Document:

EX-10.21

  Execution Version

  Exhibit 10.21

  SECOND AMENDMENT TO 
FINANCING AGREEMENT AND FIRST AMENDMENT TO SECURITY AGREEMENT

  SECOND AMENDMENT TO FINANCING AGREEMENT AND FIRST AMENDMENT TO SECURITY AGREEMENT, dated as of October 8, 2021 (this "Amendment"), to the Financing Agreement, dated as of April 19, 2021 (as amended by the First Amendment to Financing Agreement, dated as of July 26, 2021, and as may be further as amended, restated, supplemented or otherwise modified, the "Financing Agreement"), by and among Xponential Intermediate Holdings, LLC, a Delaware limited liability company (the "Parent"), Xponential Fitness LLC, a Delaware limited liability company ("XF"), each Subsidiary (as defined therein) of Parent listed as a "Borrower" on the signature pages hereto (together with XF and each other Person that executes a joinder agreement and becomes a "Borrower" thereunder, each a "Borrower" and collectively, the "Borrowers"), each other Subsidiary of Parent listed as a "Guarantor" on the signature pages thereto (together with Parent and each other Person that executes a joinder agreement and becomes a "Guarantor" thereunder or otherwise guaranties all or any part of the Obligations (as defined therein), each a "Guarantor" and collectively, the "Guarantors"), the lenders from time to time party thereto (each a "Lender" and collectively, the "Lenders"), Wilmington Trust, National Association (“Wilmington Trust”), as collateral agent for the Lenders (in such capacity, together with its successors and assigns, the "Collateral Agent") and Wilmington Trust, as administrative agent for the Lenders (in such capacity, together with its successors and assigns, the "Administrative Agent" and together with the Collateral Agent, each an "Agent" and collectively, the "Agents").  All terms used herein that are defined in the Financing Agreement and not otherwise defined herein shall have the meanings assigned to them in the Financing Agreement (as amended hereby). 

  WHEREAS, BFT Franchise Holdings, LLC, a Delaware limited liability company (“Buyer”) is party to that certain Asset Purchase Agreement, entered into as on or about October 8, 2021 (the "Acquisition Agreement"), among the Buyer, GRPX Live Pty Ltd, an Australian corporation, as trustee for GRPX Live Unit Trust (“GRPX Live”), Body Fit Training Company Pty Ltd, an Australian corporation, as trustee for the Body Fit Training Unit (“Body Fit Training”), Body Fit Training USA, Inc., a Delaware corporation (“BFT USA”, and collectively with GRPX Live and Body Fit Training, the “Sellers”, and each a “Seller”), all of the shareholders and/or equity holders of each of the Sellers that are a party thereto and Cameron Falloon, an individual, as the Sellers’ Representative (as defined in the Acquisition Agreement), pursuant to which the Buyer shall purchase and assume from the Sellers substantially all of the assets, and certain specified liabilities, of the Business (as defined in the Acquisition Agreement) (the "BFT Acquisition"); 

  WHEREAS, to enable and facilitate the consummation of the BFT Acquisition, the Borrowers wish to amend the Financing Agreement to provide for additional term loans in an aggregate principal amount equal to $38,000,000 (the "2021 Incremental Term Loans") to be made by the Lenders listed on Annex A hereto (the “2021 Incremental Term Loan Lenders”) in accordance with their respective commitments set forth on such Annex A (the “2021 Incremental Term Loan Commitments”), the proceeds of which will be used to provide consideration to the Sellers in connection with the BFT Acquisition;

  WHEREAS, the Loan Parties have requested that the Agents and the Lenders consent to, and amend the Financing Agreement in certain respects in connection with, the 2021 Incremental Term Loans and the BFT Acquisition, and the Agents and the Lenders are agreeable to such request for consent and amendment on and subject to the terms and conditions set forth herein; and

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  NOW THEREFORE, in consideration of the premises and other good and valuable consideration, the parties hereto hereby agree as follows:

  
   1. 
   
    Amendments to Financing Agreement. 
   

  

  
   (a) 
   
    The 2021 Incremental Term Loan Lenders hereby agree to provide the full amount of the 2021 Incremental Term Loans in accordance with their respective 2021 Incremental Term Loan Commitments.  The 2021 Incremental Term Loan Commitments shall be subject to all of the terms and conditions set forth herein and in the Financing Agreement.
   

  

  
   (b) 
   
    The aggregate 2021 Incremental Term Loan Commitments as of the Second Amendment Effective Date (as hereinafter defined) are $38,000,000. The 2021 Incremental Term Loan Commitments will terminate in full upon the making of the related 2021 Incremental Term Loans.
   

  

  
   (c) 
   
    Subject to the satisfaction of the conditions set forth in Section 5 below, the funding of the 2021 Incremental Term Loans will occur in one drawing on the date hereof and will be made by the 2021 Incremental Term Loan Lenders ratably in accordance with their respective 2021 Incremental Term Loan Commitments pursuant to the Administrative Borrower’s request in the form of a Notice of Borrowing (which notice may be delivered upon a shorter time period then set forth  in Section 2.02 of the Financing Agreement to the extent agreed to by each 2021 Incremental Term Loan Lenders).  In the event that all or any portion of the 2021 Incremental Term Loans are not borrowed on the date hereof, the unborrowed portion of the 2021 Incremental Term Loan Commitments shall automatically terminate on the date hereof unless the 2021 Incremental Term Loan Lenders shall, in their sole discretion and with written notice to the Administrative Agent, agree to an extension.
   

  

  
   (d) 
   
    Section 1.01 of the Financing Agreement is hereby amended to add the following definitions:
   

  

  "First Amendment" means the First Amendment to Financing Agreement, dated as of July 26, 2021, among the Loan Parties, the Lenders and the Agents.

  "Second Amendment" means the Second Amendment to Financing Agreement, dated as of October 8, 2021, among the Loan Parties, the Lenders and the Agents.

  "Second Amendment Effective Date" has the meaning specified therefor in Section 5 of the Second Amendment.

  
   (e) 
   
    Section 1.01 of the Financing Agreement is hereby amended to amend and restate the following definition in its entirety as follows:
   

  

  “Applicable Prepayment Premium” means, as of any date of determination, with respect to and in the event of any prepayment of the Term Loans, (a) during the period of time from and after the Second Amendment Effective Date up to and including the date that is the first anniversary of the Effective Date, an amount equal to 2.00% times the principal amount of any such prepayment of the Term Loans on such date, (b) during the period of time after the date that is the first anniversary of the Effective Date up to and including the date that is the first anniversary of the Second Amendment Effective Date, an amount equal to 0.98% times the principal amount of any such prepayment of the Term Loans on such date, (c) during the period of time after the date that is the first anniversary of the Second Amendment Effective Date up to and including the date that is the second anniversary of the Effective 

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  Date, an amount equal to 0.50% times the principal amount of any such prepayment of the Term Loans on such date, (d) during the period of time after the date that is the second anniversary of the Effective Date up to and including the date that is the second anniversary of the Second Amendment Effective Date, an amount equal to 0.16% times the principal amount of any such prepayment of the Term Loans on such date, and (e) from the second anniversary of the Second Amendment Effective Date and at all times thereafter, zero. 

  “Loan Document” means this Agreement, the Agent Fee Letter, any Guaranty, any Joinder Agreement, any Mortgage, any Security Agreement, the Flow of Funds Agreement, the Intercompany Subordination Agreement, any Perfection Certificate, the First Amendment, the Second Amendment, any collateral access agreement, any landlord subordination or waiver agreement, any other agreement, instrument, certificate, report and other document executed and delivered pursuant hereto or thereto or otherwise evidencing or securing any Loan or any other Obligation.

  
   (f) 
   
    Section 2.03(b) of the Financing Agreement is hereby amended and restated in its entirety and replaced by the following: “The outstanding principal of the Initial Term Loan shall be repayable, ratably, in consecutive quarterly installments, each such installment to be due and payable on the last Business Day of each calendar quarter (i.e. March, June, September, and December) (each, a “Scheduled Term Loan Payment Date”), (i) commencing with June 30, 2021 and, for the Scheduled Term Loan Payment Dates occurring on June 30, 2021 and September 30, 2021, in an amount equal to 0.25% of the original principal amount of the Initial Term Loan made hereunder on the Effective Date and (ii) commencing with December 31, 2021 and for each Scheduled Term Loan Payment Date thereafter, in an amount equal to $739,922.87; provided, however, that the last such installment shall be in the amount necessary to repay in full the unpaid principal amount of the Term Loans on the Final Maturity Date. The outstanding unpaid principal of the Term Loans and all accrued and unpaid interest thereon, shall be due and payable in full on the Final Maturity Date.”
   

  

  
   (g) 
   
    Each 2021 Incremental Term Loan Lender shall be deemed to be a “Lender”, a “Term Loan Lender” and a “Secured Party” for all purposes under the Financing Agreement and each other Loan Document, and shall have all of the rights and obligations of a Lender, a Term Loan Lender and a Secured Party under the Financing Agreement and the other Loan Documents.  The 2021 Incremental Term Loans shall be Term Loans and Initial Term Loans for all purposes under the Financing Agreement and each other Loan Document and, unless otherwise set forth in the Financing Agreement, shall have terms identical to the Initial Term Loans outstanding under the Financing Agreement immediately prior to the date hereof (including, but not limited to, with respect to “Applicable Margin”, “Maturity Date” and Section 2.04(b)); provided, that the type and, if applicable, initial Interest Period applicable to the 2021 Incremental Term Loans shall be as specified in the applicable Notice of Borrowing.
   

  

  
   (h) 
   
    The proceeds of the 2021 Incremental Term Loans shall be used to fund the BFT Acquisition on the Second Amendment Effective Date and the payment of fees, costs and expenses related to the Second Amendment. 
   

  

  
   (i) 
   
    Schedule 1.01(A) of the Financing Agreement shall be amended and supplemented to include the 2021 Incremental Term Loan Commitments  set forth on Annex A hereto. 
   

  

  
   2. 
   
    Amendments to Security Agreement. Subject to satisfaction (or waiver) of the conditions set forth in Section 6 hereof, on the Second Amendment Effective Date, the Security Agreement is hereby amended to delete the stricken text (indicated textually in the same manner as the following example: stricken text) and to add the double-underlined text (indicated textually in the same manner as the 
   

  

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    following example: double-underlined text) as set forth in Annex B attached hereto (the Security Agreement, as amended hereby, the “Amended Security Agreement”); 
   

  

  
   3. 
   
    Consent to BFT Acquisition.  
   

  

  
   (a) 
   
    Pursuant to the request of the Loan Parties and in reliance upon the representations of the Loan Parties set forth herein, the Agents and the Lenders hereby consent to the BFT Acquisition and agree that the BFT Acquisition shall be a Permitted Acquisition under the Financing Agreement and consent and agree that the Borrower may use the proceeds of the 2021 Incremental Term Loan to consummate the BFT Acquisition. 
   

  

  
   (b) 
   
    The consent in this Section 3 shall be effective only in this specific instance and for the specific purposes set forth herein and does not allow for any other or further departure from the terms and conditions of the Financing Agreement or any other Loan Document, which terms and conditions shall continue in full force and effect
   

  

  
   4. 
   
    Fees.  On the Second Amendment Effective Date, the Borrowers shall pay, or cause to be paid, to the 2021 Incremental Term Loan Lenders, an upfront fee (the “2021 Incremental Term Loan Upfront Fee”) in an amount equal to 1.00% of the aggregate principal amount of the 2021 Incremental Term Loans actually funded by the 2021 Incremental Term Loan Lenders on the Second Amendment Effective Date; provided, that, at the option of each 2021 Incremental Term Lender, such 2021 Incremental Term Loan Upfront Fee shall be taken in the form of an equivalent amount of original issue discount in respect of the aggregate principal amount of 2021 Incremental Term Loans made by such 2021 Incremental Term Lender on the Second Amendment Effective Date; provided, further that the parties hereto agree to treat the 2021 Incremental Term Loan Upfront Fee as original issue discount for U.S. federal (and all applicable state and local) income tax purposes.
   

  

  
   5. 
   
    Representations and Warranties.  Each Loan Party hereby jointly and severally represents and warrants to the Agents and the Lenders, as of the date hereof, as follows:
   

  

  
   (a)
   
    Representations and Warranties; No Event of Default.  The representations and warranties contained herein, in Article VI of the Financing Agreement and in each other Loan Document, certificate or other writing delivered by or on behalf of any Loan Party to any Secured Party pursuant thereto on or prior to the Second Amendment Effective Date are true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified as to "materiality" or "Material Adverse Effect" in the text thereof, which representations and warranties shall be true and correct in all respects subject to such qualification) on and as of such date as though made on and as of such date, except to the extent that any such representation or warranty expressly relates solely to an earlier date (in which case such representation or warranty shall be true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations or warranties that already are qualified or modified as to "materiality" or "Material Adverse Effect" in the text thereof, which representations and warranties shall be true and correct in all respects subject to such qualification) on and as of such earlier date), and no Default or Event of Default has occurred and is continuing as of the Second Amendment Effective Date or would result from this Amendment becoming effective in accordance with its terms. 
   

  

  
   (a)
   
    Authorization; Enforceability.  The execution and delivery of this Amendment by each Loan Party, and the performance of the Financing Agreement, as amended hereby, (i) have been duly authorized by all necessary action, (ii) do not and will not contravene (A) any of its Governing Documents, (B) any applicable Requirement of Law or (C) any Contractual Obligation binding on or 
   

  

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    otherwise affecting it or any of its properties, (iii) do not and will not result in or require the creation of any Lien (other than pursuant to any Loan Document) upon or with respect to any of its properties other than any such Lien that constitutes a Permitted Lien, and (iv) do not and will not result in any default, noncompliance, suspension, revocation, impairment, forfeiture or nonrenewal of any permit, license, authorization or approval applicable to its operations or any of its properties except, in the case of clauses (ii)(B), (ii)(C) and (iv), as could not reasonably be expected to have a Material Adverse Effect.  This Amendment constitutes the legal, valid and binding obligation of such Loan Party, enforceable against such Loan Party in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors' rights generally and general principles of equity. 
   

  

  
   6. 
   
    Conditions Precedent to Effectiveness.  This Amendment shall become effective upon satisfaction in full, or waiver by the parties hereto, of the following conditions precedent (the first date upon which all such conditions shall have been satisfied (or waived) being herein called the "Second Amendment Effective Date"): 
   

  

  
   (a)
   
    Payment of Fees, Etc.  The Borrowers shall have paid (or caused to be paid), on or before the Second Amendment Effective Date, (i) all fees, costs and expenses then due and payable, if any, pursuant to Section 4 of this Amendment or Section 12.04 of the Financing Agreement and (ii) to the Agents, for their own account, an amendment fee in an amount agreed upon by the Borrower and the Agents.
   

  

  
   (c) 
   
    Delivery of Documents. The Agents and the Lenders shall have received, on or before the Second Amendment Effective Date, the following, each in form and substance reasonably satisfactory to the Lenders and, unless indicated otherwise, dated the Second Amendment Effective Date: 
   

  

  
   (i)
   
    this Amendment, duly executed by the Loan Parties, each Agent and each Lender;
   

  

  
   (ii)
   
    a copy of the resolutions of each Loan Party, certified as of the Second Amendment Effective Date by an Authorized Officer thereof, authorizing (A) the borrowings hereunder and the transactions contemplated by this Amendment and (B) the execution, delivery and performance by such Loan Party of this Amendment and the execution and delivery of the other documents to be delivered by such Person in connection herewith;
   

  

  
   (iii)
   
    a certificate of an Authorized Officer of each Loan Party, certifying the names and true signatures of the representatives of such Loan Party authorized to sign this Amendment and the other documents to be executed and delivered by such Loan Party in connection herewith, together with evidence of the incumbency of such authorized officers;
   

  

  
   (iv)
   
    a certificate of the appropriate official(s) of the jurisdiction of organization of each Loan Party certifying as of a recent date not more than 30 days prior to the Second Amendment Effective Date as to the good standing of such Loan Party, in such jurisdiction, except, in each case, where the failure to be so qualified could not reasonably be expected to result in a Material Adverse Effect of the Loan Parties, taken as a whole;
   

  

  
   (v)
   
    a true and complete copy of the charter, certificate of formation, certificate of limited partnership or other publicly filed organizational document of each Loan Party certified as of a recent date not more than 30 days prior to the Second Amendment Effective Date by an appropriate official of the jurisdiction of organization of such Loan Party which shall set forth the same complete name of such 
   

  

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    Loan Party as is set forth herein and the organizational number of such Loan Party, if an organizational number is issued in such jurisdiction;
   

  

  
   (vi)
   
    a copy of the Governing Documents of each Loan Party, together with all amendments thereto, certified as of the Second Amendment Effective Date by an Authorized Officer of such Loan Party;
   

  

  
   (vii)
   
    [reserved];
   

  

  
   (viii)
   
     a certificate of an Authorized Officer of each Loan Party, certifying as to the matters described in Section 5(a) of this Amendment;
   

  

  
   (ix)
   
    a certificate of the chief financial officer of the Administrative Borrower, certifying on behalf of the Loan Parties, as to the solvency of the Loan Parties (on a consolidated basis), which certificate shall be reasonably satisfactory in form and substance to the Required Lenders; 
   

  

  
   (x)
   
    [reserved]; and
   

  

  
   (xi)
   
    a Notice of Borrowing pursuant to Section 2.02 of the Financing Agreement.
   

  

  
   7. 
   
    Conditions Subsequent to Closing. 
   

  

  
   (a) 
   
    Within sixty (60) days of the Second Amendment Effective Date, the Additional Guarantor (as defined below) shall have filed intellectual property security agreements, or such comparable agreements, as applicable, in the United States, Australia and New Zealand, in each case, in favor of the Collateral Agent, for the benefit of the Secured Parties,  on all of the registered Intellectual Property of the Additional Guarantor in the United States, Australia and New Zealand pursuant to the Amended Security Agreement. 
   

  

  
   (b)
   
    the BFT Acquisition shall be consummated within 5 Business Days of the Second  Amendment Effective Date  in accordance with the terms of the Acquisition Agreement (as in effect on the date hereof), but without giving effect to any amendments, modifications or waivers of any provision thereto that are materially adverse to the Lenders (in their capacity as such) without the consent of the Required Lenders (such consent not to be unreasonably withheld, delayed or conditioned).
   

  

  
   8. 
   
    Continued Effectiveness of the Financing Agreement and Other Loan Documents.  Each Loan Party hereby (i) acknowledges and consents to this Amendment, (ii) confirms and agrees that the Financing Agreement and each other Loan Document to which it is a party is, and shall continue to be, in full force and effect and is hereby ratified and confirmed in all respects except that on and after the Second Amendment Effective Date all references in the Financing Agreement or any other Loan Document to "Financing Agreement", the "Agreement", "thereto", "thereof", "thereunder" or words of like import referring to the Financing Agreement shall mean the Financing Agreement as amended by this Amendment, and (iii) confirms and agrees that to the extent that the Financing Agreement or any such other Loan Document purports to assign or pledge to the Collateral Agent for the benefit of the Lenders, or to grant to the Collateral Agent for the benefit of the Lenders a security interest in or Lien on, any Collateral as security for the Obligations or Guaranteed Obligations, as the case may be, of any Loan Party from time to time existing in respect of the Financing Agreement (as amended hereby) and the other Loan Documents, such pledge, assignment and/or grant of the security interest or Lien is hereby ratified and confirmed in all respects as of the date hereof.  This Amendment does not and shall not affect any of the obligations of any Loan 
   

  

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    Party, other than as expressly provided herein, including, without limitation, the Borrower's obligation to repay the Loans in accordance with the terms of Financing Agreement, or the obligations of any other Loan Party under any Loan Document to which it is a party, all of which obligations shall remain in full force and effect.  Except as expressly provided herein, the execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of the Agents or any Lender under the Financing Agreement or any other Loan Document, nor constitute a waiver of any provision of the Financing Agreement or any other Loan Document.
   

  

  
   9. 
   
    Reaffirmation of Loan Parties.  Each Loan Party hereby reaffirms its obligations under the Financing Agreement and each other Loan Document to which it is a party as of the date hereof.  Each Loan Party hereby further ratifies and reaffirms as of the date hereof the validity and enforceability of all of the Liens and security interests heretofore granted by it, pursuant to and in connection with the Financing Agreement or any other Loan Document to the Agents, on behalf and for the benefit of the Agents and each Lender, as collateral security for the obligations under the Financing Agreement and the other Loan Documents in accordance with their respective terms, and acknowledges that all of such liens and security interests, and all collateral heretofore pledged by it as security for such obligations, continues to be and remain collateral for such obligations.  Although each of the Guarantors have been informed of the matters set forth herein and have acknowledged and agreed to same, each of the Guarantors understands that the Agents and the Lenders shall have no obligation to inform the Guarantors of such matters in the future or to seek the Guarantors' acknowledgement or agreement to future amendments, waivers, or modifications, and nothing herein shall create such a duty.
   

  

  
   10. 
   
    Miscellaneous.
   

  

  
   (a)
   
    This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement.  Delivery of an executed counterpart of this Amendment by electronic mail shall be equally as effective as delivery of an original executed counterpart of this Amendment.  Any party may request in writing that parties delivering an executed counterpart of this Amendment by electronic mail also deliver an original executed counterpart of this Amendment but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Amendment. The words “execution,” “signed,” “signature,” and words of like import in this Amendment shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.
   

  

  
   (b)
   
    Section and paragraph headings herein are included for convenience of reference only and shall not constitute a part of this Amendment for any other purpose.
   

  

  
   (c)
   
    THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK.
   

  

  
   (d)
   
    This Amendment constitutes a "Loan Document" under the Financing Agreement.
   

  

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   (e)
   
    Any provision of this Amendment that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining portions hereof or affecting the validity or enforceability of such provision in any other jurisdiction.
   

  

  
   (f)
   
    The Borrower will pay (or cause to be paid) promptly upon receipt of a reasonably detailed invoice therefor, all reasonable and documented fees and out-of-pocket costs and expenses of the Agents and the Lenders in connection with the preparation, execution and delivery of this Amendment in accordance with and pursuant to Section 12.04 of the Financing Agreement, including, without limitation, reasonable and documented fees, costs and expenses of (x) King & Spalding LLP, counsel to the Lenders and (y) Arnold &  Porter Kaye Scholer LLP, counsel to the Agents.
   

  

  
   (g)
   
    By its execution hereof, each of the Lenders party hereto, constituting all Lenders party to the Financing Agreement, hereby (i) authorizes and directs each Agent to execute and deliver this Amendment and (ii) acknowledges and agrees that (x) the authorization and direction in this Section 9(g) constitutes an authorization and direction from the Lenders under the provisions of Article X of the Financing Agreement and (y) Article X (including, for the avoidance of doubt, Sections 10.03 and 10.05 thereof) of the Financing Agreement shall apply to any and all actions taken by either Agent in accordance with such direction.
   

  

  
   11. 
   
    Joinder of Additional Guarantor.
   

  

  
   (a) 
   
    By its execution of this Agreement, BFT Franchise Holdings, LLC (the “Additional Guarantor”) hereby (i) confirms that the representations contained in Article VI of the Financing Agreement are true and correct in all material respects as to the Additional Guarantor as of the Second Amendment Effective Date, except to the extent that any such representation or warranty expressly relates solely to an earlier date (in which case such representation or warranty shall be true and correct in all material respects on and as of such earlier date ), and (ii) agrees that, from and after the Second Amendment Effective Date, the Additional Guarantor shall be a party to the Financing Agreement and and be bound, as a Guarantor, by all the provisions thereof and shall comply with and be subject to all of the terms, conditions, covenants, agreements and obligations set forth therein and applicable to the Guarantors, including, without limitation, the guaranty of the Obligations made by the Guarantors, jointly and severally with the other Loan Parties, in favor of the Agents and the Lenders pursuant to Article XI of the Financing Agreement. The Additional Guarantor hereby agrees that from and after the Second Amendment Effective Date each reference to “Guarantor” or a “Loan party” and each reference to the “Guarantors” or the “Loan Parties”  in the Financing Agreement shall include the Additional Guarantor.
   

  

  
   (a)
   
    Attached hereto as Annex C are supplements to each Schedule to the Financing Agreement revised to include all information required to be provided therein with respect to, and only with respect to, the Additional Guarantor.  The Schedules to the Financing Agreement shall, without further action, be amended to include the information contained in each such supplement.
   

  

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

  BORROWER:

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	XPONENTIAL FITNESS LLC

	 

	 

	By:
	/s/ John Meloun

	 
	Name: John Meloun

	 
	Title: Chief Financial Officer

   

  GUARANTORS:

  		
	XPONENTIAL INTERMEDIATE HOLDINGS, LLC

	 

	 

	By:
	/s/ John Meloun

	 
	Name: John Meloun

	 
	Title: Chief Financial Officer

   

  		
	CLUB PILATES FRANCHISE, LLC

	 

	 

	By:
	/s/ John Meloun

	 
	Name: John Meloun

	 
	Title: Chief Financial Officer

   

  		
	CYCLEBAR HOLDCO, LLC

	 

	 

	By:
	/s/ John Meloun

	 
	Name: John Meloun

	 
	Title: Chief Financial Officer

   

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	CYCLEBAR FRANCHISING, LLC

	 

	 

	By:
	/s/ John Meloun

	 
	Name: John Meloun

	 
	Title: Chief Financial Officer

   

   

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	CYCLEBAR WORLDWIDE INC.

	 

	 

	By:
	/s/ John Meloun

	 
	Name: John Meloun

	 
	Title: Chief Financial Officer

   

  		
	STRETCH LAB FRANCHISE, LLC

	 

	 

	By:
	/s/ John Meloun

	 
	Name: John Meloun

	 
	Title: Chief Financial Officer

   

  		
	ROW HOUSE FRANCHISE, LLC

	 

	 

	By:
	/s/ John Meloun

	 
	Name: John Meloun

	 
	Title: Chief Financial Officer

   

  		
	YOGA SIX FRANCHISE, LLC

	 

	 

	By:
	/s/ John Meloun

	 
	Name: John Meloun

	 
	Title: Chief Financial Officer

   

  		
	AKT FRANCHISE, LLC

	 

	 

	By:
	/s/ John Meloun

	 
	Name: John Meloun

	 
	Title: Chief Financial Officer

   

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	PB FRANCHISING, LLC

	 

	 

	By:
	/s/ John Meloun

	 
	Name: John Meloun

	 
	Title: Chief Financial Officer

   

   

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	STRIDE FRANCHISE, LLC

	 

	 

	By:
	/s/ John Meloun

	 
	Name: John Meloun

	 
	Title: Chief Financial Officer

   

  		
	XPONENTIAL FITNESS BRANDS INTERNATIONAL, LLC

	 

	 

	By:
	/s/ John Meloun

	 
	Name: John Meloun

	 
	Title: Chief Financial Officer

   

  		
	RUMBLE FRANCHISE, LLC

	 

	 

	By:
	/s/ John Meloun

	 
	Name: John Meloun

	 
	Title: Chief Financial Officer

   

  	
	BFT FRANCHISE HOLDINGS, LLC

	 

	 

	/s/ John Meloun

	Name: John Meloun

	Title: Chief Financial Officer

   

   

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  ADMINISTRATIVE AGENT AND 
COLLATERAL AGENT:

  		
	WILMINGTON TRUST, NATIONAL ASSOCIATION, as Administrative Agent and Collateral Agent 

	 

	 

	By:
	/s/ Joseph B. Feil

	 
	Name: Joseph B. Feil

	 
	Title: Vice President

   

   

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  LENDERS:

  		
	[________________________]

	 

	 

	By:
	 

	 
	Name:

	 
	Title:

   

   

   

   

  Annex A

   

  2021 Incremental Term Loan Lenders' Commitments

   

   

   

   

   

   

   

  Annex B

   

  Amended Security Agreement

   

   

   

   

   

  Annex C

   

  Schedule Supplement

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Exhibit 4.2
 
DESCRIPTION OF SECURITIES REGISTERED PURSUANT TO SECTION 12 OF THE
SECURITIES EXCHANGE ACT OF 1934
 
AS OF DECEMBER 31, 2021
 
The following summary of certain provisions of the securities of Rush Street Interactive, Inc. (“RSI,” “we,” “our” or the “Company”) does not purport to be complete. You should refer to our second amended and restated certificate of incorporation (our “Charter”) and amended and restated bylaws (“Bylaws”) and each of the other documents referenced herein, which are attached as exhibits to the Annual Report on Form 10-K to which this Description of Securities is part. The summary below is also qualified by reference to the provisions of the General Corporation Law of the State of Delaware (“DGCL”), as applicable.
 
As of December 31, 2021, we had one class of securities registered under Section 12 of the Securities Exchange Act of 1945, as amended, our Class A common stock.
 
Authorized and Outstanding Stock
 
Our Charter authorizes the issuance of 951,000,000 shares, consisting of:
 
									
		·
	1,000,000 shares of preferred stock, par value $0.0001 per share;

 
									
		·
	750,000,000 shares of Class A common stock, par value $0.0001 per share; and

 
									
		·
	200,000,000 shares of Class V voting stock, par value $0.0001 per share.

 
Common Stock
 
Class A Common Stock
 
Voting Rights. Each holder of Class A common stock is entitled to one vote for each share of Class A common stock held by such holder on all matters on which stockholders generally are entitled to vote. Holders of Class A common stock will vote together with holders of Class V voting stock as a single class on all matters presented to the stockholders of Rush Street Interactive, Inc. (the “Company”) for their vote or approval. Except as described below, all matters to be voted on by stockholders must be approved by a majority (or, in the case of election of directors, by a plurality) of the votes entitled to be cast by all stockholders present in person (which would include presence at the virtual special meeting) or represented by proxy, voting together as a single class. Notwithstanding the foregoing, to the fullest extent permitted by law, holders of Class A common stock will have no voting power with respect to, and will not be entitled to vote on, any amendment to the Charter (including any certificate of designations relating to any series of preferred stock) that relates solely to the terms of one or more outstanding series of preferred stock if the holders of such affected series are entitled, either separately or together with the holders of one or more other such securities, to vote thereon pursuant to the Charter (including any certificate of designations relating to any series of preferred stock) or pursuant to the DGCL.
 
Pursuant to the Charter (i) the vote of holders of Class A common stock will not be required to amend, alter, change, add to or repeal the Bylaws so long as any such amendment, alteration, change, addition or repeal is consistent with Delaware law or the Charter and, in each case, subject to the rights of the parties to the Investor Rights Agreement entered into in connection with the Business Combination (the “Investor Rights Agreement”), (ii) for so long as the sellers in the Business Combination completed by the Company on December 29, 2020 (the “Sellers”) and their permitted transferees (as defined in the Investor Rights Agreement, the “Permitted Transferees”) beneficially own, in the aggregate, 40% or more of the voting power of the stock of the Company entitled to vote generally in the election of directors, and without limiting any of the rights of the parties to the Investor Rights Agreement, the vote of a majority of the total voting power of the outstanding shares of Company stock entitled to vote generally in the election of directors, voting together as a single class, is required in order for the stockholders of the Company to alter, amend, repeal or rescind, in whole or in part, any provision of the Bylaws or to adopt any provision inconsistent with the Bylaws, (iii) at any time when the Sellers and their Permitted Transferees beneficially own, in the aggregate, less than 40% of the voting power of the stock of the Company entitled to vote generally in the election of directors, and without limiting any of the rights of the parties to the Investor Rights Agreement, the vote of holders of at least 66 2/3% of the total voting power of the outstanding shares of Company stock entitled to vote generally in the election of directors, voting together as a single class, is required in order for the stockholders of the Company to alter, amend, repeal or rescind, in whole or in part, any provision of the Bylaws or to adopt any provision inconsistent with the Bylaws, (iv) a vote of at least 80% of the total voting power of the Company’s stock entitled to vote generally in the election of directors, voting together as a single class, is required to alter, amend, add to or repeal any of the provisions in Article X (Competition and Corporate Opportunities) of the Charter, and (v) without limiting clause (iv), at any time when the Sellers and their Permitted Transferees beneficially own, in the aggregate, 40% or more of the voting power of the stock of the Company entitled to vote generally in the election of directors, and without limiting any of the rights of the parties to the Investor Rights Agreement, the vote of holders of at least 66 2/3% of the total voting power of the outstanding shares of Company stock entitled to vote generally in the election of directors, voting together as a single class, is required in order for the stockholders of the Company to alter, amend, repeal or rescind, in whole or in part, any provision in Article V (Bylaws), Article VI (Board of Directors), Article VII (Consent of Stockholders in Lieu of Meeting, Annual and Special Meetings of Stockholders), Article VIII (Liability; Indemnification), Article IX (DGCL 203), Article XII (Forum) and Article XIII (Amendments) of the Charter or to adopt any provision inconsistent therewith.

  
In addition, (i) at any time when the Sellers and their Permitted Transferees beneficially own, in the aggregate, 40% or more of the voting power of the stock of the Company entitled to vote generally in the election of directors, any action required or permitted to be taken at any annual or special meeting of the stockholders of the Company may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, is signed by the holders of outstanding stock not having less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and (ii) at any time when the Sellers and their Permitted Transferees beneficially own, in the aggregate, less than 40% of the voting power of the stock of the Company entitled to vote generally in the election of directors, any action required or permitted to be taken by the stockholders of the Company must be effected at a duly called annual or special meeting of such holders and may not be effected by any written consent; provided that, any action required or permitted to be taken by the holders of preferred stock, voting separately as a series or separately as a class with one or more other such series, may be taken without a meeting, without prior notice and without a vote, to the extent expressly so provided in the applicable certificate of designation relating to such series of preferred stock.
 
Dividend Rights. Subject to preferences that may be applicable to any outstanding preferred stock, the holders of shares of Class A common stock are entitled to receive ratably such dividends, if any, as may be declared from time to time by the Board of Directors of the Company (the “Board”) out of funds legally available therefor.
 
Liquidation, Dissolution and Winding Up. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company’s affairs, the holders of Class A common stock are entitled to share ratably in all assets remaining after payment of the Company’s debts and other liabilities, subject to prior distribution rights of preferred stock or any class or series of stock having preference over the Class A common stock, then outstanding, if any.
 
Other Matters and Rights. The holders of Class A common stock have no preemptive or conversion rights or other subscription rights. There are no redemption or sinking fund provisions applicable to the Class A common stock. The rights, preferences and privileges of holders of the Class A common stock will be subject to those of the holders of any shares of preferred stock of the Company that the Company may issue in the future.
 
Class V Voting Stock
 
Voting Rights. Each holder of Class V voting stock is entitled to one vote for each share of Class V voting stock held by such holder on all matters on which stockholders generally are entitled to vote. Holders of Class V voting stock will vote together with holders of Class A common stock as a single class on all matters presented to the Company’s stockholders for their vote or approval. Except as described below, all matters to be voted on by stockholders must be approved by a majority (or, in the case of election of directors, by a plurality) of the votes entitled to be cast by all stockholders present in person or represented by proxy, voting together as a single class. Notwithstanding the foregoing, to the fullest extent permitted by law, holders of Class V voting stock, as such, will have no voting power with respect to, and will not be entitled to vote on, any amendment to the Charter (including any certificate of designations relating to any series of preferred stock) that relates solely to the terms of one or more outstanding series of preferred stock if the holders of such affected series are entitled, either separately or together with the holders of one or more other such securities, to vote thereon pursuant to the Charter (including any certificate of designations relating to any series of preferred stock) or pursuant to the DGCL.

Pursuant to the Charter (i) the vote of holders of Class V voting stock will not be required to amend, alter, change, add to or repeal the Bylaws so long as any such amendment, alteration, change, addition or repeal is consistent with Delaware law or the Charter and, in each case, subject to the rights of the parties to the Investor Rights Agreement, (ii) for so long as the Sellers and their Permitted Transferees beneficially own, in the aggregate, 40% or more of the voting power of the stock of the Company entitled to vote generally in the election of directors, and without limiting any of the rights of the parties to the Investor Rights Agreement, the vote of a majority of the total voting power of the outstanding shares of Company stock entitled to vote generally in the election of directors, voting together as a single class, is required in order for the stockholders of the Company to alter, amend, repeal or rescind, in whole or in part, any provision of the Bylaws or to adopt any provision inconsistent with the Bylaws, (iii) at any time when the Sellers and their Permitted Transferees beneficially own, in the aggregate, less than 40% of the voting power of the stock of the Company entitled to vote generally in the election of directors, and without limiting any of the rights of the parties to the Investor Rights Agreement, the vote of holders of at least 66 2/3% of the total voting power of the outstanding shares of Company stock entitled to vote generally in the election of directors, voting together as a single class, is required in order for the stockholders of the Company to alter, amend, repeal or rescind, in whole or in part, any provision of the Bylaws or to adopt any provision inconsistent with the Bylaws, (iv) a vote of at least 80% of the total voting power of the Company’s stock entitled to vote generally in the election of directors, voting together as a single class, is required to alter, amend, add to or repeal any of the provisions in Article X (Competition and Corporate Opportunities) of the Charter, and (v) without limiting clause (iv) at any time when the Sellers and their Permitted Transferees beneficially own, in the aggregate, 40% or more of the voting power of the stock of the Company entitled to vote generally in the election of directors, and without limiting any of the rights of the parties to the Investor Rights Agreement, the vote of holders of at least 66 2/3% of the total voting power of the outstanding shares of Company stock entitled to vote generally in the election of directors, voting together as a single class, is required in order for the stockholders of the Company to alter, amend, repeal or rescind, in whole or in part, any provision in Article V (Bylaws), Article VI (Board of Directors), Article VII (Consent of Stockholders in Lieu of Meeting, Annual and Special Meetings of Stockholders), Article VIII (Liability; Indemnification), Article IX (DGCL 203), Article XII (Forum) and Article XIII (Amendments) of the Charter or to adopt any provision inconsistent therewith.
 
In addition, (i) at any time when the Sellers and their Permitted Transferees beneficially own, in the aggregate, 40% or more of the voting power of the stock of the Company entitled to vote generally in the election of directors, any action required or permitted to be taken at any annual or special meeting of the stockholders of the Company may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken, is signed by the holders of 

outstanding stock not having less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and (ii) at any time when the Sellers and their Permitted Transferees beneficially own, in the aggregate, less than 40% of the voting power of the stock of the Company entitled to vote generally in the election of directors, any action required or permitted to be taken by the stockholders of the Company must be effected at a duly called annual or special meeting of such holders and may not be effected by any written consent; provided that, any action required or permitted to be taken by the holders of preferred stock, voting separately as a series or separately as a class with one or more other such series, may be taken without a meeting, without prior notice and without a vote, to the extent expressly so provided in the applicable certificate of designation relating to such series of preferred stock.
 
Dividend Rights. The holders of the Class V voting stock will not participate in any dividends declared by the Board.
 
Liquidation, Dissolution and Winding Up. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company’s affairs, the holders of Class V voting stock are not entitled to receive any assets of the Company.
 
Other Matters and Rights. The holders of shares of Class V voting stock do not have preemptive, subscription, redemption or conversion rights. There will be no redemption or sinking fund provisions applicable to the Class V voting stock.
 
Issuance and Retirement of Class V Voting Stock. In the event that any outstanding share of Class V voting stock ceases to be held directly or indirectly by certain holders thereof, such share will automatically be transferred to the Company for no consideration and thereupon will be retired. The Company will not issue additional shares of Class V voting stock after the adoption of the Charter other than in connection with the valid issuance or transfer of a Class A common unit of Rush Street Interactive, LP in accordance with the governing documents of the Company. 
Preferred Stock
 
The Charter authorizes the Board to establish one or more series of preferred stock. Unless required by law or any stock exchange, the authorized shares of preferred stock will be available for issuance without further action by the holders of the common stock of the Company. The Board has the discretion to determine the powers, preferences and relative, participating, optional and other special rights, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences of each series of preferred stock.
 
The issuance of preferred stock may have the effect of delaying, deferring or preventing a change in control of the Company without further action by the stockholders. Additionally, the issuance of preferred stock may adversely affect the holders of the common stock of the Company by restricting dividends on the Class A common stock, diluting the voting power of the Class V voting stock or subordinating the liquidation rights of the Class A common stock. As a result of these or other factors, the issuance of preferred stock could have an adverse impact on the market price of the Class A common stock.
 
Certain Anti-Takeover Provisions of Delaware Law, the Company’s Charter and Bylaws
 
The Charter, Bylaws, the Investor Rights Agreement and the DGCL contain provisions that could have the effect of rendering more difficult, delaying, or preventing an acquisition deemed undesirable by our Board. These provisions could also make it difficult for stockholders to take certain actions, including electing directors who are not nominated by the members of our Board or taking other corporate actions, including effecting changes in our management. For instance, our Board will be empowered to elect a director to fill a vacancy created by the expansion of the Board or the resignation, death, or removal of a director in certain circumstances; and the Company’s advance notice provisions in our Bylaws will require that stockholders must comply with certain procedures in order to nominate candidates to our Board or to propose matters to be acted upon at a stockholders’ meeting.
Exclusive Forum
 
The Charter requires, unless we consent in writing to the selection of an alternative forum, that (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer, other employee or Company stockholder to us or to our stockholders, (iii) any action asserting a claim against us, our directors, officers, other employees or Company stockholders arising pursuant to any provision of the DGCL, the Charter or our Bylaws, or (iv) any action asserting a claim against us, our directors, officers, other employees or Company stockholders governed by the internal affairs doctrine under Delaware law shall be brought, to the fullest extent permitted by law, solely and exclusively in the Court of Chancery in the State of Delaware; provided, however, that, in the event that the Court of Chancery in the State of Delaware lacks subject matter jurisdiction over any such actions, the Charter provides that the sole and exclusive forum shall be another state or federal court located within the State of Delaware, in each such case, unless the Court of Chancery (or such other state or federal court located within the State of Delaware, as applicable) has dismissed a prior action by the same plaintiff asserting the same claims because such court lacked personal jurisdiction over an indispensable party named as a defendant.
 
In addition, the Charter requires, unless we consent in writing to the selection of an alternative forum, that the federal district courts of the United States shall, to the fullest extent permitted by law, be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended. This provision in the Charter does not address or apply to claims that arise under the Exchange Act; however, Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder.

 

Redemption Rights and Transfer Restrictions with Respect to Capital Stock Held by Unsuitable Persons and Their Affiliates
 
The Company’s authorized but unissued common stock and preferred stock will be available for future issuances without stockholder approval and could be utilized for a variety of corporate purposes, including future offerings to raise additional capital, acquisitions and employee benefit plans. The existence of authorized but unissued and unreserved common stock and preferred stock could render more difficult or discourage an attempt to obtain control of the Company by means of a proxy contest, tender offer, merger or otherwise.
 
The “Charter provides that any equity interests of the Company owned or controlled by an unsuitable person or its affiliates will be subject to mandatory sale and transfer to either us or one or more third party transferees and in such number and class(es)/series of equity interests as determined by the Board in good faith (following consultation with reputable outside and independent gaming regulatory counsel) pursuant to a resolution adopted by a majority of the directors of the Board.
 
Our gaming activities are regulated by gaming authorities in each jurisdiction in which we operate. To operate in any given gaming jurisdiction, we and our directors, officers, certain other key employees and, in certain cases, our significant stockholders, must be found suitable by the relevant gaming authority. Gaming authorities typically have broad discretion in determining whether an applicant is suitable to conduct or be associated with gaming activities within a given jurisdiction. Though criteria for suitability varies by jurisdiction, such criteria generally include (among other things) an evaluation of the applicant’s reputation for good character, criminal and financial history and character of those with whom the applicant associates. Our association with individuals or entities that are or are likely to be deemed unsuitable in any particular jurisdiction would present risk to our ability to obtain or maintain the gaming license we need to operate in such jurisdiction.
 
Transfer Agent and Registrar
 
The transfer agent for our Class A common stock is Continental Stock Transfer & Trust Company.

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