such agreement, as applicable, and without giving effect to subsequent changes in value) and (iii) the Net Available Proceeds therefrom shall be applied as specified in Section 2.10(a)(iii);

 

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(d)                                 Liens permitted by Section 10.02, Investments may be made to the extent permitted by Sections 10.04 and Restricted Payments may be made to the extent permitted by Section 10.06;

 

(e)                                  Borrower and the Restricted Subsidiaries may dispose of cash and Cash Equivalents;

 

(f)                                   Borrower and the Restricted Subsidiaries may lease (as lessor or sublessor) real or personal property to the extent permitted under Section 10.02;

 

(g)                                  licenses and sublicenses by Borrower or any of its Restricted Subsidiaries of software and Intellectual Property in the ordinary course of business shall be permitted;

 

(h)                                 (A) Borrower or any Restricted Subsidiary may transfer or lease property to or acquire or lease property from Borrower or any Restricted Subsidiary; provided that the sum of (x) the aggregate fair market value of all Property transferred by Borrower and Domestic Subsidiaries of Borrower that are Restricted Subsidiaries to Foreign Subsidiaries of Borrower under this clause (A) plus (y) all lease payments made by Borrower and Domestic Subsidiaries of Borrower that are Restricted Subsidiaries to Foreign Subsidiaries of Borrower in respect of leasing of property by Borrower and Domestic Subsidiaries of Borrower that are Restricted Subsidiaries from Foreign Subsidiaries shall not exceed $10.0 million in any fiscal year of Borrower; (B) any Restricted Subsidiary may merge or consolidate with or into Borrower (as long as Borrower is the surviving Person) or any Guarantor (as long as the surviving Person is, or becomes substantially concurrently with such merger or consolidation, a Guarantor); (C) any Restricted Subsidiary may merge or consolidate with or into any other Restricted Subsidiary (so long as, if either Restricted Subsidiary is a Guarantor, the surviving Person is, or becomes substantially concurrently with such merger or consolidation, a Guarantor); and (D) any Restricted Subsidiary may be voluntarily liquidated, voluntarily wound up or voluntarily dissolved (so long as any such liquidation or winding up does not constitute or involve an Asset Sale to any Person other than to Borrower or any other Restricted Subsidiary or any other owner of Equity Interests in such Restricted Subsidiary unless such Asset Sale is otherwise permitted pursuant to this Section 10.05); provided, however, that, in each case with respect to clauses (A), (B) and (C) of this Section 10.05(h) (other than in the case of a transfer to a Foreign Subsidiary permitted under clause (A) above), the Lien on such property granted in favor of Collateral Agent under the Security Documents shall be maintained in accordance with the provisions of this Agreement and the applicable Security Documents;

 

(i)                                     voluntary terminations of Swap Contracts and other assets or contracts in the ordinary course of business;

 

(j)                                    conveyances, sales, leases, transfers or other dispositions which do not constitute Asset Sales;

 

(k)                                 any taking by a Governmental Authority of assets or property, or any part thereof, under the power of eminent domain or condemnation;

 

(l)                                     Borrower and its Restricted Subsidiaries may make sales, transfers or other dispositions of property subject to a Casualty Event;

 

(m)                             Borrower and its Restricted Subsidiaries may make sales, transfers or other dispositions of Investments in Joint Ventures to the extent required by, or made pursuant to, customary buy/sell arrangements between the joint venture parties set forth in joint venture arrangements and similar binding arrangements;

 

(n)                                 any transfer of Equity Interests of any Restricted Subsidiary or any Gaming Facility in connection with the occurrence of a Trigger Event;

 

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(o)                                 Asset Sales of Real Properties (i) that constitute Tribal Trust Property, to the extent permitted by Section 10.04(w)(i), (ii) to the extent permitted by Section 10.04(w)(ii), and (iii) to the extent permitted by Section 10.04(w)(iii).

 

Notwithstanding anything contained in this Agreement to the contrary, (i) in no event may any transfer, sale, conveyance or other disposition to any Person other than a Credit Party constitute all or substantially all of Borrower’s property or assets, on a consolidated basis and (ii) in no case shall Borrower or any Subsidiary be permitted to effect an Asset Sale of (a) GVR, NP Lake Mead LLC, NP Santa Fe LLC, NP Texas LLC, Boulder LLC, Red Rock LLC, Palace LLC, Sunset LLC or IP Holdco (except, in the case of IP Holdco, to the extent provided in Section 7.04(f)) or a significant portion of their respective properties, or (b) any part of the Technology Systems.

 

To the extent any Collateral is sold, transferred or otherwise disposed of as permitted by this Section 10.05 or in connection with a transaction approved by the Required Lenders, in each case, to a Person other than a Credit Party, a Holding Company or RRR, so long as no Event of Default exists, such Collateral shall, except as set forth in the proviso to Section 10.05(h), be sold, transferred or otherwise disposed of free and clear of the Liens created by the Security Documents, and Collateral Agent shall take all actions appropriate or reasonably requested by Borrower in order to effect the foregoing at the sole cost and expense of Borrower and without recourse or warranty by Collateral Agent (including the execution and delivery of appropriate UCC termination statements and such other instruments and releases as may be necessary and appropriate to effect such release).  To the extent any such sale, transfer or other disposition results in a Guarantor no longer constituting a Subsidiary of Borrower, so long as no Event of Default exists, the Obligations of such Guarantor and all obligations of such Guarantor under the Credit Documents shall terminate and be of no further force and effect, and each of Administrative Agent and Collateral Agent shall take such actions, at the sole expense of Borrower, as are appropriate or requested by Borrower in connection with such termination.

 

SECTION 10.06.               Restricted Payments.  Neither Borrower nor any of its Restricted Subsidiaries shall, directly or indirectly, declare or make any Restricted Payment at any time, except, without duplication:

 

(a)                                 Borrower or any Restricted Subsidiary may make Restricted Payments to the extent permitted pursuant to Section 2.09(b)(ii);

 

(b)                                 any Restricted Subsidiary of Borrower may declare and make Restricted Payments to Borrower or any Wholly Owned Subsidiary of Borrower which is a Restricted Subsidiary;

 

(c)                                  any Restricted Subsidiary of Borrower, if such Restricted Subsidiary is not a Wholly Owned Subsidiary, may declare and make Restricted Payments in respect of its Equity Interests to all holders of such Equity Interests generally so long as Borrower or its respective Restricted Subsidiary that owns such Equity Interest or interests in the Person making such Restricted Payments receives at least its proportionate share thereof (based upon its relative ownership of the subject Equity Interests and the terms thereof);

 

(d)                                 Borrower and its Restricted Subsidiaries may engage in transactions to the extent permitted by Section 10.05;

 

(e)                                  Borrower and its Restricted Subsidiaries may make Restricted Payments in respect of Disqualified Capital Stock issued in compliance with the terms hereof;

 

(f)                                   Borrower may repurchase, or make Restricted Payments to allow any direct or indirect parent of Borrower to repurchase, common stock or common stock options from present or former officers, directors or employees (or heirs of, estates of or trusts formed by such Persons) of any Company upon the death, disability,

 

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retirement or termination of employment of such officer, director or employee or pursuant to the terms of any stock option plan or like agreement; provided, however, that the aggregate amount of payments under this clause (f) shall not exceed $10.0 million in any fiscal year of Borrower;

 

(g)                                  Borrower and its Restricted Subsidiaries may (i) repurchase Equity Interests to the extent deemed to occur upon exercise of stock options, warrants or rights in respect thereof to the extent such Equity Interests represent a portion of the exercise price of such options, warrants or rights in respect thereof and (ii) make payments in respect of withholding or similar taxes payable or expected to be payable by any present or former member of management, director, officer, employee, or consultant of Borrower or any of its Subsidiaries or family members, spouses or former spouses, heirs of, estates of or trusts formed by such Persons in connection with the exercise of stock options or grant, vesting or delivery of Equity Interests;

 

(h)                                 Borrower and its Restricted Subsidiaries may make Restricted Payments to allow the payment of cash in lieu of the issuance of fractional shares upon the exercise of options or, warrants or rights or upon the conversion or exchange of or into Equity Interests, or payments or distributions to dissenting stockholders pursuant to applicable law;

 

(i)                                     so long as (x) immediately before and after giving effect thereto no Event of Default has occurred and is continuing and (y) immediately after giving effect thereto Borrower shall be in compliance on a Pro Forma Basis with the Financial Maintenance Covenants as of the most recent Calculation Date, Borrower and its Restricted Subsidiaries may make Restricted Payments in an aggregate amount not to exceed the sum of (i) the Initial Restricted Payment Base Amount as of such date plus (ii) the Project Reimbursement Amount as of such date;

 

(j)                                    so long as (i) immediately before and after giving effect thereto no Event of Default has occurred and is continuing, (ii) after giving effect thereto Borrower will be in compliance on a Pro Forma Basis with the Financial Maintenance Covenants as of the most recent Calculation Date and (iii) after giving effect thereto the Consolidated Total Leverage Ratio will not exceed 5.00 to 1.00 calculated on a Pro Forma Basis as of the most recent Calculation Date, Borrower and its Restricted Subsidiaries may make Restricted Payments in an aggregate amount not to exceed  the Available Amount;

 

(k)                                 such additional amount, so long as (i) immediately before and after giving effect thereto no Event of Default has occurred and is continuing, (ii) after giving effect thereto Borrower will be in compliance on a Pro Forma Basis with the Financial Maintenance Covenants as of the most recent Calculation Date and (iii) after giving effect thereto the Consolidated Total Leverage Ratio will not exceed 3.75 to 1.00 calculated on a Pro Forma Basis as of the most recent Calculation Date, Borrower and its Restricted Subsidiaries may make additional Restricted Payments;

 

(l)                                     to the extent constituting Restricted Payments, Borrower may make payments to counterparties under Swap Contracts entered into in connection with the issuance of convertible or exchangeable debt;

 

(m)                             Borrower and its Restricted Subsidiaries may make Restricted Payments to the Holding Companies or RRR:

 

(i)                  the proceeds of which shall be used by a Holding Company or RRR to pay franchise taxes and other fees, taxes and expenses required to maintain its limited liability company or corporate existence; and

 

(ii)               the proceeds of which shall be used by the Holding Companies or RRR to pay corporate overhead expenses;

 

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(n)                                 Borrower may make Restricted Payments to Holdco, the proceeds of which shall be distributed by Holdco to the Principal BlockerCos:

 

(i)                  which distributions shall be used by the Principal BlockerCos to pay franchise taxes and other fees, taxes and expenses required to maintain its limited liability company existence; and

 

(ii)               of up to $250,000 during the first twelve months after the Closing Date and up to $100,000 during any twelve-month period thereafter (in the aggregate with any loans and advances made to the Holdco pursuant to Section 10.04(s) in reliance on this paragraph (n)), which distributions shall be used by the Principal BlockerCos to pay corporate overhead expenses;

 

(o)                                 so long as immediately before and after giving effect thereto no Default or Event of Default has occurred and is continuing Borrower may make additional Restricted Payments in an amount not to exceed $50.0 million per fiscal year; and

 

(p)                                 so long as Holdco and Borrower are treated as partnerships or disregarded entities for U.S. federal income tax purposes (without duplication):

 

(i)                  prior to the occurrence of the Senior Unsecured Notes Tax Transition, Borrower may make payments to Holdco pursuant to, and in accordance with the terms of, the Holding Company Tax Sharing Agreement; provided that Restricted Payments under this clause (p)(i) in respect of Holdco’s members’ actual state and United States federal income tax liabilities in respect of income earned by Unrestricted Subsidiaries during any period shall be permitted solely to the extent of payments received from (or credits used by) Unrestricted Subsidiaries pursuant to the Subsidiary Tax Sharing Agreements with respect to such period; and

 

(ii)               from and after the occurrence of the Senior Unsecured Notes Tax Transition, Borrower may make Restricted Payments to Holdco in amounts sufficient to enable Holdco to make Tax Distributions (as defined in the Holdco LLC Agreement as in effect on the Closing Date) to its members pursuant to Section 5.4 of the Holdco LLC Agreement (as in effect on the Closing Date); provided that Restricted Payments under this clause (p)(ii) in respect of Holdco’s members’ actual state and United States federal income tax liabilities in respect of income earned by Unrestricted Subsidiaries during any period shall be permitted solely to the extent of payments received from (or credits used by) Unrestricted Subsidiaries pursuant to the Subsidiary Tax Sharing Agreements with respect to such period.

 

SECTION 10.07.               Transactions with Affiliates.  Neither Borrower nor any of its Restricted Subsidiaries shall enter into any transaction, including, without limitation, any purchase, sale, lease or exchange of Property, the rendering of any service or the payment of any management, advisory or similar fees, with any Affiliate (other than Borrower or any Restricted Subsidiary); provided, however, that notwithstanding the foregoing, Borrower and its Restricted Subsidiaries:

 

(a)                                 may enter into indemnification and employment and severance agreements and arrangements with directors, officers and employees and may pay customary fees and reasonable out of pocket costs to, and indemnities provided on behalf of, directors, officers, board managers and employees of the Holding Companies, RRR (until the VoteCo SPE Reorganization), the Borrower and its Restricted Subsidiaries in the ordinary course of business to the extent attributable to the ownership or operation of the Borrower and its Restricted Subsidiaries;

 

(b)                                 may enter into the transactions described in Borrower’s SEC filings prior to the Closing Date or listed on Schedule 10.07 hereto as in effect on the Closing Date or any amendment thereto so long as such amendment is not adverse to the Lenders in any material respect;

 

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(c)                                  may make Investments and Restricted Payments permitted hereunder;

 

(d)                                 may enter into the transactions contemplated by each applicable Transfer Agreement;

 

(e)                                  may enter into customary expense sharing arrangements entered into between Borrower and Unrestricted Subsidiaries in the ordinary course of business pursuant to which such Unrestricted Subsidiaries shall reimburse Borrower for certain shared expenses;

 

(f)                                   may consummate the VoteCo SPE Reorganization;

 

(g)                                  may enter into transactions upon fair and reasonable terms no less favorable to Borrower or such Restricted Subsidiary, as the case may be, than it would obtain in a comparable arm’s length transaction with a Person that is not an Affiliate; provided that (i) with respect to any transaction (or series of related transactions) involving consideration of more than $5.0 million, such transaction shall be approved by the majority of the directors of RRR and (ii) with respect to any transaction (or series of related transactions) involving consideration of more than $20.0 million, Borrower shall have received a favorable fairness opinion from a reputable third-party appraiser of recognized standing; and

 

(h)                                 may make payments by Borrower and its Subsidiaries pursuant to the Subsidiary Tax Sharing Agreements.

 

SECTION 10.08.               Financial Covenants. Solely for the benefit of the Lenders under the Revolving Facility and the Term A Facility, without the consent of the Required Pro Rata Lenders:

 

(a)                                 Maximum Consolidated Total Leverage Ratio.  Borrower shall not permit the Consolidated Total Leverage Ratio as of the last day of any fiscal quarter of Borrower commencing with (i) the first complete fiscal quarter ending after the Closing Date through the fiscal quarter ending June 30, 2017 to exceed 6.50 to 1.00, (ii) the fiscal quarter ending September 30, 2017 and each fiscal quarter thereafter through the fiscal quarter ending September 30, 2018 to exceed 6.25 to 1.00, (iii) the fiscal quarter ending December 31, 2018 and each fiscal quarter thereafter through the fiscal quarter ending March 31, 2019 to exceed 5.75 to 1.00, (iv) the fiscal quarter ending June 30, 2019 and each fiscal quarter thereafter through the fiscal quarter ending December 31, 2019 to exceed 5.50 to 1.00 and (v) the fiscal quarter ending March 31, 2020 and each fiscal quarter thereafter to exceed 5.25 to 1.00.

 

(b)                                 Minimum Interest Coverage Ratio.  Borrower shall not permit the Interest Coverage Ratio as of the last day of any fiscal quarter of Borrower commencing with the first complete fiscal quarter ending after the Closing Date to be less than 2.50 to 1.00.

 

For the avoidance of doubt, only the consent of the Required Pro Rata Lenders shall be required to (and only the Required Pro Rata Lenders, shall have the ability to) amend, waive or modify the covenants set forth in this Section 10.08 (including any amendment or modification of defined terms used in this Section 10.08).

 

SECTION 10.09.               Certain Payments of Indebtedness; Amendments to Certain Agreements.

 

(a)                                 None of Borrower or any of its Restricted Subsidiaries will, nor will they permit any Restricted Subsidiary to voluntarily prepay, redeem, purchase, defease or otherwise satisfy prior to the scheduled maturity thereof in any manner (it being understood that payments of regularly scheduled principal and interest shall be permitted) any Disqualified Capital Stock or Other Junior Indebtedness or make any payment in violation of any subordination terms or intercreditor agreement applicable to any such Indebtedness (such payments, “Junior Prepayments”), except:

 

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(i)                  so long as (x) immediately before and after giving effect thereto no Event of Default has occurred and is continuing and (y) immediately after giving effect thereto Borrower shall be in compliance on a Pro Forma Basis with the Financial Maintenance Covenants as of the most recent Calculation Date, Borrower and its Restricted Subsidiaries may make Junior Prepayments in an aggregate amount not to exceed the sum of (i) the Initial Restricted Payment Base Amount as of such date plus (ii) the Project Reimbursement Amount as of such date;

 

(ii)               so long as (i) immediately before and after giving effect thereto no Event of Default has occurred and is continuing, (ii) after giving effect thereto Borrower will be in compliance on a Pro Forma Basis with the Financial Maintenance Covenants as of the most recent Calculation Date and (iii) after giving effect thereto the Consolidated Total Leverage Ratio will not exceed 5.00 to 1.00 calculated on a Pro Forma Basis as of the most recent Calculation Date, Borrower and its Restricted Subsidiaries may make Junior Prepayments in an aggregate amount not to exceed  the Available Amount;

 

(iii)            such additional amount so long as (i) immediately before and after giving effect thereto no Event of Default has occurred and is continuing, (ii) after giving effect thereto Borrower will be in compliance on a Pro Forma Basis with the Financial Maintenance Covenants as of the most recent Calculation Date and (iii) after giving effect thereto the Consolidated Total Leverage Ratio will not exceed 3.75 to 1.00 calculated on a Pro Forma Basis as of the most recent Calculation Date, Borrower and its Restricted Subsidiaries may make additional Junior Prepayments;

 

(iv)           a Permitted Refinancing of any such Indebtedness (including through exchange offers and similar transactions);

 

(v)              the conversion of any such Indebtedness to Equity Interests (or exchange of any such Indebtedness for Equity Interests) of Borrower or any direct or indirect parent of Borrower (other than Disqualified Capital Stock);

 

(vi)           with respect to intercompany subordinated indebtedness, to the extent consistent with the subordination terms thereof;

 

(vii)        exchanges of Indebtedness issued in private placements and resold in reliance on Regulation S or Rule 144A for Indebtedness having substantially equivalent terms pursuant to customary exchange offers;

 

(viii)     prepayment, redemption, purchase, defeasance or satisfaction of Indebtedness of Persons acquired pursuant to, or Indebtedness assumed in connection with, Permitted Acquisitions or Investments (including any other Acquisition) not prohibited by this Agreement;

 

(ix)           Junior Prepayments made pursuant to Section 2.09(b)(ii);

 

(x)              Junior Prepayments in respect of intercompany Indebtedness owing to Borrower or its Restricted Subsidiaries will be permitted;

 

(xi)      prepayments, redemptions, purchases, defeasance or satisfaction of Disqualified Capital Stock with the proceeds of any issuance of Disqualified Capital Stock permitted to be issued hereunder or in exchange for Disqualified Capital Stock or other Equity Interests permitted to be issued hereunder; and

 

(xii)        prepayments, redemptions, purchases, defeasance or satisfaction of the Senior Unsecured Notes with the proceeds of secured Indebtedness so long as, (i) immediately before and after giving effect

 

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thereto no Event of Default has occurred and is continuing, (ii) after giving effect thereto the Consolidated First Lien Leverage Ratio will not exceed 4.50 to 1.00 calculated on a Pro Forma Basis as of the most recent Calculation Date (including giving effect to the Palms Acquisition regardless of whether the Palms Acquisition has closed at such time) and (iii) such refinancing Indebtedness constitutes (w) Revolving Loans incurred hereunder, (x) Incremental Term Loans incurred hereunder, (y) Incremental Equivalent Debt permitted hereunder that is secured by the Collateral on a pari passu basis with the Obligations or (z) Permitted First Lien Indebtedness permitted  hereunder.

 

(b)                                 Borrower shall not, and shall not permit any Restricted Subsidiary to amend, modify or change (i) in any manner adverse to the interests of the Lenders in any material respect any term or condition of any Other Junior Indebtedness Documentation (other than any documentation governing the Senior Unsecured Notes) or the LandCo Support Agreement, or (ii) any term or condition of any documentation governing the Senior Unsecured Notes to the extent such amendment, modification or change would (A) increase any component of the interest rate or yield provisions applicable to the Senior Unsecured Notes by more than 2% per annum in the aggregate over the interest rate or yield provisions applicable to the Senior Unsecured Notes in effect on the date hereof, (B) change any default or event of default under the documentation governing the Senior Unsecured Notes in a manner materially adverse to the Credit Parties, (C) change (to an earlier date) any date upon which a payment of principal, mandatory redemption, defeasance or sinking fund payment or deposit or interest is due on the Senior Unsecured Notes or increase the amount of any such payment redemption, defeasance or deposit due on the Senior Unsecured Notes, (D) increase materially the obligations of the Credit Parties under the documentation governing the Senior Unsecured Notes or confer any additional material rights of the holders of the Senior Unsecured Notes (or a representative on their behalf) which would be adverse to any Credit Parties or any Lenders in any material respect or (E) impose any restriction or limitation on the Collateral.

 

(c)                                  Borrower shall not, and shall not permit any Holding Company or any Subsidiary to amend, modify, change or waive any provision of (i) any Subsidiary Tax Sharing Agreement, or (ii) prior to the Senior Unsecured Notes Tax Transition, the Holding Company Tax Sharing Agreement, in each case, in any manner that is adverse to the interests of the Holding Companies, the Borrower, the Restricted Subsidiaries or the Lenders in any material respect or to enter into any new tax sharing agreement, tax allocation agreement, tax indemnification agreement or similar agreement without the prior written consent of the Administrative Agent (other than a Subsidiary Tax Sharing Agreement on terms substantially identical to the terms of the existing Subsidiary Tax Sharing Agreements).

 

(d)                                 Borrower shall not, and shall not permit any Holding Company or any Subsidiary to amend, modify, waive or change any provision of any Subsidiary Cost Allocation Agreement in any manner that is adverse to the interests of the Borrower, the Restricted Subsidiaries or the Lenders in any material respect or to enter into any new Subsidiary Cost Allocation Agreement or similar agreement without the prior written consent of Administrative Agent (other than a Subsidiary Cost Allocation Agreement on terms substantially identical to the terms of the Manager Allocation Agreement).

 

(e)                                  Borrower shall not, and shall not permit any Subsidiary to, without the consent of the Administrative Agent, amend, modify, change, or waive in any manner adverse to the interests of any Holding Company, their Subsidiaries or the Lenders in any material respect any term or condition of the GVR/ANC License Agreement; provided that Borrower may permit the GVR/ANC License Agreement to be terminated.

 

SECTION 10.10.               Limitation on Certain Restrictions Affecting Subsidiaries.  None of Borrower or any of its Restricted Subsidiaries shall, directly or indirectly, create any consensual encumbrance or restriction on the ability of any Restricted Subsidiary (other than any Foreign Subsidiary or Immaterial Subsidiary) of Borrower to (i) pay dividends or make any other distributions on such Restricted Subsidiary’s Equity Interests or any other interest or participation in its profits owned by Borrower or any of its Restricted Subsidiaries, or pay any Indebtedness or any other obligation owed to Borrower or any of its Restricted Subsidiaries, (ii) make Investments

 

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in or to Borrower or any of its Restricted Subsidiaries, (iii) transfer any of its Property to Borrower or any of its Restricted Subsidiaries or (iv) in the case of any Guarantor, guarantee the Obligations hereunder or, in the case of any Credit Party, subject its portion of the Collateral to the Liens securing the Obligations in favor of the Secured Parties, except that each of the following shall be permitted:

 

(a)                                 any such encumbrances or restrictions existing under or by reason of (x) applicable Law (including any Gaming Law and any regulations, order or decrees of any Gaming Authority or other applicable Governmental Authority) or (y) the Credit Documents;

 

(b)                                 restrictions on the transfer of Property, or the granting of Liens on Property, in each case, subject to Permitted Liens;

 

(c)                                  customary restrictions on subletting or assignment of any lease or sublease governing a leasehold interest of any Company;

 

(d)                                 restrictions on the transfer of any Property, or the granting of Liens on Property, subject to a contract with respect to an Asset Sale or other transfer, sale, conveyance or disposition permitted under this Agreement;

 

(e)                                  restrictions contained in the existing Indebtedness listed on Schedule 10.01 and Permitted Refinancings thereof, provided, that the restrictive provisions in any such Permitted Refinancing, taken as a whole, are not materially more restrictive than the restrictive provisions in the Indebtedness being refinanced;

 

(f)                                   restrictions contained in Indebtedness of Persons acquired pursuant to, or assumed in connection with, Permitted Acquisitions or other Acquisitions not prohibited hereunder after the Closing Date and Permitted Refinancings thereof, provided, that the restrictive provisions in any such Permitted Refinancing, taken as a whole, are not materially more restrictive than the restrictive provisions in the Indebtedness being refinanced and such restrictions are limited to the Persons or assets being acquired and of the Subsidiaries of such Persons and their assets;

 

(g)                                  with respect to clauses (i), (ii) and (iii) above, restrictions contained in any Permitted Unsecured Indebtedness and Permitted Refinancings thereof, or any Permitted Second Lien Indebtedness and Permitted Refinancings thereof, or any other Indebtedness permitted hereunder, in each case, taken as a whole, to the extent not materially more restrictive than those contained in this Agreement;

 

(h)                                 with respect to clauses (i), (ii) and (iii) above, restrictions contained in any Incremental Equivalent Debt and Permitted Refinancings thereof, or any other Indebtedness permitted hereunder, in each case, taken as a whole, to the extent not materially more restrictive than those contained in this Agreement;

 

(i)                                     customary restrictions in joint venture arrangements or management contracts; provided, that such restrictions are limited to the assets of such joint ventures and the Equity Interests of the Persons party to such joint venture arrangements or the assignment of such management contract, as applicable;

 

(j)                                    customary non-assignment provisions or other customary restrictions arising under licenses, leases and other contracts entered into in the ordinary course of business; provided, that such restrictions are limited to the assets subject to such licenses, leases and contracts and the Equity Interests of the Persons party to such licenses and contracts;

 

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(k)                                 restrictions contained in Indebtedness of Foreign Subsidiaries incurred pursuant to Section 10.01 and Permitted Refinancings thereof; provided that such restrictions apply only to the Foreign Subsidiaries incurring such Indebtedness and their Subsidiaries (and the assets thereof);

 

(l)                                     restrictions contained in Indebtedness used to finance, or incurred for the purpose of financing, Expansion Capital Expenditures and/or Development Projects and Permitted Refinancings thereof, provided, that such restrictions apply only to the asset (or the Person owning such asset) being financed pursuant to such Indebtedness;

 

(m)                             restrictions contained in subordination provisions applicable to intercompany debt owed by the Credit Parties; provided, that such intercompany debt is subordinated to the Obligations on terms at least as favorable to the Lenders as the subordination of such intercompany debt to any other obligations; and

 

(n)                                 restrictions contained in the documentation governing the Senior Unsecured Notes on the Closing Date and Permitted Refinancings thereof (so long as the restrictions in any such Permitted Refinancing, taken as a whole, are no more restrictive in any material respect to Borrower and its Restricted Subsidiaries than those in the Senior Unsecured Notes on the Closing Date).

 

SECTION 10.11.               Limitation on Lines of Business; Holding Companies; RRR.

 

(a)                                 Neither Borrower nor any Restricted Subsidiary shall directly or indirectly engage to any material extent (determined on a consolidated basis) in any line or lines of business activity other than Permitted Business.

 

(b)                                 Borrower shall not permit any of the Holding Companies to hold or maintain the ownership of any assets or Properties (including Equity Interests in Subsidiaries) other than (a) the Equity Interests of Borrower and (b) cash and Cash Equivalents.

 

(c)                                  Prior to the VoteCo SPE Reorganization Date, Borrower shall not permit RRR to engage in any material business or activity, or own any assets or incur any liabilities other than (i) the ownership, directly or indirectly, of Equity Interests in Borrower, the ownership of Equity Interests in Holdco and the ownership of cash and Cash Equivalents, (ii) the execution, delivery and performance of the Credit Documents to which it is a party and (iii) activities ancillary to the foregoing.

 

SECTION 10.12.               Limitation on Changes to Fiscal Year.  Neither Borrower nor any Restricted Subsidiary shall change its fiscal year end to a date other than December 31 of each year (provided that any Restricted Subsidiary acquired or formed, or Person designated as an Unrestricted Subsidiary, in each case, after the Closing Date may change its fiscal year to match the fiscal year of Borrower).

 

ARTICLE XI.

 

EVENTS OF DEFAULT

 

SECTION 11.01.               Events of Default.  If one or more of the following events (herein called “Events of Default”) shall occur and be continuing:

 

(a)                                 any representation or warranty made or deemed made by or on behalf of Borrower or any other Credit Party, or any Holding Company or RRR pursuant to any Credit Document or the borrowings or issuances of Letters of Credit hereunder, or any representation, warranty or statement of fact made or deemed made by or on behalf of Borrower or any other Credit Party, any Holding Company or RRR in any report, certificate, financial statement or other instrument furnished pursuant to any Credit Document, shall prove to have been false or

 

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misleading (i) in any material respect, if such representation and warranty is not qualified as to “materiality,” “Material Adverse Effect” or similar language, or (ii) in any respect, if such representation and warranty is so qualified, in each case when such representation or warranty is made, deemed made or furnished;

 

(b)                                 default shall be made in the payment of (i) any principal of any Loan or the reimbursement with respect to any Reimbursement Obligation when and as the same shall become due and payable (whether at the stated maturity upon prepayment or repayment or by acceleration thereof or otherwise) or (ii) any interest on any Loans when and as the same shall become due and payable, and such default under this clause (ii) shall continue unremedied for a period of three (3) Business Days;

 

(c)                                  default shall be made in the payment of any fee or any other amount (other than an amount referred to in (b) above) due under any Credit Document, when and as the same shall become due and payable, and such default shall continue unremedied for a period of five (5) Business Days;

 

(d)                                 default shall be made in the due observance or performance by Borrower or any Restricted Subsidiary of any covenant, condition or agreement contained in Section 9.01(a) (with respect to Borrower and each Subsidiary that owns a Core Property only), 9.04(d) or 9.06 or in Article X (subject to, in the case of the financial covenant in Section 10.08, the cure rights contained in Section 11.03); provided any default under Section 10.08 (a “Financial Covenant Event of Default”) shall not constitute an Event of Default with respect to any Loans or Commitments hereunder, other than the Revolving Loans, the Term A Facility Loans, any Revolving Commitments and/or Term A Facility Commitments, until the date on which the Revolving Loans and/or Term A Facility Loans have been accelerated, and the Revolving Commitments and/or the Term A Facility Commitments have been terminated, in each case, by the Required Pro Rata Lenders pursuant to this Section 11.01;

 

(e)                                  default shall be made in the due observance or performance by Borrower, any Holding Company, RRR or any of the Restricted Subsidiaries of any covenant, condition or agreement contained in any Credit Document (other than those specified in Section 11.01(b), 11.01(c) or 11.01(d)) and, unless such default has been waived, such default shall continue unremedied for a period of thirty (30) days after written notice thereof from Administrative Agent to Borrower;

 

(f)                                   Borrower, any Holding Company or any of the Restricted Subsidiaries (other than any Immaterial Subsidiary) shall (i) fail to pay any principal or interest, regardless of amount, due in respect of any Indebtedness (other than the Obligations), when and as the same shall become due and payable (after giving effect to any applicable grace period), or (ii) fail to observe or perform any other term, covenant, condition or agreement contained in any agreement or instrument evidencing or governing any such Indebtedness or any event or condition occurs, if the effect of any failure or occurrence referred to in this clause (ii) is to cause, or to permit the holder or holders of such Indebtedness or a trustee on its or their behalf (with or without the giving of notice but giving effect to applicable grace periods) to cause, such Indebtedness (other than Qualified Contingent Obligations) to become due, or to be repurchased, prepaid, defeased or redeemed (automatically or otherwise) or an offer to repurchase, prepay, defease or redeem such Indebtedness to be made prior to its stated maturity; provided, however, that (x) clauses (i) and (ii) shall not apply to any offer to repurchase, prepay or redeem Indebtedness of a Person acquired in an Acquisition permitted hereunder, to the extent such offer is required as a result of, or in connection with, such Acquisition, (y) any event or condition causing or permitting the holders of any Indebtedness to cause such Indebtedness to be converted into Qualified Capital Stock (including any such event or condition which, pursuant to its terms may, at the option of Borrower, be satisfied in cash in lieu of conversion into Qualified Capital Stock) shall not constitute an Event of Default pursuant to this paragraph (f) and (z) it shall not constitute an Event of Default pursuant to this paragraph (f) unless the aggregate amount of all such Indebtedness referred to in clauses (i) and (ii) exceeds $75.0 million at any one time;

 

(g)                                  an involuntary proceeding shall be commenced or an involuntary petition shall be filed in a court of competent jurisdiction in either case under the Bankruptcy Code or any other federal, state or foreign bankruptcy,

 

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insolvency, receivership or similar law, in each case seeking (i) relief in respect of Borrower, any Holding Company, RRR or any of the Restricted Subsidiaries (other than any Immaterial Subsidiary), or of a substantial part of the property or assets of Borrower, any Holding Company, RRR or any of the Restricted Subsidiaries (other than any Immaterial Subsidiary); (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for Borrower, any Holding Company, RRR or any of the Restricted Subsidiaries (other than any Immaterial Subsidiary) or for a substantial part of the property or assets of Borrower, any Holding Company, RRR or any of the Restricted Subsidiaries (other than any Immaterial Subsidiary); or (iii) the winding-up or liquidation of Borrower, any Holding Company, RRR or of any of the Restricted Subsidiaries (other than any Immaterial Subsidiary); and such proceeding or petition shall continue undismissed for 60 days or an order or decree approving or ordering any of the foregoing shall be entered;

 

(h)                                 Borrower, any Holding Company, RRR or any of the Restricted Subsidiaries (other than any Immaterial Subsidiary) shall (i) voluntarily commence any proceeding or file any petition seeking relief under the Bankruptcy Code or any other federal, state or foreign bankruptcy, insolvency, receivership or similar law; (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or the filing of any petition described in Section 11.01(g); (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for Borrower, any Holding Company, RRR or any of the Restricted Subsidiaries (other than any Immaterial Subsidiary) or for a substantial part of the property or assets of Borrower, any Holding Company, RRR or any of the Restricted Subsidiaries (other than any Immaterial Subsidiary) in any proceeding under the Bankruptcy Code or any other federal, state or foreign bankruptcy, insolvency, receivership, or similar law; (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding; (v) make a general assignment for the benefit of creditors; (vi) become unable, admit in writing its inability or fail generally to pay its debts as they become due; (vii) take any action for the purpose of effecting any of the foregoing; or (viii) wind up or liquidate (except as permitted hereunder);

 

(i)                                     one or more judgments for the payment of money in an aggregate amount in excess of $75.0 million (to the extent not covered by third party insurance) shall be rendered against Borrower, any Holding Company or any of the Restricted Subsidiaries (other than any Immaterial Subsidiary) or any combination thereof and the same shall remain undischarged for a period of 60 consecutive days during which execution shall not be effectively stayed, or any action (to the extent such action is not effectively stayed) shall be legally taken by a judgment creditor to levy upon assets or properties of Borrower, any Holding Company or any of the Restricted Subsidiaries to enforce any such judgment;

 

(j)                                    an ERISA Event shall have occurred that, when taken together with all other such ERISA Events, would reasonably be expected to result in a Material Adverse Effect;

 

(k)                                 with respect to any material Collateral, any security interest and Lien purported to be created by the applicable Security Document shall cease to be in full force and effect, or shall cease to give Collateral Agent, for the benefit of the Secured Parties, the first priority Liens and rights, powers and privileges in each case purported to be created and granted under such Security Document in favor of Collateral Agent, or shall be asserted by any Credit Party, any Holding Company, RRR or any Affiliate thereof not to be a valid, perfected (except as otherwise provided in this Agreement or such Security Document) security interest in or Lien on the Collateral covered thereby, in each case, other than as a result of an act of the Administrative Agent, the Collateral Agent or any other Secured Party;

 

(l)                                     any Guarantee shall cease to be in full force and effect or any of the Guarantors or Affiliates thereof repudiates, or attempts to repudiate, any of its obligations under any of the Guarantees (except to the extent such Guarantee ceases to be in effect in connection with any transaction permitted pursuant to Sections 9.12 or 10.05);

 

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(m)                             any Credit Document or any material provisions thereof shall at any time and for any reason be declared by a court of competent jurisdiction to be null and void, or a proceeding shall be commenced by any Credit Party seeking to establish the invalidity or unenforceability thereof (exclusive of questions of interpretation of any provision thereof), or any Credit Party, any Holding Company or RRR shall repudiate or deny that it has any liability or obligation for the payment of principal or interest purported to be created under any Credit Document;

 

(n)                                 there shall have occurred a Change of Control;

 

(o)                                 there shall have occurred a License Revocation by any Gaming Authority in one or more jurisdictions in which Borrower or any of its Restricted Subsidiaries owns or operates Gaming Facilities, which License Revocation (in the aggregate with any other License Revocations then in existence) relates to operations of Borrower and/or the Restricted Subsidiaries that in the most recent Test Period accounted for ten percent (10%) or more of the gross revenues of Borrower and its Restricted Subsidiaries on a consolidated basis; provided, however, that such License Revocation continues for at least thirty (30) consecutive days after the earlier of (x) the date of cessation of the affected operations as a result of such License Revocation and (y) the date that none of Borrower, nor any of its Restricted Subsidiaries nor the Lenders receive the net cash flows generated by any such operations; or

 

(p)                                 the provisions of any Pari Passu Intercreditor Agreement or Second Lien Intercreditor Agreement shall, in whole or in part, following such Pari Passu Intercreditor Agreement or Second Lien Intercreditor Agreement being entered into, terminate, cease to be effective or cease to be legally valid, binding and enforceable against the Persons party thereto, except in accordance with its terms;

 

then, and in every such event (other than (i) an event described in Section 11.01(g) or 11.01(h) with respect to Borrower and (ii) a Financial Covenant Event of Default unless the Revolving Loans and/or Term A Facility Loans have been accelerated, and the Revolving Commitments and/or the Term A Facility Commitments have been terminated, in each case, by the Required Pro Rata Lenders pursuant to the final paragraph of this Section 11.01), and at any time thereafter during the continuance of such event, Administrative Agent, at the request of the Required Lenders, shall, by notice to Borrower, take any or all of the following actions, at the same or different times:  (i) terminate forthwith the Commitments, (ii) declare the Loans and Reimbursement Obligations then outstanding to be forthwith due and payable in whole or in part, whereupon the principal of the Loans and Reimbursement Obligations so declared to be due and payable, together with accrued interest thereon and any unpaid accrued fees and all other liabilities and Obligations of Borrower accrued hereunder and under any other Credit Document (other than Swap Contracts and Cash Management Agreements), shall become forthwith due and payable, without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived by Borrower, anything contained herein or in any other Credit Document (other than Swap Contracts and Cash Management Agreements) to the contrary notwithstanding; (iii) exercise any other right or remedy provided under the Credit Documents or at law or in equity and (iv) direct Borrower to pay (and Borrower hereby agrees upon receipt of such notice, or upon the occurrence of any Event of Default specified in Section 11.01(g) or 11.01(h) with respect to Borrower, to pay) to Collateral Agent at the Principal Office such additional amounts of cash, to be held as security by Collateral Agent for L/C Liabilities then outstanding, equal to the aggregate L/C Liabilities then outstanding; and in any event described in Section 11.01(g) or 11.01(h) above with respect to Borrower, the Commitments shall automatically terminate and the principal of the Loans and Reimbursement Obligations then outstanding, together with accrued interest thereon and any unpaid accrued fees and all other liabilities and Obligations of Borrower accrued hereunder and under any other Credit Document, shall automatically become due and payable, without presentment, demand, protest or any other notice of any kind, all of which are hereby expressly waived by Borrower, anything contained herein or in any other Credit Document to the contrary notwithstanding.  The applicability of this Section 11.01 to RRR is subject to the operation of Section 13.20.

 

Notwithstanding the foregoing, during any period during which a Financial Covenant Event of Default has occurred and is continuing, Administrative Agent may with the consent of, and shall at the request of, the Required Pro Rata Lenders take any of the foregoing actions described in the immediately preceding paragraph solely as they

 

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relate to the Revolving Lenders or Term A Facility Lenders (versus the Lenders), the Revolving Commitments and/or Term A Facility Commitments (versus the Commitments), the Revolving Loans, the Swingline Loans, and/or the Term A Facility Loans (versus the Loans), and the Letters of Credit.

 

SECTION 11.02.               Application of Proceeds.  The proceeds received by Collateral Agent in respect of any sale of, collection from or other realization upon all or any part of the Collateral pursuant to the exercise by Collateral Agent of its remedies, or otherwise received after acceleration of the Loans, shall be applied, in full or in part, together with any other sums then held by Collateral Agent pursuant to this Agreement, promptly by Collateral Agent as follows:

 

(a)                                 First, to the payment of all reasonable costs and expenses, fees, commissions and taxes of such sale, collection or other realization including compensation to Administrative Agent and Collateral Agent and their respective agents and counsel, and all expenses, liabilities and advances made or incurred by Administrative Agent or Collateral Agent in connection therewith and all amounts for which Administrative Agent or Collateral Agent, as applicable is entitled to indemnification pursuant to the provisions of any Credit Document;

 

(b)                                 Second, to the payment of all other reasonable costs and expenses of such sale, collection or other realization and of any receiver of any part of the Collateral appointed pursuant to the applicable Security Documents including compensation to the other Secured Parties and their agents and counsel and all costs, liabilities and advances made or incurred by the other Secured Parties in connection therewith;

 

(c)                                  Third, without duplication of amounts applied pursuant to clauses (a) and (b) above, to the indefeasible payment in full in cash, pro rata, of the Obligations;

 

(d)                                 Fourth, to the Administrative Agent for the account of the L/C Lenders, to Cash Collateralize that portion of L/C Liabilities comprised of the aggregate undrawn amount of Letters of Credit; and

 

(e)                                  Fifth, the balance, if any, to the Person lawfully entitled thereto (including the applicable Credit Party or its successors or assigns) or as a court of competent jurisdiction may direct.

 

In the event that any such proceeds are insufficient to pay in full the items described in clauses (a) through (c) of this Section 11.02, the Credit Parties shall remain liable, jointly and severally, for any deficiency.

 

Notwithstanding the foregoing, Obligations arising under Secured Cash Management Agreements and Credit Swap Contracts shall be excluded from the application described above if Administrative Agent has not received written notice thereof, together with such supporting documentation as Administrative Agent may request, from the applicable Cash Management Bank or Swap Provider, as the case may be.  Each Cash Management Bank or Swap Provider not a party to this Agreement that has given the notice contemplated by the preceding sentence shall, by such notice, be deemed to have acknowledged and accepted the appointment of Administrative Agent and the Collateral Agent pursuant to the terms of Article XII hereof for itself and its Affiliates as if a “Lender” party hereto.

 

SECTION 11.03.               Borrower’s Right to Cure.  Notwithstanding anything to the contrary contained in Section 11.01, in the event of any Event of Default under any covenant set forth in Section 10.08 and until the expiration of the tenth (10th) Business Day after the date on which financial statements are required to be delivered with respect to the applicable fiscal quarter hereunder, RRR, the Holding Companies and Borrower may engage in a Permitted Equity Issuance (provided, that in the event a Holding Company or RRR engages in a Permitted Equity Issuance in connection with a cure made under this Section, such Holding Company or RRR makes a capital contribution of the proceeds thereof to Borrower) and Borrower may apply the amount of the Equity Issuance Proceeds thereof to increase Consolidated EBITDA with respect to such applicable fiscal quarter (such fiscal

 

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quarter, a “Default Quarter”); provided that such Equity Issuance Proceeds (i) are actually received by Borrower (including through capital contribution of such Equity Issuance Proceeds by Holdco or RRR to the Borrower) no later than ten (10) Business Days after the date on which financial statements are required to be delivered with respect to such Default Quarter hereunder, and (ii) do not exceed the aggregate amount necessary to cause Borrower to be in compliance with Section 10.08 for the applicable period (but, for such purpose, not taking into account any repayment of Indebtedness in connection therewith required pursuant to Section 2.10(a)(v)); provided further, that Borrower, RRR and the Holding Companies shall not be permitted to engage in any more than (A) two Permitted Equity Issuances pursuant to this Section 11.03 in any period of four consecutive fiscal quarters or (B) five Permitted Equity Issuances pursuant to this Section 11.03 during the term of this Agreement.  The parties hereby acknowledge that this Section 11.03 may not be relied on for purposes of calculating any financial ratios other than as applicable to Section 10.08 and shall not result in any adjustment to Consolidated EBITDA other than for purposes of compliance with Section 10.08 on the last day of a given Test Period (and not, for avoidance of doubt, for purposes of determining pricing, any basket sizes, the permissibility of any transaction or compliance on a Pro Forma Basis with Section 10.08 for any other purposes of this Agreement).

 

ARTICLE XII.

 

AGENTS

 

SECTION 12.01.               Appointment.  Each of the Lenders hereby irrevocably appoints Deutsche Bank to act on its behalf as the Administrative Agent and the Collateral Agent hereunder and under the other Credit Documents (including as “trustee” or “mortgage trustee” under the Ship Mortgages), and authorizes the Administrative Agent and the Collateral Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent or the Collateral Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto, including, in accordance with regulatory requirements of any Gaming Authority consistent with the intents and purposes of this Agreement and the other Credit Documents.  Deutsche Bank is hereby appointed Auction Manager hereunder, and each Lender hereby authorizes the Auction Manager to act as its agent in accordance with the terms hereof and of the other Credit Documents; provided, that Borrower shall have the right to select and appoint a replacement Auction Manager from time to time by written notice to Administrative Agent, and any such replacement shall also be so authorized to act in such capacity.  Each Lender agrees that the Auction Manager shall have solely the obligations in its capacity as the Auction Manager as are specifically described in this Agreement and shall be entitled to the benefits of Article XII, as applicable.  Each of the Lenders hereby irrevocably authorize each of the Agents (other than the Administrative Agent, Collateral Agent and the Auction Manager) to take such action on its behalf under the provisions of this Agreement and the other Credit Documents and to exercise such powers and perform such duties as are expressly delegated to such Agent by the terms of this Agreement and the other Credit Documents, together with such other powers as are reasonably incidental thereto.  The provisions of this Article are solely for the benefit of the Agents and the Lenders, and neither Borrower nor any other Credit Party, any Holding Company or RRR shall have rights as a third party beneficiary of any of the provisions of this Article XII, except to the extent set forth in this Section 12.01, Section 12.06 and Section 12.07(b).  It is understood and agreed that the use of the term “agent” herein or in any other Credit Documents (or any other similar term) with reference to any Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable Law. Instead such term is used as a matter of market custom, and is intended to create or reflect only an administrative relationship between contracting parties.  Each references in this Article XII to the Collateral Agent shall include the Collateral Agent in its capacity as “trustee” or “mortgage trustee” under the Ship Mortgages.

 

SECTION 12.02.               Rights as a Lender.  Any Person serving as an Agent hereunder shall have the same rights and powers in its capacity as a Lender (if applicable) as any other Lender and may exercise the same as though it were not an Agent, and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as such Agent hereunder in its individual capacity.  Such Person and its Affiliates may accept deposits from, lend money to, own securities of, act as the financial

 

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advisor or in any other advisory capacity for and generally engage in any kind of business with Borrower or any Subsidiary or other Affiliate thereof as if such Person were not an Agent hereunder and without any duty to account therefor to the Lenders.

 

SECTION 12.03.               Exculpatory Provisions.  No Agent shall have any duties or obligations except those expressly set forth herein and in the other Credit Documents, and each Agent’s duties hereunder shall be administrative in nature.  Without limiting the generality of the foregoing, no Agent:

 

(a)                                 shall be subject to any fiduciary or other implied duties with respect to any Credit Party, any Holding Company, RRR, any Lender or any other Person, regardless of whether a Default has occurred and is continuing;

 

(b)                                 shall 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 Credit Documents that the 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 Credit Documents), provided that no Agent shall be required to take any action that, in its opinion or the opinion of its counsel, may expose such Agent to liability or that is contrary to any Credit Document or applicable law, including for the avoidance of doubt any action that may be in violation of the automatic stay under any Debtor Relief Law or that may effect a forfeiture, modification or termination of property of a Defaulting Lender in violation of any Debtor Relief Law; and

 

(c)                                  shall, except as expressly set forth herein and in the other Credit Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to any of Borrower or any of its respective Affiliates that is communicated to or obtained by the Person serving as such Agent or any of its Affiliates in any capacity.

 

No Agent shall 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 Sections 11.01 and 13.04) or (ii) in the absence of its own gross negligence or willful misconduct as determined by a court of competent jurisdiction by final and nonappealable judgment.  No Agent shall be deemed to have knowledge of any Default or Event of Default unless and until notice describing such Default is given in writing to such Agent by Borrower or a Lender.

 

No Agent shall 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 Agreement or any other Credit 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 Agreement, any other Credit Document or any other agreement, instrument or document or (v) the satisfaction of any condition set forth in Article VII or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to such Agent.

 

The Administrative Agent shall not be responsible or have any liability for, or have any duty to ascertain, inquire into, monitor or enforce, compliance with the provisions hereof relating to Disqualified Lenders.  Without limiting the generality of the foregoing, the Administrative Agent shall not (x) be obligated to ascertain, monitor or inquire as to whether any Lender or participant or prospective Lender or participant is a Disqualified Lender or (y) have any liability with respect to or arising out of any assignment or participation of Loans or Commitments, or disclosure of confidential information, to any Disqualified Lender.  The Administrative Agent does not warrant, nor accept responsibility, nor shall the Administrative Agent have any liability with respect to the administration,

 

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submission or any other matter related to the rates in the definition of “LIBO Rate” or with respect to any comparable or successor rate thereto.

 

Each of the Lenders (and each Secured Party by accepting the benefits of the Collateral) acknowledges that Administrative Agent and/or Collateral Agent may act as the representative of other classes of indebtedness under the Pari Passu Intercreditor Agreement and the Second Lien Intercreditor Agreement.

 

SECTION 12.04.               Reliance by Agents.  Each 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.  Each 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, extension, renewal or increase of a Letter of Credit, that by its terms must be fulfilled to the satisfaction of a Lender, each Agent may presume that such condition is satisfactory to such Lender unless such Agent shall have received notice to the contrary from such Lender prior to the making of such Loan or the issuance of such Letter of Credit.  Each Agent may consult with legal counsel (who may be counsel for Borrower), 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 12.05.               Delegation of Duties. Each Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Credit Document by or through any one or more sub agents appointed by such Agent.  Each 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 each 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 an Agent.  No Agent shall be responsible for the negligence or misconduct of any sub-agents except to the extent that a court of competent jurisdiction determines in a final and non appealable judgment that an Agent acted with gross negligence, bad faith or willful misconduct in the selection of such sub-agents.

 

SECTION 12.06.               Resignation of Administrative Agent and Collateral Agent.

 

(a)                                 The Administrative Agent and Collateral Agent may at any time give notice of their resignation to the Lenders and Borrower.  Upon receipt of any such notice of resignation, the Required Lenders shall have the right, with the prior written consent of Borrower (unless an Event of Default specified in Section 11.01(b) or 11.01(c) or an Event of Default specified in Section 11.01(g) or 11.01(h) with respect to Borrower has occurred and is continuing) 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 and Collateral Agent gives notice of their resignation (or such earlier day as shall be agreed by the Required Lenders and Borrower (unless an Event of Default specified in Section 11.01(b) or 11.01(c) or an Event of Default specified in Section 11.01(g) or 11.01(h) with respect to Borrower has occurred and is continuing)) (the “Resignation Effective Date”), then the retiring Administrative Agent and Collateral Agent may (but shall not be obligated to) on behalf of the Lenders, appoint a successor Administrative Agent and Collateral Agent meeting the qualifications set forth above.  Whether or not a successor has been appointed, such resignation shall become effective in accordance with such notice on the Resignation Effective Date.

 

(b)                                 If the Person serving as Administrative Agent and Collateral Agent is a Defaulting Lender pursuant to clause (iii) of the definition thereof, the Required Lenders may, to the extent permitted by applicable law, by notice in writing to Borrower and such Person remove such Person as Administrative Agent and Collateral Agent and, in consultation with Borrower, appoint a successor.  If no such successor shall have been so appointed by

 

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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)                                  With effect from the Resignation Effective Date or the Removal Effective Date (as applicable) (1) the retiring or removed Administrative Agent and Collateral Agent shall be discharged from its duties and obligations hereunder and under the other Credit Documents (except that in the case of any collateral security held by the Administrative Agent or Collateral Agent on behalf of the Secured Parties under any of the Credit Documents, the retiring or removed Administrative Agent or Collateral Agent, as applicable, shall continue to hold such collateral security until such time as a successor Administrative Agent and Collateral Agent is appointed) and (2) except for any indemnity payments or other amounts then owed to the retiring or removed Administrative Agent or Collateral Agent, all payments, communications and determinations provided to be made by, to or through the Administrative Agent or the Collateral Agent shall instead be made by or to each Secured Party directly, until such time, if any, as the Required Lenders appoint a successor Administrative Agent and Collateral Agent as provided for above.  Upon the acceptance of a successor’s appointment as Administrative Agent and Collateral Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring (or removed) Administrative Agent and Collateral Agent (other than any rights to indemnity payments or other amounts owed to the retiring or removed Administrative Agent or Collateral Agent as of the Resignation Effective Date or the Removal Effective Date, as applicable), and the retiring or removed Administrative Agent and Collateral Agent shall be discharged from all of its duties and obligations hereunder or under the other Credit Documents (if not already discharged therefrom as provided above in this Section).  The fees payable by Borrower to a successor Administrative Agent and Collateral Agent shall be the same as those payable to its predecessor unless otherwise agreed between Borrower and such successor.  After the retiring or removed Administrative Agent’s and Collateral Agent’s resignation or removal hereunder and under the other Credit Documents, the provisions of this Article and Section 13.03 shall continue in effect for the benefit of such retiring or removed Administrative Agent and Collateral Agent, their 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 or removed Administrative Agent and Collateral Agent was acting as Administrative Agent or Collateral Agent.

 

(d)                                 Any resignation by Deutsche Bank as Administrative Agent and Collateral Agent pursuant to this Section shall also constitute its resignation as L/C Lender and Swingline Lender.  If Deutsche Bank resigns as an L/C Lender, it shall retain all the rights, powers, privileges and duties of an L/C Lender hereunder with respect to all of its Letters of Credit outstanding as of the effective date of its resignation as L/C Lender and all L/C Liability with respect thereto, including the right to require the Revolving Lenders to make ABR Loans or fund risk participations in Unreimbursed Amounts pursuant to Sections 2.03(e) and (f).  If any Lender resigns as Swingline Lender, it shall retain all the rights of the Swingline Lender provided for hereunder with respect to Swingline Loans made by it and outstanding as of the effective date of such resignation, including the right to require the Revolving Lenders to make ABR Loans or fund risk participations in outstanding Swingline Loans pursuant to Section 2.01(e)(iv).  Upon the appointment by Borrower of a successor L/C Lender or Swingline Lender hereunder (which successor shall in all cases be a Lender other than a Defaulting Lender), (a) such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring L/C Lender or Swingline Lender, as applicable, (b) the retiring L/C Lender and Swingline Lender shall be discharged from all of their respective duties and obligations hereunder or under the other Credit Documents, and (c) the successor L/C Lender shall issue letters of credit in substitution for the Letters of Credit of the retiring L/C Lender, if any, outstanding at the time of such succession or make other arrangements satisfactory to the retiring L/C Lender to effectively assume the obligations of the retiring L/C Lender  with respect to such Letters of Credit.

 

SECTION 12.07.               Nonreliance on Agents and Other Lenders.

 

(a)                                 Each Lender acknowledges that it has, independently and without reliance upon any Agent or any other Lender or any of their Related Parties and based on such documents and information as it has deemed

 

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appropriate, made its own credit analysis and decision to enter into this Agreement.  Each Lender also acknowledges that it will, independently and without reliance upon any 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 Agreement, any other Credit Document or any related agreement or any document furnished hereunder or thereunder.

 

(b)                                 Each Lender acknowledges that in connection with Borrower Loan Purchases, (i) Borrower may purchase or acquire Term Loans hereunder from the Lenders from time to time, subject to the restrictions set forth in the definition of Eligible Assignee and in Section 13.05(d), (ii) Borrower currently may have, and later may come into possession of, information regarding such Term Loans or the Credit Parties, the Holding Companies or RRR hereunder that is not known to such Lender and that may be material to a decision by such Lender to enter into an assignment of such Loans hereunder (“Excluded Information”), (iii) such Lender has independently and without reliance on any other party made such Lender’s own analysis and determined to enter into an assignment of such Loans and to consummate the transactions contemplated thereby notwithstanding such Lender’s lack of knowledge of the Excluded Information and (iv) Borrower shall have no liability to such Lender, and such Lender hereby waives and releases, to the extent permitted by law, any claims such Lender may have against Borrower, under applicable laws or otherwise, with respect to the nondisclosure of the Excluded Information; provided, however, that the Excluded Information shall not and does not affect the truth or accuracy of the representations or warranties of Borrower in the Standard Terms and Conditions set forth in the applicable assignment agreement.  Each Lender further acknowledges that the Excluded Information may not be available to Administrative Agent, Auction Manager or the other Lenders hereunder.

 

SECTION 12.08.               Indemnification.  The Lenders agree to reimburse and indemnify each Agent in its capacity as such ratably according with its “percentage” as used in determining the Required Lenders at such time or, if the Commitments have terminated and all Loans have been repaid in full, as determined immediately prior to such termination and repayment (with such “percentages” to be determined as if there are no Defaulting Lenders), from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, reasonable expenses or disbursements of any kind whatsoever which may at any time (including, without limitation, at any time following the payment of the Obligations) be imposed on, incurred by or asserted against such Agent in its capacity as such in any way relating to or arising out of this Agreement or any other Credit Document, or any documents contemplated by or referred to herein or the transactions contemplated hereby or any action taken or omitted to be taken by such Agent under or in connection with any of the foregoing, but only to the extent that any of the foregoing is not paid by Borrower or any of its Subsidiaries; provided, however, that no Lender shall be liable to any Agent for the payment of any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements (x) resulting from the gross negligence, or willful misconduct of such Agent (as determined by a court of competent jurisdiction in a final and non-appealable decision) or (y) relating to or arising out of the Engagement Letters.  If any indemnity furnished to any Agent for any purpose shall, in the opinion of such Agent be insufficient or become impaired, such Agent may call for additional indemnity and cease, or not commence, to do the acts indemnified against until such additional indemnity is furnished.  The agreements in this Section 12.08 shall survive the payment of all Obligations.

 

SECTION 12.09.               No Other Duties.  Anything herein to the contrary notwithstanding, none of the Administrative Agent, Collateral Agent, Syndication Agent, Documentation Agents or Lead Arrangers shall have any powers, duties or responsibilities under this Agreement or any of the other Credit Documents, except in its capacity, as applicable, as the Administrative Agent, the Collateral Agent, an L/C Lender, the Swingline Lender, the Auction Manager or a Lender hereunder.

 

SECTION 12.10.               Holders.  Administrative Agent may deem and treat the payee of any Note as the owner thereof for all purposes hereof unless and until a written notice of the assignment, transfer or endorsement thereof, as the case may be, shall have been filed with Administrative Agent.  Any request, authority or consent of any Person or entity who, at the time of making such request or giving such authority or consent, is the holder of any

 

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Note shall be conclusive and binding on any subsequent holder, transferee, assignee or indorsee, as the case may be, of such Note or of any Note or Notes issued in exchange therefor.

 

SECTION 12.11.               Administrative Agent May File Proofs of Claim.  In case of the pendency of any proceeding under any Debtor Relief Law or any other judicial proceeding relative to any Credit Party, any Holding Company or RRR, the Administrative Agent (irrespective of whether the principal of any Loan or L/C Liability 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 Borrower) 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 Liabilities 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 Secured Parties (including any claim for the reasonable compensation, expenses, disbursements and advances of the Secured Parties and their respective agents and counsel and all other amounts due the Secured Parties under Sections 2.03, 2.05 and 13.03) 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 Secured Party by accepting the benefits of the Collateral) to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Secured Parties, 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 Sections 2.03, 2.05 and 13.03.

 

Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Secured Party any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Secured Party to authorize the Administrative Agent to vote in respect of the claim of any Secured Party in any such proceeding.

 

SECTION 12.12.               Collateral Matters.

 

(a)                                 Each Lender (and each other Secured Party by accepting the benefits of the Collateral) authorizes and directs Collateral Agent to enter into the Security Documents for the benefit of the Secured Parties and to hold and enforce the Liens on the Collateral on behalf of the Secured Parties.  Collateral Agent is hereby authorized on behalf of all of the Lenders, without the necessity of any notice to or further consent from any Lender, from time to time prior to an Event of Default, to take any action with respect to any Collateral or Security Documents which may be necessary to perfect and maintain perfected the security interest in and liens upon the Collateral granted pursuant to the Security Documents.  The Lenders hereby authorize Collateral Agent to take the actions set forth in Section 13.04(g).  Upon request by Administrative Agent at any time, the Lenders will confirm in writing Collateral Agent’s authority to release particular types or items of Collateral pursuant to this Section 12.12.

 

(b)                                 Collateral Agent shall have no obligation whatsoever to the Lenders, the other Secured Parties or any other Person to assure that the Collateral exists or is owned by any Credit Party, any Holding Company or RRR or is cared for, protected or insured or that the Liens granted to Collateral Agent pursuant to the applicable Security Documents have been properly or sufficiently or lawfully created, perfected, protected or enforced or are entitled to any particular priority, or to exercise or to continue exercising at all or in any manner or under any duty of care,

 

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disclosure or fidelity any of the rights, authorities and powers granted or available to Collateral Agent in Section 12.01 or in this Section 12.12 or in any of the Security Documents, it being understood and agreed that in respect of the Collateral or any part thereof, or any act, omission or event related thereto, Collateral Agent may act in any manner it may deem appropriate, in its sole discretion, given Collateral Agent’s own interest in the Collateral or any part thereof as one of the Lenders and that Collateral Agent shall have no duty or liability whatsoever to the Lenders or the other Secured Parties, except for its gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final and non-appealable decision).

 

SECTION 12.13.               Withholding Tax.  To the extent required by any applicable Requirement of Law, an Agent may withhold from any payment to any Lender, an amount equivalent to any applicable withholding tax.  Without limiting or expanding the provisions of Section 5.06, each Lender shall, and does hereby, indemnify the relevant Agent, and shall make payable in respect thereof within thirty (30) calendar days after demand therefor, against any and all Taxes and any and all related losses, claims, liabilities and expenses (including fees, charges and disbursements of any counsel for the Agent) incurred by or asserted against the Agent by the Internal Revenue Service or any other Governmental Authority as a result of the failure of the Agent to properly withhold tax from amounts paid to or for the account of any Lender for any reason (including, without limitation, because the appropriate form was not delivered or not property executed, or because such Lender failed to notify Administrative Agent of a change in circumstance that rendered the exemption from, or reduction of withholding tax ineffective).  A certificate as to the amount of such payment or liability delivered to any Lender by Administrative Agent shall be conclusive absent manifest error.  Each Lender hereby authorizes Administrative Agent to set off and apply any and all amounts at any time owing to such Lender under this Agreement or any other Security Document against any amount due Administrative Agent under this Section 12.13.  The agreements in this Section 12.13 shall survive the resignation and/or replacement of Administrative Agent, any assignment of rights by, or the replacement of, a Lender, and the repayment, satisfaction or discharge of any Loans and all other amounts payable hereunder.

 

SECTION 12.14.               Secured Cash Management Agreements and Swap Contracts.  Except as otherwise expressly set forth herein or in any Security Document, no Cash Management Bank or Swap Provider that obtains the benefits of Section 11.02, Article VI or any Collateral by virtue of the provisions hereof or of any Security Document shall have any right to notice of any action or to consent to, direct or object to any action hereunder or under any other Credit Document or otherwise in respect of the Collateral (including the release or impairment of any Collateral) other than in its capacity as a Lender and, in such case, only to the extent expressly provided in the Credit Documents.  Notwithstanding any other provision of this Article XII to the contrary, the Administrative Agent shall not be required to verify the payment of, or that other satisfactory arrangements have been made with respect to, Obligations arising under Secured Cash Management Agreements and Swap Contracts unless the Administrative Agent has received written notice of such Obligations, together with such supporting documentation as the Administrative Agent may request, from the applicable Cash Management Bank or Swap Provider, as the case may be.

 

ARTICLE XIII.

 

MISCELLANEOUS

 

SECTION 13.01.               Waiver.  No failure on the part of Administrative Agent, Collateral Agent or any other Secured Party to exercise and no delay in exercising, and no course of dealing with respect to, any right, power or privilege under any Credit Document shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege under any Credit Document preclude any other or further exercise thereof or the exercise of any other right, power or privilege.  The remedies provided herein are cumulative and not exclusive of any remedies provided by Law.

 

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SECTION 13.02.               Notices.

 

(a)                                 General.  Unless otherwise expressly provided herein, all notices and other communications provided for hereunder shall be in writing (including by facsimile or electronic mail).  All such written notices shall be mailed certified or registered mail, faxed or delivered to the applicable address, telecopy or facsimile number or (subject to Section 13.02(b) below) electronic mail address, 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 any Credit Party, any Agent, L/C Lender, and the Swingline Lender, to the address, facsimile number, electronic mail address or telephone number specified for such Person below its name on the signature pages hereof;

 

(ii)               if to any other Lender, to the address, facsimile number, electronic mail address or telephone number specified for such Person below its name on the signature pages hereof or, in the case of any assignee Lender, the applicable Assignment Agreement.

 

Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices 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 delivered through electronic communications to the extent provided in Section 13.02(b) below, shall be effective as provided in such Section 13.02(b).

 

(b)                                 Electronic Communications.  Notices and other communications to the Lenders hereunder may be delivered or furnished by electronic communication (including e-mail and Internet or intranet websites) pursuant to procedures approved by Administrative Agent; provided, however, that the foregoing shall not apply to notices to any Lender pursuant to Article II, Article III or Article IV if such Lender has notified Administrative Agent that it is incapable of receiving notices under such Article by electronic communication.  Each Agent or any Credit Party 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.

 

Unless Administrative Agent otherwise prescribes, (i) notices and other communications sent to an electronic 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 electronic mail address or other written acknowledgement); provided, however, 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)                                  Change of Address, Etc.  Each Credit Party, each Agent, each L/C Lender and the Swingline Lender may change its respective address, facsimile number, electronic mail address or telephone number for notices and other communications hereunder by notice to the other parties hereto.  Each other Lender may change its address, facsimile number, electronic mail address or telephone number for notices and other communications hereunder by notice to Borrower, Administrative Agent, each L/C Lender and the Swingline Lender.

 

(d)                                 Reliance by Agents and Lenders.  Agents and the Lenders shall be entitled to rely and act upon any notices (including telephonic Notices of Borrowing and Letter of Credit Requests) purportedly given by or on behalf of Borrower 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

 

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recipient, varied from any confirmation thereof.  Borrower shall indemnify each Indemnitee from all Losses resulting from the reliance by such Indemnitee on each notice purportedly given by or on behalf of Borrower (except to the extent resulting from such Indemnitee’s own gross negligence, bad faith or willful misconduct or material breach of any Credit Document) and believed by such Indemnitee in good faith to be genuine.  All telephonic notices to and other communications with Administrative Agent or Collateral Agent may be recorded by Administrative Agent or Collateral Agent, as the case may be, and each of the parties hereto hereby consents to such recording.

 

(e)                                  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 BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER 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 BORROWER MATERIALS OR THE PLATFORM.  In no event shall any Agent or any of their respective Affiliates, directors, officers, employees, counsel, agents, trustees, investment advisors and attorneys-in-fact (collectively, the “Agent Parties”) have any liability to Borrower, any other Credit Party, any Holding Company, RRR, any Lender, any L/C Lender or any other Person for losses, claims, damages, liabilities or expenses of any kind (whether in tort, contract or otherwise) arising out of Borrower’s or Administrative Agent’s transmission of Borrower 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 non-appealable judgment to have resulted from the gross negligence, bad faith or willful misconduct of, or material breach of any Credit Document by, such Agent Party; provided however, that in no event shall any Agent Party have any liability to Borrower, any other Credit Party, any Holding Company, RRR, any Lender, any L/C Lender or any other Person for indirect, special, incidental, consequential or punitive damages (as opposed to direct or actual damages).

 

SECTION 13.03.               Expenses, Indemnification, Etc.

 

(a)                                 The Credit Parties, jointly and severally, agree to pay or reimburse:

 

(i)                           Agents for all of their reasonable and documented out-of-pocket costs and expenses (including the reasonable fees, expenses and disbursements of Latham & Watkins LLP and one local counsel in each applicable jurisdiction reasonably deemed necessary by Agents and any “ClearPar” costs and expenses) in connection with (1) the negotiation, preparation, execution and delivery of the Credit Documents and the extension and syndication of credit (including the Loans and Commitments) hereunder and (2) the negotiation, preparation, execution and delivery of any modification, supplement, amendment or waiver of any of the terms of any Credit Document (whether or not consummated or effective) requested by the Credit Parties, the Holding Companies or RRR;

 

(ii)                        each Agent and each Lender for all reasonable and documented out-of-pocket costs and expenses of such Agent or Lender (provided that any legal expenses shall be limited to the reasonable fees, expenses and disbursements of one primary legal counsel for Lenders and Agents selected by Administrative Agent and of one local counsel in each applicable jurisdiction reasonably deemed necessary by Agents (and solely in the case of an actual or perceived conflict of interest, where the Persons affected by such conflict inform Borrower in writing of the existence of an actual or perceived conflict of interest prior to retaining additional counsel, one additional of each such counsel for each group of similarly situated Secured Parties)) in connection with (1) any enforcement or collection proceedings resulting from any Default, including all manner of participation in or other involvement with (x) bankruptcy, insolvency, receivership, foreclosure, winding up or liquidation proceedings, (y) judicial or regulatory proceedings and

 

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(z) workout, restructuring or other negotiations or proceedings (whether or not the workout, restructuring or transaction contemplated thereby is consummated), (2) following the occurrence and during the continuance of an Event of Default, the enforcement of any Credit Document, (3) the enforcement of this Section 13.03 and (4) any documentary taxes; and

 

(iii)                     Administrative Agent or Collateral Agent, as applicable but without duplication, for all reasonable and documented costs, expenses, assessments and other charges (including reasonable fees and disbursements of one counsel in each applicable jurisdiction) incurred in connection with any filing, registration, recording or perfection of any security interest contemplated by any Credit Document or any other document referred to therein.

 

Without limiting the rights of any Agent under this Section 13.03(a), each Agent, promptly after a request of Borrower from time to time, will advise Borrower of an estimate of any amount anticipated to be incurred by such Agent and reimbursed by Borrower under this Section 13.03(a).

 

(b)                                 The Credit Parties, jointly and severally, hereby agree to indemnify each Agent, each Lender and their respective Affiliates and their and their respective Affiliates’, directors, trustees, officers, employees, representatives, advisors, partners and agents (each, an “Indemnitee”) from, and hold each of them harmless against, any and all Losses incurred by, imposed on or asserted against any of them directly or indirectly arising out of or by reason of or relating to the negotiation, execution, delivery, performance, administration or enforcement of any Credit Document, any of the transactions contemplated by the Credit Documents (including the Transactions), any breach by any Credit Party, any Holding Company or RRR of any representation, warranty, covenant or other agreement contained in any Credit Document in connection with any of the Transactions, the use or proposed use of any of the Loans or Letters of Credit, the issuance of or performance under any Letter of Credit or, the use of any collateral security for the Obligations (including the exercise by any Agent or Lender of the rights and remedies or any power of attorney with respect thereto or any action or inaction in respect thereof), including all amounts payable by any Lender pursuant to Section 12.08, 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, but excluding (i) any such Losses relating to matters referred to in Sections 5.01 or 5.06 (which shall be the sole remedy in respect of matters referred to therein), (ii) any such Losses arising from the gross negligence, bad faith or willful misconduct or material breach of any Credit Documents by such Indemnitee or its Related Indemnified Persons (as determined by a court of competent jurisdiction in a final and non-appealable decision) and (iii) any such Losses relating to any dispute between and among Indemnitees that does not involve an act or omission by any Company, any Holding Company, RRR or any of their respective Affiliates (other than any claims against Administrative Agent, Collateral Agent, any other agent or bookrunner named on the cover page hereto, Swingline Lender or any L/C Lender, in each case, acting in such capacities or fulfilling such roles). For purposes of this Section 13.03(b), a “Related Indemnified Person” of an Indemnitee means (1) any controlling person or controlled affiliate of such Indemnitee, (2) the respective directors, officers, or employees of such Indemnitee or any of its controlling persons or controlled Affiliates and (3) the respective agents of such Indemnitee or any of its controlling persons or controlled Affiliates, in the case of this clause (3), acting at the instructions of such Indemnitee, controlling person or such controlled Affiliate; provided that each reference to a controlled Affiliate or controlling person in this sentence pertains to a controlled Affiliate or controlling person involved in the performance of the Indemnitee’s obligations under the facilities.

 

Without limiting the generality of the foregoing, the Credit Parties, jointly and severally, will indemnify each Agent, each Lender and each other Indemnitee from, and hold each Agent, each Lender and each other Indemnitee harmless against, any Losses incurred by, imposed on or asserted against any of them arising under any Environmental Law as a result of (i) the past, present or future operations of any Company (or any predecessor-in-interest to any Company), (ii) the past, present or future condition of any site or facility owned, operated, leased or used at any time by any Company (or any such predecessor-in-interest) to the extent such Losses arise from or relate to the parties’ relationship under the Credit Documents (including the exercise or remedies thereunder) or to (A) any

 

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Company’s (or such predecessor-in-interest’s)ownership, operation, lease or use of such site or facility or (B) any aspect of the respective business or operations of any Company (or predecessor-in-interest), and, in each case shall include, without limitation, any and all such Losses for which any Company could be found liable, or (iii) any Release or threatened Release of any Hazardous Materials at, on, under or from any such site or facility to the extent such Losses arise from or relate to the parties’ relationship under the Credit Documents (including the exercise or remedies thereunder) or to (A) any Company’s (or such predecessor-in-interest’s) ownership, operation, lease or use of such site or facility or (B) any aspect of the respective business or operations of any Company (or predecessor-in-interest), and, in each case shall include, without limitation, any and all such Losses for which any Company could be found liable, including any such Release or threatened Release that shall occur during any period when any Agent or Lender shall be in possession of any such site or facility following the exercise by such Agent or Lender, as the case may be, of any of its rights and remedies hereunder or under any of the Security Documents; provided, however, that the indemnity hereunder shall be subject to the exclusions from indemnification set forth in the preceding sentence.

 

To the extent that the undertaking to indemnify and hold harmless set forth in this Section 13.03 or any other provision of any Credit Document providing for indemnification is unenforceable because it is violative of any Law or public policy or otherwise, the Credit Parties, jointly and severally, shall contribute the maximum portion that each of them is permitted to pay and satisfy under applicable Law to the payment and satisfaction of all indemnified liabilities incurred by any of the Persons indemnified hereunder.

 

To the fullest extent permitted by applicable Law, no party hereto shall assert, and the parties hereto hereby waive, any claim against any Person, 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 Agreement, any other Credit 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; provided that nothing contained in this sentence shall limit the Credit Parties’ indemnity and reimbursement obligations to the extent set forth in this Section 13.03 (including the Credit Parties’ indemnity and reimbursement obligations to indemnify the Indemnitees for indirect, special, punitive or consequential damage that are included in any third party claim in connection with which such Indemnitee is entitled to indemnification hereunder).  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 to such unintended recipients by such Indemnitee through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Credit Documents or the transactions contemplated hereby or thereby other than for direct or actual damages resulting from the gross negligence, bad faith or willful misconduct or material breach of any Credit Document by such Indemnitee as determined by a final and non-appealable judgment of a court of competent jurisdiction.

 

SECTION 13.04.               Amendments and Waiver.

 

(a)                                 Neither this Agreement nor any other Credit Document nor any terms hereof or thereof may be amended, modified, changed or waived, unless such amendment, modification, change or waiver is in writing signed by each of the Credit Parties, Holding Companies and RRR that is party thereto and the Required Lenders (or Administrative Agent with the consent of the Required Lenders); provided, however, that no such amendment, modification, change or waiver shall (and any such amendment, modification, change or waiver set forth below in clauses (i) through (vii) of this Section 13.04(a) shall only require the approval of the Agents and/or Lenders whose consent is required therefor pursuant to such clauses):

 

(i)                           extend the date for any scheduled payment of principal on any Loan or Note or extend the stated maturity of any Letter of Credit beyond any R/C Maturity Date (unless such Letter of Credit is required to be cash collateralized or otherwise backstopped (with a letter of credit on customary terms) to the Administrative Agent’s and applicable L/C Lender’s reasonable satisfaction (and the obligations of the Revolving Lenders to participate in such Letters of Credit pursuant to Section 2.03(f) are terminated upon

 

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the third Business Day preceding the applicable R/C Maturity Date) or the participations therein are required to be assumed by Revolving Lenders that have Revolving Commitments which extend beyond such R/C Maturity Date (and the other Revolving Lenders are released from their obligations under such participations)) or extend the termination date of any of the Commitments, or reduce the rate or extend the time of payment of interest (other than as a result of any waiver of the applicability of any post-default increase in interest rates) or fees thereon, or forgive or reduce the principal amount thereof, without the consent of each Lender directly affected thereby (it being understood that any amendment or modification to the financial definitions in this Agreement shall not constitute a reduction in any rate of interest or fees for purposes of this clause (i), notwithstanding the fact that such amendment or modification actually results in such a reduction);

 

(ii)                        release (x) all or substantially all of the Collateral (except as provided in the Security Documents) under all the Security Documents or (y) all or substantially all of the Guarantors from the Guarantees, without the consent of each Lender;

 

(iii)                     amend, modify, change or waive (x) any provision of Section 11.02 or this Section 13.04 without the consent of each Lender, (y) any other provision of any Credit Document or any other provision of this Agreement that expressly provides that the consent of all Lenders or all affected Lenders is required, without the consent of each Lender or (z) any provision of any Credit Document that expressly provides that the consent of the Required Tranche Lenders of a particular Tranche, Required Pro Rata Lenders or Required Revolving Lenders is required, without the consent of the Required Tranche Lenders of each Tranche, the Required Pro Rata Lenders or the Required Revolving Lenders, as the case may be (in each case, except for technical amendments with respect to additional extensions of credit (including Extended Term Loans or Extended Revolving Loans) pursuant to this Agreement which afford the benefits or protections to such additional extensions of credit of the type provided to the Term Loans and/or the Revolving Commitments and Revolving Loans, as applicable);

 

(iv)                    (x) reduce the percentage specified in the definition of Required Lenders or Required Tranche Lenders or otherwise amend the definition of Required Lenders or Required Tranche Lenders without the consent of each Lender, (y) reduce the percentage specified in the definition of Required Revolving Lenders or otherwise amend the definition of Required Revolving Lenders without the consent of each Revolving Lender or (z) reduce the percentage specified in the definition of Required Pro Rata Lenders or otherwise amend the definition of Required Pro Rata Lenders without the consent of each Revolving Lender and each Term A Facility Lender (provided that, (x) no such consent shall be required for technical amendments with respect to additional extensions of credit pursuant to this Agreement, and (y) with the consent of the Required Lenders, additional extensions of credit (including Extended Term Loans and Extended Revolving Loans) pursuant to this Agreement may be included in the determination of the Required Lenders, Required Tranche Lenders, Required Pro Rata Lenders and/or Required Revolving Lenders on substantially the same basis as the extensions of Loans and Commitments are included on the Closing Date);

 

(v)                       amend, modify, change or waive Section 4.02 or Section 4.07(b) in a manner that would alter the pro rata sharing of payments required thereby, without the consent of each Lender directly affected thereby (except for technical amendments with respect to additional extensions of credit (including Extended Term Loans or Extended Revolving Loans) pursuant to this Agreement which afford the protections to such additional extensions of credit of the type provided to the Term Loans and/or the Revolving Commitments and Revolving Loans, as applicable);

 

(vi)                    impose any greater restriction on the ability of any Lender under a Tranche to assign any of its rights or obligations hereunder without the written consent of the Required Tranche Lenders for such Tranche; or

 

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(vii)                 (A) amend, modify or waive any provision of Section 10.08 (and related definitions as used in such Section, but not as used in other Sections of this Agreement), (B) amend, modify or waive any Default or Event of Default resulting from a breach of Section 10.08, or (C) amend, modify or waive any provision of the last paragraph of Section 11.01, without the written consent of the Required Pro Rata Lenders and, notwithstanding anything to the contrary set forth in this Section 13.04, only the written consent of such Lenders shall be necessary to permit any such amendment, modification or waiver; provided, however, that the consent of the Required Lenders shall be required to waive, amend or modify the requirement to be in compliance on a Pro Forma Basis with the Financial Maintenance Covenants (and Section 10.08 and related definitions as used for such purpose) for purposes of clause (a) of the definition of “Permitted Acquisition” or Sections 9.12(a)(iii), 9.12(b)(ii) or 10.01(n)(ii);

 

provided, further, that no such amendment, modification, change or waiver shall (A) increase the Commitments of any Lender over the amount thereof then in effect without the consent of such Lender (it being understood that waivers or modifications of conditions precedent, covenants, Defaults or Events of Default or of a mandatory reduction in the total Commitments or Total Revolving Commitments or a waiver of a mandatory prepayment shall not constitute an increase of the Commitment of any Lender), (B) without the consent of each L/C Lender, amend, modify, change or waive any provision of Section 2.03 or alter such L/C Lender’s rights or obligations with respect to Letters of Credit, (C) without the consent of the Swingline Lender, alter its rights or obligations with respect to Swingline Loans, (D) without the consent of any applicable Agent, amend, modify, change or waive any provision as same relates to the rights or obligations of such Agent or (E) amend, modify, change or waive Section 2.10(b) in a manner that by its terms adversely affects the rights in respect of prepayments due to Lenders holding Loans of one Tranche differently from the rights of Lenders holding Loans of any other Tranche without the prior written consent of the Required Tranche Lenders of each adversely affected Tranche (such consent being in lieu of the consent of the Required Lenders required above in this Section 13.04(a)) (except for technical amendments with respect to additional extensions of credit pursuant to this Agreement (including Extended Term Loans or Extended Revolving Loans) so that such additional extensions may share in the application of prepayments (or commitment reductions) with any Tranche of Term Loans or Revolving Loans, as applicable); provided, however, the Required Lenders may waive, in whole or in part, any prepayment so long as the application, as between Tranches, of any portion of such prepayment which is still required to be made is not altered.  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 (x) the Commitment of such Defaulting Lender may not be increased or extended without the consent of such Defaulting Lender, (y) the principal and accrued and unpaid interest of such Defaulting Lender’s Loans shall not be reduced or forgiven (other than as a result of any waiver of the applicability of any post-default increase in interest rates), nor shall the date for any scheduled payment of any such amounts be postponed, without the consent of such Defaulting Lender (it being understood that any amendment or modification to the financial definitions in this Agreement shall not constitute a reduction in any rate of interest or fees for purposes of this clause (y), notwithstanding the fact that such amendment or modification actually results in such a reduction) and (z) any waiver, amendment or modification requiring the consent of all Lenders or each affected Lender that by its terms affects any Defaulting Lender more adversely than other affected Lenders shall require the consent of such Defaulting Lender (other than in the case of a consent by the Administrative Agent to permit Borrower and its Subsidiaries to purchase Revolving Commitments (and Revolving Loans made pursuant thereto) of Defaulting Lenders in excess of the amount permitted pursuant to Section 13.04(h)).

 

In addition, notwithstanding the foregoing, the Engagement Letters may only be amended or changed, or rights or privileges thereunder waived, only by the parties thereto in accordance with the respective provisions thereof.

 

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(b)                                 If, in connection with any proposed amendment, modification, change or waiver of or to any of the provisions of this Agreement, the consent of the Required Lenders (or in the case of a proposed amendment, modification, change or waiver affecting a particular Class or Tranche, the Lenders holding a majority of the Loans and Commitments with respect to such Class or Tranche) is obtained but the consent of one or more of such other Lenders whose consent is required is not obtained, then Borrower shall have the right, so long as all non-consenting Lenders whose individual consent is required are treated as described in either clause (A) or (B) below, to either:

 

(A) replace each such non-consenting Lender or Lenders (or, at the option of Borrower, if such non-consenting Lender’s consent is required with respect to a particular Class or Tranche of Loans (or related Commitments), to replace only the Classes or Tranches of Commitments and/or Loans of such non-consenting Lender with respect to which such Lender’s individual consent is required (such Classes or Tranches, the “Affected Classes”)) with one or more Replacement Lenders, so long as, at the time of such replacement, each such Replacement Lender consents to the proposed amendment, modification, change or waiver;  provided, further, that (i) at the time of any such replacement, the Replacement Lender shall enter into one or more Assignment Agreements (and with all fees payable pursuant to Section 13.05(b) to be paid by the Replacement Lender) pursuant to which the Replacement Lender shall acquire all of the Commitments and outstanding Loans of, and in each case L/C Interests of, the Replaced Lender (or, at the option of Borrower if the respective Lender’s consent is required with respect to less than all Classes or Tranches of Loans (or related Commitments), the Commitments, outstanding Loans and L/C Interests of the Affected Classes), (ii) at the time of any replacement, the Replaced Lender shall receive an amount equal to the sum of (A) the principal of, and all accrued interest on, all outstanding Loans of such Lender (other than any Loans not being acquired by the Replacement Lender), (B) all Reimbursement Obligations owing to such Lender, together with all then unpaid interest with respect thereto at such time, in the event Revolving Loans or Revolving Commitments owing to such Lender are being acquired and (C) all accrued, but theretofore unpaid, fees and other amounts owing to the Lender with respect to the Loans being so assigned and (iii) all obligations of Borrower owing to such Replaced Lender (other than those specifically described in clause (ii) above in respect of Replaced Lenders for which the assignment purchase price has been, or is concurrently being, paid, and other than those relating to Loans or Commitments not being acquired by the Replacement Lender, but including any amounts which would be paid to a Lender pursuant to Section 5.05 if Borrower were prepaying a LIBOR Loan), as applicable, shall be paid in full to such Replaced Lender, as applicable, concurrently with such replacement.  Upon the execution of the respective Assignment Agreement, the payment of amounts referred to in clauses (i), (ii) and (iii) above, as applicable, the receipt of any consents that would be required for an assignment of the subject Loans and Commitments to such Replacement Lender in accordance with Section 13.05, the Replacement Lender, if any, shall become a Lender hereunder and the Replaced Lender, as applicable, shall cease to constitute a Lender hereunder and be released of all its obligations as a Lender, except with respect to indemnification provisions applicable to such Lender under this Agreement, which shall survive as to such Lender and, in the case of any Replaced Lender, except with respect to Loans, Commitments and L/C Interests of such Replaced Lender not being acquired by the Replacement Lender; provided, that if the applicable Replaced Lender does not execute the Assignment Agreement within three (3) Business Days after Borrower’s request, execution of such Assignment Agreement by the Replaced Lender shall not be required to effect such assignment; or

 

(B) terminate such non-consenting Lender’s Commitment and/or repay Loans held by such Lender (or, if such non-consenting Lender’s consent is required with respect to a particular Class or Tranche of Loans, the Commitment and Loans of the Affected Class) and, if applicable, Cash Collateralize its applicable R/C Percentage of the L/C Liability, in either case, upon three (3) Business Days’ (or such shorter period as is acceptable to Administrative Agent) prior written notice to Administrative Agent at the Principal Office (which notice Administrative Agent shall promptly transmit to each of the Lenders).  Any such prepayment of the Loans or termination of the Commitments of such Lender shall be made together with accrued and unpaid interest, fees and other amounts owing to such Lender (including all amounts, if

 

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any, owing pursuant to Section 5.05) (or if the applicable consent requires approval of all Lenders of a particular Class or Tranche but not all Lenders, then Borrower shall terminate all Commitments and/or repay all Loans, in each case together with payment of all accrued and unpaid interest, fees and other amounts owing to such Lender (including all amounts, if any, owing pursuant to Section 5.05) under such Class or Tranche), so long as (i) in the case of the repayment of Revolving Loans of any Lender pursuant to this Section 13.04(b)(B), (A) the Revolving Commitment of such Lender is terminated concurrently with such repayment and (B) such Lender’s R/C Percentage of all outstanding Letters of Credit is Cash Collateralized or backstopped by Borrower in a manner reasonably satisfactory to Administrative Agent and the L/C Lenders.  Immediately upon any repayment of Loans by Borrower pursuant to this Section 13.04(b)(B), such Loans repaid or acquired pursuant hereto shall be cancelled for all purposes and no longer outstanding (and may not be resold, assigned or participated out by Borrower) for all purposes of this Agreement and all other Credit Documents (provided, that such purchases and cancellations shall not constitute prepayments or repayments of the Loans for any purpose hereunder (except for purposes of Section 2.09(c))), including, but not limited to (A) the making of, or the application of, any payments to the Lenders under this Agreement or any other Credit Document, (B) the making of any request, demand, authorization, direction, notice, consent or waiver under this Agreement or any other Credit Document, (C) the providing of any rights to Borrower as a Lender under this Agreement or any other Credit Document, and (D) the determination of Required Lenders, or for any similar or related purpose, under this Agreement or any other Credit Document; provided, however, that, unless the Commitments which are terminated and Loans which are repaid pursuant to this clause (B) are immediately replaced in full at such time through the addition of new Lenders or the increase of the Commitments and/or outstanding Loans of existing Lenders (who in each case must consent thereto), then, in the case of any action pursuant to this clause (B), the Required Lenders (determined after giving effect to the proposed action) shall specifically consent thereto;

 

provided, that Borrower shall not have the right to replace a Lender, or terminate the Commitments of or repay the Loans of a Lender under this Section 13.04(b), solely as a result of the exercise of such Lender’s rights (and the withholding of any required consent by such Lender) pursuant to clauses (A) through (E) of the second proviso to Section 13.04(a).

 

(c)                                  Administrative Agent and Borrower may (without the consent of Lenders) amend any Credit Document to the extent (but only to the extent) necessary to reflect the existence and terms of Incremental Revolving Commitments, Incremental Term Loans, Other Term Loans, Other Revolving Commitments, Extended Term Loans and Extended Revolving Commitments.  Notwithstanding anything to the contrary contained herein, such amendment shall become effective without any further consent of any other party to such Credit Document.  In addition, upon the effectiveness of any Refinancing Amendment, Administrative Agent, Borrower and the Lenders providing the relevant Credit Agreement Refinancing Indebtedness may amend this Agreement to the extent (but only to the extent) necessary to reflect the existence and terms of the Credit Agreement Refinancing Indebtedness incurred pursuant thereto (including any amendments necessary to treat the Loans and Commitments subject thereto as Other Term Loans, Other Revolving Loans, Other Revolving Commitments and/or Other Term Loan Commitments).  Administrative Agent and Borrower may effect such amendments to this Agreement and the other Credit Documents as may be necessary or appropriate, in the reasonable opinion of Administrative Agent and Borrower, to effect the terms of any Refinancing Amendment.  Administrative Agent and Collateral Agent may enter into amendments to this Agreement and the other Credit Documents with Borrower as may be necessary in order to establish new tranches or sub-tranches in respect of the Loans and/or Commitments extended pursuant to Section 2.13 or incurred pursuant to Sections 2.12 or 2.15 and such technical amendments as may be necessary or appropriate in the reasonable opinion of Administrative Agent and Borrower in connection with the establishment of such new tranches or sub-tranches, in each case on terms consistent with Section 2.13, Section 2.12 or Section 2.15.

 

(d)                                 Notwithstanding the foregoing, this Agreement may be amended (or amended and restated) with the written consent of the Required Lenders, Administrative Agent and Borrower (a) to add one or more additional credit facilities to this Agreement and to permit extensions of credit from time to time outstanding thereunder and

 

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the accrued interest and fees in respect thereof to share ratably in the benefits of this Agreement and the other Credit Documents with the Term Loans (or any Tranche thereof in the case of additional Term Loans) and the Revolving Loans and Revolving Commitments (or any Tranche of Revolving Loans and Revolving Commitments in the case of additional Revolving Loans or Revolving Commitments) and the accrued interest and fees in respect thereof and (b) to include appropriately the Lenders holding such credit facilities in any determination of the Required Lenders, Required Tranche Lenders, Required Pro Rata Lenders and/or Required Revolving Lenders, as applicable.

 

(e)                                  Notwithstanding anything to the contrary herein, (i) any Credit Document may be waived, amended, supplemented or modified pursuant to an agreement or agreements in writing entered into by Borrower and Administrative Agent (without the consent of any Lender) solely to effect administrative changes that are not adverse to any Lender or to correct administrative errors or omissions or to cure an ambiguity, defect or error (including, without limitation, to revise the legal description of any Mortgaged Real Property based on surveys), or to grant a new Lien for the benefit of the Secured Parties or extend an existing Lien over additional property or to make modifications which are not materially adverse to the Lenders and are requested or required by Gaming Authorities or Gaming Laws and (ii) any Credit Document may be waived, amended, supplemented or modified pursuant to an agreement or agreements in writing entered into by Borrower and Administrative Agent (without the consent of any Lender) to permit any changes requested or required by any Governmental Authority that are not materially adverse to the Lenders (including any changes relating to qualifications as a permitted holder of debt, licensing or limits on Property that may be pledged as Collateral or available remedies).  Notwithstanding anything to the contrary herein, (A) additional extensions of credit consented to by Required Lenders shall be permitted hereunder on a ratable basis with the existing Loans (including as to proceeds of, and sharing in the benefits of, Collateral and sharing of prepayments), (B) Collateral Agent shall (and each of the Lenders (and each Secured Party by accepting the benefits of the Collateral) hereby authorize Collateral Agent to) enter into the Pari Passu Intercreditor Agreement upon the request of Borrower in connection with the incurrence of Permitted First Priority Refinancing Debt, Permitted First Lien Indebtedness (and Permitted Refinancings thereof that qualify as Permitted First Lien Indebtedness) or Incremental Equivalent Debt (and Permitted Refinancings thereof that satisfy Sections 10.01(t)(A)(v) and 10.01(t)(A)(vi)), as applicable (or any amendments and supplements thereto in connection with the incurrence of additional Permitted First Priority Refinancing Debt, Permitted First Lien Indebtedness (and Permitted Refinancings thereof that qualify as Permitted First Lien Indebtedness) or Incremental Equivalent Debt (and Permitted Refinancings thereof that satisfy Sections 10.01(t)(A)(v) and 10.01(t)(A)(vi))), and (C) Collateral Agent (and each of the Lenders (and each Secured Party by accepting the benefits of the Collateral) hereby authorize Collateral Agent to) shall enter into the Second Lien Intercreditor Agreement upon the request of Borrower in connection with the incurrence of Permitted Second Priority Refinancing Debt, Permitted Second Lien Indebtedness (and Permitted Refinancings thereof that qualify as Permitted Second Lien Indebtedness) or Incremental Equivalent Debt (and Permitted Refinancings thereof that satisfy Sections 10.01(t)(A)(v) and 10.01(t)(A)(vi)), as applicable (or any amendments and supplements thereto in connection with the incurrence of additional Permitted Second Priority Refinancing Debt, Permitted Second Lien Indebtedness (and Permitted Refinancings thereof that qualify as Permitted Second Lien Indebtedness) or Incremental Equivalent Debt (and Permitted Refinancings thereof that satisfy Sections 10.01(t)(A)(v) and 10.01(t)(A)(vi))).  Each Lender agrees to be bound by the terms of the Pari Passu Intercreditor Agreement and the Second Lien Intercreditor Agreement, from and after the effectiveness thereof, as if directly a party thereto.

 

(f)                                   Notwithstanding anything to the contrary herein, the applicable Credit Party, Holding Company, RRR or Parties and Administrative Agent and/or Collateral Agent may (in its or their respective sole discretion, or shall, to the extent required by any Credit Document) enter into any amendment or waiver of any Credit Document, or enter into any new agreement or instrument, without the consent of any other Person, to effect the granting, perfection, protection, expansion or enhancement of any security interest in any Collateral or additional Property to become Collateral for the benefit of the Secured Parties, or as required by local law to give effect to, or protect any security interest for the benefit of the Secured Parties, in any Property or so that the security interests therein comply with applicable Requirements of Law or to release any Collateral which is not required under the Security Documents.

 

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(g)                                  Notwithstanding anything to the contrary herein, Administrative Agent and Collateral Agent shall (A) release any Lien granted to or held by Administrative Agent or Collateral Agent upon any Collateral (i) upon Payment in Full of the Obligations (other than (x) obligations under any Swap Contracts as to which acceptable arrangements have been made to the satisfaction of the relevant counterparties and (y) Cash Management Agreements not yet due and payable), (ii) upon the sale, transfer or other disposition of Collateral to the extent required pursuant to the last paragraph in Section 10.05 (and Administrative Agent or Collateral Agent may rely conclusively on a certificate to that effect provided to it by any Credit Party upon its reasonable request without further inquiry) to any Person other than a Credit Party, Holding Company or RRR, (iii) if approved, authorized or ratified in writing by the Required Lenders (or all of the Lenders to the extent required by Section 13.04(a)), (iv) if the property subject to such Lien is owned by a Guarantor, upon release of such Guarantor from its obligations under its Guarantee pursuant to Section 6.08, (v) constituting Equity Interests in or property of an Unrestricted Subsidiary, (vi) subject to Liens permitted under Sections 10.02(i) or 10.02(k), in each case, to the extent the documents governing such Liens do not permit such Collateral to secure the Obligations, or (vii) as otherwise may be provided herein or in the relevant Security Documents, and (B) consent to and enter into (and execute documents permitting the filing and recording, where appropriate) the grant of easements and covenants and subordination rights with respect to real property, conditions, restrictions and declarations on customary terms, and subordination, non-disturbance and attornment agreements on customary terms reasonably requested by Borrower with respect to leases entered into by Borrower and its Restricted Subsidiaries, to the extent requested by Borrower and not materially adverse to the interests of the Lenders.

 

(h)                                 If any Lender is a Defaulting Lender, Borrower shall have the right to terminate such Defaulting Lender’s Revolving Commitment and repay the Loans related thereto as provided below so long as Borrower Cash Collateralizes or backstops such Defaulting Lender’s applicable R/C Percentage of the L/C Liability to the reasonable satisfaction of the L/C Issuer and the Administrative Agent; provided that such terminations of Revolving Commitments shall not exceed 20 % of the sum of (x) the initial aggregate principal amount of the Revolving Commitments on the Closing Date plus (y) the initial aggregate principal amount of all Incremental Revolving Commitments incurred after the Closing Date and prior to such date of determination; provided, further, that Borrower and its Subsidiaries may terminate additional Revolving Commitments and repay the Loans related thereto pursuant to this Section 13.04(h) with the consent of the Administrative Agent.  At the time of any such termination and/or repayment, and as a condition thereto, the Replaced Lender shall receive an amount equal to the sum of (A) the principal of, and all accrued interest on, all outstanding Loans of such Lender provided pursuant to such Revolving Commitments, (B) all Reimbursement Obligations owing to such Lender, together with all then unpaid interest with respect thereto at such time, in the event Revolving Loans or Revolving Commitments owing to such Lender are being repaid and terminated or acquired, as the case may be, and (C) all accrued, but theretofore unpaid, fees owing to the Lender pursuant to Section 2.05 with respect to the Loans being so repaid, as the case may be and all other obligations of Borrower owing to such Replaced Lender (other than those relating to Loans or Commitments not being terminated or repaid) shall be paid in full to such Defaulting Lender concurrently with such termination.  At such time, unless the respective Lender continues to have outstanding Loans or Commitments hereunder, such Lender shall no longer constitute a “Lender” for purposes of this Agreement, except with respect to indemnifications under this Agreement (including, without limitation, Sections 4.02, 5.01, 5.03, 5.05, 5.06 and 13.03), which shall survive as to such repaid Lender.  Immediately upon any repayment of Loans by Borrower pursuant to this Section 13.04(h), such Loans repaid pursuant hereto shall be cancelled for all purposes and no longer outstanding (and may not be resold, assigned or participated out by Borrower) for all purposes of this Agreement and all other Credit Documents (provided; that such purchases and cancellations shall not constitute prepayments or repayments of the Loans (including, without limitation, pursuant to Section 2.09, Section 2.10 or Article IV) for any purpose hereunder), including, but not limited to (A) the making of, or the application of, any payments to the Lenders under this Agreement or any other Credit Document, (B) the making of any request, demand, authorization, direction, notice, consent or waiver under this Agreement or any other Credit Document, (C) the providing of any rights to Borrower as a Lender under this Agreement or any other Credit Document, and (D) the determination of Required Lenders, or for any similar or related purpose, under this Agreement or any other Credit Document.

 

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SECTION 13.05.               Benefit of Agreement; Assignments; Participations.

 

(a)                                 This Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective successors and assigns of the parties hereto; provided, however, except as expressly contemplated by Section 9.10 with respect to the VoteCo SPE Reorganization, no Credit Party, Holding Company or RRR may assign or transfer any of its rights, obligations or interest hereunder or under any other Credit Document (it being understood that a merger or consolidation not prohibited by this Agreement shall not constitute an assignment or transfer) without the prior written consent of all of the Lenders and provided, further, that, although any Lender may transfer, assign or grant participations in its rights hereunder, such Lender shall remain a “Lender” for all purposes hereunder (and may not transfer or assign all or any portion of its Commitments, Loans or related Obligations hereunder except as provided in Section 13.05(b)) and the participant shall not constitute a “Lender” hereunder; and provided, further, that no Lender shall transfer, assign or grant any participation (x) to a natural person, (y) to a Person that is a Disqualified Lender as of the applicable Trade Date (unless consented to by Borrower) or (z) under which the participant shall have rights to approve any amendment to or waiver of this Agreement or any other Credit Document except to the extent such amendment or waiver would (i) extend the date for any scheduled payment on, or the final scheduled maturity of, any Loan, Note or Letter of Credit (unless such Letter of Credit is not extended beyond any applicable R/C Maturity Date (unless such Letter of Credit is required to be cash collateralized or otherwise backstopped (with a letter of credit on customary terms) to the applicable L/C Lender’s and the Administrative Agent’s reasonable satisfaction or the participations therein are required to be assumed by Lenders that have commitments which extend beyond such R/C Maturity Date)) in which such participant is participating, or reduce the rate or extend the time of payment of interest or fees thereon (except in connection with a waiver of applicability of any post-default increase in interest rates) or reduce the principal amount thereof, or increase the amount of the participant’s participation over the amount thereof then in effect (it being understood that a waiver of any Default or Event of Default or of a mandatory reduction in the total Commitments or Total Revolving Commitments or of a mandatory prepayment shall not constitute a change in the terms of such participation, that an increase in any Commitment (or the available portion thereof) or Loan shall be permitted without the consent of any participant if the participant’s participation is not increased as a result thereof and that any amendment or modification to the financial definitions in this Agreement shall not constitute a reduction in any rate of interest or fees for purposes of this clause (i), notwithstanding the fact that such amendment or modification actually results in such a reduction), (ii) consent to the assignment or transfer by any Credit Party, any Holding Company or RRR of any of its rights and obligations under this Agreement or other Credit Document to which it is a party or (iii) release all or substantially all of the Collateral under all of the Security Documents (except as expressly provided in the Credit Documents) or all or substantially all of the value of the Guarantees Documents (except as expressly provided in the Credit Documents) supporting the Loans or Letters of Credit hereunder in which such participant is participating.  In the case of any such participation, the participant shall not have any rights under this Agreement or any of the other Credit Documents (the participant’s rights against such Lender in respect of such participation to be those set forth in the agreement executed by such Lender in favor of the participant relating thereto).  Subject to the last sentence of this paragraph (a), Borrower agrees that each participant shall be entitled to the benefits of Sections 5.01, and 5.06 (subject to the obligations and limitations of such Sections, including Section 5.06(b), (c) and (d) (it being understood that the documentation required under Section 5.06(b), (c) and (d) shall be delivered to the participating Lender)) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section 13.05.  To the extent permitted by law, each participant also shall be entitled to the benefits of Section 4.07 as though it were a Lender. Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of Borrower, maintain a register on which it enters the name and address of each participant and the principal amounts (and related interest amounts) of each participant’s interest in the Loans or other obligations under this Agreement (the “Participant Register”).  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 Agreement notwithstanding any notice to the contrary.  A participant shall not be entitled to receive any greater payment under Sections 5.01 or 5.06 than the applicable Lender would have been entitled to receive with respect to the participation sold to such participant,

 

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unless the entitlement to a greater payment results from any change in applicable Laws after the date the participant became a participant.

 

(b)                                 No Lender (or any Lender together with one or more other Lenders) may assign all or any portion of its Commitments, Loans and related outstanding Obligations (or, if the Commitments with respect to the relevant Tranche have terminated, outstanding Loans and Obligations) hereunder, except to one or more Eligible Assignees (treating any fund that invests in loans and any other fund that invests in loans and is managed or advised by the same investment advisor of such fund or by an Affiliate of such investment advisor as a single Eligible Assignee) with the consent of (x) Administrative Agent, (y) so long as no Event of Default pursuant to Section 11.01(b) or 11.01(c), or, with respect to Borrower, 11.01(g) or 11.01(h), has occurred and is continuing, Borrower and (z) in the case of an assignment of Revolving Loans or Revolving Commitments, the consent of the Swingline Lender and each L/C Lender (each such consent not to be unreasonably withheld or delayed); provided that (x) except in the case of an assignment of the entire remaining amount of the assigning Lender’s Commitments and Loans at the time owing to it, the aggregate amount of the Commitments or Loans subject to such assignment shall not be less than $1.0 million; (y) no such consent shall be necessary in the case of (i) an assignment of Revolving Loans or Revolving Commitments by a Revolving Lender to another Revolving Lender, (ii) an assignment of Term Loans by a Lender to another Lender or an Affiliate or Approved Fund of a Lender and (z) Borrower shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to Administrative Agent within ten (10) Business Days after having received notice thereof.   Each assignee shall become a party to this Agreement as a Lender by execution of an Assignment Agreement; provided that (I) Administrative Agent shall, unless it otherwise agrees in its sole discretion, receive at the time of each such assignment, from the assigning or assignee Lender, the payment of a non-refundable assignment fee of $3,500, (II) no such transfer or assignment will be effective until recorded by Administrative Agent on the Register pursuant to Section 2.08, and (III) such assignments may be made on a pro rata basis among Commitments and/or Loans (and related Obligations).  To the extent of any assignment permitted pursuant to this Section 13.05(b), the assigning Lender shall be relieved of its obligations hereunder with respect to its assigned Commitments and outstanding Loans (provided that such assignment shall not release such Lender of any claims or liabilities that may exist against such Lender at the time of such assignment).  At the time of each assignment pursuant to this Section 13.05(b) to a Person which is not already a Lender hereunder, the respective assignee Lender shall, to the extent legally entitled to do so, provide to Borrower and Administrative Agent the appropriate Internal Revenue Service Forms (and, if applicable, a Foreign Lender Certificate) as described in Section 5.06(b), 5.06(c) or 5.06(d), as applicable.  To the extent that an assignment of all or any portion of a Lender’s Commitments, Loans and related outstanding Obligations pursuant to Section 2.11, Section 13.04(b)(B) or this Section 13.05(b) would, under the laws in effect at the time of such assignment, result in increased costs under Section 5.01, 5.03 or (subject to clause (c) in the definition of Excluded Taxes as it relates to assignments pursuant to Section 2.11(a)) 5.06 from those being charged by the respective assigning Lender prior to such assignment, then Borrower shall not be obligated to pay such increased costs (although Borrower, in accordance with and pursuant to the other provisions of this Agreement, shall be obligated to pay any other increased costs of the type described above resulting from changes in any applicable law, treaty, governmental rule, regulation, guideline or order, or in the interpretation thereof, after the date of the respective assignment).

 

(c)                                  Nothing in this Agreement shall prevent or prohibit any Lender from pledging or assigning a security interest in its rights under this Agreement to secure obligations of such Lender, including any pledge or assignment of a security interest to a Federal Reserve Bank or other central banking authority.  No pledge pursuant to this Section 13.05(c) shall release the transferor Lender from any of its obligations hereunder or permit the pledgee to become a lender hereunder without otherwise complying with Section 13.05(b).

 

(d)                                 Notwithstanding anything to the contrary contained in this Section 13.05 or any other provision of this Agreement, Borrower and its Subsidiaries may, but shall not be required to, purchase outstanding Term Loans pursuant to (x) the Auction Procedures established for each such purchase in an auction managed by Auction Manager and (y) through open market purchases, subject solely to the following conditions:

 

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(i)                  (x) with respect to any Borrower Loan Purchase pursuant to the Auction Procedures, at the time of the applicable Purchase Notice (as defined in Exhibit O), no Event of Default has occurred and is continuing or would result therefrom, and (y) with respect to any Borrower Loan Purchase consummated through an open market purchase, at the time of the applicable assignment, no Event of Default has occurred and is continuing or would result therefrom;

 

(ii)               immediately upon any Borrower Loan Purchase, the Term Loans purchased pursuant thereto shall be cancelled for all purposes and no longer outstanding (and may not be resold, assigned or participated out by Borrower) for all purposes of this Agreement and all other Credit Documents (provided; that such purchases and cancellations shall not constitute prepayments or repayments of the Loans (including, without limitation, pursuant to Section 2.09, Section 2.10 or Article IV) for any purpose hereunder), including, but not limited to (A) the making of, or the application of, any payments to the Lenders under this Agreement or any other Credit Document, (B) the making of any request, demand, authorization, direction, notice, consent or waiver under this Agreement or any other Credit Document, (C) the providing of any rights to Borrower as a Lender under this Agreement or any other Credit Document, and (D) the determination of Required Lenders, or for any similar or related purpose, under this Agreement or any other Credit Document;

 

(iii)            with respect to each Borrower Loan Purchase, Administrative Agent shall receive (x) if such Borrower Loan Purchase is consummated pursuant to the Auction Procedures, a fully executed and completed Borrower Assignment Agreement effecting the assignment thereof, and (y) if such Borrower Loan Purchase is consummated pursuant to an open market purchase, a fully executed and completed Open Market Assignment and Assumption Agreement effecting the assignment thereof;

 

(iv)           open market purchases of Term Loans by Borrower and its Subsidiaries shall not in the aggregate exceed 15 % of the sum of (A) the initial aggregate principal amount of the Term Loans on the Closing Date plus (B) the initial aggregate principal amount of all Incremental Term Loans incurred after the Closing Date and prior to such date of determination; and

 

(v)              Borrower may not use the proceeds of any Revolving Loan to fund the purchase of outstanding Loans pursuant to this Section 13.05(d).

 

The assignment fee set forth in Section 13.05(b) shall not be applicable to any Borrower Loan Purchase consummated pursuant to this Section 13.05(d).

 

(e)                                  Subject to the conditions set forth in Section 13.05(b), any Lender may assign all or a portion of its Term Loan Commitments and Term Loans to a Station Permitted Assignee; provided that (i) no Default or Event of Default shall have occurred and be continuing at the time of such assignment or would result therefrom, (ii) such Station Permitted Assignee shall identify itself in writing as a Station Permitted Assignee to the Administrative Agent and the counterparty in the Term Loan assignment transaction, (iii) such Station Permitted Assignee shall provide either (x) a representation to the Administrative Agent to the effect that neither such Station Permitted Assignee nor any of its directors or officers are in possession of any material non-public information with respect to the business of any Holding Company, RRR, the Borrower or any of their respective Subsidiaries, or (y) indicate in writing to the Administrative Agent and the counterparty in the Term Loan assignment transaction that such Station Permitted Assignee cannot make the representation described in clause (x) above, and (iv) the aggregate principal amount of all Term Loans held by Station Permitted Assignees, after giving effect to such assignment, shall not exceed twenty percent (20%) of the aggregate principal amount of Term Loans then outstanding.

 

(f)                                   Notwithstanding anything to the contrary in this Agreement or any other Credit Document, no Affiliated Lender shall have any right to (i) attend (including by telephone) any meeting or discussions (or portion thereof) involving any of the Agents or Lenders to which representatives of the Credit Parties are not invited, or (ii)

 

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receive any information or materials prepared by any of the Agents or Lenders or any communication by or among any of the Agents or Lenders, except to the extent such information or materials have been made available to any Credit Party or its representatives.

 

(g)                                  Notwithstanding anything in Section 13.04 or the definition of “Required Lenders” to the contrary, for purposes of determining whether the Required Lenders, Required Tranche Lenders, all affected Lenders, all Lenders or any percentage of 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 Credit Document or any departure by any Credit Party or RRR therefrom, (ii) otherwise acted on any matter related to any Credit Document, or (iii) directed or required Administrative Agent or any Lender to undertake any action (or refrain from taking any action) with respect to or under any Credit Document, an Affiliated Lender shall be deemed to have voted its interest as a Lender without discretion in the same proportion as the allocation of voting with respect to such matter by Lenders who are not Affiliated Lenders; provided that no amendment, modification, waiver, consent or other action with respect to any Credit Document shall deprive such Affiliated Lender of any payments to which such Affiliated Lender is entitled under the Credit Documents without such Affiliated Lender providing its consent; provided further that such Affiliated Lender shall have the right to approve any amendment, modification, waiver or consent of the type described in Section 13.04(a)(i)-(vii) of this Agreement, in each case to the extent that such Affiliated Lender is directly and adversely affected thereby in any material respect as compared to other Lenders; and in furtherance of the foregoing, (x) the Affiliated Lender agrees to execute and deliver any ballot or other instrument reasonably requested by Administrative Agent to evidence the voting of its interest as a Lender in accordance with the provisions of this Section 13.05(f); provided that if the Affiliated Lender fails to promptly execute such ballot or other instrument such failure shall in no way prejudice any of Administrative Agents’ rights under this paragraph and (y) Administrative Agent is hereby appointed (such appointment being coupled with an interest) by the Affiliated Lender as the Affiliated Lender’s attorney-in-fact, with full authority in the place and stead of the Affiliated Lender and in the name of the Affiliated Lender, from time to time in Administrative Agent’s discretion to take any action and to execute any ballot or other instrument that the Administrative Agent may deem reasonably necessary to carry out the provisions of this Section 13.05(f).

 

(h)                                 Each Affiliated Lender, solely in its capacity as a Lender, hereby agrees that such Affiliated Lender shall not bring any claims, actions, suits or proceedings against any Agent or Lender in connection with the Loans held by such Affiliated Lender or its rights and obligations under this Agreement and the other Credit Documents, and each Affiliated Lender, solely in its capacity as a Lender, hereby waives all such claims and rights to bring such actions, suits and proceedings against the Agents and the other Lenders.

 

(i)                                     Each Affiliated Lender, solely in its capacity as a Lender, hereby further agrees that, if RRR, any Credit Party, any Holding Company or any Restricted Subsidiary shall be subject to any voluntary or involuntary proceeding commenced under any Debtor Relief Laws (“Bankruptcy Proceedings”):

 

(i)                                     such Affiliated Lender, solely in its capacity as a Lender, shall not take any step or action in such Bankruptcy Proceeding to object to, impede, or delay the exercise of any right or the taking of any action by Administrative Agent (or the taking of any action by a third party that is supported by Administrative Agent) in relation to such Affiliated Lender’s claim with respect to its Loans or Commitments (a “Claim”) (including, without limitation, objecting to any debtor in possession financing, use of cash collateral, grant of adequate protection, sale or disposition, compromise or plan of reorganization or liquidation or similar scheme);

 

(ii)                                  with respect to any matter requiring the vote of Lenders during the pendency of a Bankruptcy Proceeding (including, without limitation, voting on any plan of reorganization or liquidation or similar scheme), the Loans and Commitments held by such Affiliated Lender (and any Claim with respect thereto) shall be deemed to be voted in accordance with Section 13.05(f) regardless of whether such Loans and Commitments are separately classified in any such plan or scheme from Loans and

 

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Commitments held by non-Affiliated Lenders. In furtherance of the foregoing, (x) the Affiliated Lender agrees to execute and deliver any ballot or other instrument reasonably requested by Administrative Agent to evidence the voting of its interest as a Lender in accordance with the provisions of this Section 13.05(h)(ii); provided that if the Affiliated Lender fails to promptly execute such ballot or other instrument such failure shall in no way prejudice any of Administrative Agent’s rights under this paragraph and (y) Administrative Agent is hereby appointed (such appointment being coupled with an interest) by the Affiliated Lender as the Affiliated Lender’s attorney-in-fact, with full authority in the place and stead of the Affiliated Lender and in the name of the Affiliated Lender, from time to time in Administrative Agent’s discretion to take any action and to execute any ballot or other instrument that Administrative Agent may deem reasonably necessary to carry out the provisions of this Section 13.05(h)(ii);

 

(iii)                               it shall not, without the prior written consent of Administrative Agent (as directed by the Required Lenders) as to both form and substance, (1) file any motion or other application, objection, joinder or other filing in connection with sections 362, 363, 364 and/or 506 of the Bankruptcy Code (or any similar law, rule or provision under any applicable Debtor Relief Law) or in connection with any valuation issues or (2) participate in or otherwise support the “priming” of any of the Liens supporting the Obligations in connection with a proposed debtor-in-possession facility or otherwise;

 

(iv)                              in connection with any (1) plan of reorganization or liquidation or similar scheme or (2) distribution of cash or property with respect to an asset sale supported by the Secured Parties (other than the Affiliated Lenders) in any Bankruptcy Proceeding, such Affiliated Lender, solely in its capacity as a Lender, shall not oppose in any way a distribution of property or cash to other classes of claims or interests, regardless of the amount of such distributions (if any) to such Affiliated Lender.  In addition, and without limiting the foregoing, each Affiliated Lender, solely in its capacity as a Lender, hereby:

 

(A)                               agrees that any purchase pursuant to any credit bid by the Secured Parties (other than the Affiliated Lenders) under section 363(k) of the Bankruptcy Code (or any similar law, rule or provision under any applicable Debtor Relief Law) or otherwise shall have the effect of discharging such Affiliated Lender’s liens, claims, encumbrances and interests in the Collateral, and that title acquired pursuant to such credit bid shall be acquired free and clear of any liens, claims, encumbrances or interests arising under or by reason of the Obligations owed to the Affiliated Lenders or any Credit Document, whether or not the court order approving the sale pursuant to such credit bid expressly so provides;

 

(B)                               consents to the entry of an order approving the sale of any or all of the Collateral in one or more transactions under section 363 of the Bankruptcy Code (or any similar law, rule or provision under any applicable Debtor Relief Law), whether for cash or other consideration, including a credit bid by the Secured Parties (other than the Affiliated Lenders) under section 363(k) of the Bankruptcy Code (or any similar law, rule or provision under any applicable Debtor Relief Law) or otherwise, that expressly provides that any lien, claim, encumbrance or interest is discharged and title acquired pursuant to the sale is free and clear of any liens, claims, or encumbrances held by the Affiliated Lenders arising under or by reason of the Obligations or any Credit Document, provided that such sale is supported by the Secured Parties (other than the Affiliated Lenders); and

 

(C)                               consents to the Secured Parties (other than the Affiliated Lenders) credit bidding all or any portion of the Obligations owed to the Affiliated Lenders in connection with any credit bid by such Secured Parties under section 363(k) of the Bankruptcy Code (or any similar law, rule or provision under any applicable Debtor Relief Law) or otherwise, which shall have the effect of discharging the Affiliated Lenders’ liens, claims, encumbrances and interests in

 

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the Collateral, and agree that title acquired by such Secured Parties pursuant to such credit bid shall be acquired free and clear of any liens, claims, encumbrances or interests arising under or by reason of the Obligations owed to the Affiliated Lenders or any Credit Document, whether or not the court order approving the sale pursuant to such credit bid expressly so provides.

 

(j)                                    Section 13.05(g) and (i) shall not apply to any Designated Lender.

 

(k)                                 No assignment or participation shall be made to any Person that was a Disqualified Lender as of the date (the “Trade Date”) on which the assigning or participating Lender entered into a binding agreement to sell and assign all or a portion of its rights and obligations under this Agreement to such Person (unless Borrower has consented to such assignment or participation in writing in its sole and absolute discretion, in which case such Person will not be considered a Disqualified Lender for the purpose of such assignment or participation).  For the avoidance of doubt, with respect to any assignee that becomes a Disqualified Lender after the applicable Trade Date (including as a result of the delivery of a notice pursuant to, and/or the expiration of the notice period referred to in, the definition of “Disqualified Lender”), (x) such assignee shall not retroactively be disqualified from becoming a Lender and (y) the execution by Borrower of an Assignment Agreement with respect to such assignee will not by itself result in such assignee no longer being considered a Disqualified Lender. Any assignment in violation of this clause (f)(i) shall not be void, but the other provisions of this clause (f) shall apply, and nothing in this subsection (f) shall limit any rights or remedies available to the Credit Parties at law or in equity with respect to any Disqualified Lender and any Person that makes an assignment or participation to a Disqualified Lender in violation of this clause (f)(i).

 

(ii)                                  If any assignment or participation is made to any Disqualified Lender without Borrower’s prior written consent in violation of clause (i) above, or if any Person becomes a Disqualified Lender after the applicable Trade Date, Borrower may, at its sole expense and effort, upon notice to the applicable Disqualified Lender and the Administrative Agent, (A) terminate any Revolving Commitment of such Disqualified Lender and repay all obligations of Borrower owing to such Disqualified Lender in connection with such Revolving Commitment, (B) in the case of outstanding Term Loans held by Disqualified Lenders, purchase or prepay such Term Loan by paying the lesser of (x) the principal amount thereof and (y) the amount that such Disqualified Lender paid to acquire such Term Loans, in each case plus accrued interest, accrued fees and all other amounts (other than principal amounts) payable to it hereunder and/or (C) require such Disqualified Lender to assign, without recourse (in accordance with and subject to the restrictions contained in this Section 13.04), all of its interest, rights and obligations under this Agreement to one or more Eligible Assignees at the lesser of (x) the principal amount thereof and (y) the amount that such Disqualified Lender paid to acquire such interests, rights and obligations, in each case plus accrued interest, accrued fees and all other amounts (other than principal amounts) payable to it hereunder.

 

(iii)                               Notwithstanding anything to the contrary contained in this Agreement, Disqualified Lenders (A) will not (x) have the right to receive information, reports or other materials provided to Lenders by Borrower, the Administrative Agent or any other Lender, (y) attend or participate in meetings attended by the Lenders and the Administrative Agent, or (z) access any electronic site established for the Lenders or confidential communications from counsel to or financial advisors of the Administrative Agent or the Lenders and (B) (x) for purposes of any consent to any amendment, waiver or modification of, or any action under, and for the purpose of any direction to the Administrative Agent or any Lender to undertake any action (or refrain from taking any action) under this Agreement or any other Credit Document, each Disqualified Lender will be deemed to have consented in the same proportion as the Lenders that are not Disqualified Lenders consented to such matter, and (y) for purposes of voting on any plan of reorganization or plan of liquidation pursuant to any Debtor Relief Laws, each Disqualified Lender party hereto hereby agrees (1) not to vote on such plan of reorganization or plan of liquidation pursuant to any Debtor Relief Laws, (2) if such Disqualified Lender does vote on such plan of reorganization or plan of liquidation pursuant to any Debtor Relief Laws notwithstanding the restriction in the foregoing clause (1), such vote will be deemed not to be in good faith and shall be “designated” pursuant to Section 1126(e) of the Bankruptcy Code (or any similar provision in any other Debtor Relief Laws), and such vote shall not be counted in determining

 

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whether the applicable class has accepted or rejected such plan of reorganization or plan of liquidation pursuant to any Debtor Relief Laws in accordance with Section 1126(c) of the Bankruptcy Code (or any similar provision in any other Debtor Relief Laws) and (3) not to contest any request by any party for a determination by the Bankruptcy Court (or other applicable court of competent jurisdiction) effectuating the foregoing clause (2).

 

(iv)                              The Administrative Agent shall have the right, and Borrower hereby expressly authorizes the Administrative Agent, to (A) post the list of Disqualified Lenders provided by Borrower and any updates thereto from time to time (collectively, the “DQ List”) on the Platform, including that portion of the Platform that is designated for “public side” Lenders and/or (B) provide the DQ List to each Lender requesting the same.

 

SECTION 13.06.               Survival.  The obligations of the Credit Parties under Sections 5.01, 5.05, 5.06, 13.03 and 13.19, the obligations of each Guarantor under Section 6.03, and the obligations of the Lenders under Sections 5.06 and 12.08, in each case shall survive the repayment of the Loans and the other Obligations and the termination of the Commitments and, in the case of any Lender that may assign any interest in its Commitments, Loans or L/C Interest (and any related Obligations) hereunder, shall (to the extent relating to such time as it was a Lender) survive the making of such assignment, notwithstanding that such assigning Lender may cease to be a “Lender” hereunder.  In addition, each representation and warranty made, or deemed to be made by a notice of any extension of credit, herein or pursuant hereto shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of this Agreement and the Notes and the making of any extension of credit hereunder, regardless of any investigation made by any such other party or on its behalf and notwithstanding that Administrative Agent or any Lender may have had notice or knowledge of any Default or incorrect representation or warranty.

 

SECTION 13.07.               Captions.  The table of contents and captions and Section headings appearing herein are included solely for convenience of reference and are not intended to affect the interpretation of any provision of this Agreement.

 

SECTION 13.08.               Counterparts; Interpretation; Effectiveness.  This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract.  This Agreement and the other Credit Documents, constitute the entire contract among the parties thereto relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof, other than the Engagement Letters, which are not superseded and survive solely as to the parties thereto (to the extent provided therein).  This Agreement shall become effective when the Closing Date shall have occurred, and this Agreement shall have been executed and delivered by the Credit Parties and when Administrative Agent shall have received counterparts hereof which, when taken together, bear the signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.  Delivery of an executed counterpart of a signature page of this Agreement by facsimile or electronic mail shall be effective as delivery of a manually executed counterpart of this Agreement.

 

SECTION 13.09.               Governing Law; Submission to Jurisdiction; Waivers; Etc.

 

(a)                                 GOVERNING LAW.  THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND ANY CLAIMS, CONTROVERSIES, DISPUTES, OR CAUSES OF ACTION (WHETHER ARISING UNDER CONTRACT LAW, TORT LAW OR OTHERWISE) BASED UPON OR RELATING TO THIS AGREEMENT OR THE OTHER CREDIT DOCUMENTS (EXCEPT AS TO ANY OTHER CREDIT DOCUMENT, AS EXPRESSLY SET FORTH IN SUCH OTHER CREDIT DOCUMENT), SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW PRINCIPLES THAT WOULD APPLY THE LAW OF ANOTHER JURISDICTION.

 

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(b)                                 SUBMISSION TO JURISDICTION.  EACH CREDIT PARTY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT IT WILL NOT COMMENCE ANY ACTION, LITIGATION OR PROCEEDING OF ANY KIND OR DESCRIPTION, WHETHER AT LAW OR IN EQUITY, WHETHER IN CONTRACT OR IN TORT OR OTHERWISE, AGAINST THE ADMINISTRATIVE AGENT, ANY LENDER, ANY OF THEIR RESPECTIVE AFFILIATES, OR ANY OF THE PARTNERS, DIRECTORS, OFFICERS, EMPLOYEES, AGENTS OR ADVISORS OF THE FOREGOING IN ANY WAY RELATING TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN ANY FORUM OTHER THAN THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE JURISDICTION OF SUCH COURTS AND AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION, LITIGATION OR PROCEEDING MAY 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, LITIGATION 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 AGREEMENT OR IN ANY OTHER CREDIT DOCUMENT SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT OR ANY LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT AGAINST ANY CREDIT PARTY OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

 

(c)                                  WAIVER OF VENUE.  EACH PARTY HERETO HEREBY 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 AGREEMENT OR ANY OTHER CREDIT 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 13.02. NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.

 

(e)                                  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 AGREEMENT OR ANY OTHER CREDIT DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (i) 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 (ii) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

SECTION 13.10.               Confidentiality.  Each Agent and each Lender agrees to keep information obtained by it pursuant to the Credit Documents confidential in accordance with such Agent’s or such Lender’s customary practices and agrees that it will only use such information in connection with the transactions contemplated hereby

 

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and not disclose any of such information other than (a) to such Agent’s or such Lender’s Affiliates and its and its Affiliates’ respective employees, representatives, directors, attorneys, auditors, agents, professional advisors or trustees who are advised of the confidential nature thereof and instructed to keep such information confidential or to any direct or indirect creditor or contractual counterparty in swap agreements or such creditor’s or contractual counterparty’s professional advisor (so long as such creditor, contractual counterparty or professional advisor to such contractual counterparty agrees in writing to be bound by the provision of this Section 13.10), (b) to the extent such information presently is or hereafter becomes available to such Agent or such Lender on a non-confidential basis from a Person not an Affiliate of such Agent or such Lender not known to such Agent or such Lender to be violating a confidentiality obligation by such disclosure, (c) to the extent disclosure is required by any Law, subpoena or judicial order or process (provided that notice of such requirement or order shall be promptly furnished to Borrower unless such notice is legally prohibited) or requested or required by bank, securities, insurance or investment company regulations or auditors or any administrative body or commission or self-regulatory organization (including the Securities Valuation Office of the NAIC) to whose jurisdiction such Agent or such Lender is subject, (d) to any rating agency to the extent required in connection with any rating to be assigned to such Agent or such Lender; provided that prior notice thereof is furnished to Borrower, (e) to pledgees under Section 13.05(c), assignees, participants, prospective assignees or prospective participants, in each case who agree in writing to be bound by the provisions of this Section 13.10 or by provisions at least as restrictive as the provisions of this Section 13.10 (it being understood that any electronically recorded agreement from any Person listed above in this clause (e) in respect to any electronic information (whether posted or otherwise distributed on Intralinks or any other electronic distribution system) shall satisfy the requirements of this clause (e)), (f) in connection with the exercise of remedies hereunder or under any Credit Document or to the extent required in connection with any litigation with respect to the Loans or any Credit Document or (g) with Borrower’s prior written consent.

 

SECTION 13.11.               Independence of Representations, Warranties and Covenants.  The representations, warranties and covenants contained herein shall be independent of each other and no exception to any representation, warranty or covenant shall be deemed to be an exception to any other representation, warranty or covenant contained herein unless expressly provided, nor shall any such exception be deemed to permit any action or omission that would be in contravention of applicable law.

 

SECTION 13.12.               Severability.  Wherever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Agreement.

 

SECTION 13.13.               Gaming Laws.

 

(a)                                 Notwithstanding anything to the contrary in this Agreement or any other Credit Document, this Agreement and the other Credit Documents are subject to the Gaming Laws and the laws involving the sale, distribution and possession of alcoholic beverages and/or tobacco, as applicable (the “Liquor Laws”).  Without limiting the foregoing, Administrative Agent, each other Agent, each Lender and each participant acknowledges that (i) it is the subject of being called forward by any Gaming Authority or any Governmental Authority enforcing the Liquor Laws (the “Liquor Authority”), in each of their discretion, for licensing or a finding of suitability or to file or provide other information, and (ii) all rights, remedies and powers under this Agreement and the other Credit Documents, including with respect to the entry into and ownership and operation of the Gaming Facilities, and the possession or control of gaming equipment, alcoholic beverages or a gaming or liquor license, may be exercised only to the extent that the exercise thereof does not violate any applicable provisions of the Gaming Laws and Liquor Laws and only to the extent that required approvals (including prior approvals) are obtained from the requisite Governmental Authorities.

 

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(b)                                 Notwithstanding anything to the contrary in this Agreement or any other Credit Document, Administrative Agent, each other Agent, each Lender and each participant agrees to cooperate with each Gaming Authority and each Liquor Authority (and, in each case, to be subject to Section 2.11) in connection with the administration of their regulatory jurisdiction over Borrower and the other Credit Parties and the Holding Companies and RRR, including, without limitation, the provision of such documents or other information as may be requested by any such Gaming Authorities and/or Liquor Authorities relating to Administrative Agent, any other Agent, any of the Lenders or participants, Borrower and its Subsidiaries or to the Credit Documents.

 

(c)                                  Notwithstanding anything to the contrary in this Agreement or any other Credit Document, to the extent any provision of this Agreement or any other Credit Document excludes any assets from the scope of the Pledged Collateral, or from any requirement to take any action to make effective or perfect any security interest in favor of Collateral Agent or any other Secured Party in the Pledged Collateral, the representations, warranties and covenants made by Borrower or any Restricted Subsidiary in this Agreement with respect to the creation, perfection or priority (as applicable) of the security interest granted in favor of Collateral Agent or any other Secured Party (including, without limitation, Article VIII of this Agreement) shall be deemed not to apply to such assets.

 

SECTION 13.14.               USA Patriot Act.  Each Lender that is subject to the Act (as hereinafter defined) to the extent required hereby, notifies Borrower, the Holding Companies, RRR 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 Borrower, the Holding Companies, RRR and the Guarantors, which information includes the name and address of Borrower, the Holding Companies and the Guarantors and other information that will allow such Lender to identify Borrower, the Holding Companies, RRR and the Guarantors in accordance with the Act, and Borrower, the Holding Companies, RRR and the Guarantors agree to provide such information from time to time to any Lender.

 

SECTION 13.15.               Waiver of Claims.  Notwithstanding anything in this Agreement or the other Credit Documents to the contrary, the Credit Parties hereby agree that Borrower shall not acquire any rights as a Lender under this Agreement as a result of any Borrower Loan Purchase and may not make any claim as a Lender against any Agent or any Lender with respect to the duties and obligations of such Agent or Lender pursuant to this Agreement and the other Credit Documents; provided, however, that, for the avoidance of doubt, the foregoing shall not impair Borrower’s ability to make a claim in respect of a breach of the representations or warranties or obligations of the relevant assignor in a Borrower Loan Purchase, including in the standard terms and conditions set forth in the assignment agreement applicable to a Borrower Loan Purchase.

 

SECTION 13.16.               No Advisory or Fiduciary Responsibility.  In connection with all aspects of each transaction contemplated hereby (including in connection with any amendment, waiver or other modification hereof or of any other Credit Document), Borrower and each other Credit Party acknowledges and agrees, and acknowledges its Affiliates’ understanding, that: (i) (A) the arranging and other services regarding this Agreement provided by the Administrative Agent, the Collateral Agent, the Documentation Agents, the Syndication Agent, the Lead Arrangers and the Lenders are arm’s-length commercial transactions between Borrower, each other Credit Party, each Holding Company, RRR and their respective Affiliates, on the one hand, and the Administrative Agent, the Collateral Agent, the Documentation Agents, the Syndication Agent, the Lead Arrangers and the Lenders, on the other hand, (B) each of Borrower, the other Credit Parties, the Holding Companies and RRR has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate, and (C) Borrower, each other Credit Party, each Holding Company and RRR is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by the other Credit Documents; (ii) (A) the Administrative Agent, the Collateral Agent, the Documentation Agents, the Syndication Agent, the Lead Arrangers and each Lender is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary for Borrower, any other Credit Party, any Holding Company, RRR or any of their respective Affiliates, or any other Person (except as expressly set forth in an any engagement letters between the Administrative Agent, the Collateral Agent, the

 

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Documentation Agent, such Lead Arranger or such Lender and Borrower or such Credit Party, Holding Company, RRR or Affiliate thereof) and (B) neither the Administrative Agent, the Collateral Agent, the Documentation Agents, the Syndication Agent, the Lead Arrangers nor any Lender has any obligation to Borrower, any other Credit Party, any Holding Company, RRR or any of their respective Affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Credit Documents or in other written agreements between the Administrative Agent, the Collateral Agent, the Documentation Agents, the Syndication Agent, the Lead Arrangers or any Lender on one hand and Borrower, any other Credit Party, any Holding Company, RRR or any of their respective Affiliates on the other hand; and (iii) the Administrative Agent, the Collateral Agent, the Syndication Agent, the Documentation Agents, the Lead Arrangers and the Lenders and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from, or conflict with, those of Borrower, the other Credit Parties, the Holding Companies, RRR and their respective Affiliates, and neither the Administrative Agent, the Collateral Agent, the Documentation Agents, the Syndication Agent, the Lead Arrangers, nor any Lender has any obligation to disclose any of such interests to Borrower, any other Credit Party, any Holding Company, RRR or any of their respective Affiliates.  Each Credit Party agrees that nothing in the Credit Documents will be deemed to create an advisory, fiduciary or agency relationship or fiduciary or other implied duty between the Administrative Agent, the Collateral Agent, the Documentation Agents, the Syndication Agent, the Lead Arrangers and the Lenders, on the one hand, and such Credit Party, Holding Company or RRR, its stockholders or its Affiliates, on the other.  To the fullest extent permitted by law, each of Borrower and each other Credit Party hereby waives and releases, and Borrower hereby acknowledges each Holding Company’s and RRR’s waiver and release of, any claims that it may have against the Administrative Agent, the Collateral Agent, the Documentation Agents, the Syndication Agent, the Lead Arrangers or any Lender with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated hereby (other than any agency or fiduciary duty expressly set forth in an any engagement letter referenced in clause (ii)(A)).

 

SECTION 13.17.               Lender Action.  Each Lender agrees that it shall not take or institute any actions or proceedings, judicial or otherwise, for any right or remedy against any Credit Party, any Holding Company or RRR or any other obligor under any of the Credit Documents or the Swap Contracts or (with respect to the exercise of rights against the collateral) Cash Management Agreements (including the exercise of any right of setoff, rights on account of any banker’s lien or similar claim or other rights of self-help), or institute any actions or proceedings, or otherwise commence any remedial procedures, with respect to any Collateral or any other property of any such Credit Party, any Holding Company or RRR, without the prior written consent of Administrative Agent.  The provisions of this Section 13.17 are for the sole benefit of the Agents and Lenders and shall not afford any right to, or constitute a defense available to, any Credit Party, any Holding Company or RRR.

 

SECTION 13.18.               Interest Rate Limitation.  Notwithstanding anything to the contrary contained in any Credit Document, the interest paid or agreed to be paid under the Credit Documents (collectively, the “Charges”) shall not exceed the maximum rate of non-usurious interest permitted by applicable Law (the “Maximum Rate”).  If any 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 Borrower.  In determining whether the interest contracted for, charged, or received by an 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.  To the extent permitted by applicable Law, the interest and other Charges that would have been payable in respect of such Loan but were not payable as a result of the operation of this Section 13.18 shall be cumulated and the interest and Charges payable to such Lender in respect of other Loans or periods shall be increased (but not above the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the Federal Funds Effective Rate to the date of repayment, shall have been received by such Lender.  Thereafter, interest hereunder shall be paid at the rate(s) of interest and in the manner provided in this Agreement, unless and until the rate of interest again exceeds the Maximum Rate, and at that time this Section 13.18 shall again apply.  In no event shall the total interest received by any Lender pursuant to the terms hereof exceed the

 

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amount that such Lender could lawfully have received had the interest due hereunder been calculated for the full term hereof at the Maximum Rate.  If the Maximum Rate is calculated pursuant to this Section 13.18, such interest shall be calculated at a daily rate equal to the Maximum Rate divided by the number of days in the year in which such calculation is made.  If, notwithstanding the provisions of this Section 13.18, a court of competent jurisdiction shall finally determine that a Lender has received interest hereunder in excess of the Maximum Rate, Administrative Agent shall, to the extent permitted by applicable Law, promptly apply such excess in the order specified in this Agreement and thereafter shall refund any excess to Borrower or as a court of competent jurisdiction may otherwise order.

 

SECTION 13.19.               Payments Set Aside.  To the extent that any payment by or on behalf of Borrower is made to any Agent, any L/C Lender or any Lender, or any Agent, any L/C Lender 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 such Agent, such L/C Lender 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 the Agents’, the L/C Lender’s and the Lenders’ Liens, security interests, rights, powers and remedies under this Agreement and each Credit Document shall continue in full force and effect, and (b) each Lender severally agrees to pay to Administrative Agent upon demand its applicable share of any amount so recovered from or repaid by any Agent or L/C Lender, plus interest thereon from the date of such demand to the date such payment is made at a rate per annum equal to the Federal Funds Effective Rate from time to time in effect.  In such event, each Credit Document shall be automatically reinstated (to the extent that any Credit Document was terminated) and Borrower shall take (and shall cause each other Credit Party, each Holding Company and RRR to take) such action as may be requested by Administrative Agent, the L/C Lenders and the Lenders to effect such reinstatement.

 

SECTION 13.20.               VoteCo SPE Reorganization.  Notwithstanding anything to the contrary in this Agreement and the other Credit Documents, from and after the occurrence of VoteCo SPE Reorganization, (i) RRR shall no longer be required to provide any collateral security for the Obligations, (ii) all covenants, obligations and representations and warranties under the Credit Documents applicable to RRR shall cease to apply with respect to RRR and (iii) all references to RRR in Section 11.01 shall be deemed deleted.

 

SECTION 13.21.               Acknowledgement and Consent to Bail-In of EEA Financial Institutions.  Notwithstanding anything to the contrary in any Credit Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any EEA Financial Institution arising under any Credit Document may be subject to the write-down and conversion powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:

 

(a)                                 the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an EEA Financial Institution; 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 in such EEA Financial Institution, its parent entity, or a bridge institution 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 Agreement or any other Credit 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 EEA Resolution Authority.

 

[Signature Pages Follow]

 

191

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the day and year first above written.

 

	
 
    	
STATION CASINOS LLC
    
	
 
    	
 
    
	
 
    	
By
    	
/s/
    
	
 
    	
Name:
    	
Marc J. Falcone
    
	
 
    	
Title:
    	
Executive Vice   President, Chief Financial Officer and Treasurer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Address for Notices for   Borrower and each Subsidiary
    
	
 
    	
Guarantor:
    
	
 
    	
Station Casinos LLC
    
	
 
    	
1505 S. Pavilion Center   Drive
    
	
 
    	
Las Vegas, NV 89135
    
	
 
    	
 
    
	
 
    	
Contact Person: Marc J.   Falcone
    
	
 
    	
Facsimile No.:   702-692-3612
    
	
 
    	
Telephone No.:   702-495-3600
    
	
 
    	
Email:   mfalcone@fertitta.com
    

 

[Signature Page to Station Casinos Credit Agreement]

 

 

	
 
    	
SUBSIDIARY GUARANTORS:
    
	
 
    	
 
    
	
 
    	
NP BOULDER LLC
    
	
 
    	
NP CENTERLINE HOLDINGS   LLC
    
	
 
    	
NP DURANGO LLC
    
	
 
    	
NP FIESTA LLC
    
	
 
    	
NP INSPIRADA LLC
    
	
 
    	
NP IP HOLDINGS LLC
    
	
 
    	
NP LAKE MEAD LLC
    
	
 
    	
NP MT. ROSE LLC
    
	
 
    	
NP OPCO HOLDINGS LLC
    
	
 
    	
NP OPCO LLC
    
	
 
    	
NP PALACE LLC
    
	
 
    	
NP RED ROCK LLC
    
	
 
    	
NP RENO CONVENTION   CENTER LLC
    
	
 
    	
NP SANTA FE LLC
    
	
 
    	
NP STEAMBOAT LLC
    
	
 
    	
NP SUNSET LLC
    
	
 
    	
NP TEXAS LLC
    
	
 
    	
NP TOWN CENTER LLC
    
	
 
    	
STATION GVR   ACQUISITION, LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/
    
	
 
    	
 
    	
Name: Marc J. Falcone
    
	
 
    	
 
    	
Title: Senior Vice   President & Treasurer
    

 

[Signature Page to Station Casinos Credit Agreement]

 

 

	
 
    	
FERTITTA ENTERTAINMENT   LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
/s/
    
	
 
    	
Name:
    	
Marc J. Falcone
    
	
 
    	
Title:
    	
Executive Vice   President, Chief Financial Officer and Treasurer
    

 

[Signature Page to Station Casinos Credit Agreement]

 

 

	
 
    	
NP RANCHO LLC
    
	
 
    	
 
    
	
 
    	
By
    	
/s/
    
	
 
    	
Name:
    	
Marc J. Falcone
    
	
 
    	
Title:
    	
Senior Vice President
    

 

[Signature Page to Station Casinos Credit Agreement]

 

 

	
 
    	
SC MADERA DEVELOPMENT,   LLC
    
	
 
    	
SC MADERA MANAGEMENT,   LLC
    
	
 
    	
SC MICHIGAN, LLC
    
	
 
    	
SC SONOMA DEVELOPMENT,   LLC
    
	
 
    	
SC SONOMA MANAGEMENT,   LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/
    
	
 
    	
Name:
    	
Scott M Nielson
    
	
 
    	
Title:
    	
Senior Vice President,   General Counsel and Secretary
    

 

[Signature Page to Station Casinos Credit Agreement]

 

 

	
 
    	
NP SONOMA LAND HOLDINGS   LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/
    
	
 
    	
 
    	
Name:
    	
Marc J. Falcone
    
	
 
    	
 
    	
Title:
    	
Senior Vice   President & Treasurer
    

 

[Signature Page to Station Casinos Credit Agreement]

 

 

	
 
    	
RRR PALMS LLC
    
	
 
    	
FE LANDCO MANAGEMENT   LLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/
    
	
 
    	
 
    	
Name:
    	
Matthew L. Heinhold
    
	
 
    	
 
    	
Title:
    	
Authorized Person
    

 

[Signature Page to Station Casinos Credit Agreement]

 

 

	
 
    	
DEUTSCHE BANK AG CAYMAN ISLANDS   BRANCH, as Administrative Agent
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/
    
	
 
    	
 
    	
Name: Anca Trifan
    
	
 
    	
 
    	
Title: Managing   Director
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/
    
	
 
    	
 
    	
Name: Peter Cucchiara
    
	
 
    	
 
    	
Title: Vice President
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Address for Notices:
    
	
 
    	
 
    
	
 
    	
Deutsche Bank AG
    
	
 
    	
60 Wall Street
    
	
 
    	
New York, NY 1005
    
	
 
    	
 
    
	
 
    	
Contact Person: Sara   Pelton
    
	
 
    	
Facsimile No.:   1(904)746-4860
    
	
 
    	
Telephone No.:   1-904-217-2886
    
	
 
    	
Email:   Sara.Pelton@db.com
    

 

[Signature Page to Station Casinos Credit Agreement]

 

 

	
 
    	
DEUTSCHE BANK AG CAYMAN ISLANDS   BRANCH, as Collateral Agent
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/
    
	
 
    	
 
    	
Name: Anca Trifan
    
	
 
    	
 
    	
Title: Managing   Director
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/
    
	
 
    	
 
    	
Name: Peter Cucchiara
    
	
 
    	
 
    	
Title: Vice President
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Address for Notices:
    
	
 
    	
 
    
	
 
    	
Deutsche Bank AG
    
	
 
    	
60 Wall Street
    
	
 
    	
New York, NY 1005
    
	
 
    	
 
    
	
 
    	
Contact Person: Sara   Pelton
    
	
 
    	
Facsimile No.:   1(904)746-4860
    
	
 
    	
Telephone No.:   1-904-217-2886
    
	
 
    	
Email:   Sara.Pelton@db.com
    

 

[Signature Page to Station Casinos Credit Agreement]

 

 

	
 
    	
DEUTSCHE BANK AG CAYMAN ISLANDS   BRANCH, as Swingline Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/
    
	
 
    	
 
    	
Name: Peter Cucchiara
    
	
 
    	
 
    	
Title: Vice President
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/
    
	
 
    	
 
    	
Name: Mary Kay Cole
    
	
 
    	
 
    	
Title: Managing   Director
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Address for Notices:
    
	
 
    	
 
    
	
 
    	
Deutsche Bank AG
    
	
 
    	
60 Wall Street
    
	
 
    	
New York, NY 1005
    
	
 
    	
 
    
	
 
    	
Contact Person: Sara   Pelton
    
	
 
    	
Facsimile No.:   1(904)746-4860
    
	
 
    	
Telephone No.:   1-904-217-2886
    
	
 
    	
Email:   Sara.Pelton@db.com
    

 

[Signature Page to Station Casinos Credit Agreement]

 

 

	
 
    	
DEUTSCHE BANK AG CAYMAN ISLANDS   BRANCH, as an L/C Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/
    
	
 
    	
 
    	
Name: Peter Cucchiara
    
	
 
    	
 
    	
Title: Vice President
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/
    
	
 
    	
 
    	
Name: Mary Kay Cole
    
	
 
    	
 
    	
Title: Managing   Director
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Address for Notices:
    
	
 
    	
 
    
	
 
    	
Deutsche Bank AG
    
	
 
    	
60 Wall Street
    
	
 
    	
New York, NY 1005
    
	
 
    	
 
    
	
 
    	
Contact Person: Angeline   Quintana
    
	
 
    	
Facsimile No.: (212)   797-0403
    
	
 
    	
Telephone No.: (212)   250-2527
    
	
 
    	
Email:   angeline.quintana@db.com
    

 

[Signature Page to Station Casinos Credit Agreement]

 

 

	
 
    	
BANK OF AMERICA, N.A.,   as L/C Lender
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/
    
	
 
    	
Name:
    	
Brian D. Corum
    
	
 
    	
Title:
    	
Managing Director
    
	
 
    	
 
    
	
 
    	
Address for Notices:
    
	
 
    	
 
    
	
 
    	
901 Main Street, 64th   floor
    
	
 
    	
Dallas, TX 75202
    
	
 
    	
 
    
	
 
    	
Contact Person:
    	
Brian D. Corum
    
	
 
    	
Facsimile No.:
    	
214-530-3179
    
	
 
    	
Telephone No.:
    	
214-209-0921
    
	
 
    	
Email:   brian.corum@baml.com
    
				

 

[Signature Page to Station Casinos Credit Agreement]

 

 

	
 
    	
BANK OF AMERICA, N.A.,   as L/C Lender
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/
    
	
 
    	
Name:
    	
Brian D. Corum
    
	
 
    	
Title:
    	
Managing Director
    
	
 
    	
 
    	
 
    
	
 
    	
Address for Notices:
    
	
 
    	
 
    
	
 
    	
901 Main Street, 64th   floor
    
	
 
    	
Dallas, TX 75202
    
	
 
    	
 
    
	
 
    	
Contact Person:
    	
Brian D. Corum
    
	
 
    	
Facsimile No.:
    	
214-530-3179
    
	
 
    	
Telephone No.:
    	
214-209-0921
    
	
 
    	
Email:    brian.corum@baml.com
    
				

 

[Signature Page to Station Casinos Credit Agreement]

 

 

	
 
    	
JPMORGAN CHASE BANK,   N.A., as L/C Lender
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/
    
	
 
    	
Name:
    	
Nadeige Dang
    
	
 
    	
Title:
    	
Vice President
    
	
 
    	
 
    	
 
    
	
 
    	
Address for Notices:
    
	
 
    	
 
    
	
 
    	
JPMORGAN CHASE BANK,   N.A.
    
	
 
    	
10420 Highland Manor   Dr., 4th Fl.
    
	
 
    	
Tampa, FL 33610
    
	
 
    	
 
    
	
 
    	
Contact Person:
    	
Standby LC Unit
    
	
 
    	
Facsimile No.:
    	
856-294-5267
    
	
 
    	
Telephone No.:
    	
800-634-1969
    
	
 
    	
Email: gts.ib.standby@jpmchase.com
    
				

 

[Signature Page to Station Casinos Credit Agreement]

 

 

	
 
    	
JPMORGAN CHASE BANK,   N.A., as Lender
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/
    
	
 
    	
Name:
    	
Nadeige Dang
    
	
 
    	
Title:
    	
Vice President
    
	
 
    	
 
    	
 
    
	
 
    	
Address for Notices:
    
	
 
    	
 
    
	
 
    	
JPM-Bangalore Loan   Operations
    
	
 
    	
Prestige Tech Park,   Floor 4
    
	
 
    	
Sarjapur Outer Ring Rd,   Vathur Hobli
    
	
 
    	
Bangalore, India   560 087
    
	
 
    	
 
    
	
 
    	
Contact Person:
    	
Josemon Varghese
    
	
 
    	
Facsimile No.:
    	
201-244-3885
    
	
 
    	
Telephone No.:
    	
(+91-80) 679 05753
    
	
 
    	
Email: na_cpg@jpmorgan.com
    
				

 

[Signature Page to Station Casinos Credit Agreement]

 

 

	
 
    	
UBS AG, STAMFORD   BRANCH, as Lender
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/
    
	
 
    	
Name:
    	
Darlene Arias
    
	
 
    	
Title:
    	
Director
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/
    
	
 
    	
Name:
    	
Craig Pearson
    
	
 
    	
Title:
    	
Associate Director
    
	
 
    	
 
    	
 
    
	
 
    	
Address for Notices:
    
	
 
    	
 
    
	
 
    	
UBS AG
    
	
 
    	
600 Washington Blvd.
    
	
 
    	
Stamford, CT 06901
    
	
 
    	
 
    
	
 
    	
Contact Person:
    	
Loan Administration
    
	
 
    	
Facsimile No.:
    	
203-719-3888
    
	
 
    	
Telephone No.:
    	
615-332-6868
    
	
 
    	
Email:   UBSAgency@ubs.com
    
				

 

[Signature Page to Station Casinos Credit Agreement]

 

 

	
 
    	
MIHI LLC, as Lender
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/
    
	
 
    	
Name:
    	
Katherine Mogg
    
	
 
    	
Title:
    	
Authorized Signatory
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/
    
	
 
    	
Name:
    	
Jeff Abt
    
	
 
    	
Title:
    	
Authorized Signatory
    
	
 
    	
 
    	
 
    
	
 
    	
Address for Notices:
    
	
 
    	
MIHI LLC
    
	
 
    	
125 West 55th Street
    
	
 
    	
New York, NY 10019
    
	
 
    	
 
    
	
 
    	
Contact Person: Arvind   Admal
    
	
 
    	
Facsimile No.:
    
	
 
    	
Telephone No.:   212-231-2099
    
	
 
    	
Email:   loan.admin@macquarie.com
    

 

[Signature Page to Station Casinos Credit Agreement]

 

 

	
 
    	
GOLDMAN SACHS BANK USA,   as Lender
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/
    
	
 
    	
Name:
    	
Rebecca Kratz
    
	
 
    	
Title:
    	
Authorized Signatory
    
	
 
    	
 
    	
 
    
	
 
    	
Address for Notices:
    
	
 
    	
 
    
	
 
    	
GOLDMAN SACHS BANK USA
    
	
 
    	
200 West St
    
	
 
    	
New York, NY 10282
    
	
 
    	
 
    
	
 
    	
Contact Person:
    	
Thierry Le Jouan
    
	
 
    	
Facsimile No.:
    	
917-977-3966
    
	
 
    	
Telephone No.:
    	
212-902-1066
    
	
 
    	
Email: gs-sbd-admin-contacts@ny.email.gs.com
    
				

 

[Signature Page to Station Casinos Credit Agreement]

 

 

	
 
    	
FIFTH THIRD BANK, as   Lender
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/
    
	
 
    	
Name:
    	
Richard Arendale
    
	
 
    	
Title:
    	
Vice President
    
	
 
    	
 
    	
 
    
	
 
    	
Address for Notices:
    
	
 
    	
 
    
	
 
    	
3344 Peachtree Rd NE,   Suite 800
    
	
 
    	
Atlanta, GA
    
	
 
    	
30326
    
	
 
    	
 
    
	
 
    	
Contact Person:
    	
Andy Tessema
    
	
 
    	
Facsimile No.:
    	
404-816-5187
    
	
 
    	
Telephone No.:
    	
404-279-4570
    
	
 
    	
Email:  andy.tessema@53.com
    
				

 

[Signature Page to Station Casinos Credit Agreement]

 

 

	
 
    	
CREDIT SUISSE AG,   CAYMAN ISLANDS
    
	
 
    	
BRANCH, as Lender
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/
    
	
 
    	
Name:
    	
Whitney Gaston
    
	
 
    	
Title:
    	
Authorized Signatory
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/
    
	
 
    	
Name:
    	
Kelly Heimrich
    
	
 
    	
Title:
    	
Authorized Signatory
    
	
 
    	
 
    	
 
    
	
 
    	
Address for Notices:
    
	
 
    	
 
    
	
 
    	
Credit Suisse
    
	
 
    	
11 Madison Avenue
    
	
 
    	
New York, NY 10010
    
	
 
    	
 
    
	
 
    	
Contact Person:
    	
Andrew Griffin
    
	
 
    	
Facsimile No.:
    	
N/A
    
	
 
    	
Telephone No.:
    	
212 325 0703
    
	
 
    	
Email:  andrew.griffin@credit-suisse.com
    
				

 

[Signature Page to Station Casinos Credit Agreement]

 

 

	
 
    	
CITIZENS BANK, N.A., as   Lender
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/
    
	
 
    	
Name:
    	
Mark Sanko
    
	
 
    	
Title:
    	
Managing Director
    
	
 
    	
 
    	
 
    
	
 
    	
Address for Notices:
    
	
 
    	
 
    
	
 
    	
Citizens Bank, N.A
    
	
 
    	
20 Cabot Road, MMF140
    
	
 
    	
Medford, MA 02155
    
	
 
    	
 
    
	
 
    	
Contact Person:
    	
Michelle Chen
    
	
 
    	
Telephone No.:
    	
(781) 655-2063
    
	
 
    	
Email:  shuliu.chen@citizensbank.com
    
				

 

[Signature Page to Station Casinos Credit Agreement]

 

 

	
 
    	
CITIBANK, N.A., as   Lender
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/
    
	
 
    	
Name:
    	
Michael Tortora
    
	
 
    	
Title:
    	
Vice President
    

 

[Signature Page to Station Casinos Credit Agreement]

 

 

ANNEX A-1

 

REVOLVING COMMITMENTS

 

	
Lender
    	
 
    	
Revolving Commitment
    	
 
    	
L/C Commitment
    	
 
    
	
Deutsche Bank AG   Cayman Islands Branch
    	
 
    	
$
    	
96,245,421.25
    	
 
    	
$
    	
16,666,666.67
    	
 
    
	
JPMorgan Chase   Bank, N.A.
    	
 
    	
$
    	
96,245,421.25
    	
 
    	
$
    	
16,666,666.67
    	
 
    
	
Bank of America,   N.A.
    	
 
    	
$
    	
96,245,421.25
    	
 
    	
$
    	
16,666,666.66
    	
 
    
	
Fifth Third Bank
    	
 
    	
$
    	
94,093,406.59
    	
 
    	
$
    	
0
    	
 
    
	
Goldman Sachs   Bank USA
    	
 
    	
$
    	
75,274,725.27
    	
 
    	
$
    	
0
    	
 
    
	
Citizens Bank,   N.A.
    	
 
    	
$
    	
56,456,043.96
    	
 
    	
$
    	
0
    	
 
    
	
UBS AG, Stamford   Branch
    	
 
    	
$
    	
56,456,043.96
    	
 
    	
$
    	
0
    	
 
    
	
Citibank, N.A.
    	
 
    	
$
    	
50,000,000.00
    	
 
    	
$
    	
0
    	
 
    
	
MIHI, LLC
    	
 
    	
$
    	
37,637,362.64
    	
 
    	
$
    	
0
    	
 
    
	
Credit Suisse   AG, Cayman Islands Branch
    	
 
    	
$
    	
26,346,153.85
    	
 
    	
$
    	
0
    	
 
    
	
Total   Revolving Commitments:
    	
 
    	
$
    	
685,000,000
    	
 
    	
$
    	
50,000,000
    	
 
    

 

 

ANNEX A-2

 

TERM A FACILITY COMMITMENTS

 

	
Lender
    	
 
    	
Term A Facility Commitment
    	
 
    
	
Deutsche Bank AG   Cayman Islands Branch
    	
 
    	
$
    	
28,754,578.75
    	
 
    
	
JPMorgan Chase   Bank, N.A.
    	
 
    	
$
    	
28,754,578.75
    	
 
    
	
Bank of America,   N.A.
    	
 
    	
$
    	
28,754,578.75
    	
 
    
	
Fifth Third Bank
    	
 
    	
$
    	
30,906,593.41
    	
 
    
	
Goldman Sachs   Bank USA
    	
 
    	
$
    	
24,725,274.73
    	
 
    
	
Citizens Bank,   N.A.
    	
 
    	
$
    	
18,543,956.04
    	
 
    
	
UBS AG, Stamford   Branch
    	
 
    	
$
    	
18,543,956.04
    	
 
    
	
Citibank, N.A.
    	
 
    	
$
    	
25,000,000.00
    	
 
    
	
MIHI, LLC
    	
 
    	
$
    	
12,362,637.36
    	
 
    
	
Credit Suisse   AG, Cayman Islands Branch
    	
 
    	
$
    	
8,653,846.15
    	
 
    
	
Total   Term A Facility Commitments:
    	
 
    	
$
    	
225,000,000
    	
 
    

 

 

ANNEX A-3

 

TERM B FACILITY COMMITMENTS

 

	
Lender
    	
 
    	
Term B Facility
   Commitment
    	
 
    
	
JPMorgan Chase   Bank, N.A.
    	
 
    	
$
    	
1,500,000,000
    	
 
    
	
Total   Term B Facility Commitments:
    	
 
    	
$
    	
1,500,000,000
    	
 
    

 

 

ANNEX B

 

APPLICABLE FEE PERCENTAGE AND

APPLICABLE MARGIN FOR REVOLVING LOANS, 
  SWINGLINE LOANS AND TERM A FACILITY LOANS

 

	
 
    	
 
    	
 
    	
 
    	
Applicable Margin
    	
 
    
	
Pricing
    	
 
    	
Consolidated Total Net
    	
 
    	
Revolving Loans
   and Swingline Loans
    	
 
    	
Term A Facility Loans
    	
 
    
	
Level
    	
 
    	
Leverage Ratio
    	
 
    	
LIBOR
    	
 
    	
ABR
    	
 
    	
LIBOR
    	
 
    	
ABR
    	
 
    
	
Level I
    	
 
    	
Greater than 4.50 to 1.00
    	
 
    	
2.75
    	
%
    	
1.75
    	
%
    	
2.75
    	
%
    	
1.75
    	
%
    
	
Level   II
    	
 
    	
Less than or equal to 4.50 to 1.00 but greater than   4.00 to 1.00
    	
 
    	
2.50
    	
%
    	
1.50
    	
%
    	
2.50
    	
%
    	
1.50
    	
%
    
	
Level   III
    	
 
    	
Less than or equal to 4.00 to 1.00 but greater than   3.50 to 1.00
    	
 
    	
2.25
    	
%
    	
1.25
    	
%
    	
2.25
    	
%
    	
1.25
    	
%
    
	
Level   IV
    	
 
    	
Less than or equal to 3.50 to 1.00 but greater than   3.00 to 1.00
    	
 
    	
2.00
    	
%
    	
1.00
    	
%
    	
2.00
    	
%
    	
1.00
    	
%
    
	
Level V
    	
 
    	
Less than or equal to 3.00 to 1.00
    	
 
    	
1.75
    	
%
    	
0.75
    	
%
    	
1.75
    	
%
    	
0.75
    	
%
    

 

 

ANNEX C

 

AMORTIZATION PAYMENTS
  TERM A FACILITY LOANS

 

	
DATE(1)
    	
 
    	
PRINCIPAL AMOUNT
    	
 
    
	
September 30,   2016
    	
 
    	
$
    	
2,812,500
    	
 
    
	
December 31,   2016
    	
 
    	
$
    	
2,812,500
    	
 
    
	
March 31,   2017
    	
 
    	
$
    	
2,812,500
    	
 
    
	
June 30,   2017
    	
 
    	
$
    	
2,812,500
    	
 
    
	
September 30,   2017
    	
 
    	
$
    	
2,812,500
    	
 
    
	
December 31,   2017
    	
 
    	
$
    	
2,812,500
    	
 
    
	
March 31,   2018
    	
 
    	
$
    	
2,812,500
    	
 
    
	
June 30,   2018
    	
 
    	
$
    	
2,812,500
    	
 
    
	
September 30,   2018
    	
 
    	
$
    	
2,812,500
    	
 
    
	
December 31,   2018
    	
 
    	
$
    	
2,812,500
    	
 
    
	
March 31,   2019
    	
 
    	
$
    	
2,812,500
    	
 
    
	
June 30,   2019
    	
 
    	
$
    	
2,812,500
    	
 
    
	
September 30,   2019
    	
 
    	
$
    	
2,812,500
    	
 
    
	
December 31,   2019
    	
 
    	
$
    	
2,812,500
    	
 
    
	
March 31,   2020
    	
 
    	
$
    	
2,812,500
    	
 
    
	
June 30,   2020
    	
 
    	
$
    	
2,812,500
    	
 
    
	
September 30,   2020
    	
 
    	
$
    	
2,812,500
    	
 
    
	
December 31,   2020
    	
 
    	
$
    	
2,812,500
    	
 
    
	
March 31,   2021
    	
 
    	
$
    	
2,812,500
    	
 
    
	
The date that is   the fifth anniversary of the Closing Date
    	
 
    	
Entire remaining   outstanding principal amount of the Term A Facility Loans
    	
 
    

 

(1)  If such date is not a Business Day, then the date shall be the next succeeding Business Day unless such Business Day falls in another calendar month, in which case such date shall be the next preceding Business Day.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00259-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00259-of-00352.parquet"}]]