Download Caesars Acquisition Co (Form: 8-K, Received: 05/06

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
May 6, 2014 (May 5, 2014)
Date of Report (Date of earliest event reported)
Caesars Acquisition Company
(Exact name of registrant as specified in its charter)
Delaware
001- 36207
46-2672999
(State of Incorporation)
(Commission
File Number)
(IRS Employer
Identification Number)
One Caesars Palace Drive
Las Vegas, Nevada 89109
(Address of principal executive offices) (Zip Code)
(702) 407-6000
(Registrant’s telephone number, including area code)
N/A
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of
the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement.
Amendment to Transaction Agreement
On May 5, 2014, Caesars Acquisition Company (“ CAC ” or the “ Company ”) and Caesars Growth Partners, LLC (“ Growth Partners ”), a
wholly owned subsidiary of the Company, entered into that certain First Amendment to Transaction Agreement (the “ Amendment ”) by and
among Caesars Entertainment Corporation (“ CEC ”), Caesars Entertainment Operating Company, Inc. (“ CEOC ”), Caesars License Company,
LLC (“ CLC ”), Harrah’s New Orleans Management Company, Corner Investment Company, LLC (“ CIC ”), 3535 LV Corp., Parball
Corporation and JCC Holding Company II, LLC, pursuant to which the parties to such agreement amended the Transaction Agreement (the “
Transaction Agreement ”, as so amended by the Amendment, the “ Amended Agreement ”), dated as of March 1, 2014, entered into by and
among the parties to the Amendment.
On May 5, 2014, pursuant to the terms of the Amended Agreement, Growth Partners (or one or more of its designated direct or indirect
subsidiaries) acquired from CEOC (or one or more of its affiliates): (i) The Cromwell (f/k/a Bill’s Gamblin’ Hall & Saloon) (“ The Cromwell
”), The Quad Resort & Casino (“ The Quad ”) and Bally’s Las Vegas (each a “ Nevada Property ”, and collectively, the “ Nevada Properties ”),
(ii) 50% of the ongoing management fees and any termination fees payable under the Property Management Agreements between a Property
Manager (as defined below) and the Property Licensees (as defined below) of each of the aforementioned Nevada Properties (the “ Nevada
Property Management Agreements ”) and (iii) certain intellectual property that is specific to each of the Nevada Properties (together with the
transactions described in (i) and (ii) above, the “ First Closing ”) for an aggregate purchase price of $1,340.0 million less assumed debt of the
Nevada Prospectus, including the $185.0 million related to The Cromwell, and subject to various pre-closing and post-closing adjustments in
accordance with the terms of the Amended Agreement. Pursuant to the terms of the Amended Agreement, Growth Partners (or one or more of
its designated direct or indirect subsidiaries) also agreed to acquire from CEOC (or one or more of its affiliates) (x) Harrah’s New Orleans (the
“ Louisiana Property ”), subject to obtaining the approval from the Louisiana Gaming Control Board to purchase such property, (y) 50% of the
ongoing management fees and any termination fees payable under the Property Management Agreement to be entered between a Property
Manager and the Property Licensees of the Louisiana Property (the “ Louisiana Property Management Agreement ” and, together with the
Nevada Property Management Agreements, the “ Property Management Agreements ”); and (z) certain intellectual property that is specific to
the Louisiana Property (together with the transactions described in (x) and (y) above, the “ Second Closing ”) for an aggregate purchase price
of $660.0 million, less outstanding debt to be assumed in the Second Closing, and also subject to various pre-closing and post-closing
adjustments in accordance with the terms of the Amended Agreement.
The Second Closing is subject to certain closing conditions, including the receipt of gaming approval by the Louisiana Gaming Control Board
and receipt of financing on terms and conditions satisfactory to CAC and Growth Partners.
Property Management Agreements
In connection with the First Closing, on May 5, 2014, each of 3535 LV NewCo, LLC (“ 3535 LV NewCo ”), CIC and Parball NewCo, LLC (“
Parball NewCo ”) (each a “ Property Licensee ” and collectively, the “ Property Licensees ”) (each an indirect subsidiary of Growth Partners
following the First Closing) entered into a Nevada Property Management Agreement with the applicable property management entities (each a
“ Property Manager ” and collectively, the “ Property Managers ”). Each Property Manager is a subsidiary of CEOC. Pursuant to the Nevada
Property Management Agreements, the ongoing management fees payable to each of the Property Managers consist of (i) a base management
fee of 2% of net operating revenues with respect to each month of each year during the term of such agreement and (ii) an incentive
management fee in an amount
equal to 5% of EBITDA for each operating year. CEOC will guarantee the obligations of the Property Managers under each of the Nevada
Property Management Agreements. Pursuant to the Nevada Property Management Agreements, among other things, the Property Managers
will provide management services to the applicable Property and CLC will license enterprise-wide intellectual property used in the operation of
the Properties.
The Louisiana Property Management Agreement will be entered into in connection with the Second Closing.
Term Facility
The purchase price of the First Closing was funded by Growth Partners with cash on hand and the proceeds of $700.0 million of term loans (the
“ First Closing Term Loan ”). Caesars Growth Properties Holdings, LLC (the “ Borrower ”) closed on the First Closing Term Loan on May 5,
2014 pursuant to a First Lien Credit Agreement among Caesars Growth Properties Parent, LLC (“ Parent ”), the Borrower, the lenders party
thereto and Credit Suisse AG, Cayman Islands Branch, as Administrative Agent (the “ Credit Agreement ”). The Borrower is an indirect
subsidiary of Growth Partners, which is a joint venture between CAC and CEC.
The First Closing Term Loan matures on May 5, 2015; provided that the Borrower has the option to extend, for a fee equal to 1.00% of the
aggregate principal amount of the First Closing Term Loan outstanding on the initial maturity date, for one additional year. The First Closing
Term Loan requires scheduled quarterly payments in amounts equal to 0.25% of the original aggregate principal amount of the First Closing
Term Loan, with the balance due at maturity. In addition, the First Closing Term Loan is expected to be repaid in full upon the acquisition by
the Borrower of the Harrah’s New Orleans Hotel and Casino, the contribution of the Planet Hollywood Resort and Casino and the release of
certain indebtedness required to fund such acquisition from escrow.
The Credit Agreement allows the Borrower to request one or more incremental term loan and revolving credit facilities in an aggregate amount
of up $150.0 million, subject to certain conditions and receipt of commitments by existing or additional financial institutions or institutional
lenders.
Interest and Fees
Borrowings under the Credit Agreement bear interest at a rate equal to, at the Borrower’s option, either (a) LIBOR determined by reference to
the costs of funds for Eurodollar deposits for the interest period relevant to such borrowing, adjusted for certain additional costs, subject to a
floor of 1.00% or (b) a base rate determined by reference to the highest of (i) the federal funds rate plus 0.50%, (ii) the prime rate as determined
by the administrative agent under the Credit Agreement and (iii) the one-month adjusted LIBOR rate plus 1.00%, in each case plus an
applicable margin. Such applicable margin shall be (i) until June 5, 2014, 6.00% per annum for LIBOR Loans and 5.00% per annum for base
rate loans, (ii) from June 6, 2014 to the initial maturity date, 7.00% per annum for LIBOR Loans and 6.00% per annum for base rate loans and
(iii) from and after the initial maturity date, 8.00% per annum for LIBOR Loans and 7.00% per annum for base rate loans.
Mandatory and Voluntary Prepayments
The Credit Agreement requires the Borrower to prepay outstanding term loans, subject to certain exceptions, with:
•
50% (which percentage will be reduced to 25% if the senior secured leverage ratio is greater than 3.00 to 1.00 but less than or
equal to 3.50 to 1.00, and to 0% if the Borrower’s senior secured leverage ratio is less than or equal to 3.00 to 1.00) of the
Borrower’s annual excess cash flow to the extent such amount exceeds $5.0 million, as defined under the Credit Agreement;
•
100% of the net cash proceeds of certain non-ordinary course asset sales or certain casualty events, in each case subject to certain
exceptions and provided that the Borrower may (a) reinvest within 15 months or (b) contractually commit to reinvest those
proceeds within 15 months and so reinvest such proceeds prior to the termination of such contract in assets to be used in its
business, or certain other permitted investments; and
•
100% of the net cash proceeds of any issuance or incurrence of debt, other than proceeds from debt permitted under the Credit
Agreement.
Collateral and Guarantors
Borrowings under the Credit Agreement were borrowed by the Borrower and guaranteed by Parent and the material, domestic wholly owned
subsidiaries of the Borrower (subject to exceptions), and are secured by substantially all of the existing and future property and assets of the
Borrower and the guarantors (other than Parent, whose guarantee is unsecured), including a pledge of the capital stock of the wholly owned
domestic subsidiaries held by the Borrower and the guarantors (other than Parent) and 65% of the capital stock of the first-tier foreign
subsidiaries held by the Borrower and the subsidiary guarantors, in each case subject to exceptions. Each of Bally’s Las Vegas and The Quad
are expected to be mortgaged under the Credit Agreement. The Cromwell will not be mortgaged but the Credit Agreement is secured by an
indirect pledge of the equity interests of the subsidiary of the Borrower that holds The Cromwell.
Restrictive Covenants and Other Matters
Under the Credit Agreement, the Borrower may be required to meet specified leverage ratios in order to take certain actions, such as incurring
certain debt or making certain restricted payments. In addition, the Credit Agreement includes negative covenants, subject to certain
exceptions, restricting or limiting the Borrower’s ability and the ability of its restricted subsidiaries to, among other things: (i) make
non-ordinary course dispositions of assets; (ii) make certain mergers and acquisitions; (iii) make dividends and stock repurchases and optional
redemptions (and optional prepayments) of subordinated debt; (iv) incur indebtedness; (v) make certain loans and investments; (vi) create liens;
(vii) transact with affiliates; (viii) change the business of the Borrower and its restricted subsidiaries; (ix) enter into sale/leaseback transactions;
(x) allow limitations on negative pledges and, in the case of its restricted subsidiaries, pay dividends or make distributions; (xi) change the
fiscal year and (xii) modify subordinated debt documents. The Credit Agreement also includes negative covenants with respect to Parent,
which will limit Parent’s ability to undertake certain specified activities, as further detailed therein.
Additionally, as previously disclosed, in connection with the transactions contemplated by the Transaction Agreement, Parent, the direct parent
of the Borrower, entered into a commitment letter (the “ Commitment Letter ”) with certain financial institutions (the “ Committed Lenders ”),
pursuant to which, subject to the conditions set forth therein, the Committed Lenders committed to provide a portion of the funds necessary to
consummate such transactions. On May 5, 2014, in connection with the funding of the First Closing Term Loan, Parent agreed to terminate the
Committed Lenders’ bridge financing commitments under the Commitment Letter, with related fees to be paid following the release of the
gross proceeds of the 2022 Notes (as defined below) from escrow to fund the transactions contemplated under the Amended Agreement. In
addition, Parent agreed that the Committed Lenders’ senior facilities commitments under the Commitment Letter will be terminated upon
execution of a credit agreement in respect of such senior facilities and the funding and deposit of the proceeds of term loans thereunder into
escrow pending consummation of the Second Closing. The fees payable to the Commitment Lenders in respect of the senior facilities will be
paid following the release of the gross proceeds of the term loans from escrow to fund the transactions contemplated under the Amended
Agreement.
Note Purchase Agreement
On May 5, 2014, Growth Partners entered into a Note Purchase Agreement (the “ Note Purchase Agreement ”) by and among CEOC, Growth
Partners and Caesars Growth Bonds, LLC (“ CG Bonds ”), a wholly owned subsidiary of Growth Partners. Pursuant to the Note Purchase
Agreement, Growth Partners (i) agreed to sell to CEOC the $427,319,000 principal amount of 5.625% senior notes of CEOC due 2015 (the “
2015 Notes ”) owned by CG Bonds at a price equal to $1,048.75 per $1,000 principal amount (the same price at which CEOC has agreed to
repurchase the 2015 Notes held by another significant holder of 2015 Notes) and (ii) committed to an order of new incremental term B-7 loans
under an accordion facility of CEOC’s Second Amended and Restated Credit Agreement, dated as of March 1, 2012, in an amount equal to the
sales proceeds of all of the 2015 Notes owned by CG Bonds (subject to bookrunner allocation).
The foregoing summary, does not purport to be complete and is qualified in its entirety by reference to the CAC Current Report on Form 8-K
filed on March 3, 2014, specifically to the terms of the Transaction Agreement attached as Exhibit 2.1 thereto, the Amendment attached hereto
as Exhibit 2.1, the Nevada Property Management Agreements attached hereto as Exhibits 10.1, 10.2 and 10.3 respectively, the Credit
Agreement attached hereto as Exhibit 10.4 and the Note Purchase Agreement attached hereto as Exhibit 10.5, each of which is incorporated
herein by reference.
Item 2.01 Completion of Acquisition or Disposition of Assets.
The information set forth under Item 1.01 is incorporated by reference herein into this Item 2.01.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
Assumption of The Cromwell Indebtedness
On May 5, 2014, pursuant to the terms of the Amended Agreement, Growth Partners, among other things, acquired The Cromwell which was
owned by Corner Investment Propco, LLC (“ Corner Investment Propco ”). Corner Investment Propco is party to that certain Credit
Agreement, dated as of November 2, 2012 (the “ Cromwell Credit Agreement ”), by and among CEC, Corner Investment Propco, as borrower,
the lenders party thereto from time to time, Credit Suisse AG, Cayman Islands Branch, as administrative agent (the “ Cromwell Administrative
Agent ”) and collateral agent, and the other parties party thereto, governing a $185.0 million secured term loan facility (the “ Cromwell Facility
”) used to fund the renovation of The Cromwell into a boutique lifestyle hotel that includes a dayclub/nightclub.
Interest
Borrowings under the Cromwell Facility bear interest at a rate equal to, at Corner Investment Propco’s option, (a) either (i) LIBOR determined
by reference to the costs of funds for eurodollar deposits for the interest period relevant to such borrowing, adjusted for certain additional costs,
subject to a floor of 1.25% or (ii) a base rate determined by reference to the highest of (A) the federal funds rate plus 0.50%, (B) the prime rate
as determined by the Cromwell Administrative Agent and (C) the three-month LIBOR rate plus 1.00%, subject to a floor equal to 1.00% plus
the one-month LIBOR rate, plus (b) an applicable margin. The applicable margin for LIBOR borrowings is 9.75% and the applicable margin
for base rate borrowings is 8.75%.
Amortization
After the completion of two full fiscal quarters after the commencement of operations at The Cromwell, the term loans under the Cromwell
Facility will require scheduled quarterly payments in amounts equal to 0.25% of the original aggregate principal amount of the term loans
under the Cromwell Facility, with the balance due at maturity. The term loans under the Cromwell Facility mature in 2019.
Collateral and Guarantors
The Cromwell Facility was borrowed by Corner Investment Propco and is required to be guaranteed by each future material, domestic
wholly-owned subsidiary of Corner Investment Propco (subject to exceptions) (the “ Cromwell Subsidiary Guarantors ”). The Cromwell
Facility is secured by a pledge of substantially all of the existing and future property and assets of Corner Investment Propco and the Cromwell
Subsidiary Guarantors, subject to certain exceptions.
CEC Completion Guarantee
In connection with the Cromwell Facility, CEC provided a completion guarantee to ensure prompt and complete performance to (i) complete
construction and pay all project costs for The Cromwell in accordance with the loan documents, (ii) provide the initial working capital specified
in the project budget for The Cromwell, and (iii) obtain all material permits and licenses necessary for the commencement of operations of The
Cromwell. The maximum liability under the completion guarantee is $20.0 million.
The foregoing description of the Cromwell Credit Agreement and the Cromwell Facility is only a summary, does not purport to be complete
and is qualified in its entirety by reference to the full text of the Cromwell Credit Agreement which is filed as Exhibit 10.6 hereto and is
incorporated herein by reference.
In addition, the information set forth under Item 1.01 regarding the First Closing Term Loan and the Credit Agreement is incorporated by
reference herein into this Item 2.03.
Item 8.01 Other Events
On May 6, 2014, in connection with the First Closing, the Company issued a press release announcing the transactions and agreements noted
herein. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
Existing Caesars Growth Properties Indenture
As previously disclosed, the Borrower and Caesars Growth Properties Finance, Inc. (together, the “ Issuers ”), issued $675.0 million aggregate
principal amount of their 9.375% second-priority senior secured notes due 2022 (the “ 2022 Notes ”) pursuant to an indenture dated as of
April 17, 2014, among the Issuers and U.S. Bank National Association, as trustee (the “ Indenture ”). The Issuers deposited the gross proceeds
of the offering of the 2022 Notes, together with additional amounts necessary to redeem the 2022 Notes, if applicable, into a segregated escrow
account until the date that certain escrow conditions are satisfied (the “ Escrow Release Date ”). The Indenture provides that, among other
things, prior to the Escrow Release Date, the Issuers will not own, hold or otherwise have any interest in any assets other than the escrow
account and cash or cash equivalents (the “ Pre-Escrow Release Covenant ”). In connection with the First Closing, the Issuers are currently not
in compliance with the Pre-Escrow Release Covenant. The Issuers intend to be in compliance with the Indenture prior to such default becoming
an event of default under the Indenture by either
consummating the Second Closing and releasing the gross proceeds of the notes from escrow or, following receipt of gaming and other
required governmental approvals, transferring the assets related to the First Closing to another entity. There can be no assurances, however, that
the Issuers will be successful in consummating the Second Closing or transferring such assets, and curing such default.
Forward-Looking Statements
This filing contains or may contain “forward-looking statements” intended to qualify for the safe harbor from liability established by the
Private Securities Litigation Reform Act of 1995. You can identify these statements by the fact that they do not relate strictly to historical or
current facts. These statements contain words such as “may,” “will,” “project,” “might,” “expect,” “believe,” “anticipate,” “intend,” “could,”
“would,” “estimate,” “continue,” or “pursue,” or the negative of these words or other words or expressions of similar meaning may identify
forward-looking statements and are found at various places throughout this filing. These forward-looking statements, including, without
limitation, those relating to future actions, new projects, strategies, future performance, the outcome of contingencies such as legal proceedings,
and future financial results, wherever they occur in this filing, are based on our current expectations about future events and are necessarily
estimates reflecting the best judgment of CAC’s management and involve a number of risks and uncertainties that could cause actual results to
differ materially from those suggested by the forward-looking statements.
Investors are cautioned that forward-looking statements are not guarantees of future performance or results and involve risks and uncertainties
that cannot be predicted or quantified, and, consequently, the actual performance of CAC may differ materially from those expressed or
implied by such forward-looking statements. Such risks and uncertainties include, but are not limited to, the following factors, as well as other
factors described from time to time in CAC’s reports filed with the Securities and Exchange Commission (including the sections entitled “Risk
Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained therein):
•
the ability to satisfy the conditions to the closing with respect to the purchase Harrah’s New Orleans, including receipt of required
regulatory approvals;
•
the sale of the 2015 Notes to CEOC may not be consummated on the terms contemplated or at all;
•
the investment in new first lien debt of CEOC may not be consummated on the terms contemplated or at all;
•
the purchase of Harrah’s New Orleans may not be consummated on the terms contemplated or at all;
•
the ability to timely and cost-effectively integrate companies that Growth Partners acquires into its operations, including the three
Nevada properties;
•
construction factors, including delays, increased costs of labor and materials, availability of labor and materials, zoning issues,
environmental restrictions, soil and water conditions, weather and other hazards, site access matters, and building permit issues,
including construction of The Cromwell and the renovation of The Quad Resort & Casino;
•
CAC and Growth Partners’ dependence on CEC and its subsidiaries to provide support and services, as well as Growth Partners’
dependence on CEC’s senior management’s expertise and its participation in CEC’s Total Rewards loyalty program;
•
the effects of a default by CEC on certain debt obligations;
•
CEC’s interests may conflict with Growth Partners’ interests and may possibly keep all potential development opportunities for
itself;
•
the adverse effects if CEC or any of its subsidiaries were to file for bankruptcy;
•
the effects if a third-party successfully challenges CEC or its affiliates ownership of, or right to use, the intellectual property owned
or used by subsidiaries of CEC, which Caesars Interactive Entertainment, Inc. (“ CIE ”) licenses for use in its businesses;
•
CIE’s reliance on subsidiaries of CEC to obtain online gaming licenses in certain jurisdictions, such as New Jersey;
•
the adverse effects on CAC’s ability to comply with certain obligations imposed by federal securities law and certain debt
arrangements if it is determined that Deloitte & Touche LLP was not independent of CEC or Growth Partners;
•
the difficulty of operating Growth Partners’ business separately from CEC and managing that process effectively could take up a
significant amount of management’s time;
•
Growth Partners’ business model and short operating history;
•
Growth Partners’ ability to realize the anticipated benefits of current or potential future acquisitions, including the transactions
described herein;
•
the additional capital that Growth Partners may require to consummate the purchase of Harrah’s New Orleans and support business
growth may not be available on acceptable terms;
•
the adverse effects of extensive governmental regulation and taxation policies, which are applicable to Growth Partners, are
enforced;
•
the effects of local and national economic, credit and capital market conditions on the economy in general, and on the gaming
industry in particular;
•
the sensitivity of CAC’s business to reductions in discretionary consumer spending;
•
the rapidly growing and changing industry in which Growth Partners operates, such as CIE’s social and mobile games business and
internet gaming business;
•
any failure to protect Growth Partners’ trademarks or other intellectual property, such as CIE’s ownership of the WSOP trademark;
•
abnormal gaming holds (“gaming hold” is the amount of money that is retained by the casino from wagers by customers);
•
the effects of competition, including locations of competitors and operating and market competition, particularly the intense
competition Planet Hollywood faces from other hotel casino resorts in Las Vegas and Horseshoe Baltimore will face from other
regional casinos and resorts;
•
the uncertainty surrounding whether CIE’s games, such as Slotomania , will retain their popularity;
•
CIE’s ability to launch new games on new and emerging platforms;
•
CIE’s reliance on a small portion of its total players for nearly all of its revenue from its social and mobile games;
•
CAC’s ability to expand into international markets in light of additional business, regulatory, operational, financial and economic
risks associated with such expansion;
•
evolving regulations concerning the social and mobile games industry as well as data privacy, including, but not limited to, the
effect of U.S. and foreign laws, some of which are unsettled and still developing;
•
the low barriers to entry and intense competition of social and mobile games industry could have adverse effect on CIE and
Growth Partners;
•
evolving U.S. and foreign laws could subject CIE to claims and prevent CIE from providing its current games to players or to
modify its games;
•
the effect on Growth Partners’ business strategy if real money online poker is not legalized in states other than Delaware, Nevada
or New Jersey in the United States or is legalized in an unfavorable manner;
•
construction factors, including delays, increased costs of labor and materials, availability of labor and materials, zoning issues,
environmental restrictions, soil and water conditions, weather and other hazards, site access matters and building permit issues; and
•
political and economic uncertainty created by terrorist attacks and other acts of war or hostility;
You are cautioned to not place undue reliance on these forward-looking statements, which speak only as of the date of this filing. CAC
undertakes no obligation to publicly update or release any revisions to these forward-looking statements to reflect events or circumstances after
the date of this filing or to reflect the occurrence of unanticipated events, except as required by law.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits .
Exhibit
No.
2.1
Description
First Amendment to Transaction Agreement, dated May 5, 2014, by and among the Caesars Entertainment Corporation, Caesars
Entertainment Operating Company, Inc., Caesars License Company, LLC, Harrah’s New Orleans Management Company,
Corner Investment Company, LLC, 3535 LV Corp., Parball Corporation, JCC Holding Company II, LLC, Caesars Acquisition
Company, Caesars Growth Partners, LLC.
10.1
Management Agreement, dated May 5, 2014, by and between Cromwell Manager, LLC, Corner Investment Company, LLC,
and solely for purposes of Article VII and Sections 16.1.2, 17.5.5, 17.7.3, 17.7.4, 17.7.5, 18.3 and 19.2, Caesars License
Company, LLC.
10.2
Management Agreement, dated May 5, 2014, by and between The Quad Manager, LLC, 3535 LV NewCo, LLC, and solely for
purposes of Article VII and Sections 16.1.2, 17.5.5, 17.7.3, 17.7.4, 17.7.5, 18.3 and 19.2, Caesars License Company, LLC.
10.3
Management Agreement, dated May 5, 2014, by and between Bally’s Las Vegas Manager, LLC, Parball NewCo, LLC, and
solely for purposes of Article VII and Sections 16.1.2, 17.5.5, 17.7.3, 17.7.4, 17.7.5, 18.3 and 19.2, Caesars License Company,
LLC.
10.4
Credit Agreement, dated May 5, 2014, by and among Caesars Growth Properties Parent, LLC, Caesars Growth Properties
Holdings, LLC, the lenders party thereto and Credit Suisse AG, Cayman Islands Branch, as administrative agent.
10.5
Note Purchase Agreement, dated May 5, 2014, by and among Caesars Entertainment Operating Company, Inc., Caesars Growth
Partners, LLC and Caesars Growth Bonds, LLC.
10.6
Credit Agreement, dated November 2, 2012, by and among Caesars Entertainment Corporation, Corner Investment Propco,
LLC, the lenders party thereto and Credit Suisse AG, Cayman Islands Branch, as administrative agent and collateral agent.
99.1
Press Release, dated May 6, 2014.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
CAESARS ACQUISITION COMPANY
Date: May 6, 2014
By:
Name:
Title:
/s/ C RAIG J. A BRAHAMS
Craig J. Abrahams
Chief Financial Officer
EXHIBIT INDEX
Exhibit
No.
2.1
Description
First Amendment to Transaction Agreement, dated May 5, 2014, by and among the Caesars Entertainment Corporation, Caesars
Entertainment Operating Company, Inc., Caesars License Company, LLC, Harrah’s New Orleans Management Company,
Corner Investment Company, LLC, 3535 LV Corp., Parball Corporation, JCC Holding Company II, LLC, Caesars Acquisition
Company, Caesars Growth Partners, LLC.
10.1
Management Agreement, dated May 5, 2014, by and between Cromwell Manager, LLC, Corner Investment Company, LLC,
and solely for purposes of Article VII and Sections 16.1.2, 17.5.5, 17.7.3, 17.7.4, 17.7.5, 18.3 and 19.2, Caesars License
Company, LLC.
10.2
Management Agreement, dated May 5, 2014, by and between The Quad Manager, LLC, 3535 LV NewCo, LLC, and solely for
purposes of Article VII and Sections 16.1.2, 17.5.5, 17.7.3, 17.7.4, 17.7.5, 18.3 and 19.2, Caesars License Company, LLC.
10.3
Management Agreement, dated May 5, 2014, by and between Bally’s Las Vegas Manager, LLC, Parball NewCo, LLC, and
solely for purposes of Article VII and Sections 16.1.2, 17.5.5, 17.7.3, 17.7.4, 17.7.5, 18.3 and 19.2, Caesars License Company,
LLC.
10.4
Credit Agreement, dated May 5, 2014, by and among Caesars Growth Properties Parent, LLC, Caesars Growth Properties
Holdings, LLC, the lenders party thereto and Credit Suisse AG, Cayman Islands Branch, as administrative agent.
10.5
Note Purchase Agreement, dated May 5, 2014, by and among Caesars Entertainment Operating Company, Inc., Caesars Growth
Partners, LLC and Caesars Growth Bonds, LLC.
10.6
Credit Agreement, dated November 2, 2012, by and among Caesars Entertainment Corporation, Corner Investment Propco,
LLC, the lenders party thereto and Credit Suisse AG, Cayman Islands Branch, as administrative agent and collateral agent.
99.1
Press Release, dated May 6, 2014.
Exhibit 2.1
FIRST AMENDMENT TO TRANSACTION AGREEMENT
This FIRST AMENDMENT TO TRANSACTION AGREEMENT , dated as of May 5, 2014 (this “ Amendment ”), is entered into by
and among Caesars Entertainment Corporation, a Delaware corporation, Caesars Entertainment Operating Company, Inc., a Delaware
corporation, Caesars License Company, LLC, a Nevada limited liability company, Harrah’s New Orleans Management Company, a Nevada
corporation, Parball Corporation, a Nevada corporation, 3535 LV Corp., a Nevada corporation, Corner Investment Company, LLC, a Nevada
limited liability company, JCC Holding Company II, LLC, a Delaware limited liability company, Caesars Acquisition Company, a Delaware
corporation, and Caesars Growth Partners, LLC, a Delaware limited liability company.
WHEREAS , reference is hereby made to that certain Transaction Agreement, dated as of March 1, 2014, by and among the parties to
this Amendment (together with the Annexes, Exhibits, Schedules, and attachments thereto, and as it may be amended, supplemented, modified
or restated, from time to time, the “ Transaction Agreement ”);
WHEREAS , capitalized terms used but not defined in this Amendment shall have the meanings ascribed to them in the Transaction
Agreement; and
WHEREAS , the Transaction Agreement (prior to giving effect to this Amendment) was drafted in contemplation of a contemporaneous
closing of the First Transaction (as defined in this Amendment) and the Second Transaction (as defined in this Amendment). The Parties desire
to amend the terms and conditions of the Transaction Agreement to provide for the separate closings of the First Transaction and the Second
Transaction, as more fully described in this Amendment, and it is the Parties’ intention that, after giving effect to this Amendment, the
Transaction Agreement shall be interpreted in a manner consistent with the separate closings of the First Transaction and the Second
Transaction.
NOW, THEREFORE , in consideration of the foregoing promises and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties agree as follows:
Section 1.1 Amendments to Recitals of the Transaction Agreement .
(a) The second recital to the Transaction Agreement is hereby amended and restated in its entirety as follows:
WHEREAS , the Caesars Parties will effect a restructuring (the “ Restructuring Transactions ”) pursuant to which, among other
things, (i) CEOC will contribute (a) prior to the First Closing, all of the outstanding equity interests in CIC to a newly formed and wholly
owned limited liability company (“ CIC NewCo Parent ”); and (b) prior to the Second Closing, all of the outstanding equity interests in
JCC Holding to a newly formed and wholly owned limited liability company (“ JCC NewCo Parent ” and, together with CIC NewCo
Parent, the “ NewCo Parent Sellers ”); (ii) (a) prior to the First Closing, 3535 LV will contribute all of its assets and liabilities (except as
provided in Section 8.14(b) )
and assign the employment of, and any and all employment-related obligations (including but not limited to employment Contracts and
any Labor Agreements to which 3535 LV is party) of, its employees (the “ 3535 LV Assigned Employment Obligations ”) to a newly
formed and wholly owned limited liability company (the “ 3535 LV NewCo Subsidiary Seller ”), (b) prior to the First Closing, Parball
and each Subsidiary of Parball will contribute all of their respective assets (other than, in the case of Parball, (i) the equity interests of its
Subsidiaries, and (ii) all of its right, title and interest in the Laundry Facility (as defined below)) and liabilities (except as provided in
Section 8.14(b) ) and assign the employment of, and any and all employment-related obligations (including but not limited to
employment Contracts and any Labor Agreements to which Parball or any Subsidiary of Parball is party) of, its employees (collectively,
the “ Parball Assigned Employment Obligations ” and together with the 3535 LV Assigned Employment Obligations, collectively the “
Assigned Employment Obligations ”) to newly formed and wholly owned limited liability companies (collectively, the “ Parball NewCo
Subsidiary Sellers ” and together with the 3535 LV NewCo Subsidiary Seller, the “ NewCo Subsidiary Sellers ”, and together with the
NewCo Parent Sellers, the “ NewCo Sellers ”) and (c) immediately following such contributions by each of 3535 LV, Parball and each
Subsidiary of Parball, the NewCo Subsidiary Sellers will contribute all of their respective assets and liabilities and the applicable
Assigned Employment Obligations to newly formed and wholly owned limited liability companies (such newly formed limited liability
companies wholly owned by the Parball NewCo Subsidiary Sellers and the 3535 LV NewCo Subsidiary Seller respectively, collectively
the “ NewCo LLCs ”); and (iii) the Caesars Parties will form or cause to be formed, prior to the First Closing, the Quad Manager, the
Cromwell Manager and the Bally’s Manager, in each case, all as more fully described on Exhibit A hereto;
(b) The third recital to the Transaction Agreement is hereby amended and restated in its entirety as follows:
WHEREAS , subject to the conditions set forth herein, including receipt of the Gaming Licenses required therefor, Growth
Partners or one or more of its designated direct or indirect Subsidiaries will purchase the following assets from Subsidiaries of Parent:
(i) (a) from CIC NewCo Parent, all of the outstanding equity interests in CIC (the “ Cromwell Interests ”), (b) from the 3535 LV NewCo
Subsidiary Seller, all of the outstanding equity interests in 3535 LV NewCo (the “ Quad Interests ”), (c) from the Parball NewCo
Subsidiary Sellers, all of the outstanding equity interests in the Parball NewCos (collectively, the “ Bally’s Interests ”), (d) from the Quad
Manager, the Cromwell Manager and the Bally’s Manager, the Management Fee Stream with respect to The Quad, The Cromwell and
Bally’s, respectively, and (e) from CLC, the Caesars Parties and their respective Subsidiaries, the Purchased Intellectual Property related
to each of The Quad, The Cromwell and Bally’s (such assets described in this clause (i), collectively, the “ First Transaction Purchased
Assets ”), and (ii) (a) from JCC NewCo Parent, all the outstanding equity interests in JCC Holding (the “ Harrah’s Interests ”), (b) from
the New Orleans Property Manager, the Management Fee
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Stream with respect to Harrah’s, and (c) from CLC, the Caesars Parties and their respective Subsidiaries, the Purchased Intellectual
Property related to Harrah’s (such assets described in this clause (ii), collectively, the “ Second Transaction Purchased Assets ”);
(c) The following paragraph is hereby added as the fourth recital to the Transaction Agreement:
WHEREAS , provided that Growth Partners has not identified any material Environmental Condition or material Environmental
Liability related to the Laundry Facility, on the 30th Business Day following the First Closing Date, or if sooner, within 15 Business Days
of receiving notice from Growth Partners to do so, (i) Parball and its applicable Subsidiaries will contribute to the applicable Parball
NewCo Subsidiary Seller all of their right, title and interest in and to the Laundry Facility; (ii) immediately following the contribution
made in Section (i) above, the applicable Parball NewCo Subsidiary Seller will contribute to a newly formed and wholly owned limited
liability company (the “ Laundry NewCo ”), all of their right, title and interest in and to the Laundry Facility, and (iii) immediately
following the contributions made in Sections (i) and (ii) above, the applicable Parball NewCo Subsidiary Seller will sell, transfer, convey,
assign and deliver, free and clear of all Liens (other than Permitted Liens), to Growth Partners or its designated direct or indirect
Subsidiary, and Growth Partners or such designated direct or indirect Subsidiary will acquire from the applicable Parball NewCo
Subsidiary Seller, free and clear of all Liens (other than Permitted Liens), all of such Parball NewCo Subsidiary Seller’s right, title and
interest in and to the Laundry NewCo (the contributions and conveyance described in Sections (i), (ii) and (iii) above, collectively, the “
Laundry Facility Conveyance ”; and
Section 1.2 Amendments to Defined Terms of the Transaction Agreement .
(a) The following defined terms in Section 1.1 of the Transaction Agreement are hereby amended and restated in their entirety as
follows:
“ Base Amount ” means the sum of the First Transaction Base Amount and the Second Transaction Base Amount.
“ Casino ” or “ Casinos ” means, individually or collectively, (i) with respect to the First Transaction, The Cromwell, The Quad and
Bally’s and (ii) with respect to the Second Transaction, Harrah’s.
“ Closing ” means (i) with respect to the First Transaction, the First Closing and (ii) with respect to the Second Transaction, the
Second Closing.
“ Closing Date ” means (i) with respect to the First Transaction, the First Closing Date and (ii) with respect to the Second
Transaction, the Second Closing Date.
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“ Closing Payment ” means (i) with respect to the First Transaction, the First Transaction Closing Payment and (ii) with respect to
the Second Transaction, the Second Transaction Closing Payment.
“ Deemed Purchased Assets ” means (i) with respect to the First Transaction, the First Transaction Deemed Purchased Assets and
(ii) with respect to the Second Transaction, the Second Transaction Deemed Purchased Assets.
“ Estimated Closing Payment ” means (i) with respect to the First Transaction, the First Transaction Estimated Closing Payment and
(ii) with respect to the Second Transaction, the Second Transaction Estimated Closing Payment.
“ Estimated Closing Statement ” means (i) with respect to the First Transaction, the First Transaction Estimated Closing Statement
and (ii) with respect to the Second Transaction, the Second Transaction Estimated Closing Statement.
“ Final Closing Payment ” means (i) with respect to the First Transaction, the First Transaction Final Closing Payment and (ii) with
respect to the Second Transaction, the Second Transaction Final Closing Payment.
“ Final Closing Statement ” means (i) with respect to the First Transaction, the First Transaction Final Closing Statement and
(ii) with respect to the Second Transaction, the Second Transaction Final Closing Statement.
“ Pre-Closing Quad Renovation Expenditures ” means the costs and expenses incurred by any Caesars Party or their respective
Affiliates in connection with the construction and renovation of The Quad between February 6, 2014 and the First Closing Date pursuant
to and in accordance with the Quad Renovation Documents, in each case, to the extent such costs and expenses are not and do not
become Liabilities of any Purchased Entity or its Subsidiaries at or following the First Closing.
“ Purchase Price ” means (i) with respect to the First Transaction, the First Transaction Purchase Price and (ii) with respect to the
Second Transaction, the Second Transaction Purchase Price.
“ Purchased Assets ” means (i) with respect to the First Transaction, the First Transaction Purchased Assets and (ii) with respect to
the Second Transaction, the Second Transaction Purchased Assets.
“ Purchased Company Party Interests ” means, collectively, the Cromwell Interests and the Harrah’s Interests.
“ Purchased Entities ” means (i) with respect to the First Transaction, the First Transaction Purchased Entities and (ii) with respect
to Second Transaction, the Second Transaction Purchased Entity.
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“ Purchased Equity Interests ” means (i) with respect to the First Transaction, the First Transaction Purchased Equity Interests and
(ii) with respect to the Second Transaction, the Second Transaction Purchased Equity Interests.
“ Purchased Interests ” means (i) with respect to the First Transaction, the First Transaction Purchased Interests and (ii) with respect
to Second Transaction, the Second Transaction Purchased Interests.
“ Specified Purchased Entities ” means, (i) with respect to the First Transaction, collectively, (a) 3535 LV NewCo and (b) Parball
NewCo, and (ii) with respect to the Second Transaction, JCC Holding.
“ Target Net Working Capital ” means (i) with respect to Parball NewCo, $(10,864,265), (ii) with respect to 3535 LV NewCo,
$(4,785,988), and (iii) with respect to JCC Holding, $(11,936,582).
(b) The following definitions are hereby added to Section 1.1 of the Transaction Agreement in the appropriate alphabetical order:
“ 3535 LV Assigned Employment Obligations ” has the meaning set forth in the recitals.
“ 3535 LV NewCo Subsidiary Seller ” has the meaning set forth in the recitals.
“ Additional Commitment Lenders ” means any lender, lead arranger and/or bookrunner who may be added as a party to the
Commitment Letter after the date of this Agreement.
“ Amendment ” means that certain First Amendment to Transaction Agreement, dated as of May 5, 2014, by and among Parent,
CEOC, CLC, New Orleans Property Manager, the Company Parties, CAC and Growth Partners.
“ Bally’s ” means the hotel and casino commonly known as Bally’s Las Vegas (located at 3645 S Las Vegas Boulevard, Las Vegas,
NV 89109).
“ Bally’s Interests ” has the meaning set forth in the recitals.
“ Cromwell Interests ” has the meaning set forth in the recitals.
“ First Closing ” has the meaning set forth in Section 4.1(a) .
“ First Closing Date ” means the date hereof.
“ First Transaction ” means the transactions contemplated by this Agreement with respect to the First Transaction Purchased
Interests and each of The Quad, The Cromwell and Bally’s.
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“ First Transaction Base Amount ” means the amount identified as the “First Transaction Base Amount” on Exhibit I attached to the
Amendment.
“ First Transaction Closing Payment ” has the meaning set forth in Section 3.1(a) .
“ First Transaction Deemed Purchased Assets ” has the meaning set forth in Section 3.5(a) .
“ First Transaction Estimated Closing Payment ” has the meaning set forth in Section 3.2 .
“ First Transaction Estimated Closing Statement ” has the meaning set forth in Section 3.2 .
“ First Transaction Final Closing Payment ” has the meaning set forth in Section 3.4(a) .
“ First Transaction Final Closing Statement ” has the meaning set forth in Section 3.4(a) .
“ First Transaction Purchase Price ” has the meaning set forth in Section 3.4(a) .
“ First Transaction Purchased Assets ” has the meaning set forth in the recitals.
“ First Transaction Purchased Entities ” means collectively, CIC, 3535 LV NewCo and the Parball NewCos.
“ First Transaction Purchased Equity Interests ” means, collectively, the Cromwell Interests, the Quad Interests and the Bally’s
Interests.
“ First Transaction Purchased Interests ” means, collectively, the First Transaction Purchased Assets and all of the assets of each of
(i) 3535 LV NewCo, (ii) CIC and its Subsidiaries and (iii) the Parball NewCos.
“ Harrah’s ” means the hotel and casino commonly known as Harrah’s New Orleans (located at 228 Poydras St., New Orleans, LA
70130).
“ Harrah’s Interests ” has the meaning set forth in the recitals.
“ JCC NewCo Parent ” has the meaning set forth in the recitals.
“ Laundry Facility ” means that certain real property more particularly described on Exhibit K attached to the Amendment, together
with any Improvements thereon.
“ Laundry Facility Conveyance ” has the meaning set forth in the recitals.
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“ Laundry NewCo ” has the meaning set forth in the recitals.
“ Parball Assigned Employment Obligations ” has the meaning set forth in the recitals.
“ Parball NewCo Subsidiary Sellers ” has the meaning set forth in the recitals.
“ Parball NewCos ” means, collectively, Parball NewCo and each other NewCo LLC into which all of the assets and liabilities of
Parball’s Subsidiaries were indirectly contributed.
“ Quad Interests ” has the meaning set forth in the recitals.
“ Second Closing ” has the meaning set forth in Section 4.1(b) .
“ Second Closing Date ” means the date on which the Second Closing occurs.
“ Second Closing Termination ” has the meaning set forth in Section 10.1 .
“ Second Transaction ” means the transactions contemplated by this Agreement with respect to the Second Transaction Purchased
Interests and Harrah’s.
“ Second Transaction Base Amount ” means the amount identified as the “Second Transaction Base Amount” on Exhibit I attached
to the Amendment.
“ Second Transaction Closing Payment ” has the meaning set forth in Section 3.1(a) .
“ Second Transaction Deemed Purchased Assets ” has the meaning set forth in Section 3.5(a) .
“ Second Transaction Estimated Closing Payment ” has the meaning set forth in Section 3.2 .
“ Second Transaction Estimated Closing Statement ” has the meaning set forth in Section 3.2 .
“ Second Transaction Final Closing Payment ” has the meaning set forth in Section 3.4(a) .
“ Second Transaction Final Closing Statement ” has the meaning set forth in Section 3.4(a) .
“ Second Transaction Purchase Price ” has the meaning set forth in Section 3.4(a) .
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“ Second Transaction Purchased Assets ” has the meaning set forth in the recitals.
“ Second Transaction Purchased Entity ” means JCC Holding.
“ Second Transaction Purchased Equity Interests ” means the Harrah’s Interests.
“ Second Transaction Purchased Interests ” means, collectively, the Second Transaction Purchased Assets and all of the assets of
JCC Holding and its Subsidiaries.
Section 1.3 Amendments to Section 1.2 of the Transaction Agreement . Section 1.2 of the Transaction Agreement is amended by
inserting the following immediately after the last sentence thereof:
All references to the term “Agreement” shall be interpreted to mean the Agreement, as amended by the Amendment. Without
limiting the foregoing, all provisions of this Agreement (other than those provisions which are otherwise expressly amended and restated
as set forth in the Amendment) that refer to any aspect of the First Transaction and the Second Transaction collectively, shall be
interpreted to refer to such aspect of the First Transaction or the Second Transaction on a separate and distinct basis, with such other
interpretive changes as may be necessary or appropriate to give effect to the intention of the Parties as set forth in the Amendment.
Section 1.4 Amendments to Article II of the Transaction Agreement . Section 2.1 of the Transaction Agreement is hereby amended
and restated in its entirety as follows:
Purchased Assets . Upon the terms and subject to the conditions of this Agreement, including the receipt of all applicable Gaming
Licenses, on (x) the First Closing Date, the applicable Seller shall sell, transfer, convey, assign and deliver to Growth Partners or one or
more of its designated direct or indirect Subsidiaries, and Growth Partners or such designated direct or indirect Subsidiaries shall
purchase and acquire from the applicable Seller, free and clear of all Liens (other than Permitted Liens), all of such Seller’s right, title and
interest in and to the First Transaction Purchased Assets, in consideration for the payment by Growth Partners of the First Transaction
Purchase Price, and (y) the Second Closing Date, the applicable Seller shall sell, transfer, convey, assign and deliver to Growth Partners
or one or more of its designated direct or indirect Subsidiaries, and Growth Partners or such designated direct or indirect Subsidiaries
shall purchase and acquire from the applicable Seller, free and clear of all Liens (other than Permitted Liens), all of such Seller’s right,
title and interest in and to the Second Transaction Purchased Assets, in consideration for the payment by Growth Partners of the Second
Transaction Purchase Price. Notwithstanding anything to the contrary contained herein, provided that Growth Partners has not identified
any material Environmental Condition or material
8
Environmental Liability related to the Laundry Facility, on the 30th Business Day following the First Closing Date, or if sooner, within
15 Business Days of receiving notice from Growth Partners to do so, the Caesars Parties shall cause the applicable Parball NewCo Seller
to complete the Laundry Facility Conveyance, in consideration for the payment by Growth Partners of the Purchase Price paid hereunder.
Section 1.5 Amendments to Article III of the Transaction Agreement .
(a) Section 3.1(a) of the Transaction Agreement is hereby amended and restated in its entirety as follows:
Closing Payment . As consideration for the transactions contemplated by this Agreement, (i) at the First Closing, Growth Partners
shall pay or cause to be paid to the applicable Sellers or their designee(s), by wire transfer of immediately available funds, an aggregate
amount equal to the sum of (a) the First Transaction Base Amount, plus (b) the First Transaction Estimated Closing Payment (which can
be a positive or negative number), plus (c) the Estimated Pre-Closing Quad Renovation Expenditures, minus (d) the Estimated Closing
Indebtedness related to the First Transaction Purchased Entities (the resulting amount, the “ First Transaction Closing Payment ”) and
(ii) at the Second Closing, Growth Partners shall pay or cause to be paid to the applicable Sellers or their designee(s), by wire transfer of
immediately available funds, an aggregate amount equal to the sum of (a) the Second Transaction Base Amount, plus (b) the Second
Transaction Estimated Closing Payment (which can be a positive or negative number), minus (c) the Estimated Closing Indebtedness
related to the Second Transaction Purchased Entity (the resulting amount, the “ Second Transaction Closing Payment ”).
(b) Section 3.1(b) of the Transaction Agreement is hereby amended and restated in its entirety as follows:
Flow of Funds . With respect to the First Closing, prior to, and with respect to the Second Closing, at least three (3) days prior to, a
Closing Date, Sellers shall deliver to Growth Partners a memorandum setting forth the accounts and wire instructions of Sellers or their
designee(s) for purposes of funding the Closing Payment (each, a “ Flow of Funds ”).
(c) Section 3.2 of the Transaction Agreement is hereby amended and restated in its entirety as follows:
Estimated Closing Statements . With respect to the First Closing, prior to, and with respect to the Second Closing, no less than three
(3) nor more than five (5) Business Days prior to, a Closing Date, CEOC shall prepare and deliver to Growth Partners a written closing
statement (such written closing statement with respect to the First Transaction, the “ First Transaction Estimated Closing Statement ”, and
with respect to the Second Transaction, the “ Second Transaction
9
Estimated Closing Statement ”), including (a) the Estimated Closing Net Working Capital of each applicable Specified Purchased Entity
including the resulting Estimated Closing Net Working Capital Overage (if any) or Estimated Closing Net Working Capital Shortage (if
any) for all applicable Specified Purchased Entities (in the aggregate, in the case of the First Transaction Estimated Closing Statement),
which shall be prepared in good faith and on a basis consistent with the preparation of the Financial Statements of the relevant Company
Party and on a basis consistent with the calculation of Net Working Capital for the relevant Specified Purchased Entity as set forth on
Exhibit C , (b) the Estimated Closing Cash of each applicable Specified Purchased Entity (and, in the case of the First Transaction
Estimated Closing Statement, if applicable, CIC), including the resulting Estimated Closing Cash Overage (if any) or Estimated Closing
Cash Shortage (if any) for all applicable Specified Purchased Entities (and, in the case of the First Transaction Estimated Closing
Statement, if applicable, CIC) (in the aggregate, in the case of the First Estimated Closing Statement), and (c) a reasonably detailed
schedule setting forth (i) the Estimated Pre-Closing Quad Renovation Expenditures (in the case of the First Estimated Closing Statement)
and (ii) the applicable Estimated Closing Indebtedness, in each case, including appropriate backup documentation to support such
amounts. Any Estimated Closing Net Working Capital Overage (in the aggregate, if applicable) or Estimated Closing Cash Overage (in
the aggregate, if applicable) set forth in the applicable Estimated Closing Statement shall increase the amount paid by Growth Partners at
the applicable Closing and any Estimated Closing Net Working Capital Shortage (in the aggregate, if applicable) or Estimated Closing
Cash Shortage (in the aggregate, if applicable) set forth in the applicable Estimated Closing Statement shall reduce the amount payable to
the applicable Sellers at the applicable Closing, in each case, pursuant to Section 3.1 hereof (the amount of such increase or decrease with
respect to the First Transaction, the “ First Transaction Estimated Closing Payment ”, and with respect to the Second Transaction, the “
Second Transaction Estimated Closing Payment ”).
(d) Section 3.4(a) of the Transaction Agreement is hereby amended and restated in its entirety as follows:
No more than ninety (90) days after each of (x) the First Closing Date and (y) the Second Closing Date, Growth Partners shall
prepare and deliver to CEOC a written statement (such written closing statement with respect to the First Transaction, the “ First
Transaction Final Closing Statement ”, and with respect to the Second Transaction, the “ Second Transaction Final Closing Statement ”),
including (i) the Final Closing Net Working Capital for each applicable Specified Purchased Entity, including the resulting Final Closing
Net Working Capital Overage (if any) or Final Closing Net Working Capital Shortage (if any) for all such Specified Purchased Entities
(in the aggregate, in the case of the First Transaction Final Closing Statement), and including a detailed breakdown of the various
amounts of each component of Net Working Capital for each such Specified Purchased Entity, which shall be prepared in good faith and
on a basis consistent with the preparation of the Financial Statements for the relevant
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Company Party and the calculation of Net Working Capital for the relevant Specified Purchased Entity as set forth on Exhibit C , (ii) the
Final Closing Cash for each applicable Specified Purchased Entity (and, in the case of the First Transaction Final Closing Statement, if
applicable, CIC), including the resulting Final Closing Cash Overage (if any) or Final Closing Cash Shortage (if any) for all applicable
Specified Purchased Entities (and, in the case of the First Transaction Final Closing Statement, if applicable, CIC) (in the aggregate, in
the case of the First Transaction Final Closing Statement) and (iii) a reasonably detailed schedule setting forth (x) the Final Pre-Closing
Quad Renovation Expenditures (in the case of the First Transaction Final Closing Statement), including the resulting Final Pre-Closing
Quad Renovation Expenditures Overage (if any) or Final Pre-Closing Quad Renovation Expenditures Shortage (if any), and (y) the Final
Closing Indebtedness related to each applicable Purchased Entity (in the aggregate), including the resulting Final Closing Indebtedness
Overage (if any) (in the aggregate) or Final Closing Indebtedness Shortage (if any) (in the aggregate), in each case, including appropriate
backup documentation to support such amounts. Any such amounts determined pursuant to the First Transaction Final Closing Statement
shall be paid to either CEOC or Growth Partners pursuant to Section 3.4(c) hereof (the “ First Transaction Final Closing Payment ”). Any
such amounts determined pursuant to the Second Transaction Final Closing Statement shall be paid to either CEOC or Growth Partners
pursuant to Section 3.4(c) hereof (the “ Second Transaction Final Closing Payment ”). The aggregate of the First Transaction Closing
Payment, as adjusted by the First Transaction Final Closing Payment, is the “ First Transaction Purchase Price ”. The aggregate of the
Second Transaction Closing Payment, as adjusted by the Second Transaction Final Closing Payment, is the “ Second Transaction
Purchase Price ”.
(e) Section 3.5(a) of the Transaction Agreement is hereby amended and restated in its entirety as follows:
CEOC and Growth Partners agree that the First Transaction shall be treated for federal and applicable state and local income or
franchise Tax purposes as an acquisition of (i) the Management Fee Stream related to The Cromwell, The Quad and Bally’s, (ii) the
Purchased Intellectual Property related to The Cromwell, The Quad and Bally’s, (iii) a prepaid license with respect to the Customer
Related Intangible Rights described in the New Property Management Agreements with respect to The Cromwell, The Quad and Bally’s,
(iv) the Managed Facility Guest Data related to the First Transaction, as described in the Property Management Agreement Term Sheet
and pursuant to the terms of the applicable Property Management Agreements with respect to The Cromwell, The Quad and Bally’s, and
(v) all of the assets of each First Transaction Purchased Entity and those Subsidiaries of the First Transaction Purchased Entities
classified as disregarded entities for U.S. federal income Tax purposes (the foregoing clauses (i) through (v), collectively, the “ First
Transaction Deemed Purchased Assets ”).
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CEOC and Growth Partners agree that the Second Transaction shall be treated for federal and applicable state and local income or
franchise Tax purposes as an acquisition of (i) the Management Fee Stream related to Harrah’s, (ii) the Purchased Intellectual Property
related to Harrah’s, (iii) a prepaid license with respect to the Customer Related Intangible Rights described in the Amended and Restated
New Orleans Management Agreement, (iv) the Managed Facility Guest Data related to the Second Transaction, as described in the
Property Management Agreement Term Sheet and pursuant to the terms of the Amended and Restated New Orleans Management
Agreement, and (v) all of the assets of JCC Holding and those Subsidiaries of JCC Holding classified as disregarded entities for U.S.
federal income Tax purposes (the foregoing clauses (i) through (v), collectively, the “ Second Transaction Deemed Purchased Assets ”).
Section 1.6 Amendments to Article IV of the Transaction Agreement .
(a) Section 4.1 of the Transaction Agreement is hereby amended and restated in its entirety as follows:
The closings of (a) the First Transaction (the “ First Closing ”) and (b) the Second Transaction (the “ Second Closing ”) shall each
take place at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, 300 South Grand Avenue, Suite 3400, Los Angeles, CA 90071,
or such other place as the Parties may mutually agree, on the third (3rd) Business Day (or on such other date as is agreed to among the
Parties) following the satisfaction or waiver of the conditions set forth in Article IX with respect to each Closing (other than any
conditions that by their terms are to be satisfied or waived at the applicable Closing, but subject to the satisfaction or waiver of such
conditions).
Section 1.7 Amendments to Article VI of the Transaction Agreement .
(a) Section 6.4 of the Transaction Agreement is hereby amended and restated in its entirety as follows:
Except with respect to Owned Real Property, Leased Real Property and the Laundry Facility (which are addressed in Section 6.14
below), each Company Party or their respective Subsidiaries own, and following the Restructuring Transactions, each Purchased Entity
will own, good and marketable title to, or hold pursuant to valid and enforceable leases, all of the assets shown to be owned by them on
the Financial Statements for such Company Party (except for such property sold or disposed of subsequent to the date thereof in the
ordinary course of business) free and clear of all Liens (other than Permitted Liens).
(b) The Transaction Agreement is hereby amended by inserting the paragraph below as Section 6.14(d) of the Transaction
Agreement:
Laundry Facility . All representations and warranties contained in this Article 6 relating to the Owned Real Property also shall
be true and correct with respect to the Laundry Facility as of the date hereof and as of the date that the Laundry Facility Conveyance
is completed.
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Section 1.8 Amendments to Article VII of the Transaction Agreement .
(a) Section 7.8 of the Transaction Agreement is hereby amended by deleting the parenthetical containing the definition of
“Financing Lenders” and replacing such deleted parenthetical with the following:
(collectively, together with any Additional Commitment Lenders, and together with their respective Representatives, the “
Financing Lenders ”)
Section 1.9 Amendments to Article VIII of the Transaction Agreement .
(a) Section 8.14(a) of the Transaction Agreement is hereby amended by deleting the words “Not less than five (5) Business Days
prior” from the first sentence thereof and inserting the word “Prior” in the place of such deleted words.
(b) Section 8.16(a) of the Transaction Agreement is hereby amended by deleting the word “supervisory” from the first sentence
thereof.
(c) Section 8.16(a) of the Transaction Agreement is hereby amended by inserting the following after the word “Employees” and
before the period at the end of the second sentence thereof:
, except that, notwithstanding anything in this Agreement to the contrary, the transfers of the employment of, and all
employment-related obligations (including but not limited to employment Contracts) of certain Management Employees at or prior to
(x) the First Closing (in the case of The Quad, The Cromwell and Bally’s) and (y) the Second Closing (in the case of Harrah’s) shall in all
cases be effected in substantially the manner set forth in, and in accordance with, the Shared Employee Services Agreement in the form
attached as Exhibit L to the Amendment.
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Section 1.10 Amendments to Article IX of the Transaction Agreement .
(a) The introductory clause of Section 9.1 of the Transaction Agreement is hereby amended and restated in its entirety as follows:
Conditions to Obligations of Each Party to Close . The respective obligations of each Party to effect (x) the First Transaction shall
be subject to the satisfaction or waiver, at or prior to the First Closing Date, and (y) the Second Transaction shall be subject to the
satisfaction or waiver, at or prior to the Second Closing Date, of each of the following conditions (in the case of the foregoing clauses
(x) and (y), only to the extent that such conditions apply to the First Transaction or the Second Transaction, as applicable):
(b) Section 9.1(c) of the Transaction Agreement is hereby amended and restated in its entirety as follows:
Financial Advisor Opinions . The Board of Directors of Parent and the special committee of the Board of Directors of Parent shall
have received, as of a date that is reasonably proximate to each of the First Closing Date (for purposes of the opinions given with respect
to the First Transaction pursuant to this Section 9.1(c) ) and the Second Closing Date (for purposes of the opinions given with respect to
the Second Transaction pursuant to this Section 9.1(c) ), (x) the opinion described in Section 5.7(i)(b) with respect to (1) in the case of the
First Transaction, the First Transaction Base Amount and the aggregate of the enterprise value of the First Transaction Purchased Entities
and the value of the Management Fee Stream with respect to The Quad, The Cromwell and Bally’s, and (2) in the case of the Second
Transaction, the Second Transaction Base Amount and the aggregate of the enterprise value of the Second Transaction Purchased Entity
and the value of the Management Fee Stream with respect to Harrah’s, in the case of each of the opinions described in the foregoing
clauses (x)(1) and (x)(2) of this Section 9.1(c) respectively, in substantially the form delivered on or prior to the date hereof, and (y) an
opinion that (1) with respect to the First Transaction, collectively, (A) the sale of the First Transaction Purchased Assets in exchange for
the First Transaction Base Amount pursuant to this Agreement, and (B) the transactions contemplated by the Property Management
Agreements with respect to The Quad, The Cromwell and Bally’s and the Services Joint Venture Arrangements, are on terms that are
(i) no less favorable to CEOC or such relevant restricted subsidiary, as applicable, than would be obtained in a comparable arm’s length
transaction with a person that is not an affiliate and (ii) not materially less favorable to CEOC or such relevant restricted subsidiary, as
applicable, than those that could have been obtained in a comparable transaction by CEOC or such relevant restricted subsidiary with an
unrelated person, and (2) with respect to the Second Transaction, collectively, (A) the sale of the Second Transaction Purchased Assets in
exchange for the Second Transaction Base Amount pursuant to this Agreement, and (B) the transactions contemplated by the Amended
and Restated New Orleans Management Agreement and the Services Joint Venture Arrangements, are on terms that are (i) no less
favorable to CEOC or such relevant restricted subsidiary, as applicable, than would be obtained in a comparable arm’s length transaction
with a person that is not an affiliate and (ii) not materially less favorable to CEOC or such relevant restricted subsidiary, as applicable,
than those that could have been obtained in a comparable transaction by CEOC or such relevant restricted subsidiary with an unrelated
person in the case of clauses (x) and (y) of this Section 9.1(c) , either from the financial advisor named in Section 5.7 or such other
independent, nationally recognized financial advisor as selected by Parent and approved by Growth Partners (such approval not to be
unreasonably withheld, conditioned or delayed).
14
(c) The introductory clause of Section 9.2 of the Transaction Agreement is hereby amended and restated in its entirety as follows:
Conditions to the Obligations of the Caesars Parties . The respective obligations of the Caesars Parties to effect (x) the First
Transaction shall be subject to the satisfaction or waiver, at or prior to the First Closing Date, and (y) the Second Transaction shall be
subject to the satisfaction or waiver, at or prior to the Second Closing Date, of each of the following conditions (in the case of the
foregoing clauses (x) and (y), only to the extent that such conditions apply to the First Transaction or the Second Transaction, as
applicable):
(d) The introductory clause of Section 9.3 of the Transaction Agreement is hereby amended and restated in its entirety as follows:
Conditions to the Obligations of CAC and Growth Partners . The obligations of CAC and Growth Partners to effect (x) the First
Transaction shall be subject to the satisfaction or waiver, at or prior to the First Closing Date, and (y) the Second Transaction shall be
subject to the satisfaction or waiver, at or prior to the Second Closing Date, of each of the following conditions (in the case of the
foregoing clauses (x) and (y), only to the extent that such conditions apply to the First Transaction or the Second Transaction, as
applicable, including, for the avoidance of doubt, the condition set forth in Section 9.3(f) , which shall only be applicable to the Second
Transaction):
(e) Section 9.3(a) of the Transaction Agreement is hereby amended by adding the following new sentence at the end thereof:
Notwithstanding anything to the contrary contained in this Section 9.3(a), each of the representations and warranties contained in
Article 6 relating to the Laundry Facility shall be true and correct in all respects as of the date that the Laundry Facility Conveyance is
completed.
(f) Section 9.3(d)(iii) of the Transaction Agreement is hereby amended and restated in its entirety as follows:
a duly executed certificate or certificates from CEOC and/or other Sellers or their direct or indirect shareholders, as may be
applicable, prepared in accordance with Treasury Regulation Section 1.1445-2(b)(2)(iv), in form and substance reasonably acceptable to
Growth Partners and on the basis of which Growth Partners shall not be required to deduct or withhold any amounts under Section 1445
of the Code from any amounts payable pursuant to this Agreement, provided that the failure to provide such certificate shall not prevent
or delay the Closing, and that in the event of such failure Growth Partners shall be entitled to withhold any amounts that may be required
consistent with Section 3.6 hereof;
(g) Section 9.3(d)(vi) of the Transaction Agreement is hereby amended and restated in its entirety as follows:
with respect to each Owned Real Property, each ground leased Leased Real Property and the Laundry Facility, an American Land
Title Association extended coverage owner’s policy of title insurance (or local equivalent) (with an
15
effective date not earlier than the Closing Date) in favor of the applicable property owning entity (a) showing marketable fee simple (or
leasehold) title to such Company Real Property vested in the applicable property owning entity, (b) containing no exceptions other than
the Permitted Liens, (c) stating liability coverage in such amounts as shall be determined by Growth Partners and (d) with such
endorsements as Growth Partners may reasonably request (including, without limitation, a non-imputation endorsement as to the
Knowledge of the Caesars Parties) (collectively, the “ Title Policies ”), understanding that all costs and expenses of the Title Policies shall
be paid at Closing by Parent or Sellers; provided, however, notwithstanding and in-lieu of the foregoing, with respect to the Owned Real
Property identified in Section 6.14(a) of the Caesars Disclosure Schedule as owned by Corner Investment Propco, LLC (collectively, the
“Cromwell Property”) only, the Caesars Parties shall have until the date that is sixty (60) days after the First Closing Date to deliver to
Growth Partners date downs of that certain Owner’s Title Insurance Policy, dated as of November 2, 2012, issued by Chicago Title
Insurance Company, numbered NV-FWNV-72306-1-12-12900232 with respect to the Cromwell Properties together with non-imputation
endorsements to such down dated policies (each of the date downs and non-imputation endorsements in form and substance reasonably
acceptable to Growth Partners), provided, further, that if the Caesars Parties use commercially reasonable efforts to obtain the same, but
the title insurance company refuses to issue such non-imputation endorsements, the Caesars Parties shall have satisfied their obligations
hereunder with respect thereto. Notwithstanding anything to the contrary contained in this Section 9.3(d)(iv) the Caesars Parties shall be
obligated to deliver Title Policy relating to the Laundry Facility only as of the date the Laundry Facility Conveyance is effectuated.
(h) Section 9.3(f) of the Transaction Agreement is hereby amended and restated in its entirety as follows:
Financing . Prior to the Second Closing, CAC and Growth Partners shall have obtained financing sufficient to fund payment of the
Second Transaction Closing Payment on terms and conditions satisfactory to CAC and Growth Partners and, to the extent required under
applicable Law, approved by the relevant Gaming Authorities. For the avoidance of doubt, this Section 9.3(f) shall only constitute a
condition to the obligations of CAC and Growth Partners to effect the Second Transaction, and shall not apply to (or constitute a
condition to the obligations of CAC and Growth Partners to effect) the First Transaction.
16
Section 1.11 Amendments to Article X of the Transaction Agreement .
(a) The introductory clause of Section 10.1 of the Transaction Agreement is hereby amended and restated in its entirety as follows:
Termination . This Agreement may be terminated (x) at any time, prior to the First Closing, or (y) following the occurrence of the
First Closing but prior to the Second Closing, with respect to the Second Transaction only (the “ Second Closing Termination ”):
(b) Section 10.1(b)(i) of the Transaction Agreement is hereby amended and restated in its entirety as follows:
if (x) the First Closing (with respect to termination of this Agreement in its entirety) or (y) following the occurrence of the First
Closing, the Second Closing (with respect to termination of this Agreement with respect to the Second Transaction) shall not have
occurred on or before the Outside Date; provided that the right to terminate this Agreement in its entirety (or with respect to the Second
Transaction, as applicable) under this Section 10.1(b)(i) shall not be available to any Party to this Agreement whose breach or failure (or
whose Affiliate’s breach or failure) to perform any material covenant or obligation under this Agreement has been the cause of or has
resulted in the failure of the transactions contemplated by this Agreement to occur on or before such date;
(c) Section 10.1(e) of the Transaction Agreement is hereby amended and restated in its entirety as follows:
by Growth Partners if, (i) prior to the First Closing Date, there shall have occurred a material adverse effect on either the Purchased
Interests, taken as a whole, or the First Transaction Purchased Interests, taken as a whole or (ii) prior to the Second Closing Date and
following the occurrence of the First Closing, there shall have occurred a material adverse effect on the Second Transaction Purchased
Interests, taken as a whole.
(d) Section 10.3 of the Transaction Agreement is hereby amended and restated in its entirety as follows:
Effect of Termination . In the event of termination of this Agreement (a) prior to the First Closing Date as provided in Section 10.1 ,
this Agreement shall terminate and become void and have no effect, without any liability or obligation on the part of any Party hereto or
their respective Affiliates or Representatives in respect thereof or (b) after the First Closing Date but prior to the Second Closing Date as
provided in Section 10.1 , this Agreement shall remain in full force and effect with respect to the First Transaction only and shall
terminate and become void and have no effect with respect to the Second Transaction, without any liability or obligation on the part of
any Party hereto or their respective Affiliates or Representatives in respect thereof, except, in the case of each of the foregoing clauses
(a) and (b), (i) as set forth in Section 8.5 , this Section 10.3 and Article XII , each of which shall survive the termination of this
Agreement, and (ii) that nothing herein will relieve any Party from liability for any intentional breach of this Agreement or any fraud or
intentional misconduct with respect to this Agreement.
17
Section 1.12 Amendments to Article XI of the Transaction Agreement .
(a) The introductory clause of Section 11.1(a) of the Transaction Agreement is hereby amended and restated in its entirety as
follows:
The representations and warranties of the Caesars Parties contained in this Agreement or any certificate or other writing delivered
pursuant hereto or in connection herewith (x) with respect to the First Transaction shall survive the First Closing and shall continue for a
period of eighteen (18) months after the First Closing Date, and (y) with respect to the Second Transaction shall survive the Second
Closing and shall continue for a period of eighteen (18) months after the Second Closing Date, and any claim in respect thereof shall be
made in writing during such time period, except that:
(b) The introductory clause of Section 11.1(b) of the Transaction Agreement is hereby amended and restated in its entirety as
follows:
The representations and warranties of CAC and Growth Partners contained in this Agreement or any certificate or other writing
delivered pursuant hereto or in connection herewith (x) with respect to the First Transaction shall survive the First Closing and shall
continue for a period of eighteen (18) months after the First Closing Date, and (y) with respect to the Second Transaction shall survive the
Second Closing and shall continue for a period of eighteen (18) months after the Second Closing Date, and any claim in respect thereof
shall be made in writing during such time period, except that:
(c) Section 11.1(c) of the Transaction Agreement is hereby amended and restated in its entirety as follows:
Each covenant of the Parties contained in this Agreement or in any certificate or other writing delivered pursuant hereto or in
connection herewith shall survive for the time period contemplated for performance or, if no time period for performance is
contemplated, (x) for a period of eighteen (18) months after the First Closing Date with respect to the First Transaction and (y) for a
period of eighteen (18) months after the Second Closing Date with respect to the Second Transaction.
(d) The introductory clause of Section 11.2 of the Transaction Agreement is hereby amended and restated in its entirety as follows:
Indemnification in Favor of CAC and Growth Partners . From and after the Closing (and in the case of Section 11.2(h) only, from
and after the Second Closing), Parent and Sellers, jointly and severally, shall indemnify and save CAC, Growth Partners, their Affiliates,
including after the Closing, each of the Purchased Entities and their respective Subsidiaries, and its and their respective directors, officers,
employees, Representatives and agents (collectively, the “ Growth Indemnified Persons ”) harmless of and from any Damages suffered or
paid, directly or indirectly, by any of the Growth Indemnified Persons as a result of, in respect of, or arising out of, under, or pursuant to:
(e) Section 11.3 of the Transaction Agreement is hereby amended by (i) deleting the word “and” at the end of subsection (a) thereof,
and (ii) deleting the period at the end of subsection (b) thereof and replacing such deleted period with the following:
; and
18
(f) Section 11.3 of the Transaction Agreement is hereby amended by inserting the following as a new subsection (c) thereto:
any amounts owing by the Caesars Parties as a result of funds being drawn following the First Closing Date, the Second Closing
Date or the date on which the Laundry Facility Conveyance occurs, as applicable, on any of the letters of credit set forth on Exhibit J
attached to this Agreement.
(g) Section 11.5(a)(i) of the Transaction Agreement is hereby amended and restated in its entirety as follows:
Except in the case of fraud, in no event shall the aggregate obligation of (A) the Caesars Parties to indemnify Growth Indemnified
Persons under Section 11.2(b) (other than for a breach of a Caesars Fundamental Representation), or (B) Growth Partners to indemnify
Caesars Indemnified Persons under Section 11.3(b) (other than for a breach of a Growth Partners Fundamental Representation),
respectively, exceed $200,000,000; provided , however , that if the Second Closing does not occur, this amount shall be reduced to
$134,000,000 effective as of the Second Closing Termination.
(h) Section 11.5(a)(ii) of the Transaction Agreement is hereby amended and restated in its entirety as follows:
Except in the case of fraud, in no event shall the aggregate obligation of (A) the Caesars Parties to indemnify Growth Indemnified
Persons under Section 11.2(a) and Section 11.2(b) , or (B) CAC and Growth Partners to indemnify Caesars Indemnified Persons under
Section 11.3(a) and Section 11.3(b) , respectively, exceed (x) subject to the occurrence of the Second Closing, the sum of the First
Transaction Purchase Price and the Second Transaction Purchase Price, or (y) if the Second Closing does not occur, the First Transaction
Purchase Price.
(i) Section 11.5(a)(iii) of the Transaction Agreement is hereby amended and restated in its entirety as follows:
No claims for indemnification pursuant to Section 11.2(b) (other than for a breach of a Caesars Fundamental Representation), or
Section 11.3(b) (other than for a breach of a Growth Partners Fundamental Representation), hereof may be made by any Growth
Indemnified Person or any Caesars Indemnified Person, respectively, (x) for any Damages from any single loss or series of related losses
not in excess of $500,000 and (y) until the aggregate amount of all Damages for which claims may be made thereunder exceeds
$20,000,000; provided , however ,
19
that if the Second Closing does not occur, this amount shall be reduced to $13,400,000 effective as of the Second Closing Termination (it
being understood that any Damages that do not exceed the amount set forth in clause (x) shall be counted toward satisfaction of such
threshold), and once such threshold amount has been reached, indemnification shall be made only in excess of such threshold amount.
(j) Section 11.5(b) of the Transaction Agreement is hereby amended by inserting the words “or subsection (c) of Section 11.3 ”
before the period at the end thereof.
Section 1.13 Termination of Commitment Letter . The Parties acknowledge and agree that, notwithstanding anything in the
Transaction Agreement to the contrary, the consummation of the First Transaction shall result in the termination of the Commitment Letter, and
following the First Closing, the Commitment Letter shall no longer be in force or effect. The obligations of CAC and Growth Partners to use
reasonable best efforts to obtain the Financing as set forth in Section 8.13 of the Transaction Agreement are hereby modified to be
commercially reasonable efforts to obtain financing with respect to the Second Closing only, it being understood that there are no commitments
with respect to such financing in place after giving effect to the First Closing and no obligation to obtain alternative commitments with respect
thereto.
Section 1.14 Full Force and Effect . All provisions of the Transaction Agreement shall remain in full force and effect on and after the
date of this Amendment except as expressly amended hereby. As amended hereby, the Transaction Agreement is hereby ratified and confirmed
in all respects.
Section 1.15 Entire Agreement . This Amendment, together with the Transaction Agreement as amended pursuant to the terms hereof,
the Ancillary Agreements and the Annexes, Exhibits and Schedules hereto and thereto, contains all of the agreements, covenants, terms,
conditions and representations and warranties agreed upon by the Parties relating to the subject matter hereof and thereof, and supersedes all
prior and contemporaneous agreements, negotiations, correspondence, undertakings, representations, warranties and communications of any
kind between the Parties and their Representatives, whether oral or written, regarding such subject matter.
Section 1.16 Counterparts; Effectiveness . This Amendment may be executed and delivered (including by electronic or facsimile
transmission) in one or more counterparts, and by the different Parties hereto in separate counterparts, each of which when executed shall be
deemed to be an original but all of which taken together shall constitute one and the same agreement.
Section 1.17 Governing Law; Jurisdiction and Forum; Waiver of Jury Trial .
(a) This Amendment and any claim or controversy arising out of or relating to the transactions contemplated hereby shall be
governed by and interpreted and construed in accordance with the Laws of the State of Delaware applicable to contracts executed and to be
performed wholly within the State of Delaware and without reference to the choice-of-law principles or rules of conflict of laws that would
result in, require or permit the application of the Laws of a different jurisdiction or direct a matter to another jurisdiction.
20
(b) Each Party irrevocably and unconditionally submits to the jurisdiction of the Court of Chancery of the State of Delaware (or,
solely if such courts decline jurisdiction, in any federal court located in the State of Delaware) (any such court, a “ Chosen Court ”) any Action
arising out of or relating to this Amendment, and hereby irrevocably and unconditionally agrees that all claims in respect of such Action may
be heard and determined in a Chosen Court. Each Party hereby irrevocably and unconditionally waives, to the fullest extent that it may
effectively do so, any defense of an inconvenient forum which such Party may now or hereafter have to the maintenance of such Action. The
Parties further agree, (i) to the extent permitted by Law, that final and nonappealable judgment against any of them in any Action contemplated
above shall be conclusive and may be enforced in any other jurisdiction within or outside the United States by suit on the judgment, a certified
copy of which shall be conclusive evidence of the fact and amount of such judgment and (ii) that service of process upon such Party in any
such action or proceeding shall be effective if notice is given in accordance with Section 12.7 of the Transaction Agreement.
(c) EACH PARTY TO THIS AMENDMENT WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY OF
THEM AGAINST THE OTHER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS AMENDMENT, OR ANY OTHER
AGREEMENTS EXECUTED IN CONNECTION HEREWITH OR THE ADMINISTRATION THEREOF OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREIN OR THEREIN. NO PARTY TO THIS AMENDMENT SHALL SEEK A JURY TRIAL IN
ANY LAWSUIT, PROCEEDING, COUNTERCLAIM OR ANY OTHER LITIGATION PROCEDURE BASED UPON, OR ARISING OUT
OF, THIS AMENDMENT OR ANY RELATED INSTRUMENTS OR THE RELATIONSHIP BETWEEN THE PARTIES. NO PARTY
WILL SEEK TO CONSOLIDATE ANY SUCH ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER
ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. EACH PARTY TO THIS AMENDMENT
CERTIFIES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AMENDMENT OR INSTRUMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS SET FORTH ABOVE IN THIS SECTION 1.15. NO PARTY (OR ITS
REPRESENTATIVE) HAS IN ANY WAY AGREED WITH OR REPRESENTED TO ANY OTHER PARTY THAT THE PROVISIONS OF
THIS SECTION 1.15 WILL NOT BE FULLY ENFORCED IN ALL INSTANCES.
****
21
IN WITNESS WHEREOF, the Parties have executed this Amendment as of the date first above written.
CAESARS PARTIES:
CAESARS ENTERTAINMENT CORPORATION,
a Delaware corporation
By: /s/ Eric Hession
Name: Eric Hession
Title:
Senior Vice President and Treasurer
CAESARS ENTERTAINMENT OPERATING
COMPANY, INC.,
a Delaware corporation
By: /s/ Eric Hession
Name: Eric Hession
Title:
Senior Vice President and Treasurer
CAESARS LICENSE COMPANY, LLC,
a Nevada limited liability company
By: Caesars Entertainment Operating Company, Inc.,
its sole member
By: /s/ Eric Hession
Name: Eric Hession
Title:
Senior Vice President and Treasurer
HARRAH’S NEW ORLEANS MANAGEMENT
COMPANY,
a Nevada corporation
By: /s/ Eric Hession
Name: Eric Hession
Title:
Senior Vice President and Treasurer
[Signature Page to First Amendment to Transaction Agreement]
CORNER INVESTMENT COMPANY, LLC, a
Nevada limited liability company
By: Caesars Entertainment Operating Company, Inc.,
its managing member
By: /s/ Eric Hession
Name: Eric Hession
Title:
Senior Vice President and Treasurer
3535 LV CORP.,
a Nevada corporation
By: /s/ Donald Colvin
Name: Donald Colvin
Title:
President and Treasurer
PARBALL CORPORATION,
a Nevada corporation
By: /s/ Eric Hession
Name: Eric Hession
Title:
President and Treasurer
JCC HOLDING COMPANY II, LLC,
a Delaware limited liability company
By: Caesars Entertainment Operating Company, Inc.,
its managing member
By: /s/ Eric Hession
Name: Eric Hession
Title:
Senior Vice President and Treasurer
[Signature Page to First Amendment to Transaction Agreement]
CAC:
CAESARS ACQUISITION COMPANY, a
Delaware corporation
By: /s/ Craig Abrahams
Name: Craig Abrahams
Title:
Chief Financial Officer
GROWTH PARTNERS:
CAESARS GROWTH PARTNERS, LLC,
a Delaware limited liability company
By: Caesars Acquisition Company,
its managing member
By: /s/ Craig Abrahams
Name: Craig Abrahams
Title:
Chief Financial Officer
[Signature Page to First Amendment to Transaction Agreement]
Exhibit 10.1
EXECUTION VERSION
MANAGEMENT AGREEMENT
By and Between
Cromwell Manager, LLC,
a Delaware limited liability company
as Manager,
Corner Investment Company, LLC,
a Delaware limited liability company
as Owner,
and, solely for purposes of Article VII and Sections 16.1.2, 17.5.5, 17.7.3, 17.7.4, 17.7.5, 18.3 and 19.2,
Caesars License Company, LLC,
a Nevada limited liability company
Dated as of May 5, 2014
TABLE OF CONTENTS
ARTICLE I.
DEFINITIONS AND EXHIBITS
1.1
1.2
1.3
ARTICLE II.
Definitions
Exhibits
Structure of this Agreement
FEES AND EXPENSES
CENTRALIZED SERVICES
ARTICLE VI.
6.1
ARTICLE VII.
7.1
7.2
7.3
7.4
11
12
13
13
13
14
14
14
Centralized Services
Modification of Centralized Services
OPERATION OF THE MANAGED FACILITIES
5.1
5.2
5.3
5.4
5.5
5.6
5.7
5.8
5.9
5.10
5.11
2
8
10
11
11
Management Fees
Centralized Services Charges
Reimbursable Expenses
Interest
Payment of Fees and Expenses
Application of Payments
Sales and Use Taxes
4.1
4.2
ARTICLE V.
2
Grant of Authority
Limitations on Manager Authority
Other Operations of Manager and Owner
Term
3.1
3.2
3.3
3.4
3.5
3.6
3.7
ARTICLE IV.
1
2
2
APPOINTMENT/TERM
2.1
2.2
2.3
2.4
ARTICLE III.
1
Annual Budget
Maintenance and Repair; Capital Improvements
Personnel
Bank Accounts
Funds for Operation of the Managed Facilities
Purchasing
Managed Facilities Parking
Use of Affiliates by Manager
Limitation on Manager’s Obligations
Third-Party Operated Areas
Amenities
APPROVALS
14
15
16
16
19
20
21
24
24
25
25
26
27
27
27
Gaming Approvals
27
PROPRIETARY RIGHTS
28
Service Mark Rights
Use of Service Mark Rights
Rights to Service Mark Rights
Proprietary Information and Systems of Manager or its Affiliates
i
28
29
29
30
ARTICLE VIII.
8.1
8.2
8.3
8.4
8.5
ARTICLE IX.
9.1
ARTICLE X.
10.1
10.2
10.3
10.4
10.5
ARTICLE XI.
11.1
11.2
11.3
11.4
ARTICLE XII.
12.1
12.2
12.3
ARTICLE XIII.
13.1
13.2
13.3
13.4
13.5
13.6
ARTICLE XIV.
14.1
14.2
ARTICLE XV.
15.1
15.2
ARTICLE XVI.
16.1
16.2
16.3
16.4
CONFIDENTIALITY
Disclosure by Owner
Disclosure by Manager
Public Statements
Cumulative Remedies
Survival
MARKETING
Marketing
BOOKS AND RECORDS
Maintenance of Books and Records
Monthly Financial Reports
Quarterly Financial Reports
Annual Financial Reports
Other Reports and Schedules
ASSIGNMENTS
Assignment by Owner
Assignment by Manager
Acknowledgement of Assignment
Approvals
INSURANCE, BONDING AND INDEMNIFICATION
Owner Insurance and Bonding Requirements
Waiver of Liability
Indemnification
FINANCING; GROUND LEASE
Mortgages; Collateral Assignments; Non-Disturbance
Lender’s Right of Access
Disclosure of Mortgages
Estoppel Certificates
Amendments to Agreement
Owner’s Ground Lease Obligations
BUSINESS INTERRUPTION
Business Interruption
Proceeds of Business Interruption Insurance
CASUALTY OR CONDEMNATION
Casualty
Condemnation
DEFAULTS AND TERMINATIONS
Events of Default
Manager Termination Rights
Owner Termination Rights
Actions To Be Taken on Termination
34
34
35
36
37
37
37
37
38
38
39
39
40
41
41
41
42
43
44
44
44
46
46
48
48
48
48
49
49
49
49
49
50
50
50
50
51
51
54
55
57
ARTICLE XVII.
DISPUTE RESOLUTION
17.1
17.2
17.3
17.4
17.5
17.6
17.7
17.8
Generally
Expert Resolution
Time Limit
Prevailing Party’s Expenses
WAIVERS
Survival and Severance
ACKNOWLEDGEMENTS
Survival
ARTICLE XVIII.
18.1
18.2
18.3
ARTICLE XIX.
19.1
19.2
19.3
19.4
19.5
19.6
19.7
19.8
19.9
19.10
19.11
19.12
19.13
19.14
19.15
GAMING LAW PROVISIONS
Regulatory Matters; Initial Suitability Review
Licensing Event
Unlawful Payments
GENERAL PROVISIONS
Governing Law
Construction of this Agreement
Limitation on Liabilities
Waivers
Notices
Party Representatives
No Recordation
Further Assurances
Relationship of the Parties
Force Majeure
Terms of Other Management Agreements
Compliance with Law
Centralized Services, Insurance Programs and Purchasing Arrangements Generally
Execution of Agreement
Construction Management Services and Project Completion
EXHIBITS
Exhibit A
Exhibit B
Exhibit C
Exhibit D
Exhibit E
Exhibit F
Exhibit G
Premises
Definitions
Form of Summary Annual Budget
Manager’s Proprietary Information and Systems
Insurance Requirements
Service Marks
Total Rewards System
61
61
62
63
63
64
65
65
66
66
66
67
67
68
68
68
70
71
71
72
73
73
73
73
74
74
74
74
74
MANAGEMENT AGREEMENT
This MANAGEMENT AGREEMENT (this “ Agreement ”) is dated as of May 5, 2014, and is made and entered into by and between
Corner Investment Company, LLC, a Delaware limited liability company, or its successors and permitted assigns (“ Owner ”), Cromwell
Manager, LLC, a Nevada limited liability (“ Manager ”), and, solely for purposes of Article VII and Sections 16.1.2 , 17.5.5 , 17.7.3 , 17.7.4 ,
17.7.5 , 18.3 and 19.2 , Caesars License Company, LLC, a Nevada limited liability company (“ CLC ”). Owner and Manager are sometimes
referred to collectively in this Agreement as the “ Parties ” and individually as a “ Party .”
RECITALS
A. Owner has acquired or intends to acquire the real property interests more fully described on Exhibit A attached hereto (the “ Premises
”) and intends to own and operate a casino (the “ Casino ”) and related Facilities (as hereinafter defined) thereon (such Casino and Facilities
located at the Premises, collectively, the “ Managed Facilities ”).
B. Manager is a wholly-owned indirect subsidiary of CEOC (as hereinafter defined) with experience in operating gaming, hotel and
related businesses.
C. Owner desires to engage Manager to manage and operate the Managed Facilities under and utilizing the Brand (as hereinafter defined),
and Manager desires to manage and operate the Managed Facilities under and utilizing the Brand as an agent of Owner from and after the
Opening Date.
D. Simultaneously with or shortly after the effectiveness of this Agreement, certain Affiliates of Owner (collectively, the “ Other Owners
”), on the one hand, and certain Affiliates of Manager (collectively, the “ Other Managers ”), on the other hand, shall enter into substantially
similar agreements (collectively, the “ Affiliate Management Agreements ”) with respect to the operation and management by the Other
Managers of the casino and hotel properties owned by the Other Owners (such properties, collectively, the “ Affiliate Managed Facilities ”).
AGREEMENT
NOW, THEREFORE, in consideration of the recitals and covenants set forth in this Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are acknowledged by the Parties, the Parties agree:
ARTICLE I.
DEFINITIONS AND EXHIBITS
1.1
Definitions .
All capitalized terms used without definition in this Agreement shall have the meanings assigned to such terms in Exhibit B attached
hereto and by this reference incorporated herein.
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1.2
Exhibits .
The exhibits listed in the table of contents and attached hereto are incorporated in, and deemed to be an integral part of, this Agreement.
1.3
Structure of this Agreement .
Owner and Manager each acknowledge and agree that certain operating efficiencies and value will be achieved as a result of Owner’s
engagement of Manager hereunder and the Other Owners’ engagement of the Other Managers pursuant to the applicable Affiliate Management
Agreements to operate and manage the Managed Facilities and the Affiliate Managed Facilities that would not be possible to achieve if Owner
and the Other Owners were to engage unrelated managers to operate each of the Managed Facilities and the Other Managed Facilities. The
Parties hereto acknowledge and agree that Owner would not enter into this Agreement (and the Other Owners would not enter into the Affiliate
Management Agreements) absent the understanding and agreement of the Parties that the entire management relationship, including (without
limitation) the use of the Service Mark Rights and the use of the Total Rewards System, together with the other related intellectual property
arrangements contemplated hereunder, form part of a single integrated transaction. Accordingly, it is the express intention of the Parties that
each of the Transaction Agreement, the IP Assignment (as defined in the Transaction Agreement), this Agreement and the Affiliated
Management Agreements form part of such single integrated transaction.
ARTICLE II.
APPOINTMENT/TERM
2.1
Grant of Authority .
2.1.1 Engagement of Manager . On and subject to the terms and conditions of this Agreement, Owner hereby engages Manager, and
Manager hereby agrees to be engaged, as Owner’s agent and exclusive manager to Operate the Managed Facilities during the Term. The Parties
acknowledge that the scope of both Manager’s authority and duties as the Manager to Operate the Managed Facilities are limited to the
authority and duties set forth in this Agreement. Owner and Manager have elected to use the “Cromwell” brand (the “ Brand ”) in connection
with Manager’s Operation of the Casino; provided , that Owner shall have the right to, subject to the receipt of any required approval from any
Governmental Authority and Manager’s consent (such consent not to be unreasonably withheld, conditioned or delayed), change the Brand to
any other brand, with the costs of such rebranding borne by Owner. Manager shall reasonably assist Owner, at Owner’s expense, in connection
with any such re-branding. If the Brand is modified to another brand, the Parties shall cooperate to make such changes to this Agreement as are
necessary in light of the new brand.
2.1.2 Manager’s Standard of Care . Manager agrees with Owner that (a) it will execute its duties under this Agreement in a manner
that Manager reasonably believes will promote the overall long-term economic value and profitability of the Managed Facilities (the “
Manager’s Standard of Care ”), and (b) Manager shall be acting as the agent of Owner in connection with the performance of its duties under
this Agreement. Owner agrees that the Manager’s Standard of Care and Manager’s duties as agent to Owner are further subject to, and
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limited by, the terms and conditions of this Agreement (including Section 2.3 ) and the Operating Limitations. Except for Manager’s
indemnification obligations set forth in Article XII , Owner agrees that, as between Owner and Manager, Manager will have no liability for
monetary damages or monetary relief to Owner for any violation of Manager’s Standard of Care or claims of breach of any fiduciary duties or
duties as agent unless such violation or breach was due to the Manager’s Gross Negligence or Willful Misconduct or any Manager Event of
Default.
2.1.3 Manager’s System Policies . Owner acknowledges that Manager’s Affiliates operate other casino, racetrack, hotel, dining,
retail, entertainment and other operations and that Manager or its Affiliates may derive benefits in addition to the fees and reimbursements paid
hereunder, including in connection with marketing programs, the Total Rewards System, the Operating Limitations, the purchasing programs,
the employment policies relating to the Managed Facilities Personnel or other programmatic or policy activities that may exist from time to
time at the discretion of CEOC or its Affiliates and that extend through the majority of Gaming properties operated by Manager’s Affiliates
(collectively, the “ Manager’s System Policies ”). Owner agrees that Manager will not be in violation of the Manager’s Standard of Care or in
breach of its duties as agent hereunder when Manager follows the Manager’s System Policies, even if certain aspects of the Manager’s System
Policies have the effect of providing greater benefit to the properties owned or operated by the Manager’s Affiliates collectively or third parties
than to the Managed Facilities, so long as the Manager’s System Policies are Non-Discriminatory to the Managed Facilities in both design and
implementation. The foregoing shall not be deemed to excuse any breach by Manager of any of the express provisions of this Agreement.
2.1.4 General Grant of Authority – Managed Facilities . On and subject to the terms of this Agreement, Owner hereby grants to
Manager (and Manager hereby accepts) the right, authority and responsibility during the Term, and instructs Manager during the Term, to take
all such actions for and on behalf of Owner and the Managed Facilities that Manager reasonably deems necessary or advisable to Operate the
Managed Facilities: (a) at a level of service and quality not less than the level of service and quality at Planet Hollywood Las Vegas as of the
Opening Date; (b) in accordance in all material respects with the standards, policies and programs in effect as of the Opening Date at the
Managed Facilities (with such revisions thereto from time to time as Manager may implement in a Non-Discriminatory manner, provided that
no such revisions shall result in a material adverse change in the overall quality and level of service at the Managed Facilities without Owner’s
prior written consent thereto); and (c) utilizing the Proprietary Information and Systems in accordance with the standards, policies and
programs generally applicable to the use and implementation of the Proprietary Information and Systems, provided that the same are
Non-Discriminatory with respect to the Managed Facilities (the standards and objectives described in clauses (a) through (c) being referred to
collectively as the “ Operating Standard ”), subject in each case to the Operating Limitations.
2.1.5 Specific Actions Authorized by Owner . Without limiting the generality of the authority granted to Manager in Section 2.1.4 ,
but subject to the Annual Budget then in effect and the Operating Limitations and other limitations and conditions set forth in this Agreement,
including in Section 2.2 , Owner’s general grant of authority under Section 2.1.4 and this Section 2.1.5 shall specifically include the right,
authority and responsibility of Manager to take, on behalf of Owner during the Term, the following actions (either directly or, to the extent
permitted under this Agreement, through a third party designated or subcontracted by Manager, which may be an Affiliate of Manager):
2.1.5.1 (a) hire, supervise, train and discharge all Managed Facilities Personnel; and (b) establish all salary, fringe benefits
and benefits plans for the Managed Facilities Personnel;
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2.1.5.2 establish and administer Bank Accounts for the operation of the Managed Facilities in accordance with Section 5.4 ;
2.1.5.3 prepare and deliver to Owner for Owner’s review and approval operating plans and budgets in accordance with
Section 5.1 ;
2.1.5.4 plan, account for and supervise all repairs, capital replacements and improvements to the Managed Facilities or any
portion thereof in accordance with Sections 5.2.1 and 5.2.2 ;
2.1.5.5 establish and maintain for the Managed Facilities accounting, internal controls and reporting systems that are
adequate to provide Owner, Manager and the Designated Accountant with sufficient information about the Managed Facilities to permit the
preparation of the financial statements and reports contemplated in Article X and which comply with all Applicable Laws;
2.1.5.6 negotiate, enter into and administer, in the name of Owner, all leases, service contracts, licenses and other contracts
and agreements Manager deems necessary or advisable for the Operation of the Managed Facilities, including contracts and licenses for:
(a) health and life safety systems and security force and related security measures; (b) maintenance of all electrical, mechanical, plumbing,
HVAC, elevator, boiler and other building systems; (c) electricity, gas and telecommunications (including television and internet service);
(d) cleaning, laundry and dry cleaning services; (e) use of copyrighted materials (including games, filmed entertainment, music and videos);
(f) entertainment; (g) gaming machines and other gaming equipment in the event applicable Gaming Laws permit or require Owner to own or
lease and maintain such gaming equipment and non-gaming equipment; and (h) ownership and operation of gaming servers;
2.1.5.7 negotiate, administer and perform (or cause to be performed) all obligations of Owner, in the name of Owner, under
all leases, ground leases, licenses and concession agreements or other agreements for the right to use or occupy any public space at the
Managed Facilities, including any store, office, parking facility or lobby space thereunder;
2.1.5.8 supervise and purchase or lease or arrange for the purchase or lease of, all FF&E and Supplies that are advisable for
the Operation of the Managed Facilities in accordance with this Agreement;
2.1.5.9 be the primary interface for all interactions with the Gaming Authorities in connection with the Managed Facilities
which shall include: (a) oversight of any amendments to any licenses or permits required by the applicable Gaming Authorities under any
applicable Gaming Laws; (b) coordination of all lobbying efforts with respect to the activities
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conducted or proposed to be conducted in connection with the Managed Facilities; including any introduction or possible introduction of table
games at the Managed Facilities and (c) preparation and implementation of all actions required with respect to any filing with the applicable
Gaming Authorities relating to the Managed Facilities; provided , that Manager shall consult with and keep Owner apprised of (i) the status of
any annual or other periodic license renewals for the operation of Gaming activities at the Managed Facilities with the Gaming Authorities and
(ii) the status of non-routine matters before the Gaming Authorities regarding the Managed Facilities; provided further , that any filings or
Gaming Approvals relating to Owner and Owner’s Affiliates shall be the responsibility of Owner;
2.1.5.10 apply for and process applications and filings for all Approvals in a manner and within the time periods that are
required for the Managed Facilities to be operated on a continuous and uninterrupted basis. Manager shall act in a reasonably diligent manner
to assure that all reports required by any Governmental Authority pertaining to the Managed Facilities are filed on or prior to their due date.
Owner shall file all such other reports pertaining to Owner. Manager shall prepare, maintain and provide to Owner, at Owner’s request, a listing
of all Approvals and reports required by any Governmental Authority and the term, duration or frequency of such Approvals and reports for the
Managed Facilities to be operated in a continuous and uninterrupted basis;
2.1.5.11 institute in its own name, or in the name of Owner or the Managed Facilities, using Approved Counsel, all legal
actions or proceedings to: (a) collect charges, rent or other income derived from the Managed Facilities’ operations; (b) oust or dispossess
guests, tenants or other Persons in possession therefrom; or (c) terminate any lease, license or concession agreement for the breach thereof or
default thereunder by the tenant, licensee or concessionaire;
2.1.5.12 using Approved Counsel, defend and control any and all legal actions or proceedings arising from Claims; provided
, that as soon as reasonably practical, Manager shall notify Owner in writing of the commencement of any legal action or proceeding
concerning the Managed Facilities which could reasonably be anticipated to involve an expense, liability or damage to Owner that is not fully
covered by insurance or is in excess of Two Hundred Fifty Thousand Dollars ($250,000); provided further , however , unless insurance policies
dictate otherwise, that (a) Owner may appoint counsel, defend and control any and all legal actions or proceedings pertaining to real property
related claims not involving the Operation of the Managed Facilities (such as zoning disputes, structural defects and title disputes); (b) in
determining what portion, if any, of the cost of any legal actions or proceedings described in clause (a) above is to be allocated to the Managed
Facilities, due consideration shall be given to the potential impact of such legal action or proceeding on the Managed Facilities as compared
with the potential impact on Manager or its Affiliates or on the Other Managed Resorts; and (c) if Owner is also a named party in such legal
actions or proceedings, Owner shall have the right to appoint separate counsel to prosecute and defend its interests, such appointment being at
Owner’s sole cost and expense;
2.1.5.13 using Approved Counsel, take actions to challenge, protest, appeal or litigate to final decision in any appropriate
court or forum any Applicable Laws affecting the Managed Facilities or any alleged non-compliance with, or violation of, any
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Applicable Law (with the cost of such challenge, protest, appeal or litigation being treated in the same manner as the cost of compliance with
the Applicable Law in question would be treated under Section 5.1.5.4 );
2.1.5.14 in Consultation with Owner, establish and implement all policies and procedures of credit to patrons of the
Managed Facilities;
2.1.5.15 collect and account for and remit to Governmental Authorities all applicable excise, sales, occupancy and use Taxes
and all other Taxes, assessments, duties, levies and charges imposed by any Governmental Authority and collectible by the Managed Facilities
directly from patrons or guests (including those Taxes based on the sales price of any goods, services, or displays, gross receipts or admission)
or imposed by Applicable Laws on the Managed Facilities or the Operations thereof;
2.1.5.16 subject to Applicable Law and in Consultation with Owner, establish the types of Gaming activities to be offered at
the Managed Facilities, including the matrix of owned, leased, progressive and electronic games and gaming systems. Manager, in Consultation
with Owner, shall establish all policies and procedures for Gaming at the Casino;
2.1.5.17 administer all non-Gaming activities to be conducted at the Managed Facilities, including all hospitality, retail, food
and beverage and other related activities;
2.1.5.18 establish and implement policies and procedures regarding, and assign Managed Facilities Personnel to resolve,
disputes with patrons of the Managed Facilities;
2.1.5.19 establish rates for all areas within the Managed Facilities, including all: (a) charges for food and beverage;
(b) charges for recreational and other guest amenities at the Managed Facilities, consistent with the corporate policy applicable to comparable
Other Managed Resorts; (c) subject to Applicable Law, policies with respect to discounted and complimentary food and beverage and other
services at the Managed Facilities; (d) billing policies (including entering into agreements with credit card organizations); (e) price and rate
schedules; and (f) rents, fees and charges for all leases, concessions or other rights to use or occupy any space in the Managed Facilities;
2.1.5.20 supervise, direct and control the collection of income of any nature from the Operation of the Managed Facilities
and issue receipts with respect to, and use reasonable efforts to collect all charges, rent and other amounts due from guests, lessees and
concessionaires of the Managed Facilities, and use those funds, as well as funds from other sources as may be available to the Managed
Facilities, in accordance with this Agreement;
2.1.5.21 determine the number of hours per week and the days per week that the Managed Facilities shall be open for
business, taking into account Applicable Laws, the season of the year and other relevant and customary factors;
2.1.5.22 in Consultation with Owner, select all entertainment and promotions events to be staged at the Managed Facilities;
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2.1.5.23 cooperate in all reasonable respects with Owner and any prospective purchaser, lessee, Lender or other prospective
lender in connection with any proposed sale, lease or financing of or relating to the Managed Facilities, including answering questions of
Owner or such other Persons, providing copies of financial statements and projections, preparing schedules and providing copies of leases,
concessions, Supplies, FF&E, employees and other similar matters, as may reasonably be requested by Owner or such other Persons; provided ,
that (a) if cooperation by Manager pursuant to this Section 2.1.5.23 involves the disclosure of Manager Confidential Information, Manager
shall only be required to release such Manager Confidential Information to a Lender, and only to the extent that such Lender has a “need to
know” such Manager Confidential Information in connection with any Financing, subject to customary protections against disclosure or misuse
of such information; and (b) Owner shall reimburse Manager for any Out-of-Pocket Expenses incurred by Manager in connection with such
cooperation to the extent such expense is not otherwise paid or reimbursed under this Agreement;
2.1.5.24 take all actions necessary (except to the extent not within Manager’s reasonable ability to do so) to comply with:
(a) all Applicable Laws or the requirements to maintain all Approvals necessary for the operation of the Managed Facilities ( provided , that
Manager shall not be a guarantor of the Managed Facilities’ compliance with such Applicable Laws or such requirements); (b) the requirements
of the Ground Leases (as applicable), the terms of which shall be provided by Owner to Manager ( provided that Manager shall not be a
guarantor of Owner’s compliance with the Ground Leases); (c) the requirements of any Mortgage or other lease that is specifically identified by
Owner to Manager ( provided , that Manager shall not be a guarantor of Owner’s compliance with any such Mortgage or lease); (d) the
requirements of any Financing Documents provided to Manager ( provided , that Manager shall not be a guarantor of Owner’s compliance with
any such Financing Documents); and (e) the terms of all insurance policies applicable to the Managed Facilities and provided to Manager;
2.1.5.25 as directed by Owner and at Owner’s expense, take actions to discharge any lien, encumbrance or charge against the
Managed Facilities or any component of the Managed Facilities;
2.1.5.26 supervise and maintain books of account and records relating to or reflecting the results of operation of the
Managed Facilities;
2.1.5.27 keep the Managed Facilities and the FF&E in good operating order, repair and condition, consistent with the
Operating Standard;
2.1.5.28 take such actions as Manager determines to be necessary or advisable to perform all duties and obligations required
to be performed by Manager under this Agreement or as are customary and usual in the operation of the Managed Facilities in accordance with
the Operating Standard and the Manager’s Standard of Care, in each case subject to the Operating Limitations;
2.1.5.29 implement standards, policies and programs in effect for the Brand and the Total Rewards System in accordance
with Exhibit G attached hereto;
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2.1.5.30 with respect to the Managed Facilities Guest Data, the Guest Data, the Managed Facilities and Total Rewards
System, establish such contact and privacy policies and implement such data security policies and security controls for databases and systems
utilizing Managed Facilities Guest Data, the Guest Data and the Total Rewards System as Manager determines is desirable to protect such
information;
2.1.5.31 establish policies and procedures relating to problem gaming, underage drinking, compliance with the Americans
with Disabilities Act, diversity and inclusion and a whistleblower hotline which shall, in each case, comply in all respects with Applicable
Laws;
2.1.5.32 establish, in Consultation with Owner, rates for the usage of all guest rooms and suites, including all (i) room rates
for individuals and groups; (ii) charges for room service, food and beverage; (iii) charges for recreational and other hotel guest amenities at the
Managed Facilities (consistent with the corporate policy applicable to the Other Managed Resorts); (iv) policies with respect to
Complimentaries; (v) billing policies (including entering into agreements with credit card organizations); (vi) price and rate schedules; and
2.1.5.33 take any action necessary or ancillary to the responsibilities and authorities set forth above in this Section 2.1.5 , it
being acknowledged and agreed that the foregoing is not intended to be an exhaustive list of Manager’s responsibilities or authorities.
2.2
Limitations on Manager Authority .
Notwithstanding the grant of authority given to Manager in Section 2.1 , and without limiting any of the other circumstances under which
Owner’s approval is specifically required under this Agreement, Manager shall not take any of the following actions without Owner’s prior
written approval:
2.2.1 Settle any claim (a) regardless of the amount, admitting intentional misconduct or fraud or (b) arising out of the Operations of
the Managed Facilities which involves an amount in excess of $500,000 that is not fully covered (other than deductible amounts) by insurance
or as to which the insurance denies coverage or “reserves rights” as to coverage; provided , that the dollar amount specified in this Section 2.2.1
shall be increased on January 1 of every third Operating Year by the percentage increase in the Index since January 1 of the first Operating
Year or the date of the prior increase, as applicable;
2.2.2 Execute, amend, modify, provide a written waiver of rights under or terminate any contract, lease, equipment lease or other
agreement (in each case, or a series of contracts, leases, equipment leases or other agreements relating to the same or similar property,
equipment, goods or services, as applicable, with the same or a related party) that (a)(i) is for a term of greater than three (3) years and
(ii) requires payment in excess of $500,000 or (b) requires aggregate annual payments in excess of $500,000, other than contracts, leases or
other agreements which are specifically identified in the Annual Budget; provided , that the dollar amount specified in this Section 2.2.2 shall
be increased on January 1 of every third Operating Year by the percentage increase in the Index since January 1 of the first Operating Year or
the date of the prior increase, as applicable;
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2.2.3 Except as permitted by Section 5.5.3 , borrow any money or incur indebtedness or issue any guaranty in respect of borrowed
money, or issue any indemnity or surety obligation outside of the ordinary course of business, in the name and on behalf of Owner;
2.2.4 Grant or create any lien or security interest on the Managed Facilities or any part thereof or interest therein; provided , that the
foregoing shall not be deemed to restrict Manager from incurring trade payables, ordinary course advances for travel, entertainment or
relocation or granting credit or refunds to patrons for goods and services incurred in the ordinary course of business in the Operation of the
Managed Facilities in accordance with this Agreement;
2.2.5 Sell or otherwise dispose of the Managed Facilities or any part thereof or interest therein, including FF&E, except for the sale
of inventory and the disposal of obsolete or worn out or damaged items, each in the ordinary course of business or as contemplated in the
Annual Budget or Capital Budget;
2.2.6 Commence any ROI Capital Improvements, except as directed by Owner or as included in the Capital Budget, or commence
any Building Capital Improvements, except if required by the Operating Standard as determined pursuant to Section 5.1.4 and Expert
Resolution under Article XVII or Operating Limitations;
2.2.7 Hire or replace individuals for the positions of Senior Executive Personnel;
2.2.8 Submit, settle, adjust or otherwise resolve any casualty insurance claim related to the Managed Facilities involving losses or
casualties in excess of $500,000; provided , that the amount specified in this Section 2.2.8 shall be increased on January 1 of every third
Operating Year by the percentage increase in the Index since January 1 of the first Operating Year or the date of the prior increase, as
applicable;
2.2.9 Enter into any contract or transaction with an Affiliate of Manager, except as expressly provided for in this Agreement or
expressly permitted in the Annual Budget (it being understood that any such contract or transaction entered into with an Affiliate of Manager
and not approved in writing pursuant to this Section 2.2 shall first comply with the provisions of Section 5.6 or Section 5.8 , as applicable);
2.2.10 Confess any judgment, make any assignment for the benefit of creditors, admit an inability to pay debts as they become due
in the ordinary course of business, file a voluntary bankruptcy or consent to any involuntary bankruptcy with respect to the Managed Facilities
or Owner;
2.2.11 Initiate or settle any real or personal property tax appeals or claims involving property of Owner, unless directed by Owner in
writing;
2.2.12 Acquire any land or interest in land in the name of Owner;
2.2.13 Consent to any condemnation relating to the Managed Facilities, except with respect to Manager’s interests under this
Agreement as contemplated in Section 15.2 ;
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2.2.14 File with any Governmental Authority any federal or state income tax return applicable to Owner; or
2.2.15 Execute, amend, modify, provide written waiver of rights under or terminate any collective bargaining, recognition,
neutrality or other material labor agreements solely involving the Managed Facilities Personnel; provided , that with respect to the execution,
amendment, modification, waiver of rights under or termination of any collective bargaining, recognition, neutrality or other material labor
agreements which involve both Managed Facilities Personnel and other employees providing services at properties that are owned by or
managed by Manager’s Affiliates (other than any of the Growth Managed Facilities), the consent of Owner shall be required, which consent
shall not be unreasonably withheld, conditioned or delayed.
2.3
Other Operations of Manager and Owner .
2.3.1 Without limiting Manager’s obligation under Section 2.1.2 , Owner acknowledges that: (a) Owner has selected Manager to
Operate the Managed Facilities on behalf of Owner in substantial part because of the other hotels, casinos, entertainment venues, dining
establishments, spas and retail locations that are owned or operated by Manager and its Affiliates; (b) Owner has determined, on an overall
basis, that the benefits of operation as part of the Total Rewards System are substantial, notwithstanding that the properties operating under the
Service Mark Rights may not all benefit equally from operation under the Service Mark Rights; and (c) in certain respects all hotels, casinos,
entertainment venues, dining establishments, spas and retail locations compete on a national, regional and local basis with other hotels and
casinos and facilities, and that conflicts and competition may, from time to time, arise between the Managed Facilities, on the one hand, and
Other Managed Resorts, on the other hand.
2.3.2 Owner acknowledges and agrees that (i) Manager and its Affiliates own and operate many casino, hotel and other properties
across the country and internationally, some of which may be in competition with the Managed Facilities and (ii) neither Manager nor any
Affiliate of Manager shall have any obligation to promote the value and profitability of the Managed Facilities at the expense of such other
properties. Subject to the limitations and restrictions set forth in Sections 2.3.4 , 2.3.5 and 7.4.3 and Applicable Law, Manager and its Affiliates
shall be permitted to: (a) utilize the Guest Data for its own account and for use at Manager’s and its Affiliates’ other owned and/or operated
properties and utilize and retain the Guest Data after expiration or termination of the Term, (b) engage in commercially reasonable
cross-marketing and cross-promotional activities with Manager’s and its Affiliates’ other owned and/or operated properties, and (c) otherwise
participate or engage in competing projects, programs and activities. This Section 2.3.2 shall survive the expiration or termination of this
Agreement.
2.3.3 Manager acknowledges and agrees that Owner and its Affiliates may develop, operate and manage properties and other
facilities in other locations, some of which may be in competition with the Managed Facilities. Subject to the limitations and restrictions set
forth in Sections 7.4.3 and Applicable Law, Owner shall be permitted to: (a) utilize the Managed Facilities Guest Data for its own account and
for use at its other properties, utilize the Managed Facilities Guest Data during the Term, and retain and use the Managed Facilities Guest Data
after expiration or termination of the Term in accordance with this Agreement, (b) engage in
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cross-marketing and cross-promotional activities for the direct benefit of Owner’s other properties in a manner that may be competitive to the
Managed Facilities or Manager’s and its Affiliates’ other owned and/or operated facilities or operations, and (c) otherwise participate or engage
in competing projects, programs and activities. This Section 2.3.3 shall survive the expiration or termination of this Agreement.
2.3.4 Notwithstanding anything herein to the contrary, none of the limitations or restrictions in this Section 2.3 shall apply to
e-gaming operations.
2.4
Term .
2.4.1 Term . The initial term (the “ Initial Term ”) of this Agreement (together with the Renewal Term and any Continuing Term, as
applicable, the “ Term ”) shall commence on the Commencement Date and expire on the day immediately preceding the fifteenth
(15th) anniversary of the Opening Date, unless terminated earlier in accordance with the terms of this Agreement or extended by Manager.
Manager shall have the right (but not the obligation) to extend the Initial Term of this Agreement for one (1) additional ten (10) year period
(the “ Renewal Term ”) by giving Owner written notice of its desire to extend not later than ninety (90) days prior to the expiration of the Initial
Term of this Agreement. The Renewal Term is subject to earlier termination in accordance with the terms of this Agreement. After expiration
of the Renewal Term, the Term of this Agreement shall continue until (a) terminated by Manager or Owner upon at least ninety (90) days prior
written notice delivered to the Other Party, (b) terminated by Manager as permitted by Section 16.2 or (c) terminated by Owner as permitted by
Section 16.3 (the “ Continuing Term ”). If this Agreement is renewed for the Renewal Term or continues for the Continuing Term, unless
otherwise agreed by the Manager and Owner in writing, this Agreement, and all terms, covenants and conditions set forth herein, shall be
automatically extended to the expiration or earlier termination in accordance with the terms of this Agreement of the Renewal Term or the
Continuing Term, as applicable.
2.4.2 No Other Early Termination . This Agreement may only be terminated prior to the expiration of the Term as provided in
Article XVI . Notwithstanding any Applicable Law to the contrary, including principles of agency, fiduciary duties or operation of law, neither
Owner nor Manager shall be permitted to terminate this Agreement except in accordance with the express provisions of Article XVI of this
Agreement.
ARTICLE III.
FEES AND EXPENSES
3.1
Management Fees .
The following provisions shall apply to the payment of the Management Fees and other fees and expenses:
3.1.1 Base Management Fee . The Base Management Fee for each month shall be payable to Manager in monthly installments in
arrears within fifteen (15) days of delivery to Owner of each Monthly Report required under Section 10.2 . Each installment payment of the
Base Management Fee shall equal the Base Management Fee for the preceding twelve (12) month period, less the sum of all prior installment
payments of Base Management
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Fee attributable to such period (and subject to any adjustments made in connection with any annual reconciliations undertaken pursuant to
Section 3.1.3 ). At the time of submission of each Monthly Report, Manager shall provide to Owner a computation of the Base Management
Fee installment payment in reasonable detail and certified by Manager’s Designated Financial Officer. Any disputes regarding the Base
Management Fee shall be referred to the Expert for Expert Resolution pursuant to Article XVII .
3.1.2 Incentive Management Fee . The Incentive Management Fee shall be payable to Manager in quarterly installments in arrears
within fifteen (15) days of delivery to Owner of each Quarterly Report with respect to the end of the calendar quarter to which such Incentive
Management Fee installment relates. Each installment payment of the Incentive Management Fee shall equal the Incentive Management Fee
for the period consisting of the preceding four (4) calendar quarters, less the sum of all prior installment payments of Incentive Management
Fee attributable to such period (and subject to any adjustments made in connection with any annual reconciliations undertaken pursuant to
Section 3.1.3 ). At the time of submission of each Quarterly Report, Manager shall provide to Owner a computation of the Incentive
Management Fee installment payment in reasonable detail and certified by Manager’s Designated Financial Officer. Any disputes regarding the
Incentive Management Fee shall be referred to the Expert for Expert Resolution pursuant to Article XVII .
3.1.3 Reconciliation of Management Fees . By April 15 of each Operating Year during the Term, Manager shall cause to be
prepared and delivered to Owner a reconciliation statement for the prior Operating Year showing the calculation and payment of the
Management Fees for the prior Operating Year, and appropriate adjustments shall be made for any overpayment or underpayment of the
Management Fees during such Operating Year. If any reconciliation statement reflects an overpayment of Management Fees to Manager,
Manager shall, within fifteen (15) days after such reconciliation statement has been delivered by Manager to Owner, deposit into the Operating
Account the amount of such overpayment. If the reconciliation statement reflects an underpayment of Management Fees to Manager, Manager
shall disburse from the Operating Account, within thirty (30) days after such reconciliation statement has been delivered by Manager to Owner,
the amount of such underpayment of Management Fees due Manager; provided that if funds in the Operating Account are insufficient to
withdraw such underpayment or such withdrawal is otherwise restricted for a period of sixty (60) days after such reconciliation statement has
been delivered, the amount of such underpayment shall accrue interest in accordance with Section 3.4 and shall be withdrawn by Manager as
soon as funds are sufficient therefor. Any disputes regarding such reconciliation statement shall be referred to the Expert for Expert Resolution
pursuant to Article XVII .
3.2
Centralized Services Charges .
Centralized Services Charges payable in accordance with Section 4.1.1 shall be due and payable to Manager monthly in arrears for the
immediately preceding month within fifteen (15) days of delivery to Owner of the Monthly Report for such month. All Centralized Services
Charges shall be set forth in the Monthly Reports. Any disputes regarding the Centralized Services Charges shall be referred to the Expert for
Expert Resolution pursuant to Article XVII .
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3.3
Reimbursable Expenses .
Owner shall reimburse Manager for all Reimbursable Expenses incurred by Manager during the Term. The Reimbursable Expenses
(a) may be withdrawn by Manager from the Operating Account to pay such Reimbursable Expenses when such amounts become due or
(b) shall be due monthly in arrears for the immediately preceding month within fifteen (15) days of delivery to Owner of the Monthly Reports
for such month. If funds in the Bank Accounts are insufficient to pay such Reimbursable Expenses or if such withdrawal is otherwise restricted
within the sixty (60) day period after such Reimbursable Expenses are due, such Reimbursable Expenses shall accrue interest in accordance
with Section 3.4 and shall be withdrawn by Manager from the Operating Account as soon as funds are sufficient therefor. Any disputes
regarding the Reimbursable Expenses shall be referred to the Expert for Expert Resolution pursuant to Article XVII .
3.4
Interest .
If any fee or other amount due by either Party to the other Party or its Affiliates or designees under this Agreement is not paid within
sixty (60) days after such payment is due, such amount shall bear interest from and after the respective due dates thereof until the date on which
the amount is received in the bank account designated by the Party to which such amount is owed at an annual rate of interest equal to the
lesser of (a) the prevailing lending rate of such Party’s principal bank for working capital loans to such Party plus three percent (3%) and
(b) the highest rate permitted by Applicable Law.
3.5
Payment of Fees and Expenses .
3.5.1 No Offset . All payments by Owner or by Manager under this Agreement and all related agreements between the Parties or
their respective Affiliates shall be made pursuant to independent covenants, and neither Owner nor Manager shall set off any claim for damages
or money due from either Party or any of its Affiliates to the other, except to the extent of any outstanding and undisputed payments owed to
Owner by Manager under this Agreement.
3.5.2 Place and Means of Payment . All fees and other amounts due to Manager or its Affiliates under this Agreement, including,
without limitation, Management Fees, Centralized Services Charges and Reimbursable Expenses, shall be paid to Manager in U.S. Dollars, in
immediately available funds. Manager may pay such fees and other amounts owed to Manager or its Affiliates consistent with this Agreement
and the Annual Budget directly from the Operating Account or, in the case of Management Fees, Management Account when such fees and
other amounts are due. In addition, Manager may require that any such payments to Manager hereunder be effected through electronic
debit/credit transfer of funds programs specified by Manager from time to time, and Owner agrees to execute such documents (including
independent transfer authorizations), pay such fees and costs and do such things as Manager reasonably deems necessary to effect such
transfers of funds.
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3.6
Application of Payments .
All payments by Owner, or by Manager on behalf of Owner, pursuant to this Agreement and all related agreements shall be applied in the
manner provided in this Agreement.
3.7
Sales and Use Taxes .
Owner shall pay to Manager an amount equal to any sales, use, commercial activity tax, gross receipts, value added, excise or similar
taxes assessed against Manager by any Governmental Authority that are calculated on Reimbursable Expenses or Centralized Services Charges
required to be paid by Owner under this Agreement (but not, for avoidance of doubt, any such assessment with respect to the Management
Fees), other than income, gross receipts, franchise or similar taxes assessed against Manager on the Management Fees or income taxes on
Manager’s income. Owner and Manager agree to cooperate in good faith to minimize the taxes assessed against Manager, Owner and the
Managed Facilities, including taxes assessed against Owner in connection with paying Reimbursable Expenses directly to the applicable
third-party vendor, so long as such actions are commercially reasonable and could not reasonably be expected to, and do not, result in an
adverse impact in any material respect on Manager, Owner or the Managed Facilities. In the event of any dispute regarding appropriate actions
to be taken to minimize taxes assessed against Manager, Owner and the Managed Facilities, such dispute may be submitted by either Party for
Expert Resolution in accordance with Article XVII .
ARTICLE IV.
CENTRALIZED SERVICES
4.1
Centralized Services .
In connection with Manager’s Operation of the Managed Facilities, Manager agrees to arrange for it or its Affiliates to provide, on
commercially reasonable terms and on a Non-Discriminatory basis, the centralized managerial, administrative, supervisory and support services
and products to Manager and the Managed Facilities as are generally provided to the Other Managed Resorts as of the Opening Date
(collectively, the “ Centralized Services ”), including (without limitation): (a) services and products in the areas of marketing, risk
management, information technology, legal, internal audit, accounting and accounts payable; (b) the Proprietary Information and Systems; and
(c) the Total Rewards System. As consideration for the Management Fee, Manager grants (or has caused its Affiliates to grant) to the Owner a
license to the Technology Systems included in the Centralized Services solely with respect to the Property during the Term and the Transition
Period; provided that, notwithstanding anything to the contrary set forth in this Agreement, such license shall be perpetual if a Manager Event
of Default occurs. The Centralized Services to be provided under this Agreement may be provided by Manager, CEC, CEOC, Services Co or
an Affiliate of any of them in or from Las Vegas, Nevada or in or from other locations other than the Managed Facilities, or for such
Centralized Services provided by third parties, by a third-party designated by Manager, CEOC, Services Co or an Affiliate of any of them (the
“ Third-Party Centralized Services ”). Owner and Manager acknowledge and agree that the Managed Facilities shall participate in all
Centralized Services as determined by Manager on a Non-Discriminatory basis, and Owner shall pay all Centralized Services Charges (all of
which shall be commercially reasonable and reasonably allocated) for, and comply with all terms and requirements of, such Centralized
Services.
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4.1.1 Centralized Services Charges .
4.1.1.1 Calculation of Centralized Services Charges . The amounts charged to the Managed Facilities for the Centralized
Services (the “ Centralized Services Charges ”) shall be determined as follows: the sum of (a) such amounts that have been historically
“allocated” to the Managed Facilities will continue to be done in a manner consistent with past practices, and (b) such amounts that have been
historically “unallocated” and incurred in performance of the Centralized Services and fairly and equitably allocated to the Managed Facilities
on the same basis as such amounts are determined for substantially all of the Other Managed Resorts that are participating in such Centralized
Services and in a manner that is commercially reasonable and Non-Discriminatory to the Managed Facilities, and may include a reasonable
allocation of amounts reasonably calculated to cover the overhead and other costs incurred by Manager or its Affiliates (as applicable) in
providing (or arranging for the provision of) such Centralized Services, including: (i) compensation and employee benefits of Corporate
Personnel directly involved in providing the Centralized Services; (ii) recovery of development costs and promotion costs for such Centralized
Services; (iii) costs of equipment employed in providing the Centralized Services; and (iv) costs of operating, maintaining and upgrading the
Centralized Services. In addition, Owner shall pay all costs for the installation and maintenance of any equipment and Technology Systems at
the Managed Facilities used in connection with the Centralized Services. Manager, its Affiliates and any third-party providing any Centralized
Services shall have the right to increase or decrease any or all of the Centralized Services Charges from time to time, upon notice to Owner,
provided that any such changes in the services and/or charges for such Centralized Services are commercially reasonable and are applied on a
Non-Discriminatory basis.
4.1.1.2 Allocation of Costs . Owner acknowledges that from time to time there might be a current surplus or current deficit
of funds for any one (1) or more Centralized Services, and that any retention of funds for use at a later date (including interest earned thereon)
shall not constitute a profit. Owner acknowledges that the Centralized Services Charges for Third-Party Centralized Services may include a
profit component to such third-party.
4.1.1.3 Right to Pay Third-Party Providers . Manager shall have the right (but not the obligation) to pay (directly or through
an Affiliate) a reasonable allocation of any amounts due to a third-party for any Third-Party Centralized Services provided to the Managed
Facilities, in which case, notwithstanding anything to the contrary in this Agreement, such amounts shall be deemed to be Reimbursable
Expenses for all purposes under this Agreement and such amount shall not be included in the Centralized Services Charges to the extent it is
characterized as a Reimbursable Expense.
4.2
Modification of Centralized Services .
Owner acknowledges that the Centralized Services are an integral part of Manager’s operation of the Other Managed Resorts and related
facilities, and CEOC and/or Services Co needs the flexibility to modify the Centralized Services to respond to market trends, customer
demands, economic conditions, technological advances and other factors affecting the operation of the Other Managed Resorts and related
facilities, as they may change from time to time.
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Accordingly, Owner agrees that CEOC and/or Services Co and its respective Affiliates shall have the right to: (a) modify the structure, scope,
delivery and manner of providing of any Centralized Services; or (b) add a new, or discontinue an existing, Centralized Service, as Manager
deems advisable from time to time; provided that, in each case, any such changes are commercially reasonable and Non-Discriminatory to the
Managed Facilities in both design and implementation.
ARTICLE V.
OPERATION OF THE MANAGED FACILITIES
5.1
Annual Budget .
5.1.1 Proposed Annual Budget . The portion of the operating plan and budget for the Managed Facilities in effect immediately prior
to the Commencement Date that relates and applies to the period from and after the Commencement Date through and including December 31,
2014 shall apply under this Agreement as the Annual Budget for such period. Subject to reimbursement for Reimbursable Expenses in
accordance with this Agreement, from the Commencement Date through the Opening Date, Manager will continue to provide the pre-opening
services to the Managed Facilities in a manner and level commensurate with the pre-opening services being provided immediately prior to the
Commencement Date to the Managed Facilities pursuant to the terms and conditions of the Transaction Agreement. On or before November 1
of each Operating Year, Manager shall prepare and deliver to Owner, for its review and approval, a proposed operating plan and budget for the
next Operating Year. All operating plans and budgets proposed by Manager shall include (without limitation) projections of Gross Operating
Revenue and Operating Expenses by department for such period for the Managed Facilities and shall be prepared in good faith in accordance
with budgeting and planning procedures typically employed by CEOC’s operating subsidiaries. Each operating plan and budget shall include
monthly and annualized projections of each of the following items, as applicable, for the Managed Facilities:
5.1.1.1 results of operations (including itemized Gross Operating Revenue, Promotional Allowances, Operating Expenses
and EBITDA), together with the following supporting data: (a) total labor costs, including both fixed and variable labor; (b) the Management
Fees, Centralized Services Charges and Reimbursable Expenses; and (c) a description of the category and nature of Centralized Services to be
provided, together with a budget for each such category;
5.1.1.2 a description of proposed Routine Capital Improvements, Building Capital Improvements and ROI Capital
Improvements to be made during such Operating Year, including capitalized lease expenses, an itemization of the costs of such capital
improvements (including a contingency line item) and proposed monthly funding for such costs, and project schedules to commence and
complete such capital improvements (the “ Capital Budget ”);
5.1.1.3 a statement of cash flow, including a schedule of any anticipated cash shortfalls or requirements for funding by
Owner;
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5.1.1.4 a schedule of debt service payments and reserves required under any Financing Documents;
5.1.1.5 a marketing plan and budget for the activities to be undertaken by Manager pursuant to Article IX , including
promotional activities and Promotional Allowances for the Managed Facilities;
5.1.1.6 an allocation for all Centralized Services; and
5.1.1.7 any other information or projections reasonably requested by Owner to be included in the operating plan and budget
from time to time.
5.1.2 Approval of Annual Budget . Owner shall review the proposed operating plan and budget and shall provide Manager with its
written approval of or any objections to such proposed operating plan and budget in writing, in reasonable detail, within forty-five (45) days
after receipt of the proposed operating plan and budget from Manager; provided , any line items in the proposed operating plan and budget shall
not be adopted and implemented by Manager until Owner shall have approved such operating plan and budget and/or any items therein in
dispute shall have been determined pursuant to Section 5.1.3 . Owner shall be deemed to have approved that portion of any proposed operating
plan and budget to which Owner has not approved in writing or objected to in writing within such forty-five (45) day period. If Owner objects
to any portion of the proposed operating plan and budget within such forty-five (45) day period, the Parties shall meet within twenty (20) days
after Manager’s receipt of Owner’s objections and discuss such objections, and then Manager shall submit written revisions to the proposed
operating plan and budget after such discussion. The Parties shall use good faith efforts to reach an agreement on the operating plan and budget
prior to January 1 of each Operating Year. The proposed operating plan and budget, as modified to reflect the revisions, if any, agreed to by the
Parties pursuant to Section 5.1.3 , shall become the “ Annual Budget ” for the next Operating Year. Owner shall act reasonably and exercise
prudent business judgment in approving of, or objecting to, all or any portion of any proposed operating plan and budget.
5.1.3 Resolution of Disputes for Annual Budget . If the Parties, despite their good faith efforts, are unable to reach final agreement
on the proposed operating plan prior to January 1 of each Operating Year, or otherwise have a dispute regarding the Annual Budget as
contemplated by this Section 5.1 , those portions of such proposed operating plan that are not in dispute shall become effective on January 1 of
such Operating Year and, pending the Parties’ resolution of such dispute, the prior year’s Annual Budget shall govern the items in dispute,
except that the budgeted expenses provided for such item(s) in the prior year’s Annual Budget (or, if earlier, the last Annual Budget in which
the budgeted expenses for such disputed item(s) were approved) shall be increased by the percentage increase in the Index from January 1 of
the prior Operating Year (or, if applicable, each additional Operating Year between the prior Operating Year and the Operating Year in which
there became effective the last Annual Budget in which the budgeted expenses for such disputed item(s) were approved). Upon the resolution
of any such dispute by agreement of the Parties, such resolution shall control as to such item(s). For purposes of clarity, all disputes regarding
the Annual Budget shall be resolved (if at all) between Owner and Manager directly and no such dispute shall subject to Expert Resolution
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through the procedures described in Article XVII unless Owner and Manager (each acting in its sole discretion) agree in writing at the time any
such dispute arises to mutually submit the subject dispute to Expert Resolution under Article XVII .
5.1.4 Operation in Accordance with Annual Budget . Manager shall use its commercially reasonable efforts to operate the Managed
Facilities in accordance with the Annual Budget for the applicable Operating Year (subject, in the case of disputed items, to the provisions of
Section 5.1.3 ). Nevertheless, the Parties acknowledge that preparation of the Annual Budgets is inherently inexact and that Manager may vary
from any Annual Budget (a) to the extent Manager reasonably determines that such variance is required by any Financing Document and/or
any Ground Lease, (b) in connection with the matters set forth in Section 5.1.5 , or (c) by reallocating up to ten percent (10%) of any line item
(as shown on the Summary Annual Budget in the form attached hereto as Exhibit C ) to any other line item without Owner’s prior approval
(unless such other line item is for Centralized Service Charges or Reimbursable Expenses for Third Party Centralized Services pursuant to
Section 4.1.1.3 , in which event Owner’s approval shall be required for such reallocation). Other than as set forth in the preceding sentence,
Manager shall not incur costs or expenses or make expenditures that would cause the total expenditures for the Operation of the Managed
Facilities to exceed the aggregate amount of expenditures provided in the Annual Budget by more than five percent (5%) without Owner’s
prior approval. Owner acknowledges that the actual financial performance of the Managed Facilities during any Operating Year will likely vary
from the projections contained in the Annual Budget for such Operating Year, and Manager shall not be deemed to have made any guarantee,
warranty or representation whatsoever in connection with the Annual Budget or consistency of actual results with the Operating Plan.
5.1.5 Exceptions to Annual Budget . Notwithstanding Section 5.1.4 , Owner acknowledges and agrees as follows:
5.1.5.1 The amount of certain expenses provided for in the Annual Budget for any Operating Year will vary based on the
occupancy, use and demand for goods and services provided at the Managed Facilities and, accordingly, to the extent that occupancy, use and
demand for such goods and services for any Operating Year exceeds the occupancy, use and demand projected in the Annual Budget for such
Operating Year, such Annual Budget shall be deemed to include corresponding increases in such variable expenses, provided , that the
percentage increase in the variable expense over budget shall not exceed the percentage increase in corresponding revenue over projections. To
the extent that occupancy, use and demand for goods and services provided at the Managed Facilities for any Operating Year is less than the
occupancy, use and demand projected in the Annual Budget for such Operating Year, Manager will make commercially reasonable adjustments
to the Operation of the Managed Facilities in an effort to reduce such variable expenses;
5.1.5.2 The amount of certain expenses provided for in the Annual Budget for any Operating Year are not within the ability
of Manager to control, including real estate and personal property taxes, applicable gaming taxes, insurance premiums, utility rates, license and
permit fees and certain charges provided for in contracts and leases entered into pursuant to this Agreement, and accordingly, Manager shall
have the right to pay from the Operating Account the actual amount of such uncontrollable expenses without reference to the
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amounts provided for with respect thereto in the Annual Budget for such Operating Year ( provided that Manager shall promptly provide
Owner with a reasonably detailed written explanation of all variances in excess of five percent (5%) between the budgeted and actual amounts
of any such uncontrollable expenses);
5.1.5.3 If any expenditures are required on an emergency basis to (a) preserve or repair the Managed Facilities or other
property or (b) avoid potential injury to persons or material damage to the Managed Facilities or other property, Manager shall have the right to
make such expenditures, whether or not provided for, or within the amounts provided for, in the Annual Budget for the Operating Year in
question, to the extent reasonably required to avoid or mitigate such injury or material damage; and
5.1.5.4 If any expenditures are required to comply with, or cure or prevent any violation of, any Applicable Law, Manager
shall, following written notice to Owner (except in the case of emergency, in which case the provisions of Section 5.1.5.3 shall govern) have
the right to make such expenditures, whether or not provided for or within the amounts provided for in the Annual Budget for the Operating
Year in question, as may be necessary to comply with, or cure or prevent the violation of, such Applicable Law.
5.1.6 Modification to Annual Budget . Manager shall have the right from time to time during each Operating Year to propose
modifications to the Annual Budget then in effect based on actual operations during the elapsed portion of the applicable Operating Year and
Manager’s reasonable business judgment as to what will transpire during the remainder of such Operating Year. If, during any Operating Year,
Manager forecasts the EBITDA for such Operating Year to be less than the budgeted EBITDA by more than five percent (5%), Manager shall
meet with Owner to discuss appropriate modifications to the operating, promotional and marketing plans in order to address the forecasted
variance. Modifications to such Annual Budget, if any, shall be subject to Owner’s prior written approval; provided , that in no event shall
Owner have the right to withhold its approval to any material modifications on account of changes to costs of insurance premiums, operating
supplies and equipment, charges provided for in contracts and leases entered into pursuant to this Agreement or other amounts that are not
within Manager’s ability to control (e.g., taxes, assessments, utilities, license or permit fees, inspection fees and any impositions imposed by
any Governmental Authority).
5.2
Maintenance and Repair; Capital Improvements .
5.2.1 Required Maintenance and Repair and Capital Improvements . Except as otherwise provided in this Section 5.2 , Manager, at
Owner’s expense, shall perform or cause to be performed all ordinary maintenance and repairs and all such Routine Capital Improvements and
Building Capital Improvements: (a) as are necessary or advisable to keep the Managed Facilities in good working order and condition and in
compliance with the Operating Standard (subject to the Annual Budget and Section 5.1.4) and Operating Limitations; and (b) as Manager
reasonably determines are necessary or advisable to comply with, and cure or prevent the violation of, any Applicable Laws. Manager, at
Owner’s expense, shall perform or cause to be performed all such Routine Capital Improvements and Building Capital Improvements as are
provided in the Annual Budget or otherwise approved in writing by Owner.
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5.2.2 Discretionary Capital Improvements . Manager, at Owner’s expense, shall cause to be performed all ROI Capital
Improvements approved by Owner (in the Annual Budget or otherwise in writing in advance), and shall supervise such work and ensure that
the performance of such work is undertaken in a manner reasonably calculated to avoid or minimize interference with the Operation of the
Managed Facilities. Except as provided in the applicable Annual Budget or proposed by Manager and approved by Owner, Owner shall notify
Manager of any ROI Capital Improvements proposed to be undertaken by Owner and Manager may, within thirty (30) days after receipt of
such notice, object to the undertaking of such ROI Capital Improvements based on Manager’s reasonable determination that such ROI Capital
Improvements will not be consistent with the Operating Standard or will unreasonably interfere with the Operation of the Managed Facilities,
including that such ROI Capital Improvements would unreasonably interfere with the Managed Facilities’ operating performance and the
ability of Manager to Operate the Managed Facilities in accordance with the Operating Standard. Within fifteen (15) days after receipt of any
notice from Manager alleging a deficiency with respect to any ROI Capital Improvement proposed by Owner, Owner shall respond in detail to
such allegation and, if the matter is not resolved by the Parties within thirty (30) days after Owner’s response, the determination of whether
such capital improvement does not, or when constructed will not, be consistent with the Operating Standard or will unreasonably interfere with
the Operation of the Managed Facilities shall be submitted to the Expert for Expert Resolution in accordance with Article XVII . If the Expert
determines that such capital improvement does not, or when constructed will not, comply with the Operating Standard or will unreasonably
interfere with the Operation of the Managed Facilities, Owner shall promptly take such actions as the Expert shall require to bring such capital
improvement into compliance with the Operating Standard or to cause such capital improvement to not unreasonably interfere with the
Operation of the Managed Facilities.
5.2.3 Intentionally Omitted .
5.2.4 Intentionally Omitted .
5.2.5 Remediation of Design or Construction Defect . If the design or construction of the Managed Facilities is defective, and the
defective condition presents a risk of injury to persons or damage to the Managed Facilities or other property, or results in non-compliance with
Applicable Law, then Manager shall have the authority to, at Owner’s expense, perform all work necessary to remedy such design or
construction defect in the Managed Facilities. Owner acknowledges that such work shall be performed at Owner’s expense and that Manager
shall not use funds in the Operating Account in remedying such defects.
5.3
Personnel .
5.3.1 Manager Control . Manager shall manage and have sole and exclusive control of all aspects of the Managed Facilities’ human
resources functions as set forth in this Section 5.3 .
5.3.2 Employment of Managed Facilities Personnel . All Managed Facilities Personnel shall be employees of Owner or an Affiliate
and Owner shall bear all Managed Facilities Personnel Costs. Managed Facilities Personnel Costs shall be Operating Expenses. Owner shall
have no right to supervise, discharge or direct any Managed Facilities Personnel, except as otherwise set forth herein, and covenants and agrees
not to attempt to so supervise, direct or discharge.
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5.3.3 Senior Executive Personnel . Subject to Owner’s approval rights in Section 2.2.7 , Manager shall, on Owner’s behalf, recruit,
screen, appoint, hire, pay (from the Operating Account), train, supervise, instruct and direct the Senior Executive Personnel, and they, or other
Managed Facilities Personnel to whom they may delegate such authority, shall, on Owner’s behalf: (a) recruit, screen, appoint, hire, train,
supervise, instruct and direct all other Managed Facilities Personnel necessary or advisable for the Operation of the Managed Facilities; and
(b) discipline, transfer, relocate, replace, terminate and discharge any Managed Facilities Personnel.
5.3.4 Terms of Employment . Subject to Owner’s approval rights under Section 2.2.7 , all terms and conditions of employment,
personnel policies and practices relating to the Managed Facilities Personnel shall be established, maintained and implemented by Manager in
compliance with all Applicable Laws, on Owner’s behalf, including, but not limited to, Applicable Laws relating to the terms and conditions of
employment, recruiting, screening, appointment, hiring, compensation, bonuses, severance, pension plans and other employee benefits,
training, supervision, instruction, direction, discipline, transfer, relocation, replacement, termination and discharge of Managed Facilities
Personnel. Manager shall process the payroll and benefits for Managed Facilities Personnel.
5.3.5 Non-Solicitation . Manager hereby agrees not to, and to cause its Affiliates, its and their respective successors and assigns and
any Person acting for or on behalf of any of them not to, solicit the employment of any senior supervisory Managed Facilities Personnel,
without Owner’s prior written consent, at any time during the Term or any management personnel of any Affiliate of Owner during the Term;
provided , that this covenant shall not restrict Manager and its Affiliates from engaging in general solicitation or advertising of employment
opportunities that is not targeted at employees of the Managed Facilities.
5.3.6 Corporate Personnel . All Corporate Personnel who travel to the Managed Facilities to perform technical assistance,
participate in special projects or provide other services shall be permitted to reasonably utilize the services provided at the Managed Facilities
(including food and beverage consumption), without charge to Manager or such Corporate Personnel.
5.4
Bank Accounts .
5.4.1 Administration of Bank Accounts . Manager shall establish and administer the bank accounts listed in this Section 5.4 (the “
Bank Accounts ”) on Owner’s behalf at a bank or banks selected by Owner and reasonably approved by Manager. All Bank Accounts shall
(a) be established by Manager, as agent for Owner, in the name of Owner, doing business as the Managed Facilities, (b) be owned by Owner
and (c) use the taxpayer identification number of Owner. The Bank Accounts shall be interest-bearing accounts if such accounts are reasonably
available. The Bank Accounts may include:
5.4.1.1 one or more accounts for the purposes of depositing all funds received in the Operation of the Managed Facilities and
paying all Operating Expenses (collectively, the “ Operating Account ”);
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5.4.1.2 one or more accounts into which amounts sufficient to cover all Managed Facilities Personnel Costs shall be
deposited from time to time by Manager (by transfer of funds from the Operating Account);
5.4.1.3 a separate account for the purpose of depositing funds sufficient to pay all Management Fees and other amounts due
to Manager under this Agreement (by transfer of funds from the Operating Account) (the “ Management Account ”); and
5.4.1.4 such other accounts as Manager with Owner’s prior approval (or Owner with Manager’s approval (not to be
unreasonably withheld)) deems necessary or desirable.
All funds in the Bank Accounts shall be held in express trust for the benefit of Owner and shall be disbursed on the terms and subject to the
conditions of this Agreement and only for the purposes set forth in this Agreement, and Manager shall not commingle the funds associated with
the Managed Facilities with those of any other property or Person and Manager shall use such funds solely in connection with the Operation of
the Managed Facilities and for no other purpose. All funds of Owner and all funds generated with respect to the Managed Facilities shall be
held, at all times, in the Bank Accounts until such funds are paid to third parties in accordance with this Agreement and Manager shall not hold
any such funds in any other manner. To the extent, if any, that the funds in the Bank Accounts are deemed not to be held in express trust for the
benefit of Owner and to the extent permitted by the terms of any Financing, Owner is hereby granted a security interest and lien in the Bank
Accounts to secure Manager’s obligations under this Agreement and Owner is entitled to perfect its security interest and lien in the Bank
Accounts through an account control agreement with the applicable bank(s) where the Bank Account(s) are deposited (in customary form and
substance and which is reasonably satisfactory to Manager and which is consistent with this Agreement, including the provisions of this
agreement applicable to the holding and disbursement of funds).
5.4.2 Authorized Signatories; Bank Account Information .
5.4.2.1 Manager’s designees shall be the only Persons authorized to draw funds from the Bank Accounts and make deposits
into the Bank Accounts during the Term; provided , however , that if any Manager Event of Default has occurred, Manager is in breach of
Section 5.4.4 or the fifth sentence of Section 5.4.1 , (i) Owner shall be authorized to draw, disburse and retain funds as Manager would be so
entitled under Section 5.4.4 (and such funds may only be used in accordance with Section 5.4.4 ) and (ii) if any Manager Event of Default has
occurred, Manager shall cease having any further rights to draw on such Bank Accounts and a signature (electronic or otherwise) from Owner
shall also be required for the drawing of funds from the Bank Accounts. Manager shall establish reasonable controls to ensure accurate
reporting of all transactions involving the Bank Accounts and as Manager, consistent with commercially reasonable business procedures and
practices which are consistent with the size and nature of the operations at the Managed Facilities, reasonably deems necessary or advisable.
5.4.2.2 Manager shall (a) provide Owner copies of bank statements with respect to the Bank Accounts, and (b) provide
Owner (1) weekly cash balance summaries with respect to each Bank Account and (2) such other information regarding the Bank Accounts as
reasonably requested by Owner from time to time.
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5.4.3 Permitted Investments; Liability for Loss in Bank Accounts . Manager shall not invest funds in the Bank Accounts, except as
may be permitted under the Financing Documents and as approved by Owner. Owner shall bear all losses suffered in any investment of funds
into any such Bank Account, and Manager shall have no liability or responsibility for such losses, except to the extent due to Manager’s Gross
Negligence or Willful Misconduct or any Manager Event of Default.
5.4.4 Disbursement of Funds to Owner . All revenues from the operation of the Managed Facilities shall be deposited promptly by
Manager in the Operating Account. Unless the Parties agree otherwise, on or about the twenty fifth (25th) day of each calendar quarter,
Manager shall disburse to Owner, as directed by Owner, any funds remaining in the Operating Account at the end of the immediately preceding
month after payment, contribution or retention, as applicable, of the following in the following order of priority: (a) all Operating Expenses
then due but which have not yet been paid; (b) the amount of debt service accruals and payments due to Lenders as provided in the most
recently updated Monthly Debt Service Schedule; (c) transfer of the Management Fees then due to the Management Account (for payment
within one (1) Business Day to Manager and, if applicable, in accordance with Section 5.4.5 ); (d) the amount of any reserves required to be
funded pursuant to the Financing Documents; and (e) retention by Manager of an amount sufficient to cover (i) a reasonable reserve (as
approved by Owner in the Annual Budget or otherwise in writing in advance), (ii) any other amounts necessary to cure or prevent any violation
of any Applicable Law in accordance with this Agreement, and (iii) such other amounts as may be agreed to by the Parties from time to time. In
the event Owner disputes any decision by Manager to reserve and not disburse to Owner funds pursuant to this Section 5.4.4 , such dispute may
be submitted by either Party for Expert Resolution in accordance with Article XVII .
5.4.5 Transfers Between Bank Accounts . Manager has the authority to transfer funds from and between the Bank Accounts in order
to pay Operating Expenses, to pay debt service with respect to the Managed Facilities, to invest funds for the benefit of the Managed Facilities
(to the extent permitted under this Agreement), to pay the Management Fees to Manager pursuant to this Agreement and for any other purpose
consistent with the Annual Budget and good business practices; provided , that, if the circumstance contemplated by the proviso in the first
sentence of Section 5.4.2 has occurred and is continuing, Manager shall not transfer funds from the Management Account without the
co-signature (electronic or otherwise) of a representative of Owner (other than an Affiliate of Manager) (and Owner shall not unreasonably
withhold, condition or delay such co-signature).
5.4.6 Monthly Debt Service Schedule . Whenever Owner incurs indebtedness with respect to the Managed Facilities, Owner shall
provide Manager with a schedule of all principal and interests payments due with respect thereto and the method for calculating interest with
respect to such indebtedness (as the same may be updated, the “ Monthly Debt Service Schedule ”).
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5.5
Funds for Operation of the Managed Facilities .
5.5.1 Initial Cash . As of the Commencement Date, Owner shall ensure that the available funds in the Operating Account include at
least $2,700,000 of cash.
5.5.2 Additional Funds . If Manager reasonably determines at any time during the Term that: (a) the available funds in the
Operating Account are insufficient to allow for the uninterrupted and efficient Operation of the Managed Facilities in accordance with this
Agreement (including the Operating Standard) based on a ninety (90) day reference period; (b) the available funds in the Operating Account
are insufficient for the timely payment of amounts in any given month to be paid under Section 5.4.4 ; (c) the available funds in the Operating
Account are insufficient for (i) the Operation of the Managed Facilities in accordance with the Operating Limitations, (ii) Building Capital
Improvements or (iii) ROI Capital Improvements then contemplated in the Annual Budget or otherwise approved by Owner, Manager shall
notify Owner of the existence and amount of the shortfall (a “ Funds Request ”) and shall provide a reasonably detailed explanation (including
any relevant documentation related thereto) of the cause of such shortfall. Owner shall be obligated to deposit into the Operating Account the
amount requested by Manager in the Funds Request within fifteen (15) days after delivery of the Funds Request.
5.5.3 Failure to Provide Funds . If Owner fails to deposit all or any portion of any amount requested in a Funds Request, Manager
shall have the right (but not the obligation) to use or pledge its credit in paying, on Owner’s behalf, (a) ordinary and customary Operating
Expenses to the extent incurred in accordance with this Agreement, (b) Building Capital Improvements and Routine Capital Improvements to
the extent incurred in accordance with this Agreement and (c) ROI Capital Improvements then contemplated in the Annual Budget or otherwise
approved by Owner, in which case Owner shall pay for such goods or services when such payment is due. In addition, if Owner fails to pay for
such goods or services when such payment is due, then Manager shall have the right (but not the obligation) to pay for such goods or services,
in which case Owner shall reimburse Manager immediately upon demand by Manager (and Manager shall be entitled to reimburse itself from
any available funds from the Operation of the Managed Facilities, including the Operating Account) for all such amounts advanced by
Manager, together with interest thereon in accordance with Section 3.4 . Notwithstanding the foregoing, Manager shall not have the rights
described in this Section 5.5.3 with respect to any failure by Owner to fund or pay such amounts that is caused directly or indirectly by
Manager or any of its Affiliates.
5.6
Purchasing .
Manager and its Affiliates shall make or cause to be made available to the Managed Facilities, on a Non-Discriminatory basis, licensing
or purchasing programs available to Other Managed Resorts (whether on a national, regional, mandatory, optional or other basis) (each, a “
Purchasing Program ”). Manager may elect, in its discretion, but subject to the terms of this Section 5.6 and Applicable Law, to license any
games or purchase or lease any FF&E and Supplies for the Operation of the Managed Facilities from a Purchasing Program maintained by or
for the benefit of Manager or its Affiliates; provided , that Manager shall ensure the prices and terms of the games, FF&E and Supplies to be
licensed or purchased under such Purchasing
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Program (including with such modifications as provided below) are reasonably comparable to the prices and terms which would be charged by
reputable and qualified unrelated third parties on an arm’s length basis for similar games, FF&E and Supplies sold, leased or licensed to similar
companies in the hospitality industry, and may be grouped in reasonable categories rather than being compared item by item. Manager and its
Affiliates shall pass through any discounts, rebates or similar incentives received in connection with a Purchasing Program to the Managed
Facility on a Non-Discriminatory basis, and Owner hereby acknowledges that certain discounts, rebates and similar incentives are not passed
through to Other Managed Resorts. Owner acknowledges and agrees that Manager and its Affiliates shall have the right, provided the same is
implemented on a Non-Discriminatory basis, to (a) modify the fees, costs or terms of any such Purchasing Program, including adding games,
FF&E and Supplies to, and, subject to Applicable Law, deleting games, FF&E and Supplies from, such Purchasing Program; (b) terminate all
or any portion of any such Purchasing Program, from time to time, upon sixty (60) days’ notice to Owner; (c) subject to the obligation to pass
through any such amounts as set forth in the immediately preceding sentence, receive commercially reasonable payments, fees, commissions or
reimbursements from suppliers and third parties in respect of such purchases, leases or licenses; and (d) own or have investments in such
suppliers.
5.7
Managed Facilities Parking .
Owner shall cause to be available as part of the Managed Facilities parking sufficient for the Operation of the Managed Facilities (it being
acknowledged and agreed by Manager that, as of the Commencement Date, the parking facilities available to the Managed Facilities are
sufficient for the Operation of the Managed Facilities). If parking for the Managed Facilities is not Operated as a part of the Managed Facilities,
Manager shall have the right to approve the arrangements for such operation, including the identity of any third-party parking manager.
5.8
Use of Affiliates by Manager .
In performing its obligations under this Agreement, Manager from time to time may use the services of one (1) or more of its Affiliates as
permitted under this Agreement. If an Affiliate of Manager performs services Manager is required to provide under this Agreement, such
Affiliate and its employees must hold such licenses or qualifications as may be required by the Gaming Authorities in connection with the
performance of such services and Manager shall be ultimately responsible to Owner for its Affiliate’s performance. Owner shall bear no cost or
expense for the Affiliate’s services, other than as expressly set forth in Section 4.1.1 for Centralized Services Charges, Section 3.3 for
Reimbursable Expenses, Section 5.6 for participation in Purchasing Programs, Section 5.11 for an Amenities Manager and Section 12.1.2 for
the Insurance Program. Additionally, Manager may cause Affiliates of Manager who operate other facilities on behalf of Owner or Owner’s
Affiliates to perform services Manager is required to provide under this Agreement and the costs associated with such performance shall be an
Operating Expense of the Managed Facilities. Any agreement or transaction between Manager acting on behalf of Owner, on the one hand, and
any Affiliate of Manager, on the other hand, that involves a cost or expense to Owner or the Managed Facilities, or a transfer of assets from the
Managed Facilities, shall either be (a) approved by Owner or (b) expressly set forth in the Annual Budget (subject to Sections 5.1.4 and 5.1.5 )
and identified as an expense of an Affiliate of Manager (except that Managed Facilities Personnel Costs and costs incurred to third-party
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vendors under the Purchasing Program need not be separately identified in the Annual Budget as an expense to an Affiliate of Manager).
Subject to any confidentiality or similar obligations ( provided the same are applied in a Non-Discriminatory manner to all Persons with whom
Manager transacts similar business), Manager shall make available to Owner such information as reasonably requested by Owner to compare
the cost or expense charged by the Affiliate with charges of an unaffiliated third party. Notwithstanding anything to the contrary contained
herein, Manager acknowledges and agrees that all transactions with, or services performed by, any Affiliate of Manager hereunder shall be on
commercially reasonable and fair, arm’s-length terms and conditions (unless otherwise expressly approved by Owner in writing).
5.9
Limitation on Manager’s Obligations .
5.9.1 General Limitations . Manager’s obligations under this Agreement are subject in all respects to the availability of sufficient
funds from the Operation of the Managed Facilities, or which are otherwise provided by Owner. Except as otherwise expressly provided in this
Agreement, all costs and expenses of Operating the Managed Facilities shall be payable out of funds from the Operation of the Managed
Facilities, or which are otherwise provided by Owner. In no event shall Manager be obligated to pledge or use its own credit or advance any of
its own funds to pay any such costs or expenses for the Managed Facilities. Accordingly, notwithstanding anything to the contrary in this
Agreement, Manager shall be relieved from its obligations to Operate the Managed Facilities in compliance with the Operating Standard and in
accordance with this Agreement whenever and to the extent that Manager is prevented or restricted in any way from doing so by reason of:
(a) the occurrence of a Force Majeure Event; (b) the Operating Limitations; (c) Owner’s breach of any material term of this Agreement
(including Owner’s obligation to provide sufficient funds as required under this Agreement); (d) any limitation or restriction in this Agreement
on Manager’s authority or ability to expend funds in respect of the Managed Facilities; or (e) the lack of availability of sufficient funds to
Operate the Managed Facilities, except to the extent caused by Manager’s Gross Negligence or Willful Misconduct or any Manager Event of
Default (disregarding any applicable notice and/or cure periods for such purpose).
5.9.2 Pre-Existing Conditions and External Events . If any environmental, construction, personnel, real property-related or other
problems arise at the Managed Facilities during the Term that: (a) relate to the Operation or condition of the Managed Facilities, or activities
undertaken at the Managed Facilities or on the Premises, prior to the Term; or (b) are caused by or arise from sources outside of the Managed
Facilities, Manager’s services under this Agreement shall not extend to management of any remediation, abatement or other correction of such
problems, and Owner shall retain full managerial and financial responsibility and liability for and control over the remediation, abatement and
correction of such problems (in each case, in accordance with all Applicable Law), and shall take such actions in a timely manner with as little
disturbance or interruption of the use and Operation of the Managed Facilities as reasonably practicable. Notwithstanding the foregoing, in the
event such problems exist: (i) Manager will cooperate reasonably with Owner in connection with Owner’s remediation, abatement and
correction efforts; and (ii) if there is a reasonable likelihood that such problems would cause criminal or civil liability to Manager, injury to
persons using the Managed Facilities or damage to the Managed Facilities, Owner shall promptly remedy such problems and if Owner fails to
do so, Manager shall have the right to take all reasonably necessary steps to comply with any Applicable Law, or to avoid criminal or civil
liability to Manager, or injury to Persons or property; provided , that Manager shall give Owner prior notice thereof.
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5.10
Third-Party Operated Areas .
Manager shall, in Consultation with Owner, identify particular portions of the Managed Facilities, such as a restaurant, bar, entertainment
venue, spa or retail location (“ Third-Party Operated Areas ”), that shall be operated by third parties (the “ Third-Party Managers ”) under a
lease, operating agreement, franchise agreement or similar agreement arranged by Manager and in the name of Owner. Manager shall have the
right to manage the process of selecting any Third-Party Managers. Any lease, operating agreement, franchise agreement or similar agreement
entered into with a Third-Party Manager shall (a) be consistent with the terms of this Agreement (including that the same shall be
Non-Discriminatory to the Managed Facilities); (b) require the Third Party Managers to operate the Third-Party Operated Areas in accordance
with the Operating Standard and all other terms of this Agreement, subject to the Operating Limitations, and (c) require the Third-Party
Managers and their employees and contractors, as applicable, to hold such license or qualification as may be required by the Gaming
Authorities.
5.11
Amenities .
Subject to Section 2.2.9 , Manager shall have the right to propose to have an Affiliate of Manager (the “ Amenities Manager ”) operate
one or more of the Third-Party Operated Areas. The arrangement with any Amenities Manager for the operation of a restaurant, bars,
entertainment venue, spa, retail location or other amenity as a part of the Managed Facilities shall be documented pursuant to a lease or
management agreement prepared by Manager and approved by Owner which shall provide that the restaurant, bars, entertainment venue, spa,
retail location or other amenity, as applicable, shall be (a) designed and constructed in all material respects in accordance with the Operating
Standard, Design Guidance and any other standards reasonably required by Owner and the Amenities Manager, and (b) operated in accordance
with the Operating Standard and all other terms of this Agreement, in each case subject to the Operating Limitations.
ARTICLE VI.
APPROVALS
6.1
Gaming Approvals .
This Agreement and all other agreements contemplated herein shall be executed only after receipt of all required approvals and
authorizations, if any, by all applicable Gaming Authorities. Owner, at its expense, during the Term shall take such commercially reasonable
actions as may be reasonably required to maintain such required approvals or authorizations from the applicable Governmental Authorities to
make effective this Agreement as and if required by Applicable Law and permit Owner to make the payments required to be made to Manager
under this Agreement and all related agreements; provided , that Manager, at Manager’s expense, during the Term shall maintain such
license(s) or qualification(s) applicable to Manager as may be required by applicable Gaming Authorities. Manager shall have the right, at its
expense, to participate in all phases of the approval or authorization process. The Parties shall cooperate in all such undertakings or dealings
with Gaming Authorities, and Owner shall provide
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reasonable notice to Manager prior to all meetings with any Gaming Authority for such purpose. Each of Manager and Owner covenants and
agrees to use its best efforts to maintain all Approvals (other than such license(s) or qualification(s) applicable to the other Party) required to
approve Manager to Operate the Managed Facilities and this Agreement.
ARTICLE VII.
PROPRIETARY RIGHTS
7.1
Service Mark Rights .
7.1.1 In consideration of the Management Fee, Manager and CLC shall procure for the benefit of, and hereby grant to, Owner and
the Managed Facilities the non-exclusive right and license to use and otherwise exploit the Service Mark Rights in connection with the
Operation, promotion and marketing of the Managed Facilities throughout the Term of this Agreement and during the Transition Period. As
between Owner and CLC or any CLC assignee that owns any Service Mark Right, with respect to such right and license, CLC and/or such
assignee shall, during the Term, have the sole and exclusive right to determine the form of presentation of the Service Mark Rights in the
Operation of the Managed Facilities, including in all uses of the Service Mark Rights in marketing, sales, advertising and promotional materials
of the Managed Facilities, any goods or services relating to the Managed Facilities and any signage for the Managed Facilities. Subject to the
Annual Budget, Manager agrees to procure merchandise bearing the Brand or the Service Mark Rights on behalf of the Owner for sale or
promotion at the Managed Facilities at customary whole-sale prices for such merchandise.
7.1.2 Notwithstanding that Manager shall use the Service Mark Rights in the conduct of the Operations, Owner acknowledges that,
as between CLC or any CLC assignee that owns any Service Mark Right, on the one hand, and Owner, on the other hand, this use of the
Service Mark Rights shall not create in Owner’s favor any right, title, or interest in or to any of the Service Mark Rights, but all rights of
ownership and control of the Service Mark Rights shall reside solely with CLC or any CLC assignee that owns such Service Mark Right(s). If
and to the extent Owner acquires any right, title or interest in or to any of the Service Mark Rights, Owner hereby assigns all such right, title
and interest therein to such CLC or any CLC assignee that owns any Service Mark Right, as directed by CLC.
7.1.3 Owner acknowledges and agrees that the right to use the Service Mark Rights in connection with the Managed Facilities
(a) excludes any right of Owner to register any trademarks, copyrights or domain names or seek any patents which use any element of the
Service Mark Rights, such right being reserved exclusively to CLC or any CLC assignee that owns any Service Mark Right; (b) excludes any
right of Owner to sublicense or subcontract or permit other Persons to use the Service Mark Rights (including the production of branded
products) without the prior written consent of Manager (except a successor manager of the Managed Facilities during the Transition Period
shall be permitted such use), (c) does not permit Owner to use the Service Mark Rights or any marks, names, indicia or identifiers that are or
may be confusingly similar to any element of the Service Mark Rights in Owner’s corporate name; (d) does not permit Owner to acquire, or
represent in any manner that Owner has acquired, in any manner any ownership rights in the Service Mark Rights or any marks, names, indicia
or identifiers that are confusingly similar to the Service Mark Rights, and (e) does not permit
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Owner to use the Service Mark Rights to incur, secure or guarantee any obligation or indebtedness in such a manner as may, in any way,
subject CLC or any CLC assignee that owns such Service Mark Right(s) to liability. Further, as between Owner and CLC or any CLC assignee
that owns any Service Mark Right, any new trademarks, trade dress, slogans, logos, and any other matter capable of serving as a designation of
origin for the goods and services provided in connection with the Managed Facilities to the extent incorporating and derived from a Service
Mark Right shall be owned by CLC or any CLC assignee that owns such Service Mark Right, as directed by CLC.
7.2
Use of Service Mark Rights .
Subject to the obligation of the Manager to operate the Managed Facilities under the Brand, as part of Manager’s services under this
Agreement for the Operation of the Managed Facilities, Manager may, during the Term, use any Service Mark Rights in the Operation of the
Managed Facilities as Manager deems appropriate or advisable consistent with the Annual Budget. The Managed Facilities shall be a part of
the Total Rewards System used generally at the Other Managed Resorts. Manager reserves the right and discretion to require Managed
Facilities Personnel to sign a commercially reasonable confidentiality and restricted use agreement as a condition to the disclosure or use of any
Service Mark Rights by such Person, which shall supplement the terms set forth in this Article VII .
7.3
Rights to Service Mark Rights .
7.3.1 Subject to Section 7.3.2 , Owner hereby (a) recognizes the sole and exclusive right of ownership of CLC or any CLC assignee
that owns any Service Mark Right to all Service Mark Rights and (b) agrees that Owner’s use of the Service Mark Rights shall be conducted
exclusively by Manager (or, as provided herein during the Transition Period, Owner or a successor manager of the Managed Facilities) under
this Agreement. Without limiting any other rights, remedies or claims of CLC or any CLC assignee that owns any Service Mark Right and/or
any of their respective Affiliates at law, under this Agreement or otherwise, Owner covenants that in the event of any termination or expiration
of this Agreement, whether as a result of a default by Manager or otherwise, Owner shall not continue the operations of the Managed Facilities
pursuant to a Service Mark Right, nor will it otherwise utilize any of the Service Mark Rights (or hold itself out as operating pursuant to the
same) or any confusingly similar variant thereof in the operations of the Managed Facilities or the name of the Managed Facilities; provided ,
however , that Owner shall have a period of twelve (12) months following termination or expiration of this Agreement to remove all Service
Mark Rights from FF&E and the Managed Facilities, the cost which shall be borne by Owner. All use of the Service Mark Rights by Owner
during such period shall inure to the benefit of CLC or any CLC assignee that owns such Service Mark Right. If Owner fails to so remove all
Service Mark Rights from FF&E and the Managed Facilities within such twelve (12) month period, Owner agrees that Manager and its
Affiliates or their respective representatives may enter the Managed Facilities at reasonable times and upon fifteen days’ prior written notice to
Owner to remove all Service Mark Rights from FF&E and the Managed Facilities, the cost of which shall be borne by Owner provided that
Manager and its Affiliates use commercially reasonable efforts to avoid unnecessary damages to the FF&E and the Managed Facilities.
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7.3.2 Notwithstanding the foregoing, Owner shall have and is hereby granted by CLC an irrevocable and perpetual (including
following the Transition Period, but in each case subject to CLC’s enforcement rights, including the right to seek and obtain specific
performance or other equitable relief for quality control breaches), transferable, royalty-free, sublicenseable (in connection with the Managed
Facilities) and non-exclusive license and right to all Owner Primary Marks for use in connection with the Managed Facilities subject only to the
use of such Owner Primary Marks at a level of quality that is at least generally commensurate with the level of quality during the Term. With
respect to the Service Mark Rights and the Owner Primary Marks, each of Manager, CLC and any CLC assignee that owns a Service Mark
shall have the right after the Term to inspect the Managed Facilities upon reasonable notice and at reasonable times to confirm the quality of
the goods and services offered under the Service Mark Rights and the Owner Primary Marks. All use of the Service Mark Rights and Owner
Primary Marks by Owner shall inure to the benefit of CLC or CLC’s assignee that owns the same.
7.3.3 Owner Primary IP . Owner shall have, and is hereby granted by Manager and CLC, an irrevocable, perpetual (including
following the Transition Period), transferable, royalty-free, sublicenseable and non-exclusive license and right to exploit all Owner Primary IP.
7.3.4 Owner Owned IP . Owner and its Affiliates shall have the sole and exclusive right, title and ownership to all Owner Owned
IP. All Owner Owned IP made during the Term is hereby irrevocably assigned by Manager and CLC on behalf of themselves and their
respective Affiliates (to the extent of Manager’s, CLC’s and their respective Affiliates’ interest therein, if any) to Owner or its designee and
upon creation shall be and become the exclusive property of Owner or its designee, and neither Manager, CLC nor any of their respective
Affiliates shall have any ownership rights in any such Owner Owned IP. Owner hereby grants for the benefit of Manager, its Affiliates, CEC
and its Affiliates, CEOC and its Affiliates, Services Co and the Managed Facilities the non-exclusive right and license to use and otherwise
exploit the Owner Owned IP during the Term and the Transition Period in connection with the Operation, promotion and marketing of the
Managed Facilities and in connection with enterprise level functions not associated with a specific facility consistent with uses as of the
Commencement Date (including the Total Rewards System). Prior to or at the expiration of the Transition Period, Manager, its Affiliates, CEC
and is Affiliates shall discontinue all use of the Owner Owned IP.
7.3.5 This Section 7.3 shall survive the expiration or termination of this Agreement; provided , that notwithstanding the foregoing,
this Section 7.3 shall be replaced and superseded by the terms and conditions set forth in the Cross-License Agreement upon the effective date
of such agreement.
7.4
Proprietary Information and Systems of Manager or its Affiliates .
7.4.1 Proprietary Information and Systems . Owner agrees that, as of the Commencement Date, Manager, its Affiliates and licensees
have the sole and exclusive right, title and ownership to the following items as now in existence and as the same may be modified,
supplemented or updated in the future, in each case as and to the extent provided during the Term by Manager, CEOC or any of their respective
Affiliates or licensees for use in the operation of the Managed Facilities (collectively, the “ Proprietary Information and Systems ”):
7.4.1.1 proprietary information, techniques and methods of operating and marketing, gaming, hotel and related businesses,
including without limitation, the Total Rewards System;
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7.4.1.2 proprietary information, techniques and methods of designing, selecting, maintaining, operating, marketing,
developing and customizing games used in gaming, hotel and related businesses;
7.4.1.3 proprietary information, techniques and methods of training employees in the gaming, hotel and related businesses;
7.4.1.4 proprietary business plans, projections, marketing, advertising and promotion plans, strategies and systems, including
the proprietary items listed on Exhibit D attached hereto and incorporated herein by this reference and any modifications, supplements or
revisions thereof, which may hereafter be made by Manager, CEOC or any of their respective Affiliates or licensees, all of which have been
developed or acquired over many years through the expenditure of time, money and effort and to the extent which Manager, CEOC or any of
their respective Affiliates or licensees maintain as confidential and as a trade secret(s); and
7.4.1.5 all proprietary information, techniques and methods used in connection with the Total Rewards System or any other
rewards system which is used generally at Other Managed Resorts.
Notwithstanding the foregoing, Proprietary Information and Systems shall not include: information, techniques, methods and systems
(a) developed by Owner or third parties (that are not Affiliates or licensees of CEC or CEOC) on Owner’s behalf; (b) developed by Manager or
its Affiliates or a third party specifically for use at the Managed Facilities; (c) specific to the Managed Facilities that may be contained in
Proprietary Information and Systems, including the Managed Facilities Guest Data; and (d) which are not recognized as a trade secret of
Manager or its Affiliates, or entitled to protection as proprietary to Manager or its Affiliates, under applicable state law.
Manager and CLC shall procure for the benefit of, and hereby grant to, Owner and the Managed Facilities the non-exclusive and
sublicenseable right and license to use and otherwise exploit the Proprietary Information and Systems (and other proprietary intellectual
property used by Manager under this Agreement, if any, excluding Owner Primary IP, Owner Owned IP and any Service Mark Right) in
connection with the Operation, promotion and marketing of the Managed Facilities throughout the Term of this Agreement and during the
Transition Period.
7.4.2 Confidentiality . Owner further agrees that, to the extent Owner has access to the Proprietary Information and Systems and
subject to Owner’s right to use or permit use on its behalf as permitted under this Agreement, Owner shall: (a) maintain the confidentiality of
Manager Confidential Information in such Proprietary Information and Systems, and not provide access to such Manager Confidential
Information (or any documents, notes, memoranda, lists, computer programs or summaries thereof) to any third parties; (b) not
31
use the Proprietary Information and Systems for any purpose other than as permitted under this Agreement; (c) make no copies of all or any
portion of the Proprietary Information and Systems; and (d) upon the termination or expiration of this Agreement, (i) return all Proprietary
Information and Systems to Manager, including documents, notes, memoranda, lists, computer programs and any summaries of the Proprietary
Information and Systems in Owner’s possession or control but excluding any Managed Facilities Guest Data which Owner may retain pursuant
to the terms of this Agreement, and (ii) cease to access any and all of the Proprietary Information and Systems, in each case upon the end of the
Transition Period.
7.4.3 Guest Data and Managed Facilities Guest Data .
7.4.3.1 Owner recognizes the exclusive right of ownership of Manager and its Affiliates to all Guest Data, other than
Managed Facilities Guest Data, and the Parties agree that they shall have and hereby assign to each other joint ownership to all Managed
Facilities Guest Data (without a duty to account to the other or other obligations except as expressly set forth herein). Owner hereby disclaims
any right or interest in Guest Data, other than Managed Facilities Guest Data, regardless of any legal protection afforded thereto. Owner and
Manager hereby acknowledge and agree that a portion of the consideration paid or payable (as applicable) pursuant to Section 3.5 of the
Transaction Agreement, dated as of February 28, 2014, by and among CEC, CEOC, Caesars License Company, LLC, CGP and certain other
parties thereto (as may have been amended prior to the Commencement Date, the “ Transaction Agreement ”) shall be treated as a prepaid
license fee and other consideration paid by Owner for the Proprietary Information and Systems and the Managed Facility Guest Data. Owner
agrees that throughout the Term, Manager or Manager’s designees shall host and retain the database relating to customers’ activities at the
Managed Facilities which shall be collected and stored in systems implemented and managed by or on behalf of Manager or its Affiliates,
including all customer information gathered by or on behalf of Manager or its Affiliates in connection with any casino player loyalty program
card or successor player or guest rewards program, and Manager or one of its Affiliates shall own and, subject to the restrictions set forth in this
Section 7.4.3 , be entitled to use any and all of the customer or other information gathered by or on behalf of Manager or its Affiliates in
connection with this Agreement or such programs.
7.4.3.2 Each of Owner and Manager shall not and shall cause its respective Affiliates (and Persons to whom disclosure is
made by it under clause (c) below) not to, and each of Manager and Owner shall cause Services Co not to, and Owner shall cause any successor
manager of the Managed Facilities not to, (a) use the Managed Facilities Guest Data to offer, solicit or promote any illegal, obscene,
inappropriate, adult oriented, or pornographic material or activity or to engage in any activity that would constitute spamming or a violation of
any Applicable Laws relating to privacy, (b) use the Managed Facilities Guest Data in any manner which is inconsistent with the integrity of
the Brand or the Service Mark Rights, (c) sell, license or grant to any other Person (except, in the case of Manager, to an Affiliate of Manager,
CEC or its Affiliate, CEOC or its Affiliate, CERP or its Affiliate or Services Co or its Controlled subsidiary or, in the case of Owner, to an
Affiliate of Owner) a right to use, view or copy the Managed Facilities Guest Data or (d) use the Managed Facilities Guest Data for any
purpose which is not for the direct benefit of the Managed Facilities, or the businesses and/or operations of Manager and its Affiliates, CEC or
its Affiliates, CEOC or its Affiliates, CERP or its Affiliates or Owner and its Affiliates. Notwithstanding anything contained in this Agreement
to
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the contrary, the use of the Managed Facilities Guest Data shall, in all events, be subject to the limitations and restrictions set forth in any other
agreement or other contract related thereto, this Agreement, Applicable Law and this Section 7.4.3 . Owner and Manager further agree not to
use, nor permit their Affiliates (or Persons to whom disclosure is made by it under clause (c) above) to use, at any time, the Managed Facilities
Guest Data in any illegal manner, nor to engage in any activity that would constitute spamming or a violation of any privacy laws under any
applicable jurisdiction’s regulations. For the avoidance of doubt, Owner agrees that it shall not and shall cause its Affiliates not to disclose any
gaming play or player rating information contained in the Managed Facilities Guest Data to a Competitor. Notwithstanding the foregoing, if,
upon the Assignment by Manager of this Agreement or the expiration or termination of this Agreement, Owner engages a successor manager to
Operate the Managed Facilities ((including any Person who becomes the “Manager” hereunder or otherwise performs any of Managers rights
or obligations hereunder, including Services Co), then the Managed Facilities Guest Data may be disclosed to and used by such successor, but
in all events such use shall be subject to the limitations and restrictions set forth in any other agreement or other contract related thereto, this
Agreement, Applicable Law and this Section 7.4.3 ; provided , that if Applicable Law or any privacy policy of Manager or its Affiliates
requires Manager to provide guests of the Managed Facilities with notice of such transfer and/or a right to “opt out” of having their information
transferred to such successor, Owner and Manager shall comply with such requirement and the election of such guest with respect thereto. Each
of Owner and Manager agrees to, and to cause its respective Affiliates (and Persons to whom disclosure is made by it under clause (c) above) to
and Services Co to, and Owner shall cause any successor manager to, (A) maintain commercially reasonable measures to protect the physical
safety and data integrity of the Managed Facilities Guest Data, and (B) comply with (1) all applicable data protection policies applicable to
guest data, to which Manager and its Affiliates are subject, including compliance with all relevant security best practices including PCI Data
Security Standards and the Sarbanes Oxley Act, and (2) during the Term, all privacy, data security and reasonable contact policies of Manager
and its Affiliates, in the case of clause (B)(1) or (B)(2), Owner’s obligations shall only apply to such policies that have been identified to
Owner in advance in writing. Manager may require Owner to acknowledge in writing its receipt of any Managed Facilities Guest Data (in
whatever form) and confirm its obligations under this Section 7.4.3 and the requirements described herein. In the event Manager reasonably
believes the integrity of such Managed Facilities Guest Data has been compromised, Manager and its Affiliates shall have the right, upon
reasonable notice and at reasonable times, to inspect the physical facilities and servers where Owner stores (or has stored on its behalf) the
Managed Facilities Guest Data and to review all methods and processes associated with the storage and use of same.
7.4.3.3 Subject to any limitations or requirements of any applicable Gaming Authority and in conformance with Applicable
Law, during the Term and the Transition Period:
(a) from time to time (but not more than twice per year), upon the reasonable request of Owner and at Owner’s
expense, Manager shall prepare filtered lists and datasets from the Managed Facilities Guest Data and provide to Owner a copy of the Managed
Facilities Guest Data in comma separate value (CSV) format, unless another format is agreed upon by Owner and Manager; and
(b) Manager shall maintain, in a manner consistent with commercially reasonable data retention and security practices
on a monthly basis, backup tapes in iSeries format (the “ Backup Tapes ”) containing all Managed Facilities Guest Data resident on the
management system installed for the Managed Facilities (the “ CMS ”), provided , that the Backup Tapes may be located at the Managed
Facilities or such other location reasonably determined by Manager and to which Owner has reasonable access, and Manager shall keep the
Backup Tapes for a rolling period of six (6) months, with the costs of all Backup Tapes and maintenance thereof shall be an Operating
Expense.
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7.4.4 Improvements to System . All intellectual property rights to the improvements made during the Term in the Proprietary
Information and Systems (the “ System Improvements ”) are hereby irrevocably assigned by Owner (to the extent of Owner’s interest therein, if
any) to CEOC or its designee and upon creation shall be and become the exclusive property of CEOC or its designee, and neither Owner nor
any of its Affiliates nor any successor manager hereunder shall have any ownership rights in any System Improvements. CEOC or its Affiliates
may incorporate any such System Improvements into the Proprietary Information and Systems and shall have the exclusive right to all
intellectual property rights (including patent, copyright, and industrial design rights) in and to the System Improvements, and to register and
protect such System Improvements in CEOC’s or its designee’s own name to the exclusion of Owner, who shall have no rights to use such
System Improvements except as specifically granted to Owner under this Agreement. Owner agrees to execute such assignment or other
documents, and to cause any successor manager to execute such assignment or other documents, as CEOC may reasonably request to evidence
its ownership or to assist CEOC in securing intellectual property rights to the System Improvements, at CEOC’s sole expense.
7.4.5 Survival . This Section 7.4 shall survive the expiration or termination of this Agreement.
ARTICLE VIII.
CONFIDENTIALITY
8.1
Disclosure by Owner .
Owner acknowledges that Manager will provide certain Manager Confidential Information to Owner in connection with the Operation of
the Managed Facilities, and that such Manager Confidential Information is proprietary to Manager and its Affiliates, and includes trade secrets.
Accordingly, during the Term and thereafter: (a) Owner shall not, and shall cause its Affiliates not to, use the Manager Confidential
Information in any other business or capacity, and Owner acknowledges such use would constitute an unfair method of competition; (b) Owner
shall maintain the confidentiality of, and shall not disclose to any other Person (including the media), any Manager Confidential Information or
the terms of this Agreement, except to its shareholders, partners, directors, officers, employees, agents, representatives, legal counsel,
accountants and existing and potential Lenders and investors and potential purchasers (provided such potential investor or purchaser is not a
Competitor), but only on a reasonable “need to know” basis in connection with its ownership of the Managed Facilities and subject to
customary confidentiality protections; (c) Owner shall not make unauthorized copies of any portion of the Manager Confidential Information
disclosed in written, electronic or other form; and (d) Owner
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shall ensure that none of its shareholders, partners, directors, officers, employees, agents, legal counsel, accountants and existing and potential
Lenders or investors or potential purchasers use, disclose or copy any Manager Confidential Information, disclose any terms of this Agreement
or take any other actions that Owner is otherwise prohibited from taking under this Section 8.1 . Notwithstanding the foregoing, the restrictions
on the use and disclosure of Manager Confidential Information shall not apply: (i) to information or techniques which are or become generally
known to the public (other than through any breach of this Section 8.1 with respect to confidentiality); (ii) to the extent such disclosure is
required under Applicable Laws, including reporting requirements applicable to public companies, or stock exchange rules; or (iii) to
information known to Owner (other than in connection with the performance of its rights or duties hereunder) before disclosure by Manager or
disclosed to Owner by a third party not subject to confidentiality obligations to Manager or developed by Owner without use of Manager
Confidential Information. In the event that Owner or any Person to which Owner has disclosed Manager Confidential Information is requested
or required by oral question, interrogatory, request for information or documents, subpoena, civil investigative demand or similar process to
disclose any Manager Confidential Information, Owner shall and shall cause such Person to: (A) provide Manager with prompt notice, to the
extent legally permissible, so that Manager and its Affiliates may seek a protective order or other appropriate remedy or, in their discretion,
waive compliance with the provisions of this Section 8.1 ; and (B) reasonably cooperate with Manager and its Affiliates, at their expense, in
any effort Manager or any of its Affiliates undertakes to obtain a protective order or other remedy. In the event that such protective order or
other remedy is not obtained or Manager in its discretion waives compliance with the provisions of this Section 8.1 , Owner shall and shall
cause such Person to disclose to the Person compelling disclosure only that portion of the Manager Confidential Information that Owner is
advised, by outside counsel, is legally required and to use commercially reasonable efforts to obtain reliable assurance that confidential
treatment is accorded the Manager Confidential Information so disclosed (to the extent available). Owner shall be responsible for any acts or
omissions of any of its employees, members, managers, attorneys, accountants, agents, representatives, consultants, existing and potential
Lenders and investors and potential purchasers in violation of this Section 8.1 .
8.2
Disclosure by Manager .
Manager acknowledges that Owner may from time to time provide certain Owner Confidential Information to Manager in connection
with the Operation of the Managed Facilities, and that such Owner Confidential Information is proprietary to Owner and its Affiliates, and may
include trade secrets. Accordingly, during the Term and thereafter: (a) Manager shall not, and shall cause its Affiliates not to, use the Owner
Confidential Information in any other business or capacity, and Manager acknowledges such use would constitute an unfair method of
competition; (b) Manager shall maintain the confidentiality of, and shall not disclose to any other Person (including the media), any Owner
Confidential Information or the terms of this Agreement, except to its shareholders, partners, directors, officers, employees, agents,
representatives, legal counsel, accountants and existing and potential lenders and investors and potential purchasers, but only on a reasonable
“need to know” basis in connection with its Operation of the Managed Facilities and subject to customary confidentiality protections;
(c) Manager shall not make unauthorized copies of any portion of the Owner Confidential Information disclosed in written, electronic or other
form; and (d) Manager shall ensure that
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none of its shareholders, partners, directors, officers, employees, agents, legal counsel, accountants and existing and potential lenders or
investors or potential purchasers use, disclose or copy any Owner Confidential Information, disclose any terms of this Agreement or take any
other actions that Manager is otherwise prohibited from taking under this Section 8.2 . Notwithstanding the foregoing, the restrictions on the
use and disclosure of Owner Confidential Information shall not apply: (i) to information or techniques which are or become generally known to
the public (other than through any breach of this Section 8.2 with respect to confidentiality); (ii) to the extent such disclosure is required under
Applicable Laws, including reporting requirements applicable to public companies, or stock exchange rules; or (iii) to information known to
Manager (other than in connection with the performance of its rights or duties hereunder) before disclosure by Owner or disclosed to Manager
by a third party not subject to confidentiality obligations to Owner or developed by Manager without use of Owner Confidential Information. In
the event that Manager or any Person to which Manager has disclosed Owner Confidential Information is requested or required by oral
question, interrogatory, request for information or documents, subpoena, civil investigative demand or similar process to disclose any Owner
Confidential Information, Manager shall and shall cause such Person to: (A) provide Owner with prompt notice, to the extent legally
permissible, so that Owner and its Affiliates may seek a protective order or other appropriate remedy or, in their discretion, waive compliance
with the provisions of this Section 8.2 ; and (B) reasonably cooperate with Owner and its Affiliates, at their expense, in any effort Owner or any
of its Affiliates undertakes to obtain a protective order or other remedy. In the event that such protective order or other remedy is not obtained
or Owner in its discretion waives compliance with the provisions of this Section 8.2 , Manager shall and shall cause such Person to disclose to
the Person compelling disclosure only that portion of the Owner Confidential Information that Manager is advised, by outside counsel, is
legally required and to use commercially reasonable efforts to obtain reliable assurance that confidential treatment is accorded the Owner
Confidential Information so disclosed (to the extent available). Manager shall be responsible for any acts or omissions of any of its employees,
members, managers, attorneys, accountants, agents, representatives, consultants, existing and potential lenders and investors and potential
purchasers in violation of this Section 8.2 .
8.3
Public Statements .
The Parties shall cooperate with each other on all press releases and other public statements relating to the Managed Facilities and neither
Party shall issue any press release or other public statement relating to the Managed Facilities without the prior written approval of the other
Party and receipt of any required approvals from any Governmental Authority, except for any public statement required under Applicable Law;
provided , that Manager and its Affiliates may, subject to Applicable Law, make public statements and press releases regarding the Managed
Facilities in connection with CEOC’s general business operations, the Operation of the Managed Facilities or in the ordinary course of
Manager’s Operation of the Managed Facilities. With respect to any public statement required under Applicable Law, the issuing Party shall
provide the other Party with a reasonable opportunity to review and comment upon any such statement prior to its issuance. In addition, either
Party may make reference to the Managed Facilities, this Agreement and such Party’s business in connection with making Securities Exchange
Commission filings, investor and lender reports and presentations, financing documents and offering materials.
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8.4
Cumulative Remedies .
Owner acknowledges that any violation of the provisions of Section 8.1 or 8.3 would cause irreparable harm and injury to Manager and
its Affiliates and that money damages would not be an adequate remedy for any such violation and, accordingly, Manager and its Affiliates
shall be entitled to injunctive or other equitable relief to prevent any actual or threatened breach of any of such provisions and to enforce such
provisions specifically, without the necessity of posting a bond or other security or of proving actual damages, by an appropriate court in the
appropriate jurisdiction.
Manager acknowledges that any violation of the provisions of Section 8.2 or 8.3 would cause irreparable harm and injury to Owner and
its Affiliates and that money damages would not be an adequate remedy for any such violation and, accordingly, Owner and its Affiliates shall
be entitled to injunctive or other equitable relief to prevent any actual or threatened breach of any of such provisions and to enforce such
provisions specifically, without the necessity of posting a bond or other security or of proving actual damages, by an appropriate court in the
appropriate jurisdiction.
The remedies provided in this Section 8.4 are cumulative and shall not exclude any other remedies to which a Party or its Affiliates may
be entitled under this Agreement or Applicable Law, and the exercise of a remedy under this Section 8.4 shall not be deemed an election
excluding any other remedy or any waiver thereof.
8.5
Survival .
This Article VIII shall survive the expiration or termination of this Agreement.
ARTICLE IX.
MARKETING
9.1
Marketing .
9.1.1 Managed Facilities Marketing Program . In addition to the Managed Facilities’ participation in any marketing program
included as part of the Centralized Services, Manager shall develop and implement a specific marketing program for the Managed Facilities,
which shall provide for the planning, publicity, internal communications, organizing and budgeting activities to be undertaken, and which may
include the following: (a) production, distribution and placement of promotional materials relating to the Managed Facilities, including
materials for the promotion of employee relations; (b) development and implementation of promotional offers or programs that benefit the
Managed Facilities and are undertaken by Manager or by a group of hotels and casinos that includes the Managed Facilities; (c) attendance of
Managed Facilities Personnel at conferences, conventions, meetings, seminars and travel congresses; (d) selection of and guidance to
advertising agency and public relations personnel; and (e) preparation and dissemination of news releases for national and international trade
and, consumer publications. Owner shall not publish any advertising materials or otherwise implement any marketing, advertising or promotion
program for the Managed Facilities on its own, without Manager’s prior written approval (not to be unreasonably withheld, conditioned, or
delayed).
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9.1.2 Development and Implementation . The development and implementation of the Managed Facilities’ specific marketing
program shall be effected substantially by Managed Facilities Personnel, with periodic assistance from Corporate Personnel with marketing and
sales expertise. Any such assistance provided by any Corporate Personnel shall be at no cost to Owner or the Managed Facilities for such
Corporate Personnel’s time, but the reasonable Out-of-Pocket Expenses incurred by Manager or its Affiliates in connection with such
assistance shall be Operating Expenses. Subject to the provisions of Section 5.1 relating to the Annual Budget, the Managed Facilities’ specific
marketing program shall comply with the sales, advertising and public relations policies and guidelines and corporate identity requirements
established by Manager, for Other Managed Resorts, as such policies, guidelines and requirements may be modified from time to time. Subject
to the provisions of Section 5.1 relating to the Annual Budget, Manager shall have the right to engage a Person on behalf of Owner to perform
such marketing and public relations activities for the Managed Facilities pursuant to this Article IX .
9.1.3 Content . Manager shall have the right to obtain, or at the reasonable request of Manager, Owner shall obtain and provide to
Manager, updated photographs, descriptive content and other media, such as video and floor plans, of the Managed Facilities (collectively, “
Content ”) from time to time in accordance with Manager’s specifications for Content. All ownership or license rights to Content, whether
procured by Manager or Owner, shall vest in Owner. If Owner obtains Content, Owner shall ensure that any such Content includes usage rights
for the benefit of Manager in connection with the operation of the Managed Facilities during the Term.
ARTICLE X.
BOOKS AND RECORDS
10.1
Maintenance of Books and Records .
Manager shall keep and maintain, on an Operating Year basis in accordance with GAAP, accurate books, records and accounts reflecting
all of the financial affairs, and all items of income and expense, in connection with the Operation of the Managed Facilities and otherwise in a
manner consistent with the then existing policies and standards applicable to Other Managed Resorts and otherwise reasonably acceptable to
Owner. All books of account and other financial records of the Managed Facilities shall be available to Owner, any Lender and their respective
agents, representatives and designees (subject to Section 8.1 ) at all reasonable times for examination, audit, inspection and copying; provided ,
that Owner shall bear all Out-Of-Pocket Expenses incurred by Manager or its Affiliates in connection with any such examination, audit,
inspection or copying. All of the financial books and records of the Managed Facilities, including books of account and front office records (but
excluding any Proprietary Rights) shall be the property of Owner. Notwithstanding anything to the contrary contained in this Agreement,
Owner shall have the right (not more than once per calendar year), at its expense, to or to cause its agents or auditors to carry out an
independent audit or inspection of the books of accounts and records and/or any other information maintained by the Manager with respect to
the Managed Facilities (including, without limitation, all information, records and materials with respect to contracts and engagements entered
into by Manager with Affiliates and/or with respect to purchasing programs, which information shall include terms of all cost allocations
between the
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Managed Facilities on the one hand and other hotel properties and casinos owned and/or managed by Manager and its Affiliates and subject to
the same agreements and/or purchasing programs on the other hand, and copies of all agreements and fee schedules with respect to such
properties and such other information as is reasonably necessary to make the determination set forth in clause (ii) below). In the event of any
such audit or inspection, Manager shall promptly respond to any queries raised by any such auditors in relation to that audit and shall promptly
make available to any such auditors any and all materials relevant to the management of the applicable Managed Facilities. Notwithstanding
the foregoing, if it is determined by any such audit or inspection that (i) the actual amount of Gross Operating Revenues or Operating Expenses
for any Operating Year differs by more than five percent (5%) from the amount of Gross Operating Revenues or Operating Expenses for such
Operating Year recorded in the books and records maintained by Manager, or (ii) Manager has materially breached any of its obligations with
respect to the requirements in this Agreement that all Purchasing Programs and all contracts with (or services provided by) Affiliates of
Manager shall be Non-Discriminatory to the Managed Facilities and on arms-length terms, then, in either case, Manager shall be responsible
for the entire out-of-pocket cost of such audit or inspection and immediately upon demand shall reimburse Owner therefor.
10.2
Monthly Financial Reports .
Manager shall cause to be prepared and delivered to Owner reasonably detailed unaudited monthly operating reports (the “ Monthly
Reports ”) that reflect the operational results of the Managed Facilities for each month of each Operating Year. Manager shall deliver each
Monthly Report to Owner on or before the twenty fifth (25th) day of the month following the month (or partial month) to which such Monthly
Report relates. At a minimum, the Monthly Reports shall include: (a) a balance sheet including current and prior month and prior year-end
comparisons (to the extent applicable) and differences in reasonable detail; (b) an income and expense statement for such month and for the
elapsed portion of the current Operating Year through the end of such month (with comparison to previous year); (c) a statement of cash flows
for such month and for the elapsed portion of the Current Operating Year through the end of such month (with comparison to previous year) in
reasonable detail to allow Owner to identify and ascertain sources and uses thereof; (d) a statement of account balances in each Bank Account;
(e) a computation of any installment of the Base Management Fees due following delivery of such Monthly Report; and (f) such other reports
or information otherwise specified in this Agreement to be provided to Owner on a monthly basis or as Owner may reasonably specify from
time to time. Notwithstanding anything to the contrary contained in this Section 10.2 , Manager shall not be obligated to deliver a Monthly
Report for the last month of each calendar quarter. In lieu of such delivery, Manager shall deliver the Quarterly Report for the applicable
calendar quarter and such Quarterly Report shall include the information that would have been included in the Monthly Report for such month
pursuant to this Section 10.2 .
10.3
Quarterly Financial Reports .
Manager shall cause to be prepared and delivered to Owner reasonably detailed unaudited quarterly operating reports (the “ Quarterly
Reports ”) and shall deliver each Quarterly Report to Owner on or before the twenty fifth (25th) day of the month following the end of the
fiscal quarter (or partial fiscal quarter) to which such Quarterly Report relates. With respect to the
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Quarterly Reports, Manager’s Designated Financial Officer shall certify that it has reviewed such Quarterly Reports and, to such Designated
Financial Officer’s Knowledge, such Designated Financial Officer has no reason to believe that such Quarterly Reports do not fairly present, in
all material respects, the financial condition, results of operations, cash flows and other financial and operating results, as applicable, of the
Managed Facilities for the periods presented in the report (except for the fact that there are no footnotes to such Quarterly Reports and subject
to year end adjustments in all respects). At a minimum, the Quarterly Reports shall include: (a) a narrative report on Owner’s actual
performance to the Operating Plan and Capital Budget; (b) a computation of any installment of the Incentive Management Fees due following
delivery of such Quarterly Report; (c) an itemization of expenses other than Management Fees incurred to Manager or any Affiliate of Manager
during such quarter, including Centralized Services Charges and Reimbursable Expenses; (d) a schedule comparing the financial performance
of the Managed Facilities to the financial covenants under Financing Documents to the extent that the applicable Financing relates the Managed
Facilities only; (e) a report on the project status and actual to budget expenditures for Routine Capital Improvements and Building Capital
Improvements projects underway; (f) for the last month of such calendar quarter, the information that would have been included in the Monthly
Report for such month pursuant to Section 10.2 ; and (g) such other reports or information otherwise specified in this Agreement to be provided
to Owner on a quarterly basis or as Owner may reasonably specify from time to time.
10.4
Annual Financial Reports .
Manager shall cause to be prepared and delivered to Owner no later than fifty-five (55) days after the end of each Operating Year
(beginning with February 25 of the second (2nd) Operating Year with respect to the completion of the first (1st) Operating Year), year end
financial statements for the preceding Operating Year (including a balance sheet, a statement of earnings and retained earnings and a statement
of cash flows), which statements shall be unaudited and shall be prepared in accordance with GAAP. With respect to such statements,
Manager’s Designated Financial Officer shall certify that it has reviewed such statements and, to such Designated Financial Officer’s
knowledge, such Designated Financial Officer has no reason to believe that such statements do not fairly present, in all material respects, the
financial condition, results of operations, cash flows and other financial and operating results, as applicable, of the Managed Facilities for the
periods presented in the statements (except for the fact that there are no footnotes to such statements and subject to all adjustments made in the
Certified Financial Statements). Owner shall engage the Designated Accountant to provide audited financial statements for the Operating Year
then ended (the “ Certified Financial Statements ”). Owner and Manager shall cooperate in all respects with the Designated Accountant in the
preparation of such financial statements, including the delivery by Manager of any financial information generated by Manager pursuant to the
terms of this Agreement and reasonably required by the Designated Accountant to prepare such audited financial statements. The Certified
Financial Statements prepared by the Designated Accountant pursuant to this Section 10.4 and all information therein shall be binding and
conclusive on the Parties unless, within sixty (60) days after the delivery of such statements to the Parties, either Party shall deliver written
notice to the other Party of its objection thereto setting forth in reasonable detail the nature of such objection. If the Parties are unable thereafter
to resolve any disputes with respect to the matters set forth in the Certified Financial Statements within sixty (60) days after delivery by either
Party of such notice, either Party shall have the right to cause such dispute to be resolved in accordance with Article XVII .
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10.5
Other Reports and Schedules .
In addition to the Operating Reports and Certified Financial Statement required to be delivered to Owner hereunder, Manager shall cause
to be prepared and delivered to Owner any additional reports and schedules as Owner may reasonably request from time to time, and copies of
such leases, contracts and documents as Owner may reasonably request from time to time.
ARTICLE XI.
ASSIGNMENTS
11.1
Assignment by Owner .
11.1.1 Owner Assignments Restricted . Except as otherwise permitted in Article XIII or this Article XI , Owner may not cause,
permit or suffer an Assignment of Owner’s right, title and interest in and to this Agreement without the prior consent of Manager which
consent shall not be unreasonably withheld, conditioned or delayed. Any Change of Control of Owner shall be deemed an Assignment for
purposes of this Article XI . Any Assignment by Owner in violation of the terms of this Article XI shall be void and of no force or effect as
between the Parties and shall constitute an Event of Default by Owner governed by the terms of Article XVI .
11.1.2 Assignment by Owner without Manager’s Consent .
11.1.2.1 Notwithstanding the provisions of Section 11.1.1 , Owner shall have the right, without Manager’s consent, to effect
an Assignment of this Agreement in connection with a Managed Facilities Transfer; provided , that, to the extent applicable, the conditions
described in Section 11.1.3 are satisfied in connection with such Assignment.
11.1.2.2 Notwithstanding the provisions of Section 11.1.1 , Owner shall have the right, without Manager’s consent, to effect
an Assignment of this Agreement or a Managed Facilities Transfer in connection with any Financing provided , that, to the extent applicable,
the conditions described in Section 11.1.3 are satisfied in connection with such Assignment.
11.1.3 Conditions to Assignment . Notwithstanding anything to the contrary in Section 11.1.2 , all Assignments by Owner (whether
or not Manager’s consent is required pursuant to this Section 11.1 ) shall be subject to the following conditions:
11.1.3.1 Owner shall provide written notice to Manager at least thirty (30) days prior to the proposed Assignment, specifying
in reasonable detail the nature of the Assignment and such additional information as Manager may reasonably request in order to determine
whether the proposed transferee is a Manager Prohibited Person;
11.1.3.2 The assignee (other than a Lender in connection with a Financing, except to the extent of any foreclosure or
realization) shall assume the obligations of
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Owner under this Agreement and shall agree in writing to be bound by this Agreement from and after the date of the Assignment, and Owner
shall provide Manager with a copy of such agreement, together with copies of all other documents effecting such Assignment, within ten
(10) days following the date of the Assignment; and
11.1.3.3 The assignee (in the case of a direct assignment) or controlling parties (in the case of a Change of Control), and in
each case its or their direct or indirect equity owners, is not a Manager Prohibited Person.
11.2
Assignment by Manager .
11.2.1 Manager Assignments Restricted . Except as otherwise permitted in this Article XI , Manager may not cause, permit or suffer
an Assignment, in whole or in part, of Manager’s right, title and interest in and to this Agreement without the prior consent of Owner. Any
Change of Control of Manager shall be deemed an Assignment for purposes of this Article XI . Any Assignment by Manager in violation of the
terms of this Article XI shall be void and of no force or effect as between the Parties and shall constitute an Event of Default by Manager
governed by the terms of Article XVI .
11.2.2 Assignment by Manager without Owner’s Consent . Notwithstanding the provisions of Section 11.1.1 , Manager shall have
the right, without Owner’s consent, to assign its right, title and interest in and to this Agreement (a) to any Affiliate of Manager that is directly
or indirectly wholly owned by CEOC, or (b) in connection with (i) a Change of Control of CEOC or (ii) a Substantial Sale; provided , that
neither the proposed transferee (in the case of a direct transfer), or controlling parties (in the case of a Change of Control or CEOC or
Substantial Sale), nor in either case any of its direct or indirect equity owners, is an Owner Prohibited Person and provided further that
Manager shall (a) provide written notice to Owner at least thirty (30) days prior to the proposed Assignment, specifying in reasonable detail the
nature of the Assignment, and such additional information as Owner may reasonably request in order to determine whether the proposed
transferee is an Owner Prohibited Person, and (b) the assignee shall assume the obligations of Manager under this Agreement and shall agree in
writing to be bound by this Agreement from and after the date of the Assignment, and Manager shall provide Owner with a copy of such
agreement, together with copies of all other documents effecting such Assignment, within ten (10) days following the date of this Assignment.
11.2.3 Assignment at the Request of Owner . Subject to the provisions of this Section 11.2.3 , Manager shall, upon the written
request of Owner, assign all of its rights, benefits, obligations, duties, responsibilities and liabilities under this Agreement to Services Co (or a
Controlled subsidiary of Services Co) as soon as reasonably practicable following the formation and capitalization of Services Co (the “
Services Co Assignment ”). Notwithstanding the foregoing, Owner shall not be permitted to request the Services Co Assignment unless and
until (a) all Gaming Approvals have been received with respect to such Services Co Assignment, and (b) any required Approvals from any
Governmental Authorities have been received with respect to such Services Co Assignment. Manager acknowledges that Owner may not
request the Services Co Assignment until Owner is satisfied, in its sole discretion that Services Co (or a Controlled subsidiary of Services Co)
has obtained all items and rights needed to Operate the Managed Facilities under the Brand (including to provide the Centralized Services to
the
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Managed Facilities) all in accordance with this Agreement, which items and rights shall include, without limitation: (i) all intellectual property
rights required to grant, maintain and support the licenses and assignments set forth under this Agreement (including under Article VII ), (ii) all
Corporate Personnel and other personnel required to Operate the Managed Facilities, and (iii) all infrastructure, processes, procedures,
contracts, permits, licenses, consents, approvals, assets and other items and rights required to Operate the Managed Facilities. Each of Owner
and Manager agrees that upon the effective date of the Services Co Assignment: (A) Cromwell Manager, LLC shall assign all of its rights,
benefits, obligations, duties, responsibilities and liabilities under this Agreement to Services Co (or a Controlled subsidiary of Services Co) and
Services Co shall automatically and without any further action by any Person become the “Manager” under this Agreement, provided , that
Cromwell Manager, LLC (the “ Transferring Manager ”) shall retain all rights in respect of pre-assignment periods, rights under Section 19.2.7,
the right to receive the Management Fees during the Term (and any interest thereon or taxes with respect thereto), any Termination Fee and the
right to claim damages in respect of any Owner breach of this Agreement that directly results in a reduced or terminated Management Fees (the
“ Retained Rights ”); (B) Services Co (or a Controlled subsidiary of Services Co) shall expressly assume all of the Transferring Manager’s
rights (other than the Retained Rights), benefits, obligations, duties, responsibilities and liabilities under this Agreement pursuant to an
assignment and assumption agreement mutually agreeable to Owner and the Transferring Manager and the Transferring Manager shall be
released from its obligations under this Agreement; (C) Services Co (or a Controlled subsidiary of Services Co) shall be entitled to receive all
Centralized Services Charges and all Reimbursable Expenses incurred under this Agreement from and after the Services Co Assignment;
(D) the Transferring Manager’s rights with respect to the Bank Accounts shall terminate and any right to withdraw the Management Fees from
the Management Account will be undertaken by Services Co as successor manager; and (E) with respect to each provision in this Agreement
that by its terms survives any expiration or termination of this Agreement, such provisions shall survive the Services Co Assignment with
respect to the Transferring Manager, CEOC and their respective Affiliates. This Section 11.2 shall survive the Services Co Assignment and any
expiration or termination of this Agreement thereafter. Owner and Transferring Manager agree, between them, to amend or amend and restate
this Agreement following the Services Co Assignment as needed solely to implement the provisions set forth in this Section 11.2.2 and
Transferring Manager and CLC shall do and cause to be done all such acts, matters and things and shall execute all such documents and
instruments required to effectuate the Services Co Assignment in accordance with this Agreement. Notwithstanding anything contained in this
Agreement to the contrary, the Retained Rights may be terminated immediately by Owner if there is any Event of Default of Service Co
following the effective date of the Service Co Assignment, in which case, Owner shall not be required to terminate this Agreement with respect
to Services Co or Transferring Manager. From and after the Services Co Assignment, Owner shall not permit any amendment to this
Agreement that would reasonably be expected to reduce or otherwise adversely impact the Retained Rights.
11.3
Acknowledgement of Assignment.
Notwithstanding anything to the contrary contained herein, with respect to any Assignment under this Article XI , the transferring Party
shall, within thirty (30) days following the request of the non-assigning Party, provide a written acknowledgement to the non-assigning Party
confirming that such Assignment complied with the provisions of this Article XI and was
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permitted hereunder and such acknowledgment shall be accompanied by the provision of such information as may reasonably be necessary to
demonstrate that the Assignment complies with the provisions of this Article XI .
11.4
Approvals.
To the extent necessary, all Assignments will be subject to the requirements of the Gaming Authorities, which may include prior approval
of such Assignments.
ARTICLE XII.
INSURANCE, BONDING AND INDEMNIFICATION
12.1
Owner Insurance and Bonding Requirements .
12.1.1 Insurance Policies and Bonding Requirements .
12.1.1.1 Manager, at Owner’s expense (except to the extent such expenses are expressly classified as Operating Expenses),
shall procure and maintain all insurance policies required under the Insurance Requirements set forth as Exhibit E (except to the extent Exhibit
E attached hereto or this Agreement expressly provides that Manager shall procure and obtain specific insurance policies) and in accordance
with the Annual Budget to protect the Owner and Manager against loss or damage arising in connection with the ownership and operation of
the Managed Facilities. The insurance policies shall be effective upon the Commencement Date. Manager may modify the Insurance
Requirements on at least sixty (60) days’ notice to respond to insurance market trends, customer demands, economic conditions, technological
advances and other factors affecting the gaming industry and its risks, as they may change from time to time; provided , that the Insurance
Requirements are (a) consistent with the Other Managed Resorts that are similarly situated to the Managed Facilities or (b) only applicable to
the Managed Facilities and a material policy, and in either case they shall be subject, at Owner’s election, to review by Owner’s independent
insurance consultant and, in the case of clause (b), approval by such consultant (not to be unreasonably withheld). Manager, at its sole
discretion, shall hire a qualified insurance broker to place such insurance policies required under Exhibit E attached hereto.
12.1.1.2 Manager, at Owner’s expense, shall have the power and authority to procure and deliver to the applicable Gaming
Authorities all bonding instruments required by the State where the Managed Facilities are located.
12.1.2 Insurance Program . Manager shall make the insurance programs provided to the Other Managed Resorts available to Owner
with respect to the Managed Facilities (the “ Insurance Program ”) on substantially the same basis and for the same premium allocation
methodology as for the Other Managed Resorts, to the extent permitted by the terms of such Insurance Program. Owner, at Manager’s sole
direction, may obtain any insurance coverage required under the Insurance Requirements through the Insurance Program to the extent such
coverage is available under the Insurance Program. Owner acknowledges that (a) the premiums charged under the Insurance Program include
certain third-party pass-through costs, such as brokers’ commissions and insurance services performed by third parties, and (b) some or all of
the insurance in the Insurance Program may be provided by an Affiliate of Manager, and
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such Affiliate will have a profit or loss for its insurance business from time to time, depending on the amount of premiums received, and claims
paid, by such Affiliate during the relevant period. Manager shall cause any and all costs, expenses or savings resulting from the foregoing
clauses (a) and (b) to be passed through, applied and realized amongst all participants in any Insurance Program on a Non-Discriminatory basis.
12.1.3 Evidence of Insurance . Owner (for insurance policies obtained by Owner through third-party insurers) and Manager (for
insurance policies obtained by Manager through the Insurance Program or other vendors) shall provide the other Party with certificates or other
reasonably satisfactory insurance evidence confirming that the insurance policies comply with the Insurance Requirements. In addition, upon a
Party’s request, the other Party promptly shall provide to the requesting Party a schedule of insurance obtained by such Party, listing the
insurance policy numbers, the names of the insurers, the names of the Persons insured, the amounts of coverage, the expiration dates and the
risks covered thereunder.
12.1.4 Payment of Premiums . For all insurance policies contemplated by this Section 12.1 , Manager shall have the right to pay
premiums using funds from the Operating Account. For the avoidance of doubt, any additional insurance policies obtained by Owner or
Manager that are not contemplated by this Section 12.1 or otherwise approved by the Parties, shall not be funded from the Operating Account.
12.1.5 Review of Insurance . All insurance policy limits provided under this Article XII shall be reviewed by the Parties every three
(3) years following the commencement of the Term, or sooner if reasonably requested by Owner or Manager, to determine the suitability of
such insurance limits in view of exposures reasonably anticipated over the ensuing three (3) years. Owner and Manager hereby acknowledge
that changing practices in the insurance industry and changes in the local law and custom may necessitate changes to types or amounts of
coverage during the Term. Each Party agrees to comply with any other insurance requirements the other Party reasonably requests in order to
protect the Managed Facilities and the respective interests of Owner and Manager. Any dispute regarding such other insurance requirements
shall be referred to the Expert for Expert Resolution pursuant to Article XVII .
12.1.6 Investigation of Claims and Reports . Manager shall promptly investigate and, as soon as reasonably practicable, make a full
written report to Owner regarding all material accidents or claims for material damage relating to the ownership, operation and maintenance of
the Managed Facilities and the estimated liability or cost of repair thereof, and shall prepare, for the approval of Owner, any and all reports
required by any insurance carrier in connection therewith.
12.1.7 Reliance on Owner’s Advisors . Owner acknowledges that neither Manager nor any insurance broker that Manager or its
Affiliates may retain makes any representation, warranty or guaranty whatsoever regarding: (a) the advisability or sufficiency of the insurance
required or obtained under this Agreement; (b) whether the insurance made available under the Insurance Program maintained by Manager or
its Affiliates is sufficient to protect Owner, the Managed Facilities and its Operations against all liability, damage, loss, cost or expense that
might be incurred; or (c) any other insurance that Owner should consider for the protection of Owner, the Managed Facilities and its
Operations, and Owner agrees to rely exclusively on its own insurance advisors with respect to all insurance matters.
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12.2
Waiver of Liability .
AS LONG AS A PARTY AND ANY AFFILIATES REQUESTED BY SUCH PARTY ARE A NAMED INSURED OR ADDITIONAL
INSURED UNDER THE OTHER PARTY’S INSURANCE POLICIES, OR THE POLICIES OTHERWISE PERMIT IF SUCH PARTY OR
ITS AFFILIATES ARE NOT SO NAMED, SUCH PARTY HEREBY RELEASES THE OTHER PARTY, AND ITS AFFILIATES, AND ITS
AND THEIR TRUSTEES, BENEFICIARIES, DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS, AND THE SUCCESSORS AND
ASSIGNS OF EACH OF THE FOREGOING, FROM ANY AND ALL LIABILITY FOR MONETARY RELIEF, DAMAGE, LOSS, COST
OR EXPENSE INCURRED BY THE RELEASING PARTY, WHETHER OR NOT DUE TO THE NEGLIGENT OR OTHER ACTS OR
OMISSIONS OF THE PERSONS SO RELEASED TO THE EXTENT SUCH LIABILITY, DAMAGE, LOSS, COST OR EXPENSE IS
COVERED BY THE INSURANCE POLICIES OF THE RELEASING PARTY, BUT (OTHER THAN AS PROVIDED IN ARTICLE XIV )
ONLY TO THE EXTENT OF INSURANCE PROCEEDS RECEIVED.
12.3
Indemnification .
12.3.1 Indemnification by Owner . Subject to Sections 12.3.3 , 12.3.4 and 17.5.5 , Owner shall defend, indemnify and hold harmless
Manager and its Affiliates (and, following the Services Co Assignment until such time as neither Services Co nor any of its Affiliates is the
Manager hereunder, the Transferring Manager and its Affiliates), and each of their respective shareholders, members, partners, trustees,
beneficiaries, directors, officers, employees and agents, and the successors and assigns of each of the foregoing (collectively, the “ Manager
Indemnified Parties ”) for, from and against any and all Claims that are not within the scope of Manager’s indemnification pursuant to
Section 12.3.2 . Nothing in this Section 12.3 shall be deemed to limit Owner’s right to pursue its contractual damage remedies against Manager
with respect to amounts paid by Owner to one (1) or more other Persons in connection with any Claim caused by an Event of Default by
Manager (it being further understood that the provisions of this Section 12.3 shall not be deemed to modify the provisions of Section 16.1
regarding the establishment of an Event of Default by Manager, including any provisions of Section 16.1 regarding notice of cure of any
default that would, with the giving of notice or the passage of time, become an Event of Default). Manager shall promptly provide Owner with
written notice of any Claim that is reasonably likely to result in any indemnification by Owner.
12.3.2 Indemnification by Manager . Subject to Sections 12.3.3 , 12.3.4 and 17.5.5 , Manager shall defend, indemnify and hold
harmless Owner and its Affiliates, and each of their respective shareholders, members, partners, trustees, beneficiaries, directors officers,
employees and agents, and the successors and assigns of each of the foregoing (collectively, the “ Owner Indemnified Parties ”) for, from and
against any and all (a) Claims that any Owner Indemnified Party or Parties may incur, become responsible for or pay out to the extent caused
by Manager’s Gross Negligence or Willful Misconduct or as a result of an Event of Default by Manager (disregarding any applicable notice or
cure periods for such purpose) or the use of any
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intellectual property rights owned, licensed or otherwise provided by Manager or its Affiliates (including, without limitation, the Service Mark
Rights and the Proprietary Information and Systems) that infringes, misappropriates or otherwise violates or is alleged to infringe,
misappropriate or otherwise violate the intellectual property rights of any third party, and (b) any uninsured loss incurred by Owner due to the
commission by any Senior Executive Personnel or Corporate Personnel of any act of fraud, embezzlement, misappropriation or similar act of
malfeasance with respect to the Managed Facilities.
12.3.3 Insurance Coverage . Notwithstanding anything to the contrary in this Section 12.3 , the Parties shall look first to the
appropriate insurance coverages in effect pursuant to this Agreement prior to seeking indemnification under this Section 12.3 in the event any
claim or liability occurs as a result of injury to persons or damage to property, regardless of the cause of such claim or liability; provided , that
if the insurance carrier denies coverage or “reserves rights” as to coverage, then the Indemnified Parties shall have the right to seek
indemnification, without first looking to such insurance coverage. In addition, nothing contained in this Section 12.3 shall in any way affect the
releases set forth in Section 12.2 .
12.3.4 Indemnification Procedures . The Indemnifying Party shall have the right to assume the defense of any Claim with respect to
which the Indemnified Party is entitled to indemnification hereunder. If the Indemnifying Party assumes such defense, (a) such defense shall be
conducted by counsel selected by the Indemnifying Party and approved by the Indemnified Party, such approval not to be unreasonably
withheld or delayed ( provided , that the Indemnified Party’s approval shall not be required with respect to counsel designated by the
Indemnifying Party’s insurer); (b) so long as the Indemnifying Party is conducting such defense with reasonable diligence, the Indemnifying
Party shall have the right to control said defense and shall not be required to pay the fees or disbursements of any counsel engaged by the
Indemnified Party except if a material conflict of interest exists between the Indemnified Party and the Indemnifying Party with respect to such
Claim or defense; and (iii) the Indemnifying Party shall have the right, without the consent of the Indemnified Party, to settle such Claim, but
only if such settlement involves only the payment of money, the Indemnifying Party pays all amounts due in connection with or by reason of
such settlement and, as part thereof, the Indemnified Party is unconditionally released from all liability in respect of such Claim. The
Indemnified Party shall have the right to participate in the defense of such Claim being defended by the Indemnifying Party at the expense of
the Indemnified Party, but the Indemnifying Party shall have the right to control such defense (other than in the event of a material conflict of
interest between the parties with respect to such Claim or defense). In no event shall (A) the Indemnified Party settle any Claim without the
consent of the Indemnifying Party so long as the Indemnifying Party is conducting the defense thereof in accordance with this Agreement or
(B) if a Claim is covered by the Indemnifying Party’s insurance, knowingly take or omit to take any action that would cause the insurer not to
defend such Claim or to disclaim liability in respect thereof.
12.3.5 Survival . This Section 12.3 shall survive any expiration or termination of this Agreement.
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ARTICLE XIII.
FINANCING; GROUND LEASE
13.1
Mortgages; Collateral Assignments; Non-Disturbance .
Subject to Article XI , Owner shall have the right to grant a Mortgage or Security Interest to a Lender in connection with any Financing,
and to assign to any Lender as collateral security for any Financing, all of Owner’s right, title and interest in and to this Agreement. Promptly
following execution of any such Financing Documents, Owner shall provide Manager a true and complete copy of all such Financing
Documents. Owner shall cause any Lender under a Financing Document and any lessor under the Ground Lease to enter into a
Non-Disturbance Agreement in a form acceptable to Manager, in its reasonable discretion, which explicitly provides that such Lender or lessor
may not terminate Manager under this Agreement, under any circumstance except to the extent Manager may be terminated in accordance with
the terms of this Agreement, irrespective of whether the Financing or Ground Lease is in default or has been foreclosed upon or the Lender or
lessor has acquired all or a portion of the Managed Facilities or Premises by deed-in-lieu of foreclosure.
Any foreclosure or realization on a Financing Document or the Ground Lease or that results in a transfer of all or a substantial portion of
the Managed Facilities, the Premises, the Ground Lease, this Agreement or Manager’s rights hereunder other than for security purposes shall be
subject to the transfer provisions set forth under Article XI of this Agreement.
13.2
Lender’s Right of Access .
Upon reasonable advance notice from a Lender (which notice may be given orally in connection with an emergency or upon the
occurrence of an event of default under any Financing Documents), Manager shall permit and cooperate with such Lender and its agents and
representatives to enter any part of the Managed Facilities, except for those parts of the Managed Facilities as to which access is restricted by
Applicable Law, at any reasonable time for the purposes of examining or inspecting the Managed Facilities, or examining or copying the books
and records of the Managed Facilities; provided , that: (a) any expenses incurred in connection with such activities shall be Operating Expenses
of the Managed Facilities; and (b) Owner shall use commercially reasonable efforts (including the inclusion of an appropriate confidentiality
provision in the Financing Documents) to cause such Lender to agree to treat as confidential any information such Lender obtains from
examining the books and records of the Managed Facilities provided by Owner to Manager, including the Annual Budget. Manager
acknowledges that a Lender may disclose such information to the same extent and subject to the same restrictions as are applicable to the
Owner with respect to Manager Confidential Information under Article VIII of this Agreement (including to any actual or potential purchasers
of the relevant Mortgage or any interest therein).
13.3
Disclosure of Mortgages .
Owner represents and warrants that as of the date of this Agreement, except as disclosed to Manager in writing prior to the
Commencement Date, there is no Mortgage encumbering the Managed Facilities, Premises or the Ground Lease or any portion thereof or
interest therein. Owner shall provide to Manager a true and complete copy of any new proposed Mortgage
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documents for Manager’s review no less than thirty (30) days before the execution of such new Mortgage documents. Promptly following
execution of such new Mortgage documents, Owner shall provide Manager a true and complete copy of all such new Mortgage documents.
13.4
Estoppel Certificates .
Upon written request at any time during the Term, Manager shall issue to Owner or any Lender, within no less than thirty (30) days after
Manager’s receipt of such request from Owner, an estoppel certificate, comfort letter or other documents as may be reasonably requested by a
Lender: (a) certifying that this Agreement has not been modified and is in full force and effect (or, if there have been modifications, specifying
the modifications and that the same is in full force and effect as modified); and (b) stating whether, to the knowledge of the signatory of such
certificate, any default by Owner exists, and if so, specifying each default of which the signatory has knowledge. Similarly, Manager shall be
entitled to (and Owner shall provide upon written request) an estoppel certificate from Owner, any Lender, or any ground lessor (with respect
to any ground lease), upon the same notice and terms for an estoppel certificate issued by Manager.
13.5
Amendments to Agreement .
In the event any Lender or proposed Lender, directly or indirectly as a condition of closing the proposed Financing, requires any
commercially reasonable modification of any terms or provisions of this Agreement, the Parties shall comply with such request; provided , that
in no event shall Manager be required to agree to any requested modification or amendment to this Agreement that would increase Manager’s
obligations under this Agreement or diminish the fees or reimbursements becoming due to Manager.
13.6
Owner’s Ground Lease Obligations .
Without limiting Manager’s rights set forth in this Agreement, Owner shall (a) timely exercise any and all renewal or other term
extension rights granted to Owner under the Ground Lease and not terminate the Ground Lease, (b) comply in all respects with its base rent
payments, participation rent payments and all other payment obligations set forth in the Ground Lease, (c) otherwise comply in all material
respects with the terms and conditions of the Ground Lease and (d) not suffer an Assignment of Owner’s interest in the Ground Lease except
pursuant to a Managed Facilities Transfer permitted by this Agreement and which includes the Managed Facilities.
ARTICLE XIV.
BUSINESS INTERRUPTION
14.1
Business Interruption.
At all times during the Term, Manager shall assist Owner in procuring, at Owner’s Expense, and Owner shall maintain Business
Interruption Insurance for the Managed Facilities in accordance with the requirements set forth in Exhibit E attached hereto. If any event,
including a Force Majeure Event, occurs that results in an interruption in the Operation of the Managed Facilities (a “ Business Interruption
Event ”), Manager shall use commercially reasonable efforts to reduce Operating Expenses, Centralized Services Charges and
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Reimbursable Expenses to levels commensurate with the levels of reduced revenues and business activity. All Centralized Service Charges and
Reimbursable Expenses actually incurred during the period of the Business Interruption Event shall continue to be payable in accordance with
the provisions this Agreement, regardless of whether there are sufficient Business Interruption Insurance proceeds to cover such amounts.
Owner shall also be obligated to pay to Manager, in accordance with this Agreement, Management Fees based on the prior year’s actual Net
Operating Revenues and EBITDA (as measured as of the date immediately prior to the commencement of the Business Interruption Event)
during the period of the Business Interruption Event; provided , that during the first Operating Year, EBITDA shall be based on the projected
EBITDA included in the Annual Budget(s) for the twelve (12) months from and after the Opening Date.
14.2
Proceeds of Business Interruption Insurance .
The net proceeds of the Business Interruption Insurance maintained in accordance with Section 14.1 (after the application of any
deductible) shall be deposited in the Operating Account and used by Manager in the same manner as funds generated from the Operation of the
Managed Facilities are used by Manager in accordance with this Agreement, including the payment of Operating Expenses, Management Fees,
the Centralized Services Charges and Managed Facilities Personnel Costs and all other Operating Expenses as provided in Section 14.1 .
ARTICLE XV.
CASUALTY OR CONDEMNATION
15.1
Casualty .
15.1.1 Notices . If the Managed Facilities or any portion thereof is damaged by a Casualty, Manager shall immediately notify
Owner thereof.
15.1.2 Casualty . If the Managed Facilities are damaged or destroyed by a Casualty and, thereafter, the business operations at the
Managed Facilities substantially cease, then a Force Majeure Event shall be deemed to exist and the Term of this Agreement shall be extended
for each day that such Force Majeure Event continues. If Owner elects to commence and complete the Restoration of the Managed Facilities
following such Casualty, the Term of this Agreement shall recommence upon the completion of such Restoration. If Owner chooses not to
complete such Restoration and sells the Managed Facilities (or any material portion of the Managed Facilities or the parking structure)
following such Casualty, then Manager, upon written notice to Owner, may elect to terminate this Agreement in accordance with
Section 16.2.4 and Owner, upon written notice to Manager, may elect to terminate this Agreement in accordance with Section 16.3.4 .
15.2
Condemnation .
15.2.1 Notices . If either Party receives notice of any actual, pending or contemplated Condemnation (or other action in lieu thereof)
of all or a portion of the Managed Facilities, such party shall promptly notify the other Party thereof.
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15.2.2 Total Condemnation . If all or substantially all of the Managed Facilities is taken in a Condemnation, or if a portion of the
Managed Facilities shall be so taken such that Owner determines that the cost of Restoration is not justified in comparison to the anticipated
profitability of the Managed Facilities during the remaining Term or the remaining portion cannot be Operated as a casino, either Party, upon
written notice to the other Party, may terminate this Agreement. The proceeds of any condemnation award for the condemnation of all, or
substantially all, of the Managed Facilities shall be equitably allocated between Manager and Owner based on their respective interests in the
Managed Facilities; provided , however , that in no event shall Manager receive from the Condemnation award an amount in excess of the fee
that would be payable to Manager in accordance with Section 16.3.4 (assuming a fee would be payable thereunder) based on the date of
termination of this Agreement. The provisions of this Section 15.2.2 shall survive the termination or expiration of this Agreement.
15.2.3 Partial Condemnation . If all or a portion of the Managed Facilities shall be taken by Condemnation and this Agreement is
not terminated by either Party in accordance with Section 15.2.2 , or the Condemnation is only on a temporary basis, this Agreement shall not
terminate and Owner shall promptly commence and complete the Restoration, but only to a viable architectural unit and provided , that Owner
shall not be obligated to expend any funds in excess of the amount of Condemnation proceeds actually received by Owner. In the event of a
partial condemnation, the proceeds of any condemnation award shall be payable solely to Owner.
15.2.4 Exception . Notwithstanding anything in this Agreement to the contrary, Owner shall not be liable for any inconvenience or
annoyance to Manager or injury to Manager’s business relating in any way from such Condemnation or repair or restoration.
15.3 Coordination with Ground Lease and Financing Documents . To the extent this Agreement is in effect and the provisions of
Section 15.1 or 15.2 are in conflict with any of the provisions of the Ground Lease or the Financing Documents with respect to any casualty or
condemnation affecting the Managed Facilities, the Ground Lease or the Financing Documents, as applicable, shall control.
ARTICLE XVI.
DEFAULTS AND TERMINATIONS
16.1
Events of Default .
16.1.1 Owner Events of Default . Each of the following actions and events may be deemed an “ Owner Event of Default ”:
16.1.1.1 A failure by Owner within the time periods specified in this Agreement to pay the amount due and payable under
this Agreement to Manager or its Affiliates for the Management Fees, Reimbursable Expenses or Centralized Services Charges and that is not
cured within sixty (60) days after notice to Owner specifying such failure; provided , that in the event sufficient funds are available in the
Operating Account to pay such amounts then due and Manager has the right to withdraw, transfer or apply such funds to the payment of such
amounts then due, then such failure of Owner to pay such amount shall not be an Event of Default;
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16.1.1.2 Except as set forth in Section 16.1.1.1 , a failure by Owner to pay any amount of money to Manager when due and
payable under this Agreement that is not cured within sixty (60) days after notice to Owner;
16.1.1.3 A failure by Owner to materially perform or comply with any of the covenants, duties or obligations set forth in this
Agreement to be performed by Owner that is not cured within thirty (30) days following notice of such default from Manager to Owner;
provided , that if: (a) the default is not susceptible of cure within a thirty (30) day period; (b) the default cannot be cured solely by the payment
of a sum of money; and (c) the default would not expose Manager to an imminent and material risk of criminal liability or of material damage
to its business reputation, the thirty (30) day cure period shall be extended for such time as is necessary (but in no event longer than ninety
(90) days) to cure the default so long as Owner commences to cure the default within such thirty (30) day period and thereafter proceeds with
reasonable diligence to complete such cure; and
16.1.1.4 (i) Owner’s failure generally to pay its debts as such debts become due; (ii) a general assignment by Owner for the
benefit of its creditors, or any similar arrangement with its creditors by Owner; (iii) the entry of a judgment of insolvency against Owner;
(iv) the filing by the Owner of a petition for relief under applicable bankruptcy, insolvency, or similar debtor relief laws; (v) the filing of a
petition for relief under applicable bankruptcy, insolvency or similar debtor relief laws by any Person against Owner which is consented to by
Owner; (vi) the appointment (or petition or application for appointment) of a receiver, custodian, trustee, conservator, or liquidator to oversee
all or any substantial part of Owner’s assets or the conduct of its business; (vii) any action by Owner for dissolution of its operations; or
(viii) any other similar proceedings in any relevant jurisdiction affecting Owner.
Notwithstanding the foregoing, there shall be no Owner Event of Default if the basis for any asserted Owner Event of Default is in the
process of being resolved pursuant to Sections 5.1.3 and 5.1.4 or Article XVII .
16.1.2 Manager Events of Default . Each of the following actions and events may be deemed a “ Manager Event of Default ”:
16.1.2.1 A failure by Manager to pay any amount of money to Owner when due and payable under this Agreement that is
not cured within sixty (60) days after notice to Manager;
16.1.2.2 A failure by Manager or CLC to materially perform or comply with any of the covenants, duties or obligations set
forth in this Agreement to be performed by Manager or CLC, as applicable, that is not cured within thirty (30) days following notice of such
default from Owner to Manager; provided, that if: (a) the default is not susceptible of cure within a thirty (30) day period; (b) the default cannot
be cured solely by the payment of a sum of money; and (c) the default would not expose Owner to an imminent and material risk of criminal
liability or of material damage to its business reputation, the thirty (30) day cure period shall be extended for such time as is necessary (but in
no event longer than ninety (90) days) to cure the default so long as Manager commences to cure the default within such thirty (30) day period
and thereafter proceeds with reasonable diligence to complete such cure; and
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16.1.2.3 (i) Manager’s failure generally to pay its debts as such debts become due; (ii) a general assignment by Manager
and/or CLC for the benefit of its creditors, or any similar arrangement with its creditors by Manager and/or CLC; (iii) the entry of a judgment
of insolvency against Manager and/or CLC; (iv) the filing by the Manager and/or CLC of a petition for relief under applicable bankruptcy,
insolvency, or similar debtor relief laws; (v) the filing of a petition for relief under applicable bankruptcy, insolvency or similar debtor relief
laws by any Person against Manager and/or CLC which is consented to by Manager and/or CLC, as applicable; (vi) the appointment (or
petition or application for appointment) of a receiver, custodian, trustee, conservator, or liquidator to oversee all or any substantial part of
Manager’s assets or the conduct of its business; (vii) any action by Manager for dissolution of its operations; (viii) the appointment (or petition
or application for appointment) of a receiver, custodian, trustee, conservator, or liquidator to oversee all or any substantial part of CLC’s assets
or the conduct of its business; (ix) any action by CLC for dissolution of its operations; or (x) any other similar proceedings in any relevant
jurisdiction affecting Manager and/or CLC.
Notwithstanding the foregoing, there shall be no Manager Event of Default if the basis for any asserted Manager Event of Default is in
the process of being resolved pursuant to Sections 5.1.3 and 5.1.4 or Article XVII .
16.1.3 Remedies for Event of Default . Subject to the terms of this Agreement, if any Event of Default shall have occurred, the
non-defaulting Party shall have the right to terminate this Agreement in accordance with this Section 16.1 and to exercise against the defaulting
Party any other rights and remedies available to the non-defaulting Party under this Agreement (subject to the provisions hereof) at law or in
equity; provided , however , Owner shall not have the right to terminate this Agreement by reason of the occurrence of any Event of Default
and Manager shall not have the right to terminate this Agreement by reason of the occurrence of an Event of Default under this Section 16.1 ,
unless: (a) the Event of Default is material in amount or in its adverse effect on the Operation, ownership or possession of the Managed
Facilities; (b) the Event of Default constitutes intentional misconduct, reckless behavior or repeated Events of Default of a similar nature by the
defaulting Party; or (c) the remedies under this Agreement are inadequate to redress such Event of Default; provided , that the foregoing
limitations and the cure period set forth in Section 16.1.2.1 shall not be applicable in the event of any breach by the Manager under Section 5.4
of this Agreement involving at least One Million Dollars ($1,000,000) and a ten (10) day cure period shall instead be applicable after written
notice is received by Manager from Owner. For the avoidance of doubt, in the event of any payment by Manager that is the subject of a breach
notice as contemplated by the foregoing sentence, Manager may cure the breach by placing the amount of the payment into a mutually
agreeable escrow to be held for its benefit pending the outcome of dispute resolution in accordance with this Agreement (which shall include,
in the case of Management Fees, Expert Resolution pursuant to Article XVII ). Notwithstanding the foregoing, Manager may not terminate this
Agreement by reason of the occurrence of an Event of Default under Section 16.1.1.1 or Section 16.1.1.2 unless the nonpayment giving rise to
the Event of Default is greater than One Million Dollars ($1,000,000). If, following a Service Co Assignment, a Manager Event of Default
occurs and Owner terminates this Agreement, Owner may (in addition to the other rights and remedies available to Owner under this
Agreement) terminate Transferring Manager’s right to receive the Retained Rights.
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16.1.4 Notice of Termination . If termination of this Agreement is a remedy elected by a non-defaulting Party pursuant to this
Section 16.1 , such remedy shall be exercised by the non-defaulting Party only by irrevocable and unconditional written notice of termination
to the defaulting Party, in which case this Agreement shall terminate on the date specified by the non-defaulting Party in the termination notice,
which date shall be no less than ninety (90) days nor later than twelve (12) months after the delivery of such notice. The right of termination
shall be in addition to, and not in lieu of, any other rights or remedies at law or in equity by reason of the occurrence of any such Event of
Default, it being understood and agreed that the exercise of the remedy of termination shall not constitute an election of remedies and shall be
without prejudice to any such other rights or remedies otherwise available to the non-defaulting Party.
16.2
Manager Termination Rights .
16.2.1 In Connection with Certain Assignments . Manager shall have the right to terminate this Agreement if there shall be (a) any
Assignment in violation of Article XI , (b) any Transfer of Ownership Interests to a Manager Prohibited Person or (c) any Change of Control,
such termination to be effective (i) twelve (12) months after delivery of such notice (unless Owner shall agree to an earlier termination date) or
(ii) if such Assignment or Transfer of Ownership Interests involves a Manager Prohibited Person, such earlier date as is required by any
Gaming Authority. Such right of termination shall be exercisable until the date which is of ninety (90) days after Manager receives written
notice of such an Assignment, Transfer of Ownership Interests or Change of Control from Owner.
16.2.2 In Connection with a Managed Facilities Transfer . Manager shall have the right to terminate this Agreement if there shall be
a Managed Facilities Transfer, such termination to be effective twelve (12) months after delivery of such notice (unless Owner shall agree to an
earlier termination date). Such right of termination shall be exercisable until the date which is of ninety (90) days after Manager receives
written notice of such Managed Facilities Transfer from Owner.
16.2.3 Upon an Operating Deficiency . If, at any time during the Term, Manager determines in the exercise of its good faith
judgment that it cannot Operate the Managed Facilities in all material respects in accordance with the Operating Standard and Operating
Limitations as provided herein and that the proximate cause thereof is an Operating Deficiency Cause, Manager shall be entitled to provide
notice of such determination to Owner (an “ Operating Deficiency Notice ”), which Operating Deficiency Notice shall allege with reasonable
specificity the details of the non-compliance with the Operating Standard or Operating Limitations. For purposes of the preceding sentence, an
“ Operating Deficiency Cause ” shall mean any one or more of the following: (a) any failure by Owner to fund a Funds Request issued pursuant
to Section 5.5.2 ; or (b) any interference by Owner or its agents or representatives in any material respect with the Operation of the Managed
Facilities. Within fifteen (15) days after receipt of any Operating Deficiency Notice, Owner shall respond in detail to such allegation and, if the
matter is not resolved by the Parties within forty five (45) days after Owner’s response, the matter shall be referred to the Expert for Expert
Resolution in accordance with Article XVII . If the Expert determines that the Managed Facilities are not being Operated in accordance with
the Operating Standard or Operating Limitations in one or more material respects as provided herein and that the proximate cause of such
non-compliance is an Operating
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Deficiency Cause, then an “ Operating Limitations Deficiency ” shall be deemed to exist, and, unless Owner shall within fifteen (15) days of
the Expert’s determination fund the subject Funds Request or cease the actions that interfere with the Operation of the Managed Facilities by
Manager, then Manager shall have the right, in its discretion, exercisable within thirty (30) days of the Expert’s determination by written notice
to Owner, to terminate this Agreement, such termination to be effective twelve (12) months following delivery of Manager’s notice of
termination unless Owner shall agree to an earlier termination date. A Termination Fee shall not be payable by Owner upon a termination by
Manager pursuant to this Section 16.2.3 .
16.2.4 Upon a Casualty or Condemnation . Manager shall have the right to terminate this Agreement as provided in Section 15.1.2
due to a Casualty only if Owner elects not to undertake Restoration and sells any material portion of the remaining Managed Facilities and
interest in the Premises and/or the Ground Lease (the “ Remainder ”). Manager shall have the right to terminate this Agreement as provided in
Section 15.2.2 due to a Condemnation and Manager shall share in the condemnation proceeds as set forth in Section 15.2.2 . Such termination
shall be effective as of the date set forth in the notice of termination. A Termination Fee shall not be payable by Owner upon a termination by
Manager pursuant to this Section 16.2.4 .
16.2.5 Upon a Failure to Amend . Manager shall have the right to terminate this Agreement as provided in Section 19.2.10 of this
Agreement by written notice to Owner to terminate this Agreement, such termination to be effective thirty (30) days following delivery of
Manager’s notice of termination. No termination fee or penalty shall be payable by Owner upon a termination of this Agreement pursuant to
this Section 16.2.5 .
16.2.6 Upon a Licensing Event . Manager shall have the right, in its discretion, to terminate this Agreement upon no less than ninety
(90) days’ nor more than twelve (12) months’ written notice of termination to Owner following a Licensing Event which is not cured within the
period required by the applicable Gaming Authorities. No termination fee or penalty shall be payable by Owner upon a termination of this
Agreement pursuant to this Section 16.2.6 .
16.2.7 Notice of Termination . If termination of this Agreement is elected by Manager pursuant to this Section 16.2 , such remedy
shall be exercised by Manager only by irrevocable and unconditional written notice of termination to Owner and shall not be an exclusive
remedy.
16.3
Owner Termination Rights .
16.3.1 Termination Upon a Managed Facilities Transfer . Owner shall have the right, in its discretion, to terminate this Agreement
upon no less than ninety (90) days’ nor more than twelve (12) months’ written notice of termination to Manager following a Managed Facilities
Transfer. Such right of termination shall be exercisable until the date which is ninety (90) days after such Managed Facilities Transfer. Upon
and as a condition to such termination by Owner, Owner shall pay to Manager a Termination Fee.
16.3.2 Upon a Licensing Event . Owner shall have the right, in its discretion, to terminate this Agreement upon no less than ninety
(90) days’ nor more than twelve (12)
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months’ written notice of termination to Manager, without payment of any termination fee or penalty, if, as a result of a final, non-appealable
determination by any applicable Gaming Authority, Manager shall have failed to obtain or maintain any license, qualification or approval from
any Gaming Authority necessary for Manager to manage the Managed Facilities unless such failure was attributable, in whole or in part, to
Owner or one or more direct or indirect members or other equity holders of Owner (other than any such Person who is an Affiliate of
Manager). No termination fee or penalty shall be payable by Owner upon a termination pursuant to this Section 16.3.2 .
16.3.3 Upon a Failure to Amend . Owner shall have the right to terminate this Agreement, without payment of any termination fee
or penalty, as provided in Section 19.2.10 of this Agreement, upon written notice of termination to Manager, such termination to be effective
thirty (30) days following delivery of Owner’s notice of termination. No termination fee or penalty shall be payable by Owner upon a
termination pursuant to this Section 16.3.3 .
16.3.4 Upon a Casualty or Condemnation . Owner shall have the right to terminate this Agreement as provided in Section 15.2 due
to a Casualty only if Owner elects not to undertake Restoration and sells the Remainder, in which event (a) if the Remainder is sold to a third
party and the purchaser agrees for the benefit of Manager not to build a casino on the Premises for the Trailing Period following such Casualty,
Owner shall not be obligated to pay to Manager any termination fee or penalty and (b) if the Remainder is sold to a third party and such third
party does not agree for the benefit of Manager that it will not build a casino on the Premises for the Trailing Period following such Casualty,
then Owner shall pay to Manager the Termination Fee. Owner shall have the right to terminate this Agreement as provided in Section 15.2.2
due to a Condemnation and Manager shall share in the condemnation proceeds as set forth in Section 15.2.2 ; provided , that if the Remainder
remaining after the Condemnation is subsequently sold to a third party and such third party does not agree (in favor of Manager) that it will not
build a casino on the Premises at any time during the Trailing Period following such Casualty, then Owner shall pay to Manager the
Termination Fee less the amount of the condemnation award received by Manager in accordance with Section 15.2.2 . Such termination shall
be effective as of the date set forth in the notice of termination. For purposes hereof, “ Trailing Period ” means (a) if during the Initial Term, the
period of time that this Agreement would have continued to be in effect if the Initial Term had not terminated, (b) if during the Renewal Term,
the period of time that this Agreement would have continued to be in effect if the Renewal Term had not terminated, and (c) during any
Continuing Term, there shall be no Trailing Period.
16.3.5 In Connection with Certain Assignments . If there shall be any Assignment by Manager in violation of Section 11.2 or to an
Owner Prohibited Person, Owner shall have the right to terminate this Agreement, such termination to be effective (i) twelve (12) months after
delivery of such notice (unless Manager shall agree to an earlier termination date) or (ii) if such Assignment involves an Owner Prohibited
Person, such earlier date as is required by any Gaming Authority. Such right of termination shall be exercisable until the date which is ninety
(90) days after Owner receives written notice of such an Assignment, transfer of Ownership Interest or Change of Control from Manager. No
termination fee or penalty shall be payable by Owner upon a termination pursuant to this Section 16.3.8 .
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16.3.6 Notice of Certain Assignments, Change of Control, Managed Facilities Transfer and Ground Lease Matters . Owner shall
provide prompt written notice to Manager of (a) any Assignment, Transfer of Ownership Interests, Change of Control or Managed Facilities
Transfer, in each case both at the time of execution of any definitive agreement with respect thereto and at the time of the consummation of
such transaction or (b) receipt of notice of any breach under the Ground Lease or any termination notice delivered under the Ground Lease, in
each case including a copy of the relevant notice.
16.3.7 Notice of Termination . If termination of this Agreement is elected by Owner pursuant to this Section 16.3 , such remedy
shall be exercised by Owner only by irrevocable and unconditional written notice of termination to Manager and shall not be an exclusive
remedy.
16.4
Actions To Be Taken on Termination .
The Parties shall take the following actions upon the expiration or termination of this Agreement pursuant to this Section 16 or otherwise
pursuant to this Agreement (in addition to the rights of the non-defaulting Party to pursue all other remedies available to it under this
Agreement if such termination is due to an Event of Default):
16.4.1 Payment of Expenses for Termination . In the event of termination of this Agreement due to an Event of Default of the
Owner, all commercially reasonable direct expenses arising as a result of the cessation of Managed Facilities operations by Manager (including
expenses arising under this Section 16.4 ) shall be for the sole account of Owner, and Owner shall reimburse Manager within fifteen (15) days
following receipt of any invoice from Manager for any such expenses, including those arising from or in connection with severing the
employment of Managed Facilities Personnel not engaged by Owner in accordance with Section 16.6.9 (with severance benefits calculated in
accordance with policies applicable generally to employees of Other Managed Resorts or any applicable employment agreement or union
agreement that had been reflected in the Annual Budget or otherwise approved by Owner) incurred by Manager in the course of effecting the
termination of this Agreement.
16.4.2 Payment of Amounts Due to Manager . Upon the expiration or termination of this Agreement, Owner shall pay to Manager
(a) the Base Management Fee through the effective date of such expiration or termination, (b) Managed Facilities Personnel Costs, (c) other
Reimbursable Expenses, (d) the Centralized Services Charges, (e) any Incentive Management Fees which were due but not yet paid, (f) any
other amounts due Manager under this Agreement through the effective date of expiration or termination and (g) if applicable, any termination
fee that may be due in accordance with (and for the avoidance of doubt, no termination fee or penalty shall be due in the event of any other
termination), Section 16.3.1 (Managed Facilities Transfer) or Section 16.3.4 (Casualty/Condemnation), (subject, in the case of termination
pursuant to Section 16.3.4 , to the terms thereof). This obligation is unconditional and shall survive the expiration or termination of this
Agreement (including all amounts owed to Manager that are not fully ascertainable as of the expiration or termination date), and Owner shall
not have or exercise any rights of setoff, except to the extent of any outstanding and undisputed payments owed to Owner by Manager under
this Agreement. Manager acknowledges that the payment of any termination fee under this Section 16.4.2 and the payment
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of all other amounts under this Section 16.4 , as and when paid, shall be the sole and exclusive remedy of Manager in the case of any
termination by Owner or Manager under circumstances in which any such termination fee is to be paid. The Parties further acknowledge that
any such termination fee does not represent a penalty or punitive clause but represents an agreed measure of damages, the amount of which is
impossible to determine on the date this Agreement is signed. Any disputes regarding amounts owed to Manager under this Section 16.4.2 shall
be referred to the Expert for Expert Resolution pursuant to Article XVII . In addition, all provisions in this Agreement that specifically survive
the expiration or termination of this Agreement shall continue to survive as provided herein and, notwithstanding the limitations contained in
this Section 16.4.2 , Manager shall continue to have a right to receive any and all payments which would be due and payable in connection with
such surviving provisions.
16.4.3 Surrender of Managed Facilities; Cooperation . Manager shall peacefully vacate and surrender the Managed Facilities to
Owner on the effective date of such expiration or termination, and the Parties shall execute and deliver any expiration or termination or other
necessary agreements either Party shall request for the purpose of evidencing the expiration or termination of this Agreement, and Manager
shall deliver to Owner all keys, passwords, combinations, and take all such additional actions as Owner may reasonably request to ensure the
orderly transition of Operation of the Managed Facilities to Owner or such Person as Owner may designate.
16.4.4 Proprietary Information and Systems; Service Mark Rights .
16.4.4.1 Upon the expiration or termination of this Agreement, Owner, at its expense, shall immediately commence and
diligently pursue to completion during a transition period of twelve (12) months following termination or expiration of this Agreement (the “
Transition Period ”) the following actions:
(a) the discontinuation of all use in any manner of any Proprietary Information and Systems and any and all Service
Mark Rights (other than the Owner Primary Marks); provided that, with respect to the Proprietary Information and Systems, Manager shall
(i) reasonably cooperate with Owner, at Owner’s expense, to develop, construct and install such hardware and software systems as are
reasonably necessary to continue to Operate the Managed Facilities in substantially the same manner and functionality as Operated by Manager
prior to such termination, and (ii) provide Owner reasonably in advance of such discontinuation with a list that describes with reasonable
specificity the Proprietary Information and Systems to which the obligation described in this Section 16.4.4.1(a) applies and their respective
functions;
(b) the cancellation of all fictitious or assumed name registrations relating to Owner’s use of any Proprietary
Information and Systems;
(c) notification to Owner and all telephone directory publishers of the termination or expiration of Owner’s right to use
any telephone number and any regular, classified or other telephone directory listings associated with any Proprietary Information and Systems
and authorization to transfer such number to Manager or at Manager’s direction; provided, that nothing herein shall be deemed to require
Owner to change or surrender any telephone number used exclusively by the Managed Facilities;
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(d) removal from the Managed Facilities, and discontinuation for any purpose, of all publicly observable FF&E,
Supplies, signage and other materials to the extent displaying any aspect of the Service Mark Rights (other than the Owner Primary Marks);
and
(e) the cessation of use of Manuals, policy statements and the like to the extent displaying any Service Mark Right
(other than the Owner Primary Marks).
16.4.4.2 From and after the conclusion of the Transition Period:
(a) Owner shall not, copy, reproduce, use or retain any of the Proprietary Information and Systems, other than
historical materials relating to the Managed Facilities that include incidental Proprietary Information and Systems;
(b) Owner shall not hold itself or the Managed Facilities out to the public as being or remaining (or otherwise
associated with) any other Managed Resorts, or any project or resort managed by Manager or its Affiliates; and
(c) Owner shall provide to Manager evidence reasonably satisfactory to Manager of Owner’s compliance with its
obligations under this Section 16.4.4 .
16.4.5 Assignment and Transfers to Owner . Upon the expiration or termination of this Agreement, Manager shall assign and
transfer to Owner:
16.4.5.1 all leases and contracts to which Manager, CLC, or any of their Affiliates is a party, if any, (including collective
bargaining agreements and pension plans, equipment leases, leases, licenses and concession agreements and maintenance and service contracts)
in effect that relate exclusively to the Managed Facilities or the Owner Owned IP as of the date of expiration or termination of this Agreement
which are assignable without third party consent or as to which consent to assignment may be and has been obtained without cost to Manager,
and Owner shall, effective as of the date of such termination, assume all liabilities and obligations thereunder, and Owner shall confirm its
assumption of such liabilities and obligations in writing; provided , that Manager shall provide to Owner a list of all contracts and agreements
with CLC, and any Affiliates of Manager, and Manager shall assign, and Owner shall assume only such contracts and agreements between the
Managed Facilities, on the one hand, and CLC or an Affiliate of Manager, on the other hand, as Owner shall elect (and Manager shall
terminate, at Manager’s sole cost and expense) all Affiliate contracts and agreements not so assumed by Owner);
16.4.5.2 all of Manager’s right, title and interest in and to all Approvals, including liquor licenses, if any, held by Manager in
connection with the Operation of the Managed Facilities, but only to the extent such assignment or transfer is permitted under Applicable Law;
provided , that Owner shall reimburse Manager for any funds Manager has expended in obtaining any such Approvals (if not otherwise paid or
reimbursed by Owner). In addition, if Manager or any Affiliate of Manager is the holder of any liquor license for the Managed Facilities which
is not assignable to Owner or its designee upon termination of this Agreement, then, upon the request of Owner, Manager (or such Affiliate)
shall enter into a temporary lease, license or such other agreement as may be permitted under Applicable Law to
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permit the continuous and uninterrupted sale of alcohol beverages at the Managed Facilities consistent with prior operations. In such event,
Manager (or its Affiliate, if applicable) shall not be entitled to compensation in connection with such arrangement, but shall not incur any cost
or liability in connection therewith and shall be named as an additional insured on any “dramshop” or other liability insurance pertaining to the
sale of alcoholic beverages at the Managed Facilities. Any such temporary lease, license or other arrangement shall include an indemnification
of Manager and its Affiliates from Owner and shall provide for the termination of all obligations of Manager and its Affiliates thereunder
within one hundred twenty (120) days following the date of termination of this Agreement. In addition, to the extent permitted under
Applicable Law, any other permits or licenses that may not be assigned to Owner shall be maintained by Manager for Owner’s benefit at
Owner’s cost and expense until such time (but no later than one hundred twenty (120) days following the termination of this Agreement) as
Owner may secure permits and licenses in its own name, subject to Owner’s provision of an indemnification of Manager and its Affiliates from
Owner; and
16.4.5.3 all books and records of the Managed Facilities (but excluding any Manager Confidential Information); provided ,
that Manager may retain one or more archival copies of such books and records for Manager’s independent use.
16.4.6 Bookings and Reservations . Owner shall honor, and shall cause any successor manager to honor, all business confirmed for
the Managed Facilities with reservations (including reservations made by Manager pursuant to Manager’s other promotional programs) dated
after the effective date of the expiration or termination of this Agreement in accordance with such bookings as accepted by Manager. Manager
shall transfer to Owner and will assume responsibility for all advance deposits received by Manager for the Managed Facilities.
16.4.7 Bank Accounts; Receivables . On the expiration or termination of this Agreement, Manager shall either, at Owner’s election,
(a) terminate all Bank Accounts and disburse all funds therein to Owner or (b) terminate the authority of Manager’s authorized signatories to
draw funds from the Bank Accounts and cause the Persons designated by Owner to become authorized signatories. All receivables of the
Managed Facilities outstanding as of the effective date of termination or expiration of this Agreement shall continue to be the property of
Owner. Manager will turn over to Owner any receivables collected directly by Manager after the effective date of termination or expiration of
this Agreement.
16.4.8 Final Accounting . Within thirty (30) days following the expiration or termination of this Agreement, Manager shall render a
full accounting to Owner (including all statements and reports in the forms required herein) for the final month ending on the date of expiration
or termination of this Agreement. At the request of Owner, Manager shall cause to be prepared and delivered to Owner within ninety (90) days
following the expiration or termination of this Agreement Certified Financial Statements for the final Operating Year, containing the reports
and other items and prepared on the same basis as under Section 10.4 . The cost of preparing the Certified Financial Statements pursuant to this
Section 16.4.8 shall be an Operating Expense attributable to the final Operating Year. The final Certified Financial Statements delivered
pursuant to this Section 16.4.8 , and all information contained therein, shall be binding and conclusive on the Parties unless, within sixty
(60) days following the delivery thereof, either Party shall deliver to the other Party written notice of its objection thereto setting forth in
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reasonable detail the nature of such objection. If the Parties are unable thereafter to resolve any disputes between them with respect to the
matters set forth in the final Certified Financial Statements within sixty (60) days after delivery by either Party of the aforesaid written notice,
either Party shall have the right to cause such dispute to be resolved by Expert Resolution in accordance with the provisions of Article XVII .
16.4.9 Managed Facilities Personnel . From and after expiration or termination of this Agreement the Managed Facilities Personnel
shall not be restrained by this Agreement in making their own decision as to whether to be employed by Owner, Manager or their respective
Affiliates and Manager and its Affiliates may employ any of the Senior Executive Personnel or any other Managed Facilities Personnel who
desire employment with Manager or its Affiliates and who Owner does not employ. Manager shall make reasonably available to Owner from
time to time during the Transition Period any Managed Facilities Personnel employed by Manager or its Affiliates to answer questions that
Owner may have regarding the Managed Facilities.
16.4.10 Centralized Services and Purchasing Program . In consideration of the continued payment of the Centralized Services
Charges (as set forth in Section 4.1.1 ), the charges for Reimbursable Expenses (as set forth in Section 3.3 ) and for participation in Purchasing
Programs (as contemplated by Section 5.6 ), Manager shall, during the Transition Period (or such shorter period as requested by Owner),
continue to provide Centralized Services and allow the Owner to purchase through the Purchasing Program, in each case to the extent Manager
and its Affiliates are permitted to do so pursuant to the terms of any applicable third party arrangements.
16.4.11 Survival . This Section 16.4 shall survive the expiration or termination of this Agreement.
ARTICLE XVII.
DISPUTE RESOLUTION
17.1
Generally .
17.1.1 Except for disputes specifically provided in this Agreement to be referred to Expert Resolution, all claims, demands,
controversies, disputes, actions or causes of action of any nature or character arising out of or in connection with this Agreement, whether legal
or equitable, known or unknown, contingent or otherwise shall be resolved in the United States District Court for Nevada and any appellate
courts thereto, or if federal jurisdiction is lacking, then in the State Courts of Nevada. The Parties agree that service of process for purposes of
any such litigation or legal proceeding need not be personally served or served within the State of Nevada, but may be served with the same
effect as if the Party in question were served within the State of Nevada, by giving notice containing such service to the intended recipient
(with copies to counsel) in the manner provided in Section 19.5 . This provision shall survive and be binding upon the Parties after this
Agreement is no longer in effect.
17.1.2 If any dispute between any of the Parties or any of their respective Affiliates is pending in any state or federal court located
in the State of Nevada with respect to this Agreement (or this Agreement), and any subsequent dispute arises between one or more
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Parties or any of their respective Affiliates which is not required by this Agreement to be referred to Expert Resolution and is pending in any
other state or federal court, the Parties shall (to the extent permissible under applicable rules) jointly move to consolidate such subsequent
dispute in the same court with the pending dispute, and in the event that the court declines to consolidate the disputes (or consolidation is not
permissible under applicable rules), the Parties shall request that the court refer the subsequent dispute to the judge presiding over the pending
dispute as a related case, it being the intent of the Parties to keep any litigation relating to this Agreement within the same court to the fullest
extent possible under the law.
17.2
Expert Resolution .
With respect to any dispute to be submitted to an Expert pursuant to this Agreement, any Party that is party to such dispute may require
that the dispute be submitted to final and binding arbitration (without appeal or review) in Las Vegas, Nevada (“ Expert Resolution ”),
administered by an independent arbitration tribunal consisting of three (3) arbitrators, one of which is appointed by each Party and the third
arbitrator shall be selected by the other two arbitrators (collectively, the “ Expert ”). Such Expert Resolution shall be conducted by the
American Arbitration Association in accordance with the Commercial Arbitration Rules of the American Arbitration Association. The Expert
shall be a person having not less than ten (10) years’ experience in the area of expertise on which the dispute is based and having no conflict of
interest with either Party. With respect to any dispute to be submitted to an Expert pursuant to this Agreement, the use of the Expert shall be the
exclusive remedy of the Parties and neither Party shall attempt to adjudicate such dispute in any other forum. The decision of the Expert shall
be final and binding on the Parties and shall not be capable of challenge, whether by Expert Resolution, arbitration, in court or otherwise.
17.2.1 Related Disputes .
17.2.1.1 Any two (2) or more disputes which are required to be submitted to an Expert under this Agreement shall be
considered related for purposes of this section if they involve the same or substantially similar issues of law or fact. In the event any Party to a
dispute (the “ Subsequent Related Dispute ”) designates it as being related to a prior or pending dispute (the “ Prior Related Dispute ”), the
Subsequent Related Dispute shall be referred for resolution to the Expert to whom the Prior Related Dispute was referred (the “ Initial Expert
”). If a Party objects to the designation of a Subsequent Related Dispute as being related to a Prior Related Dispute, the objection shall be
resolved by the Initial Expert. If the Initial Expert concludes that the disputes are related, the Subsequent Related Dispute shall be resolved by
the Initial Expert in accordance with this Section 17.2 , and to the extent practical issues in the Subsequent Related Dispute that are the same or
substantially similar as in the Prior Related Dispute shall be resolved in a manner consistent with the resolution of such issues in the Prior
Related Dispute. If the Initial Expert concludes that the Subsequent Related Dispute is not related to the Prior Related Dispute, the Subsequent
Related Dispute shall be referred to an Expert selected in accordance with the introductory paragraph of this Section 17.2 .
17.2.1.2 Notwithstanding anything to the contrary contained in this Agreement, if a claim is asserted involving an alleged
Event of Default under this Agreement (or under this Agreement) (a “ Default Claim ”), any and all issues, whether legal, factual or
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otherwise, relating to such Default Claim shall be resolved exclusively by a state or federal court located in the State of Nevada in accordance
with the provisions hereof regardless of whether any of such issues would otherwise be required to be referred to an Expert for resolution under
a provision of this Agreement; provided , that any decision by an Expert made in accordance with this Agreement which was rendered prior to
the assertion of a Default Claim and which relates to such Default Claim shall be considered final and binding in any court proceeding
involving such Default Claim, it being the intent and understanding of the Parties that, except for specific issues that were determined by an
Expert before a Default Claim is asserted, all issues relating to such Default Claim shall be resolved exclusively by the court in the action or
proceeding involving the Default Claim.
17.2.2 Restrictions on Expert . THE EXPERT SHALL HAVE NO AUTHORITY TO VARY OR IGNORE THE TERMS OF THIS
AGREEMENT, INCLUDING SECTION 17.7.5 , AND SHALL BE BOUND BY APPLICABLE LAW. ALL PROCEEDINGS, AWARDS
AND DECISIONS UNDER ANY EXPERT RESOLUTION PROCEEDING SHALL BE STRICTLY PRIVATE AND CONFIDENTIAL,
EXCEPT AS MAY BE NECESSARY TO ENFORCE THE SAME.
17.3
Time Limit .
Any Expert Resolution of a dispute must be commenced within twelve (12) months from the date on which either Party first gave written
notice to the other of the existence of the dispute, and any Party who fails to commence litigation or Expert Resolution within such twelve
(12) month period shall be deemed to have waived any of its affirmative rights and claims in connection with the dispute and shall be barred
from asserting such rights and claims at any time thereafter except as a defense to any related or similar claims subsequently raised by the other
party. An Expert Resolution shall be deemed commenced by a Party when the Party sends a notice to the other Party and to the American
Arbitration Association, identifying the dispute and requesting Expert Resolution. Litigation shall be deemed commenced by a Party when the
Party serves a complaint (or, as the case may be, a counterclaim) on the other Party with respect to the dispute.
17.4
Prevailing Party’s Expenses .
The prevailing Party in any Expert Resolution, litigation or other legal action or proceeding arising out of or related to this Agreement
shall be entitled to recover from the losing Party all reasonable fees, costs and expenses incurred by the prevailing Party in connection with
such Expert Resolution, litigation or other legal action or proceeding (including any appeals and actions to enforce any Expert Resolution
awards and court judgments), including reasonable fees, expenses and disbursements for attorneys, experts and other third parties engaged in
connection therewith and its share of the fees and costs of the Expert. If a Party prevails on some, but not all, of its claims, such Party shall be
entitled to recover an equitable amount of such fees, expenses and disbursements, as determined by the applicable Expert(s) or court. All
amounts recovered by the prevailing Party under this Section 17.4 shall be separate from, and in addition to, any other amount included in any
Expert Resolution award or judgment rendered in favor of such Party.
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17.5
WAIVERS.
17.5.1 JURISDICTION AND VENUE . OWNER AND MANAGER WAIVE, TO THE FULLEST EXTENT PERMITTED BY
LAW, ALL DEFENSES BASED ON LACK OF JURISDICTION OR INCONVENIENT VENUE OR FORUM FOR ANY LITIGATION OR
OTHER LEGAL ACTION OR PROCEEDING PURSUED BY MANAGER OR OWNER IN THE JURISDICTION AND VENUE
SPECIFIED IN SECTION 17.1 .
17.5.2 TRIAL BY JURY . EACH PARTY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, TRIAL BY JURY
OF ALL CLAIMS ARISING OUT OF OR RELATING TO THIS AGREEMENT.
17.5.3 CLASS ACTIONS . OWNER AGREES THAT, FOR MANAGER’S AND ITS AFFILIATES’ CHAIN OF BRANDED
HOTELS AND CASINOS TO FUNCTION PROPERLY, MANAGER SHOULD NOT BE BURDENED WITH THE COSTS OF
ARBITRATING OR LITIGATING SYSTEM WIDE CLAIMS. ACCORDINGLY, OWNER AGREES THAT ANY DISAGREEMENT
BETWEEN OWNER AND MANAGER SHALL BE CONSIDERED UNIQUE AS TO ITS FACTS AND SHALL NOT BE BROUGHT AS
A CLASS ACTION, AND OWNER WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ALL RIGHTS TO BRING A CLASS
ACTION OR MULTI-PLAINTIFF, CONSOLIDATED OR COLLECTIVE ACTION AGAINST MANAGER OR ANY OF ITS
AFFILIATES. FOR AVOIDANCE OF DOUBT, THE FOREGOING RESTRICTION SHALL NOT BE CONSTRUED TO PROHIBIT
EITHER PARTY OR ITS AFFILIATES FROM JOINING WITH OTHER PARTIES TO THE AFFILIATE MANAGEMENT
AGREEMENTS TO BRING ACTIONS RELATING TO ONE OR MORE OF SUCH AFFILIATE MANAGEMENT AGREEMENTS.
17.5.4 DECISIONS IN PRIOR CLAIMS . SUBJECT TO SECTION 17.2.1.2 , OWNER AND MANAGER AGREE THAT IN
ANY EXPERT RESOLUTION OR LITIGATION BETWEEN THE PARTIES, THE EXPERT(S) OR COURT SHALL NOT BE
PRECLUDED FROM MAKING ITS OWN INDEPENDENT DETERMINATION OF THE ISSUES IN QUESTION, NOTWITHSTANDING
THE SIMILARITY OF ISSUES IN ANY OTHER EXPERT RESOLUTION OR LITIGATION INVOLVING MANAGER AND ANY
OTHER OWNER OR ANY OF THEIR AFFILIATES, AND EACH PARTY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
LAW, ALL RIGHTS TO CLAIM THAT A PRIOR DISPOSITION OF THE SAME OR SIMILAR ISSUES PRECLUDES SUCH
INDEPENDENT DETERMINATION.
17.5.5 PUNITIVE, CONSEQUENTIAL AND CERTAIN OTHER DAMAGES . NOTWITHSTANDING ANYTHING TO THE
CONTRARY IN THIS AGREEMENT OR UNDER APPLICABLE LAW, IN ANY EXPERT RESOLUTION, LAWSUIT, LEGAL ACTION
OR PROCEEDING BETWEEN THE PARTIES ARISING FROM OR RELATING TO THIS AGREEMENT OR THE MANAGED
FACILITIES, THE PARTIES UNCONDITIONALLY AND IRREVOCABLY WAIVE AND DISCLAIM TO THE FULLEST EXTENT
PERMITTED UNDER APPLICABLE LAW ALL RIGHTS TO ANY CONSEQUENTIAL, LOST PROFITS, PUNITIVE, EXEMPLARY,
STATUTORY OR TREBLE DAMAGES (OTHER THAN STATUTORY RIGHTS AND MANAGER’S RIGHT
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TO RECEIVE ANY TERMINATION FEE IN ACCORDANCE WITH THIS AGREEMENT, AND EXCEPT FOR A CLAIM FOR
RECOVERY OF ANY SUCH DAMAGES THAT THE CLAIMING PARTY IS REQUIRED BY A COURT OF COMPETENT
JURISDICTION OR THE EXPERT TO PAY TO A THIRD PARTY), AND ACKNOWLEDGE AND AGREE THAT THE RIGHTS AND
REMEDIES IN THIS AGREEMENT, AND ALL OTHER RIGHTS AND REMEDIES AT LAW AND IN EQUITY, WILL BE ADEQUATE
IN ALL CIRCUMSTANCES FOR ANY CLAIMS THE PARTIES MIGHT HAVE WITH RESPECT TO DAMAGES.
17.6
Survival and Severance .
This Article XVII shall survive the expiration or termination of this Agreement. The provisions of this Article XVII are severable from
the other provisions of this Agreement and shall survive and not be merged into any termination or expiration of this Agreement or any
judgment or award entered in connection with any dispute, regardless of whether such dispute arises before or after termination or expiration of
this Agreement, and regardless of whether the related Expert Resolution or litigation proceedings occur before or after termination or expiration
of this Agreement. If any part of this Article XVII is held to be unenforceable, it shall be severed and shall not affect either the duties to submit
any dispute to Expert Resolution or any other part of this Article XVII .
17.7
ACKNOWLEDGEMENTS .
OWNER AND MANAGER EACH ACKNOWLEDGE AND CONFIRM TO THE OTHER THAT:
17.7.1 INFORMED INVESTOR . THE ACKNOWLEDGING PARTY HAS HAD THE BENEFIT OF LEGAL COUNSEL AND
ALL OTHER ADVISORS DEEMED NECESSARY OR ADVISABLE TO ASSIST IT IN THE NEGOTIATION AND PREPARATION OF
THIS AGREEMENT, AND THE OTHER PARTY’S ATTORNEYS HAVE NOT REPRESENTED THE ACKNOWLEDGING PARTY, OR
PROVIDED ANY LEGAL COUNSEL OR OTHER ADVICE TO THE ACKNOWLEDGING PARTY, WITH RESPECT TO THIS
AGREEMENT.
17.7.2 BUSINESS RISKS . THE ACKNOWLEDGING PARTY (A) IS A SOPHISTICATED PERSON, WITH SUBSTANTIAL
EXPERIENCE IN THE OWNERSHIP AND OPERATION OF COMMERCIAL DEVELOPMENT PROJECTS; (B) RECOGNIZES THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT INVOLVE SUBSTANTIAL BUSINESS RISKS; AND (C) HAS MADE
AN INDEPENDENT INVESTIGATION OF ALL ASPECTS OF THIS AGREEMENT SUCH PARTY DEEMS NECESSARY OR
ADVISABLE.
17.7.3 NO ADDITIONAL REPRESENTATIONS OR WARRANTIES . NO PARTY HAS MADE ANY PROMISES,
REPRESENTATIONS, WARRANTIES OR GUARANTIES OF ANY KIND WHATSOEVER TO ANY OTHER PARTY, EXCEPT AS
SPECIFICALLY SET FORTH IN THIS AGREEMENT, AND NO PERSON IS AUTHORIZED TO MAKE ANY PROMISES,
REPRESENTATIONS, WARRANTIES OR GUARANTIES ON BEHALF OF A PARTY, EXCEPT AS SPECIFICALLY SET FORTH IN
THIS AGREEMENT.
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17.7.4 NO RELIANCE . NO PARTY HAS RELIED UPON ANY STATEMENTS OR PROJECTIONS OF REVENUE, SALES,
EXPENSES, INCOME, GAMING WIN, RATES, AVERAGE DAILY RATE, CONTRIBUTION, PROFITABILITY, VALUE OF THE
MANAGED FACILITIES OR SIMILAR INFORMATION PROVIDED BY ANY OTHER PARTY BUT HAS INDEPENDENTLY
CONFIRMED THE ACCURACY AND RELIABILITY OF ANY SUCH INFORMATION AND IS SATISFIED WITH THE RESULTS OF
SUCH INDEPENDENT CONFIRMATION.
17.7.5 LIMITATION ON FIDUCIARY DUTIES . TO THE EXTENT ANY FIDUCIARY DUTIES THAT MAY EXIST AS A
RESULT OF THE RELATIONSHIP OF THE PARTIES ARE INCONSISTENT WITH, OR WOULD HAVE THE EFFECT OF
EXPANDING, MODIFYING, LIMITING OR RESTRICTING ANY OF THE EXPRESS TERMS OF THIS AGREEMENT, (A) THE
EXPRESS TERMS OF THIS AGREEMENT SHALL CONTROL AND (B) ANY LIABILITY OF THE PARTIES FOR MONETARY
DAMAGES OR MONETARY RELIEF SHALL BE BASED SOLELY ON PRINCIPLES OF CONTRACT LAW AND THE EXPRESS
TERMS OF THIS AGREEMENT. ACCORDINGLY, NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT,
TO THE FULLEST EXTENT PERMITTED UNDER APPLICABLE LAW, THE PARTIES HEREBY UNCONDITIONALLY AND
IRREVOCABLY WAIVE AND DISCLAIM ANY POWER OR RIGHT SUCH PARTY MAY HAVE TO CLAIM ANY PUNITIVE,
EXEMPLARY, STATUTORY OR TREBLE DAMAGES OR CONSEQUENTIAL OR INCIDENTAL DAMAGES FOR ANY BREACH OF
FIDUCIARY DUTIES.
17.7.6 IRREVOCABILITY OF CONTRACT . IN ORDER TO REALIZE THE FULL BENEFITS CONTEMPLATED BY THE
PARTIES, THE PARTIES INTEND THAT THIS AGREEMENT SHALL BE NON-TERMINABLE, EXCEPT FOR THE SPECIFIC
TERMINATION RIGHTS IN FAVOR OF A PARTY SET FORTH IN THIS AGREEMENT. ACCORDINGLY, NOTWITHSTANDING
ANYTHING TO THE CONTRARY IN THIS AGREEMENT, TO THE FULLEST EXTENT PERMITTED UNDER APPLICABLE LAW,
THE PARTIES HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVE AND DISCLAIM ALL RIGHTS TO TERMINATE THIS
AGREEMENT AT LAW OR IN EQUITY, EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT.
17.8
Survival .
The provisions of this Article XVII shall survive the expiration or termination of this Agreement.
ARTICLE XVIII.
GAMING LAW PROVISIONS
18.1
Regulatory Matters; Initial Suitability Review .
18.1.1 Manager’s Regulatory Environment . Owner acknowledges that Manager, CEOC and their respective Affiliates (a) conduct
business in an industry that is subject to and exists because of privileged licenses issued by Governmental Authorities in multiple jurisdictions,
(b) are subject to extensive gaming regulation and oversight, and are required to adhere to strict laws and regulations regarding vendor and
other business relationships, and (c) have adopted strict internal controls and compliance policies governing their own activities and those of
certain parties with whom they do business.
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18.1.2 Suitability Investigations . As an initial matter, Owner acknowledges and agrees that Manager, CEOC and their respective
Affiliates must perform a background check, suitability review and such other due diligence with respect to the Subject Group, but excluding
Manager and its Affiliates and those individuals associated with Owner previously subject to CEOC’s suitability review, as required under
applicable gaming regulations and/or the corporate policies of Manager, CEOC and their respective Affiliates. Accordingly, Owner hereby
(a) acknowledges and understands that Manager, CEOC and their respective Affiliates must perform such investigations and inquiries with
respect to the Subject Group regarding the financial and credit condition, the existence and status of any litigation, criminal proceedings and
convictions, character and personal qualifications of any such Person, (b) agrees to promptly provide the information regarding the Subject
Group required by the CEC Business Information Form (Revised 6/22/05) and such other information as is reasonably requested by Manager,
CEOC or their respective Affiliates for such purposes (collectively, the “ Requested Information ”), and (c) agrees to cooperate with Manager,
CEOC and their respective Affiliates in the completion of its due diligence and gaming suitability and background checks of the Subject Group.
Manager acknowledges receipt and completion of such investigation and inquiries on the persons or entities within the Subject Group as of the
date of this Agreement.
18.2
Licensing Event .
If there shall occur a Licensing Event and any aspect of such Licensing Event is attributable to a member of the Subject Group, then
Manager shall notify Owner as promptly as practicable after becoming aware of such Licensing Event (but in no event later than twenty
(20) days after becoming aware of such Licensing Event). In such event, Owner shall and shall cause the other members of the Subject Group
to use commercially reasonable efforts to assist Manager and its Affiliates in resolving such Licensing Event within the time period required by
the applicable Gaming Authorities by submitting to investigation by the relevant Gaming Authorities and cooperating with any reasonable
requests made by such Gaming Authorities (including filing requested forms and delivering information to the Gaming Authorities). If, despite
these efforts, such Licensing Event cannot be resolved to the satisfaction of the applicable Gaming Authorities within the time period required
by such Gaming Authorities, Manager shall have the right to terminate this Agreement to the extent provided in Section 16.2.6 or, if applicable,
Owner shall have the right to terminate this Agreement to the extent provided in Section 16.3.2 .
18.3
Unlawful Payments .
Neither Party nor any Person for or on behalf of such Party, shall make, and each Party acknowledges that the other Party will not make,
any expenditure for any unlawful purposes in the performance of its obligations under this Agreement and in connection with its activities in
relation thereto. Neither Party nor any Person for or on behalf of such Party, shall, and each Party acknowledges that the other Party will not,
make any illegal offer, payment or promise to pay, authorize the payment of any money, or offer, promise or authorize the giving or anything
of value, to (a) any government official, any political party or official thereof, or any candidate
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for political office; or (b) any other Person while knowing or having reason to know that all or a portion of such money or thing of value will be
offered, given, or promised, directly or indirectly, to any such official, to any such political party or official thereof, or to any candidate for
political office for the purpose of (i) influencing any action or decision of such official party or official thereof, or candidate in his or its
capacity, including a decision to fail to perform his or its official functions; or (ii) inducing such official party or official thereof, or candidate
to use his or its influence with any Governmental Authority to effect or influence any act or decision of such Governmental Authority. Each
Party represents and warrants to the other Party that no government official nor any candidate for political office has any direct or indirect
ownership or investment interest in the revenues or profit of such Party or the Managed Facilities. CLC shall be a “Party” for purposes of this
Section 18.3 .
ARTICLE XIX.
GENERAL PROVISIONS
19.1
Governing Law .
This Agreement shall be construed under the laws of the State of Nevada, without regard to any conflict of law principles.
19.2
Construction of this Agreement .
The Parties and CLC (which shall be a “Party” for purposes of this Section 19.2 ) intend that the following principles (and no others not
consistent with them) be applied in construing and interpreting this Agreement:
19.2.1 Presumption Against a Party . The terms and provisions of this Agreement shall not be construed against or in favor of a
Party hereto merely because such Party is the Manager hereunder or such Party or its counsel is the drafter of this Agreement.
19.2.2 Severability . If any term or provision of this Agreement is held invalid, illegal or unenforceable by a court of competent
jurisdiction or the Expert for any reason, the remainder of this Agreement shall in no way be affected and shall remain valid and enforceable
for all purposes, each Party hereby declaring that it (i) would have executed this Agreement without inclusion of such term or provision; and
(ii) execute and deliver to the other Party any additional documents that may be reasonably requested by a Party to fully effectuate this
Section 19.2.2 .
19.2.3 Certain Words and Phrases . All words in this Agreement shall be deemed to include any number or gender as the context or
sense of this Agreement requires. The words “will,” “shall,” and “must” in this Agreement indicate a mandatory obligation. The use of the
words “include,” “includes,” and “including” followed by one (1) or more examples is intended to be illustrative and is not a limitation on the
scope of the description or term for which the examples are provided. All dollar amounts set forth in this Agreement are stated in U.S. dollars,
unless otherwise specified. The words “day” and “days” refer to calendar days unless otherwise stated. The words “month” and “months” refer
to calendar months unless otherwise stated. The words “hereof”, “hereto” and “herein” refer to this Agreement, and are not limited to the
article, section, paragraph or clause in which such words are used. If any decision, approval
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or other determination is required or permitted to be made hereunder in a Party’s “discretion”, the word “discretion” shall be interpreted to
mean such Party’s sole discretion. If the Operating Year is a fiscal year other than a calendar year, all references in this Agreement to January 1
shall mean the first day of such fiscal year.
19.2.4 Headings . The table of contents, headings and captions contained herein are for the purposes of convenience and reference
only and are not to be construed as a part of this Agreement. All references to any article, section or exhibits in this Agreement are to articles,
sections or exhibits of this Agreement, unless otherwise noted.
19.2.5 Approvals . Unless expressly stated otherwise in this Agreement, whenever a matter is submitted to a Party for approval or
consent in accordance with the terms of this Agreement, that Party has a duty to act reasonably and timely in rendering a decision on the
matter.
19.2.6 Entire Agreement . This Agreement (including the attached Exhibits), together with the Transaction Agreement, constitutes
the entire agreement between the Parties with respect to the subject matter contemplated herein and supersedes all prior agreements and
understandings, written or oral. No undertaking, promise, duty, obligation, covenant, term, condition, representation, warranty, certification or
guaranty shall be deemed to have been given or be implied from anything said or written in negotiations between the Parties prior to the
execution of this Agreement, except as expressly set forth in this Agreement. Neither Party shall have any remedy in respect of any untrue
statement made by the other Party on which that Party relied in entering into this Agreement (unless such untrue statement was made
fraudulently), except to the extent that such statement is expressly set forth in this Agreement.
19.2.7 Third-Party Beneficiary . Except as set forth in Section 12.3 , no third-party shall be a beneficiary of Owner’s or Manager’s
rights or benefits under this Agreement; provided , that each of CEC, CEOC, CERP the Transferring Manager, CLC and their respective
Affiliates shall be express beneficiaries of this Agreement to the extent related to the Service Mark Rights or to other intellectual property
rights or confidential information owned by them, the Retained Rights, Article XVIII and any other provision of this Agreement that
specifically identifies it.
19.2.8 Time of the Essence . Time is of the essence for all purposes of this Agreement.
19.2.9 Remedies Cumulative . Except as otherwise expressly provided in this Agreement, the remedies provided in this Agreement
are cumulative and not exclusive of the remedies provided by Applicable Law, and a Party’s exercise of any one or more remedies for any
default shall not preclude the Party from exercising any other remedies at any other time for the same default.
19.2.10 Amendments . Neither this Agreement nor any of its terms or provisions may be amended, modified, changed, waived or
discharged, except: (a) for Manager’s right to make changes to the Operating Limitations, Total Rewards System, and Centralized Services as
permitted under this Agreement; (b) by an instrument in writing signed by the Party against whom the enforcement of the amendment,
modification, change, waiver or discharge is
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sought; and (c) if any Governmental Authority requires, as a condition of its approval of the initial effectiveness of this Agreement, directly or
indirectly, the modification of any terms or provisions of this Agreement, the Parties shall use their commercially reasonable efforts to comply
with such request; provided , that if such requested modification would materially and adversely affect either Party’s rights or obligations under
this Agreement, then either Party shall have the right to terminate this Agreement by giving written notice to the other Party within thirty
(30) days after receipt of such request for modification, with no liability whatsoever to the terminating Party for such termination.
19.2.11 Survival . The expiration or termination of this Agreement does not terminate or affect Owner’s or Manager’s covenants
and obligations that either expressly or by their nature survive the expiration or termination of this Agreement. This Section 19 shall survive the
expiration or termination of this Agreement.
19.3
Limitation on Liabilities .
19.3.1 Projections in Annual Budget . Owner acknowledges that: (a) all budgets and financial projections prepared by Manager or
its Affiliates prior to the date of this Agreement or under this Agreement, including the Annual Budget, are intended to assist in Operating the
Managed Facilities, but are not to be relied on by Owner or any third-party as to the accuracy of the information or the results predicted therein;
and (b) Manager does not guarantee the accuracy of the information nor the results in such budgets and projections. Accordingly, Owner agrees
that (i) neither Manager nor its Affiliates shall be liable to Owner or any third-party for divergence between such budgets and projections and
actual operating results achieved except as otherwise provided in this Agreement, including limits on incurring expenses; (ii) the failure of the
Managed Facilities to achieve any Annual Budget for any Operating Year shall not constitute a default by Manager or give Owner the right to
terminate this Agreement; and (iii) if Owner provides any such budgets or projections to a third-party, Owner shall advise such third-party in
writing of the substance of the disclaimer of liability set forth in this Section 19.3.1 . Manager represents that it shall prepare all budgets and
financial projections and operating plans prepared by Manager under this Agreement in good faith based upon Manager’s experience and
knowledge.
19.3.2 Approvals and Recommendations . Each party acknowledges that in granting any consents, approvals or authorizations under
this Agreement, and in providing any advice, assistance, recommendation or direction under this Agreement, neither party nor any Affiliates
guarantee success or a satisfactory result from the subject of such consent, approval, authorization, advice, assistance, recommendation or
direction. Accordingly, each agrees that neither party shall have any liability whatsoever to the other or any third person by reason of: (a) any
consent, approval or authorization, or advice, assistance, recommendation or direction, given or withheld; or (b) any delay or failure to provide
any consent, approval or authorization, or advice, assistance, recommendation or direction (except in the event of a breach of a covenant herein
not to unreasonably withhold or delay any consent or approval); provided , however , each agrees to act in good faith when dealing with or
providing any advice, consent, assistance, recommendation or direction.
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19.3.3 Technical Advice . Owner acknowledges that any review, advice, assistance, recommendation or direction provided by
Manager with respect to the design, construction, equipping, furnishing, decoration, alteration, improvement, renovation or refurbishing of the
Managed Facilities (a) is intended solely to assist Owner in the development, construction, maintenance, repair and upgrading of the Managed
Facilities and Owner’s compliance with its obligations under this Agreement; and (b) does not constitute any representation, warranty or
guaranty of any kind whatsoever that (i) there are no errors in the plans and specification, (ii) there are no defects in the design of construction
of the Managed Facilities or installation of any building systems or FF&E therein or (iii) the plans, specifications, construction and installation
work will comply with all Applicable Laws (including laws or regulations governing public accommodations for Individuals with disabilities).
Accordingly, Owner agrees that neither Manager nor its Affiliates shall have any liability whatsoever to Owner or any third-party for any
(A) errors in the plans and specifications; (B) defects in the design of construction of the Managed Facilities or installation of any building
systems or FF&E therein; or (C) noncompliance with any engineering and structural design standards or Applicable Laws.
19.3.4 Owner Limitation . Manager agrees that in no event shall Owner’s liability to Manager with respect to lost or future
Management Fees upon any Owner Event of Default exceed the amount of the termination fee that would be payable to Manager under
Section 16.4.2 upon a termination of this Agreement as of the date of such Owner Event of Default.
19.4
Waivers .
Except as set forth in Section 17.3 of this Agreement, no failure or delay by a Party to insist upon the strict performance of any term of
this Agreement, or to exercise any right or remedy consequent on a breach thereof, shall constitute a waiver of any breach or any subsequent
breach of such term. No waiver of any default shall alter this Agreement, but each and every term of this Agreement shall continue in full force
and effect with respect to any other then existing or subsequent breach.
19.5
Notices .
All notices, consents, determinations, requests, approvals, demands, reports, objections, directions and other communications required or
permitted to be given under this Agreement shall be in writing and delivered by: (a) personal delivery; (b) overnight DHL, FedEx, UPS or other
similar courier service; or (c) facsimile transmission ( provided , that a copy of such facsimile transmission together with confirmation of such
facsimile transmission is delivered to the addressee in the manner provided in clause (a) or (b) above by no later than the second
(2nd) business day following such transmission, addressed to the Parties at the addresses specified below, or at such other address as the Party
to whom the notice is sent has designated in accordance with this Section 19.5 , and shall be deemed to have been received by the Party to
whom such notice or other communication is sent upon (i) delivery to the address (or facsimile number) of the recipient Party; provided , that
such delivery is made prior to 5:00 p.m. (local time for the recipient Party) on a business day, otherwise the following business day; or (ii) the
attempted delivery of such Notice if such recipient Party refuses delivery, or such recipient Party
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is no longer at such address number, and failed to provide the sending Party with its current address pursuant to this Section 19.5 (unless the
sending Party had actual knowledge of such current address)). Notwithstanding the foregoing, any notice or other communication delivered to a
Party by email that is actually received by such Party (and for which such Party has sent an acknowledgement of receipt by return email) shall
be deemed to have been sufficiently given for purposes of this Agreement and shall be deemed to have been received at the time described in
clause (i) above, as if such notice had been delivered by one of the methods described in clauses (a) through (c) above. Notwithstanding
anything to the contrary contained in this Agreement, if any documents or materials delivered under this Agreement are delivered by email
(with confirmation of receipt from the intended recipient), no additional copies of such documents or materials shall be required to be
delivered.
OWNER:
Corner Investment Company, LLC
One Caesars Palace Drive
Las Vegas, Nevada 89109
Attention: General Counsel
with a copy to:
Caesars Acquisition Company
One Caesars Palace Drive
Las Vegas, Nevada 89109
Attention: General Counsel
MANAGER:
Cromwell Manager, LLC
One Caesars Palace Drive
Las Vegas, Nevada 89109
Attention: General Counsel
Facsimile: (702) 407-6418
19.6
Party Representatives .
Owner has designated Mitch Garberto act as representative for Owner (“ Owner’s Representative ”), and Manager shall have the right to
rely on all actions by, and communications with, Owner’s Representative as binding on Owner. Owner shall provide to Manager the name,
address, telephone and fax numbers, email address and other relevant contact information for the Owner’s Representative within ten (10) days
of any change thereto. Manager has designated Tom Jenkins to act as representative for Manager (“ Manager’s Representative ”), and Owner
shall have the right to rely on all actions by, and communications with, Manager’s Representative as binding on Manager. Manager shall
provide to Owner the name, address, telephone and fax numbers, email address and other relevant contact information for the Manager’s
Representative within ten (10) days of any change thereto. Subject to compliance with applicable Gaming Laws, Owner’s Representative shall
have access at all reasonable times
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to all books and records maintained by Manager with respect to the Managed Facilities, copies of all leases, contracts, agreements, permits and
approvals related to the Managed Facilities and all associated files, and all physical areas of the Managed Facilities, other than private offices.
19.7
No Recordation .
Neither this Agreement nor any memorandum hereof shall be recorded against the Project, the Managed Facilities or the Premises and
any recordation or attempted recordation of this Agreement or any memorandum of this Agreement by Manager shall constitute an Event of
Default, and in addition to any other remedies therefor, Owner is hereby granted a power of attorney (which power is coupled with an interest
and shall be irrevocable) to execute and record on behalf of Manager a notice or memorandum removing this Agreement or such memorandum
of this Agreement from the public records or evidencing the termination hereof (as the case may be).
19.8
Further Assurances .
The Parties shall do and cause to be done all such acts, matters and things and shall execute and deliver all such documents and
instruments as shall be required to enable the Parties to perform their respective obligations under, and to give effect to the transactions
contemplated by, this Agreement.
19.9
Relationship of the Parties .
The Parties acknowledge and agree that (a) the relationship between them shall be that of principal (in the case of Owner) and agent (in
the case of Manager), which relationship may not be terminated by Owner except in strict accord with the termination provisions of this
Agreement; (b) Manager shall have the authority to bind the Owner with respect to third Persons to the extent Manager is performing its
obligations under and consistent with this Agreement; (c) Manager’s agency established with the Owner is, and is intended to be, an agency
coupled with an interest; (d) this Agreement does not create joint venturers, partners or joint owners with respect to the Managed Facilities; and
(e) nothing in this Agreement shall be construed as creating a partnership, joint venture or similar relationship between the Parties. The Parties
further acknowledge and agree that in Operating the Managed Facilities, including entering into leases and contracts, accepting reservations,
and conducting financial transactions for the Managed Facilities, (i) Manager assumes no independent contractual liability; and (ii) Manager
shall have no obligation to extend its own credit with respect to any obligation incurred in Operating the Managed Facilities or performing its
obligation under this Agreement.
19.10
Force Majeure .
In the event of a Force Majeure Event, the obligations of the Parties and the time period for the performance of such obligations (other
than an obligation to pay any amount hereunder) shall be extended for each day that such Party is prevented, hindered or delayed in such
performance during the period of such Force Majeure Event, except as expressly provided otherwise in this Agreement. Upon the occurrence of
a Force Majeure Event, the affected Party shall give prompt notice of such Force Majeure Event to the other Party. If Manager is unable to
perform its obligations under this Agreement due to a Force Majeure Event, or Manager
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reasonably deems it necessary to close and cease the Operation of all or any portion of the Managed Facilities due to a Force Majeure Event in
order to protect the Managed Facilities or the health, safety or welfare of the its guests or Managed Facilities Personnel, then Manager may
close or cease Operation of all or a portion of the Managed Facilities for such time and in such manner as Manager reasonably deems necessary
as a result of such Force Majeure Event, and reopen or recommence the Operation of the Managed Facilities when Manager again is able to
perform its obligations under this Agreement, and determines that there is no unreasonable risk to the Managed Facilities or health, safety or
welfare or its guests or Managed Facilities Personnel. Notwithstanding anything contained herein to the contrary, Owner and Manager each
acknowledge and agree that the Term of this Agreement shall be extended for each day that a Force Majeure Event continues.
19.11
Terms of Other Management Agreements .
Manager makes no representation or warranty that any past or future forms of its management agreement do or will contain terms
substantially similar to those contained in this Agreement. In addition, Owner acknowledges and agrees that Manager may, due to local
business conditions or otherwise, waive or modify any comparable terms of other management agreements heretofore or hereafter entered into
by Manager or its Affiliates.
19.12
Compliance with Law .
Owner and, subject to the Operating Limitations, Manager shall each exercise their respective rights, perform their respective obligations
and take all other actions required or permitted to be taken by each of them hereunder in compliance with all Applicable Laws.
19.13
Centralized Services, Insurance Programs and Purchasing Arrangements Generally .
The Parties hereby agree that Manager and its Affiliates shall administer, implement and make available to Owner and the Managed
Facilities, the Centralized Services, the Insurance Programs and any multi-party purchasing programs and arrangements contemplated
hereunder on commercially reasonable terms and on a Non-Discriminatory basis and in such a manner that, in each case, there shall be no
(i) mark-up, margin or other premium charged or otherwise passed through to Owner in connection therewith (except as may be payable to a
third party), and (ii) duplication of any reimbursable expense otherwise payable by Owner to Manager or its Affiliates.
19.14
Execution of Agreement .
This Agreement may be executed in counterparts, each of which when executed and delivered shall be deemed an original, and such
counterparts together shall constitute one and the same instrument.
19.15
Construction Management Services and Project Completion .
In consideration of the Management Fee and at no additional cost to Owner, from the Commencement Date until the Opening Date,
Manager shall provide any and all construction
74
management and other services necessary to complete and turn over to Owner all components of the Managed Facilities on a turn-key basis
without additional cost or expense of any kind to Owner, and subject to, and without limitation of, any of the terms or conditions of the
Transaction Agreement.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date and year first above written.
Corner Investment Company, LLC , a Delaware
limited liability company
By:
Name:
Title:
/s/ Eric Hession
Eric Hession
President and Treasurer
Cromwell Manager, LLC , a Delaware limited liability
company
By: Caesars Entertainment Operating Company, Inc. its
sole member
By:
Name:
Title:
/s/ Eric Hession
Eric Hession
Senior Vice President and Treasurer
Solely for purposes of Article VII and Sections 16.1.2,
17.5.5, 17.7.3, 17.7.4, 17.7.5, 18.3 and 19.2
CAESARS LICENSE COMPANY, LLC,
a Delaware limited liability company
By: Caesars Entertainment Operating Company, Inc.
its sole member
By:
Name:
Title:
76
/s/ Eric Hession
Eric Hession
Senior Vice President and Treasurer
CEOC hereby irrevocably and unconditionally guarantees to Owner the prompt and complete payment and performance when due of all of the
covenants, agreements, promises, liabilities and obligations of Manager to Owner under this Management Agreement, whether now existing or
hereafter arising, including, without limitation, Manager’s indemnification obligations under Section 12.3.2 and the obligation to pay all other
amounts due and owing or to become due and owing by Manager to Owner under the Management Agreement; provided , however , that
CEOC’s obligations pursuant to this paragraph shall be void and of no further force or effect on the earliest to occur of (a) that date on which
neither CEOC nor an Affiliate of CEOC owns, directly or indirectly, any Ownership Interest in Manager, (b) the date on which neither CAC
nor one of its Controlled subsidiaries Controls Owner and (c) assignment of this Agreement by Manager to Services Co or a Controlled
subsidiary of Services Co.
CAESARS ENTERTAINMENT OPERATING
COMPANY, INC., a Delaware corporation
By:
Name:
Title:
[Signature Page to the Management Agreement]
/s/ Gregory J. Miller
Gregory J. Miller
Executive Vice President of Domestic
Development
Exhibit 10.2
EXECUTION VERSION
MANAGEMENT AGREEMENT
By and Between
The Quad Manager, LLC,
a Delaware limited liability company
as Manager,
3535 LV NewCo, LLC,
a Delaware limited liability company
as Owner,
and, solely for purposes of Article VII and Sections 16.1.2, 17.5.5, 17.7.3, 17.7.4, 17.7.5, 18.3 and 19.2,
Caesars License Company, LLC,
a Nevada limited liability company
Dated as of May 5, 2014
TABLE OF CONTENTS
ARTICLE I.
DEFINITIONS AND EXHIBITS
1.1
1.2
1.3
ARTICLE II.
Definitions
Exhibits
Structure of this Agreement
FEES AND EXPENSES
CENTRALIZED SERVICES
ARTICLE VI.
6.1
ARTICLE VII.
7.1
7.2
7.3
7.4
11
12
13
13
13
14
14
14
Centralized Services
Modification of Centralized Services
OPERATION OF THE MANAGED FACILITIES
5.1
5.2
5.3
5.4
5.5
5.6
5.7
5.8
5.9
5.10
5.11
2
8
10
11
11
Management Fees
Centralized Services Charges
Reimbursable Expenses
Interest
Payment of Fees and Expenses
Application of Payments
Sales and Use Taxes
4.1
4.2
ARTICLE V.
2
Grant of Authority
Limitations on Manager Authority
Other Operations of Manager and Owner
Term
3.1
3.2
3.3
3.4
3.5
3.6
3.7
ARTICLE IV.
1
2
2
APPOINTMENT/TERM
2.1
2.2
2.3
2.4
ARTICLE III.
1
Annual Budget
Maintenance and Repair; Capital Improvements
Personnel
Bank Accounts
Funds for Operation of the Managed Facilities
Purchasing
Managed Facilities Parking
Use of Affiliates by Manager
Limitation on Manager’s Obligations
Third-Party Operated Areas
Amenities
APPROVALS
14
15
16
16
19
20
21
24
24
25
25
26
27
27
27
Gaming Approvals
27
PROPRIETARY RIGHTS
28
Service Mark Rights
Use of Service Mark Rights
Rights to Service Mark Rights
Proprietary Information and Systems of Manager or its Affiliates
i
28
29
29
30
ARTICLE VIII.
8.1
8.2
8.3
8.4
8.5
ARTICLE IX.
9.1
ARTICLE X.
10.1
10.2
10.3
10.4
10.5
ARTICLE XI.
11.1
11.2
11.3
11.4
ARTICLE XII.
12.1
12.2
12.3
ARTICLE XIII.
13.1
13.2
13.3
13.4
13.5
13.6
ARTICLE XIV.
14.1
14.2
ARTICLE XV.
15.1
15.2
ARTICLE XVI.
16.1
16.2
16.3
16.4
CONFIDENTIALITY
Disclosure by Owner
Disclosure by Manager
Public Statements
Cumulative Remedies
Survival
MARKETING
Marketing
BOOKS AND RECORDS
Maintenance of Books and Records
Monthly Financial Reports
Quarterly Financial Reports
Annual Financial Reports
Other Reports and Schedules
ASSIGNMENTS
Assignment by Owner
Assignment by Manager
Acknowledgement of Assignment
Approvals
INSURANCE, BONDING AND INDEMNIFICATION
Owner Insurance and Bonding Requirements
Waiver of Liability
Indemnification
FINANCING; GROUND LEASE
Mortgages; Collateral Assignments; Non-Disturbance
Lender’s Right of Access
Disclosure of Mortgages
Estoppel Certificates
Amendments to Agreement
Owner’s Ground Lease Obligations
BUSINESS INTERRUPTION
Business Interruption
Proceeds of Business Interruption Insurance
CASUALTY OR CONDEMNATION
Casualty
Condemnation
DEFAULTS AND TERMINATIONS
Events of Default
Manager Termination Rights
Owner Termination Rights
Actions To Be Taken on Termination
34
34
35
36
37
37
37
37
38
38
39
40
40
41
41
41
42
44
44
44
44
46
46
48
48
48
49
49
49
49
50
50
50
50
50
51
52
52
54
56
57
ARTICLE XVII.
DISPUTE RESOLUTION
17.1
17.2
17.3
17.4
17.5
17.6
17.7
17.8
Generally
Expert Resolution
Time Limit
Prevailing Party’s Expenses
WAIVERS
Survival and Severance
ACKNOWLEDGEMENTS
Survival
ARTICLE XVIII.
18.1
18.2
18.3
ARTICLE XIX.
19.1
19.2
19.3
19.4
19.5
19.6
19.7
19.8
19.9
19.10
19.11
19.12
19.13
19.14
19.15
GAMING LAW PROVISIONS
Regulatory Matters; Initial Suitability Review
Licensing Event
Unlawful Payments
GENERAL PROVISIONS
Governing Law
Construction of this Agreement
Limitation on Liabilities
Waivers
Notices
Party Representatives
No Recordation
Further Assurances
Relationship of the Parties
Force Majeure
Terms of Other Management Agreements
Compliance with Law
Centralized Services, Insurance Programs and Purchasing Arrangements Generally
Execution of Agreement
Renovation Management Services and Project Completion
EXHIBITS
Exhibit A
Exhibit B
Exhibit C
Exhibit D
Exhibit E
Exhibit F
Exhibit G
Premises
Definitions
Form of Summary Annual Budget
Manager’s Proprietary Information and Systems
Insurance Requirements
Service Marks
Total Rewards System
62
62
62
63
64
64
65
65
67
67
67
67
68
68
68
68
70
71
72
73
73
73
73
74
74
74
75
75
75
MANAGEMENT AGREEMENT
This MANAGEMENT AGREEMENT (this “ Agreement ”) is dated as of May 5, 2014, and is made and entered into by and between
3535 LV NewCo, LLC, a Delaware limited liability company, or its successors and permitted assigns (“ Owner ”), The Quad Manager, LLC, a
Delaware limited liability company (“ Manager ”), and, solely for purposes of Article VII and Sections 16.1.2 , 17.5.5 , 17.7.3 , 17.7.4 , 17.7.5 ,
18.3 and 19.2 , Caesars License Company, LLC, a Nevada limited liability company (“ CLC ”). Owner and Manager are sometimes referred to
collectively in this Agreement as the “ Parties ” and individually as a “ Party .”
RECITALS
A. Owner has acquired or intends to acquire the real property interests more fully described on Exhibit A attached hereto (the “ Premises
”) and intends to own and operate a casino (the “ Casino ”) and related Facilities (as hereinafter defined) thereon (such Casino and Facilities
located at the Premises, collectively, the “ Managed Facilities ”).
B. Manager is a wholly-owned indirect subsidiary of CEOC (as hereinafter defined) with experience in operating gaming, hotel and
related businesses.
C. Owner desires to engage Manager to manage and operate the Managed Facilities under and utilizing the Brand (as hereinafter defined),
and Manager desires to manage and operate the Managed Facilities under and utilizing the Brand as an agent of Owner from and after the
Opening Date.
D. Simultaneously with or shortly after the effectiveness of this Agreement, certain Affiliates of Owner (collectively, the “ Other Owners
”), on the one hand, and certain Affiliates of Manager (collectively, the “ Other Managers ”), on the other hand, shall enter into substantially
similar agreements (collectively, the “ Affiliate Management Agreements ”) with respect to the operation and management by the Other
Managers of the casino and hotel properties owned by the Other Owners (such properties, collectively, the “ Affiliate Managed Facilities ”).
AGREEMENT
NOW, THEREFORE, in consideration of the recitals and covenants set forth in this Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are acknowledged by the Parties, the Parties agree:
ARTICLE I.
DEFINITIONS AND EXHIBITS
1.1
Definitions .
All capitalized terms used without definition in this Agreement shall have the meanings assigned to such terms in Exhibit B attached
hereto and by this reference incorporated herein.
1
1.2
Exhibits .
The exhibits listed in the table of contents and attached hereto are incorporated in, and deemed to be an integral part of, this Agreement.
1.3
Structure of this Agreement .
Owner and Manager each acknowledge and agree that certain operating efficiencies and value will be achieved as a result of Owner’s
engagement of Manager hereunder and the Other Owners’ engagement of the Other Managers pursuant to the applicable Affiliate Management
Agreements to operate and manage the Managed Facilities and the Affiliate Managed Facilities that would not be possible to achieve if Owner
and the Other Owners were to engage unrelated managers to operate each of the Managed Facilities and the Other Managed Facilities. The
Parties hereto acknowledge and agree that Owner would not enter into this Agreement (and the Other Owners would not enter into the Affiliate
Management Agreements) absent the understanding and agreement of the Parties that the entire management relationship, including (without
limitation) the use of the Service Mark Rights and the use of the Total Rewards System, together with the other related intellectual property
arrangements contemplated hereunder, form part of a single integrated transaction. Accordingly, it is the express intention of the Parties that
each of the Transaction Agreement, the IP Assignment (as defined in the Transaction Agreement), this Agreement and the Affiliated
Management Agreements form part of such single integrated transaction.
ARTICLE II.
APPOINTMENT/TERM
2.1
Grant of Authority .
2.1.1 Engagement of Manager . On and subject to the terms and conditions of this Agreement, Owner hereby engages Manager, and
Manager hereby agrees to be engaged, as Owner’s agent and exclusive manager to Operate the Managed Facilities during the Term. The Parties
acknowledge that the scope of both Manager’s authority and duties as the Manager to Operate the Managed Facilities are limited to the
authority and duties set forth in this Agreement. Owner and Manager have elected to use the “Quad” brand (the “ Brand ”) in connection with
Manager’s Operation of the Casino; provided , that Owner shall have the right to, subject to the receipt of any required approval from any
Governmental Authority and Manager’s consent (such consent not to be unreasonably withheld, conditioned or delayed), change the Brand to
any other brand, with the costs of such rebranding borne by Owner. Manager shall reasonably assist Owner, at Owner’s expense, in connection
with any such re-branding. If the Brand is modified to another brand, the Parties shall cooperate to make such changes to this Agreement as are
necessary in light of the new brand.
2.1.2 Manager’s Standard of Care . Manager agrees with Owner that (a) it will execute its duties under this Agreement in a manner
that Manager reasonably believes will promote the overall long-term economic value and profitability of the Managed Facilities (the “
Manager’s Standard of Care ”), and (b) Manager shall be acting as the agent of Owner in connection with the performance of its duties under
this Agreement. Owner agrees that the Manager’s Standard of Care and Manager’s duties as agent to Owner are further subject to, and
2
limited by, the terms and conditions of this Agreement (including Section 2.3 ) and the Operating Limitations. Except for Manager’s
indemnification obligations set forth in Article XII , Owner agrees that, as between Owner and Manager, Manager will have no liability for
monetary damages or monetary relief to Owner for any violation of Manager’s Standard of Care or claims of breach of any fiduciary duties or
duties as agent unless such violation or breach was due to the Manager’s Gross Negligence or Willful Misconduct or any Manager Event of
Default.
2.1.3 Manager’s System Policies . Owner acknowledges that Manager’s Affiliates operate other casino, racetrack, hotel, dining,
retail, entertainment and other operations and that Manager or its Affiliates may derive benefits in addition to the fees and reimbursements paid
hereunder, including in connection with marketing programs, the Total Rewards System, the Operating Limitations, the purchasing programs,
the employment policies relating to the Managed Facilities Personnel or other programmatic or policy activities that may exist from time to
time at the discretion of CEOC or its Affiliates and that extend through the majority of Gaming properties operated by Manager’s Affiliates
(collectively, the “ Manager’s System Policies ”). Owner agrees that Manager will not be in violation of the Manager’s Standard of Care or in
breach of its duties as agent hereunder when Manager follows the Manager’s System Policies, even if certain aspects of the Manager’s System
Policies have the effect of providing greater benefit to the properties owned or operated by the Manager’s Affiliates collectively or third parties
than to the Managed Facilities, so long as the Manager’s System Policies are Non-Discriminatory to the Managed Facilities in both design and
implementation. The foregoing shall not be deemed to excuse any breach by Manager of any of the express provisions of this Agreement.
2.1.4 General Grant of Authority – Managed Facilities . On and subject to the terms of this Agreement, Owner hereby grants to
Manager (and Manager hereby accepts) the right, authority and responsibility during the Term, and instructs Manager during the Term, to take
all such actions for and on behalf of Owner and the Managed Facilities that Manager reasonably deems necessary or advisable to Operate the
Managed Facilities: (a) at a level of service and quality not less than the level of service and quality at Planet Hollywood Las Vegas as of the
Opening Date; (b) in accordance in all material respects with the standards, policies and programs in effect as of the Opening Date at the
Managed Facilities (with such revisions thereto from time to time as Manager may implement in a Non-Discriminatory manner, provided that
no such revisions shall result in a material adverse change in the overall quality and level of service at the Managed Facilities without Owner’s
prior written consent thereto); and (c) utilizing the Proprietary Information and Systems in accordance with the standards, policies and
programs generally applicable to the use and implementation of the Proprietary Information and Systems, provided that the same are
Non-Discriminatory with respect to the Managed Facilities (the standards and objectives described in clauses (a) through (c) being referred to
collectively as the “ Operating Standard ”), subject in each case to the Operating Limitations.
2.1.5 Specific Actions Authorized by Owner . Without limiting the generality of the authority granted to Manager in Section 2.1.4 ,
but subject to the Annual Budget then in effect and the Operating Limitations and other limitations and conditions set forth in this Agreement,
including in Section 2.2 , Owner’s general grant of authority under Section 2.1.4 and this Section 2.1.5 shall specifically include the right,
authority and responsibility of Manager to take, on behalf of Owner during the Term, the following actions (either directly or, to the extent
permitted under this Agreement, through a third party designated or subcontracted by Manager, which may be an Affiliate of Manager):
2.1.5.1 (a) hire, supervise, train and discharge all Managed Facilities Personnel; and (b) establish all salary, fringe benefits
and benefits plans for the Managed Facilities Personnel;
3
2.1.5.2 establish and administer Bank Accounts for the operation of the Managed Facilities in accordance with Section 5.4 ;
2.1.5.3 prepare and deliver to Owner for Owner’s review and approval operating plans and budgets in accordance with
Section 5.1 ;
2.1.5.4 plan, account for and supervise all repairs, capital replacements and improvements to the Managed Facilities or any
portion thereof in accordance with Sections 5.2.1 and 5.2.2 ;
2.1.5.5 establish and maintain for the Managed Facilities accounting, internal controls and reporting systems that are
adequate to provide Owner, Manager and the Designated Accountant with sufficient information about the Managed Facilities to permit the
preparation of the financial statements and reports contemplated in Article X and which comply with all Applicable Laws;
2.1.5.6 negotiate, enter into and administer, in the name of Owner, all leases, service contracts, licenses and other contracts
and agreements Manager deems necessary or advisable for the Operation of the Managed Facilities, including contracts and licenses for:
(a) health and life safety systems and security force and related security measures; (b) maintenance of all electrical, mechanical, plumbing,
HVAC, elevator, boiler and other building systems; (c) electricity, gas and telecommunications (including television and internet service);
(d) cleaning, laundry and dry cleaning services; (e) use of copyrighted materials (including games, filmed entertainment, music and videos);
(f) entertainment; (g) gaming machines and other gaming equipment in the event applicable Gaming Laws permit or require Owner to own or
lease and maintain such gaming equipment and non-gaming equipment; and (h) ownership and operation of gaming servers;
2.1.5.7 negotiate, administer and perform (or cause to be performed) all obligations of Owner, in the name of Owner, under
all leases, ground leases, licenses and concession agreements or other agreements for the right to use or occupy any public space at the
Managed Facilities, including any store, office, parking facility or lobby space thereunder;
2.1.5.8 supervise and purchase or lease or arrange for the purchase or lease of, all FF&E and Supplies that are advisable for
the Operation of the Managed Facilities in accordance with this Agreement;
2.1.5.9 be the primary interface for all interactions with the Gaming Authorities in connection with the Managed Facilities
which shall include: (a) oversight of any amendments to any licenses or permits required by the applicable Gaming Authorities under any
applicable Gaming Laws; (b) coordination of all lobbying efforts with respect to the activities
4
conducted or proposed to be conducted in connection with the Managed Facilities; including any introduction or possible introduction of table
games at the Managed Facilities and (c) preparation and implementation of all actions required with respect to any filing with the applicable
Gaming Authorities relating to the Managed Facilities; provided , that Manager shall consult with and keep Owner apprised of (i) the status of
any annual or other periodic license renewals for the operation of Gaming activities at the Managed Facilities with the Gaming Authorities and
(ii) the status of non-routine matters before the Gaming Authorities regarding the Managed Facilities; provided further , that any filings or
Gaming Approvals relating to Owner and Owner’s Affiliates shall be the responsibility of Owner;
2.1.5.10 apply for and process applications and filings for all Approvals in a manner and within the time periods that are
required for the Managed Facilities to be operated on a continuous and uninterrupted basis. Manager shall act in a reasonably diligent manner
to assure that all reports required by any Governmental Authority pertaining to the Managed Facilities are filed on or prior to their due date.
Owner shall file all such other reports pertaining to Owner. Manager shall prepare, maintain and provide to Owner, at Owner’s request, a listing
of all Approvals and reports required by any Governmental Authority and the term, duration or frequency of such Approvals and reports for the
Managed Facilities to be operated in a continuous and uninterrupted basis;
2.1.5.11 institute in its own name, or in the name of Owner or the Managed Facilities, using Approved Counsel, all legal
actions or proceedings to: (a) collect charges, rent or other income derived from the Managed Facilities’ operations; (b) oust or dispossess
guests, tenants or other Persons in possession therefrom; or (c) terminate any lease, license or concession agreement for the breach thereof or
default thereunder by the tenant, licensee or concessionaire;
2.1.5.12 using Approved Counsel, defend and control any and all legal actions or proceedings arising from Claims; provided
, that as soon as reasonably practical, Manager shall notify Owner in writing of the commencement of any legal action or proceeding
concerning the Managed Facilities which could reasonably be anticipated to involve an expense, liability or damage to Owner that is not fully
covered by insurance or is in excess of Two Hundred Fifty Thousand Dollars ($250,000); provided further , however , unless insurance policies
dictate otherwise, that (a) Owner may appoint counsel, defend and control any and all legal actions or proceedings pertaining to real property
related claims not involving the Operation of the Managed Facilities (such as zoning disputes, structural defects and title disputes); (b) in
determining what portion, if any, of the cost of any legal actions or proceedings described in clause (a) above is to be allocated to the Managed
Facilities, due consideration shall be given to the potential impact of such legal action or proceeding on the Managed Facilities as compared
with the potential impact on Manager or its Affiliates or on the Other Managed Resorts; and (c) if Owner is also a named party in such legal
actions or proceedings, Owner shall have the right to appoint separate counsel to prosecute and defend its interests, such appointment being at
Owner’s sole cost and expense;
2.1.5.13 using Approved Counsel, take actions to challenge, protest, appeal or litigate to final decision in any appropriate
court or forum any Applicable Laws affecting the Managed Facilities or any alleged non-compliance with, or violation of, any
5
Applicable Law (with the cost of such challenge, protest, appeal or litigation being treated in the same manner as the cost of compliance with
the Applicable Law in question would be treated under Section 5.1.5.4 );
2.1.5.14 in Consultation with Owner, establish and implement all policies and procedures of credit to patrons of the
Managed Facilities;
2.1.5.15 collect and account for and remit to Governmental Authorities all applicable excise, sales, occupancy and use Taxes
and all other Taxes, assessments, duties, levies and charges imposed by any Governmental Authority and collectible by the Managed Facilities
directly from patrons or guests (including those Taxes based on the sales price of any goods, services, or displays, gross receipts or admission)
or imposed by Applicable Laws on the Managed Facilities or the Operations thereof;
2.1.5.16 subject to Applicable Law and in Consultation with Owner, establish the types of Gaming activities to be offered at
the Managed Facilities, including the matrix of owned, leased, progressive and electronic games and gaming systems. Manager, in Consultation
with Owner, shall establish all policies and procedures for Gaming at the Casino;
2.1.5.17 administer all non-Gaming activities to be conducted at the Managed Facilities, including all hospitality, retail, food
and beverage and other related activities;
2.1.5.18 establish and implement policies and procedures regarding, and assign Managed Facilities Personnel to resolve,
disputes with patrons of the Managed Facilities;
2.1.5.19 establish rates for all areas within the Managed Facilities, including all: (a) charges for food and beverage;
(b) charges for recreational and other guest amenities at the Managed Facilities, consistent with the corporate policy applicable to comparable
Other Managed Resorts; (c) subject to Applicable Law, policies with respect to discounted and complimentary food and beverage and other
services at the Managed Facilities; (d) billing policies (including entering into agreements with credit card organizations); (e) price and rate
schedules; and (f) rents, fees and charges for all leases, concessions or other rights to use or occupy any space in the Managed Facilities;
2.1.5.20 supervise, direct and control the collection of income of any nature from the Operation of the Managed Facilities
and issue receipts with respect to, and use reasonable efforts to collect all charges, rent and other amounts due from guests, lessees and
concessionaires of the Managed Facilities, and use those funds, as well as funds from other sources as may be available to the Managed
Facilities, in accordance with this Agreement;
2.1.5.21 determine the number of hours per week and the days per week that the Managed Facilities shall be open for
business, taking into account Applicable Laws, the season of the year and other relevant and customary factors;
2.1.5.22 in Consultation with Owner, select all entertainment and promotions events to be staged at the Managed Facilities;
6
2.1.5.23 cooperate in all reasonable respects with Owner and any prospective purchaser, lessee, Lender or other prospective
lender in connection with any proposed sale, lease or financing of or relating to the Managed Facilities, including answering questions of
Owner or such other Persons, providing copies of financial statements and projections, preparing schedules and providing copies of leases,
concessions, Supplies, FF&E, employees and other similar matters, as may reasonably be requested by Owner or such other Persons; provided ,
that (a) if cooperation by Manager pursuant to this Section 2.1.5.23 involves the disclosure of Manager Confidential Information, Manager
shall only be required to release such Manager Confidential Information to a Lender, and only to the extent that such Lender has a “need to
know” such Manager Confidential Information in connection with any Financing, subject to customary protections against disclosure or misuse
of such information; and (b) Owner shall reimburse Manager for any Out-of-Pocket Expenses incurred by Manager in connection with such
cooperation to the extent such expense is not otherwise paid or reimbursed under this Agreement;
2.1.5.24 take all actions necessary (except to the extent not within Manager’s reasonable ability to do so) to comply with:
(a) all Applicable Laws or the requirements to maintain all Approvals necessary for the operation of the Managed Facilities ( provided , that
Manager shall not be a guarantor of the Managed Facilities’ compliance with such Applicable Laws or such requirements); (b) the requirements
of the Ground Leases (as applicable), the terms of which shall be provided by Owner to Manager ( provided that Manager shall not be a
guarantor of Owner’s compliance with the Ground Leases); (c) the requirements of any Mortgage or other lease that is specifically identified by
Owner to Manager ( provided , that Manager shall not be a guarantor of Owner’s compliance with any such Mortgage or lease); (d) the
requirements of any Financing Documents provided to Manager ( provided , that Manager shall not be a guarantor of Owner’s compliance with
any such Financing Documents); and (e) the terms of all insurance policies applicable to the Managed Facilities and provided to Manager;
2.1.5.25 as directed by Owner and at Owner’s expense, take actions to discharge any lien, encumbrance or charge against the
Managed Facilities or any component of the Managed Facilities;
2.1.5.26 supervise and maintain books of account and records relating to or reflecting the results of operation of the
Managed Facilities;
2.1.5.27 keep the Managed Facilities and the FF&E in good operating order, repair and condition, consistent with the
Operating Standard;
2.1.5.28 take such actions as Manager determines to be necessary or advisable to perform all duties and obligations required
to be performed by Manager under this Agreement or as are customary and usual in the operation of the Managed Facilities in accordance with
the Operating Standard and the Manager’s Standard of Care, in each case subject to the Operating Limitations;
2.1.5.29 implement standards, policies and programs in effect for the Brand and the Total Rewards System in accordance
with Exhibit G attached hereto;
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2.1.5.30 with respect to the Managed Facilities Guest Data, the Guest Data, the Managed Facilities and Total Rewards
System, establish such contact and privacy policies and implement such data security policies and security controls for databases and systems
utilizing Managed Facilities Guest Data, the Guest Data and the Total Rewards System as Manager determines is desirable to protect such
information;
2.1.5.31 establish policies and procedures relating to problem gaming, underage drinking, compliance with the Americans
with Disabilities Act, diversity and inclusion and a whistleblower hotline which shall, in each case, comply in all respects with Applicable
Laws;
2.1.5.32 establish, in Consultation with Owner, rates for the usage of all guest rooms and suites, including all (i) room rates
for individuals and groups; (ii) charges for room service, food and beverage; (iii) charges for recreational and other hotel guest amenities at the
Managed Facilities (consistent with the corporate policy applicable to the Other Managed Resorts); (iv) policies with respect to
Complimentaries; (v) billing policies (including entering into agreements with credit card organizations); (vi) price and rate schedules; and
2.1.5.33 take any action necessary or ancillary to the responsibilities and authorities set forth above in this Section 2.1.5 , it
being acknowledged and agreed that the foregoing is not intended to be an exhaustive list of Manager’s responsibilities or authorities.
2.2
Limitations on Manager Authority .
Notwithstanding the grant of authority given to Manager in Section 2.1 , and without limiting any of the other circumstances under which
Owner’s approval is specifically required under this Agreement, Manager shall not take any of the following actions without Owner’s prior
written approval:
2.2.1 Settle any claim (a) regardless of the amount, admitting intentional misconduct or fraud or (b) arising out of the Operations of
the Managed Facilities which involves an amount in excess of $500,000 that is not fully covered (other than deductible amounts) by insurance
or as to which the insurance denies coverage or “reserves rights” as to coverage; provided , that the dollar amount specified in this Section 2.2.1
shall be increased on January 1 of every third Operating Year by the percentage increase in the Index since January 1 of the first Operating
Year or the date of the prior increase, as applicable;
2.2.2 Execute, amend, modify, provide a written waiver of rights under or terminate any contract, lease, equipment lease or other
agreement (in each case, or a series of contracts, leases, equipment leases or other agreements relating to the same or similar property,
equipment, goods or services, as applicable, with the same or a related party) that (a)(i) is for a term of greater than three (3) years and
(ii) requires payment in excess of $500,000 or (b) requires aggregate annual payments in excess of $500,000, other than contracts, leases or
other agreements which are specifically identified in the Annual Budget; provided , that the dollar amount specified in this Section 2.2.2 shall
be increased on January 1 of every third Operating Year by the percentage increase in the Index since January 1 of the first Operating Year or
the date of the prior increase, as applicable;
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2.2.3 Except as permitted by Section 5.5.3 , borrow any money or incur indebtedness or issue any guaranty in respect of borrowed
money, or issue any indemnity or surety obligation outside of the ordinary course of business, in the name and on behalf of Owner;
2.2.4 Grant or create any lien or security interest on the Managed Facilities or any part thereof or interest therein; provided , that the
foregoing shall not be deemed to restrict Manager from incurring trade payables, ordinary course advances for travel, entertainment or
relocation or granting credit or refunds to patrons for goods and services incurred in the ordinary course of business in the Operation of the
Managed Facilities in accordance with this Agreement;
2.2.5 Sell or otherwise dispose of the Managed Facilities or any part thereof or interest therein, including FF&E, except for the sale
of inventory and the disposal of obsolete or worn out or damaged items, each in the ordinary course of business or as contemplated in the
Annual Budget or Capital Budget;
2.2.6 Commence any ROI Capital Improvements, except as directed by Owner or as included in the Capital Budget, or commence
any Building Capital Improvements, except if required by the Operating Standard as determined pursuant to Section 5.1.4 and Expert
Resolution under Article XVII or Operating Limitations;
2.2.7 Hire or replace individuals for the positions of Senior Executive Personnel;
2.2.8 Submit, settle, adjust or otherwise resolve any casualty insurance claim related to the Managed Facilities involving losses or
casualties in excess of $500,000; provided , that the amount specified in this Section 2.2.8 shall be increased on January 1 of every third
Operating Year by the percentage increase in the Index since January 1 of the first Operating Year or the date of the prior increase, as
applicable;
2.2.9 Enter into any contract or transaction with an Affiliate of Manager, except as expressly provided for in this Agreement or
expressly permitted in the Annual Budget (it being understood that any such contract or transaction entered into with an Affiliate of Manager
and not approved in writing pursuant to this Section 2.2 shall first comply with the provisions of Section 5.6 or Section 5.8 , as applicable);
2.2.10 Confess any judgment, make any assignment for the benefit of creditors, admit an inability to pay debts as they become due
in the ordinary course of business, file a voluntary bankruptcy or consent to any involuntary bankruptcy with respect to the Managed Facilities
or Owner;
2.2.11 Initiate or settle any real or personal property tax appeals or claims involving property of Owner, unless directed by Owner in
writing;
2.2.12 Acquire any land or interest in land in the name of Owner;
2.2.13 Consent to any condemnation relating to the Managed Facilities, except with respect to Manager’s interests under this
Agreement as contemplated in Section 15.2 ;
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2.2.14 File with any Governmental Authority any federal or state income tax return applicable to Owner; or
2.2.15 Execute, amend, modify, provide written waiver of rights under or terminate any collective bargaining, recognition,
neutrality or other material labor agreements solely involving the Managed Facilities Personnel; provided , that with respect to the execution,
amendment, modification, waiver of rights under or termination of any collective bargaining, recognition, neutrality or other material labor
agreements which involve both Managed Facilities Personnel and other employees providing services at properties that are owned by or
managed by Manager’s Affiliates (other than any of the Growth Managed Facilities), the consent of Owner shall be required, which consent
shall not be unreasonably withheld, conditioned or delayed.
2.3
Other Operations of Manager and Owner .
2.3.1 Without limiting Manager’s obligation under Section 2.1.2 , Owner acknowledges that: (a) Owner has selected Manager to
Operate the Managed Facilities on behalf of Owner in substantial part because of the other hotels, casinos, entertainment venues, dining
establishments, spas and retail locations that are owned or operated by Manager and its Affiliates; (b) Owner has determined, on an overall
basis, that the benefits of operation as part of the Total Rewards System are substantial, notwithstanding that the properties operating under the
Service Mark Rights may not all benefit equally from operation under the Service Mark Rights; and (c) in certain respects all hotels, casinos,
entertainment venues, dining establishments, spas and retail locations compete on a national, regional and local basis with other hotels and
casinos and facilities, and that conflicts and competition may, from time to time, arise between the Managed Facilities, on the one hand, and
Other Managed Resorts, on the other hand.
2.3.2 Owner acknowledges and agrees that (i) Manager and its Affiliates own and operate many casino, hotel and other properties
across the country and internationally, some of which may be in competition with the Managed Facilities and (ii) neither Manager nor any
Affiliate of Manager shall have any obligation to promote the value and profitability of the Managed Facilities at the expense of such other
properties. Subject to the limitations and restrictions set forth in Sections 2.3.4 , 2.3.5 and 7.4.3 and Applicable Law, Manager and its Affiliates
shall be permitted to: (a) utilize the Guest Data for its own account and for use at Manager’s and its Affiliates’ other owned and/or operated
properties and utilize and retain the Guest Data after expiration or termination of the Term, (b) engage in commercially reasonable
cross-marketing and cross-promotional activities with Manager’s and its Affiliates’ other owned and/or operated properties, and (c) otherwise
participate or engage in competing projects, programs and activities. This Section 2.3.2 shall survive the expiration or termination of this
Agreement.
2.3.3 Manager acknowledges and agrees that Owner and its Affiliates may develop, operate and manage properties and other
facilities in other locations, some of which may be in competition with the Managed Facilities. Subject to the limitations and restrictions set
forth in Sections 7.4.3 and Applicable Law, Owner shall be permitted to: (a) utilize the Managed Facilities Guest Data for its own account and
for use at its other properties, utilize the Managed Facilities Guest Data during the Term, and retain and use the Managed Facilities Guest Data
after expiration or termination of the Term in accordance with this Agreement, (b) engage in
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cross-marketing and cross-promotional activities for the direct benefit of Owner’s other properties in a manner that may be competitive to the
Managed Facilities or Manager’s and its Affiliates’ other owned and/or operated facilities or operations, and (c) otherwise participate or engage
in competing projects, programs and activities. This Section 2.3.3 shall survive the expiration or termination of this Agreement.
2.3.4 Notwithstanding anything herein to the contrary, none of the limitations or restrictions in this Section 2.3 shall apply to
e-gaming operations.
2.4
Term .
2.4.1 Term . The initial term (the “ Initial Term ”) of this Agreement (together with the Renewal Term and any Continuing Term, as
applicable, the “ Term ”) shall commence on the Commencement Date and expire on the day immediately preceding the fifteenth
(15th) anniversary of the Opening Date, unless terminated earlier in accordance with the terms of this Agreement or extended by Manager.
Manager shall have the right (but not the obligation) to extend the Initial Term of this Agreement for one (1) additional ten (10) year period
(the “ Renewal Term ”) by giving Owner written notice of its desire to extend not later than ninety (90) days prior to the expiration of the Initial
Term of this Agreement. The Renewal Term is subject to earlier termination in accordance with the terms of this Agreement. After expiration
of the Renewal Term, the Term of this Agreement shall continue until (a) terminated by Manager or Owner upon at least ninety (90) days prior
written notice delivered to the Other Party, (b) terminated by Manager as permitted by Section 16.2 or (c) terminated by Owner as permitted by
Section 16.3 (the “ Continuing Term ”). If this Agreement is renewed for the Renewal Term or continues for the Continuing Term, unless
otherwise agreed by the Manager and Owner in writing, this Agreement, and all terms, covenants and conditions set forth herein, shall be
automatically extended to the expiration or earlier termination in accordance with the terms of this Agreement of the Renewal Term or the
Continuing Term, as applicable.
2.4.2 No Other Early Termination . This Agreement may only be terminated prior to the expiration of the Term as provided in
Article XVI . Notwithstanding any Applicable Law to the contrary, including principles of agency, fiduciary duties or operation of law, neither
Owner nor Manager shall be permitted to terminate this Agreement except in accordance with the express provisions of Article XVI of this
Agreement.
ARTICLE III.
FEES AND EXPENSES
3.1
Management Fees .
The following provisions shall apply to the payment of the Management Fees and other fees and expenses:
3.1.1 Base Management Fee . The Base Management Fee for each month shall be payable to Manager in monthly installments in
arrears within fifteen (15) days of delivery to Owner of each Monthly Report required under Section 10.2 . Each installment payment of the
Base Management Fee shall equal the Base Management Fee for the preceding twelve (12) month period, less the sum of all prior installment
payments of Base Management
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Fee attributable to such period (and subject to any adjustments made in connection with any annual reconciliations undertaken pursuant to
Section 3.1.3 ). At the time of submission of each Monthly Report, Manager shall provide to Owner a computation of the Base Management
Fee installment payment in reasonable detail and certified by Manager’s Designated Financial Officer. Any disputes regarding the Base
Management Fee shall be referred to the Expert for Expert Resolution pursuant to Article XVII .
3.1.2 Incentive Management Fee . The Incentive Management Fee shall be payable to Manager in quarterly installments in arrears
within fifteen (15) days of delivery to Owner of each Quarterly Report with respect to the end of the calendar quarter to which such Incentive
Management Fee installment relates. Each installment payment of the Incentive Management Fee shall equal the Incentive Management Fee
for the period consisting of the preceding four (4) calendar quarters, less the sum of all prior installment payments of Incentive Management
Fee attributable to such period (and subject to any adjustments made in connection with any annual reconciliations undertaken pursuant to
Section 3.1.3 ). At the time of submission of each Quarterly Report, Manager shall provide to Owner a computation of the Incentive
Management Fee installment payment in reasonable detail and certified by Manager’s Designated Financial Officer. Any disputes regarding the
Incentive Management Fee shall be referred to the Expert for Expert Resolution pursuant to Article XVII .
3.1.3 Reconciliation of Management Fees . By April 15 of each Operating Year during the Term, Manager shall cause to be
prepared and delivered to Owner a reconciliation statement for the prior Operating Year showing the calculation and payment of the
Management Fees for the prior Operating Year, and appropriate adjustments shall be made for any overpayment or underpayment of the
Management Fees during such Operating Year. If any reconciliation statement reflects an overpayment of Management Fees to Manager,
Manager shall, within fifteen (15) days after such reconciliation statement has been delivered by Manager to Owner, deposit into the Operating
Account the amount of such overpayment. If the reconciliation statement reflects an underpayment of Management Fees to Manager, Manager
shall disburse from the Operating Account, within thirty (30) days after such reconciliation statement has been delivered by Manager to Owner,
the amount of such underpayment of Management Fees due Manager; provided that if funds in the Operating Account are insufficient to
withdraw such underpayment or such withdrawal is otherwise restricted for a period of sixty (60) days after such reconciliation statement has
been delivered, the amount of such underpayment shall accrue interest in accordance with Section 3.4 and shall be withdrawn by Manager as
soon as funds are sufficient therefor. Any disputes regarding such reconciliation statement shall be referred to the Expert for Expert Resolution
pursuant to Article XVII .
3.2
Centralized Services Charges .
Centralized Services Charges payable in accordance with Section 4.1.1 shall be due and payable to Manager monthly in arrears for the
immediately preceding month within fifteen (15) days of delivery to Owner of the Monthly Report for such month. All Centralized Services
Charges shall be set forth in the Monthly Reports. Any disputes regarding the Centralized Services Charges shall be referred to the Expert for
Expert Resolution pursuant to Article XVII .
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3.3
Reimbursable Expenses .
Owner shall reimburse Manager for all Reimbursable Expenses incurred by Manager during the Term. The Reimbursable Expenses
(a) may be withdrawn by Manager from the Operating Account to pay such Reimbursable Expenses when such amounts become due or
(b) shall be due monthly in arrears for the immediately preceding month within fifteen (15) days of delivery to Owner of the Monthly Reports
for such month. If funds in the Bank Accounts are insufficient to pay such Reimbursable Expenses or if such withdrawal is otherwise restricted
within the sixty (60) day period after such Reimbursable Expenses are due, such Reimbursable Expenses shall accrue interest in accordance
with Section 3.4 and shall be withdrawn by Manager from the Operating Account as soon as funds are sufficient therefor. Any disputes
regarding the Reimbursable Expenses shall be referred to the Expert for Expert Resolution pursuant to Article XVII .
3.4
Interest .
If any fee or other amount due by either Party to the other Party or its Affiliates or designees under this Agreement is not paid within
sixty (60) days after such payment is due, such amount shall bear interest from and after the respective due dates thereof until the date on which
the amount is received in the bank account designated by the Party to which such amount is owed at an annual rate of interest equal to the
lesser of (a) the prevailing lending rate of such Party’s principal bank for working capital loans to such Party plus three percent (3%) and
(b) the highest rate permitted by Applicable Law.
3.5
Payment of Fees and Expenses .
3.5.1 No Offset . All payments by Owner or by Manager under this Agreement and all related agreements between the Parties or
their respective Affiliates shall be made pursuant to independent covenants, and neither Owner nor Manager shall set off any claim for damages
or money due from either Party or any of its Affiliates to the other, except to the extent of any outstanding and undisputed payments owed to
Owner by Manager under this Agreement.
3.5.2 Place and Means of Payment . All fees and other amounts due to Manager or its Affiliates under this Agreement, including,
without limitation, Management Fees, Centralized Services Charges and Reimbursable Expenses, shall be paid to Manager in U.S. Dollars, in
immediately available funds. Manager may pay such fees and other amounts owed to Manager or its Affiliates consistent with this Agreement
and the Annual Budget directly from the Operating Account or, in the case of Management Fees, Management Account when such fees and
other amounts are due. In addition, Manager may require that any such payments to Manager hereunder be effected through electronic
debit/credit transfer of funds programs specified by Manager from time to time, and Owner agrees to execute such documents (including
independent transfer authorizations), pay such fees and costs and do such things as Manager reasonably deems necessary to effect such
transfers of funds.
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3.6
Application of Payments .
All payments by Owner, or by Manager on behalf of Owner, pursuant to this Agreement and all related agreements shall be applied in the
manner provided in this Agreement.
3.7
Sales and Use Taxes .
Owner shall pay to Manager an amount equal to any sales, use, commercial activity tax, gross receipts, value added, excise or similar
taxes assessed against Manager by any Governmental Authority that are calculated on Reimbursable Expenses or Centralized Services Charges
required to be paid by Owner under this Agreement (but not, for avoidance of doubt, any such assessment with respect to the Management
Fees), other than income, gross receipts, franchise or similar taxes assessed against Manager on the Management Fees or income taxes on
Manager’s income. Owner and Manager agree to cooperate in good faith to minimize the taxes assessed against Manager, Owner and the
Managed Facilities, including taxes assessed against Owner in connection with paying Reimbursable Expenses directly to the applicable
third-party vendor, so long as such actions are commercially reasonable and could not reasonably be expected to, and do not, result in an
adverse impact in any material respect on Manager, Owner or the Managed Facilities. In the event of any dispute regarding appropriate actions
to be taken to minimize taxes assessed against Manager, Owner and the Managed Facilities, such dispute may be submitted by either Party for
Expert Resolution in accordance with Article XVII .
ARTICLE IV.
CENTRALIZED SERVICES
4.1
Centralized Services .
In connection with Manager’s Operation of the Managed Facilities, Manager agrees to arrange for it or its Affiliates to provide, on
commercially reasonable terms and on a Non-Discriminatory basis, the centralized managerial, administrative, supervisory and support services
and products to Manager and the Managed Facilities as are generally provided to the Other Managed Resorts as of the Opening Date
(collectively, the “ Centralized Services ”), including (without limitation): (a) services and products in the areas of marketing, risk
management, information technology, legal, internal audit, accounting and accounts payable; (b) the Proprietary Information and Systems; and
(c) the Total Rewards System. As consideration for the Management Fee, Manager grants (or has caused its Affiliates to grant) to the Owner a
license to the Technology Systems included in the Centralized Services solely with respect to the Property during the Term and the Transition
Period; provided that, notwithstanding anything to the contrary set forth in this Agreement, such license shall be perpetual if a Manager Event
of Default occurs. The Centralized Services to be provided under this Agreement may be provided by Manager, CEC, CEOC, Services Co or
an Affiliate of any of them in or from Las Vegas, Nevada or in or from other locations other than the Managed Facilities, or for such
Centralized Services provided by third parties, by a third-party designated by Manager, CEOC, Services Co or an Affiliate of any of them (the
“ Third-Party Centralized Services ”). Owner and Manager acknowledge and agree that the Managed Facilities shall participate in all
Centralized Services as determined by Manager on a Non-Discriminatory basis, and Owner shall pay all Centralized Services Charges (all of
which shall be commercially reasonable and reasonably allocated) for, and comply with all terms and requirements of, such Centralized
Services.
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4.1.1 Centralized Services Charges .
4.1.1.1 Calculation of Centralized Services Charges . The amounts charged to the Managed Facilities for the Centralized
Services (the “ Centralized Services Charges ”) shall be determined as follows: the sum of (a) such amounts that have been historically
“allocated” to the Managed Facilities will continue to be done in a manner consistent with past practices, and (b) such amounts that have been
historically “unallocated” and incurred in performance of the Centralized Services and fairly and equitably allocated to the Managed Facilities
on the same basis as such amounts are determined for substantially all of the Other Managed Resorts that are participating in such Centralized
Services and in a manner that is commercially reasonable and Non-Discriminatory to the Managed Facilities, and may include a reasonable
allocation of amounts reasonably calculated to cover the overhead and other costs incurred by Manager or its Affiliates (as applicable) in
providing (or arranging for the provision of) such Centralized Services, including: (i) compensation and employee benefits of Corporate
Personnel directly involved in providing the Centralized Services; (ii) recovery of development costs and promotion costs for such Centralized
Services; (iii) costs of equipment employed in providing the Centralized Services; and (iv) costs of operating, maintaining and upgrading the
Centralized Services. In addition, Owner shall pay all costs for the installation and maintenance of any equipment and Technology Systems at
the Managed Facilities used in connection with the Centralized Services. Manager, its Affiliates and any third-party providing any Centralized
Services shall have the right to increase or decrease any or all of the Centralized Services Charges from time to time, upon notice to Owner,
provided that any such changes in the services and/or charges for such Centralized Services are commercially reasonable and are applied on a
Non-Discriminatory basis.
4.1.1.2 Allocation of Costs . Owner acknowledges that from time to time there might be a current surplus or current deficit
of funds for any one (1) or more Centralized Services, and that any retention of funds for use at a later date (including interest earned thereon)
shall not constitute a profit. Owner acknowledges that the Centralized Services Charges for Third-Party Centralized Services may include a
profit component to such third-party.
4.1.1.3 Right to Pay Third-Party Providers . Manager shall have the right (but not the obligation) to pay (directly or through
an Affiliate) a reasonable allocation of any amounts due to a third-party for any Third-Party Centralized Services provided to the Managed
Facilities, in which case, notwithstanding anything to the contrary in this Agreement, such amounts shall be deemed to be Reimbursable
Expenses for all purposes under this Agreement and such amount shall not be included in the Centralized Services Charges to the extent it is
characterized as a Reimbursable Expense.
4.2
Modification of Centralized Services .
Owner acknowledges that the Centralized Services are an integral part of Manager’s operation of the Other Managed Resorts and related
facilities, and CEOC and/or Services Co needs the flexibility to modify the Centralized Services to respond to market trends, customer
demands, economic conditions, technological advances and other factors affecting the operation of the Other Managed Resorts and related
facilities, as they may change from time to time.
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Accordingly, Owner agrees that CEOC and/or Services Co and its respective Affiliates shall have the right to: (a) modify the structure, scope,
delivery and manner of providing of any Centralized Services; or (b) add a new, or discontinue an existing, Centralized Service, as Manager
deems advisable from time to time; provided that, in each case, any such changes are commercially reasonable and Non-Discriminatory to the
Managed Facilities in both design and implementation.
ARTICLE V.
OPERATION OF THE MANAGED FACILITIES
5.1
Annual Budget .
5.1.1 Proposed Annual Budget . The portion of the operating plan and budget for the Managed Facilities in effect immediately prior
to the Commencement Date that relates and applies to the period from and after the Commencement Date through and including December 31,
2014 shall apply under this Agreement as the Annual Budget for such period. Subject to reimbursement for Reimbursable Expenses in
accordance with this Agreement, from the Commencement Date through the Opening Date, Manager will continue to provide the pre-opening
services to the Managed Facilities in a manner and level commensurate with the pre-opening services being provided immediately prior to the
Commencement Date to the Managed Facilities pursuant to the terms and conditions of the Transaction Agreement. On or before November 1
of each Operating Year, Manager shall prepare and deliver to Owner, for its review and approval, a proposed operating plan and budget for the
next Operating Year. All operating plans and budgets proposed by Manager shall include (without limitation) projections of Gross Operating
Revenue and Operating Expenses by department for such period for the Managed Facilities and shall be prepared in good faith in accordance
with budgeting and planning procedures typically employed by CEOC’s operating subsidiaries. Each operating plan and budget shall include
monthly and annualized projections of each of the following items, as applicable, for the Managed Facilities:
5.1.1.1 results of operations (including itemized Gross Operating Revenue, Promotional Allowances, Operating Expenses
and EBITDA), together with the following supporting data: (a) total labor costs, including both fixed and variable labor; (b) the Management
Fees, Centralized Services Charges and Reimbursable Expenses; and (c) a description of the category and nature of Centralized Services to be
provided, together with a budget for each such category;
5.1.1.2 a description of proposed Routine Capital Improvements, Building Capital Improvements and ROI Capital
Improvements to be made during such Operating Year, including capitalized lease expenses, an itemization of the costs of such capital
improvements (including a contingency line item) and proposed monthly funding for such costs, and project schedules to commence and
complete such capital improvements (the “ Capital Budget ”);
5.1.1.3 a statement of cash flow, including a schedule of any anticipated cash shortfalls or requirements for funding by
Owner;
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5.1.1.4 a schedule of debt service payments and reserves required under any Financing Documents;
5.1.1.5 a marketing plan and budget for the activities to be undertaken by Manager pursuant to Article IX , including
promotional activities and Promotional Allowances for the Managed Facilities;
5.1.1.6 an allocation for all Centralized Services; and
5.1.1.7 any other information or projections reasonably requested by Owner to be included in the operating plan and budget
from time to time.
5.1.2 Approval of Annual Budget . Owner shall review the proposed operating plan and budget and shall provide Manager with its
written approval of or any objections to such proposed operating plan and budget in writing, in reasonable detail, within forty-five (45) days
after receipt of the proposed operating plan and budget from Manager; provided , any line items in the proposed operating plan and budget shall
not be adopted and implemented by Manager until Owner shall have approved such operating plan and budget and/or any items therein in
dispute shall have been determined pursuant to Section 5.1.3 . Owner shall be deemed to have approved that portion of any proposed operating
plan and budget to which Owner has not approved in writing or objected to in writing within such forty-five (45) day period. If Owner objects
to any portion of the proposed operating plan and budget within such forty-five (45) day period, the Parties shall meet within twenty (20) days
after Manager’s receipt of Owner’s objections and discuss such objections, and then Manager shall submit written revisions to the proposed
operating plan and budget after such discussion. The Parties shall use good faith efforts to reach an agreement on the operating plan and budget
prior to January 1 of each Operating Year. The proposed operating plan and budget, as modified to reflect the revisions, if any, agreed to by the
Parties pursuant to Section 5.1.3 , shall become the “ Annual Budget ” for the next Operating Year. Owner shall act reasonably and exercise
prudent business judgment in approving of, or objecting to, all or any portion of any proposed operating plan and budget.
5.1.3 Resolution of Disputes for Annual Budget . If the Parties, despite their good faith efforts, are unable to reach final agreement
on the proposed operating plan prior to January 1 of each Operating Year, or otherwise have a dispute regarding the Annual Budget as
contemplated by this Section 5.1 , those portions of such proposed operating plan that are not in dispute shall become effective on January 1 of
such Operating Year and, pending the Parties’ resolution of such dispute, the prior year’s Annual Budget shall govern the items in dispute,
except that the budgeted expenses provided for such item(s) in the prior year’s Annual Budget (or, if earlier, the last Annual Budget in which
the budgeted expenses for such disputed item(s) were approved) shall be increased by the percentage increase in the Index from January 1 of
the prior Operating Year (or, if applicable, each additional Operating Year between the prior Operating Year and the Operating Year in which
there became effective the last Annual Budget in which the budgeted expenses for such disputed item(s) were approved). Upon the resolution
of any such dispute by agreement of the Parties, such resolution shall control as to such item(s). For purposes of clarity, all disputes regarding
the Annual Budget shall be resolved (if at all) between Owner and Manager directly and no such dispute shall subject to Expert Resolution
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through the procedures described in Article XVII unless Owner and Manager (each acting in its sole discretion) agree in writing at the time any
such dispute arises to mutually submit the subject dispute to Expert Resolution under Article XVII .
5.1.4 Operation in Accordance with Annual Budget . Manager shall use its commercially reasonable efforts to operate the Managed
Facilities in accordance with the Annual Budget for the applicable Operating Year (subject, in the case of disputed items, to the provisions of
Section 5.1.3 ). Nevertheless, the Parties acknowledge that preparation of the Annual Budgets is inherently inexact and that Manager may vary
from any Annual Budget (a) to the extent Manager reasonably determines that such variance is required by any Financing Document and/or
any Ground Lease, (b) in connection with the matters set forth in Section 5.1.5 , or (c) by reallocating up to ten percent (10%) of any line item
(as shown on the Summary Annual Budget in the form attached hereto as Exhibit C ) to any other line item without Owner’s prior approval
(unless such other line item is for Centralized Service Charges or Reimbursable Expenses for Third Party Centralized Services pursuant to
Section 4.1.1.3 , in which event Owner’s approval shall be required for such reallocation). Other than as set forth in the preceding sentence,
Manager shall not incur costs or expenses or make expenditures that would cause the total expenditures for the Operation of the Managed
Facilities to exceed the aggregate amount of expenditures provided in the Annual Budget by more than five percent (5%) without Owner’s
prior approval. Owner acknowledges that the actual financial performance of the Managed Facilities during any Operating Year will likely vary
from the projections contained in the Annual Budget for such Operating Year, and Manager shall not be deemed to have made any guarantee,
warranty or representation whatsoever in connection with the Annual Budget or consistency of actual results with the Operating Plan.
5.1.5 Exceptions to Annual Budget . Notwithstanding Section 5.1.4 , Owner acknowledges and agrees as follows:
5.1.5.1 The amount of certain expenses provided for in the Annual Budget for any Operating Year will vary based on the
occupancy, use and demand for goods and services provided at the Managed Facilities and, accordingly, to the extent that occupancy, use and
demand for such goods and services for any Operating Year exceeds the occupancy, use and demand projected in the Annual Budget for such
Operating Year, such Annual Budget shall be deemed to include corresponding increases in such variable expenses, provided , that the
percentage increase in the variable expense over budget shall not exceed the percentage increase in corresponding revenue over projections. To
the extent that occupancy, use and demand for goods and services provided at the Managed Facilities for any Operating Year is less than the
occupancy, use and demand projected in the Annual Budget for such Operating Year, Manager will make commercially reasonable adjustments
to the Operation of the Managed Facilities in an effort to reduce such variable expenses;
5.1.5.2 The amount of certain expenses provided for in the Annual Budget for any Operating Year are not within the ability
of Manager to control, including real estate and personal property taxes, applicable gaming taxes, insurance premiums, utility rates, license and
permit fees and certain charges provided for in contracts and leases entered into pursuant to this Agreement, and accordingly, Manager shall
have the right to pay from the Operating Account the actual amount of such uncontrollable expenses without reference to the
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amounts provided for with respect thereto in the Annual Budget for such Operating Year ( provided that Manager shall promptly provide
Owner with a reasonably detailed written explanation of all variances in excess of five percent (5%) between the budgeted and actual amounts
of any such uncontrollable expenses);
5.1.5.3 If any expenditures are required on an emergency basis to (a) preserve or repair the Managed Facilities or other
property or (b) avoid potential injury to persons or material damage to the Managed Facilities or other property, Manager shall have the right to
make such expenditures, whether or not provided for, or within the amounts provided for, in the Annual Budget for the Operating Year in
question, to the extent reasonably required to avoid or mitigate such injury or material damage; and
5.1.5.4 If any expenditures are required to comply with, or cure or prevent any violation of, any Applicable Law, Manager
shall, following written notice to Owner (except in the case of emergency, in which case the provisions of Section 5.1.5.3 shall govern) have
the right to make such expenditures, whether or not provided for or within the amounts provided for in the Annual Budget for the Operating
Year in question, as may be necessary to comply with, or cure or prevent the violation of, such Applicable Law.
5.1.6 Modification to Annual Budget . Manager shall have the right from time to time during each Operating Year to propose
modifications to the Annual Budget then in effect based on actual operations during the elapsed portion of the applicable Operating Year and
Manager’s reasonable business judgment as to what will transpire during the remainder of such Operating Year. If, during any Operating Year,
Manager forecasts the EBITDA for such Operating Year to be less than the budgeted EBITDA by more than five percent (5%), Manager shall
meet with Owner to discuss appropriate modifications to the operating, promotional and marketing plans in order to address the forecasted
variance. Modifications to such Annual Budget, if any, shall be subject to Owner’s prior written approval; provided , that in no event shall
Owner have the right to withhold its approval to any material modifications on account of changes to costs of insurance premiums, operating
supplies and equipment, charges provided for in contracts and leases entered into pursuant to this Agreement or other amounts that are not
within Manager’s ability to control (e.g., taxes, assessments, utilities, license or permit fees, inspection fees and any impositions imposed by
any Governmental Authority).
5.2
Maintenance and Repair; Capital Improvements .
5.2.1 Required Maintenance and Repair and Capital Improvements . Except as otherwise provided in this Section 5.2 , Manager, at
Owner’s expense, shall perform or cause to be performed all ordinary maintenance and repairs and all such Routine Capital Improvements and
Building Capital Improvements: (a) as are necessary or advisable to keep the Managed Facilities in good working order and condition and in
compliance with the Operating Standard (subject to the Annual Budget and Section 5.1.4) and Operating Limitations; and (b) as Manager
reasonably determines are necessary or advisable to comply with, and cure or prevent the violation of, any Applicable Laws. Manager, at
Owner’s expense, shall perform or cause to be performed all such Routine Capital Improvements and Building Capital Improvements as are
provided in the Annual Budget or otherwise approved in writing by Owner.
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5.2.2 Discretionary Capital Improvements . Manager, at Owner’s expense, shall cause to be performed all ROI Capital
Improvements approved by Owner (in the Annual Budget or otherwise in writing in advance), and shall supervise such work and ensure that
the performance of such work is undertaken in a manner reasonably calculated to avoid or minimize interference with the Operation of the
Managed Facilities. Except as provided in the applicable Annual Budget or proposed by Manager and approved by Owner, Owner shall notify
Manager of any ROI Capital Improvements proposed to be undertaken by Owner and Manager may, within thirty (30) days after receipt of
such notice, object to the undertaking of such ROI Capital Improvements based on Manager’s reasonable determination that such ROI Capital
Improvements will not be consistent with the Operating Standard or will unreasonably interfere with the Operation of the Managed Facilities,
including that such ROI Capital Improvements would unreasonably interfere with the Managed Facilities’ operating performance and the
ability of Manager to Operate the Managed Facilities in accordance with the Operating Standard. Within fifteen (15) days after receipt of any
notice from Manager alleging a deficiency with respect to any ROI Capital Improvement proposed by Owner, Owner shall respond in detail to
such allegation and, if the matter is not resolved by the Parties within thirty (30) days after Owner’s response, the determination of whether
such capital improvement does not, or when constructed will not, be consistent with the Operating Standard or will unreasonably interfere with
the Operation of the Managed Facilities shall be submitted to the Expert for Expert Resolution in accordance with Article XVII . If the Expert
determines that such capital improvement does not, or when constructed will not, comply with the Operating Standard or will unreasonably
interfere with the Operation of the Managed Facilities, Owner shall promptly take such actions as the Expert shall require to bring such capital
improvement into compliance with the Operating Standard or to cause such capital improvement to not unreasonably interfere with the
Operation of the Managed Facilities.
5.2.3 Intentionally Omitted .
5.2.4 Intentionally Omitted .
5.2.5 Remediation of Design or Construction Defect . If the design or construction of the Managed Facilities is defective, and the
defective condition presents a risk of injury to persons or damage to the Managed Facilities or other property, or results in non-compliance with
Applicable Law, then Manager shall have the authority to, at Owner’s expense, perform all work necessary to remedy such design or
construction defect in the Managed Facilities. Owner acknowledges that such work shall be performed at Owner’s expense and that Manager
shall not use funds in the Operating Account in remedying such defects.
5.3
Personnel .
5.3.1 Manager Control . Manager shall manage and have sole and exclusive control of all aspects of the Managed Facilities’ human
resources functions as set forth in this Section 5.3 .
5.3.2 Employment of Managed Facilities Personnel . All Managed Facilities Personnel shall be employees of Owner or an Affiliate
and Owner shall bear all Managed Facilities Personnel Costs. Managed Facilities Personnel Costs shall be Operating Expenses. Owner shall
have no right to supervise, discharge or direct any Managed Facilities Personnel, except as otherwise set forth herein, and covenants and agrees
not to attempt to so supervise, direct or discharge.
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5.3.3 Senior Executive Personnel . Subject to Owner’s approval rights in Section 2.2.7 , Manager shall, on Owner’s behalf, recruit,
screen, appoint, hire, pay (from the Operating Account), train, supervise, instruct and direct the Senior Executive Personnel, and they, or other
Managed Facilities Personnel to whom they may delegate such authority, shall, on Owner’s behalf: (a) recruit, screen, appoint, hire, train,
supervise, instruct and direct all other Managed Facilities Personnel necessary or advisable for the Operation of the Managed Facilities; and
(b) discipline, transfer, relocate, replace, terminate and discharge any Managed Facilities Personnel.
5.3.4 Terms of Employment . Subject to Owner’s approval rights under Section 2.2.7 , all terms and conditions of employment,
personnel policies and practices relating to the Managed Facilities Personnel shall be established, maintained and implemented by Manager in
compliance with all Applicable Laws, on Owner’s behalf, including, but not limited to, Applicable Laws relating to the terms and conditions of
employment, recruiting, screening, appointment, hiring, compensation, bonuses, severance, pension plans and other employee benefits,
training, supervision, instruction, direction, discipline, transfer, relocation, replacement, termination and discharge of Managed Facilities
Personnel. Manager shall process the payroll and benefits for Managed Facilities Personnel.
5.3.5 Non-Solicitation . Manager hereby agrees not to, and to cause its Affiliates, its and their respective successors and assigns and
any Person acting for or on behalf of any of them not to, solicit the employment of any senior supervisory Managed Facilities Personnel,
without Owner’s prior written consent, at any time during the Term or any management personnel of any Affiliate of Owner during the Term;
provided , that this covenant shall not restrict Manager and its Affiliates from engaging in general solicitation or advertising of employment
opportunities that is not targeted at employees of the Managed Facilities.
5.3.6 Corporate Personnel . All Corporate Personnel who travel to the Managed Facilities to perform technical assistance,
participate in special projects or provide other services shall be permitted to reasonably utilize the services provided at the Managed Facilities
(including food and beverage consumption), without charge to Manager or such Corporate Personnel.
5.4
Bank Accounts .
5.4.1 Administration of Bank Accounts . Manager shall establish and administer the bank accounts listed in this Section 5.4 (the “
Bank Accounts ”) on Owner’s behalf at a bank or banks selected by Owner and reasonably approved by Manager. All Bank Accounts shall
(a) be established by Manager, as agent for Owner, in the name of Owner, doing business as the Managed Facilities, (b) be owned by Owner
and (c) use the taxpayer identification number of Owner. The Bank Accounts shall be interest-bearing accounts if such accounts are reasonably
available. The Bank Accounts may include:
5.4.1.1 one or more accounts for the purposes of depositing all funds received in the Operation of the Managed Facilities and
paying all Operating Expenses (collectively, the “ Operating Account ”);
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5.4.1.2 one or more accounts into which amounts sufficient to cover all Managed Facilities Personnel Costs shall be
deposited from time to time by Manager (by transfer of funds from the Operating Account);
5.4.1.3 a separate account for the purpose of depositing funds sufficient to pay all Management Fees and other amounts due
to Manager under this Agreement (by transfer of funds from the Operating Account) (the “ Management Account ”); and
5.4.1.4 such other accounts as Manager with Owner’s prior approval (or Owner with Manager’s approval (not to be
unreasonably withheld)) deems necessary or desirable.
All funds in the Bank Accounts shall be held in express trust for the benefit of Owner and shall be disbursed on the terms and subject to the
conditions of this Agreement and only for the purposes set forth in this Agreement, and Manager shall not commingle the funds associated with
the Managed Facilities with those of any other property or Person and Manager shall use such funds solely in connection with the Operation of
the Managed Facilities and for no other purpose. All funds of Owner and all funds generated with respect to the Managed Facilities shall be
held, at all times, in the Bank Accounts until such funds are paid to third parties in accordance with this Agreement and Manager shall not hold
any such funds in any other manner. To the extent, if any, that the funds in the Bank Accounts are deemed not to be held in express trust for the
benefit of Owner and to the extent permitted by the terms of any Financing, Owner is hereby granted a security interest and lien in the Bank
Accounts to secure Manager’s obligations under this Agreement and Owner is entitled to perfect its security interest and lien in the Bank
Accounts through an account control agreement with the applicable bank(s) where the Bank Account(s) are deposited (in customary form and
substance and which is reasonably satisfactory to Manager and which is consistent with this Agreement, including the provisions of this
agreement applicable to the holding and disbursement of funds).
5.4.2 Authorized Signatories; Bank Account Information .
5.4.2.1 Manager’s designees shall be the only Persons authorized to draw funds from the Bank Accounts and make deposits
into the Bank Accounts during the Term; provided , however , that if any Manager Event of Default has occurred, Manager is in breach of
Section 5.4.4 or the fifth sentence of Section 5.4.1 , (i) Owner shall be authorized to draw, disburse and retain funds as Manager would be so
entitled under Section 5.4.4 (and such funds may only be used in accordance with Section 5.4.4 ) and (ii) if any Manager Event of Default has
occurred, Manager shall cease having any further rights to draw on such Bank Accounts and a signature (electronic or otherwise) from Owner
shall also be required for the drawing of funds from the Bank Accounts. Manager shall establish reasonable controls to ensure accurate
reporting of all transactions involving the Bank Accounts and as Manager, consistent with commercially reasonable business procedures and
practices which are consistent with the size and nature of the operations at the Managed Facilities, reasonably deems necessary or advisable.
5.4.2.2 Manager shall (a) provide Owner copies of bank statements with respect to the Bank Accounts, and (b) provide
Owner (1) weekly cash balance summaries with respect to each Bank Account and (2) such other information regarding the Bank Accounts as
reasonably requested by Owner from time to time.
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5.4.3 Permitted Investments; Liability for Loss in Bank Accounts . Manager shall not invest funds in the Bank Accounts, except as
may be permitted under the Financing Documents and as approved by Owner. Owner shall bear all losses suffered in any investment of funds
into any such Bank Account, and Manager shall have no liability or responsibility for such losses, except to the extent due to Manager’s Gross
Negligence or Willful Misconduct or any Manager Event of Default.
5.4.4 Disbursement of Funds to Owner . All revenues from the operation of the Managed Facilities shall be deposited promptly by
Manager in the Operating Account. Unless the Parties agree otherwise, on or about the twenty fifth (25th) day of each calendar quarter,
Manager shall disburse to Owner, as directed by Owner, any funds remaining in the Operating Account at the end of the immediately preceding
month after payment, contribution or retention, as applicable, of the following in the following order of priority: (a) all Operating Expenses
then due but which have not yet been paid; (b) the amount of debt service accruals and payments due to Lenders as provided in the most
recently updated Monthly Debt Service Schedule; (c) transfer of the Management Fees then due to the Management Account (for payment
within one (1) Business Day to Manager and, if applicable, in accordance with Section 5.4.5 ); (d) the amount of any reserves required to be
funded pursuant to the Financing Documents; and (e) retention by Manager of an amount sufficient to cover (i) a reasonable reserve (as
approved by Owner in the Annual Budget or otherwise in writing in advance), (ii) any other amounts necessary to cure or prevent any violation
of any Applicable Law in accordance with this Agreement, and (iii) such other amounts as may be agreed to by the Parties from time to time. In
the event Owner disputes any decision by Manager to reserve and not disburse to Owner funds pursuant to this Section 5.4.4 , such dispute may
be submitted by either Party for Expert Resolution in accordance with Article XVII .
5.4.5 Transfers Between Bank Accounts . Manager has the authority to transfer funds from and between the Bank Accounts in order
to pay Operating Expenses, to pay debt service with respect to the Managed Facilities, to invest funds for the benefit of the Managed Facilities
(to the extent permitted under this Agreement), to pay the Management Fees to Manager pursuant to this Agreement and for any other purpose
consistent with the Annual Budget and good business practices; provided , that, if the circumstance contemplated by the proviso in the first
sentence of Section 5.4.2 has occurred and is continuing, Manager shall not transfer funds from the Management Account without the
co-signature (electronic or otherwise) of a representative of Owner (other than an Affiliate of Manager) (and Owner shall not unreasonably
withhold, condition or delay such co-signature).
5.4.6 Monthly Debt Service Schedule . Whenever Owner incurs indebtedness with respect to the Managed Facilities, Owner shall
provide Manager with a schedule of all principal and interests payments due with respect thereto and the method for calculating interest with
respect to such indebtedness (as the same may be updated, the “ Monthly Debt Service Schedule ”).
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5.5
Funds for Operation of the Managed Facilities .
5.5.1 Initial Working Capital . As of the Commencement Date, Owner shall ensure that the available funds in the Operating
Account include at least $4,347,913 of cash and the net working capital of the Managed Facilities (as calculated in a manner consistent with the
calculation of Net Working Capital as defined in the Transaction Agreement) shall be at least $(4,177,370).
5.5.2 Additional Funds . If Manager reasonably determines at any time during the Term that: (a) the available funds in the
Operating Account are insufficient to allow for the uninterrupted and efficient Operation of the Managed Facilities in accordance with this
Agreement (including the Operating Standard) based on a ninety (90) day reference period; (b) the available funds in the Operating Account
are insufficient for the timely payment of amounts in any given month to be paid under Section 5.4.4 ; (c) the available funds in the Operating
Account are insufficient for (i) the Operation of the Managed Facilities in accordance with the Operating Limitations, (ii) Building Capital
Improvements or (iii) ROI Capital Improvements then contemplated in the Annual Budget or otherwise approved by Owner, Manager shall
notify Owner of the existence and amount of the shortfall (a “ Funds Request ”) and shall provide a reasonably detailed explanation (including
any relevant documentation related thereto) of the cause of such shortfall. Owner shall be obligated to deposit into the Operating Account the
amount requested by Manager in the Funds Request within fifteen (15) days after delivery of the Funds Request.
5.5.3 Failure to Provide Funds . If Owner fails to deposit all or any portion of any amount requested in a Funds Request, Manager
shall have the right (but not the obligation) to use or pledge its credit in paying, on Owner’s behalf, (a) ordinary and customary Operating
Expenses to the extent incurred in accordance with this Agreement, (b) Building Capital Improvements and Routine Capital Improvements to
the extent incurred in accordance with this Agreement and (c) ROI Capital Improvements then contemplated in the Annual Budget or otherwise
approved by Owner, in which case Owner shall pay for such goods or services when such payment is due. In addition, if Owner fails to pay for
such goods or services when such payment is due, then Manager shall have the right (but not the obligation) to pay for such goods or services,
in which case Owner shall reimburse Manager immediately upon demand by Manager (and Manager shall be entitled to reimburse itself from
any available funds from the Operation of the Managed Facilities, including the Operating Account) for all such amounts advanced by
Manager, together with interest thereon in accordance with Section 3.4 . Notwithstanding the foregoing, Manager shall not have the rights
described in this Section 5.5.3 with respect to any failure by Owner to fund or pay such amounts that is caused directly or indirectly by
Manager or any of its Affiliates.
5.6
Purchasing .
Manager and its Affiliates shall make or cause to be made available to the Managed Facilities, on a Non-Discriminatory basis, licensing
or purchasing programs available to Other Managed Resorts (whether on a national, regional, mandatory, optional or other basis) (each, a “
Purchasing Program ”). Manager may elect, in its discretion, but subject to the terms of this Section 5.6 and Applicable Law, to license any
games or purchase or lease any FF&E and
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Supplies for the Operation of the Managed Facilities from a Purchasing Program maintained by or for the benefit of Manager or its Affiliates;
provided , that Manager shall ensure the prices and terms of the games, FF&E and Supplies to be licensed or purchased under such Purchasing
Program (including with such modifications as provided below) are reasonably comparable to the prices and terms which would be charged by
reputable and qualified unrelated third parties on an arm’s length basis for similar games, FF&E and Supplies sold, leased or licensed to similar
companies in the hospitality industry, and may be grouped in reasonable categories rather than being compared item by item. Manager and its
Affiliates shall pass through any discounts, rebates or similar incentives received in connection with a Purchasing Program to the Managed
Facility on a Non-Discriminatory basis, and Owner hereby acknowledges that certain discounts, rebates and similar incentives are not passed
through to Other Managed Resorts. Owner acknowledges and agrees that Manager and its Affiliates shall have the right, provided the same is
implemented on a Non-Discriminatory basis, to (a) modify the fees, costs or terms of any such Purchasing Program, including adding games,
FF&E and Supplies to, and, subject to Applicable Law, deleting games, FF&E and Supplies from, such Purchasing Program; (b) terminate all
or any portion of any such Purchasing Program, from time to time, upon sixty (60) days’ notice to Owner; (c) subject to the obligation to pass
through any such amounts as set forth in the immediately preceding sentence, receive commercially reasonable payments, fees, commissions or
reimbursements from suppliers and third parties in respect of such purchases, leases or licenses; and (d) own or have investments in such
suppliers.
5.7
Managed Facilities Parking .
Owner shall cause to be available as part of the Managed Facilities parking sufficient for the Operation of the Managed Facilities (it being
acknowledged and agreed by Manager that, as of the Commencement Date, the parking facilities available to the Managed Facilities are
sufficient for the Operation of the Managed Facilities). If parking for the Managed Facilities is not Operated as a part of the Managed Facilities,
Manager shall have the right to approve the arrangements for such operation, including the identity of any third-party parking manager.
5.8
Use of Affiliates by Manager .
In performing its obligations under this Agreement, Manager from time to time may use the services of one (1) or more of its Affiliates as
permitted under this Agreement. If an Affiliate of Manager performs services Manager is required to provide under this Agreement, such
Affiliate and its employees must hold such licenses or qualifications as may be required by the Gaming Authorities in connection with the
performance of such services and Manager shall be ultimately responsible to Owner for its Affiliate’s performance. Owner shall bear no cost or
expense for the Affiliate’s services, other than as expressly set forth in Section 4.1.1 for Centralized Services Charges, Section 3.3 for
Reimbursable Expenses, Section 5.6 for participation in Purchasing Programs, Section 5.11 for an Amenities Manager and Section 12.1.2 for
the Insurance Program. Additionally, Manager may cause Affiliates of Manager who operate other facilities on behalf of Owner or Owner’s
Affiliates to perform services Manager is required to provide under this Agreement and the costs associated with such performance shall be an
Operating Expense of the Managed Facilities. Any agreement or transaction between Manager acting on behalf of Owner, on the one hand, and
any Affiliate of Manager, on the other hand, that involves a cost or expense to Owner or the Managed Facilities, or a transfer of assets from the
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Managed Facilities, shall either be (a) approved by Owner or (b) expressly set forth in the Annual Budget (subject to Sections 5.1.4 and 5.1.5 )
and identified as an expense of an Affiliate of Manager (except that Managed Facilities Personnel Costs and costs incurred to third-party
vendors under the Purchasing Program need not be separately identified in the Annual Budget as an expense to an Affiliate of Manager).
Subject to any confidentiality or similar obligations ( provided the same are applied in a Non-Discriminatory manner to all Persons with whom
Manager transacts similar business), Manager shall make available to Owner such information as reasonably requested by Owner to compare
the cost or expense charged by the Affiliate with charges of an unaffiliated third party. Notwithstanding anything to the contrary contained
herein, Manager acknowledges and agrees that all transactions with, or services performed by, any Affiliate of Manager hereunder shall be on
commercially reasonable and fair, arm’s-length terms and conditions (unless otherwise expressly approved by Owner in writing).
5.9
Limitation on Manager’s Obligations .
5.9.1 General Limitations . Manager’s obligations under this Agreement are subject in all respects to the availability of sufficient
funds from the Operation of the Managed Facilities, or which are otherwise provided by Owner. Except as otherwise expressly provided in this
Agreement, all costs and expenses of Operating the Managed Facilities shall be payable out of funds from the Operation of the Managed
Facilities, or which are otherwise provided by Owner. In no event shall Manager be obligated to pledge or use its own credit or advance any of
its own funds to pay any such costs or expenses for the Managed Facilities. Accordingly, notwithstanding anything to the contrary in this
Agreement, Manager shall be relieved from its obligations to Operate the Managed Facilities in compliance with the Operating Standard and in
accordance with this Agreement whenever and to the extent that Manager is prevented or restricted in any way from doing so by reason of:
(a) the occurrence of a Force Majeure Event; (b) the Operating Limitations; (c) Owner’s breach of any material term of this Agreement
(including Owner’s obligation to provide sufficient funds as required under this Agreement); (d) any limitation or restriction in this Agreement
on Manager’s authority or ability to expend funds in respect of the Managed Facilities; or (e) the lack of availability of sufficient funds to
Operate the Managed Facilities, except to the extent caused by Manager’s Gross Negligence or Willful Misconduct or any Manager Event of
Default (disregarding any applicable notice and/or cure periods for such purpose).
5.9.2 Pre-Existing Conditions and External Events . If any environmental, construction, personnel, real property-related or other
problems arise at the Managed Facilities during the Term that: (a) relate to the Operation or condition of the Managed Facilities, or activities
undertaken at the Managed Facilities or on the Premises, prior to the Term; or (b) are caused by or arise from sources outside of the Managed
Facilities, Manager’s services under this Agreement shall not extend to management of any remediation, abatement or other correction of such
problems, and Owner shall retain full managerial and financial responsibility and liability for and control over the remediation, abatement and
correction of such problems (in each case, in accordance with all Applicable Law), and shall take such actions in a timely manner with as little
disturbance or interruption of the use and Operation of the Managed Facilities as reasonably practicable. Notwithstanding the foregoing, in the
event such problems exist: (i) Manager will cooperate reasonably with Owner in connection with Owner’s remediation, abatement and
correction efforts; and (ii) if there is a reasonable likelihood that such problems would cause
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criminal or civil liability to Manager, injury to persons using the Managed Facilities or damage to the Managed Facilities, Owner shall
promptly remedy such problems and if Owner fails to do so, Manager shall have the right to take all reasonably necessary steps to comply with
any Applicable Law, or to avoid criminal or civil liability to Manager, or injury to Persons or property; provided , that Manager shall give
Owner prior notice thereof.
5.10
Third-Party Operated Areas .
Manager shall, in Consultation with Owner, identify particular portions of the Managed Facilities, such as a restaurant, bar, entertainment
venue, spa or retail location (“ Third-Party Operated Areas ”), that shall be operated by third parties (the “ Third-Party Managers ”) under a
lease, operating agreement, franchise agreement or similar agreement arranged by Manager and in the name of Owner. Manager shall have the
right to manage the process of selecting any Third-Party Managers. Any lease, operating agreement, franchise agreement or similar agreement
entered into with a Third-Party Manager shall (a) be consistent with the terms of this Agreement (including that the same shall be
Non-Discriminatory to the Managed Facilities); (b) require the Third Party Managers to operate the Third-Party Operated Areas in accordance
with the Operating Standard and all other terms of this Agreement, subject to the Operating Limitations, and (c) require the Third-Party
Managers and their employees and contractors, as applicable, to hold such license or qualification as may be required by the Gaming
Authorities.
5.11
Amenities .
Subject to Section 2.2.9 , Manager shall have the right to propose to have an Affiliate of Manager (the “ Amenities Manager ”) operate
one or more of the Third-Party Operated Areas. The arrangement with any Amenities Manager for the operation of a restaurant, bars,
entertainment venue, spa, retail location or other amenity as a part of the Managed Facilities shall be documented pursuant to a lease or
management agreement prepared by Manager and approved by Owner which shall provide that the restaurant, bars, entertainment venue, spa,
retail location or other amenity, as applicable, shall be (a) designed and constructed in all material respects in accordance with the Operating
Standard, Design Guidance and any other standards reasonably required by Owner and the Amenities Manager, and (b) operated in accordance
with the Operating Standard and all other terms of this Agreement, in each case subject to the Operating Limitations.
ARTICLE VI.
APPROVALS
6.1
Gaming Approvals .
This Agreement and all other agreements contemplated herein shall be executed only after receipt of all required approvals and
authorizations, if any, by all applicable Gaming Authorities. Owner, at its expense, during the Term shall take such commercially reasonable
actions as may be reasonably required to maintain such required approvals or authorizations from the applicable Governmental Authorities to
make effective this Agreement as and if required by Applicable Law and permit Owner to make the payments required to be made to Manager
under this Agreement and all related agreements; provided , that Manager, at Manager’s expense, during the Term shall maintain such
license(s) or qualification(s) applicable to Manager
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as may be required by applicable Gaming Authorities. Manager shall have the right, at its expense, to participate in all phases of the approval or
authorization process. The Parties shall cooperate in all such undertakings or dealings with Gaming Authorities, and Owner shall provide
reasonable notice to Manager prior to all meetings with any Gaming Authority for such purpose. Each of Manager and Owner covenants and
agrees to use its best efforts to maintain all Approvals (other than such license(s) or qualification(s) applicable to the other Party) required to
approve Manager to Operate the Managed Facilities and this Agreement.
ARTICLE VII.
PROPRIETARY RIGHTS
7.1
Service Mark Rights .
7.1.1 In consideration of the Management Fee, Manager and CLC shall procure for the benefit of, and hereby grant to, Owner and
the Managed Facilities the non-exclusive right and license to use and otherwise exploit the Service Mark Rights in connection with the
Operation, promotion and marketing of the Managed Facilities throughout the Term of this Agreement and during the Transition Period. As
between Owner and CLC or any CLC assignee that owns any Service Mark Right, with respect to such right and license, CLC and/or such
assignee shall, during the Term, have the sole and exclusive right to determine the form of presentation of the Service Mark Rights in the
Operation of the Managed Facilities, including in all uses of the Service Mark Rights in marketing, sales, advertising and promotional materials
of the Managed Facilities, any goods or services relating to the Managed Facilities and any signage for the Managed Facilities. Subject to the
Annual Budget, Manager agrees to procure merchandise bearing the Brand or the Service Mark Rights on behalf of the Owner for sale or
promotion at the Managed Facilities at customary whole-sale prices for such merchandise.
7.1.2 Notwithstanding that Manager shall use the Service Mark Rights in the conduct of the Operations, Owner acknowledges that,
as between CLC or any CLC assignee that owns any Service Mark Right, on the one hand, and Owner, on the other hand, this use of the
Service Mark Rights shall not create in Owner’s favor any right, title, or interest in or to any of the Service Mark Rights, but all rights of
ownership and control of the Service Mark Rights shall reside solely with CLC or any CLC assignee that owns such Service Mark Right(s). If
and to the extent Owner acquires any right, title or interest in or to any of the Service Mark Rights, Owner hereby assigns all such right, title
and interest therein to such CLC or any CLC assignee that owns any Service Mark Right, as directed by CLC.
7.1.3 Owner acknowledges and agrees that the right to use the Service Mark Rights in connection with the Managed Facilities
(a) excludes any right of Owner to register any trademarks, copyrights or domain names or seek any patents which use any element of the
Service Mark Rights, such right being reserved exclusively to CLC or any CLC assignee that owns any Service Mark Right; (b) excludes any
right of Owner to sublicense or subcontract or permit other Persons to use the Service Mark Rights (including the production of branded
products) without the prior written consent of Manager (except a successor manager of the Managed Facilities during the Transition Period
shall be permitted such use), (c) does not permit Owner to use the Service Mark Rights or any marks, names, indicia or identifiers that are or
may be confusingly similar to any element of the Service Mark Rights in Owner’s corporate name;
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(d) does not permit Owner to acquire, or represent in any manner that Owner has acquired, in any manner any ownership rights in the Service
Mark Rights or any marks, names, indicia or identifiers that are confusingly similar to the Service Mark Rights, and (e) does not permit Owner
to use the Service Mark Rights to incur, secure or guarantee any obligation or indebtedness in such a manner as may, in any way, subject CLC
or any CLC assignee that owns such Service Mark Right(s) to liability. Further, as between Owner and CLC or any CLC assignee that owns
any Service Mark Right, any new trademarks, trade dress, slogans, logos, and any other matter capable of serving as a designation of origin for
the goods and services provided in connection with the Managed Facilities to the extent incorporating and derived from a Service Mark Right
shall be owned by CLC or any CLC assignee that owns such Service Mark Right, as directed by CLC.
7.2
Use of Service Mark Rights .
Subject to the obligation of the Manager to operate the Managed Facilities under the Brand, as part of Manager’s services under this
Agreement for the Operation of the Managed Facilities, Manager may, during the Term, use any Service Mark Rights in the Operation of the
Managed Facilities as Manager deems appropriate or advisable consistent with the Annual Budget. The Managed Facilities shall be a part of
the Total Rewards System used generally at the Other Managed Resorts. Manager reserves the right and discretion to require Managed
Facilities Personnel to sign a commercially reasonable confidentiality and restricted use agreement as a condition to the disclosure or use of any
Service Mark Rights by such Person, which shall supplement the terms set forth in this Article VII .
7.3
Rights to Service Mark Rights .
7.3.1 Subject to Section 7.3.2 , Owner hereby (a) recognizes the sole and exclusive right of ownership of CLC or any CLC assignee
that owns any Service Mark Right to all Service Mark Rights and (b) agrees that Owner’s use of the Service Mark Rights shall be conducted
exclusively by Manager (or, as provided herein during the Transition Period, Owner or a successor manager of the Managed Facilities) under
this Agreement. Without limiting any other rights, remedies or claims of CLC or any CLC assignee that owns any Service Mark Right and/or
any of their respective Affiliates at law, under this Agreement or otherwise, Owner covenants that in the event of any termination or expiration
of this Agreement, whether as a result of a default by Manager or otherwise, Owner shall not continue the operations of the Managed Facilities
pursuant to a Service Mark Right, nor will it otherwise utilize any of the Service Mark Rights (or hold itself out as operating pursuant to the
same) or any confusingly similar variant thereof in the operations of the Managed Facilities or the name of the Managed Facilities; provided ,
however , that Owner shall have a period of twelve (12) months following termination or expiration of this Agreement to remove all Service
Mark Rights from FF&E and the Managed Facilities, the cost which shall be borne by Owner. All use of the Service Mark Rights by Owner
during such period shall inure to the benefit of CLC or any CLC assignee that owns such Service Mark Right. If Owner fails to so remove all
Service Mark Rights from FF&E and the Managed Facilities within such twelve (12) month period, Owner agrees that Manager and its
Affiliates or their respective representatives may enter the Managed Facilities at reasonable times and upon fifteen days’ prior written notice to
Owner to remove all Service Mark Rights from FF&E and the Managed Facilities, the cost of which shall be borne by Owner provided that
Manager and its Affiliates use commercially reasonable efforts to avoid unnecessary damages to the FF&E and the Managed Facilities.
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7.3.2 Notwithstanding the foregoing, Owner shall have and is hereby granted by CLC an irrevocable and perpetual (including
following the Transition Period, but in each case subject to CLC’s enforcement rights, including the right to seek and obtain specific
performance or other equitable relief for quality control breaches), transferable, royalty-free, sublicenseable (in connection with the Managed
Facilities) and non-exclusive license and right to all Owner Primary Marks for use in connection with the Managed Facilities subject only to the
use of such Owner Primary Marks at a level of quality that is at least generally commensurate with the level of quality during the Term. With
respect to the Service Mark Rights and the Owner Primary Marks, each of Manager, CLC and any CLC assignee that owns a Service Mark
shall have the right after the Term to inspect the Managed Facilities upon reasonable notice and at reasonable times to confirm the quality of
the goods and services offered under the Service Mark Rights and the Owner Primary Marks. All use of the Service Mark Rights and Owner
Primary Marks by Owner shall inure to the benefit of CLC or CLC’s assignee that owns the same.
7.3.3 Owner Primary IP . Owner shall have, and is hereby granted by Manager and CLC, an irrevocable, perpetual (including
following the Transition Period), transferable, royalty-free, sublicenseable and non-exclusive license and right to exploit all Owner Primary IP.
7.3.4 Owner Owned IP . Owner and its Affiliates shall have the sole and exclusive right, title and ownership to all Owner Owned
IP. All Owner Owned IP made during the Term is hereby irrevocably assigned by Manager and CLC on behalf of themselves and their
respective Affiliates (to the extent of Manager’s, CLC’s and their respective Affiliates’ interest therein, if any) to Owner or its designee and
upon creation shall be and become the exclusive property of Owner or its designee, and neither Manager, CLC nor any of their respective
Affiliates shall have any ownership rights in any such Owner Owned IP. Owner hereby grants for the benefit of Manager, its Affiliates, CEC
and its Affiliates, CEOC and its Affiliates, Services Co and the Managed Facilities the non-exclusive right and license to use and otherwise
exploit the Owner Owned IP during the Term and the Transition Period in connection with the Operation, promotion and marketing of the
Managed Facilities and in connection with enterprise level functions not associated with a specific facility consistent with uses as of the
Commencement Date (including the Total Rewards System). Prior to or at the expiration of the Transition Period, Manager, its Affiliates, CEC
and is Affiliates shall discontinue all use of the Owner Owned IP.
7.3.5 This Section 7.3 shall survive the expiration or termination of this Agreement; provided , that notwithstanding the foregoing,
this Section 7.3 shall be replaced and superseded by the terms and conditions set forth in the Cross-License Agreement upon the effective date
of such agreement.
7.4
Proprietary Information and Systems of Manager or its Affiliates .
7.4.1 Proprietary Information and Systems . Owner agrees that, as of the Commencement Date, Manager, its Affiliates and licensees
have the sole and exclusive right,
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title and ownership to the following items as now in existence and as the same may be modified, supplemented or updated in the future, in each
case as and to the extent provided during the Term by Manager, CEOC or any of their respective Affiliates or licensees for use in the operation
of the Managed Facilities (collectively, the “ Proprietary Information and Systems ”):
7.4.1.1 proprietary information, techniques and methods of operating and marketing, gaming, hotel and related businesses,
including without limitation, the Total Rewards System;
7.4.1.2 proprietary information, techniques and methods of designing, selecting, maintaining, operating, marketing,
developing and customizing games used in gaming, hotel and related businesses;
7.4.1.3 proprietary information, techniques and methods of training employees in the gaming, hotel and related businesses;
7.4.1.4 proprietary business plans, projections, marketing, advertising and promotion plans, strategies and systems, including
the proprietary items listed on Exhibit D attached hereto and incorporated herein by this reference and any modifications, supplements or
revisions thereof, which may hereafter be made by Manager, CEOC or any of their respective Affiliates or licensees, all of which have been
developed or acquired over many years through the expenditure of time, money and effort and to the extent which Manager, CEOC or any of
their respective Affiliates or licensees maintain as confidential and as a trade secret(s); and
7.4.1.5 all proprietary information, techniques and methods used in connection with the Total Rewards System or any other
rewards system which is used generally at Other Managed Resorts.
Notwithstanding the foregoing, Proprietary Information and Systems shall not include: information, techniques, methods and systems
(a) developed by Owner or third parties (that are not Affiliates or licensees of CEC or CEOC) on Owner’s behalf; (b) developed by Manager or
its Affiliates or a third party specifically for use at the Managed Facilities; (c) specific to the Managed Facilities that may be contained in
Proprietary Information and Systems, including the Managed Facilities Guest Data; and (d) which are not recognized as a trade secret of
Manager or its Affiliates, or entitled to protection as proprietary to Manager or its Affiliates, under applicable state law.
Manager and CLC shall procure for the benefit of, and hereby grant to, Owner and the Managed Facilities the non-exclusive and
sublicenseable right and license to use and otherwise exploit the Proprietary Information and Systems (and other proprietary intellectual
property used by Manager under this Agreement, if any, excluding Owner Primary IP, Owner Owned IP and any Service Mark Right) in
connection with the Operation, promotion and marketing of the Managed Facilities throughout the Term of this Agreement and during the
Transition Period.
7.4.2 Confidentiality . Owner further agrees that, to the extent Owner has access to the Proprietary Information and Systems and
subject to Owner’s right to use or permit use on its behalf as permitted under this Agreement, Owner shall: (a) maintain the confidentiality of
Manager Confidential Information in such Proprietary Information and
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Systems, and not provide access to such Manager Confidential Information (or any documents, notes, memoranda, lists, computer programs or
summaries thereof) to any third parties; (b) not use the Proprietary Information and Systems for any purpose other than as permitted under this
Agreement; (c) make no copies of all or any portion of the Proprietary Information and Systems; and (d) upon the termination or expiration of
this Agreement, (i) return all Proprietary Information and Systems to Manager, including documents, notes, memoranda, lists, computer
programs and any summaries of the Proprietary Information and Systems in Owner’s possession or control but excluding any Managed
Facilities Guest Data which Owner may retain pursuant to the terms of this Agreement, and (ii) cease to access any and all of the Proprietary
Information and Systems, in each case upon the end of the Transition Period.
7.4.3 Guest Data and Managed Facilities Guest Data .
7.4.3.1 Owner recognizes the exclusive right of ownership of Manager and its Affiliates to all Guest Data, other than
Managed Facilities Guest Data, and the Parties agree that they shall have and hereby assign to each other joint ownership to all Managed
Facilities Guest Data (without a duty to account to the other or other obligations except as expressly set forth herein). Owner hereby disclaims
any right or interest in Guest Data, other than Managed Facilities Guest Data, regardless of any legal protection afforded thereto. Owner and
Manager hereby acknowledge and agree that a portion of the consideration paid or payable (as applicable) pursuant to Section 3.5 of the
Transaction Agreement, dated as of February 28, 2014, by and among CEC, CEOC, Caesars License Company, LLC, CGP and certain other
parties thereto (as may have been amended prior to the Commencement Date, the “ Transaction Agreement ”) shall be treated as a prepaid
license fee and other consideration paid by Owner for the Proprietary Information and Systems and the Managed Facility Guest Data. Owner
agrees that throughout the Term, Manager or Manager’s designees shall host and retain the database relating to customers’ activities at the
Managed Facilities which shall be collected and stored in systems implemented and managed by or on behalf of Manager or its Affiliates,
including all customer information gathered by or on behalf of Manager or its Affiliates in connection with any casino player loyalty program
card or successor player or guest rewards program, and Manager or one of its Affiliates shall own and, subject to the restrictions set forth in this
Section 7.4.3 , be entitled to use any and all of the customer or other information gathered by or on behalf of Manager or its Affiliates in
connection with this Agreement or such programs.
7.4.3.2 Each of Owner and Manager shall not and shall cause its respective Affiliates (and Persons to whom disclosure is
made by it under clause (c) below) not to, and each of Manager and Owner shall cause Services Co not to, and Owner shall cause any successor
manager of the Managed Facilities not to, (a) use the Managed Facilities Guest Data to offer, solicit or promote any illegal, obscene,
inappropriate, adult oriented, or pornographic material or activity or to engage in any activity that would constitute spamming or a violation of
any Applicable Laws relating to privacy, (b) use the Managed Facilities Guest Data in any manner which is inconsistent with the integrity of
the Brand or the Service Mark Rights, (c) sell, license or grant to any other Person (except, in the case of Manager, to an Affiliate of Manager,
CEC or its Affiliate, CEOC or its Affiliate, CERP or its Affiliate or Services Co or its Controlled subsidiary or, in the case of Owner, to an
Affiliate of Owner) a right to use, view or copy the Managed Facilities Guest Data or (d) use the Managed Facilities Guest Data for any
purpose which is not for the direct benefit of the Managed Facilities, or the businesses and/or operations
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of Manager and its Affiliates, CEC or its Affiliates, CEOC or its Affiliates, CERP or its Affiliates or Owner and its Affiliates. Notwithstanding
anything contained in this Agreement to the contrary, the use of the Managed Facilities Guest Data shall, in all events, be subject to the
limitations and restrictions set forth in any other agreement or other contract related thereto, this Agreement, Applicable Law and this
Section 7.4.3 . Owner and Manager further agree not to use, nor permit their Affiliates (or Persons to whom disclosure is made by it under
clause (c) above) to use, at any time, the Managed Facilities Guest Data in any illegal manner, nor to engage in any activity that would
constitute spamming or a violation of any privacy laws under any applicable jurisdiction’s regulations. For the avoidance of doubt, Owner
agrees that it shall not and shall cause its Affiliates not to disclose any gaming play or player rating information contained in the Managed
Facilities Guest Data to a Competitor. Notwithstanding the foregoing, if, upon the Assignment by Manager of this Agreement or the expiration
or termination of this Agreement, Owner engages a successor manager to Operate the Managed Facilities ((including any Person who becomes
the “Manager” hereunder or otherwise performs any of Managers rights or obligations hereunder, including Services Co), then the Managed
Facilities Guest Data may be disclosed to and used by such successor, but in all events such use shall be subject to the limitations and
restrictions set forth in any other agreement or other contract related thereto, this Agreement, Applicable Law and this Section 7.4.3 ; provided ,
that if Applicable Law or any privacy policy of Manager or its Affiliates requires Manager to provide guests of the Managed Facilities with
notice of such transfer and/or a right to “opt out” of having their information transferred to such successor, Owner and Manager shall comply
with such requirement and the election of such guest with respect thereto. Each of Owner and Manager agrees to, and to cause its respective
Affiliates (and Persons to whom disclosure is made by it under clause (c) above) to and Services Co to, and Owner shall cause any successor
manager to, (A) maintain commercially reasonable measures to protect the physical safety and data integrity of the Managed Facilities Guest
Data, and (B) comply with (1) all applicable data protection policies applicable to guest data, to which Manager and its Affiliates are subject,
including compliance with all relevant security best practices including PCI Data Security Standards and the Sarbanes Oxley Act, and
(2) during the Term, all privacy, data security and reasonable contact policies of Manager and its Affiliates, in the case of clause (B)(1) or
(B)(2), Owner’s obligations shall only apply to such policies that have been identified to Owner in advance in writing. Manager may require
Owner to acknowledge in writing its receipt of any Managed Facilities Guest Data (in whatever form) and confirm its obligations under this
Section 7.4.3 and the requirements described herein. In the event Manager reasonably believes the integrity of such Managed Facilities Guest
Data has been compromised, Manager and its Affiliates shall have the right, upon reasonable notice and at reasonable times, to inspect the
physical facilities and servers where Owner stores (or has stored on its behalf) the Managed Facilities Guest Data and to review all methods
and processes associated with the storage and use of same.
7.4.3.3 Subject to any limitations or requirements of any applicable Gaming Authority and in conformance with Applicable
Law, during the Term and the Transition Period:
(a) from time to time (but not more than twice per year), upon the reasonable request of Owner and at Owner’s
expense, Manager shall prepare filtered lists and datasets from the Managed Facilities Guest Data and provide to Owner a copy of the Managed
Facilities Guest Data in comma separate value (CSV) format, unless another format is agreed upon by Owner and Manager; and
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(b) Manager shall maintain, in a manner consistent with commercially reasonable data retention and security practices
on a monthly basis, backup tapes in iSeries format (the “ Backup Tapes ”) containing all Managed Facilities Guest Data resident on the
management system installed for the Managed Facilities (the “ CMS ”), provided , that the Backup Tapes may be located at the Managed
Facilities or such other location reasonably determined by Manager and to which Owner has reasonable access, and Manager shall keep the
Backup Tapes for a rolling period of six (6) months, with the costs of all Backup Tapes and maintenance thereof shall be an Operating
Expense.
7.4.4 Improvements to System . All intellectual property rights to the improvements made during the Term in the Proprietary
Information and Systems (the “ System Improvements ”) are hereby irrevocably assigned by Owner (to the extent of Owner’s interest therein, if
any) to CEOC or its designee and upon creation shall be and become the exclusive property of CEOC or its designee, and neither Owner nor
any of its Affiliates nor any successor manager hereunder shall have any ownership rights in any System Improvements. CEOC or its Affiliates
may incorporate any such System Improvements into the Proprietary Information and Systems and shall have the exclusive right to all
intellectual property rights (including patent, copyright, and industrial design rights) in and to the System Improvements, and to register and
protect such System Improvements in CEOC’s or its designee’s own name to the exclusion of Owner, who shall have no rights to use such
System Improvements except as specifically granted to Owner under this Agreement. Owner agrees to execute such assignment or other
documents, and to cause any successor manager to execute such assignment or other documents, as CEOC may reasonably request to evidence
its ownership or to assist CEOC in securing intellectual property rights to the System Improvements, at CEOC’s sole expense.
7.4.5 Survival . This Section 7.4 shall survive the expiration or termination of this Agreement.
ARTICLE VIII.
CONFIDENTIALITY
8.1
Disclosure by Owner .
Owner acknowledges that Manager will provide certain Manager Confidential Information to Owner in connection with the Operation of
the Managed Facilities, and that such Manager Confidential Information is proprietary to Manager and its Affiliates, and includes trade secrets.
Accordingly, during the Term and thereafter: (a) Owner shall not, and shall cause its Affiliates not to, use the Manager Confidential
Information in any other business or capacity, and Owner acknowledges such use would constitute an unfair method of competition; (b) Owner
shall maintain the confidentiality of, and shall not disclose to any other Person (including the media), any Manager Confidential Information or
the terms of this Agreement, except to its shareholders, partners, directors, officers, employees, agents, representatives, legal counsel,
accountants and existing and potential Lenders and investors and potential purchasers (provided such potential investor or purchaser is not a
Competitor), but only on a reasonable “need to know” basis in connection with its ownership of the Managed Facilities and subject to
customary
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confidentiality protections; (c) Owner shall not make unauthorized copies of any portion of the Manager Confidential Information disclosed in
written, electronic or other form; and (d) Owner shall ensure that none of its shareholders, partners, directors, officers, employees, agents, legal
counsel, accountants and existing and potential Lenders or investors or potential purchasers use, disclose or copy any Manager Confidential
Information, disclose any terms of this Agreement or take any other actions that Owner is otherwise prohibited from taking under this
Section 8.1 . Notwithstanding the foregoing, the restrictions on the use and disclosure of Manager Confidential Information shall not apply:
(i) to information or techniques which are or become generally known to the public (other than through any breach of this Section 8.1 with
respect to confidentiality); (ii) to the extent such disclosure is required under Applicable Laws, including reporting requirements applicable to
public companies, or stock exchange rules; or (iii) to information known to Owner (other than in connection with the performance of its rights
or duties hereunder) before disclosure by Manager or disclosed to Owner by a third party not subject to confidentiality obligations to Manager
or developed by Owner without use of Manager Confidential Information. In the event that Owner or any Person to which Owner has disclosed
Manager Confidential Information is requested or required by oral question, interrogatory, request for information or documents, subpoena,
civil investigative demand or similar process to disclose any Manager Confidential Information, Owner shall and shall cause such Person to:
(A) provide Manager with prompt notice, to the extent legally permissible, so that Manager and its Affiliates may seek a protective order or
other appropriate remedy or, in their discretion, waive compliance with the provisions of this Section 8.1 ; and (B) reasonably cooperate with
Manager and its Affiliates, at their expense, in any effort Manager or any of its Affiliates undertakes to obtain a protective order or other
remedy. In the event that such protective order or other remedy is not obtained or Manager in its discretion waives compliance with the
provisions of this Section 8.1 , Owner shall and shall cause such Person to disclose to the Person compelling disclosure only that portion of the
Manager Confidential Information that Owner is advised, by outside counsel, is legally required and to use commercially reasonable efforts to
obtain reliable assurance that confidential treatment is accorded the Manager Confidential Information so disclosed (to the extent available).
Owner shall be responsible for any acts or omissions of any of its employees, members, managers, attorneys, accountants, agents,
representatives, consultants, existing and potential Lenders and investors and potential purchasers in violation of this Section 8.1 .
8.2
Disclosure by Manager .
Manager acknowledges that Owner may from time to time provide certain Owner Confidential Information to Manager in connection
with the Operation of the Managed Facilities, and that such Owner Confidential Information is proprietary to Owner and its Affiliates, and may
include trade secrets. Accordingly, during the Term and thereafter: (a) Manager shall not, and shall cause its Affiliates not to, use the Owner
Confidential Information in any other business or capacity, and Manager acknowledges such use would constitute an unfair method of
competition; (b) Manager shall maintain the confidentiality of, and shall not disclose to any other Person (including the media), any Owner
Confidential Information or the terms of this Agreement, except to its shareholders, partners, directors, officers, employees, agents,
representatives, legal counsel, accountants and existing and potential lenders and investors and potential purchasers, but only on a reasonable
“need to know” basis in connection with its Operation of the Managed Facilities and subject to customary confidentiality protections; (c)
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Manager shall not make unauthorized copies of any portion of the Owner Confidential Information disclosed in written, electronic or other
form; and (d) Manager shall ensure that none of its shareholders, partners, directors, officers, employees, agents, legal counsel, accountants and
existing and potential lenders or investors or potential purchasers use, disclose or copy any Owner Confidential Information, disclose any terms
of this Agreement or take any other actions that Manager is otherwise prohibited from taking under this Section 8.2 . Notwithstanding the
foregoing, the restrictions on the use and disclosure of Owner Confidential Information shall not apply: (i) to information or techniques which
are or become generally known to the public (other than through any breach of this Section 8.2 with respect to confidentiality); (ii) to the extent
such disclosure is required under Applicable Laws, including reporting requirements applicable to public companies, or stock exchange rules;
or (iii) to information known to Manager (other than in connection with the performance of its rights or duties hereunder) before disclosure by
Owner or disclosed to Manager by a third party not subject to confidentiality obligations to Owner or developed by Manager without use of
Owner Confidential Information. In the event that Manager or any Person to which Manager has disclosed Owner Confidential Information is
requested or required by oral question, interrogatory, request for information or documents, subpoena, civil investigative demand or similar
process to disclose any Owner Confidential Information, Manager shall and shall cause such Person to: (A) provide Owner with prompt notice,
to the extent legally permissible, so that Owner and its Affiliates may seek a protective order or other appropriate remedy or, in their discretion,
waive compliance with the provisions of this Section 8.2 ; and (B) reasonably cooperate with Owner and its Affiliates, at their expense, in any
effort Owner or any of its Affiliates undertakes to obtain a protective order or other remedy. In the event that such protective order or other
remedy is not obtained or Owner in its discretion waives compliance with the provisions of this Section 8.2 , Manager shall and shall cause
such Person to disclose to the Person compelling disclosure only that portion of the Owner Confidential Information that Manager is advised,
by outside counsel, is legally required and to use commercially reasonable efforts to obtain reliable assurance that confidential treatment is
accorded the Owner Confidential Information so disclosed (to the extent available). Manager shall be responsible for any acts or omissions of
any of its employees, members, managers, attorneys, accountants, agents, representatives, consultants, existing and potential lenders and
investors and potential purchasers in violation of this Section 8.2 .
8.3
Public Statements .
The Parties shall cooperate with each other on all press releases and other public statements relating to the Managed Facilities and neither
Party shall issue any press release or other public statement relating to the Managed Facilities without the prior written approval of the other
Party and receipt of any required approvals from any Governmental Authority, except for any public statement required under Applicable Law;
provided , that Manager and its Affiliates may, subject to Applicable Law, make public statements and press releases regarding the Managed
Facilities in connection with CEOC’s general business operations, the Operation of the Managed Facilities or in the ordinary course of
Manager’s Operation of the Managed Facilities. With respect to any public statement required under Applicable Law, the issuing Party shall
provide the other Party with a reasonable opportunity to review and comment upon any such statement prior to its issuance. In addition, either
Party may make reference to the Managed Facilities, this Agreement and such Party’s business in connection with making Securities Exchange
Commission filings, investor and lender reports and presentations, financing documents and offering materials.
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8.4
Cumulative Remedies .
Owner acknowledges that any violation of the provisions of Section 8.1 or 8.3 would cause irreparable harm and injury to Manager and
its Affiliates and that money damages would not be an adequate remedy for any such violation and, accordingly, Manager and its Affiliates
shall be entitled to injunctive or other equitable relief to prevent any actual or threatened breach of any of such provisions and to enforce such
provisions specifically, without the necessity of posting a bond or other security or of proving actual damages, by an appropriate court in the
appropriate jurisdiction.
Manager acknowledges that any violation of the provisions of Section 8.2 or 8.3 would cause irreparable harm and injury to Owner and
its Affiliates and that money damages would not be an adequate remedy for any such violation and, accordingly, Owner and its Affiliates shall
be entitled to injunctive or other equitable relief to prevent any actual or threatened breach of any of such provisions and to enforce such
provisions specifically, without the necessity of posting a bond or other security or of proving actual damages, by an appropriate court in the
appropriate jurisdiction.
The remedies provided in this Section 8.4 are cumulative and shall not exclude any other remedies to which a Party or its Affiliates may
be entitled under this Agreement or Applicable Law, and the exercise of a remedy under this Section 8.4 shall not be deemed an election
excluding any other remedy or any waiver thereof.
8.5
Survival .
This Article VIII shall survive the expiration or termination of this Agreement.
ARTICLE IX.
MARKETING
9.1
Marketing .
9.1.1 Managed Facilities Marketing Program . In addition to the Managed Facilities’ participation in any marketing program
included as part of the Centralized Services, Manager shall develop and implement a specific marketing program for the Managed Facilities,
which shall provide for the planning, publicity, internal communications, organizing and budgeting activities to be undertaken, and which may
include the following: (a) production, distribution and placement of promotional materials relating to the Managed Facilities, including
materials for the promotion of employee relations; (b) development and implementation of promotional offers or programs that benefit the
Managed Facilities and are undertaken by Manager or by a group of hotels and casinos that includes the Managed Facilities; (c) attendance of
Managed Facilities Personnel at conferences, conventions, meetings, seminars and travel congresses; (d) selection of and guidance to
advertising agency and public relations personnel; and (e) preparation and dissemination of news releases for national and international trade
and, consumer publications. Owner shall not publish any advertising materials or otherwise
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implement any marketing, advertising or promotion program for the Managed Facilities on its own, without Manager’s prior written approval
(not to be unreasonably withheld, conditioned, or delayed).
9.1.2 Development and Implementation . The development and implementation of the Managed Facilities’ specific marketing
program shall be effected substantially by Managed Facilities Personnel, with periodic assistance from Corporate Personnel with marketing and
sales expertise. Any such assistance provided by any Corporate Personnel shall be at no cost to Owner or the Managed Facilities for such
Corporate Personnel’s time, but the reasonable Out-of-Pocket Expenses incurred by Manager or its Affiliates in connection with such
assistance shall be Operating Expenses. Subject to the provisions of Section 5.1 relating to the Annual Budget, the Managed Facilities’ specific
marketing program shall comply with the sales, advertising and public relations policies and guidelines and corporate identity requirements
established by Manager, for Other Managed Resorts, as such policies, guidelines and requirements may be modified from time to time. Subject
to the provisions of Section 5.1 relating to the Annual Budget, Manager shall have the right to engage a Person on behalf of Owner to perform
such marketing and public relations activities for the Managed Facilities pursuant to this Article IX .
9.1.3 Content . Manager shall have the right to obtain, or at the reasonable request of Manager, Owner shall obtain and provide to
Manager, updated photographs, descriptive content and other media, such as video and floor plans, of the Managed Facilities (collectively, “
Content ”) from time to time in accordance with Manager’s specifications for Content. All ownership or license rights to Content, whether
procured by Manager or Owner, shall vest in Owner. If Owner obtains Content, Owner shall ensure that any such Content includes usage rights
for the benefit of Manager in connection with the operation of the Managed Facilities during the Term.
ARTICLE X.
BOOKS AND RECORDS
10.1
Maintenance of Books and Records .
Manager shall keep and maintain, on an Operating Year basis in accordance with GAAP, accurate books, records and accounts reflecting
all of the financial affairs, and all items of income and expense, in connection with the Operation of the Managed Facilities and otherwise in a
manner consistent with the then existing policies and standards applicable to Other Managed Resorts and otherwise reasonably acceptable to
Owner. All books of account and other financial records of the Managed Facilities shall be available to Owner, any Lender and their respective
agents, representatives and designees (subject to Section 8.1 ) at all reasonable times for examination, audit, inspection and copying; provided ,
that Owner shall bear all Out-Of-Pocket Expenses incurred by Manager or its Affiliates in connection with any such examination, audit,
inspection or copying. All of the financial books and records of the Managed Facilities, including books of account and front office records (but
excluding any Proprietary Rights) shall be the property of Owner. Notwithstanding anything to the contrary contained in this Agreement,
Owner shall have the right (not more than once per calendar year), at its expense, to or to cause its agents or auditors to carry out an
independent audit or inspection of the books of
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accounts and records and/or any other information maintained by the Manager with respect to the Managed Facilities (including, without
limitation, all information, records and materials with respect to contracts and engagements entered into by Manager with Affiliates and/or with
respect to purchasing programs, which information shall include terms of all cost allocations between the Managed Facilities on the one hand
and other hotel properties and casinos owned and/or managed by Manager and its Affiliates and subject to the same agreements and/or
purchasing programs on the other hand, and copies of all agreements and fee schedules with respect to such properties and such other
information as is reasonably necessary to make the determination set forth in clause (ii) below). In the event of any such audit or inspection,
Manager shall promptly respond to any queries raised by any such auditors in relation to that audit and shall promptly make available to any
such auditors any and all materials relevant to the management of the applicable Managed Facilities. Notwithstanding the foregoing, if it is
determined by any such audit or inspection that (i) the actual amount of Gross Operating Revenues or Operating Expenses for any Operating
Year differs by more than five percent (5%) from the amount of Gross Operating Revenues or Operating Expenses for such Operating Year
recorded in the books and records maintained by Manager, or (ii) Manager has materially breached any of its obligations with respect to the
requirements in this Agreement that all Purchasing Programs and all contracts with (or services provided by) Affiliates of Manager shall be
Non-Discriminatory to the Managed Facilities and on arms-length terms, then, in either case, Manager shall be responsible for the entire
out-of-pocket cost of such audit or inspection and immediately upon demand shall reimburse Owner therefor.
10.2
Monthly Financial Reports .
Manager shall cause to be prepared and delivered to Owner reasonably detailed unaudited monthly operating reports (the “ Monthly
Reports ”) that reflect the operational results of the Managed Facilities for each month of each Operating Year. Manager shall deliver each
Monthly Report to Owner on or before the twenty fifth (25th) day of the month following the month (or partial month) to which such Monthly
Report relates. At a minimum, the Monthly Reports shall include: (a) a balance sheet including current and prior month and prior year-end
comparisons (to the extent applicable) and differences in reasonable detail; (b) an income and expense statement for such month and for the
elapsed portion of the current Operating Year through the end of such month (with comparison to previous year); (c) a statement of cash flows
for such month and for the elapsed portion of the Current Operating Year through the end of such month (with comparison to previous year) in
reasonable detail to allow Owner to identify and ascertain sources and uses thereof; (d) a statement of account balances in each Bank Account;
(e) a computation of any installment of the Base Management Fees due following delivery of such Monthly Report; and (f) such other reports
or information otherwise specified in this Agreement to be provided to Owner on a monthly basis or as Owner may reasonably specify from
time to time. Notwithstanding anything to the contrary contained in this Section 10.2 , Manager shall not be obligated to deliver a Monthly
Report for the last month of each calendar quarter. In lieu of such delivery, Manager shall deliver the Quarterly Report for the applicable
calendar quarter and such Quarterly Report shall include the information that would have been included in the Monthly Report for such month
pursuant to this Section 10.2 .
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10.3
Quarterly Financial Reports .
Manager shall cause to be prepared and delivered to Owner reasonably detailed unaudited quarterly operating reports (the “ Quarterly
Reports ”) and shall deliver each Quarterly Report to Owner on or before the twenty fifth (25th) day of the month following the end of the
fiscal quarter (or partial fiscal quarter) to which such Quarterly Report relates. With respect to the Quarterly Reports, Manager’s Designated
Financial Officer shall certify that it has reviewed such Quarterly Reports and, to such Designated Financial Officer’s Knowledge, such
Designated Financial Officer has no reason to believe that such Quarterly Reports do not fairly present, in all material respects, the financial
condition, results of operations, cash flows and other financial and operating results, as applicable, of the Managed Facilities for the periods
presented in the report (except for the fact that there are no footnotes to such Quarterly Reports and subject to year end adjustments in all
respects). At a minimum, the Quarterly Reports shall include: (a) a narrative report on Owner’s actual performance to the Operating Plan and
Capital Budget; (b) a computation of any installment of the Incentive Management Fees due following delivery of such Quarterly Report;
(c) an itemization of expenses other than Management Fees incurred to Manager or any Affiliate of Manager during such quarter, including
Centralized Services Charges and Reimbursable Expenses; (d) a schedule comparing the financial performance of the Managed Facilities to the
financial covenants under Financing Documents to the extent that the applicable Financing relates the Managed Facilities only; (e) a report on
the project status and actual to budget expenditures for Routine Capital Improvements and Building Capital Improvements projects underway;
(f) for the last month of such calendar quarter, the information that would have been included in the Monthly Report for such month pursuant to
Section 10.2 ; and (g) such other reports or information otherwise specified in this Agreement to be provided to Owner on a quarterly basis or
as Owner may reasonably specify from time to time.
10.4
Annual Financial Reports .
Manager shall cause to be prepared and delivered to Owner no later than fifty-five (55) days after the end of each Operating Year
(beginning with February 25 of the second (2nd) Operating Year with respect to the completion of the first (1st) Operating Year), year end
financial statements for the preceding Operating Year (including a balance sheet, a statement of earnings and retained earnings and a statement
of cash flows), which statements shall be unaudited and shall be prepared in accordance with GAAP. With respect to such statements,
Manager’s Designated Financial Officer shall certify that it has reviewed such statements and, to such Designated Financial Officer’s
knowledge, such Designated Financial Officer has no reason to believe that such statements do not fairly present, in all material respects, the
financial condition, results of operations, cash flows and other financial and operating results, as applicable, of the Managed Facilities for the
periods presented in the statements (except for the fact that there are no footnotes to such statements and subject to all adjustments made in the
Certified Financial Statements). Owner shall engage the Designated Accountant to provide audited financial statements for the Operating Year
then ended (the “ Certified Financial Statements ”). Owner and Manager shall cooperate in all respects with the Designated Accountant in the
preparation of such financial statements, including the delivery by Manager of any financial information generated by Manager pursuant to the
terms of this Agreement and reasonably required by the Designated Accountant to prepare such audited financial statements. The Certified
Financial Statements prepared by the Designated Accountant pursuant to this
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Section 10.4 and all information therein shall be binding and conclusive on the Parties unless, within sixty (60) days after the delivery of such
statements to the Parties, either Party shall deliver written notice to the other Party of its objection thereto setting forth in reasonable detail the
nature of such objection. If the Parties are unable thereafter to resolve any disputes with respect to the matters set forth in the Certified
Financial Statements within sixty (60) days after delivery by either Party of such notice, either Party shall have the right to cause such dispute
to be resolved in accordance with Article XVII .
10.5
Other Reports and Schedules .
In addition to the Operating Reports and Certified Financial Statement required to be delivered to Owner hereunder, Manager shall cause
to be prepared and delivered to Owner any additional reports and schedules as Owner may reasonably request from time to time, and copies of
such leases, contracts and documents as Owner may reasonably request from time to time.
ARTICLE XI.
ASSIGNMENTS
11.1
Assignment by Owner .
11.1.1 Owner Assignments Restricted . Except as otherwise permitted in Article XIII or this Article XI , Owner may not cause,
permit or suffer an Assignment of Owner’s right, title and interest in and to this Agreement without the prior consent of Manager which
consent shall not be unreasonably withheld, conditioned or delayed. Any Change of Control of Owner shall be deemed an Assignment for
purposes of this Article XI . Any Assignment by Owner in violation of the terms of this Article XI shall be void and of no force or effect as
between the Parties and shall constitute an Event of Default by Owner governed by the terms of Article XVI .
11.1.2 Assignment by Owner without Manager’s Consent .
11.1.2.1 Notwithstanding the provisions of Section 11.1.1 , Owner shall have the right, without Manager’s consent, to effect
an Assignment of this Agreement in connection with a Managed Facilities Transfer; provided , that, to the extent applicable, the conditions
described in Section 11.1.3 are satisfied in connection with such Assignment.
11.1.2.2 Notwithstanding the provisions of Section 11.1.1 , Owner shall have the right, without Manager’s consent, to effect
an Assignment of this Agreement or a Managed Facilities Transfer in connection with any Financing provided , that, to the extent applicable,
the conditions described in Section 11.1.3 are satisfied in connection with such Assignment.
11.1.3 Conditions to Assignment . Notwithstanding anything to the contrary in Section 11.1.2 , all Assignments by Owner (whether
or not Manager’s consent is required pursuant to this Section 11.1 ) shall be subject to the following conditions:
11.1.3.1 Owner shall provide written notice to Manager at least thirty (30) days prior to the proposed Assignment, specifying
in reasonable detail the nature of the Assignment and such additional information as Manager may reasonably request in order to determine
whether the proposed transferee is a Manager Prohibited Person;
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11.1.3.2 The assignee (other than a Lender in connection with a Financing, except to the extent of any foreclosure or
realization) shall assume the obligations of Owner under this Agreement and shall agree in writing to be bound by this Agreement from and
after the date of the Assignment, and Owner shall provide Manager with a copy of such agreement, together with copies of all other documents
effecting such Assignment, within ten (10) days following the date of the Assignment; and
11.1.3.3 The assignee (in the case of a direct assignment) or controlling parties (in the case of a Change of Control), and in
each case its or their direct or indirect equity owners, is not a Manager Prohibited Person.
11.2
Assignment by Manager .
11.2.1 Manager Assignments Restricted . Except as otherwise permitted in this Article XI , Manager may not cause, permit or suffer
an Assignment, in whole or in part, of Manager’s right, title and interest in and to this Agreement without the prior consent of Owner. Any
Change of Control of Manager shall be deemed an Assignment for purposes of this Article XI . Any Assignment by Manager in violation of the
terms of this Article XI shall be void and of no force or effect as between the Parties and shall constitute an Event of Default by Manager
governed by the terms of Article XVI .
11.2.2 Assignment by Manager without Owner’s Consent . Notwithstanding the provisions of Section 11.1.1 , Manager shall have
the right, without Owner’s consent, to assign its right, title and interest in and to this Agreement (a) to any Affiliate of Manager that is directly
or indirectly wholly owned by CEOC, or (b) in connection with (i) a Change of Control of CEOC or (ii) a Substantial Sale; provided , that
neither the proposed transferee (in the case of a direct transfer), or controlling parties (in the case of a Change of Control or CEOC or
Substantial Sale), nor in either case any of its direct or indirect equity owners, is an Owner Prohibited Person and provided further that
Manager shall (a) provide written notice to Owner at least thirty (30) days prior to the proposed Assignment, specifying in reasonable detail the
nature of the Assignment, and such additional information as Owner may reasonably request in order to determine whether the proposed
transferee is an Owner Prohibited Person, and (b) the assignee shall assume the obligations of Manager under this Agreement and shall agree in
writing to be bound by this Agreement from and after the date of the Assignment, and Manager shall provide Owner with a copy of such
agreement, together with copies of all other documents effecting such Assignment, within ten (10) days following the date of this Assignment.
11.2.3 Assignment at the Request of Owner . Subject to the provisions of this Section 11.2.3 , Manager shall, upon the written
request of Owner, assign all of its rights, benefits, obligations, duties, responsibilities and liabilities under this Agreement to Services Co (or a
Controlled subsidiary of Services Co) as soon as reasonably practicable following the formation and capitalization of Services Co (the “
Services Co Assignment ”). Notwithstanding the foregoing, Owner shall not be permitted to request the Services Co Assignment unless and
until (a) all Gaming Approvals have been received with respect to such Services Co Assignment, and (b) any required Approvals from any
Governmental Authorities have been received with
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respect to such Services Co Assignment. Manager acknowledges that Owner may not request the Services Co Assignment until Owner is
satisfied, in its sole discretion that Services Co (or a Controlled subsidiary of Services Co) has obtained all items and rights needed to Operate
the Managed Facilities under the Brand (including to provide the Centralized Services to the Managed Facilities) all in accordance with this
Agreement, which items and rights shall include, without limitation: (i) all intellectual property rights required to grant, maintain and support
the licenses and assignments set forth under this Agreement (including under Article VII ), (ii) all Corporate Personnel and other personnel
required to Operate the Managed Facilities, and (iii) all infrastructure, processes, procedures, contracts, permits, licenses, consents, approvals,
assets and other items and rights required to Operate the Managed Facilities. Each of Owner and Manager agrees that upon the effective date of
the Services Co Assignment: (A) The Quad Manager, LLC shall assign all of its rights, benefits, obligations, duties, responsibilities and
liabilities under this Agreement to Services Co (or a Controlled subsidiary of Services Co) and Services Co shall automatically and without any
further action by any Person become the “Manager” under this Agreement, provided , that The Quad Manager, LLC (the “ Transferring
Manager ”) shall retain all rights in respect of pre-assignment periods, rights under Section 19.2.7, the right to receive the Management Fees
during the Term (and any interest thereon or taxes with respect thereto), any Termination Fee and the right to claim damages in respect of any
Owner breach of this Agreement that directly results in a reduced or terminated Management Fees (the “ Retained Rights ”); (B) Services Co
(or a Controlled subsidiary of Services Co) shall expressly assume all of the Transferring Manager’s rights (other than the Retained Rights),
benefits, obligations, duties, responsibilities and liabilities under this Agreement pursuant to an assignment and assumption agreement mutually
agreeable to Owner and the Transferring Manager and the Transferring Manager shall be released from its obligations under this Agreement;
(C) Services Co (or a Controlled subsidiary of Services Co) shall be entitled to receive all Centralized Services Charges and all Reimbursable
Expenses incurred under this Agreement from and after the Services Co Assignment; (D) the Transferring Manager’s rights with respect to the
Bank Accounts shall terminate and any right to withdraw the Management Fees from the Management Account will be undertaken by Services
Co as successor manager; and (E) with respect to each provision in this Agreement that by its terms survives any expiration or termination of
this Agreement, such provisions shall survive the Services Co Assignment with respect to the Transferring Manager, CEOC and their
respective Affiliates. This Section 11.2 shall survive the Services Co Assignment and any expiration or termination of this Agreement
thereafter. Owner and Transferring Manager agree, between them, to amend or amend and restate this Agreement following the Services Co
Assignment as needed solely to implement the provisions set forth in this Section 11.2.2 and Transferring Manager and CLC shall do and cause
to be done all such acts, matters and things and shall execute all such documents and instruments required to effectuate the Services Co
Assignment in accordance with this Agreement. Notwithstanding anything contained in this Agreement to the contrary, (x) the Retained Rights
may be terminated immediately by Owner if there is any Event of Default of Services Co hereunder following the effective date of the Services
Co Assignment that is caused by or results from a breach by CEOC (or any Affiliate thereof that is a member of Services Co) of any of its
obligations under the limited liability company agreement of Services Co, in which case Owner shall not be required to terminate this
Agreement with respect to Services Co or Transferring Manager, and (y) if as a result of any Event of Default of Services Co hereunder
following the effective date of the Services Co Assignment, Owner becomes entitled (whether pursuant to the terms hereof, at law or in equity)
to any reduction in and/or offset of Management Fees or to otherwise recover any
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losses, costs, damages and/or expenses from Services Co, Owner shall be entitled to deduct (without duplication of any other recovery made by
Owner) any and all such amounts from future installments of Management Fees otherwise due and payable to the Transferring Manager as part
of the Retained Rights during the Term until Owner has recovered the entire amount of all such losses, costs, damages and/or expenses
(provided, however, that the Transferring Manager shall not have any liability for any such amounts in excess of the value of the remaining
Management Fees payable hereunder during the Term at the time Owner becomes entitled to any such recovery). From and after the Services
Co Assignment, Owner shall not permit any amendment to this Agreement that would reasonably be expected to reduce or otherwise adversely
impact the Retained Rights.
11.3
Acknowledgement of Assignment.
Notwithstanding anything to the contrary contained herein, with respect to any Assignment under this Article XI , the transferring Party
shall, within thirty (30) days following the request of the non-assigning Party, provide a written acknowledgement to the non-assigning Party
confirming that such Assignment complied with the provisions of this Article XI and was permitted hereunder and such acknowledgment shall
be accompanied by the provision of such information as may reasonably be necessary to demonstrate that the Assignment complies with the
provisions of this Article XI .
11.4
Approvals.
To the extent necessary, all Assignments will be subject to the requirements of the Gaming Authorities, which may include prior approval
of such Assignments.
ARTICLE XII.
INSURANCE, BONDING AND INDEMNIFICATION
12.1
Owner Insurance and Bonding Requirements .
12.1.1 Insurance Policies and Bonding Requirements .
12.1.1.1 Manager, at Owner’s expense (except to the extent such expenses are expressly classified as Operating Expenses),
shall procure and maintain all insurance policies required under the Insurance Requirements set forth as Exhibit E (except to the extent Exhibit
E attached hereto or this Agreement expressly provides that Manager shall procure and obtain specific insurance policies) and in accordance
with the Annual Budget to protect the Owner and Manager against loss or damage arising in connection with the ownership and operation of
the Managed Facilities. The insurance policies shall be effective upon the Commencement Date. Manager may modify the Insurance
Requirements on at least sixty (60) days’ notice to respond to insurance market trends, customer demands, economic conditions, technological
advances and other factors affecting the gaming industry and its risks, as they may change from time to time; provided , that the Insurance
Requirements are (a) consistent with the Other Managed Resorts that are similarly situated to the Managed Facilities or (b) only applicable to
the Managed Facilities and a material policy, and in either case they shall be subject, at Owner’s election, to review by Owner’s independent
insurance consultant and, in the case of clause (b), approval by such consultant (not to be unreasonably withheld). Manager, at its sole
discretion, shall hire a qualified insurance broker to place such insurance policies required under Exhibit E attached hereto.
12.1.1.2 Manager, at Owner’s expense, shall have the power and authority to procure and deliver to the applicable Gaming
Authorities all bonding instruments required by the State where the Managed Facilities are located.
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12.1.2 Insurance Program . Manager shall make the insurance programs provided to the Other Managed Resorts available to Owner
with respect to the Managed Facilities (the “ Insurance Program ”) on substantially the same basis and for the same premium allocation
methodology as for the Other Managed Resorts, to the extent permitted by the terms of such Insurance Program. Owner, at Manager’s sole
direction, may obtain any insurance coverage required under the Insurance Requirements through the Insurance Program to the extent such
coverage is available under the Insurance Program. Owner acknowledges that (a) the premiums charged under the Insurance Program include
certain third-party pass-through costs, such as brokers’ commissions and insurance services performed by third parties, and (b) some or all of
the insurance in the Insurance Program may be provided by an Affiliate of Manager, and such Affiliate will have a profit or loss for its
insurance business from time to time, depending on the amount of premiums received, and claims paid, by such Affiliate during the relevant
period. Manager shall cause any and all costs, expenses or savings resulting from the foregoing clauses (a) and (b) to be passed through,
applied and realized amongst all participants in any Insurance Program on a Non-Discriminatory basis.
12.1.3 Evidence of Insurance . Owner (for insurance policies obtained by Owner through third-party insurers) and Manager (for
insurance policies obtained by Manager through the Insurance Program or other vendors) shall provide the other Party with certificates or other
reasonably satisfactory insurance evidence confirming that the insurance policies comply with the Insurance Requirements. In addition, upon a
Party’s request, the other Party promptly shall provide to the requesting Party a schedule of insurance obtained by such Party, listing the
insurance policy numbers, the names of the insurers, the names of the Persons insured, the amounts of coverage, the expiration dates and the
risks covered thereunder.
12.1.4 Payment of Premiums . For all insurance policies contemplated by this Section 12.1 , Manager shall have the right to pay
premiums using funds from the Operating Account. For the avoidance of doubt, any additional insurance policies obtained by Owner or
Manager that are not contemplated by this Section 12.1 or otherwise approved by the Parties, shall not be funded from the Operating Account.
12.1.5 Review of Insurance . All insurance policy limits provided under this Article XII shall be reviewed by the Parties every three
(3) years following the commencement of the Term, or sooner if reasonably requested by Owner or Manager, to determine the suitability of
such insurance limits in view of exposures reasonably anticipated over the ensuing three (3) years. Owner and Manager hereby acknowledge
that changing practices in the insurance industry and changes in the local law and custom may necessitate changes to types or amounts of
coverage during the Term. Each Party agrees to comply with any other insurance requirements the other Party reasonably requests in order to
protect the Managed Facilities and the respective interests of Owner and Manager. Any dispute regarding such other insurance requirements
shall be referred to the Expert for Expert Resolution pursuant to Article XVII .
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12.1.6 Investigation of Claims and Reports . Manager shall promptly investigate and, as soon as reasonably practicable, make a full
written report to Owner regarding all material accidents or claims for material damage relating to the ownership, operation and maintenance of
the Managed Facilities and the estimated liability or cost of repair thereof, and shall prepare, for the approval of Owner, any and all reports
required by any insurance carrier in connection therewith.
12.1.7 Reliance on Owner’s Advisors . Owner acknowledges that neither Manager nor any insurance broker that Manager or its
Affiliates may retain makes any representation, warranty or guaranty whatsoever regarding: (a) the advisability or sufficiency of the insurance
required or obtained under this Agreement; (b) whether the insurance made available under the Insurance Program maintained by Manager or
its Affiliates is sufficient to protect Owner, the Managed Facilities and its Operations against all liability, damage, loss, cost or expense that
might be incurred; or (c) any other insurance that Owner should consider for the protection of Owner, the Managed Facilities and its
Operations, and Owner agrees to rely exclusively on its own insurance advisors with respect to all insurance matters.
12.2
Waiver of Liability .
AS LONG AS A PARTY AND ANY AFFILIATES REQUESTED BY SUCH PARTY ARE A NAMED INSURED OR ADDITIONAL
INSURED UNDER THE OTHER PARTY’S INSURANCE POLICIES, OR THE POLICIES OTHERWISE PERMIT IF SUCH PARTY OR
ITS AFFILIATES ARE NOT SO NAMED, SUCH PARTY HEREBY RELEASES THE OTHER PARTY, AND ITS AFFILIATES, AND ITS
AND THEIR TRUSTEES, BENEFICIARIES, DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS, AND THE SUCCESSORS AND
ASSIGNS OF EACH OF THE FOREGOING, FROM ANY AND ALL LIABILITY FOR MONETARY RELIEF, DAMAGE, LOSS, COST
OR EXPENSE INCURRED BY THE RELEASING PARTY, WHETHER OR NOT DUE TO THE NEGLIGENT OR OTHER ACTS OR
OMISSIONS OF THE PERSONS SO RELEASED TO THE EXTENT SUCH LIABILITY, DAMAGE, LOSS, COST OR EXPENSE IS
COVERED BY THE INSURANCE POLICIES OF THE RELEASING PARTY, BUT (OTHER THAN AS PROVIDED IN ARTICLE XIV )
ONLY TO THE EXTENT OF INSURANCE PROCEEDS RECEIVED.
12.3
Indemnification .
12.3.1 Indemnification by Owner . Subject to Sections 12.3.3 , 12.3.4 and 17.5.5 , Owner shall defend, indemnify and hold harmless
Manager and its Affiliates (and, following the Services Co Assignment until such time as neither Services Co nor any of its Affiliates is the
Manager hereunder, the Transferring Manager and its Affiliates), and each of their respective shareholders, members, partners, trustees,
beneficiaries, directors, officers, employees and agents, and the successors and assigns of each of the foregoing (collectively, the “ Manager
Indemnified Parties ”) for, from and against any and all Claims that are not within the scope of Manager’s indemnification pursuant to
Section 12.3.2 . Nothing in this Section 12.3 shall be deemed to limit Owner’s right to pursue its contractual damage remedies against
46
Manager with respect to amounts paid by Owner to one (1) or more other Persons in connection with any Claim caused by an Event of Default
by Manager (it being further understood that the provisions of this Section 12.3 shall not be deemed to modify the provisions of Section 16.1
regarding the establishment of an Event of Default by Manager, including any provisions of Section 16.1 regarding notice of cure of any
default that would, with the giving of notice or the passage of time, become an Event of Default). Manager shall promptly provide Owner with
written notice of any Claim that is reasonably likely to result in any indemnification by Owner.
12.3.2 Indemnification by Manager . Subject to Sections 12.3.3 , 12.3.4 and 17.5.5 , Manager shall defend, indemnify and hold
harmless Owner and its Affiliates, and each of their respective shareholders, members, partners, trustees, beneficiaries, directors officers,
employees and agents, and the successors and assigns of each of the foregoing (collectively, the “ Owner Indemnified Parties ”) for, from and
against any and all (a) Claims that any Owner Indemnified Party or Parties may incur, become responsible for or pay out to the extent caused
by Manager’s Gross Negligence or Willful Misconduct or as a result of an Event of Default by Manager (disregarding any applicable notice or
cure periods for such purpose) or the use of any intellectual property rights owned, licensed or otherwise provided by Manager or its Affiliates
(including, without limitation, the Service Mark Rights and the Proprietary Information and Systems) that infringes, misappropriates or
otherwise violates or is alleged to infringe, misappropriate or otherwise violate the intellectual property rights of any third party, and (b) any
uninsured loss incurred by Owner due to the commission by any Senior Executive Personnel or Corporate Personnel of any act of fraud,
embezzlement, misappropriation or similar act of malfeasance with respect to the Managed Facilities.
12.3.3 Insurance Coverage . Notwithstanding anything to the contrary in this Section 12.3 , the Parties shall look first to the
appropriate insurance coverages in effect pursuant to this Agreement prior to seeking indemnification under this Section 12.3 in the event any
claim or liability occurs as a result of injury to persons or damage to property, regardless of the cause of such claim or liability; provided , that
if the insurance carrier denies coverage or “reserves rights” as to coverage, then the Indemnified Parties shall have the right to seek
indemnification, without first looking to such insurance coverage. In addition, nothing contained in this Section 12.3 shall in any way affect the
releases set forth in Section 12.2 .
12.3.4 Indemnification Procedures . The Indemnifying Party shall have the right to assume the defense of any Claim with respect to
which the Indemnified Party is entitled to indemnification hereunder. If the Indemnifying Party assumes such defense, (a) such defense shall be
conducted by counsel selected by the Indemnifying Party and approved by the Indemnified Party, such approval not to be unreasonably
withheld or delayed ( provided , that the Indemnified Party’s approval shall not be required with respect to counsel designated by the
Indemnifying Party’s insurer); (b) so long as the Indemnifying Party is conducting such defense with reasonable diligence, the Indemnifying
Party shall have the right to control said defense and shall not be required to pay the fees or disbursements of any counsel engaged by the
Indemnified Party except if a material conflict of interest exists between the Indemnified Party and the Indemnifying Party with respect to such
Claim or defense; and (iii) the Indemnifying Party shall have the right, without the consent of the Indemnified Party, to settle such Claim, but
only if such settlement involves only the payment of money, the Indemnifying Party pays all amounts due in connection with or by reason of
such settlement and, as part thereof, the Indemnified Party
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is unconditionally released from all liability in respect of such Claim. The Indemnified Party shall have the right to participate in the defense of
such Claim being defended by the Indemnifying Party at the expense of the Indemnified Party, but the Indemnifying Party shall have the right
to control such defense (other than in the event of a material conflict of interest between the parties with respect to such Claim or defense). In
no event shall (A) the Indemnified Party settle any Claim without the consent of the Indemnifying Party so long as the Indemnifying Party is
conducting the defense thereof in accordance with this Agreement or (B) if a Claim is covered by the Indemnifying Party’s insurance,
knowingly take or omit to take any action that would cause the insurer not to defend such Claim or to disclaim liability in respect thereof.
12.3.5 Survival . This Section 12.3 shall survive any expiration or termination of this Agreement.
ARTICLE XIII.
FINANCING; GROUND LEASE
13.1
Mortgages; Collateral Assignments; Non-Disturbance .
Subject to Article XI , Owner shall have the right to grant a Mortgage or Security Interest to a Lender in connection with any Financing,
and to assign to any Lender as collateral security for any Financing, all of Owner’s right, title and interest in and to this Agreement. Promptly
following execution of any such Financing Documents, Owner shall provide Manager a true and complete copy of all such Financing
Documents. Owner shall cause any Lender under a Financing Document and any lessor under the Ground Lease to enter into a
Non-Disturbance Agreement in a form acceptable to Manager, in its reasonable discretion, which explicitly provides that such Lender or lessor
may not terminate Manager under this Agreement, under any circumstance except to the extent Manager may be terminated in accordance with
the terms of this Agreement, irrespective of whether the Financing or Ground Lease is in default or has been foreclosed upon or the Lender or
lessor has acquired all or a portion of the Managed Facilities or Premises by deed-in-lieu of foreclosure.
Any foreclosure or realization on a Financing Document or the Ground Lease or that results in a transfer of all or a substantial portion of
the Managed Facilities, the Premises, the Ground Lease, this Agreement or Manager’s rights hereunder other than for security purposes shall be
subject to the transfer provisions set forth under Article XI of this Agreement.
13.2
Lender’s Right of Access .
Upon reasonable advance notice from a Lender (which notice may be given orally in connection with an emergency or upon the
occurrence of an event of default under any Financing Documents), Manager shall permit and cooperate with such Lender and its agents and
representatives to enter any part of the Managed Facilities, except for those parts of the Managed Facilities as to which access is restricted by
Applicable Law, at any reasonable time for the purposes of examining or inspecting the Managed Facilities, or examining or copying the books
and records of the Managed Facilities; provided , that: (a) any expenses incurred in connection with such activities shall be Operating Expenses
of the Managed Facilities; and (b) Owner shall use commercially reasonable efforts (including the inclusion of an appropriate confidentiality
provision in the Financing Documents) to cause such Lender to agree to treat as confidential any
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information such Lender obtains from examining the books and records of the Managed Facilities provided by Owner to Manager, including
the Annual Budget. Manager acknowledges that a Lender may disclose such information to the same extent and subject to the same restrictions
as are applicable to the Owner with respect to Manager Confidential Information under Article VIII of this Agreement (including to any actual
or potential purchasers of the relevant Mortgage or any interest therein).
13.3
Disclosure of Mortgages .
Owner represents and warrants that as of the date of this Agreement, except as disclosed to Manager in writing prior to the
Commencement Date, there is no Mortgage encumbering the Managed Facilities, Premises or the Ground Lease or any portion thereof or
interest therein. Owner shall provide to Manager a true and complete copy of any new proposed Mortgage documents for Manager’s review no
less than thirty (30) days before the execution of such new Mortgage documents. Promptly following execution of such new Mortgage
documents, Owner shall provide Manager a true and complete copy of all such new Mortgage documents.
13.4
Estoppel Certificates .
Upon written request at any time during the Term, Manager shall issue to Owner or any Lender, within no less than thirty (30) days after
Manager’s receipt of such request from Owner, an estoppel certificate, comfort letter or other documents as may be reasonably requested by a
Lender: (a) certifying that this Agreement has not been modified and is in full force and effect (or, if there have been modifications, specifying
the modifications and that the same is in full force and effect as modified); and (b) stating whether, to the knowledge of the signatory of such
certificate, any default by Owner exists, and if so, specifying each default of which the signatory has knowledge. Similarly, Manager shall be
entitled to (and Owner shall provide upon written request) an estoppel certificate from Owner, any Lender, or any ground lessor (with respect
to any ground lease), upon the same notice and terms for an estoppel certificate issued by Manager.
13.5
Amendments to Agreement .
In the event any Lender or proposed Lender, directly or indirectly as a condition of closing the proposed Financing, requires any
commercially reasonable modification of any terms or provisions of this Agreement, the Parties shall comply with such request; provided , that
in no event shall Manager be required to agree to any requested modification or amendment to this Agreement that would increase Manager’s
obligations under this Agreement or diminish the fees or reimbursements becoming due to Manager.
13.6
Owner’s Ground Lease Obligations .
Without limiting Manager’s rights set forth in this Agreement, Owner shall (a) timely exercise any and all renewal or other term
extension rights granted to Owner under the Ground Lease and not terminate the Ground Lease, (b) comply in all respects with its base rent
payments, participation rent payments and all other payment obligations set forth in the Ground Lease, (c) otherwise comply in all material
respects with the terms and conditions of the Ground Lease and (d) not suffer an Assignment of Owner’s interest in the Ground Lease except
pursuant to a Managed Facilities Transfer permitted by this Agreement and which includes the Managed Facilities.
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ARTICLE XIV.
BUSINESS INTERRUPTION
14.1
Business Interruption.
At all times during the Term, Manager shall assist Owner in procuring, at Owner’s Expense, and Owner shall maintain Business
Interruption Insurance for the Managed Facilities in accordance with the requirements set forth in Exhibit E attached hereto. If any event,
including a Force Majeure Event, occurs that results in an interruption in the Operation of the Managed Facilities (a “ Business Interruption
Event ”), Manager shall use commercially reasonable efforts to reduce Operating Expenses, Centralized Services Charges and Reimbursable
Expenses to levels commensurate with the levels of reduced revenues and business activity. All Centralized Service Charges and Reimbursable
Expenses actually incurred during the period of the Business Interruption Event shall continue to be payable in accordance with the provisions
this Agreement, regardless of whether there are sufficient Business Interruption Insurance proceeds to cover such amounts. Owner shall also be
obligated to pay to Manager, in accordance with this Agreement, Management Fees based on the prior year’s actual Net Operating Revenues
and EBITDA (as measured as of the date immediately prior to the commencement of the Business Interruption Event) during the period of the
Business Interruption Event; provided , that during the first Operating Year, EBITDA shall be based on the projected EBITDA included in the
Annual Budget(s) for the twelve (12) months from and after the Opening Date.
14.2
Proceeds of Business Interruption Insurance .
The net proceeds of the Business Interruption Insurance maintained in accordance with Section 14.1 (after the application of any
deductible) shall be deposited in the Operating Account and used by Manager in the same manner as funds generated from the Operation of the
Managed Facilities are used by Manager in accordance with this Agreement, including the payment of Operating Expenses, Management Fees,
the Centralized Services Charges and Managed Facilities Personnel Costs and all other Operating Expenses as provided in Section 14.1 .
ARTICLE XV.
CASUALTY OR CONDEMNATION
15.1
Casualty .
15.1.1 Notices . If the Managed Facilities or any portion thereof is damaged by a Casualty, Manager shall immediately notify
Owner thereof.
15.1.2 Casualty . If the Managed Facilities are damaged or destroyed by a Casualty and, thereafter, the business operations at the
Managed Facilities substantially cease, then a Force Majeure Event shall be deemed to exist and the Term of this Agreement shall be extended
for each day that such Force Majeure Event continues. If Owner elects to commence and complete the Restoration of the Managed Facilities
following such Casualty, the Term of
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this Agreement shall recommence upon the completion of such Restoration. If Owner chooses not to complete such Restoration and sells the
Managed Facilities (or any material portion of the Managed Facilities or the parking structure) following such Casualty, then Manager, upon
written notice to Owner, may elect to terminate this Agreement in accordance with Section 16.2.4 and Owner, upon written notice to Manager,
may elect to terminate this Agreement in accordance with Section 16.3.4 .
15.2
Condemnation .
15.2.1 Notices . If either Party receives notice of any actual, pending or contemplated Condemnation (or other action in lieu thereof)
of all or a portion of the Managed Facilities, such party shall promptly notify the other Party thereof.
15.2.2 Total Condemnation . If all or substantially all of the Managed Facilities is taken in a Condemnation, or if a portion of the
Managed Facilities shall be so taken such that Owner determines that the cost of Restoration is not justified in comparison to the anticipated
profitability of the Managed Facilities during the remaining Term or the remaining portion cannot be Operated as a casino, either Party, upon
written notice to the other Party, may terminate this Agreement. The proceeds of any condemnation award for the condemnation of all, or
substantially all, of the Managed Facilities shall be equitably allocated between Manager and Owner based on their respective interests in the
Managed Facilities; provided , however , that in no event shall Manager receive from the Condemnation award an amount in excess of the fee
that would be payable to Manager in accordance with Section 16.3.4 (assuming a fee would be payable thereunder) based on the date of
termination of this Agreement. The provisions of this Section 15.2.2 shall survive the termination or expiration of this Agreement.
15.2.3 Partial Condemnation . If all or a portion of the Managed Facilities shall be taken by Condemnation and this Agreement is
not terminated by either Party in accordance with Section 15.2.2 , or the Condemnation is only on a temporary basis, this Agreement shall not
terminate and Owner shall promptly commence and complete the Restoration, but only to a viable architectural unit and provided , that Owner
shall not be obligated to expend any funds in excess of the amount of Condemnation proceeds actually received by Owner. In the event of a
partial condemnation, the proceeds of any condemnation award shall be payable solely to Owner.
15.2.4 Exception . Notwithstanding anything in this Agreement to the contrary, Owner shall not be liable for any inconvenience or
annoyance to Manager or injury to Manager’s business relating in any way from such Condemnation or repair or restoration.
15.3 Coordination with Ground Lease and Financing Documents . To the extent this Agreement is in effect and the provisions of
Section 15.1 or 15.2 are in conflict with any of the provisions of the Ground Lease or the Financing Documents with respect to any casualty or
condemnation affecting the Managed Facilities, the Ground Lease or the Financing Documents, as applicable, shall control.
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ARTICLE XVI.
DEFAULTS AND TERMINATIONS
16.1
Events of Default .
16.1.1 Owner Events of Default . Each of the following actions and events may be deemed an “ Owner Event of Default ”:
16.1.1.1 A failure by Owner within the time periods specified in this Agreement to pay the amount due and payable under
this Agreement to Manager or its Affiliates for the Management Fees, Reimbursable Expenses or Centralized Services Charges and that is not
cured within sixty (60) days after notice to Owner specifying such failure; provided , that in the event sufficient funds are available in the
Operating Account to pay such amounts then due and Manager has the right to withdraw, transfer or apply such funds to the payment of such
amounts then due, then such failure of Owner to pay such amount shall not be an Event of Default;
16.1.1.2 Except as set forth in Section 16.1.1.1 , a failure by Owner to pay any amount of money to Manager when due and
payable under this Agreement that is not cured within sixty (60) days after notice to Owner;
16.1.1.3 A failure by Owner to materially perform or comply with any of the covenants, duties or obligations set forth in this
Agreement to be performed by Owner that is not cured within thirty (30) days following notice of such default from Manager to Owner;
provided , that if: (a) the default is not susceptible of cure within a thirty (30) day period; (b) the default cannot be cured solely by the payment
of a sum of money; and (c) the default would not expose Manager to an imminent and material risk of criminal liability or of material damage
to its business reputation, the thirty (30) day cure period shall be extended for such time as is necessary (but in no event longer than ninety
(90) days) to cure the default so long as Owner commences to cure the default within such thirty (30) day period and thereafter proceeds with
reasonable diligence to complete such cure; and
16.1.1.4(i) Owner’s failure generally to pay its debts as such debts become due; (ii) a general assignment by Owner for the
benefit of its creditors, or any similar arrangement with its creditors by Owner; (iii) the entry of a judgment of insolvency against Owner;
(iv) the filing by the Owner of a petition for relief under applicable bankruptcy, insolvency, or similar debtor relief laws; (v) the filing of a
petition for relief under applicable bankruptcy, insolvency or similar debtor relief laws by any Person against Owner which is consented to by
Owner; (vi) the appointment (or petition or application for appointment) of a receiver, custodian, trustee, conservator, or liquidator to oversee
all or any substantial part of Owner’s assets or the conduct of its business; (vii) any action by Owner for dissolution of its operations; or
(viii) any other similar proceedings in any relevant jurisdiction affecting Owner.
Notwithstanding the foregoing, there shall be no Owner Event of Default if the basis for any asserted Owner Event of Default is in the
process of being resolved pursuant to Sections 5.1.3 and 5.1.4 or Article XVII .
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16.1.2 Manager Events of Default . Each of the following actions and events may be deemed a “ Manager Event of Default ”:
16.1.2.1 A failure by Manager to pay any amount of money to Owner when due and payable under this Agreement that is
not cured within sixty (60) days after notice to Manager;
16.1.2.2 A failure by Manager or CLC to materially perform or comply with any of the covenants, duties or obligations set
forth in this Agreement to be performed by Manager or CLC, as applicable, that is not cured within thirty (30) days following notice of such
default from Owner to Manager; provided, that if: (a) the default is not susceptible of cure within a thirty (30) day period; (b) the default cannot
be cured solely by the payment of a sum of money; and (c) the default would not expose Owner to an imminent and material risk of criminal
liability or of material damage to its business reputation, the thirty (30) day cure period shall be extended for such time as is necessary (but in
no event longer than ninety (90) days) to cure the default so long as Manager commences to cure the default within such thirty (30) day period
and thereafter proceeds with reasonable diligence to complete such cure; and
16.1.2.3(i) Manager’s failure generally to pay its debts as such debts become due; (ii) a general assignment by Manager
and/or CLC for the benefit of its creditors, or any similar arrangement with its creditors by Manager and/or CLC; (iii) the entry of a judgment
of insolvency against Manager and/or CLC; (iv) the filing by the Manager and/or CLC of a petition for relief under applicable bankruptcy,
insolvency, or similar debtor relief laws; (v) the filing of a petition for relief under applicable bankruptcy, insolvency or similar debtor relief
laws by any Person against Manager and/or CLC which is consented to by Manager and/or CLC, as applicable; (vi) the appointment (or
petition or application for appointment) of a receiver, custodian, trustee, conservator, or liquidator to oversee all or any substantial part of
Manager’s assets or the conduct of its business; (vii) any action by Manager for dissolution of its operations; (viii) the appointment (or petition
or application for appointment) of a receiver, custodian, trustee, conservator, or liquidator to oversee all or any substantial part of CLC’s assets
or the conduct of its business; (ix) any action by CLC for dissolution of its operations; or (x) any other similar proceedings in any relevant
jurisdiction affecting Manager and/or CLC.
Notwithstanding the foregoing, there shall be no Manager Event of Default if the basis for any asserted Manager Event of Default is in
the process of being resolved pursuant to Sections 5.1.3 and 5.1.4 or Article XVII .
16.1.3 Remedies for Event of Default . Subject to the terms of this Agreement, if any Event of Default shall have occurred, the
non-defaulting Party shall have the right to terminate this Agreement in accordance with this Section 16.1 and to exercise against the defaulting
Party any other rights and remedies available to the non-defaulting Party under this Agreement (subject to the provisions hereof) at law or in
equity; provided , however , Owner shall not have the right to terminate this Agreement by reason of the occurrence of any Event of Default
and Manager shall not have the right to terminate this Agreement by reason of the occurrence of an Event of Default under this Section 16.1 ,
unless: (a) the Event of Default is material in amount or in its adverse effect on the Operation, ownership or possession of the Managed
Facilities; (b) the Event of Default constitutes intentional misconduct, reckless
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behavior or repeated Events of Default of a similar nature by the defaulting Party; or (c) the remedies under this Agreement are inadequate to
redress such Event of Default; provided , that the foregoing limitations and the cure period set forth in Section 16.1.2.1 shall not be applicable
in the event of any breach by the Manager under Section 5.4 of this Agreement involving at least One Million Dollars ($1,000,000) and a ten
(10) day cure period shall instead be applicable after written notice is received by Manager from Owner. For the avoidance of doubt, in the
event of any payment by Manager that is the subject of a breach notice as contemplated by the foregoing sentence, Manager may cure the
breach by placing the amount of the payment into a mutually agreeable escrow to be held for its benefit pending the outcome of dispute
resolution in accordance with this Agreement (which shall include, in the case of Management Fees, Expert Resolution pursuant to Article
XVII ). Notwithstanding the foregoing, Manager may not terminate this Agreement by reason of the occurrence of an Event of Default under
Section 16.1.1.1 or Section 16.1.1.2 unless the nonpayment giving rise to the Event of Default is greater than One Million Dollars
($1,000,000). If, following a Service Co Assignment, a Manager Event of Default occurs and Owner terminates this Agreement, Owner may
(in addition to the other rights and remedies available to Owner under this Agreement) terminate Transferring Manager’s right to receive the
Retained Rights.
16.1.4 Notice of Termination . If termination of this Agreement is a remedy elected by a non-defaulting Party pursuant to this
Section 16.1 , such remedy shall be exercised by the non-defaulting Party only by irrevocable and unconditional written notice of termination
to the defaulting Party, in which case this Agreement shall terminate on the date specified by the non-defaulting Party in the termination notice,
which date shall be no less than ninety (90) days nor later than twelve (12) months after the delivery of such notice. The right of termination
shall be in addition to, and not in lieu of, any other rights or remedies at law or in equity by reason of the occurrence of any such Event of
Default, it being understood and agreed that the exercise of the remedy of termination shall not constitute an election of remedies and shall be
without prejudice to any such other rights or remedies otherwise available to the non-defaulting Party.
16.2
Manager Termination Rights .
16.2.1 In Connection with Certain Assignments . Manager shall have the right to terminate this Agreement if there shall be (a) any
Assignment in violation of Article XI , (b) any Transfer of Ownership Interests to a Manager Prohibited Person or (c) any Change of Control,
such termination to be effective (i) twelve (12) months after delivery of such notice (unless Owner shall agree to an earlier termination date) or
(ii) if such Assignment or Transfer of Ownership Interests involves a Manager Prohibited Person, such earlier date as is required by any
Gaming Authority. Such right of termination shall be exercisable until the date which is of ninety (90) days after Manager receives written
notice of such an Assignment, Transfer of Ownership Interests or Change of Control from Owner.
16.2.2 In Connection with a Managed Facilities Transfer . Manager shall have the right to terminate this Agreement if there shall be
a Managed Facilities Transfer, such termination to be effective twelve (12) months after delivery of such notice (unless Owner shall agree to an
earlier termination date). Such right of termination shall be exercisable until the date which is of ninety (90) days after Manager receives
written notice of such Managed Facilities Transfer from Owner.
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16.2.3 Upon an Operating Deficiency . If, at any time during the Term, Manager determines in the exercise of its good faith
judgment that it cannot Operate the Managed Facilities in all material respects in accordance with the Operating Standard and Operating
Limitations as provided herein and that the proximate cause thereof is an Operating Deficiency Cause, Manager shall be entitled to provide
notice of such determination to Owner (an “ Operating Deficiency Notice ”), which Operating Deficiency Notice shall allege with reasonable
specificity the details of the non-compliance with the Operating Standard or Operating Limitations. For purposes of the preceding sentence, an
“ Operating Deficiency Cause ” shall mean any one or more of the following: (a) any failure by Owner to fund a Funds Request issued pursuant
to Section 5.5.2 ; or (b) any interference by Owner or its agents or representatives in any material respect with the Operation of the Managed
Facilities. Within fifteen (15) days after receipt of any Operating Deficiency Notice, Owner shall respond in detail to such allegation and, if the
matter is not resolved by the Parties within forty five (45) days after Owner’s response, the matter shall be referred to the Expert for Expert
Resolution in accordance with Article XVII . If the Expert determines that the Managed Facilities are not being Operated in accordance with
the Operating Standard or Operating Limitations in one or more material respects as provided herein and that the proximate cause of such
non-compliance is an Operating Deficiency Cause, then an “ Operating Limitations Deficiency ” shall be deemed to exist, and, unless Owner
shall within fifteen (15) days of the Expert’s determination fund the subject Funds Request or cease the actions that interfere with the Operation
of the Managed Facilities by Manager, then Manager shall have the right, in its discretion, exercisable within thirty (30) days of the Expert’s
determination by written notice to Owner, to terminate this Agreement, such termination to be effective twelve (12) months following delivery
of Manager’s notice of termination unless Owner shall agree to an earlier termination date. A Termination Fee shall not be payable by Owner
upon a termination by Manager pursuant to this Section 16.2.3 .
16.2.4 Upon a Casualty or Condemnation . Manager shall have the right to terminate this Agreement as provided in Section 15.1.2
due to a Casualty only if Owner elects not to undertake Restoration and sells any material portion of the remaining Managed Facilities and
interest in the Premises and/or the Ground Lease (the “ Remainder ”). Manager shall have the right to terminate this Agreement as provided in
Section 15.2.2 due to a Condemnation and Manager shall share in the condemnation proceeds as set forth in Section 15.2.2 . Such termination
shall be effective as of the date set forth in the notice of termination. A Termination Fee shall not be payable by Owner upon a termination by
Manager pursuant to this Section 16.2.4 .
16.2.5 Upon a Failure to Amend . Manager shall have the right to terminate this Agreement as provided in Section 19.2.10 of this
Agreement by written notice to Owner to terminate this Agreement, such termination to be effective thirty (30) days following delivery of
Manager’s notice of termination. No termination fee or penalty shall be payable by Owner upon a termination of this Agreement pursuant to
this Section 16.2.5 .
16.2.6 Upon a Licensing Event . Manager shall have the right, in its discretion, to terminate this Agreement upon no less than ninety
(90) days’ nor more than twelve (12) months’ written notice of termination to Owner following a Licensing Event which is not cured within the
period required by the applicable Gaming Authorities. No termination fee or penalty shall be payable by Owner upon a termination of this
Agreement pursuant to this Section 16.2.6 .
16.2.7 Notice of Termination . If termination of this Agreement is elected by Manager pursuant to this Section 16.2 , such remedy
shall be exercised by Manager only by irrevocable and unconditional written notice of termination to Owner and shall not be an exclusive
remedy.
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16.3
Owner Termination Rights .
16.3.1 Termination Upon a Managed Facilities Transfer . Owner shall have the right, in its discretion, to terminate this Agreement
upon no less than ninety (90) days’ nor more than twelve (12) months’ written notice of termination to Manager following a Managed Facilities
Transfer. Such right of termination shall be exercisable until the date which is ninety (90) days after such Managed Facilities Transfer. Upon
and as a condition to such termination by Owner, Owner shall pay to Manager a Termination Fee.
16.3.2 Upon a Licensing Event . Owner shall have the right, in its discretion, to terminate this Agreement upon no less than ninety
(90) days’ nor more than twelve (12) months’ written notice of termination to Manager, without payment of any termination fee or penalty, if,
as a result of a final, non-appealable determination by any applicable Gaming Authority, Manager shall have failed to obtain or maintain any
license, qualification or approval from any Gaming Authority necessary for Manager to manage the Managed Facilities unless such failure was
attributable, in whole or in part, to Owner or one or more direct or indirect members or other equity holders of Owner (other than any such
Person who is an Affiliate of Manager). No termination fee or penalty shall be payable by Owner upon a termination pursuant to this
Section 16.3.2 .
16.3.3 Upon a Failure to Amend . Owner shall have the right to terminate this Agreement, without payment of any termination fee
or penalty, as provided in Section 19.2.10 of this Agreement, upon written notice of termination to Manager, such termination to be effective
thirty (30) days following delivery of Owner’s notice of termination. No termination fee or penalty shall be payable by Owner upon a
termination pursuant to this Section 16.3.3 .
16.3.4 Upon a Casualty or Condemnation . Owner shall have the right to terminate this Agreement as provided in Section 15.2 due
to a Casualty only if Owner elects not to undertake Restoration and sells the Remainder, in which event (a) if the Remainder is sold to a third
party and the purchaser agrees for the benefit of Manager not to build a casino on the Premises for the Trailing Period following such Casualty,
Owner shall not be obligated to pay to Manager any termination fee or penalty and (b) if the Remainder is sold to a third party and such third
party does not agree for the benefit of Manager that it will not build a casino on the Premises for the Trailing Period following such Casualty,
then Owner shall pay to Manager the Termination Fee. Owner shall have the right to terminate this Agreement as provided in Section 15.2.2
due to a Condemnation and Manager shall share in the condemnation proceeds as set forth in Section 15.2.2 ; provided , that if the Remainder
remaining after the Condemnation is subsequently sold to a third party and such third party does not agree (in favor of Manager) that it will not
build a casino on the Premises at any time during the Trailing Period following such Casualty, then Owner shall pay to Manager the
Termination Fee less the amount of the
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condemnation award received by Manager in accordance with Section 15.2.2 . Such termination shall be effective as of the date set forth in the
notice of termination. For purposes hereof, “ Trailing Period ” means (a) if during the Initial Term, the period of time that this Agreement
would have continued to be in effect if the Initial Term had not terminated, (b) if during the Renewal Term, the period of time that this
Agreement would have continued to be in effect if the Renewal Term had not terminated, and (c) during any Continuing Term, there shall be
no Trailing Period.
16.3.5 In Connection with Certain Assignments . If there shall be any Assignment by Manager in violation of Section 11.2 or to an
Owner Prohibited Person, Owner shall have the right to terminate this Agreement, such termination to be effective (i) twelve (12) months after
delivery of such notice (unless Manager shall agree to an earlier termination date) or (ii) if such Assignment involves an Owner Prohibited
Person, such earlier date as is required by any Gaming Authority. Such right of termination shall be exercisable until the date which is ninety
(90) days after Owner receives written notice of such an Assignment, transfer of Ownership Interest or Change of Control from Manager. No
termination fee or penalty shall be payable by Owner upon a termination pursuant to this Section 16.3.8 .
16.3.6 Notice of Certain Assignments, Change of Control, Managed Facilities Transfer and Ground Lease Matters . Owner shall
provide prompt written notice to Manager of (a) any Assignment, Transfer of Ownership Interests, Change of Control or Managed Facilities
Transfer, in each case both at the time of execution of any definitive agreement with respect thereto and at the time of the consummation of
such transaction or (b) receipt of notice of any breach under the Ground Lease or any termination notice delivered under the Ground Lease, in
each case including a copy of the relevant notice.
16.3.7 Notice of Termination . If termination of this Agreement is elected by Owner pursuant to this Section 16.3 , such remedy
shall be exercised by Owner only by irrevocable and unconditional written notice of termination to Manager and shall not be an exclusive
remedy.
16.4
Actions To Be Taken on Termination .
The Parties shall take the following actions upon the expiration or termination of this Agreement pursuant to this Section 16 or otherwise
pursuant to this Agreement (in addition to the rights of the non-defaulting Party to pursue all other remedies available to it under this
Agreement if such termination is due to an Event of Default):
16.4.1 Payment of Expenses for Termination . In the event of termination of this Agreement due to an Event of Default of the
Owner, all commercially reasonable direct expenses arising as a result of the cessation of Managed Facilities operations by Manager (including
expenses arising under this Section 16.4 ) shall be for the sole account of Owner, and Owner shall reimburse Manager within fifteen (15) days
following receipt of any invoice from Manager for any such expenses, including those arising from or in connection with severing the
employment of Managed Facilities Personnel not engaged by Owner in accordance with Section 16.6.9 (with severance benefits calculated in
accordance with policies applicable generally to employees of Other Managed Resorts or any applicable employment agreement or union
agreement that had been reflected in the Annual Budget or otherwise approved by Owner) incurred by Manager in the course of effecting the
termination of this Agreement.
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16.4.2 Payment of Amounts Due to Manager . Upon the expiration or termination of this Agreement, Owner shall pay to Manager
(a) the Base Management Fee through the effective date of such expiration or termination, (b) Managed Facilities Personnel Costs, (c) other
Reimbursable Expenses, (d) the Centralized Services Charges, (e) any Incentive Management Fees which were due but not yet paid, (f) any
other amounts due Manager under this Agreement through the effective date of expiration or termination and (g) if applicable, any termination
fee that may be due in accordance with (and for the avoidance of doubt, no termination fee or penalty shall be due in the event of any other
termination), Section 16.3.1 (Managed Facilities Transfer) or Section 16.3.4 (Casualty/Condemnation), (subject, in the case of termination
pursuant to Section 16.3.4 , to the terms thereof). This obligation is unconditional and shall survive the expiration or termination of this
Agreement (including all amounts owed to Manager that are not fully ascertainable as of the expiration or termination date), and Owner shall
not have or exercise any rights of setoff, except to the extent of any outstanding and undisputed payments owed to Owner by Manager under
this Agreement. Manager acknowledges that the payment of any termination fee under this Section 16.4.2 and the payment of all other amounts
under this Section 16.4 , as and when paid, shall be the sole and exclusive remedy of Manager in the case of any termination by Owner or
Manager under circumstances in which any such termination fee is to be paid. The Parties further acknowledge that any such termination fee
does not represent a penalty or punitive clause but represents an agreed measure of damages, the amount of which is impossible to determine
on the date this Agreement is signed. Any disputes regarding amounts owed to Manager under this Section 16.4.2 shall be referred to the
Expert for Expert Resolution pursuant to Article XVII . In addition, all provisions in this Agreement that specifically survive the expiration or
termination of this Agreement shall continue to survive as provided herein and, notwithstanding the limitations contained in this Section 16.4.2
, Manager shall continue to have a right to receive any and all payments which would be due and payable in connection with such surviving
provisions.
16.4.3 Surrender of Managed Facilities; Cooperation . Manager shall peacefully vacate and surrender the Managed Facilities to
Owner on the effective date of such expiration or termination, and the Parties shall execute and deliver any expiration or termination or other
necessary agreements either Party shall request for the purpose of evidencing the expiration or termination of this Agreement, and Manager
shall deliver to Owner all keys, passwords, combinations, and take all such additional actions as Owner may reasonably request to ensure the
orderly transition of Operation of the Managed Facilities to Owner or such Person as Owner may designate.
16.4.4 Proprietary Information and Systems; Service Mark Rights .
16.4.4.1 Upon the expiration or termination of this Agreement, Owner, at its expense, shall immediately commence and
diligently pursue to completion during a transition period of twelve (12) months following termination or expiration of this Agreement (the “
Transition Period ”) the following actions:
(a) the discontinuation of all use in any manner of any Proprietary Information and Systems and any and all Service
Mark Rights (other than the Owner Primary Marks); provided that, with respect to the Proprietary Information and Systems, Manager shall
(i) reasonably cooperate with Owner, at Owner’s expense, to develop, construct and install such hardware and software systems as are
reasonably necessary to continue to Operate the Managed Facilities in substantially the same manner and functionality as Operated by Manager
prior to such termination, and (ii) provide Owner reasonably in advance of such discontinuation with a list that describes with reasonable
specificity the Proprietary Information and Systems to which the obligation described in this Section 16.4.4.1(a) applies and their respective
functions;
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(b) the cancellation of all fictitious or assumed name registrations relating to Owner’s use of any Proprietary
Information and Systems;
(c) notification to Owner and all telephone directory publishers of the termination or expiration of Owner’s right to use
any telephone number and any regular, classified or other telephone directory listings associated with any Proprietary Information and Systems
and authorization to transfer such number to Manager or at Manager’s direction; provided, that nothing herein shall be deemed to require
Owner to change or surrender any telephone number used exclusively by the Managed Facilities;
(d) removal from the Managed Facilities, and discontinuation for any purpose, of all publicly observable FF&E,
Supplies, signage and other materials to the extent displaying any aspect of the Service Mark Rights (other than the Owner Primary Marks);
and
(e) the cessation of use of Manuals, policy statements and the like to the extent displaying any Service Mark Right
(other than the Owner Primary Marks).
16.4.4.2 From and after the conclusion of the Transition Period:
(a) Owner shall not, copy, reproduce, use or retain any of the Proprietary Information and Systems, other than
historical materials relating to the Managed Facilities that include incidental Proprietary Information and Systems;
(b) Owner shall not hold itself or the Managed Facilities out to the public as being or remaining (or otherwise
associated with) any other Managed Resorts, or any project or resort managed by Manager or its Affiliates; and
(c) Owner shall provide to Manager evidence reasonably satisfactory to Manager of Owner’s compliance with its
obligations under this Section 16.4.4 .
16.4.5 Assignment and Transfers to Owner . Upon the expiration or termination of this Agreement, Manager shall assign and
transfer to Owner:
16.4.5.1 all leases and contracts to which Manager, CLC, or any of their Affiliates is a party, if any, (including collective
bargaining agreements and pension plans, equipment leases, leases, licenses and concession agreements and maintenance and service
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contracts) in effect that relate exclusively to the Managed Facilities or the Owner Owned IP as of the date of expiration or termination of this
Agreement which are assignable without third party consent or as to which consent to assignment may be and has been obtained without cost to
Manager, and Owner shall, effective as of the date of such termination, assume all liabilities and obligations thereunder, and Owner shall
confirm its assumption of such liabilities and obligations in writing; provided , that Manager shall provide to Owner a list of all contracts and
agreements with CLC, and any Affiliates of Manager, and Manager shall assign, and Owner shall assume only such contracts and agreements
between the Managed Facilities, on the one hand, and CLC or an Affiliate of Manager, on the other hand, as Owner shall elect (and Manager
shall terminate, at Manager’s sole cost and expense) all Affiliate contracts and agreements not so assumed by Owner);
16.4.5.2 all of Manager’s right, title and interest in and to all Approvals, including liquor licenses, if any, held by Manager in
connection with the Operation of the Managed Facilities, but only to the extent such assignment or transfer is permitted under Applicable Law;
provided , that Owner shall reimburse Manager for any funds Manager has expended in obtaining any such Approvals (if not otherwise paid or
reimbursed by Owner). In addition, if Manager or any Affiliate of Manager is the holder of any liquor license for the Managed Facilities which
is not assignable to Owner or its designee upon termination of this Agreement, then, upon the request of Owner, Manager (or such Affiliate)
shall enter into a temporary lease, license or such other agreement as may be permitted under Applicable Law to permit the continuous and
uninterrupted sale of alcohol beverages at the Managed Facilities consistent with prior operations. In such event, Manager (or its Affiliate, if
applicable) shall not be entitled to compensation in connection with such arrangement, but shall not incur any cost or liability in connection
therewith and shall be named as an additional insured on any “dramshop” or other liability insurance pertaining to the sale of alcoholic
beverages at the Managed Facilities. Any such temporary lease, license or other arrangement shall include an indemnification of Manager and
its Affiliates from Owner and shall provide for the termination of all obligations of Manager and its Affiliates thereunder within one hundred
twenty (120) days following the date of termination of this Agreement. In addition, to the extent permitted under Applicable Law, any other
permits or licenses that may not be assigned to Owner shall be maintained by Manager for Owner’s benefit at Owner’s cost and expense until
such time (but no later than one hundred twenty (120) days following the termination of this Agreement) as Owner may secure permits and
licenses in its own name, subject to Owner’s provision of an indemnification of Manager and its Affiliates from Owner; and
16.4.5.3 all books and records of the Managed Facilities (but excluding any Manager Confidential Information); provided ,
that Manager may retain one or more archival copies of such books and records for Manager’s independent use.
16.4.6 Bookings and Reservations . Owner shall honor, and shall cause any successor manager to honor, all business confirmed for
the Managed Facilities with reservations (including reservations made by Manager pursuant to Manager’s other promotional programs) dated
after the effective date of the expiration or termination of this Agreement in accordance with such bookings as accepted by Manager. Manager
shall transfer to Owner and will assume responsibility for all advance deposits received by Manager for the Managed Facilities.
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16.4.7 Bank Accounts; Receivables . On the expiration or termination of this Agreement, Manager shall either, at Owner’s election,
(a) terminate all Bank Accounts and disburse all funds therein to Owner or (b) terminate the authority of Manager’s authorized signatories to
draw funds from the Bank Accounts and cause the Persons designated by Owner to become authorized signatories. All receivables of the
Managed Facilities outstanding as of the effective date of termination or expiration of this Agreement shall continue to be the property of
Owner. Manager will turn over to Owner any receivables collected directly by Manager after the effective date of termination or expiration of
this Agreement.
16.4.8 Final Accounting . Within thirty (30) days following the expiration or termination of this Agreement, Manager shall render a
full accounting to Owner (including all statements and reports in the forms required herein) for the final month ending on the date of expiration
or termination of this Agreement. At the request of Owner, Manager shall cause to be prepared and delivered to Owner within ninety (90) days
following the expiration or termination of this Agreement Certified Financial Statements for the final Operating Year, containing the reports
and other items and prepared on the same basis as under Section 10.4 . The cost of preparing the Certified Financial Statements pursuant to this
Section 16.4.8 shall be an Operating Expense attributable to the final Operating Year. The final Certified Financial Statements delivered
pursuant to this Section 16.4.8 , and all information contained therein, shall be binding and conclusive on the Parties unless, within sixty
(60) days following the delivery thereof, either Party shall deliver to the other Party written notice of its objection thereto setting forth in
reasonable detail the nature of such objection. If the Parties are unable thereafter to resolve any disputes between them with respect to the
matters set forth in the final Certified Financial Statements within sixty (60) days after delivery by either Party of the aforesaid written notice,
either Party shall have the right to cause such dispute to be resolved by Expert Resolution in accordance with the provisions of Article XVII .
16.4.9 Managed Facilities Personnel . From and after expiration or termination of this Agreement the Managed Facilities Personnel
shall not be restrained by this Agreement in making their own decision as to whether to be employed by Owner, Manager or their respective
Affiliates and Manager and its Affiliates may employ any of the Senior Executive Personnel or any other Managed Facilities Personnel who
desire employment with Manager or its Affiliates and who Owner does not employ. Manager shall make reasonably available to Owner from
time to time during the Transition Period any Managed Facilities Personnel employed by Manager or its Affiliates to answer questions that
Owner may have regarding the Managed Facilities.
16.4.10 Centralized Services and Purchasing Program . In consideration of the continued payment of the Centralized Services
Charges (as set forth in Section 4.1.1 ), the charges for Reimbursable Expenses (as set forth in Section 3.3 ) and for participation in Purchasing
Programs (as contemplated by Section 5.6 ), Manager shall, during the Transition Period (or such shorter period as requested by Owner),
continue to provide Centralized Services and allow the Owner to purchase through the Purchasing Program, in each case to the extent Manager
and its Affiliates are permitted to do so pursuant to the terms of any applicable third party arrangements.
16.4.11 Survival . This Section 16.4 shall survive the expiration or termination of this Agreement.
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ARTICLE XVII.
DISPUTE RESOLUTION
17.1
Generally .
17.1.1 Except for disputes specifically provided in this Agreement to be referred to Expert Resolution, all claims, demands,
controversies, disputes, actions or causes of action of any nature or character arising out of or in connection with this Agreement, whether legal
or equitable, known or unknown, contingent or otherwise shall be resolved in the United States District Court for Nevada and any appellate
courts thereto, or if federal jurisdiction is lacking, then in the State Courts of Nevada. The Parties agree that service of process for purposes of
any such litigation or legal proceeding need not be personally served or served within the State of Nevada, but may be served with the same
effect as if the Party in question were served within the State of Nevada, by giving notice containing such service to the intended recipient
(with copies to counsel) in the manner provided in Section 19.5 . This provision shall survive and be binding upon the Parties after this
Agreement is no longer in effect.
17.1.2 If any dispute between any of the Parties or any of their respective Affiliates is pending in any state or federal court located
in the State of Nevada with respect to this Agreement (or this Agreement), and any subsequent dispute arises between one or more Parties or
any of their respective Affiliates which is not required by this Agreement to be referred to Expert Resolution and is pending in any other state
or federal court, the Parties shall (to the extent permissible under applicable rules) jointly move to consolidate such subsequent dispute in the
same court with the pending dispute, and in the event that the court declines to consolidate the disputes (or consolidation is not permissible
under applicable rules), the Parties shall request that the court refer the subsequent dispute to the judge presiding over the pending dispute as a
related case, it being the intent of the Parties to keep any litigation relating to this Agreement within the same court to the fullest extent possible
under the law.
17.2
Expert Resolution .
With respect to any dispute to be submitted to an Expert pursuant to this Agreement, any Party that is party to such dispute may require
that the dispute be submitted to final and binding arbitration (without appeal or review) in Las Vegas, Nevada (“ Expert Resolution ”),
administered by an independent arbitration tribunal consisting of three (3) arbitrators, one of which is appointed by each Party and the third
arbitrator shall be selected by the other two arbitrators (collectively, the “ Expert ”). Such Expert Resolution shall be conducted by the
American Arbitration Association in accordance with the Commercial Arbitration Rules of the American Arbitration Association. The Expert
shall be a person having not less than ten (10) years’ experience in the area of expertise on which the dispute is based and having no conflict of
interest with either Party. With respect to any dispute to be submitted to an Expert pursuant to this Agreement, the use of the Expert shall be the
exclusive remedy of the Parties and neither Party shall attempt to adjudicate such dispute in any other forum. The decision of the Expert shall
be final and binding on the Parties and shall not be capable of challenge, whether by Expert Resolution, arbitration, in court or otherwise.
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17.2.1 Related Disputes .
17.2.1.1 Any two (2) or more disputes which are required to be submitted to an Expert under this Agreement shall be
considered related for purposes of this section if they involve the same or substantially similar issues of law or fact. In the event any Party to a
dispute (the “ Subsequent Related Dispute ”) designates it as being related to a prior or pending dispute (the “ Prior Related Dispute ”), the
Subsequent Related Dispute shall be referred for resolution to the Expert to whom the Prior Related Dispute was referred (the “ Initial Expert
”). If a Party objects to the designation of a Subsequent Related Dispute as being related to a Prior Related Dispute, the objection shall be
resolved by the Initial Expert. If the Initial Expert concludes that the disputes are related, the Subsequent Related Dispute shall be resolved by
the Initial Expert in accordance with this Section 17.2 , and to the extent practical issues in the Subsequent Related Dispute that are the same or
substantially similar as in the Prior Related Dispute shall be resolved in a manner consistent with the resolution of such issues in the Prior
Related Dispute. If the Initial Expert concludes that the Subsequent Related Dispute is not related to the Prior Related Dispute, the Subsequent
Related Dispute shall be referred to an Expert selected in accordance with the introductory paragraph of this Section 17.2 .
17.2.1.2 Notwithstanding anything to the contrary contained in this Agreement, if a claim is asserted involving an alleged
Event of Default under this Agreement (or under this Agreement) (a “ Default Claim ”), any and all issues, whether legal, factual or otherwise,
relating to such Default Claim shall be resolved exclusively by a state or federal court located in the State of Nevada in accordance with the
provisions hereof regardless of whether any of such issues would otherwise be required to be referred to an Expert for resolution under a
provision of this Agreement; provided , that any decision by an Expert made in accordance with this Agreement which was rendered prior to
the assertion of a Default Claim and which relates to such Default Claim shall be considered final and binding in any court proceeding
involving such Default Claim, it being the intent and understanding of the Parties that, except for specific issues that were determined by an
Expert before a Default Claim is asserted, all issues relating to such Default Claim shall be resolved exclusively by the court in the action or
proceeding involving the Default Claim.
17.2.2 Restrictions on Expert . THE EXPERT SHALL HAVE NO AUTHORITY TO VARY OR IGNORE THE TERMS OF THIS
AGREEMENT, INCLUDING SECTION 17.7.5 , AND SHALL BE BOUND BY APPLICABLE LAW. ALL PROCEEDINGS, AWARDS
AND DECISIONS UNDER ANY EXPERT RESOLUTION PROCEEDING SHALL BE STRICTLY PRIVATE AND CONFIDENTIAL,
EXCEPT AS MAY BE NECESSARY TO ENFORCE THE SAME.
17.3
Time Limit .
Any Expert Resolution of a dispute must be commenced within twelve (12) months from the date on which either Party first gave written
notice to the other of the existence of the dispute, and any Party who fails to commence litigation or Expert Resolution within such twelve
(12) month period shall be deemed to have waived any of its affirmative rights and claims in connection with the dispute and shall be barred
from asserting such rights and claims at any time thereafter except as a defense to any related or similar claims subsequently raised by the other
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party. An Expert Resolution shall be deemed commenced by a Party when the Party sends a notice to the other Party and to the American
Arbitration Association, identifying the dispute and requesting Expert Resolution. Litigation shall be deemed commenced by a Party when the
Party serves a complaint (or, as the case may be, a counterclaim) on the other Party with respect to the dispute.
17.4
Prevailing Party’s Expenses .
The prevailing Party in any Expert Resolution, litigation or other legal action or proceeding arising out of or related to this Agreement
shall be entitled to recover from the losing Party all reasonable fees, costs and expenses incurred by the prevailing Party in connection with
such Expert Resolution, litigation or other legal action or proceeding (including any appeals and actions to enforce any Expert Resolution
awards and court judgments), including reasonable fees, expenses and disbursements for attorneys, experts and other third parties engaged in
connection therewith and its share of the fees and costs of the Expert. If a Party prevails on some, but not all, of its claims, such Party shall be
entitled to recover an equitable amount of such fees, expenses and disbursements, as determined by the applicable Expert(s) or court. All
amounts recovered by the prevailing Party under this Section 17.4 shall be separate from, and in addition to, any other amount included in any
Expert Resolution award or judgment rendered in favor of such Party.
17.5
WAIVERS .
17.5.1 JURISDICTION AND VENUE . OWNER AND MANAGER WAIVE, TO THE FULLEST EXTENT PERMITTED BY
LAW, ALL DEFENSES BASED ON LACK OF JURISDICTION OR INCONVENIENT VENUE OR FORUM FOR ANY LITIGATION OR
OTHER LEGAL ACTION OR PROCEEDING PURSUED BY MANAGER OR OWNER IN THE JURISDICTION AND VENUE
SPECIFIED IN SECTION 17.1 .
17.5.2 TRIAL BY JURY . EACH PARTY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, TRIAL BY JURY
OF ALL CLAIMS ARISING OUT OF OR RELATING TO THIS AGREEMENT.
17.5.3 CLASS ACTIONS . OWNER AGREES THAT, FOR MANAGER’S AND ITS AFFILIATES’ CHAIN OF BRANDED
HOTELS AND CASINOS TO FUNCTION PROPERLY, MANAGER SHOULD NOT BE BURDENED WITH THE COSTS OF
ARBITRATING OR LITIGATING SYSTEM WIDE CLAIMS. ACCORDINGLY, OWNER AGREES THAT ANY DISAGREEMENT
BETWEEN OWNER AND MANAGER SHALL BE CONSIDERED UNIQUE AS TO ITS FACTS AND SHALL NOT BE BROUGHT AS
A CLASS ACTION, AND OWNER WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ALL RIGHTS TO BRING A CLASS
ACTION OR MULTI-PLAINTIFF, CONSOLIDATED OR COLLECTIVE ACTION AGAINST MANAGER OR ANY OF ITS
AFFILIATES. FOR AVOIDANCE OF DOUBT, THE FOREGOING RESTRICTION SHALL NOT BE CONSTRUED TO PROHIBIT
EITHER PARTY OR ITS AFFILIATES FROM JOINING WITH OTHER PARTIES TO THE AFFILIATE MANAGEMENT
AGREEMENTS TO BRING ACTIONS RELATING TO ONE OR MORE OF SUCH AFFILIATE MANAGEMENT AGREEMENTS.
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17.5.4 DECISIONS IN PRIOR CLAIMS . SUBJECT TO SECTION 17.2.1.2 , OWNER AND MANAGER AGREE THAT IN
ANY EXPERT RESOLUTION OR LITIGATION BETWEEN THE PARTIES, THE EXPERT(S) OR COURT SHALL NOT BE
PRECLUDED FROM MAKING ITS OWN INDEPENDENT DETERMINATION OF THE ISSUES IN QUESTION, NOTWITHSTANDING
THE SIMILARITY OF ISSUES IN ANY OTHER EXPERT RESOLUTION OR LITIGATION INVOLVING MANAGER AND ANY
OTHER OWNER OR ANY OF THEIR AFFILIATES, AND EACH PARTY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
LAW, ALL RIGHTS TO CLAIM THAT A PRIOR DISPOSITION OF THE SAME OR SIMILAR ISSUES PRECLUDES SUCH
INDEPENDENT DETERMINATION.
17.5.5 PUNITIVE, CONSEQUENTIAL AND CERTAIN OTHER DAMAGES . NOTWITHSTANDING ANYTHING TO THE
CONTRARY IN THIS AGREEMENT OR UNDER APPLICABLE LAW, IN ANY EXPERT RESOLUTION, LAWSUIT, LEGAL ACTION
OR PROCEEDING BETWEEN THE PARTIES ARISING FROM OR RELATING TO THIS AGREEMENT OR THE MANAGED
FACILITIES, THE PARTIES UNCONDITIONALLY AND IRREVOCABLY WAIVE AND DISCLAIM TO THE FULLEST EXTENT
PERMITTED UNDER APPLICABLE LAW ALL RIGHTS TO ANY CONSEQUENTIAL, LOST PROFITS, PUNITIVE, EXEMPLARY,
STATUTORY OR TREBLE DAMAGES (OTHER THAN STATUTORY RIGHTS AND MANAGER’S RIGHT TO RECEIVE ANY
TERMINATION FEE IN ACCORDANCE WITH THIS AGREEMENT, AND EXCEPT FOR A CLAIM FOR RECOVERY OF ANY SUCH
DAMAGES THAT THE CLAIMING PARTY IS REQUIRED BY A COURT OF COMPETENT JURISDICTION OR THE EXPERT TO
PAY TO A THIRD PARTY), AND ACKNOWLEDGE AND AGREE THAT THE RIGHTS AND REMEDIES IN THIS AGREEMENT,
AND ALL OTHER RIGHTS AND REMEDIES AT LAW AND IN EQUITY, WILL BE ADEQUATE IN ALL CIRCUMSTANCES FOR
ANY CLAIMS THE PARTIES MIGHT HAVE WITH RESPECT TO DAMAGES.
17.6
Survival and Severance .
This Article XVII shall survive the expiration or termination of this Agreement. The provisions of this Article XVII are severable from
the other provisions of this Agreement and shall survive and not be merged into any termination or expiration of this Agreement or any
judgment or award entered in connection with any dispute, regardless of whether such dispute arises before or after termination or expiration of
this Agreement, and regardless of whether the related Expert Resolution or litigation proceedings occur before or after termination or expiration
of this Agreement. If any part of this Article XVII is held to be unenforceable, it shall be severed and shall not affect either the duties to submit
any dispute to Expert Resolution or any other part of this Article XVII .
17.7
ACKNOWLEDGEMENTS .
OWNER AND MANAGER EACH ACKNOWLEDGE AND CONFIRM TO THE OTHER THAT:
17.7.1 INFORMED INVESTOR . THE ACKNOWLEDGING PARTY HAS HAD THE BENEFIT OF LEGAL COUNSEL AND
ALL OTHER ADVISORS DEEMED
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NECESSARY OR ADVISABLE TO ASSIST IT IN THE NEGOTIATION AND PREPARATION OF THIS AGREEMENT, AND THE
OTHER PARTY’S ATTORNEYS HAVE NOT REPRESENTED THE ACKNOWLEDGING PARTY, OR PROVIDED ANY LEGAL
COUNSEL OR OTHER ADVICE TO THE ACKNOWLEDGING PARTY, WITH RESPECT TO THIS AGREEMENT.
17.7.2 BUSINESS RISKS . THE ACKNOWLEDGING PARTY (A) IS A SOPHISTICATED PERSON, WITH SUBSTANTIAL
EXPERIENCE IN THE OWNERSHIP AND OPERATION OF COMMERCIAL DEVELOPMENT PROJECTS; (B) RECOGNIZES THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT INVOLVE SUBSTANTIAL BUSINESS RISKS; AND (C) HAS MADE
AN INDEPENDENT INVESTIGATION OF ALL ASPECTS OF THIS AGREEMENT SUCH PARTY DEEMS NECESSARY OR
ADVISABLE.
17.7.3 NO ADDITIONAL REPRESENTATIONS OR WARRANTIES . NO PARTY HAS MADE ANY PROMISES,
REPRESENTATIONS, WARRANTIES OR GUARANTIES OF ANY KIND WHATSOEVER TO ANY OTHER PARTY, EXCEPT AS
SPECIFICALLY SET FORTH IN THIS AGREEMENT, AND NO PERSON IS AUTHORIZED TO MAKE ANY PROMISES,
REPRESENTATIONS, WARRANTIES OR GUARANTIES ON BEHALF OF A PARTY, EXCEPT AS SPECIFICALLY SET FORTH IN
THIS AGREEMENT.
17.7.4 NO RELIANCE . NO PARTY HAS RELIED UPON ANY STATEMENTS OR PROJECTIONS OF REVENUE, SALES,
EXPENSES, INCOME, GAMING WIN, RATES, AVERAGE DAILY RATE, CONTRIBUTION, PROFITABILITY, VALUE OF THE
MANAGED FACILITIES OR SIMILAR INFORMATION PROVIDED BY ANY OTHER PARTY BUT HAS INDEPENDENTLY
CONFIRMED THE ACCURACY AND RELIABILITY OF ANY SUCH INFORMATION AND IS SATISFIED WITH THE RESULTS OF
SUCH INDEPENDENT CONFIRMATION.
17.7.5 LIMITATION ON FIDUCIARY DUTIES . TO THE EXTENT ANY FIDUCIARY DUTIES THAT MAY EXIST AS A
RESULT OF THE RELATIONSHIP OF THE PARTIES ARE INCONSISTENT WITH, OR WOULD HAVE THE EFFECT OF
EXPANDING, MODIFYING, LIMITING OR RESTRICTING ANY OF THE EXPRESS TERMS OF THIS AGREEMENT, (A) THE
EXPRESS TERMS OF THIS AGREEMENT SHALL CONTROL AND (B) ANY LIABILITY OF THE PARTIES FOR MONETARY
DAMAGES OR MONETARY RELIEF SHALL BE BASED SOLELY ON PRINCIPLES OF CONTRACT LAW AND THE EXPRESS
TERMS OF THIS AGREEMENT. ACCORDINGLY, NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT,
TO THE FULLEST EXTENT PERMITTED UNDER APPLICABLE LAW, THE PARTIES HEREBY UNCONDITIONALLY AND
IRREVOCABLY WAIVE AND DISCLAIM ANY POWER OR RIGHT SUCH PARTY MAY HAVE TO CLAIM ANY PUNITIVE,
EXEMPLARY, STATUTORY OR TREBLE DAMAGES OR CONSEQUENTIAL OR INCIDENTAL DAMAGES FOR ANY BREACH OF
FIDUCIARY DUTIES.
17.7.6 IRREVOCABILITY OF CONTRACT . IN ORDER TO REALIZE THE FULL BENEFITS CONTEMPLATED BY THE
PARTIES, THE PARTIES INTEND THAT THIS AGREEMENT SHALL BE NON-TERMINABLE, EXCEPT FOR THE SPECIFIC
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TERMINATION RIGHTS IN FAVOR OF A PARTY SET FORTH IN THIS AGREEMENT. ACCORDINGLY, NOTWITHSTANDING
ANYTHING TO THE CONTRARY IN THIS AGREEMENT, TO THE FULLEST EXTENT PERMITTED UNDER APPLICABLE LAW,
THE PARTIES HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVE AND DISCLAIM ALL RIGHTS TO TERMINATE THIS
AGREEMENT AT LAW OR IN EQUITY, EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT.
17.8
Survival .
The provisions of this Article XVII shall survive the expiration or termination of this Agreement.
ARTICLE XVIII.
GAMING LAW PROVISIONS
18.1
Regulatory Matters; Initial Suitability Review .
18.1.1 Manager’s Regulatory Environment . Owner acknowledges that Manager, CEOC and their respective Affiliates (a) conduct
business in an industry that is subject to and exists because of privileged licenses issued by Governmental Authorities in multiple jurisdictions,
(b) are subject to extensive gaming regulation and oversight, and are required to adhere to strict laws and regulations regarding vendor and
other business relationships, and (c) have adopted strict internal controls and compliance policies governing their own activities and those of
certain parties with whom they do business.
18.1.2 Suitability Investigations . As an initial matter, Owner acknowledges and agrees that Manager, CEOC and their respective
Affiliates must perform a background check, suitability review and such other due diligence with respect to the Subject Group, but excluding
Manager and its Affiliates and those individuals associated with Owner previously subject to CEOC’s suitability review, as required under
applicable gaming regulations and/or the corporate policies of Manager, CEOC and their respective Affiliates. Accordingly, Owner hereby
(a) acknowledges and understands that Manager, CEOC and their respective Affiliates must perform such investigations and inquiries with
respect to the Subject Group regarding the financial and credit condition, the existence and status of any litigation, criminal proceedings and
convictions, character and personal qualifications of any such Person, (b) agrees to promptly provide the information regarding the Subject
Group required by the CEC Business Information Form (Revised 6/22/05) and such other information as is reasonably requested by Manager,
CEOC or their respective Affiliates for such purposes (collectively, the “ Requested Information ”), and (c) agrees to cooperate with Manager,
CEOC and their respective Affiliates in the completion of its due diligence and gaming suitability and background checks of the Subject Group.
Manager acknowledges receipt and completion of such investigation and inquiries on the persons or entities within the Subject Group as of the
date of this Agreement.
18.2
Licensing Event .
If there shall occur a Licensing Event and any aspect of such Licensing Event is attributable to a member of the Subject Group, then
Manager shall notify Owner as promptly as practicable after becoming aware of such Licensing Event (but in no event later than twenty (20)
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days after becoming aware of such Licensing Event). In such event, Owner shall and shall cause the other members of the Subject Group to use
commercially reasonable efforts to assist Manager and its Affiliates in resolving such Licensing Event within the time period required by the
applicable Gaming Authorities by submitting to investigation by the relevant Gaming Authorities and cooperating with any reasonable requests
made by such Gaming Authorities (including filing requested forms and delivering information to the Gaming Authorities). If, despite these
efforts, such Licensing Event cannot be resolved to the satisfaction of the applicable Gaming Authorities within the time period required by
such Gaming Authorities, Manager shall have the right to terminate this Agreement to the extent provided in Section 16.2.6 or, if applicable,
Owner shall have the right to terminate this Agreement to the extent provided in Section 16.3.2 .
18.3
Unlawful Payments .
Neither Party nor any Person for or on behalf of such Party, shall make, and each Party acknowledges that the other Party will not make,
any expenditure for any unlawful purposes in the performance of its obligations under this Agreement and in connection with its activities in
relation thereto. Neither Party nor any Person for or on behalf of such Party, shall, and each Party acknowledges that the other Party will not,
make any illegal offer, payment or promise to pay, authorize the payment of any money, or offer, promise or authorize the giving or anything
of value, to (a) any government official, any political party or official thereof, or any candidate for political office; or (b) any other Person
while knowing or having reason to know that all or a portion of such money or thing of value will be offered, given, or promised, directly or
indirectly, to any such official, to any such political party or official thereof, or to any candidate for political office for the purpose of
(i) influencing any action or decision of such official party or official thereof, or candidate in his or its capacity, including a decision to fail to
perform his or its official functions; or (ii) inducing such official party or official thereof, or candidate to use his or its influence with any
Governmental Authority to effect or influence any act or decision of such Governmental Authority. Each Party represents and warrants to the
other Party that no government official nor any candidate for political office has any direct or indirect ownership or investment interest in the
revenues or profit of such Party or the Managed Facilities. CLC shall be a “Party” for purposes of this Section 18.3 .
ARTICLE XIX.
GENERAL PROVISIONS
19.1
Governing Law .
This Agreement shall be construed under the laws of the State of Nevada, without regard to any conflict of law principles.
19.2
Construction of this Agreement .
The Parties and CLC (which shall be a “Party” for purposes of this Section 19.2 ) intend that the following principles (and no others not
consistent with them) be applied in construing and interpreting this Agreement:
19.2.1 Presumption Against a Party . The terms and provisions of this Agreement shall not be construed against or in favor of a
Party hereto merely because such Party is the Manager hereunder or such Party or its counsel is the drafter of this Agreement.
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19.2.2 Severability . If any term or provision of this Agreement is held invalid, illegal or unenforceable by a court of competent
jurisdiction or the Expert for any reason, the remainder of this Agreement shall in no way be affected and shall remain valid and enforceable
for all purposes, each Party hereby declaring that it (i) would have executed this Agreement without inclusion of such term or provision; and
(ii) execute and deliver to the other Party any additional documents that may be reasonably requested by a Party to fully effectuate this
Section 19.2.2 .
19.2.3 Certain Words and Phrases . All words in this Agreement shall be deemed to include any number or gender as the context or
sense of this Agreement requires. The words “will,” “shall,” and “must” in this Agreement indicate a mandatory obligation. The use of the
words “include,” “includes,” and “including” followed by one (1) or more examples is intended to be illustrative and is not a limitation on the
scope of the description or term for which the examples are provided. All dollar amounts set forth in this Agreement are stated in U.S. dollars,
unless otherwise specified. The words “day” and “days” refer to calendar days unless otherwise stated. The words “month” and “months” refer
to calendar months unless otherwise stated. The words “hereof”, “hereto” and “herein” refer to this Agreement, and are not limited to the
article, section, paragraph or clause in which such words are used. If any decision, approval or other determination is required or permitted to
be made hereunder in a Party’s “discretion”, the word “discretion” shall be interpreted to mean such Party’s sole discretion. If the Operating
Year is a fiscal year other than a calendar year, all references in this Agreement to January 1 shall mean the first day of such fiscal year.
19.2.4 Headings . The table of contents, headings and captions contained herein are for the purposes of convenience and reference
only and are not to be construed as a part of this Agreement. All references to any article, section or exhibits in this Agreement are to articles,
sections or exhibits of this Agreement, unless otherwise noted.
19.2.5 Approvals . Unless expressly stated otherwise in this Agreement, whenever a matter is submitted to a Party for approval or
consent in accordance with the terms of this Agreement, that Party has a duty to act reasonably and timely in rendering a decision on the
matter.
19.2.6 Entire Agreement . This Agreement (including the attached Exhibits), together with the Transaction Agreement, constitutes
the entire agreement between the Parties with respect to the subject matter contemplated herein and supersedes all prior agreements and
understandings, written or oral. No undertaking, promise, duty, obligation, covenant, term, condition, representation, warranty, certification or
guaranty shall be deemed to have been given or be implied from anything said or written in negotiations between the Parties prior to the
execution of this Agreement, except as expressly set forth in this Agreement. Neither Party shall have any remedy in respect of any untrue
statement made by the other Party on which that Party relied in entering into this Agreement (unless such untrue statement was made
fraudulently), except to the extent that such statement is expressly set forth in this Agreement.
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19.2.7 Third-Party Beneficiary . Except as set forth in Section 12.3 , no third-party shall be a beneficiary of Owner’s or Manager’s
rights or benefits under this Agreement; provided , that each of CEC, CEOC, CERP the Transferring Manager, CLC and their respective
Affiliates shall be express beneficiaries of this Agreement to the extent related to the Service Mark Rights or to other intellectual property
rights or confidential information owned by them, the Retained Rights, Article XVIII and any other provision of this Agreement that
specifically identifies it.
19.2.8 Time of the Essence . Time is of the essence for all purposes of this Agreement.
19.2.9 Remedies Cumulative . Except as otherwise expressly provided in this Agreement, the remedies provided in this Agreement
are cumulative and not exclusive of the remedies provided by Applicable Law, and a Party’s exercise of any one or more remedies for any
default shall not preclude the Party from exercising any other remedies at any other time for the same default.
19.2.10 Amendments . Neither this Agreement nor any of its terms or provisions may be amended, modified, changed, waived or
discharged, except: (a) for Manager’s right to make changes to the Operating Limitations, Total Rewards System, and Centralized Services as
permitted under this Agreement; (b) by an instrument in writing signed by the Party against whom the enforcement of the amendment,
modification, change, waiver or discharge is sought; and (c) if any Governmental Authority requires, as a condition of its approval of the initial
effectiveness of this Agreement, directly or indirectly, the modification of any terms or provisions of this Agreement, the Parties shall use their
commercially reasonable efforts to comply with such request; provided , that if such requested modification would materially and adversely
affect either Party’s rights or obligations under this Agreement, then either Party shall have the right to terminate this Agreement by giving
written notice to the other Party within thirty (30) days after receipt of such request for modification, with no liability whatsoever to the
terminating Party for such termination.
19.2.11 Survival . The expiration or termination of this Agreement does not terminate or affect Owner’s or Manager’s covenants
and obligations that either expressly or by their nature survive the expiration or termination of this Agreement. This Section 19 shall survive the
expiration or termination of this Agreement.
19.3
Limitation on Liabilities .
19.3.1 Projections in Annual Budget . Owner acknowledges that: (a) all budgets and financial projections prepared by Manager or
its Affiliates prior to the date of this Agreement or under this Agreement, including the Annual Budget, are intended to assist in Operating the
Managed Facilities, but are not to be relied on by Owner or any third-party as to the accuracy of the information or the results predicted therein;
and (b) Manager does not guarantee the accuracy of the information nor the results in such budgets and projections. Accordingly, Owner agrees
that (i) neither Manager nor its Affiliates shall be liable to Owner or any third-party for divergence between such budgets and projections and
actual operating results achieved except as otherwise provided in this Agreement, including limits on incurring expenses; (ii) the failure of the
Managed Facilities to achieve any Annual Budget for any Operating Year
70
shall not constitute a default by Manager or give Owner the right to terminate this Agreement; and (iii) if Owner provides any such budgets or
projections to a third-party, Owner shall advise such third-party in writing of the substance of the disclaimer of liability set forth in this
Section 19.3.1 . Manager represents that it shall prepare all budgets and financial projections and operating plans prepared by Manager under
this Agreement in good faith based upon Manager’s experience and knowledge.
19.3.2 Approvals and Recommendations . Each party acknowledges that in granting any consents, approvals or authorizations under
this Agreement, and in providing any advice, assistance, recommendation or direction under this Agreement, neither party nor any Affiliates
guarantee success or a satisfactory result from the subject of such consent, approval, authorization, advice, assistance, recommendation or
direction. Accordingly, each agrees that neither party shall have any liability whatsoever to the other or any third person by reason of: (a) any
consent, approval or authorization, or advice, assistance, recommendation or direction, given or withheld; or (b) any delay or failure to provide
any consent, approval or authorization, or advice, assistance, recommendation or direction (except in the event of a breach of a covenant herein
not to unreasonably withhold or delay any consent or approval); provided , however , each agrees to act in good faith when dealing with or
providing any advice, consent, assistance, recommendation or direction.
19.3.3 Technical Advice . Owner acknowledges that any review, advice, assistance, recommendation or direction provided by
Manager with respect to the design, construction, equipping, furnishing, decoration, alteration, improvement, renovation or refurbishing of the
Managed Facilities (a) is intended solely to assist Owner in the development, construction, maintenance, repair and upgrading of the Managed
Facilities and Owner’s compliance with its obligations under this Agreement; and (b) does not constitute any representation, warranty or
guaranty of any kind whatsoever that (i) there are no errors in the plans and specification, (ii) there are no defects in the design of construction
of the Managed Facilities or installation of any building systems or FF&E therein or (iii) the plans, specifications, construction and installation
work will comply with all Applicable Laws (including laws or regulations governing public accommodations for Individuals with disabilities).
Accordingly, Owner agrees that neither Manager nor its Affiliates shall have any liability whatsoever to Owner or any third-party for any
(A) errors in the plans and specifications; (B) defects in the design of construction of the Managed Facilities or installation of any building
systems or FF&E therein; or (C) noncompliance with any engineering and structural design standards or Applicable Laws.
19.3.4 Owner Limitation . Manager agrees that in no event shall Owner’s liability to Manager with respect to lost or future
Management Fees upon any Owner Event of Default exceed the amount of the termination fee that would be payable to Manager under
Section 16.4.2 upon a termination of this Agreement as of the date of such Owner Event of Default.
19.4
Waivers .
Except as set forth in Section 17.3 of this Agreement, no failure or delay by a Party to insist upon the strict performance of any term of
this Agreement, or to exercise any right or
71
remedy consequent on a breach thereof, shall constitute a waiver of any breach or any subsequent breach of such term. No waiver of any
default shall alter this Agreement, but each and every term of this Agreement shall continue in full force and effect with respect to any other
then existing or subsequent breach.
19.5
Notices .
All notices, consents, determinations, requests, approvals, demands, reports, objections, directions and other communications required or
permitted to be given under this Agreement shall be in writing and delivered by: (a) personal delivery; (b) overnight DHL, FedEx, UPS or other
similar courier service; or (c) facsimile transmission ( provided , that a copy of such facsimile transmission together with confirmation of such
facsimile transmission is delivered to the addressee in the manner provided in clause (a) or (b) above by no later than the second
(2nd) business day following such transmission, addressed to the Parties at the addresses specified below, or at such other address as the Party
to whom the notice is sent has designated in accordance with this Section 19.5 , and shall be deemed to have been received by the Party to
whom such notice or other communication is sent upon (i) delivery to the address (or facsimile number) of the recipient Party; provided , that
such delivery is made prior to 5:00 p.m. (local time for the recipient Party) on a business day, otherwise the following business day; or (ii) the
attempted delivery of such Notice if such recipient Party refuses delivery, or such recipient Party is no longer at such address number, and
failed to provide the sending Party with its current address pursuant to this Section 19.5 (unless the sending Party had actual knowledge of such
current address)). Notwithstanding the foregoing, any notice or other communication delivered to a Party by email that is actually received by
such Party (and for which such Party has sent an acknowledgement of receipt by return email) shall be deemed to have been sufficiently given
for purposes of this Agreement and shall be deemed to have been received at the time described in clause (i) above, as if such notice had been
delivered by one of the methods described in clauses (a) through (c) above. Notwithstanding anything to the contrary contained in this
Agreement, if any documents or materials delivered under this Agreement are delivered by email (with confirmation of receipt from the
intended recipient), no additional copies of such documents or materials shall be required to be delivered.
OWNER:
3535 LV NewCo, LLC
One Caesars Palace Drive
Las Vegas, Nevada 89109
Attention: General Counsel
with a copy to:
Caesars Acquisition Company
One Caesars Palace Drive
Las Vegas, Nevada 89109
Attention: General Counsel
MANAGER:
The Quad Manager, LLC
One Caesars Palace Drive
Las Vegas, Nevada 89109
Attention: General Counsel
Facsimile: (702) 407-6418
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19.6
Party Representatives .
Owner has designated Mitch Garber to act as representative for Owner (“ Owner’s Representative ”), and Manager shall have the right to
rely on all actions by, and communications with, Owner’s Representative as binding on Owner. Owner shall provide to Manager the name,
address, telephone and fax numbers, email address and other relevant contact information for the Owner’s Representative within ten (10) days
of any change thereto. Manager has designated Tom Jenkins to act as representative for Manager (“ Manager’s Representative ”), and Owner
shall have the right to rely on all actions by, and communications with, Manager’s Representative as binding on Manager. Manager shall
provide to Owner the name, address, telephone and fax numbers, email address and other relevant contact information for the Manager’s
Representative within ten (10) days of any change thereto. Subject to compliance with applicable Gaming Laws, Owner’s Representative shall
have access at all reasonable times to all books and records maintained by Manager with respect to the Managed Facilities, copies of all leases,
contracts, agreements, permits and approvals related to the Managed Facilities and all associated files, and all physical areas of the Managed
Facilities, other than private offices.
19.7
No Recordation .
Neither this Agreement nor any memorandum hereof shall be recorded against the Project, the Managed Facilities or the Premises and
any recordation or attempted recordation of this Agreement or any memorandum of this Agreement by Manager shall constitute an Event of
Default, and in addition to any other remedies therefor, Owner is hereby granted a power of attorney (which power is coupled with an interest
and shall be irrevocable) to execute and record on behalf of Manager a notice or memorandum removing this Agreement or such memorandum
of this Agreement from the public records or evidencing the termination hereof (as the case may be).
19.8
Further Assurances .
The Parties shall do and cause to be done all such acts, matters and things and shall execute and deliver all such documents and
instruments as shall be required to enable the Parties to perform their respective obligations under, and to give effect to the transactions
contemplated by, this Agreement.
19.9
Relationship of the Parties .
The Parties acknowledge and agree that (a) the relationship between them shall be that of principal (in the case of Owner) and agent (in
the case of Manager), which relationship may not be terminated by Owner except in strict accord with the termination provisions of this
Agreement; (b) Manager shall have the authority to bind the Owner with respect to third Persons to the extent Manager is performing its
obligations under and consistent with this Agreement; (c)
73
Manager’s agency established with the Owner is, and is intended to be, an agency coupled with an interest; (d) this Agreement does not create
joint venturers, partners or joint owners with respect to the Managed Facilities; and (e) nothing in this Agreement shall be construed as creating
a partnership, joint venture or similar relationship between the Parties. The Parties further acknowledge and agree that in Operating the
Managed Facilities, including entering into leases and contracts, accepting reservations, and conducting financial transactions for the Managed
Facilities, (i) Manager assumes no independent contractual liability; and (ii) Manager shall have no obligation to extend its own credit with
respect to any obligation incurred in Operating the Managed Facilities or performing its obligation under this Agreement.
19.10
Force Majeure .
In the event of a Force Majeure Event, the obligations of the Parties and the time period for the performance of such obligations (other
than an obligation to pay any amount hereunder) shall be extended for each day that such Party is prevented, hindered or delayed in such
performance during the period of such Force Majeure Event, except as expressly provided otherwise in this Agreement. Upon the occurrence of
a Force Majeure Event, the affected Party shall give prompt notice of such Force Majeure Event to the other Party. If Manager is unable to
perform its obligations under this Agreement due to a Force Majeure Event, or Manager reasonably deems it necessary to close and cease the
Operation of all or any portion of the Managed Facilities due to a Force Majeure Event in order to protect the Managed Facilities or the health,
safety or welfare of the its guests or Managed Facilities Personnel, then Manager may close or cease Operation of all or a portion of the
Managed Facilities for such time and in such manner as Manager reasonably deems necessary as a result of such Force Majeure Event, and
reopen or recommence the Operation of the Managed Facilities when Manager again is able to perform its obligations under this Agreement,
and determines that there is no unreasonable risk to the Managed Facilities or health, safety or welfare or its guests or Managed Facilities
Personnel. Notwithstanding anything contained herein to the contrary, Owner and Manager each acknowledge and agree that the Term of this
Agreement shall be extended for each day that a Force Majeure Event continues.
19.11
Terms of Other Management Agreements .
Manager makes no representation or warranty that any past or future forms of its management agreement do or will contain terms
substantially similar to those contained in this Agreement. In addition, Owner acknowledges and agrees that Manager may, due to local
business conditions or otherwise, waive or modify any comparable terms of other management agreements heretofore or hereafter entered into
by Manager or its Affiliates.
19.12
Compliance with Law .
Owner and, subject to the Operating Limitations, Manager shall each exercise their respective rights, perform their respective obligations
and take all other actions required or permitted to be taken by each of them hereunder in compliance with all Applicable Laws.
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19.13
Centralized Services, Insurance Programs and Purchasing Arrangements Generally .
The Parties hereby agree that Manager and its Affiliates shall administer, implement and make available to Owner and the Managed
Facilities, the Centralized Services, the Insurance Programs and any multi-party purchasing programs and arrangements contemplated
hereunder on commercially reasonable terms and on a Non-Discriminatory basis and in such a manner that, in each case, there shall be no
(i) mark-up, margin or other premium charged or otherwise passed through to Owner in connection therewith (except as may be payable to a
third party), and (ii) duplication of any reimbursable expense otherwise payable by Owner to Manager or its Affiliates.
19.14
Execution of Agreement .
This Agreement may be executed in counterparts, each of which when executed and delivered shall be deemed an original, and such
counterparts together shall constitute one and the same instrument.
19.15
Renovation Management Services and Project Completion .
Manager represents, warrants and covenants to and for the benefit of Owner that there shall be no costs or expenses passed through to
Owner in connection with the completion of the renovations at the Managed Facilities except as reflected in the approved budget therefor, and
subject to, and without limitation of, any of the terms or conditions of the Transaction Agreement.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date and year first above written.
3535 LV NewCo, LLC , a Delaware limited liability
company
By: 3535 LV Parent, LLC
its sole member
By 3535 LV Corp.
its sole member
By:
Name:
Title:
/s/ Donald Colvin
Donald Colvin
President and Treasurer
The Quad Manager, LLC , a Delaware limited liability
company
By: Caesars Entertainment Operating Company, Inc.
its sole member
By:
Name:
Title:
/s/ Eric Hession
Eric Hession
Senior Vice President and Treasurer
Solely for purposes of Article VII and Sections 16.1.2,
17.5.5, 17.7.3, 17.7.4, 17.7.5, 18.3 and 19.2
CAESARS LICENSE COMPANY, LLC,
a Delaware limited liability company
By: Caesars Entertainment Operating Company, Inc.
its sole member
By:
Name:
Title:
76
/s/ Eric Hession
Eric Hession
Senior Vice President and Treasurer
CEOC hereby irrevocably and unconditionally guarantees to Owner the prompt and complete payment and performance when due of all of the
covenants, agreements, promises, liabilities and obligations of Manager to Owner under this Management Agreement, whether now existing or
hereafter arising, including, without limitation, Manager’s indemnification obligations under Section 12.3.2 and the obligation to pay all other
amounts due and owing or to become due and owing by Manager to Owner under the Management Agreement; provided , however , that
CEOC’s obligations pursuant to this paragraph shall be void and of no further force or effect on the earliest to occur of (a) that date on which
neither CEOC nor an Affiliate of CEOC owns, directly or indirectly, any Ownership Interest in Manager, (b) the date on which neither CAC
nor one of its Controlled subsidiaries Controls Owner and (c) assignment of this Agreement by Manager to Services Co or a Controlled
subsidiary of Services Co.
CAESARS ENTERTAINMENT OPERATING
COMPANY, INC., a Delaware corporation
By:
Name:
Title:
[Signature Page to the Management Agreement]
/s/ Gregory J. Miller
Gregory J. Miller
Executive Vice President of Domestic
Development
Exhibit 10.3
EXECUTION VERSION
MANAGEMENT AGREEMENT
By and Between
Bally’s Las Vegas Manager, LLC,
a Delaware limited liability company
as Manager,
Parball NewCo, LLC,
a Delaware limited liability company
as Owner,
and, solely for purposes of Article VII and Sections 16.1.2, 17.5.5, 17.7.3, 17.7.4, 17.7.5, 18.3
and 19.2,
Caesars License Company, LLC,
a Nevada limited liability company
Dated as of May 5, 2014
TABLE OF CONTENTS
ARTICLE I. DEFINITIONS AND EXHIBITS
1.1
1.2
1.3
1
Definitions
Exhibits
Structure of this Agreement
1
2
2
ARTICLE II. APPOINTMENT/TERM
2.1
2.2
2.3
2.4
2
Grant of Authority
Limitations on Manager Authority
Other Operations of Manager and Owner
Term
2
8
10
11
ARTICLE III. FEES AND EXPENSES
3.1
3.2
3.3
3.4
3.5
3.6
3.7
12
Management Fees
Centralized Services Charges
Reimbursable Expenses
Interest
Payment of Fees and Expenses
Application of Payments
Sales and Use Taxes
12
12
13
13
13
14
14
ARTICLE IV. CENTRALIZED SERVICES
4.1
4.2
14
Centralized Services
Modification of Centralized Services
14
15
ARTICLE V. OPERATION OF THE MANAGED FACILITIES
5.1
5.2
5.3
5.4
5.5
5.6
5.7
5.8
5.9
5.10
5.11
16
Annual Budget
Maintenance and Repair; Capital Improvements
Personnel
Bank Accounts
Funds for Operation of the Managed Facilities
Purchasing
Managed Facilities Parking
Use of Affiliates by Manager
Limitation on Manager’s Obligations
Third-Party Operated Areas
Amenities
16
19
20
21
24
24
25
25
26
27
27
ARTICLE VI. APPROVALS
6.1
27
Gaming Approvals
27
ARTICLE VII. PROPRIETARY RIGHTS
7.1
7.2
7.3
7.4
28
Service Mark Rights
Use of Service Mark Rights
Rights to Service Mark Rights
Proprietary Information and Systems of Manager or its Affiliates
i
28
29
29
31
ARTICLE VIII. CONFIDENTIALITY
8.1
8.2
8.3
8.4
8.5
Disclosure by Owner
Disclosure by Manager
Public Statements
Cumulative Remedies
Survival
ARTICLE IX. MARKETING
9.1
34
34
35
36
37
37
37
Marketing
37
ARTICLE X. BOOKS AND RECORDS
38
10.1
10.2
10.3
10.4
10.5
Maintenance of Books and Records
Monthly Financial Reports
Quarterly Financial Reports
Annual Financial Reports
Other Reports and Schedules
ARTICLE XI. ASSIGNMENTS
11.1
11.2
11.3
11.4
Assignment by Owner
Assignment by Manager
Acknowledgement of Assignment
Approvals
ARTICLE XII. INSURANCE, BONDING AND INDEMNIFICATION
12.1
12.2
12.3
Owner Insurance and Bonding Requirements
Waiver of Liability
Indemnification
ARTICLE XIII. FINANCING
13.1
13.2
13.3
13.4
13.5
Mortgages; Collateral Assignments; Non-Disturbance
Lender’s Right of Access
Disclosure of Mortgages
Estoppel Certificates
Amendments to Agreement
ARTICLE XIV. BUSINESS INTERRUPTION
14.1
14.2
Business Interruption
Proceeds of Business Interruption Insurance
ARTICLE XV. CASUALTY OR CONDEMNATION
15.1
15.2
Casualty
Condemnation
ARTICLE XVI. DEFAULTS AND TERMINATIONS
16.1
16.2
16.3
16.4
Events of Default
Manager Termination Rights
Owner Termination Rights
Actions To Be Taken on Termination
38
39
40
40
41
41
41
42
44
44
44
44
46
46
48
48
48
49
49
49
50
50
50
50
50
51
52
52
54
56
57
ARTICLE XVII. DISPUTE RESOLUTION
17.1
17.2
17.3
17.4
17.5
17.6
17.7
17.8
61
Generally
Expert Resolution
Time Limit
Prevailing Party’s Expenses
WAIVERS
Survival and Severance
ACKNOWLEDGEMENTS
Survival
61
62
63
63
64
65
65
67
ARTICLE XVIII. GAMING LAW PROVISIONS
18.1
18.2
18.3
67
Regulatory Matters; Initial Suitability Review
Licensing Event
Unlawful Payments
67
67
68
ARTICLE XIX. GENERAL PROVISIONS
19.1
19.2
19.3
19.4
19.5
19.6
19.7
19.8
19.9
19.10
19.11
19.12
19.13
19.14
68
Governing Law
Construction of this Agreement
Limitation on Liabilities
Waivers
Notices
Party Representatives
No Recordation
Further Assurances
Relationship of the Parties
Force Majeure
Terms of Other Management Agreements
Compliance with Law
Centralized Services, Insurance Programs and Purchasing Arrangements Generally
Execution of Agreement
68
68
70
71
72
73
73
73
73
74
74
74
74
75
EXHIBITS
Exhibit A
Exhibit B
Exhibit C
Exhibit D
Exhibit E
Exhibit F
Exhibit G
Premises
Definitions
Form of Summary Annual Budget
Manager’s Proprietary Information and Systems
Insurance Requirements
Service Marks
Total Rewards System
MANAGEMENT AGREEMENT
This MANAGEMENT AGREEMENT (this “ Agreement ”) is dated as of May 5, 2014, and is made and entered into by and between
Parball NewCo, LLC, a Delaware limited liability company, or its successors and permitted assigns (“ Owner ”), Bally’s Las Vegas Manager,
LLC, a Delaware limited liability company (“ Manager ”), and, solely for purposes of Article VII and Sections 16.1.2 , 17.5.5 , 17.7.3 , 17.7.4 ,
17.7.5 , 18.3 and 19.2 , Caesars License Company, LLC, a Nevada limited liability company (“ CLC ”). Owner and Manager are sometimes
referred to collectively in this Agreement as the “ Parties ” and individually as a “ Party .”
RECITALS
A. Owner has acquired or intends to acquire the real property interests more fully described on Exhibit A attached hereto (the “ Premises
”) and intends to own and operate a casino (the “ Casino ”) and related Facilities (as hereinafter defined) thereon (such Casino and Facilities
located at the Premises, collectively, the “ Managed Facilities ”).
B. Manager is a wholly-owned indirect subsidiary of CEOC (as hereinafter defined) with experience in operating gaming, hotel and
related businesses.
C. Owner desires to engage Manager to manage and operate the Managed Facilities under and utilizing the Brand (as hereinafter defined),
and Manager desires to manage and operate the Managed Facilities under and utilizing the Brand as an agent of Owner.
D. Simultaneously with or shortly after the effectiveness of this Agreement, certain Affiliates of Owner (collectively, the “ Other Owners
”), on the one hand, and certain Affiliates of Manager (collectively, the “ Other Managers ”), on the other hand, shall enter into substantially
similar agreements (collectively, the “ Affiliate Management Agreements ”) with respect to the operation and management by the Other
Managers of the casino and hotel properties owned by the Other Owners (such properties, collectively, the “ Affiliate Managed Facilities ”).
AGREEMENT
NOW, THEREFORE, in consideration of the recitals and covenants set forth in this Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are acknowledged by the Parties, the Parties agree:
ARTICLE I.
DEFINITIONS AND EXHIBITS
1.1 Definitions .
All capitalized terms used without definition in this Agreement shall have the meanings assigned to such terms in Exhibit B attached
hereto and by this reference incorporated herein.
1
1.2 Exhibits .
The exhibits listed in the table of contents and attached hereto are incorporated in, and deemed to be an integral part of, this Agreement.
1.3 Structure of this Agreement .
Owner and Manager each acknowledge and agree that certain operating efficiencies and value will be achieved as a result of Owner’s
engagement of Manager hereunder and the Other Owners’ engagement of the Other Managers pursuant to the applicable Affiliate Management
Agreements to operate and manage the Managed Facilities and the Affiliate Managed Facilities that would not be possible to achieve if Owner
and the Other Owners were to engage unrelated managers to operate each of the Managed Facilities and the Other Managed Facilities. The
Parties hereto acknowledge and agree that Owner would not enter into this Agreement (and the Other Owners would not enter into the Affiliate
Management Agreements) absent the understanding and agreement of the Parties that the entire management relationship, including (without
limitation) the use of the Service Mark Rights, the Licensed Brand and the use of the Total Rewards System, together with the other related
intellectual property arrangements contemplated hereunder, form part of a single integrated transaction. Accordingly, it is the express intention
of the Parties that each of the Transaction Agreement, the IP Assignment (as defined in the Transaction Agreement), this Agreement and the
Affiliated Management Agreements form part of such single integrated transaction.
ARTICLE II.
APPOINTMENT/TERM
2.1 Grant of Authority .
2.1.1 Engagement of Manager . On and subject to the terms and conditions of this Agreement, Owner hereby engages Manager, and
Manager hereby agrees to be engaged, as Owner’s agent and exclusive manager to Operate the Managed Facilities during the Term. The Parties
acknowledge that the scope of both Manager’s authority and duties as the Manager to Operate the Managed Facilities are limited to the
authority and duties set forth in this Agreement. Owner and Manager have elected to use the “Bally’s” brand (the “ Brand ”) in connection with
Manager’s Operation of the Casino; provided , that Owner shall have the right to, subject to the receipt of any required approval from any
Governmental Authority and Manager’s consent (such consent not to be unreasonably withheld, conditioned or delayed), change the Brand to
any other brand, with the costs of such rebranding borne by Owner. Manager shall reasonably assist Owner, at Owner’s expense, in connection
with any such re-branding. If the Brand is modified to another brand, the Parties shall cooperate to make such changes to this Agreement as are
necessary in light of the new brand.
2.1.2 Manager’s Standard of Care . Manager agrees with Owner that (a) it will execute its duties under this Agreement in a manner
that Manager reasonably believes will promote the overall long-term economic value and profitability of the Managed Facilities (the “
Manager’s Standard of Care ”), and (b) Manager shall be acting as the agent of Owner in connection with the performance of its duties under
this Agreement. Owner agrees that the Manager’s Standard of Care and Manager’s duties as agent to Owner are further subject to, and
2
limited by, the terms and conditions of this Agreement (including Section 2.3 ) and the Operating Limitations. Except for Manager’s
indemnification obligations set forth in Article XII , Owner agrees that, as between Owner and Manager, Manager will have no liability for
monetary damages or monetary relief to Owner for any violation of Manager’s Standard of Care or claims of breach of any fiduciary duties or
duties as agent unless such violation or breach was due to the Manager’s Gross Negligence or Willful Misconduct or any Manager Event of
Default.
2.1.3 Manager’s System Policies . Owner acknowledges that Manager’s Affiliates operate other casino, racetrack, hotel, dining,
retail, entertainment and other operations and that Manager or its Affiliates may derive benefits in addition to the fees and reimbursements paid
hereunder, including in connection with marketing programs, the Total Rewards System, the Operating Limitations, the purchasing programs,
the employment policies relating to the Managed Facilities Personnel or other programmatic or policy activities that may exist from time to
time at the discretion of CEOC or its Affiliates and that extend through the majority of Gaming properties operated by Manager’s Affiliates
(collectively, the “ Manager’s System Policies ”). Owner agrees that Manager will not be in violation of the Manager’s Standard of Care or in
breach of its duties as agent hereunder when Manager follows the Manager’s System Policies, even if certain aspects of the Manager’s System
Policies have the effect of providing greater benefit to the properties owned or operated by the Manager’s Affiliates collectively or third parties
than to the Managed Facilities, so long as the Manager’s System Policies are Non-Discriminatory to the Managed Facilities in both design and
implementation. The foregoing shall not be deemed to excuse any breach by Manager of any of the express provisions of this Agreement.
2.1.4 General Grant of Authority – Managed Facilities . On and subject to the terms of this Agreement, Owner hereby grants to
Manager (and Manager hereby accepts) the right, authority and responsibility during the Term, and instructs Manager during the Term, to take
all such actions for and on behalf of Owner and the Managed Facilities that Manager reasonably deems necessary or advisable to Operate the
Managed Facilities: (a) at a level of service and quality not less than the level of service and quality at the Managed Facilities as of the
Commencement Date; (b) in accordance in all material respects with the standards, policies and programs in effect as of the Commencement
Date at the Managed Facilities (with such revisions thereto from time to time as Manager may implement in a Non-Discriminatory manner,
provided that no such revisions shall result in a material adverse change in the overall quality and level of service at the Managed Facilities
without Owner’s prior written consent thereto); and (c) utilizing the Proprietary Information and Systems in accordance with the standards,
policies and programs generally applicable to the use and implementation of the Proprietary Information and Systems, provided that the same
are Non-Discriminatory with respect to the Managed Facilities (the standards and objectives described in clauses (a) through (c) being
referred to collectively as the “ Operating Standard ”), subject in each case to the Operating Limitations.
3
2.1.5 Specific Actions Authorized by Owner . Without limiting the generality of the authority granted to Manager in Section 2.1.4 ,
but subject to the Annual Budget then in effect and the Operating Limitations and other limitations and conditions set forth in this Agreement,
including in Section 2.2 , Owner’s general grant of authority under Section 2.1.4 and this Section 2.1.5 shall specifically include the right,
authority and responsibility of Manager to take, on behalf of Owner during the Term, the following actions (either directly or, to the extent
permitted under this Agreement, through a third party designated or subcontracted by Manager, which may be an Affiliate of Manager):
2.1.5.1(a) hire, supervise, train and discharge all Managed Facilities Personnel; and (b) establish all salary, fringe benefits
and benefits plans for the Managed Facilities Personnel;
2.1.5.2 establish and administer Bank Accounts for the operation of the Managed Facilities in accordance with Section 5.4 ;
2.1.5.3 prepare and deliver to Owner for Owner’s review and approval operating plans and budgets in accordance with
Section 5.1 ;
2.1.5.4 plan, account for and supervise all repairs, capital replacements and improvements to the Managed Facilities or any
portion thereof in accordance with Sections 5.2.1 and 5.2.2 ;
2.1.5.5 establish and maintain for the Managed Facilities accounting, internal controls and reporting systems that are
adequate to provide Owner, Manager and the Designated Accountant with sufficient information about the Managed Facilities to permit the
preparation of the financial statements and reports contemplated in Article X and which comply with all Applicable Laws;
2.1.5.6 negotiate, enter into and administer, in the name of Owner, all leases, service contracts, licenses and other contracts
and agreements Manager deems necessary or advisable for the Operation of the Managed Facilities, including contracts and licenses for:
(a) health and life safety systems and security force and related security measures; (b) maintenance of all electrical, mechanical, plumbing,
HVAC, elevator, boiler and other building systems; (c) electricity, gas and telecommunications (including television and internet service);
(d) cleaning, laundry and dry cleaning services; (e) use of copyrighted materials (including games, filmed entertainment, music and videos);
(f) entertainment; (g) gaming machines and other gaming equipment in the event applicable Gaming Laws permit or require Owner to own or
lease and maintain such gaming equipment and non-gaming equipment; and (h) ownership and operation of gaming servers;
2.1.5.7 negotiate, administer and perform (or cause to be performed) all obligations of Owner, in the name of Owner, under
all leases, ground leases, licenses and concession agreements or other agreements for the right to use or occupy any public space at the
Managed Facilities, including any store, office, parking facility or lobby space thereunder;
2.1.5.8 supervise and purchase or lease or arrange for the purchase or lease of, all FF&E and Supplies that are advisable for
the Operation of the Managed Facilities in accordance with this Agreement;
2.1.5.9 be the primary interface for all interactions with the Gaming Authorities in connection with the Managed Facilities
which shall include: (a) oversight of any amendments to any licenses or permits required by the applicable Gaming Authorities under any
applicable Gaming Laws; (b) coordination of all lobbying efforts with respect to the activities
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conducted or proposed to be conducted in connection with the Managed Facilities; including any introduction or possible introduction of table
games at the Managed Facilities and (c) preparation and implementation of all actions required with respect to any filing with the applicable
Gaming Authorities relating to the Managed Facilities; provided , that Manager shall consult with and keep Owner apprised of (i) the status of
any annual or other periodic license renewals for the operation of Gaming activities at the Managed Facilities with the Gaming Authorities and
(ii) the status of non-routine matters before the Gaming Authorities regarding the Managed Facilities; provided further , that any filings or
Gaming Approvals relating to Owner and Owner’s Affiliates shall be the responsibility of Owner;
2.1.5.10 apply for and process applications and filings for all Approvals in a manner and within the time periods that are
required for the Managed Facilities to be operated on a continuous and uninterrupted basis. Manager shall act in a reasonably diligent manner
to assure that all reports required by any Governmental Authority pertaining to the Managed Facilities are filed on or prior to their due date.
Owner shall file all such other reports pertaining to Owner. Manager shall prepare, maintain and provide to Owner, at Owner’s request, a listing
of all Approvals and reports required by any Governmental Authority and the term, duration or frequency of such Approvals and reports for the
Managed Facilities to be operated in a continuous and uninterrupted basis;
2.1.5.11 institute in its own name, or in the name of Owner or the Managed Facilities, using Approved Counsel, all legal
actions or proceedings to: (a) collect charges, rent or other income derived from the Managed Facilities’ operations; (b) oust or dispossess
guests, tenants or other Persons in possession therefrom; or (c) terminate any lease, license or concession agreement for the breach thereof or
default thereunder by the tenant, licensee or concessionaire;
2.1.5.12 using Approved Counsel, defend and control any and all legal actions or proceedings arising from Claims; provided
, that as soon as reasonably practical, Manager shall notify Owner in writing of the commencement of any legal action or proceeding
concerning the Managed Facilities which could reasonably be anticipated to involve an expense, liability or damage to Owner that is not fully
covered by insurance or is in excess of Two Hundred Fifty Thousand Dollars ($250,000); provided further , however , unless insurance policies
dictate otherwise, that (a) Owner may appoint counsel, defend and control any and all legal actions or proceedings pertaining to real property
related claims not involving the Operation of the Managed Facilities (such as zoning disputes, structural defects and title disputes); (b) in
determining what portion, if any, of the cost of any legal actions or proceedings described in clause (a) above is to be allocated to the Managed
Facilities, due consideration shall be given to the potential impact of such legal action or proceeding on the Managed Facilities as compared
with the potential impact on Manager or its Affiliates or on the Other Managed Resorts; and (c) if Owner is also a named party in such legal
actions or proceedings, Owner shall have the right to appoint separate counsel to prosecute and defend its interests, such appointment being at
Owner’s sole cost and expense;
2.1.5.13 using Approved Counsel, take actions to challenge, protest, appeal or litigate to final decision in any appropriate
court or forum any Applicable Laws affecting the Managed Facilities or any alleged non-compliance with, or violation of, any
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Applicable Law (with the cost of such challenge, protest, appeal or litigation being treated in the same manner as the cost of compliance with
the Applicable Law in question would be treated under Section 5.1.5.4 );
2.1.5.14 in Consultation with Owner, establish and implement all policies and procedures of credit to patrons of the
Managed Facilities;
2.1.5.15 collect and account for and remit to Governmental Authorities all applicable excise, sales, occupancy and use Taxes
and all other Taxes, assessments, duties, levies and charges imposed by any Governmental Authority and collectible by the Managed Facilities
directly from patrons or guests (including those Taxes based on the sales price of any goods, services, or displays, gross receipts or admission)
or imposed by Applicable Laws on the Managed Facilities or the Operations thereof;
2.1.5.16 subject to Applicable Law and in Consultation with Owner, establish the types of Gaming activities to be offered at
the Managed Facilities, including the matrix of owned, leased, progressive and electronic games and gaming systems. Manager, in Consultation
with Owner, shall establish all policies and procedures for Gaming at the Casino;
2.1.5.17 administer all non-Gaming activities to be conducted at the Managed Facilities, including all hospitality, retail, food
and beverage and other related activities;
2.1.5.18 establish and implement policies and procedures regarding, and assign Managed Facilities Personnel to resolve,
disputes with patrons of the Managed Facilities;
2.1.5.19 establish rates for all areas within the Managed Facilities, including all: (a) charges for food and beverage;
(b) charges for recreational and other guest amenities at the Managed Facilities, consistent with the corporate policy applicable to the Brand;
(c) subject to Applicable Law, policies with respect to discounted and complimentary food and beverage and other services at the Managed
Facilities; (d) billing policies (including entering into agreements with credit card organizations); (e) price and rate schedules; and (f) rents, fees
and charges for all leases, concessions or other rights to use or occupy any space in the Managed Facilities;
2.1.5.20 supervise, direct and control the collection of income of any nature from the Operation of the Managed Facilities
and issue receipts with respect to, and use reasonable efforts to collect all charges, rent and other amounts due from guests, lessees and
concessionaires of the Managed Facilities, and use those funds, as well as funds from other sources as may be available to the Managed
Facilities, in accordance with this Agreement;
2.1.5.21 determine the number of hours per week and the days per week that the Managed Facilities shall be open for
business, taking into account Applicable Laws, the season of the year and other relevant and customary factors;
2.1.5.22 in Consultation with Owner, select all entertainment and promotions events to be staged at the Managed Facilities;
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2.1.5.23 cooperate in all reasonable respects with Owner and any prospective purchaser, lessee, Lender or other prospective
lender in connection with any proposed sale, lease or financing of or relating to the Managed Facilities, including answering questions of
Owner or such other Persons, providing copies of financial statements and projections, preparing schedules and providing copies of leases,
concessions, Supplies, FF&E, employees and other similar matters, as may reasonably be requested by Owner or such other Persons; provided ,
that (a) if cooperation by Manager pursuant to this Section 2.1.5.23 involves the disclosure of Manager Confidential Information, Manager
shall only be required to release such Manager Confidential Information to a Lender, and only to the extent that such Lender has a “need to
know” such Manager Confidential Information in connection with any Financing, subject to customary protections against disclosure or misuse
of such information; and (b) Owner shall reimburse Manager for any Out-of-Pocket Expenses incurred by Manager in connection with such
cooperation to the extent such expense is not otherwise paid or reimbursed under this Agreement;
2.1.5.24 take all actions necessary (except to the extent not within Manager’s reasonable ability to do so) to comply with:
(a) all Applicable Laws or the requirements to maintain all Approvals necessary for the operation of the Managed Facilities ( provided , that
Manager shall not be a guarantor of the Managed Facilities’ compliance with such Applicable Laws or such requirements); (b) the requirements
of any Mortgage or other lease that is specifically identified by Owner to Manager ( provided , that Manager shall not be a guarantor of
Owner’s compliance with any such Mortgage or lease); (c) the requirements of any Financing Documents provided to Manager ( provided , that
Manager shall not be a guarantor of Owner’s compliance with any such Financing Documents); and (d) the terms of all insurance policies
applicable to the Managed Facilities and provided to Manager;
2.1.5.25 as directed by Owner and at Owner’s expense, take actions to discharge any lien, encumbrance or charge against the
Managed Facilities or any component of the Managed Facilities;
2.1.5.26 supervise and maintain books of account and records relating to or reflecting the results of operation of the
Managed Facilities;
2.1.5.27 keep the Managed Facilities and the FF&E in good operating order, repair and condition, consistent with the
Operating Standard;
2.1.5.28 take such actions as Manager determines to be necessary or advisable to perform all duties and obligations required
to be performed by Manager under this Agreement or as are customary and usual in the operation of the Managed Facilities in accordance with
the Operating Standard and the Manager’s Standard of Care, in each case subject to the Operating Limitations;
2.1.5.29 implement standards, policies and programs in effect for the Brand and the Total Rewards System in accordance
with Exhibit G attached hereto;
2.1.5.30 with respect to the Managed Facilities Guest Data, the Guest Data, the Managed Facilities and Total Rewards
System, establish such contact and privacy policies and implement such data security policies and security controls for databases and systems
utilizing Managed Facilities Guest Data, the Guest Data and the Total Rewards System as Manager determines is desirable to protect such
information;
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2.1.5.31 establish policies and procedures relating to problem gaming, underage drinking, compliance with the Americans
with Disabilities Act, diversity and inclusion and a whistleblower hotline which shall, in each case, comply in all respects with Applicable
Laws;
2.1.5.32 establish, in Consultation with Owner, rates for the usage of all guest rooms and suites, including all (i) room rates
for individuals and groups; (ii) charges for room service, food and beverage; (iii) charges for recreational and other hotel guest amenities at the
Managed Facilities (consistent with the corporate policy applicable to the Other Managed Resorts); (iv) policies with respect to
Complimentaries; (v) billing policies (including entering into agreements with credit card organizations); (vi) price and rate schedules; and
2.1.5.33 take any action necessary or ancillary to the responsibilities and authorities set forth above in this Section 2.1.5 , it
being acknowledged and agreed that the foregoing is not intended to be an exhaustive list of Manager’s responsibilities or authorities.
2.2 Limitations on Manager Authority .
Notwithstanding the grant of authority given to Manager in Section 2.1 , and without limiting any of the other circumstances under which
Owner’s approval is specifically required under this Agreement, Manager shall not take any of the following actions without Owner’s prior
written approval:
2.2.1 Settle any claim (a) regardless of the amount, admitting intentional misconduct or fraud or (b) arising out of the Operations of
the Managed Facilities which involves an amount in excess of $500,000 that is not fully covered (other than deductible amounts) by insurance
or as to which the insurance denies coverage or “reserves rights” as to coverage; provided , that the dollar amount specified in this Section 2.2.1
shall be increased on January 1 of every third Operating Year by the percentage increase in the Index since January 1 of the first Operating
Year or the date of the prior increase, as applicable;
2.2.2 Execute, amend, modify, provide a written waiver of rights under or terminate any contract, lease, equipment lease or other
agreement (in each case, or a series of contracts, leases, equipment leases or other agreements relating to the same or similar property,
equipment, goods or services, as applicable, with the same or a related party) that (a)(i) is for a term of greater than three (3) years and
(ii) requires payment in excess of $500,000 or (b) requires aggregate annual payments in excess of $500,000, other than contracts, leases or
other agreements which are specifically identified in the Annual Budget; provided , that the dollar amount specified in this Section 2.2.2 shall
be increased on January 1 of every third Operating Year by the percentage increase in the Index since January 1 of the first Operating Year or
the date of the prior increase, as applicable;
2.2.3 Except as permitted by Section 5.5.3 , borrow any money or incur indebtedness or issue any guaranty in respect of borrowed
money, or issue any indemnity or surety obligation outside of the ordinary course of business, in the name and on behalf of Owner;
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2.2.4 Grant or create any lien or security interest on the Managed Facilities or any part thereof or interest therein; provided , that the
foregoing shall not be deemed to restrict Manager from incurring trade payables, ordinary course advances for travel, entertainment or
relocation or granting credit or refunds to patrons for goods and services incurred in the ordinary course of business in the Operation of the
Managed Facilities in accordance with this Agreement;
2.2.5 Sell or otherwise dispose of the Managed Facilities or any part thereof or interest therein, including FF&E, except for the sale
of inventory and the disposal of obsolete or worn out or damaged items, each in the ordinary course of business or as contemplated in the
Annual Budget or Capital Budget;
2.2.6 Commence any ROI Capital Improvements, except as directed by Owner or as included in the Capital Budget, or commence
any Building Capital Improvements, except if required by the Operating Standard as determined pursuant to Section 5.1.4 and Expert
Resolution under Article XVII or Operating Limitations;
2.2.7 Hire or replace individuals for the positions of Senior Executive Personnel;
2.2.8 Submit, settle, adjust or otherwise resolve any casualty insurance claim related to the Managed Facilities involving losses or
casualties in excess of $500,000; provided , that the amount specified in this Section 2.2.8 shall be increased on January 1 of every third
Operating Year by the percentage increase in the Index since January 1 of the first Operating Year or the date of the prior increase, as
applicable;
2.2.9 Enter into any contract or transaction with an Affiliate of Manager, except as expressly provided for in this Agreement or
expressly permitted in the Annual Budget (it being understood that any such contract or transaction entered into with an Affiliate of Manager
and not approved in writing pursuant to this Section 2.2 shall first comply with the provisions of Section 5.6 or Section 5.8 , as applicable);
2.2.10 Confess any judgment, make any assignment for the benefit of creditors, admit an inability to pay debts as they become due
in the ordinary course of business, file a voluntary bankruptcy or consent to any involuntary bankruptcy with respect to the Managed Facilities
or Owner;
2.2.11 Initiate or settle any real or personal property tax appeals or claims involving property of Owner, unless directed by Owner in
writing;
2.2.12 Acquire any land or interest in land in the name of Owner;
2.2.13 Consent to any condemnation relating to the Managed Facilities, except with respect to Manager’s interests under this
Agreement as contemplated in Section 15.2 ;
2.2.14 File with any Governmental Authority any federal or state income tax return applicable to Owner; or
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2.2.15 Execute, amend, modify, provide written waiver of rights under or terminate any collective bargaining, recognition,
neutrality or other material labor agreements solely involving the Managed Facilities Personnel; provided , that with respect to the execution,
amendment, modification, waiver of rights under or termination of any collective bargaining, recognition, neutrality or other material labor
agreements which involve both Managed Facilities Personnel and other employees providing services at properties that are owned by or
managed by Manager’s Affiliates (other than any of the Growth Managed Facilities), the consent of Owner shall be required, which consent
shall not be unreasonably withheld, conditioned or delayed.
2.3 Other Operations of Manager and Owner .
2.3.1 Without limiting Manager’s obligation under Section 2.1.2 , Owner acknowledges that: (a) Owner has selected Manager to
Operate the Managed Facilities on behalf of Owner in substantial part because of the other hotels, casinos, entertainment venues, dining
establishments, spas and retail locations that are owned or operated by Manager and its Affiliates; (b) Owner has determined, on an overall
basis, that the benefits of operation as part of the Total Rewards System are substantial, notwithstanding that the properties operating under the
Brand and the Service Mark Rights may not all benefit equally from operation as part of the Brand or under such Service Mark Rights; and
(c) in certain respects all hotels, casinos, entertainment venues, dining establishments, spas and retail locations compete on a national, regional
and local basis with other hotels and casinos and facilities, and that conflicts and competition may, from time to time, arise between the
Managed Facilities, on the one hand, and Other Managed Resorts, on the other hand.
2.3.2 Owner acknowledges and agrees that (i) Manager and its Affiliates own and operate many casino, hotel and other properties
across the country and internationally, some of which may be in competition with the Managed Facilities and (ii) neither Manager nor any
Affiliate of Manager shall have any obligation to promote the value and profitability of the Managed Facilities at the expense of such other
properties. Subject to the limitations and restrictions set forth in Sections 2.3.4 , 2.3.5 and 7.4.3 and Applicable Law, Manager and its Affiliates
shall be permitted to: (a) utilize the Guest Data for its own account and for use at Manager’s and its Affiliates’ other owned and/or operated
properties and utilize and retain the Guest Data after expiration or termination of the Term, (b) engage in commercially reasonable
cross-marketing and cross-promotional activities with Manager’s and its Affiliates’ other owned and/or operated properties, and (c) otherwise
participate or engage in competing projects, programs and activities. This Section 2.3.2 shall survive the expiration or termination of this
Agreement. For the avoidance of doubt, the limitations and restrictions set forth in Sections 2.3.4 shall not survive the expiration or termination
of this Agreement.
2.3.3 Manager acknowledges and agrees that Owner and its Affiliates may develop, operate and manage properties and other
facilities in other locations, some of which may be in competition with the Managed Facilities. Subject to the limitations and restrictions set
forth in Sections 7.4.3 and Applicable Law, Owner shall be permitted to: (a) utilize the Managed Facilities Guest Data for its own account and
for use at its other properties, utilize the Managed Facilities Guest Data during the Term, and retain and use the Managed Facilities Guest Data
after expiration or termination of the Term in accordance with this Agreement, (b) engage in cross-marketing and cross-promotional activities
for the direct benefit of Owner’s other
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properties in a manner that may be competitive to the Managed Facilities or Manager’s and its Affiliates’ other owned and/or operated facilities
or operations, and (c) otherwise participate or engage in competing projects, programs and activities. This Section 2.3.3 shall survive the
expiration or termination of this Agreement.
2.3.4 Notwithstanding the provisions of Section 2.3.2 , Manager hereby agrees that neither it nor any of its Affiliates shall, directly
or through others, own or operate a physical gaming facility under the name “Bally’s” (or any derivative thereof) within twenty (20) miles of
the Managed Facilities (for so long as “Bally’s” (or any derivative thereof) is the Brand).
2.3.5 Notwithstanding anything herein to the contrary, none of the limitations or restrictions in this Section 2.3 shall apply to
e-gaming operations.
2.4 Term .
2.4.1 Term . The initial term (the “ Initial Term ”) of this Agreement (together with the Renewal Term and any Continuing Term, as
applicable, the “ Term ”) shall commence on the Commencement Date and expire on the day immediately preceding the fifteenth
(15th) anniversary of the Commencement Date, unless terminated earlier in accordance with the terms of this Agreement or extended by
Manager. Manager shall have the right (but not the obligation) to extend the Initial Term of this Agreement for one (1) additional ten (10) year
period (the “ Renewal Term ”) by giving Owner written notice of its desire to extend not later than ninety (90) days prior to the expiration of
the Initial Term of this Agreement. The Renewal Term is subject to earlier termination in accordance with the terms of this Agreement. After
expiration of the Renewal Term, the Term of this Agreement shall continue until (a) terminated by Manager or Owner upon at least ninety
(90) days prior written notice delivered to the Other Party, (b) terminated by Manager as permitted by Section 16.2 or (c) terminated by Owner
as permitted by Section 16.3 (the “ Continuing Term ”). If this Agreement is renewed for the Renewal Term or continues for the Continuing
Term, unless otherwise agreed by the Manager and Owner in writing, this Agreement, and all terms, covenants and conditions set forth herein,
shall be automatically extended to the expiration or earlier termination in accordance with the terms of this Agreement of the Renewal Term or
the Continuing Term, as applicable.
2.4.2 No Other Early Termination . This Agreement may only be terminated prior to the expiration of the Term as provided in
Article XVI . Notwithstanding any Applicable Law to the contrary, including principles of agency, fiduciary duties or operation of law, neither
Owner nor Manager shall be permitted to terminate this Agreement except in accordance with the express provisions of Article XVI of this
Agreement.
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ARTICLE III.
FEES AND EXPENSES
3.1 Management Fees .
The following provisions shall apply to the payment of the Management Fees and other fees and expenses:
3.1.1 Base Management Fee . The Base Management Fee for each month shall be payable to Manager in monthly installments in
arrears within fifteen (15) days of delivery to Owner of each Monthly Report required under Section 10.2 . Each installment payment of the
Base Management Fee shall equal the Base Management Fee for the preceding twelve (12) month period, less the sum of all prior installment
payments of Base Management Fee attributable to such period (and subject to any adjustments made in connection with any annual
reconciliations undertaken pursuant to Section 3.1.3 ). At the time of submission of each Monthly Report, Manager shall provide to Owner a
computation of the Base Management Fee installment payment in reasonable detail and certified by Manager’s Designated Financial Officer.
Any disputes regarding the Base Management Fee shall be referred to the Expert for Expert Resolution pursuant to Article XVII .
3.1.2 Incentive Management Fee . The Incentive Management Fee shall be payable to Manager in quarterly installments in arrears
within fifteen (15) days of delivery to Owner of each Quarterly Report with respect to the end of the calendar quarter to which such Incentive
Management Fee installment relates. Each installment payment of the Incentive Management Fee shall equal the Incentive Management Fee
for the period consisting of the preceding four (4) calendar quarters, less the sum of all prior installment payments of Incentive Management
Fee attributable to such period (and subject to any adjustments made in connection with any annual reconciliations undertaken pursuant to
Section 3.1.3 ). At the time of submission of each Quarterly Report, Manager shall provide to Owner a computation of the Incentive
Management Fee installment payment in reasonable detail and certified by Manager’s Designated Financial Officer. Any disputes regarding the
Incentive Management Fee shall be referred to the Expert for Expert Resolution pursuant to Article XVII .
3.1.3 Reconciliation of Management Fees . By April 15 of each Operating Year during the Term, Manager shall cause to be
prepared and delivered to Owner a reconciliation statement for the prior Operating Year showing the calculation and payment of the
Management Fees for the prior Operating Year, and appropriate adjustments shall be made for any overpayment or underpayment of the
Management Fees during such Operating Year. If any reconciliation statement reflects an overpayment of Management Fees to Manager,
Manager shall, within fifteen (15) days after such reconciliation statement has been delivered by Manager to Owner, deposit into the Operating
Account the amount of such overpayment. If the reconciliation statement reflects an underpayment of Management Fees to Manager, Manager
shall disburse from the Operating Account, within thirty (30) days after such reconciliation statement has been delivered by Manager to Owner,
the amount of such underpayment of Management Fees due Manager; provided that if funds in the Operating Account are insufficient to
withdraw such underpayment or such withdrawal is otherwise restricted for a period of sixty (60) days after such reconciliation statement has
been delivered, the amount of such underpayment shall accrue interest in accordance with Section 3.4 and shall be withdrawn by Manager as
soon as funds are sufficient therefor. Any disputes regarding such reconciliation statement shall be referred to the Expert for Expert Resolution
pursuant to Article XVII .
3.2 Centralized Services Charges .
Centralized Services Charges payable in accordance with Section 4.1.1 shall be due and payable to Manager monthly in arrears for the
immediately preceding month within fifteen (15)
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days of delivery to Owner of the Monthly Report for such month. All Centralized Services Charges shall be set forth in the Monthly Reports.
Any disputes regarding the Centralized Services Charges shall be referred to the Expert for Expert Resolution pursuant to Article XVII .
3.3 Reimbursable Expenses .
Owner shall reimburse Manager for all Reimbursable Expenses incurred by Manager during the Term. The Reimbursable Expenses
(a) may be withdrawn by Manager from the Operating Account to pay such Reimbursable Expenses when such amounts become due or
(b) shall be due monthly in arrears for the immediately preceding month within fifteen (15) days of delivery to Owner of the Monthly Reports
for such month. If funds in the Bank Accounts are insufficient to pay such Reimbursable Expenses or if such withdrawal is otherwise restricted
within the sixty (60) day period after such Reimbursable Expenses are due, such Reimbursable Expenses shall accrue interest in accordance
with Section 3.4 and shall be withdrawn by Manager from the Operating Account as soon as funds are sufficient therefor. Any disputes
regarding the Reimbursable Expenses shall be referred to the Expert for Expert Resolution pursuant to Article XVII .
3.4 Interest .
If any fee or other amount due by either Party to the other Party or its Affiliates or designees under this Agreement is not paid within
sixty (60) days after such payment is due, such amount shall bear interest from and after the respective due dates thereof until the date on which
the amount is received in the bank account designated by the Party to which such amount is owed at an annual rate of interest equal to the
lesser of (a) the prevailing lending rate of such Party’s principal bank for working capital loans to such Party plus three percent (3%) and
(b) the highest rate permitted by Applicable Law.
3.5 Payment of Fees and Expenses .
3.5.1 No Offset . All payments by Owner or by Manager under this Agreement and all related agreements between the Parties or
their respective Affiliates shall be made pursuant to independent covenants, and neither Owner nor Manager shall set off any claim for damages
or money due from either Party or any of its Affiliates to the other, except to the extent of any outstanding and undisputed payments owed to
Owner by Manager under this Agreement.
3.5.2 Place and Means of Payment . All fees and other amounts due to Manager or its Affiliates under this Agreement, including,
without limitation, Management Fees, Centralized Services Charges and Reimbursable Expenses, shall be paid to Manager in U.S. Dollars, in
immediately available funds. Manager may pay such fees and other amounts owed to Manager or its Affiliates consistent with this Agreement
and the Annual Budget directly from the Operating Account or, in the case of Management Fees, Management Account when such fees and
other amounts are due. In addition, Manager may require that any such payments to Manager hereunder be effected through electronic
debit/credit transfer of funds programs specified by Manager from time to time, and Owner agrees to execute such documents (including
independent transfer authorizations), pay such fees and costs and do such things as Manager reasonably deems necessary to effect such
transfers of funds.
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3.6 Application of Payments .
All payments by Owner, or by Manager on behalf of Owner, pursuant to this Agreement and all related agreements shall be applied in the
manner provided in this Agreement.
3.7 Sales and Use Taxes .
Owner shall pay to Manager an amount equal to any sales, use, commercial activity tax, gross receipts, value added, excise or similar
taxes assessed against Manager by any Governmental Authority that are calculated on Reimbursable Expenses or Centralized Services Charges
required to be paid by Owner under this Agreement (but not, for avoidance of doubt, any such assessment with respect to the Management
Fees), other than income, gross receipts, franchise or similar taxes assessed against Manager on the Management Fees or income taxes on
Manager’s income. Owner and Manager agree to cooperate in good faith to minimize the taxes assessed against Manager, Owner and the
Managed Facilities, including taxes assessed against Owner in connection with paying Reimbursable Expenses directly to the applicable
third-party vendor, so long as such actions are commercially reasonable and could not reasonably be expected to, and do not, result in an
adverse impact in any material respect on Manager, Owner or the Managed Facilities. In the event of any dispute regarding appropriate actions
to be taken to minimize taxes assessed against Manager, Owner and the Managed Facilities, such dispute may be submitted by either Party for
Expert Resolution in accordance with Article XVII .
ARTICLE IV.
CENTRALIZED SERVICES
4.1 Centralized Services .
In connection with Manager’s Operation of the Managed Facilities, Manager agrees to arrange for it or its Affiliates to provide, on
commercially reasonable terms and on a Non-Discriminatory basis, the centralized managerial, administrative, supervisory and support services
and products to Manager and the Managed Facilities as are generally provided to the Other Managed Resorts as of the Commencement Date
(collectively, the “ Centralized Services ”), including (without limitation): (a) services and products in the areas of marketing, risk
management, information technology, legal, internal audit, accounting and accounts payable; (b) the Proprietary Information and Systems; and
(c) the Total Rewards System. As consideration for the Management Fee, Manager grants (or has caused its Affiliates to grant) to the Owner a
license to the Technology Systems included in the Centralized Services solely with respect to the Property during the Term and the Transition
Period; provided that, notwithstanding anything to the contrary set forth in this Agreement, such license shall be perpetual if a Manager Event
of Default occurs. The Centralized Services to be provided under this Agreement may be provided by Manager, CEC, CEOC, Services Co or
an Affiliate of any of them in or from Las Vegas, Nevada or in or from other locations other than the Managed Facilities, or for such
Centralized Services provided by third parties, by a third-party designated by Manager, CEOC, Services Co or an Affiliate of any of them (the
“ Third-Party Centralized Services ”). Owner and Manager acknowledge and agree that the Managed Facilities shall participate in all
Centralized Services as determined by Manager on a Non-Discriminatory basis, and Owner shall pay all Centralized Services Charges (all of
which shall be commercially reasonable and reasonably allocated) for, and comply with all terms and requirements of, such Centralized
Services.
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4.1.1 Centralized Services Charges .
4.1.1.1 Calculation of Centralized Services Charges . The amounts charged to the Managed Facilities for the Centralized
Services (the “ Centralized Services Charges ”) shall be determined as follows: the sum of (a) such amounts that have been historically
“allocated” to the Managed Facilities will continue to be done in a manner consistent with past practices, and (b) such amounts that have been
historically “unallocated” and incurred in performance of the Centralized Services and fairly and equitably allocated to the Managed Facilities
on the same basis as such amounts are determined for substantially all of the Other Managed Resorts that are participating in such Centralized
Services and in a manner that is commercially reasonable and Non-Discriminatory to the Managed Facilities, and may include a reasonable
allocation of amounts reasonably calculated to cover the overhead and other costs incurred by Manager or its Affiliates (as applicable) in
providing (or arranging for the provision of) such Centralized Services, including: (i) compensation and employee benefits of Corporate
Personnel directly involved in providing the Centralized Services; (ii) recovery of development costs and promotion costs for such Centralized
Services; (iii) costs of equipment employed in providing the Centralized Services; and (iv) costs of operating, maintaining and upgrading the
Centralized Services. In addition, Owner shall pay all costs for the installation and maintenance of any equipment and Technology Systems at
the Managed Facilities used in connection with the Centralized Services. Manager, its Affiliates and any third-party providing any Centralized
Services shall have the right to increase or decrease any or all of the Centralized Services Charges from time to time, upon notice to Owner,
provided that any such changes in the services and/or charges for such Centralized Services are commercially reasonable and are applied on a
Non-Discriminatory basis.
4.1.1.2 Allocation of Costs . Owner acknowledges that from time to time there might be a current surplus or current deficit
of funds for any one (1) or more Centralized Services, and that any retention of funds for use at a later date (including interest earned thereon)
shall not constitute a profit. Owner acknowledges that the Centralized Services Charges for Third-Party Centralized Services may include a
profit component to such third-party.
4.1.1.3 Right to Pay Third-Party Providers . Manager shall have the right (but not the obligation) to pay (directly or through
an Affiliate) a reasonable allocation of any amounts due to a third-party for any Third-Party Centralized Services provided to the Managed
Facilities, in which case, notwithstanding anything to the contrary in this Agreement, such amounts shall be deemed to be Reimbursable
Expenses for all purposes under this Agreement and such amount shall not be included in the Centralized Services Charges to the extent it is
characterized as a Reimbursable Expense.
4.2 Modification of Centralized Services .
Owner acknowledges that the Centralized Services are an integral part of Manager’s operation of the Other Managed Resorts and related
facilities, and CEOC and/or Services Co needs the flexibility to modify the Centralized Services to respond to market trends, customer
demands, economic conditions, technological advances and other factors affecting the operation of the Other Managed Resorts and related
facilities, as they may change from time to time.
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Accordingly, Owner agrees that CEOC and/or Services Co and its respective Affiliates shall have the right to: (a) modify the structure, scope,
delivery and manner of providing of any Centralized Services; or (b) add a new, or discontinue an existing, Centralized Service, as Manager
deems advisable from time to time; provided that, in each case, any such changes are commercially reasonable and Non-Discriminatory to the
Managed Facilities in both design and implementation.
ARTICLE V.
OPERATION OF THE MANAGED FACILITIES
5.1 Annual Budget .
5.1.1 Proposed Annual Budget . The portion of the operating plan and budget for the Managed Facilities in effect immediately prior
to the Commencement Date that relates and applies to the period from and after the Commencement Date through and including December 31,
2014 shall apply under this Agreement as the Annual Budget for such period. On or before November 1 of each Operating Year, Manager shall
prepare and deliver to Owner, for its review and approval, a proposed operating plan and budget for the next Operating Year. All operating
plans and budgets proposed by Manager shall include (without limitation) projections of Gross Operating Revenue and Operating Expenses by
department for such period for the Managed Facilities and shall be prepared in good faith in accordance with budgeting and planning
procedures typically employed by CEOC’s operating subsidiaries. Each operating plan and budget shall include monthly and annualized
projections of each of the following items, as applicable, for the Managed Facilities:
5.1.1.1 results of operations (including itemized Gross Operating Revenue, Promotional Allowances, Operating Expenses
and EBITDA), together with the following supporting data: (a) total labor costs, including both fixed and variable labor; (b) the Management
Fees, Centralized Services Charges and Reimbursable Expenses; and (c) a description of the category and nature of Centralized Services to be
provided, together with a budget for each such category;
5.1.1.2 a description of proposed Routine Capital Improvements, Building Capital Improvements and ROI Capital
Improvements to be made during such Operating Year, including capitalized lease expenses, an itemization of the costs of such capital
improvements (including a contingency line item) and proposed monthly funding for such costs, and project schedules to commence and
complete such capital improvements (the “ Capital Budget ”);
5.1.1.3 a statement of cash flow, including a schedule of any anticipated cash shortfalls or requirements for funding by
Owner;
5.1.1.4 a schedule of debt service payments and reserves required under any Financing Documents;
5.1.1.5 a marketing plan and budget for the activities to be undertaken by Manager pursuant to Article IX , including
promotional activities and Promotional Allowances for the Managed Facilities;
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5.1.1.6 an allocation for all Centralized Services; and
5.1.1.7 any other information or projections reasonably requested by Owner to be included in the operating plan and budget
from time to time.
5.1.2 Approval of Annual Budget . Owner shall review the proposed operating plan and budget and shall provide Manager with its
written approval of or any objections to such proposed operating plan and budget in writing, in reasonable detail, within forty-five (45) days
after receipt of the proposed operating plan and budget from Manager; provided , any line items in the proposed operating plan and budget shall
not be adopted and implemented by Manager until Owner shall have approved such operating plan and budget and/or any items therein in
dispute shall have been determined pursuant to Section 5.1.3 . Owner shall be deemed to have approved that portion of any proposed operating
plan and budget to which Owner has not approved in writing or objected to in writing within such forty-five (45) day period. If Owner objects
to any portion of the proposed operating plan and budget within such forty-five (45) day period, the Parties shall meet within twenty (20) days
after Manager’s receipt of Owner’s objections and discuss such objections, and then Manager shall submit written revisions to the proposed
operating plan and budget after such discussion. The Parties shall use good faith efforts to reach an agreement on the operating plan and budget
prior to January 1 of each Operating Year. The proposed operating plan and budget, as modified to reflect the revisions, if any, agreed to by the
Parties pursuant to Section 5.1.3 , shall become the “ Annual Budget ” for the next Operating Year. Owner shall act reasonably and exercise
prudent business judgment in approving of, or objecting to, all or any portion of any proposed operating plan and budget.
5.1.3 Resolution of Disputes for Annual Budget . If the Parties, despite their good faith efforts, are unable to reach final agreement
on the proposed operating plan prior to January 1 of each Operating Year, or otherwise have a dispute regarding the Annual Budget as
contemplated by this Section 5.1 , those portions of such proposed operating plan that are not in dispute shall become effective on January 1 of
such Operating Year and, pending the Parties’ resolution of such dispute, the prior year’s Annual Budget shall govern the items in dispute,
except that the budgeted expenses provided for such item(s) in the prior year’s Annual Budget (or, if earlier, the last Annual Budget in which
the budgeted expenses for such disputed item(s) were approved) shall be increased by the percentage increase in the Index from January 1 of
the prior Operating Year (or, if applicable, each additional Operating Year between the prior Operating Year and the Operating Year in which
there became effective the last Annual Budget in which the budgeted expenses for such disputed item(s) were approved). Upon the resolution
of any such dispute by agreement of the Parties, such resolution shall control as to such item(s). For purposes of clarity, all disputes regarding
the Annual Budget shall be resolved (if at all) between Owner and Manager directly and no such dispute shall subject to Expert Resolution
through the procedures described in Article XVII unless Owner and Manager (each acting in its sole discretion) agree in writing at the time any
such dispute arises to mutually submit the subject dispute to Expert Resolution under Article XVII .
5.1.4 Operation in Accordance with Annual Budget . Manager shall use its commercially reasonable efforts to operate the Managed
Facilities in accordance with the Annual Budget for the applicable Operating Year (subject, in the case of disputed items, to the
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provisions of Section 5.1.3 ). Nevertheless, the Parties acknowledge that preparation of the Annual Budgets is inherently inexact and that
Manager may vary from any Annual Budget (a) to the extent Manager reasonably determines that such variance is required by any Financing
Document, (b) in connection with the matters set forth in Section 5.1.5 , or (c) by reallocating up to ten percent (10%) of any line item (as
shown on the Summary Annual Budget in the form attached hereto as Exhibit C ) to any other line item without Owner’s prior approval (unless
such other line item is for Centralized Service Charges or Reimbursable Expenses for Third Party Centralized Services pursuant to
Section 4.1.1.3 , in which event Owner’s approval shall be required for such reallocation). Other than as set forth in the preceding sentence,
Manager shall not incur costs or expenses or make expenditures that would cause the total expenditures for the Operation of the Managed
Facilities to exceed the aggregate amount of expenditures provided in the Annual Budget by more than five percent (5%) without Owner’s
prior approval. Owner acknowledges that the actual financial performance of the Managed Facilities during any Operating Year will likely vary
from the projections contained in the Annual Budget for such Operating Year, and Manager shall not be deemed to have made any guarantee,
warranty or representation whatsoever in connection with the Annual Budget or consistency of actual results with the Operating Plan.
5.1.5 Exceptions to Annual Budget . Notwithstanding Section 5.1.4 , Owner acknowledges and agrees as follows:
5.1.5.1 The amount of certain expenses provided for in the Annual Budget for any Operating Year will vary based on the
occupancy, use and demand for goods and services provided at the Managed Facilities and, accordingly, to the extent that occupancy, use and
demand for such goods and services for any Operating Year exceeds the occupancy, use and demand projected in the Annual Budget for such
Operating Year, such Annual Budget shall be deemed to include corresponding increases in such variable expenses, provided , that the
percentage increase in the variable expense over budget shall not exceed the percentage increase in corresponding revenue over projections. To
the extent that occupancy, use and demand for goods and services provided at the Managed Facilities for any Operating Year is less than the
occupancy, use and demand projected in the Annual Budget for such Operating Year, Manager will make commercially reasonable adjustments
to the Operation of the Managed Facilities in an effort to reduce such variable expenses;
5.1.5.2 The amount of certain expenses provided for in the Annual Budget for any Operating Year are not within the ability
of Manager to control, including real estate and personal property taxes, applicable gaming taxes, insurance premiums, utility rates, license and
permit fees and certain charges provided for in contracts and leases entered into pursuant to this Agreement, and accordingly, Manager shall
have the right to pay from the Operating Account the actual amount of such uncontrollable expenses without reference to the amounts provided
for with respect thereto in the Annual Budget for such Operating Year ( provided that Manager shall promptly provide Owner with a
reasonably detailed written explanation of all variances in excess of five percent (5%) between the budgeted and actual amounts of any such
uncontrollable expenses);
5.1.5.3 If any expenditures are required on an emergency basis to (a) preserve or repair the Managed Facilities or other
property or (b) avoid potential injury to
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persons or material damage to the Managed Facilities or other property, Manager shall have the right to make such expenditures, whether or not
provided for, or within the amounts provided for, in the Annual Budget for the Operating Year in question, to the extent reasonably required to
avoid or mitigate such injury or material damage; and
5.1.5.4 If any expenditures are required to comply with, or cure or prevent any violation of, any Applicable Law, Manager
shall, following written notice to Owner (except in the case of emergency, in which case the provisions of Section 5.1.5.3 shall govern) have
the right to make such expenditures, whether or not provided for or within the amounts provided for in the Annual Budget for the Operating
Year in question, as may be necessary to comply with, or cure or prevent the violation of, such Applicable Law.
5.1.6 Modification to Annual Budget . Manager shall have the right from time to time during each Operating Year to propose
modifications to the Annual Budget then in effect based on actual operations during the elapsed portion of the applicable Operating Year and
Manager’s reasonable business judgment as to what will transpire during the remainder of such Operating Year. If, during any Operating Year,
Manager forecasts the EBITDA for such Operating Year to be less than the budgeted EBITDA by more than five percent (5%), Manager shall
meet with Owner to discuss appropriate modifications to the operating, promotional and marketing plans in order to address the forecasted
variance. Modifications to such Annual Budget, if any, shall be subject to Owner’s prior written approval; provided , that in no event shall
Owner have the right to withhold its approval to any material modifications on account of changes to costs of insurance premiums, operating
supplies and equipment, charges provided for in contracts and leases entered into pursuant to this Agreement or other amounts that are not
within Manager’s ability to control (e.g., taxes, assessments, utilities, license or permit fees, inspection fees and any impositions imposed by
any Governmental Authority).
5.2 Maintenance and Repair; Capital Improvements .
5.2.1 Required Maintenance and Repair and Capital Improvements . Except as otherwise provided in this Section 5.2 , Manager, at
Owner’s expense, shall perform or cause to be performed all ordinary maintenance and repairs and all such Routine Capital Improvements and
Building Capital Improvements: (a) as are necessary or advisable to keep the Managed Facilities in good working order and condition and in
compliance with the Operating Standard (subject to the Annual Budget and Section 5.1.4) and Operating Limitations; and (b) as Manager
reasonably determines are necessary or advisable to comply with, and cure or prevent the violation of, any Applicable Laws. Manager, at
Owner’s expense, shall perform or cause to be performed all such Routine Capital Improvements and Building Capital Improvements as are
provided in the Annual Budget or otherwise approved in writing by Owner.
5.2.2 Discretionary Capital Improvements . Manager, at Owner’s expense, shall cause to be performed all ROI Capital
Improvements approved by Owner (in the Annual Budget or otherwise in writing in advance), and shall supervise such work and ensure that
the performance of such work is undertaken in a manner reasonably calculated to avoid or minimize interference with the Operation of the
Managed Facilities. Except as provided in the applicable Annual Budget or proposed by Manager and approved by Owner, Owner shall notify
Manager of any ROI Capital Improvements proposed to be undertaken by Owner and Manager may, within
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thirty (30) days after receipt of such notice, object to the undertaking of such ROI Capital Improvements based on Manager’s reasonable
determination that such ROI Capital Improvements will not be consistent with the Operating Standard or will unreasonably interfere with the
Operation of the Managed Facilities, including that such ROI Capital Improvements would unreasonably interfere with the Managed Facilities’
operating performance and the ability of Manager to Operate the Managed Facilities in accordance with the Operating Standard. Within fifteen
(15) days after receipt of any notice from Manager alleging a deficiency with respect to any ROI Capital Improvement proposed by Owner,
Owner shall respond in detail to such allegation and, if the matter is not resolved by the Parties within thirty (30) days after Owner’s response,
the determination of whether such capital improvement does not, or when constructed will not, be consistent with the Operating Standard or
will unreasonably interfere with the Operation of the Managed Facilities shall be submitted to the Expert for Expert Resolution in accordance
with Article XVII . If the Expert determines that such capital improvement does not, or when constructed will not, comply with the Operating
Standard or will unreasonably interfere with the Operation of the Managed Facilities, Owner shall promptly take such actions as the Expert
shall require to bring such capital improvement into compliance with the Operating Standard or to cause such capital improvement to not
unreasonably interfere with the Operation of the Managed Facilities.
5.2.3 Intentionally Omitted .
5.2.4 Intentionally Omitted .
5.2.5 Remediation of Design or Construction Defect . If the design or construction of the Managed Facilities is defective, and the
defective condition presents a risk of injury to persons or damage to the Managed Facilities or other property, or results in non-compliance with
Applicable Law, then Manager shall have the authority to, at Owner’s expense, perform all work necessary to remedy such design or
construction defect in the Managed Facilities. Owner acknowledges that such work shall be performed at Owner’s expense and that Manager
shall not use funds in the Operating Account in remedying such defects.
5.3 Personnel .
5.3.1 Manager Control . Manager shall manage and have sole and exclusive control of all aspects of the Managed Facilities’ human
resources functions as set forth in this Section 5.3 .
5.3.2 Employment of Managed Facilities Personnel . All Managed Facilities Personnel shall be employees of Owner or an Affiliate
and Owner shall bear all Managed Facilities Personnel Costs. Managed Facilities Personnel Costs shall be Operating Expenses. Owner shall
have no right to supervise, discharge or direct any Managed Facilities Personnel, except as otherwise set forth herein, and covenants and agrees
not to attempt to so supervise, direct or discharge.
5.3.3 Senior Executive Personnel . Subject to Owner’s approval rights in Section 2.2.7 , Manager shall, on Owner’s behalf, recruit,
screen, appoint, hire, pay (from the Operating Account), train, supervise, instruct and direct the Senior Executive Personnel, and they, or other
Managed Facilities Personnel to whom they may delegate such authority, shall, on
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Owner’s behalf: (a) recruit, screen, appoint, hire, train, supervise, instruct and direct all other Managed Facilities Personnel necessary or
advisable for the Operation of the Managed Facilities; and (b) discipline, transfer, relocate, replace, terminate and discharge any Managed
Facilities Personnel.
5.3.4 Terms of Employment . Subject to Owner’s approval rights under Section 2.2.7 , all terms and conditions of employment,
personnel policies and practices relating to the Managed Facilities Personnel shall be established, maintained and implemented by Manager in
compliance with all Applicable Laws, on Owner’s behalf, including, but not limited to, Applicable Laws relating to the terms and conditions of
employment, recruiting, screening, appointment, hiring, compensation, bonuses, severance, pension plans and other employee benefits,
training, supervision, instruction, direction, discipline, transfer, relocation, replacement, termination and discharge of Managed Facilities
Personnel. Manager shall process the payroll and benefits for Managed Facilities Personnel.
5.3.5 Non-Solicitation . Manager hereby agrees not to, and to cause its Affiliates, its and their respective successors and assigns and
any Person acting for or on behalf of any of them not to, solicit the employment of any senior supervisory Managed Facilities Personnel,
without Owner’s prior written consent, at any time during the Term or any management personnel of any Affiliate of Owner during the Term;
provided , that this covenant shall not restrict Manager and its Affiliates from engaging in general solicitation or advertising of employment
opportunities that is not targeted at employees of the Managed Facilities.
5.3.6 Corporate Personnel . All Corporate Personnel who travel to the Managed Facilities to perform technical assistance,
participate in special projects or provide other services shall be permitted to reasonably utilize the services provided at the Managed Facilities
(including food and beverage consumption), without charge to Manager or such Corporate Personnel.
5.4 Bank Accounts .
5.4.1 Administration of Bank Accounts . Manager shall establish and administer the bank accounts listed in this Section 5.4 (the “
Bank Accounts ”) on Owner’s behalf at a bank or banks selected by Owner and reasonably approved by Manager. All Bank Accounts shall
(a) be established by Manager, as agent for Owner, in the name of Owner, doing business as the Managed Facilities, (b) be owned by Owner
and (c) use the taxpayer identification number of Owner. The Bank Accounts shall be interest-bearing accounts if such accounts are reasonably
available. The Bank Accounts may include:
5.4.1.1 one or more accounts for the purposes of depositing all funds received in the Operation of the Managed Facilities and
paying all Operating Expenses (collectively, the “ Operating Account ”);
5.4.1.2 one or more accounts into which amounts sufficient to cover all Managed Facilities Personnel Costs shall be
deposited from time to time by Manager (by transfer of funds from the Operating Account);
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5.4.1.3 a separate account for the purpose of depositing funds sufficient to pay all Management Fees and other amounts due
to Manager under this Agreement (by transfer of funds from the Operating Account) (the “ Management Account ”); and
5.4.1.4 such other accounts as Manager with Owner’s prior approval (or Owner with Manager’s approval (not to be
unreasonably withheld)) deems necessary or desirable.
All funds in the Bank Accounts shall be held in express trust for the benefit of Owner and shall be disbursed on the terms and subject to the
conditions of this Agreement and only for the purposes set forth in this Agreement, and Manager shall not commingle the funds associated with
the Managed Facilities with those of any other property or Person and Manager shall use such funds solely in connection with the Operation of
the Managed Facilities and for no other purpose. All funds of Owner and all funds generated with respect to the Managed Facilities shall be
held, at all times, in the Bank Accounts until such funds are paid to third parties in accordance with this Agreement and Manager shall not hold
any such funds in any other manner. To the extent, if any, that the funds in the Bank Accounts are deemed not to be held in express trust for the
benefit of Owner and to the extent permitted by the terms of any Financing, Owner is hereby granted a security interest and lien in the Bank
Accounts to secure Manager’s obligations under this Agreement and Owner is entitled to perfect its security interest and lien in the Bank
Accounts through an account control agreement with the applicable bank(s) where the Bank Account(s) are deposited (in customary form and
substance and which is reasonably satisfactory to Manager and which is consistent with this Agreement, including the provisions of this
agreement applicable to the holding and disbursement of funds).
5.4.2 Authorized Signatories; Bank Account Information .
5.4.2.1 Manager’s designees shall be the only Persons authorized to draw funds from the Bank Accounts and make deposits
into the Bank Accounts during the Term; provided , however , that if any Manager Event of Default has occurred, Manager is in breach of
Section 5.4.4 or the fifth sentence of Section 5.4.1 , (i) Owner shall be authorized to draw, disburse and retain funds as Manager would be so
entitled under Section 5.4.4 (and such funds may only be used in accordance with Section 5.4.4 ) and (ii) if any Manager Event of Default has
occurred, Manager shall cease having any further rights to draw on such Bank Accounts and a signature (electronic or otherwise) from Owner
shall also be required for the drawing of funds from the Bank Accounts. Manager shall establish reasonable controls to ensure accurate
reporting of all transactions involving the Bank Accounts and as Manager, consistent with commercially reasonable business procedures and
practices which are consistent with the size and nature of the operations at the Managed Facilities, reasonably deems necessary or advisable.
5.4.2.2 Manager shall (a) provide Owner copies of bank statements with respect to the Bank Accounts, and (b) provide
Owner (1) weekly cash balance summaries with respect to each Bank Account and (2) such other information regarding the Bank Accounts as
reasonably requested by Owner from time to time.
5.4.3 Permitted Investments; Liability for Loss in Bank Accounts . Manager shall not invest funds in the Bank Accounts, except as
may be permitted under the Financing Documents and as approved by Owner. Owner shall bear all losses suffered in any investment of
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funds into any such Bank Account, and Manager shall have no liability or responsibility for such losses, except to the extent due to Manager’s
Gross Negligence or Willful Misconduct or any Manager Event of Default.
5.4.4 Disbursement of Funds to Owner . All revenues from the operation of the Managed Facilities shall be deposited promptly by
Manager in the Operating Account. Unless the Parties agree otherwise, on or about the twenty fifth (25th) day of each calendar quarter,
Manager shall disburse to Owner, as directed by Owner, any funds remaining in the Operating Account at the end of the immediately preceding
month after payment, contribution or retention, as applicable, of the following in the following order of priority: (a) all Operating Expenses
then due but which have not yet been paid; (b) the amount of debt service accruals and payments due to Lenders as provided in the most
recently updated Monthly Debt Service Schedule; (c) transfer of the Management Fees then due to the Management Account (for payment
within one (1) Business Day to Manager and, if applicable, in accordance with Section 5.4.5 ); (d) the amount of any reserves required to be
funded pursuant to the Financing Documents; and (e) retention by Manager of an amount sufficient to cover (i) a reasonable reserve (as
approved by Owner in the Annual Budget or otherwise in writing in advance), (ii) any other amounts necessary to cure or prevent any violation
of any Applicable Law in accordance with this Agreement, and (iii) such other amounts as may be agreed to by the Parties from time to time. In
the event Owner disputes any decision by Manager to reserve and not disburse to Owner funds pursuant to this Section 5.4.4 , such dispute may
be submitted by either Party for Expert Resolution in accordance with Article XVII .
5.4.5 Transfers Between Bank Accounts . Manager has the authority to transfer funds from and between the Bank Accounts in order
to pay Operating Expenses, to pay debt service with respect to the Managed Facilities, to invest funds for the benefit of the Managed Facilities
(to the extent permitted under this Agreement), to pay the Management Fees to Manager pursuant to this Agreement and for any other purpose
consistent with the Annual Budget and good business practices; provided , that, if the circumstance contemplated by the proviso in the first
sentence of Section 5.4.2 has occurred and is continuing, Manager shall not transfer funds from the Management Account without the
co-signature (electronic or otherwise) of a representative of Owner (other than an Affiliate of Manager) (and Owner shall not unreasonably
withhold, condition or delay such co-signature).
5.4.6 Monthly Debt Service Schedule . Whenever Owner incurs indebtedness with respect to the Managed Facilities, Owner shall
provide Manager with a schedule of all principal and interests payments due with respect thereto and the method for calculating interest with
respect to such indebtedness (as the same may be updated, the “ Monthly Debt Service Schedule ”).
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5.5 Funds for Operation of the Managed Facilities .
5.5.1 Initial Working Capital . As of the Commencement Date, Owner shall ensure that the available funds in the Operating
Account include at least $9,403,297 of cash and the net working capital of the Managed Facilities (as calculated in a manner consistent with the
calculation of Net Working Capital as defined in the Transaction Agreement) shall be at least $(8,931,180).
5.5.2 Additional Funds . If Manager reasonably determines at any time during the Term that: (a) the available funds in the
Operating Account are insufficient to allow for the uninterrupted and efficient Operation of the Managed Facilities in accordance with this
Agreement (including the Operating Standard) based on a ninety (90) day reference period; (b) the available funds in the Operating Account
are insufficient for the timely payment of amounts in any given month to be paid under Section 5.4.4 ; (c) the available funds in the Operating
Account are insufficient for (i) the Operation of the Managed Facilities in accordance with the Operating Limitations, (ii) Building Capital
Improvements or (iii) ROI Capital Improvements then contemplated in the Annual Budget or otherwise approved by Owner, Manager shall
notify Owner of the existence and amount of the shortfall (a “ Funds Request ”) and shall provide a reasonably detailed explanation (including
any relevant documentation related thereto) of the cause of such shortfall. Owner shall be obligated to deposit into the Operating Account the
amount requested by Manager in the Funds Request within fifteen (15) days after delivery of the Funds Request.
5.5.3 Failure to Provide Funds . If Owner fails to deposit all or any portion of any amount requested in a Funds Request, Manager
shall have the right (but not the obligation) to use or pledge its credit in paying, on Owner’s behalf, (a) ordinary and customary Operating
Expenses to the extent incurred in accordance with this Agreement, (b) Building Capital Improvements and Routine Capital Improvements to
the extent incurred in accordance with this Agreement and (c) ROI Capital Improvements then contemplated in the Annual Budget or otherwise
approved by Owner, in which case Owner shall pay for such goods or services when such payment is due. In addition, if Owner fails to pay for
such goods or services when such payment is due, then Manager shall have the right (but not the obligation) to pay for such goods or services,
in which case Owner shall reimburse Manager immediately upon demand by Manager (and Manager shall be entitled to reimburse itself from
any available funds from the Operation of the Managed Facilities, including the Operating Account) for all such amounts advanced by
Manager, together with interest thereon in accordance with Section 3.4 . Notwithstanding the foregoing, Manager shall not have the rights
described in this Section 5.5.3 with respect to any failure by Owner to fund or pay such amounts that is caused directly or indirectly by
Manager or any of its Affiliates.
5.6 Purchasing .
Manager and its Affiliates shall make or cause to be made available to the Managed Facilities, on a Non-Discriminatory basis, licensing
or purchasing programs available to Other Managed Resorts (whether on a national, regional, mandatory, optional or other basis) (each, a “
Purchasing Program ”). Manager may elect, in its discretion, but subject to the terms of this Section 5.6 and Applicable Law, to license any
games or purchase or lease any FF&E and
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Supplies for the Operation of the Managed Facilities from a Purchasing Program maintained by or for the benefit of Manager or its Affiliates;
provided , that Manager shall ensure the prices and terms of the games, FF&E and Supplies to be licensed or purchased under such Purchasing
Program (including with such modifications as provided below) are reasonably comparable to the prices and terms which would be charged by
reputable and qualified unrelated third parties on an arm’s length basis for similar games, FF&E and Supplies sold, leased or licensed to similar
companies in the hospitality industry, and may be grouped in reasonable categories rather than being compared item by item. Manager and its
Affiliates shall pass through any discounts, rebates or similar incentives received in connection with a Purchasing Program to the Managed
Facility on a Non-Discriminatory basis, and Owner hereby acknowledges that certain discounts, rebates and similar incentives are not passed
through to Other Managed Resorts. Owner acknowledges and agrees that Manager and its Affiliates shall have the right, provided the same is
implemented on a Non-Discriminatory basis, to (a) modify the fees, costs or terms of any such Purchasing Program, including adding games,
FF&E and Supplies to, and, subject to Applicable Law, deleting games, FF&E and Supplies from, such Purchasing Program; (b) terminate all
or any portion of any such Purchasing Program, from time to time, upon sixty (60) days’ notice to Owner; (c) subject to the obligation to pass
through any such amounts as set forth in the immediately preceding sentence, receive commercially reasonable payments, fees, commissions or
reimbursements from suppliers and third parties in respect of such purchases, leases or licenses; and (d) own or have investments in such
suppliers.
5.7 Managed Facilities Parking .
Owner shall cause to be available as part of the Managed Facilities parking sufficient for the Operation of the Managed Facilities (it being
acknowledged and agreed by Manager that, as of the Commencement Date, the parking facilities available to the Managed Facilities are
sufficient for the Operation of the Managed Facilities). If parking for the Managed Facilities is not Operated as a part of the Managed Facilities,
Manager shall have the right to approve the arrangements for such operation, including the identity of any third-party parking manager.
5.8 Use of Affiliates by Manager .
In performing its obligations under this Agreement, Manager from time to time may use the services of one (1) or more of its Affiliates as
permitted under this Agreement. If an Affiliate of Manager performs services Manager is required to provide under this Agreement, such
Affiliate and its employees must hold such licenses or qualifications as may be required by the Gaming Authorities in connection with the
performance of such services and Manager shall be ultimately responsible to Owner for its Affiliate’s performance. Owner shall bear no cost or
expense for the Affiliate’s services, other than as expressly set forth in Section 4.1.1 for Centralized Services Charges, Section 3.3 for
Reimbursable Expenses, Section 5.6 for participation in Purchasing Programs, Section 5.11 for an Amenities Manager and Section 12.1.2 for
the Insurance Program. Additionally, Manager may cause Affiliates of Manager who operate other facilities on behalf of Owner or Owner’s
Affiliates to perform services Manager is required to provide under this Agreement and the costs associated with such performance shall be an
Operating Expense of the Managed Facilities. Any agreement or transaction between Manager acting on behalf of Owner, on the one hand, and
any Affiliate of Manager, on the other hand, that involves a cost or expense to Owner or the Managed Facilities, or a transfer of assets from the
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Managed Facilities, shall either be (a) approved by Owner or (b) expressly set forth in the Annual Budget (subject to Sections 5.1.4 and 5.1.5 )
and identified as an expense of an Affiliate of Manager (except that Managed Facilities Personnel Costs and costs incurred to third-party
vendors under the Purchasing Program need not be separately identified in the Annual Budget as an expense to an Affiliate of Manager).
Subject to any confidentiality or similar obligations ( provided the same are applied in a Non-Discriminatory manner to all Persons with whom
Manager transacts similar business), Manager shall make available to Owner such information as reasonably requested by Owner to compare
the cost or expense charged by the Affiliate with charges of an unaffiliated third party. Notwithstanding anything to the contrary contained
herein, Manager acknowledges and agrees that all transactions with, or services performed by, any Affiliate of Manager hereunder shall be on
commercially reasonable and fair, arm’s-length terms and conditions (unless otherwise expressly approved by Owner in writing).
5.9 Limitation on Manager’s Obligations .
5.9.1 General Limitations . Manager’s obligations under this Agreement are subject in all respects to the availability of sufficient
funds from the Operation of the Managed Facilities, or which are otherwise provided by Owner. Except as otherwise expressly provided in this
Agreement, all costs and expenses of Operating the Managed Facilities shall be payable out of funds from the Operation of the Managed
Facilities, or which are otherwise provided by Owner. In no event shall Manager be obligated to pledge or use its own credit or advance any of
its own funds to pay any such costs or expenses for the Managed Facilities. Accordingly, notwithstanding anything to the contrary in this
Agreement, Manager shall be relieved from its obligations to Operate the Managed Facilities in compliance with the Operating Standard and in
accordance with this Agreement whenever and to the extent that Manager is prevented or restricted in any way from doing so by reason of:
(a) the occurrence of a Force Majeure Event; (b) the Operating Limitations; (c) Owner’s breach of any material term of this Agreement
(including Owner’s obligation to provide sufficient funds as required under this Agreement); (d) any limitation or restriction in this Agreement
on Manager’s authority or ability to expend funds in respect of the Managed Facilities; or (e) the lack of availability of sufficient funds to
Operate the Managed Facilities, except to the extent caused by Manager’s Gross Negligence or Willful Misconduct or any Manager Event of
Default (disregarding any applicable notice and/or cure periods for such purpose).
5.9.2 Pre-Existing Conditions and External Events . If any environmental, construction, personnel, real property-related or other
problems arise at the Managed Facilities during the Term that: (a) relate to the Operation or condition of the Managed Facilities, or activities
undertaken at the Managed Facilities or on the Premises, prior to the Term; or (b) are caused by or arise from sources outside of the Managed
Facilities, Manager’s services under this Agreement shall not extend to management of any remediation, abatement or other correction of such
problems, and Owner shall retain full managerial and financial responsibility and liability for and control over the remediation, abatement and
correction of such problems (in each case, in accordance with all Applicable Law), and shall take such actions in a timely manner with as little
disturbance or interruption of the use and Operation of the Managed Facilities as reasonably practicable. Notwithstanding the foregoing, in the
event such problems exist: (i) Manager will cooperate reasonably with Owner in connection with Owner’s remediation, abatement and
correction efforts; and (ii) if there is a reasonable likelihood that such problems would cause
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criminal or civil liability to Manager, injury to persons using the Managed Facilities or damage to the Managed Facilities, Owner shall
promptly remedy such problems and if Owner fails to do so, Manager shall have the right to take all reasonably necessary steps to comply with
any Applicable Law, or to avoid criminal or civil liability to Manager, or injury to Persons or property; provided , that Manager shall give
Owner prior notice thereof.
5.10 Third-Party Operated Areas .
Manager shall, in Consultation with Owner, identify particular portions of the Managed Facilities, such as a restaurant, bar, entertainment
venue, spa or retail location (“ Third-Party Operated Areas ”), that shall be operated by third parties (the “ Third-Party Managers ”) under a
lease, operating agreement, franchise agreement or similar agreement arranged by Manager and in the name of Owner. Manager shall have the
right to manage the process of selecting any Third-Party Managers. Any lease, operating agreement, franchise agreement or similar agreement
entered into with a Third-Party Manager shall (a) be consistent with the terms of this Agreement (including that the same shall be
Non-Discriminatory to the Managed Facilities); (b) require the Third Party Managers to operate the Third-Party Operated Areas in accordance
with the Operating Standard and all other terms of this Agreement, subject to the Operating Limitations, and (c) require the Third-Party
Managers and their employees and contractors, as applicable, to hold such license or qualification as may be required by the Gaming
Authorities.
5.11 Amenities .
Subject to Section 2.2.9 , Manager shall have the right to propose to have an Affiliate of Manager (the “ Amenities Manager ”) operate
one or more of the Third-Party Operated Areas. The arrangement with any Amenities Manager for the operation of a restaurant, bars,
entertainment venue, spa, retail location or other amenity as a part of the Managed Facilities shall be documented pursuant to a lease or
management agreement prepared by Manager and approved by Owner which shall provide that the restaurant, bars, entertainment venue, spa,
retail location or other amenity, as applicable, shall be (a) designed and constructed in all material respects in accordance with the Operating
Standard, Design Guidance and any other standards reasonably required by Owner and the Amenities Manager, and (b) operated in accordance
with the Operating Standard and all other terms of this Agreement, in each case subject to the Operating Limitations.
ARTICLE VI.
APPROVALS
6.1 Gaming Approvals .
This Agreement and all other agreements contemplated herein shall be executed only after receipt of all required approvals and
authorizations, if any, by all applicable Gaming Authorities. Owner, at its expense, during the Term shall take such commercially reasonable
actions as may be reasonably required to maintain such required approvals or authorizations from the applicable Governmental Authorities to
make effective this Agreement as and if required by Applicable Law and permit Owner to make the payments required to be made to Manager
under this Agreement and all related agreements; provided , that Manager, at Manager’s expense, during the Term shall maintain such
license(s) or qualification(s) applicable to Manager
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as may be required by applicable Gaming Authorities. Manager shall have the right, at its expense, to participate in all phases of the approval or
authorization process. The Parties shall cooperate in all such undertakings or dealings with Gaming Authorities, and Owner shall provide
reasonable notice to Manager prior to all meetings with any Gaming Authority for such purpose. Each of Manager and Owner covenants and
agrees to use its best efforts to maintain all Approvals (other than such license(s) or qualification(s) applicable to the other Party) required to
approve Manager to Operate the Managed Facilities and this Agreement.
ARTICLE VII.
PROPRIETARY RIGHTS
7.1 Service Mark Rights .
7.1.1 In consideration of the Management Fee, Manager and CLC shall procure for the benefit of, and hereby grant to, Owner and
the Managed Facilities the non-exclusive right and license to use and otherwise exploit the Service Mark Rights in connection with the
Operation, promotion and marketing of the Managed Facilities throughout the Term of this Agreement and during the Transition Period. As
between Owner and CLC or any CLC assignee that owns any Service Mark Right, with respect to such right and license, CLC and/or such
assignee shall, during the Term, have the sole and exclusive right to determine the form of presentation of the Service Mark Rights in the
Operation of the Managed Facilities, including in all uses of the Service Mark Rights in marketing, sales, advertising and promotional materials
of the Managed Facilities, any goods or services relating to the Managed Facilities and any signage for the Managed Facilities. Subject to the
Annual Budget, Manager agrees to procure merchandise bearing the Brand or other Service Mark Rights on behalf of the Owner for sale or
promotion at the Managed Facilities at customary whole-sale prices for such merchandise.
7.1.2 Notwithstanding that Manager shall use the Service Mark Rights in the conduct of the Operations, Owner acknowledges that,
as between CLC or any CLC assignee that owns any Service Mark Right, on the one hand, and Owner, on the other hand, this use of the
Service Mark Rights shall not create in Owner’s favor any right, title, or interest in or to any of the Service Mark Rights, but all rights of
ownership and control of the Service Mark Rights shall reside solely with CLC or any CLC assignee that owns such Service Mark Right(s). If
and to the extent Owner acquires any right, title or interest in or to any of the Service Mark Rights, Owner hereby assigns all such right, title
and interest therein to such CLC or any CLC assignee that owns any Service Mark Right, as directed by CLC.
7.1.3 Owner acknowledges and agrees that the right to use the Service Mark Rights in connection with the Managed Facilities
(a) excludes any right of Owner to register any trademarks, copyrights or domain names or seek any patents which use any element of the
Service Mark Rights, such right being reserved exclusively to CLC or any CLC assignee that owns any Service Mark Right; (b) excludes any
right of Owner to sublicense or subcontract or permit other Persons to use the Service Mark Rights (including the production of branded
products) without the prior written consent of Manager (except a successor manager of the Managed Facilities during the Transition Period
shall be permitted such use), (c) does not permit Owner to use the Brand, the Service Mark Rights or any marks, names, indicia or identifiers
that are or may be confusingly similar to any element of the Brand or the Service Mark Rights in
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Owner’s corporate name; (d) does not permit Owner to acquire, or represent in any manner that Owner has acquired, in any manner any
ownership rights in the Brand or the Service Mark Rights or any marks, names, indicia or identifiers that are confusingly similar to the Brand or
the Service Mark Rights, and (e) does not permit Owner to use the Service Mark Rights to incur, secure or guarantee any obligation or
indebtedness in such a manner as may, in any way, subject CLC or any CLC assignee that owns such Service Mark Right(s) to liability.
Further, as between Owner and CLC or any CLC assignee that owns any Service Mark Right, any new trademarks, trade dress, slogans, logos,
and any other matter capable of serving as a designation of origin for the goods and services provided in connection with the Managed
Facilities to the extent incorporating and derived from a Service Mark Right shall be owned by CLC or any CLC assignee that owns such
Service Mark Right, as directed by CLC.
7.2 Use of Service Mark Rights .
Subject to the obligation of the Manager to operate the Managed Facilities under the Brand, as part of Manager’s services under this
Agreement for the Operation of the Managed Facilities, Manager may, during the Term, use any Service Mark Rights in the Operation of the
Managed Facilities as Manager deems appropriate or advisable consistent with the Annual Budget. The Managed Facilities shall be a part of
the Total Rewards System used generally at the Other Managed Resorts. Manager reserves the right and discretion to require Managed
Facilities Personnel to sign a commercially reasonable confidentiality and restricted use agreement as a condition to the disclosure or use of any
Service Mark Rights by such Person, which shall supplement the terms set forth in this Article VII .
7.3 Rights to Service Mark Rights .
7.3.1 Subject to Section 7.3.2 , Owner hereby (a) recognizes the sole and exclusive right of ownership of CLC or any CLC assignee
that owns any Service Mark Right to all Service Mark Rights and (b) agrees that Owner’s use of the Service Mark Rights shall be conducted
exclusively by Manager (or, as provided herein during the Transition Period, Owner or a successor manager of the Managed Facilities) under
this Agreement. Without limiting any other rights, remedies or claims of CLC or any CLC assignee that owns any Service Mark Right and/or
any of their respective Affiliates at law, under this Agreement or otherwise, Owner covenants that in the event of any termination or expiration
of this Agreement, whether as a result of a default by Manager or otherwise, Owner shall not continue the operations of the Managed Facilities
pursuant to a Service Mark Right, nor will it otherwise utilize any of the Service Mark Rights (or hold itself out as operating pursuant to the
same) or any confusingly similar variant thereof in the operations of the Managed Facilities or the name of the Managed Facilities; provided ,
however , that Owner shall have a period of twelve (12) months following termination or expiration of this Agreement to remove all Service
Mark Rights (other than the Licensed Brand) from FF&E and the Managed Facilities, the cost which shall be borne by Owner. All use of the
Service Mark Rights by Owner during such period shall inure to the benefit of CLC or any CLC assignee that owns such Service Mark Right. If
Owner fails to so remove all Service Mark Rights (other than the Licensed Brand) from FF&E and the Managed Facilities within such twelve
(12) month period, Owner agrees that Manager and its Affiliates or their respective representatives may enter the Managed Facilities at
reasonable times and upon fifteen days’ prior written notice to Owner to remove all Service Mark Rights from FF&E and
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the Managed Facilities, the cost of which shall be borne by Owner provided that Manager and its Affiliates use commercially reasonable efforts
to avoid unnecessary damages to the FF&E and the Managed Facilities.
7.3.2 Notwithstanding the foregoing, Owner shall have and is hereby granted by CLC an irrevocable and perpetual (including
following the Transition Period, but in each case subject to CLC’s enforcement rights, including the right to seek and obtain specific
performance or other equitable relief for quality control breaches), transferable, royalty-free, sublicenseable (in connection with the Managed
Facilities) and exclusive (only with respect to the Restricted Area) license and right to use the Licensed Brand for use in connection with the
Managed Facilities, subject only to the use of such Licensed Brand at a level of quality that is at least generally commensurate with the level of
quality during the Term. Additionally, Owner shall have and is hereby granted by CLC an irrevocable and perpetual (including following the
Transition Period, but in each case subject to CLC’s enforcement rights, including the right to seek and obtain specific performance or other
equitable relief for quality control breaches), transferable, royalty-free, sublicenseable (in connection with the Managed Facilities) and
non-exclusive license and right to all Owner Primary Marks (excluding the Licensed Brands) for use in connection with the Managed Facilities
subject only to the use of such Owner Primary Marks at a level of quality that is at least generally commensurate with the level of quality
during the Term. With respect to the Service Mark Rights and the Owner Primary Marks, each of Manager, CLC and any CLC assignee that
owns a Service Mark shall have the right after the Term to inspect the Managed Facilities upon reasonable notice and at reasonable times to
confirm the quality of the goods and services offered under the Service Mark Rights and the Owner Primary Marks. All use of the Service
Mark Rights, Owner Primary Marks and Licensed Brands by Owner shall inure to the benefit of CLC or CLC’s assignee that owns the same.
7.3.3 Owner Primary IP . Owner shall have, and is hereby granted by Manager and CLC, an irrevocable, perpetual (including
following the Transition Period), transferable, royalty-free, sublicenseable and non-exclusive license and right to exploit all Owner Primary IP.
7.3.4 Owner Owned IP . Owner and its Affiliates shall have the sole and exclusive right, title and ownership to all Owner Owned
IP. All Owner Owned IP made during the Term is hereby irrevocably assigned by Manager and CLC on behalf of themselves and their
respective Affiliates (to the extent of Manager’s, CLC’s and their respective Affiliates’ interest therein, if any) to Owner or its designee and
upon creation shall be and become the exclusive property of Owner or its designee, and neither Manager, CLC nor any of their respective
Affiliates shall have any ownership rights in any such Owner Owned IP. Owner hereby grants for the benefit of Manager, its Affiliates, CEC
and its Affiliates, CEOC and its Affiliates, Services Co and the Managed Facilities the non-exclusive right and license to use and otherwise
exploit the Owner Owned IP during the Term and the Transition Period in connection with the Operation, promotion and marketing of the
Managed Facilities and in connection with enterprise level functions not associated with a specific facility consistent with uses as of the
Commencement Date (including the Total Rewards System). Prior to or at the expiration of the Transition Period, Manager, its Affiliates, CEC
and is Affiliates shall discontinue all use of the Owner Owned IP.
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7.3.5 This Section 7.3 shall survive the expiration or termination of this Agreement; provided , that notwithstanding the foregoing,
this Section 7.3 shall be replaced and superseded by the terms and conditions set forth in the Cross-License Agreement upon the effective date
of such agreement.
7.4 Proprietary Information and Systems of Manager or its Affiliates .
7.4.1 Proprietary Information and Systems . Owner agrees that, as of the Commencement Date, Manager, its Affiliates and licensees
have the sole and exclusive right, title and ownership to the following items as now in existence and as the same may be modified,
supplemented or updated in the future, in each case as and to the extent provided during the Term by Manager, CEOC or any of their respective
Affiliates or licensees for use in the operation of the Managed Facilities (collectively, the “ Proprietary Information and Systems ”):
7.4.1.1 proprietary information, techniques and methods of operating and marketing, gaming, hotel and related businesses,
including without limitation, the Total Rewards System;
7.4.1.2 proprietary information, techniques and methods of designing, selecting, maintaining, operating, marketing,
developing and customizing games used in gaming, hotel and related businesses;
7.4.1.3 proprietary information, techniques and methods of training employees in the gaming, hotel and related businesses;
7.4.1.4 proprietary business plans, projections, marketing, advertising and promotion plans, strategies and systems, including
the proprietary items listed on Exhibit D attached hereto and incorporated herein by this reference and any modifications, supplements or
revisions thereof, which may hereafter be made by Manager, CEOC or any of their respective Affiliates or licensees, all of which have been
developed or acquired over many years through the expenditure of time, money and effort and to the extent which Manager, CEOC or any of
their respective Affiliates or licensees maintain as confidential and as a trade secret(s); and
7.4.1.5 all proprietary information, techniques and methods used in connection with the Total Rewards System or any other
rewards system which is used generally at other Brand facilities or Other Managed Resorts.
Notwithstanding the foregoing, Proprietary Information and Systems shall not include: information, techniques, methods and systems
(a) developed by Owner or third parties (that are not Affiliates or licensees of CEC or CEOC) on Owner’s behalf; (b) developed by Manager or
its Affiliates or a third party specifically for use at the Managed Facilities; (c) specific to the Managed Facilities that may be contained in
Proprietary Information and Systems, including the Managed Facilities Guest Data; and (d) which are not recognized as a trade secret of
Manager or its Affiliates, or entitled to protection as proprietary to Manager or its Affiliates, under applicable state law.
Manager and CLC shall procure for the benefit of, and hereby grant to, Owner and the Managed Facilities the non-exclusive and
sublicenseable right and license to use and otherwise
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exploit the Proprietary Information and Systems (and other proprietary intellectual property used by Manager under this Agreement, if any,
excluding Owner Primary IP, Owner Owned IP and any Service Mark Right) in connection with the Operation, promotion and marketing of the
Managed Facilities throughout the Term of this Agreement and during the Transition Period.
7.4.2 Confidentiality . Owner further agrees that, to the extent Owner has access to the Proprietary Information and Systems and
subject to Owner’s right to use or permit use on its behalf as permitted under this Agreement, Owner shall: (a) maintain the confidentiality of
Manager Confidential Information in such Proprietary Information and Systems, and not provide access to such Manager Confidential
Information (or any documents, notes, memoranda, lists, computer programs or summaries thereof) to any third parties; (b) not use the
Proprietary Information and Systems for any purpose other than as permitted under this Agreement; (c) make no copies of all or any portion of
the Proprietary Information and Systems; and (d) upon the termination or expiration of this Agreement, (i) return all Proprietary Information
and Systems to Manager, including documents, notes, memoranda, lists, computer programs and any summaries of the Proprietary Information
and Systems in Owner’s possession or control but excluding any Managed Facilities Guest Data which Owner may retain pursuant to the terms
of this Agreement, and (ii) cease to access any and all of the Proprietary Information and Systems, in each case upon the end of the Transition
Period.
7.4.3 Guest Data and Managed Facilities Guest Data .
7.4.3.1 Owner recognizes the exclusive right of ownership of Manager and its Affiliates to all Guest Data, other than
Managed Facilities Guest Data, and the Parties agree that they shall have and hereby assign to each other joint ownership to all Managed
Facilities Guest Data (without a duty to account to the other or other obligations except as expressly set forth herein). Owner hereby disclaims
any right or interest in Guest Data, other than Managed Facilities Guest Data, regardless of any legal protection afforded thereto. Owner and
Manager hereby acknowledge and agree that a portion of the consideration paid or payable (as applicable) pursuant to Section 3.5 of the
Transaction Agreement, dated as of February 28, 2014, by and among CEC, CEOC, Caesars License Company, LLC, CGP and certain other
parties thereto (as may have been amended prior to the Commencement Date, the “ Transaction Agreement ”) shall be treated as a prepaid
license fee and other consideration paid by Owner for the Proprietary Information and Systems and the Managed Facility Guest Data. Owner
agrees that throughout the Term, Manager or Manager’s designees shall host and retain the database relating to customers’ activities at the
Managed Facilities which shall be collected and stored in systems implemented and managed by or on behalf of Manager or its Affiliates,
including all customer information gathered by or on behalf of Manager or its Affiliates in connection with any casino player loyalty program
card or successor player or guest rewards program, and Manager or one of its Affiliates shall own and, subject to the restrictions set forth in this
Section 7.4.3 , be entitled to use any and all of the customer or other information gathered by or on behalf of Manager or its Affiliates in
connection with this Agreement or such programs.
7.4.3.2 Each of Owner and Manager shall not and shall cause its respective Affiliates (and Persons to whom disclosure is
made by it under clause (c) below) not to, and each of Manager and Owner shall cause Services Co not to, and Owner shall cause any successor
manager of the Managed Facilities not to, (a) use the Managed Facilities Guest Data to
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offer, solicit or promote any illegal, obscene, inappropriate, adult oriented, or pornographic material or activity or to engage in any activity that
would constitute spamming or a violation of any Applicable Laws relating to privacy, (b) use the Managed Facilities Guest Data in any manner
which is inconsistent with the integrity of the Brand or the Service Mark Rights, (c) sell, license or grant to any other Person (except, in the
case of Manager, to an Affiliate of Manager, CEC or its Affiliate, CEOC or its Affiliate, CERP or its Affiliate or Services Co or its Controlled
subsidiary or, in the case of Owner, to an Affiliate of Owner) a right to use, view or copy the Managed Facilities Guest Data or (d) use the
Managed Facilities Guest Data for any purpose which is not for the direct benefit of the Managed Facilities, or the businesses and/or operations
of Manager and its Affiliates, CEC or its Affiliates, CEOC or its Affiliates, CERP or its Affiliates or Owner and its Affiliates. Notwithstanding
anything contained in this Agreement to the contrary, the use of the Managed Facilities Guest Data shall, in all events, be subject to the
limitations and restrictions set forth in any other agreement or other contract related thereto, this Agreement, Applicable Law and this
Section 7.4.3 . Owner and Manager further agree not to use, nor permit their Affiliates (or Persons to whom disclosure is made by it under
clause (c) above) to use, at any time, the Managed Facilities Guest Data in any illegal manner, nor to engage in any activity that would
constitute spamming or a violation of any privacy laws under any applicable jurisdiction’s regulations. For the avoidance of doubt, Owner
agrees that it shall not and shall cause its Affiliates not to disclose any gaming play or player rating information contained in the Managed
Facilities Guest Data to a Competitor. Notwithstanding the foregoing, if, upon the Assignment by Manager of this Agreement or the expiration
or termination of this Agreement, Owner engages a successor manager to Operate the Managed Facilities ((including any Person who becomes
the “Manager” hereunder or otherwise performs any of Managers rights or obligations hereunder, including Services Co), then the Managed
Facilities Guest Data may be disclosed to and used by such successor, but in all events such use shall be subject to the limitations and
restrictions set forth in any other agreement or other contract related thereto, this Agreement, Applicable Law and this Section 7.4.3 ; provided ,
that if Applicable Law or any privacy policy of Manager or its Affiliates requires Manager to provide guests of the Managed Facilities with
notice of such transfer and/or a right to “opt out” of having their information transferred to such successor, Owner and Manager shall comply
with such requirement and the election of such guest with respect thereto. Each of Owner and Manager agrees to, and to cause its respective
Affiliates (and Persons to whom disclosure is made by it under clause (c) above) to and Services Co to, and Owner shall cause any successor
manager to, (A) maintain commercially reasonable measures to protect the physical safety and data integrity of the Managed Facilities Guest
Data, and (B) comply with (1) all applicable data protection policies applicable to guest data, to which Manager and its Affiliates are subject,
including compliance with all relevant security best practices including PCI Data Security Standards and the Sarbanes Oxley Act, and
(2) during the Term, all privacy, data security and reasonable contact policies of Manager and its Affiliates, in the case of clause (B)(1) or
(B)(2), Owner’s obligations shall only apply to such policies that have been identified to Owner in advance in writing. Manager may require
Owner to acknowledge in writing its receipt of any Managed Facilities Guest Data (in whatever form) and confirm its obligations under this
Section 7.4.3 and the requirements described herein. In the event Manager reasonably believes the integrity of such Managed Facilities Guest
Data has been compromised, Manager and its Affiliates shall have the right, upon reasonable notice and at reasonable times, to inspect the
physical facilities and servers where Owner stores (or has stored on its behalf) the Managed Facilities Guest Data and to review all methods
and processes associated with the storage and use of same.
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7.4.3.3 Subject to any limitations or requirements of any applicable Gaming Authority and in conformance with Applicable
Law, during the Term and the Transition Period:
(a) from time to time (but not more than twice per year), upon the reasonable request of Owner and at Owner’s
expense, Manager shall prepare filtered lists and datasets from the Managed Facilities Guest Data and provide to Owner a copy of the Managed
Facilities Guest Data in comma separate value (CSV) format, unless another format is agreed upon by Owner and Manager; and
(b) Manager shall maintain, in a manner consistent with commercially reasonable data retention and security practices
on a monthly basis, backup tapes in iSeries format (the “ Backup Tapes ”) containing all Managed Facilities Guest Data resident on the
management system installed for the Managed Facilities (the “ CMS ”), provided , that the Backup Tapes may be located at the Managed
Facilities or such other location reasonably determined by Manager and to which Owner has reasonable access, and Manager shall keep the
Backup Tapes for a rolling period of six (6) months, with the costs of all Backup Tapes and maintenance thereof shall be an Operating
Expense.
7.4.4 Improvements to System . All intellectual property rights to the improvements made during the Term in the Proprietary
Information and Systems (the “ System Improvements ”) are hereby irrevocably assigned by Owner (to the extent of Owner’s interest therein, if
any) to CEOC or its designee and upon creation shall be and become the exclusive property of CEOC or its designee, and neither Owner nor
any of its Affiliates nor any successor manager hereunder shall have any ownership rights in any System Improvements. CEOC or its Affiliates
may incorporate any such System Improvements into the Proprietary Information and Systems and shall have the exclusive right to all
intellectual property rights (including patent, copyright, and industrial design rights) in and to the System Improvements, and to register and
protect such System Improvements in CEOC’s or its designee’s own name to the exclusion of Owner, who shall have no rights to use such
System Improvements except as specifically granted to Owner under this Agreement. Owner agrees to execute such assignment or other
documents, and to cause any successor manager to execute such assignment or other documents, as CEOC may reasonably request to evidence
its ownership or to assist CEOC in securing intellectual property rights to the System Improvements, at CEOC’s sole expense.
7.4.5 Survival . This Section 7.4 shall survive the expiration or termination of this Agreement.
ARTICLE VIII.
CONFIDENTIALITY
8.1 Disclosure by Owner .
Owner acknowledges that Manager will provide certain Manager Confidential Information to Owner in connection with the Operation of
the Managed Facilities, and that such Manager Confidential Information is proprietary to Manager and its Affiliates, and includes trade secrets.
Accordingly, during the Term and thereafter: (a) Owner shall not, and shall cause its Affiliates not to, use the Manager Confidential
Information in any other business or capacity, and
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Owner acknowledges such use would constitute an unfair method of competition; (b) Owner shall maintain the confidentiality of, and shall not
disclose to any other Person (including the media), any Manager Confidential Information or the terms of this Agreement, except to its
shareholders, partners, directors, officers, employees, agents, representatives, legal counsel, accountants and existing and potential Lenders and
investors and potential purchasers (provided such potential investor or purchaser is not a Competitor), but only on a reasonable “need to know”
basis in connection with its ownership of the Managed Facilities and subject to customary confidentiality protections; (c) Owner shall not make
unauthorized copies of any portion of the Manager Confidential Information disclosed in written, electronic or other form; and (d) Owner shall
ensure that none of its shareholders, partners, directors, officers, employees, agents, legal counsel, accountants and existing and potential
Lenders or investors or potential purchasers use, disclose or copy any Manager Confidential Information, disclose any terms of this Agreement
or take any other actions that Owner is otherwise prohibited from taking under this Section 8.1 . Notwithstanding the foregoing, the restrictions
on the use and disclosure of Manager Confidential Information shall not apply: (i) to information or techniques which are or become generally
known to the public (other than through any breach of this Section 8.1 with respect to confidentiality); (ii) to the extent such disclosure is
required under Applicable Laws, including reporting requirements applicable to public companies, or stock exchange rules; or (iii) to
information known to Owner (other than in connection with the performance of its rights or duties hereunder) before disclosure by Manager or
disclosed to Owner by a third party not subject to confidentiality obligations to Manager or developed by Owner without use of Manager
Confidential Information. In the event that Owner or any Person to which Owner has disclosed Manager Confidential Information is requested
or required by oral question, interrogatory, request for information or documents, subpoena, civil investigative demand or similar process to
disclose any Manager Confidential Information, Owner shall and shall cause such Person to: (A) provide Manager with prompt notice, to the
extent legally permissible, so that Manager and its Affiliates may seek a protective order or other appropriate remedy or, in their discretion,
waive compliance with the provisions of this Section 8.1 ; and (B) reasonably cooperate with Manager and its Affiliates, at their expense, in
any effort Manager or any of its Affiliates undertakes to obtain a protective order or other remedy. In the event that such protective order or
other remedy is not obtained or Manager in its discretion waives compliance with the provisions of this Section 8.1 , Owner shall and shall
cause such Person to disclose to the Person compelling disclosure only that portion of the Manager Confidential Information that Owner is
advised, by outside counsel, is legally required and to use commercially reasonable efforts to obtain reliable assurance that confidential
treatment is accorded the Manager Confidential Information so disclosed (to the extent available). Owner shall be responsible for any acts or
omissions of any of its employees, members, managers, attorneys, accountants, agents, representatives, consultants, existing and potential
Lenders and investors and potential purchasers in violation of this Section 8.1 .
8.2 Disclosure by Manager .
Manager acknowledges that Owner may from time to time provide certain Owner Confidential Information to Manager in connection
with the Operation of the Managed Facilities, and that such Owner Confidential Information is proprietary to Owner and its Affiliates, and may
include trade secrets. Accordingly, during the Term and thereafter: (a) Manager shall not, and shall cause its Affiliates not to, use the Owner
Confidential Information in any other business or
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capacity, and Manager acknowledges such use would constitute an unfair method of competition; (b) Manager shall maintain the
confidentiality of, and shall not disclose to any other Person (including the media), any Owner Confidential Information or the terms of this
Agreement, except to its shareholders, partners, directors, officers, employees, agents, representatives, legal counsel, accountants and existing
and potential lenders and investors and potential purchasers, but only on a reasonable “need to know” basis in connection with its Operation of
the Managed Facilities and subject to customary confidentiality protections; (c) Manager shall not make unauthorized copies of any portion of
the Owner Confidential Information disclosed in written, electronic or other form; and (d) Manager shall ensure that none of its shareholders,
partners, directors, officers, employees, agents, legal counsel, accountants and existing and potential lenders or investors or potential purchasers
use, disclose or copy any Owner Confidential Information, disclose any terms of this Agreement or take any other actions that Manager is
otherwise prohibited from taking under this Section 8.2 . Notwithstanding the foregoing, the restrictions on the use and disclosure of Owner
Confidential Information shall not apply: (i) to information or techniques which are or become generally known to the public (other than
through any breach of this Section 8.2 with respect to confidentiality); (ii) to the extent such disclosure is required under Applicable Laws,
including reporting requirements applicable to public companies, or stock exchange rules; or (iii) to information known to Manager (other than
in connection with the performance of its rights or duties hereunder) before disclosure by Owner or disclosed to Manager by a third party not
subject to confidentiality obligations to Owner or developed by Manager without use of Owner Confidential Information. In the event that
Manager or any Person to which Manager has disclosed Owner Confidential Information is requested or required by oral question,
interrogatory, request for information or documents, subpoena, civil investigative demand or similar process to disclose any Owner
Confidential Information, Manager shall and shall cause such Person to: (A) provide Owner with prompt notice, to the extent legally
permissible, so that Owner and its Affiliates may seek a protective order or other appropriate remedy or, in their discretion, waive compliance
with the provisions of this Section 8.2 ; and (B) reasonably cooperate with Owner and its Affiliates, at their expense, in any effort Owner or any
of its Affiliates undertakes to obtain a protective order or other remedy. In the event that such protective order or other remedy is not obtained
or Owner in its discretion waives compliance with the provisions of this Section 8.2 , Manager shall and shall cause such Person to disclose to
the Person compelling disclosure only that portion of the Owner Confidential Information that Manager is advised, by outside counsel, is
legally required and to use commercially reasonable efforts to obtain reliable assurance that confidential treatment is accorded the Owner
Confidential Information so disclosed (to the extent available). Manager shall be responsible for any acts or omissions of any of its employees,
members, managers, attorneys, accountants, agents, representatives, consultants, existing and potential lenders and investors and potential
purchasers in violation of this Section 8.2 .
8.3 Public Statements .
The Parties shall cooperate with each other on all press releases and other public statements relating to the Managed Facilities and neither
Party shall issue any press release or other public statement relating to the Managed Facilities without the prior written approval of the other
Party and receipt of any required approvals from any Governmental Authority, except for any public statement required under Applicable Law;
provided , that Manager and its Affiliates
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may, subject to Applicable Law, make public statements and press releases regarding the Managed Facilities in connection with CEOC’s
general business operations, the Operation of the Managed Facilities or in the ordinary course of Manager’s Operation of the Managed
Facilities. With respect to any public statement required under Applicable Law, the issuing Party shall provide the other Party with a reasonable
opportunity to review and comment upon any such statement prior to its issuance. In addition, either Party may make reference to the Managed
Facilities, this Agreement and such Party’s business in connection with making Securities Exchange Commission filings, investor and lender
reports and presentations, financing documents and offering materials.
8.4 Cumulative Remedies .
Owner acknowledges that any violation of the provisions of Section 8.1 or 8.3 would cause irreparable harm and injury to Manager and
its Affiliates and that money damages would not be an adequate remedy for any such violation and, accordingly, Manager and its Affiliates
shall be entitled to injunctive or other equitable relief to prevent any actual or threatened breach of any of such provisions and to enforce such
provisions specifically, without the necessity of posting a bond or other security or of proving actual damages, by an appropriate court in the
appropriate jurisdiction.
Manager acknowledges that any violation of the provisions of Section 8.2 or 8.3 would cause irreparable harm and injury to Owner and
its Affiliates and that money damages would not be an adequate remedy for any such violation and, accordingly, Owner and its Affiliates shall
be entitled to injunctive or other equitable relief to prevent any actual or threatened breach of any of such provisions and to enforce such
provisions specifically, without the necessity of posting a bond or other security or of proving actual damages, by an appropriate court in the
appropriate jurisdiction.
The remedies provided in this Section 8.4 are cumulative and shall not exclude any other remedies to which a Party or its Affiliates may
be entitled under this Agreement or Applicable Law, and the exercise of a remedy under this Section 8.4 shall not be deemed an election
excluding any other remedy or any waiver thereof.
8.5 Survival .
This Article VIII shall survive the expiration or termination of this Agreement.
ARTICLE IX.
MARKETING
9.1 Marketing .
9.1.1 Managed Facilities Marketing Program . In addition to the Managed Facilities’ participation in any marketing program
included as part of the Centralized Services, Manager shall develop and implement a specific marketing program for the Managed Facilities,
which shall provide for the planning, publicity, internal communications, organizing and budgeting activities to be undertaken, and which may
include the following: (a) production, distribution and placement of promotional materials relating to the Managed Facilities, including
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materials for the promotion of employee relations; (b) development and implementation of promotional offers or programs that benefit the
Managed Facilities and are undertaken by Manager or by a group of hotels and casinos that includes the Managed Facilities; (c) attendance of
Managed Facilities Personnel at conferences, conventions, meetings, seminars and travel congresses; (d) selection of and guidance to
advertising agency and public relations personnel; and (e) preparation and dissemination of news releases for national and international trade
and, consumer publications. Owner shall not publish any advertising materials or otherwise implement any marketing, advertising or promotion
program for the Managed Facilities on its own, without Manager’s prior written approval (not to be unreasonably withheld, conditioned, or
delayed).
9.1.2 Development and Implementation . The development and implementation of the Managed Facilities’ specific marketing
program shall be effected substantially by Managed Facilities Personnel, with periodic assistance from Corporate Personnel with marketing and
sales expertise. Any such assistance provided by any Corporate Personnel shall be at no cost to Owner or the Managed Facilities for such
Corporate Personnel’s time, but the reasonable Out-of-Pocket Expenses incurred by Manager or its Affiliates in connection with such
assistance shall be Operating Expenses. Subject to the provisions of Section 5.1 relating to the Annual Budget, the Managed Facilities’ specific
marketing program shall comply with the sales, advertising and public relations policies and guidelines and corporate identity requirements
established by Manager, for Other Managed Resorts, as such policies, guidelines and requirements may be modified from time to time. Subject
to the provisions of Section 5.1 relating to the Annual Budget, Manager shall have the right to engage a Person on behalf of Owner to perform
such marketing and public relations activities for the Managed Facilities pursuant to this Article IX .
9.1.3 Content . Manager shall have the right to obtain, or at the reasonable request of Manager, Owner shall obtain and provide to
Manager, updated photographs, descriptive content and other media, such as video and floor plans, of the Managed Facilities (collectively, “
Content ”) from time to time in accordance with Manager’s specifications for Content. All ownership or license rights to Content, whether
procured by Manager or Owner, shall vest in Owner. If Owner obtains Content, Owner shall ensure that any such Content includes usage rights
for the benefit of Manager in connection with the operation of the Managed Facilities during the Term.
ARTICLE X.
BOOKS AND RECORDS
10.1 Maintenance of Books and Records .
Manager shall keep and maintain, on an Operating Year basis in accordance with GAAP, accurate books, records and accounts reflecting
all of the financial affairs, and all items of income and expense, in connection with the Operation of the Managed Facilities and otherwise in a
manner consistent with the then existing policies and standards applicable to Other Managed Resorts and otherwise reasonably acceptable to
Owner. All books of account and other financial records of the Managed Facilities shall be available to Owner, any Lender and their respective
agents, representatives and designees (subject to Section 8.1 ) at all reasonable times for
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examination, audit, inspection and copying; provided , that Owner shall bear all Out-Of-Pocket Expenses incurred by Manager or its Affiliates
in connection with any such examination, audit, inspection or copying. All of the financial books and records of the Managed Facilities,
including books of account and front office records (but excluding any Proprietary Rights) shall be the property of Owner. Notwithstanding
anything to the contrary contained in this Agreement, Owner shall have the right (not more than once per calendar year), at its expense, to or to
cause its agents or auditors to carry out an independent audit or inspection of the books of accounts and records and/or any other information
maintained by the Manager with respect to the Managed Facilities (including, without limitation, all information, records and materials with
respect to contracts and engagements entered into by Manager with Affiliates and/or with respect to purchasing programs, which information
shall include terms of all cost allocations between the Managed Facilities on the one hand and other hotel properties and casinos owned and/or
managed by Manager and its Affiliates and subject to the same agreements and/or purchasing programs on the other hand, and copies of all
agreements and fee schedules with respect to such properties and such other information as is reasonably necessary to make the determination
set forth in clause (ii) below). In the event of any such audit or inspection, Manager shall promptly respond to any queries raised by any such
auditors in relation to that audit and shall promptly make available to any such auditors any and all materials relevant to the management of the
applicable Managed Facilities. Notwithstanding the foregoing, if it is determined by any such audit or inspection that (i) the actual amount of
Gross Operating Revenues or Operating Expenses for any Operating Year differs by more than five percent (5%) from the amount of Gross
Operating Revenues or Operating Expenses for such Operating Year recorded in the books and records maintained by Manager, or (ii) Manager
has materially breached any of its obligations with respect to the requirements in this Agreement that all Purchasing Programs and all contracts
with (or services provided by) Affiliates of Manager shall be Non-Discriminatory to the Managed Facilities and on arms-length terms, then, in
either case, Manager shall be responsible for the entire out-of-pocket cost of such audit or inspection and immediately upon demand shall
reimburse Owner therefor.
10.2 Monthly Financial Reports .
Manager shall cause to be prepared and delivered to Owner reasonably detailed unaudited monthly operating reports (the “ Monthly
Reports ”) that reflect the operational results of the Managed Facilities for each month of each Operating Year. Manager shall deliver each
Monthly Report to Owner on or before the twenty fifth (25th) day of the month following the month (or partial month) to which such Monthly
Report relates. At a minimum, the Monthly Reports shall include: (a) a balance sheet including current and prior month and prior year-end
comparisons (to the extent applicable) and differences in reasonable detail; (b) an income and expense statement for such month and for the
elapsed portion of the current Operating Year through the end of such month (with comparison to previous year); (c) a statement of cash flows
for such month and for the elapsed portion of the Current Operating Year through the end of such month (with comparison to previous year) in
reasonable detail to allow Owner to identify and ascertain sources and uses thereof; (d) a statement of account balances in each Bank Account;
(e) a computation of any installment of the Base Management Fees due following delivery of such Monthly Report; and (f) such other reports
or information otherwise specified in this Agreement to be provided to Owner on a monthly basis or as Owner may reasonably specify from
time to time. Notwithstanding anything to the contrary contained in this Section 10.2 , Manager shall not
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be obligated to deliver a Monthly Report for the last month of each calendar quarter. In lieu of such delivery, Manager shall deliver the
Quarterly Report for the applicable calendar quarter and such Quarterly Report shall include the information that would have been included in
the Monthly Report for such month pursuant to this Section 10.2 .
10.3 Quarterly Financial Reports .
Manager shall cause to be prepared and delivered to Owner reasonably detailed unaudited quarterly operating reports (the “ Quarterly
Reports ”) and shall deliver each Quarterly Report to Owner on or before the twenty fifth (25th) day of the month following the end of the
fiscal quarter (or partial fiscal quarter) to which such Quarterly Report relates. With respect to the Quarterly Reports, Manager’s Designated
Financial Officer shall certify that it has reviewed such Quarterly Reports and, to such Designated Financial Officer’s Knowledge, such
Designated Financial Officer has no reason to believe that such Quarterly Reports do not fairly present, in all material respects, the financial
condition, results of operations, cash flows and other financial and operating results, as applicable, of the Managed Facilities for the periods
presented in the report (except for the fact that there are no footnotes to such Quarterly Reports and subject to year end adjustments in all
respects). At a minimum, the Quarterly Reports shall include: (a) a narrative report on Owner’s actual performance to the Operating Plan and
Capital Budget; (b) a computation of any installment of the Incentive Management Fees due following delivery of such Quarterly Report;
(c) an itemization of expenses other than Management Fees incurred to Manager or any Affiliate of Manager during such quarter, including
Centralized Services Charges and Reimbursable Expenses; (d) a schedule comparing the financial performance of the Managed Facilities to the
financial covenants under Financing Documents to the extent that the applicable Financing relates the Managed Facilities only; (e) a report on
the project status and actual to budget expenditures for Routine Capital Improvements and Building Capital Improvements projects underway;
(f) for the last month of such calendar quarter, the information that would have been included in the Monthly Report for such month pursuant to
Section 10.2 ; and (g) such other reports or information otherwise specified in this Agreement to be provided to Owner on a quarterly basis or
as Owner may reasonably specify from time to time.
10.4 Annual Financial Reports .
Manager shall cause to be prepared and delivered to Owner no later than fifty-five (55) days after the end of each Operating Year
(beginning with February 25 of the second (2nd) Operating Year with respect to the completion of the first (1st) Operating Year), year end
financial statements for the preceding Operating Year (including a balance sheet, a statement of earnings and retained earnings and a statement
of cash flows), which statements shall be unaudited and shall be prepared in accordance with GAAP. With respect to such statements,
Manager’s Designated Financial Officer shall certify that it has reviewed such statements and, to such Designated Financial Officer’s
knowledge, such Designated Financial Officer has no reason to believe that such statements do not fairly present, in all material respects, the
financial condition, results of operations, cash flows and other financial and operating results, as applicable, of the Managed Facilities for the
periods presented in the statements (except for the fact that there are no footnotes to such statements and subject to all adjustments made in the
Certified Financial Statements). Owner shall engage the Designated Accountant to provide audited financial statements for the Operating Year
then ended (the “ Certified Financial
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Statements ”). Owner and Manager shall cooperate in all respects with the Designated Accountant in the preparation of such financial
statements, including the delivery by Manager of any financial information generated by Manager pursuant to the terms of this Agreement and
reasonably required by the Designated Accountant to prepare such audited financial statements. The Certified Financial Statements prepared by
the Designated Accountant pursuant to this Section 10.4 and all information therein shall be binding and conclusive on the Parties unless,
within sixty (60) days after the delivery of such statements to the Parties, either Party shall deliver written notice to the other Party of its
objection thereto setting forth in reasonable detail the nature of such objection. If the Parties are unable thereafter to resolve any disputes with
respect to the matters set forth in the Certified Financial Statements within sixty (60) days after delivery by either Party of such notice, either
Party shall have the right to cause such dispute to be resolved in accordance with Article XVII .
10.5 Other Reports and Schedules .
In addition to the Operating Reports and Certified Financial Statement required to be delivered to Owner hereunder, Manager shall cause
to be prepared and delivered to Owner any additional reports and schedules as Owner may reasonably request from time to time, and copies of
such leases, contracts and documents as Owner may reasonably request from time to time.
ARTICLE XI.
ASSIGNMENTS
11.1 Assignment by Owner .
11.1.1 Owner Assignments Restricted . Except as otherwise permitted in Article XIII or this Article XI , Owner may not cause,
permit or suffer an Assignment of Owner’s right, title and interest in and to this Agreement without the prior consent of Manager which
consent shall not be unreasonably withheld, conditioned or delayed. Any Change of Control of Owner shall be deemed an Assignment for
purposes of this Article XI . Any Assignment by Owner in violation of the terms of this Article XI shall be void and of no force or effect as
between the Parties and shall constitute an Event of Default by Owner governed by the terms of Article XVI .
11.1.2 Assignment by Owner without Manager’s Consent .
11.1.2.1 Notwithstanding the provisions of Section 11.1.1 , Owner shall have the right, without Manager’s consent, to effect
an Assignment of this Agreement in connection with a Managed Facilities Transfer; provided , that, to the extent applicable, the conditions
described in Section 11.1.3 are satisfied in connection with such Assignment.
11.1.2.2 Notwithstanding the provisions of Section 11.1.1 , Owner shall have the right, without Manager’s consent, to effect
an Assignment of this Agreement or a Managed Facilities Transfer in connection with any Financing provided , that, to the extent applicable,
the conditions described in Section 11.1.3 are satisfied in connection with such Assignment.
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11.1.3 Conditions to Assignment . Notwithstanding anything to the contrary in Section 11.1.2 , all Assignments by Owner (whether
or not Manager’s consent is required pursuant to this Section 11.1 ) shall be subject to the following conditions:
11.1.3.1 Owner shall provide written notice to Manager at least thirty (30) days prior to the proposed Assignment, specifying
in reasonable detail the nature of the Assignment and such additional information as Manager may reasonably request in order to determine
whether the proposed transferee is a Manager Prohibited Person;
11.1.3.2 The assignee (other than a Lender in connection with a Financing, except to the extent of any foreclosure or
realization) shall assume the obligations of Owner under this Agreement and shall agree in writing to be bound by this Agreement from and
after the date of the Assignment, and Owner shall provide Manager with a copy of such agreement, together with copies of all other documents
effecting such Assignment, within ten (10) days following the date of the Assignment; and
11.1.3.3 The assignee (in the case of a direct assignment) or controlling parties (in the case of a Change of Control), and in
each case its or their direct or indirect equity owners, is not a Manager Prohibited Person.
11.2 Assignment by Manager .
11.2.1 Manager Assignments Restricted . Except as otherwise permitted in this Article XI , Manager may not cause, permit or suffer
an Assignment, in whole or in part, of Manager’s right, title and interest in and to this Agreement without the prior consent of Owner. Any
Change of Control of Manager shall be deemed an Assignment for purposes of this Article XI . Any Assignment by Manager in violation of the
terms of this Article XI shall be void and of no force or effect as between the Parties and shall constitute an Event of Default by Manager
governed by the terms of Article XVI .
11.2.2 Assignment by Manager without Owner’s Consent . Notwithstanding the provisions of Section 11.1.1 , Manager shall have
the right, without Owner’s consent, to assign its right, title and interest in and to this Agreement (a) to any Affiliate of Manager that is directly
or indirectly wholly owned by CEOC, or (b) in connection with (i) a Change of Control of CEOC or (ii) a Substantial Sale; provided , that
neither the proposed transferee (in the case of a direct transfer), or controlling parties (in the case of a Change of Control or CEOC or
Substantial Sale), nor in either case any of its direct or indirect equity owners, is an Owner Prohibited Person and provided further that
Manager shall (a) provide written notice to Owner at least thirty (30) days prior to the proposed Assignment, specifying in reasonable detail the
nature of the Assignment, and such additional information as Owner may reasonably request in order to determine whether the proposed
transferee is an Owner Prohibited Person, and (b) the assignee shall assume the obligations of Manager under this Agreement and shall agree in
writing to be bound by this Agreement from and after the date of the Assignment, and Manager shall provide Owner with a copy of such
agreement, together with copies of all other documents effecting such Assignment, within ten (10) days following the date of this Assignment.
11.2.3 Assignment at the Request of Owner . Subject to the provisions of this Section 11.2.3 , Manager shall, upon the written
request of Owner, assign all of its rights,
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benefits, obligations, duties, responsibilities and liabilities under this Agreement to Services Co (or a Controlled subsidiary of Services Co) as
soon as reasonably practicable following the formation and capitalization of Services Co (the “ Services Co Assignment ”). Notwithstanding
the foregoing, Owner shall not be permitted to request the Services Co Assignment unless and until (a) all Gaming Approvals have been
received with respect to such Services Co Assignment, and (b) any required Approvals from any Governmental Authorities have been received
with respect to such Services Co Assignment. Manager acknowledges that Owner may not request the Services Co Assignment until Owner is
satisfied, in its sole discretion that Services Co (or a Controlled subsidiary of Services Co) has obtained all items and rights needed to Operate
the Managed Facilities under the Brand (including to provide the Centralized Services to the Managed Facilities) all in accordance with this
Agreement, which items and rights shall include, without limitation: (i) all intellectual property rights required to grant, maintain and support
the licenses and assignments set forth under this Agreement (including under Article VII ), (ii) all Corporate Personnel and other personnel
required to Operate the Managed Facilities, and (iii) all infrastructure, processes, procedures, contracts, permits, licenses, consents, approvals,
assets and other items and rights required to Operate the Managed Facilities. Each of Owner and Manager agrees that upon the effective date of
the Services Co Assignment: (A) Bally’s Las Vegas Manager, LLC shall assign all of its rights, benefits, obligations, duties, responsibilities
and liabilities under this Agreement to Services Co (or a Controlled subsidiary of Services Co) and Services Co shall automatically and without
any further action by any Person become the “Manager” under this Agreement, provided , that Bally’s Las Vegas Manager, LLC (the “
Transferring Manager ”) shall retain all rights in respect of pre-assignment periods, rights under Section 19.2.7, the right to receive the
Management Fees during the Term (and any interest thereon or taxes with respect thereto), any Termination Fee and the right to claim damages
in respect of any Owner breach of this Agreement that directly results in a reduced or terminated Management Fees (the “ Retained Rights ”);
(B) Services Co (or a Controlled subsidiary of Services Co) shall expressly assume all of the Transferring Manager’s rights (other than the
Retained Rights), benefits, obligations, duties, responsibilities and liabilities under this Agreement pursuant to an assignment and assumption
agreement mutually agreeable to Owner and the Transferring Manager and the Transferring Manager shall be released from its obligations
under this Agreement; (C) Services Co (or a Controlled subsidiary of Services Co) shall be entitled to receive all Centralized Services Charges
and all Reimbursable Expenses incurred under this Agreement from and after the Services Co Assignment; (D) the Transferring Manager’s
rights with respect to the Bank Accounts shall terminate and any right to withdraw the Management Fees from the Management Account will
be undertaken by Services Co as successor manager; and (E) with respect to each provision in this Agreement that by its terms survives any
expiration or termination of this Agreement, such provisions shall survive the Services Co Assignment with respect to the Transferring
Manager, CEOC and their respective Affiliates. This Section 11.2 shall survive the Services Co Assignment and any expiration or termination
of this Agreement thereafter. Owner and Transferring Manager agree, between them, to amend or amend and restate this Agreement following
the Services Co Assignment as needed solely to implement the provisions set forth in this Section 11.2.2 and Transferring Manager and CLC
shall do and cause to be done all such acts, matters and things and shall execute all such documents and instruments required to effectuate the
Services Co Assignment in accordance with this Agreement. Notwithstanding anything contained in this Agreement to the contrary, (x) the
Retained Rights may be terminated immediately by Owner if there is any Event of Default of Services Co hereunder following the effective
date of the Services Co Assignment
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that is caused by or results from a breach by CEOC (or any Affiliate thereof that is a member of Services Co) of any of its obligations under the
limited liability company agreement of Services Co, in which case Owner shall not be required to terminate this Agreement with respect to
Services Co or Transferring Manager, and (y) if as a result of any Event of Default of Services Co hereunder following the effective date of the
Services Co Assignment, Owner becomes entitled (whether pursuant to the terms hereof, at law or in equity) to any reduction in and/or offset
of Management Fees or to otherwise recover any losses, costs, damages and/or expenses from Services Co, Owner shall be entitled to deduct
(without duplication of any other recovery made by Owner) any and all such amounts from future installments of Management Fees otherwise
due and payable to the Transferring Manager as part of the Retained Rights during the Term until Owner has recovered the entire amount of all
such losses, costs, damages and/or expenses (provided, however, that the Transferring Manager shall not have any liability for any such
amounts in excess of the value of the remaining Management Fees payable hereunder during the Term at the time Owner becomes entitled to
any such recovery). From and after the Services Co Assignment, Owner shall not permit any amendment to this Agreement that would
reasonably be expected to reduce or otherwise adversely impact the Retained Rights.
11.3 Acknowledgement of Assignment.
Notwithstanding anything to the contrary contained herein, with respect to any Assignment under this Article XI , the transferring Party
shall, within thirty (30) days following the request of the non-assigning Party, provide a written acknowledgement to the non-assigning Party
confirming that such Assignment complied with the provisions of this Article XI and was permitted hereunder and such acknowledgment shall
be accompanied by the provision of such information as may reasonably be necessary to demonstrate that the Assignment complies with the
provisions of this Article XI .
11.4 Approvals.
To the extent necessary, all Assignments will be subject to the requirements of the Gaming Authorities, which may include prior approval
of such Assignments.
ARTICLE XII.
INSURANCE, BONDING AND INDEMNIFICATION
12.1 Owner Insurance and Bonding Requirements .
12.1.1 Insurance Policies and Bonding Requirements .
12.1.1.1 Manager, at Owner’s expense (except to the extent such expenses are expressly classified as Operating Expenses),
shall procure and maintain all insurance policies required under the Insurance Requirements set forth as Exhibit E (except to the extent Exhibit
E attached hereto or this Agreement expressly provides that Manager shall procure and obtain specific insurance policies) and in accordance
with the Annual Budget to protect the Owner and Manager against loss or damage arising in connection with the ownership and operation of
the Managed Facilities. The insurance policies shall be effective upon the Commencement Date. Manager may modify the Insurance
Requirements on at least sixty (60) days’ notice to respond to insurance market trends, customer demands, economic conditions,
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technological advances and other factors affecting the gaming industry and its risks, as they may change from time to time; provided , that the
Insurance Requirements are (a) consistent with the Other Managed Resorts that are similarly situated to the Managed Facilities or (b) only
applicable to the Managed Facilities and a material policy, and in either case they shall be subject, at Owner’s election, to review by Owner’s
independent insurance consultant and, in the case of clause (b), approval by such consultant (not to be unreasonably withheld). Manager, at its
sole discretion, shall hire a qualified insurance broker to place such insurance policies required under Exhibit E attached hereto.
12.1.1.2 Manager, at Owner’s expense, shall have the power and authority to procure and deliver to the applicable Gaming
Authorities all bonding instruments required by the State where the Managed Facilities are located.
12.1.2 Insurance Program . Manager shall make the insurance programs provided to the Other Managed Resorts available to Owner
with respect to the Managed Facilities (the “ Insurance Program ”) on substantially the same basis and for the same premium allocation
methodology as for the Other Managed Resorts, to the extent permitted by the terms of such Insurance Program. Owner, at Manager’s sole
direction, may obtain any insurance coverage required under the Insurance Requirements through the Insurance Program to the extent such
coverage is available under the Insurance Program. Owner acknowledges that (a) the premiums charged under the Insurance Program include
certain third-party pass-through costs, such as brokers’ commissions and insurance services performed by third parties, and (b) some or all of
the insurance in the Insurance Program may be provided by an Affiliate of Manager, and such Affiliate will have a profit or loss for its
insurance business from time to time, depending on the amount of premiums received, and claims paid, by such Affiliate during the relevant
period. Manager shall cause any and all costs, expenses or savings resulting from the foregoing clauses (a) and (b) to be passed through,
applied and realized amongst all participants in any Insurance Program on a Non-Discriminatory basis.
12.1.3 Evidence of Insurance . Owner (for insurance policies obtained by Owner through third-party insurers) and Manager (for
insurance policies obtained by Manager through the Insurance Program or other vendors) shall provide the other Party with certificates or other
reasonably satisfactory insurance evidence confirming that the insurance policies comply with the Insurance Requirements. In addition, upon a
Party’s request, the other Party promptly shall provide to the requesting Party a schedule of insurance obtained by such Party, listing the
insurance policy numbers, the names of the insurers, the names of the Persons insured, the amounts of coverage, the expiration dates and the
risks covered thereunder.
12.1.4 Payment of Premiums . For all insurance policies contemplated by this Section 12.1 , Manager shall have the right to pay
premiums using funds from the Operating Account. For the avoidance of doubt, any additional insurance policies obtained by Owner or
Manager that are not contemplated by this Section 12.1 or otherwise approved by the Parties, shall not be funded from the Operating Account.
12.1.5 Review of Insurance . All insurance policy limits provided under this Article XII shall be reviewed by the Parties every three
(3) years following the commencement of the Term, or sooner if reasonably requested by Owner or Manager, to determine the suitability
45
of such insurance limits in view of exposures reasonably anticipated over the ensuing three (3) years. Owner and Manager hereby acknowledge
that changing practices in the insurance industry and changes in the local law and custom may necessitate changes to types or amounts of
coverage during the Term. Each Party agrees to comply with any other insurance requirements the other Party reasonably requests in order to
protect the Managed Facilities and the respective interests of Owner and Manager. Any dispute regarding such other insurance requirements
shall be referred to the Expert for Expert Resolution pursuant to Article XVII .
12.1.6 Investigation of Claims and Reports . Manager shall promptly investigate and, as soon as reasonably practicable, make a full
written report to Owner regarding all material accidents or claims for material damage relating to the ownership, operation and maintenance of
the Managed Facilities and the estimated liability or cost of repair thereof, and shall prepare, for the approval of Owner, any and all reports
required by any insurance carrier in connection therewith.
12.1.7 Reliance on Owner’s Advisors . Owner acknowledges that neither Manager nor any insurance broker that Manager or its
Affiliates may retain makes any representation, warranty or guaranty whatsoever regarding: (a) the advisability or sufficiency of the insurance
required or obtained under this Agreement; (b) whether the insurance made available under the Insurance Program maintained by Manager or
its Affiliates is sufficient to protect Owner, the Managed Facilities and its Operations against all liability, damage, loss, cost or expense that
might be incurred; or (c) any other insurance that Owner should consider for the protection of Owner, the Managed Facilities and its
Operations, and Owner agrees to rely exclusively on its own insurance advisors with respect to all insurance matters.
12.2 Waiver of Liability .
AS LONG AS A PARTY AND ANY AFFILIATES REQUESTED BY SUCH PARTY ARE A NAMED INSURED OR ADDITIONAL
INSURED UNDER THE OTHER PARTY’S INSURANCE POLICIES, OR THE POLICIES OTHERWISE PERMIT IF SUCH PARTY OR
ITS AFFILIATES ARE NOT SO NAMED, SUCH PARTY HEREBY RELEASES THE OTHER PARTY, AND ITS AFFILIATES, AND ITS
AND THEIR TRUSTEES, BENEFICIARIES, DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS, AND THE SUCCESSORS AND
ASSIGNS OF EACH OF THE FOREGOING, FROM ANY AND ALL LIABILITY FOR MONETARY RELIEF, DAMAGE, LOSS, COST
OR EXPENSE INCURRED BY THE RELEASING PARTY, WHETHER OR NOT DUE TO THE NEGLIGENT OR OTHER ACTS OR
OMISSIONS OF THE PERSONS SO RELEASED TO THE EXTENT SUCH LIABILITY, DAMAGE, LOSS, COST OR EXPENSE IS
COVERED BY THE INSURANCE POLICIES OF THE RELEASING PARTY, BUT (OTHER THAN AS PROVIDED IN ARTICLE XIV )
ONLY TO THE EXTENT OF INSURANCE PROCEEDS RECEIVED.
12.3 Indemnification .
12.3.1 Indemnification by Owner . Subject to Sections 12.3.3 , 12.3.4 and 17.5.5 , Owner shall defend, indemnify and hold harmless
Manager and its Affiliates (and, following the Services Co Assignment until such time as neither Services Co nor any of its Affiliates is the
Manager hereunder, the Transferring Manager and its Affiliates), and each of
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their respective shareholders, members, partners, trustees, beneficiaries, directors, officers, employees and agents, and the successors and
assigns of each of the foregoing (collectively, the “ Manager Indemnified Parties ”) for, from and against any and all Claims that are not within
the scope of Manager’s indemnification pursuant to Section 12.3.2 . Nothing in this Section 12.3 shall be deemed to limit Owner’s right to
pursue its contractual damage remedies against Manager with respect to amounts paid by Owner to one (1) or more other Persons in connection
with any Claim caused by an Event of Default by Manager (it being further understood that the provisions of this Section 12.3 shall not be
deemed to modify the provisions of Section 16.1 regarding the establishment of an Event of Default by Manager, including any provisions of
Section 16.1 regarding notice of cure of any default that would, with the giving of notice or the passage of time, become an Event of Default).
Manager shall promptly provide Owner with written notice of any Claim that is reasonably likely to result in any indemnification by Owner.
12.3.2 Indemnification by Manager . Subject to Sections 12.3.3 , 12.3.4 and 17.5.5 , Manager shall defend, indemnify and hold
harmless Owner and its Affiliates, and each of their respective shareholders, members, partners, trustees, beneficiaries, directors officers,
employees and agents, and the successors and assigns of each of the foregoing (collectively, the “ Owner Indemnified Parties ”) for, from and
against any and all (a) Claims that any Owner Indemnified Party or Parties may incur, become responsible for or pay out to the extent caused
by Manager’s Gross Negligence or Willful Misconduct or as a result of an Event of Default by Manager (disregarding any applicable notice or
cure periods for such purpose) or the use of any intellectual property rights owned, licensed or otherwise provided by Manager or its Affiliates
(including, without limitation, the Licensed Brand, the Service Mark Rights and the Proprietary Information and Systems) that infringes,
misappropriates or otherwise violates or is alleged to infringe, misappropriate or otherwise violate the intellectual property rights of any third
party, and (b) any uninsured loss incurred by Owner due to the commission by any Senior Executive Personnel or Corporate Personnel of any
act of fraud, embezzlement, misappropriation or similar act of malfeasance with respect to the Managed Facilities.
12.3.3 Insurance Coverage . Notwithstanding anything to the contrary in this Section 12.3 , the Parties shall look first to the
appropriate insurance coverages in effect pursuant to this Agreement prior to seeking indemnification under this Section 12.3 in the event any
claim or liability occurs as a result of injury to persons or damage to property, regardless of the cause of such claim or liability; provided , that
if the insurance carrier denies coverage or “reserves rights” as to coverage, then the Indemnified Parties shall have the right to seek
indemnification, without first looking to such insurance coverage. In addition, nothing contained in this Section 12.3 shall in any way affect the
releases set forth in Section 12.2 .
12.3.4 Indemnification Procedures . The Indemnifying Party shall have the right to assume the defense of any Claim with respect to
which the Indemnified Party is entitled to indemnification hereunder. If the Indemnifying Party assumes such defense, (a) such defense shall be
conducted by counsel selected by the Indemnifying Party and approved by the Indemnified Party, such approval not to be unreasonably
withheld or delayed ( provided , that the Indemnified Party’s approval shall not be required with respect to counsel designated by the
Indemnifying Party’s insurer); (b) so long as the Indemnifying Party is conducting such defense with reasonable diligence, the Indemnifying
Party shall have the right to control said defense and shall not be required to pay the fees or disbursements of any counsel engaged by the
Indemnified
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Party except if a material conflict of interest exists between the Indemnified Party and the Indemnifying Party with respect to such Claim or
defense; and (iii) the Indemnifying Party shall have the right, without the consent of the Indemnified Party, to settle such Claim, but only if
such settlement involves only the payment of money, the Indemnifying Party pays all amounts due in connection with or by reason of such
settlement and, as part thereof, the Indemnified Party is unconditionally released from all liability in respect of such Claim. The Indemnified
Party shall have the right to participate in the defense of such Claim being defended by the Indemnifying Party at the expense of the
Indemnified Party, but the Indemnifying Party shall have the right to control such defense (other than in the event of a material conflict of
interest between the parties with respect to such Claim or defense). In no event shall (A) the Indemnified Party settle any Claim without the
consent of the Indemnifying Party so long as the Indemnifying Party is conducting the defense thereof in accordance with this Agreement or
(B) if a Claim is covered by the Indemnifying Party’s insurance, knowingly take or omit to take any action that would cause the insurer not to
defend such Claim or to disclaim liability in respect thereof.
12.3.5 Survival . This Section 12.3 shall survive any expiration or termination of this Agreement.
ARTICLE XIII.
FINANCING
13.1 Mortgages; Collateral Assignments; Non-Disturbance .
Subject to Article XI , Owner shall have the right to grant a Mortgage or Security Interest to a Lender in connection with any Financing,
and to assign to any Lender as collateral security for any Financing, all of Owner’s right, title and interest in and to this Agreement. Promptly
following execution of any such Financing Documents, Owner shall provide Manager a true and complete copy of all such Financing
Documents. Owner shall cause any Lender under a Financing Document to enter into a Non-Disturbance Agreement in a form acceptable to
Manager, in its reasonable discretion, which explicitly provides that such Lender may not terminate Manager under this Agreement, under any
circumstance except to the extent Manager may be terminated in accordance with the terms of this Agreement, irrespective of whether the
Financing is in default or has been foreclosed upon or the Lender has acquired all or a portion of the Managed Facilities or Premises by
deed-in-lieu of foreclosure.
Any foreclosure or realization on a Financing Document or that results in a transfer of all or a substantial portion of the Managed
Facilities, the Premises, this Agreement or Manager’s rights hereunder other than for security purposes shall be subject to the transfer
provisions set forth under Article XI of this Agreement.
13.2 Lender’s Right of Access .
Upon reasonable advance notice from a Lender (which notice may be given orally in connection with an emergency or upon the
occurrence of an event of default under any Financing Documents), Manager shall permit and cooperate with such Lender and its agents and
representatives to enter any part of the Managed Facilities, except for those parts of the Managed Facilities as to which access is restricted by
Applicable Law, at any reasonable time for the purposes of examining or inspecting the Managed Facilities, or examining or copying the books
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and records of the Managed Facilities; provided , that: (a) any expenses incurred in connection with such activities shall be Operating Expenses
of the Managed Facilities; and (b) Owner shall use commercially reasonable efforts (including the inclusion of an appropriate confidentiality
provision in the Financing Documents) to cause such Lender to agree to treat as confidential any information such Lender obtains from
examining the books and records of the Managed Facilities provided by Owner to Manager, including the Annual Budget. Manager
acknowledges that a Lender may disclose such information to the same extent and subject to the same restrictions as are applicable to the
Owner with respect to Manager Confidential Information under Article VIII of this Agreement (including to any actual or potential purchasers
of the relevant Mortgage or any interest therein).
13.3 Disclosure of Mortgages .
Owner represents and warrants that as of the date of this Agreement, except as disclosed to Manager in writing prior to the
Commencement Date, there is no Mortgage encumbering the Managed Facilities, Premises or any portion thereof or interest therein. Owner
shall provide to Manager a true and complete copy of any new proposed Mortgage documents for Manager’s review no less than thirty
(30) days before the execution of such new Mortgage documents. Promptly following execution of such new Mortgage documents, Owner
shall provide Manager a true and complete copy of all such new Mortgage documents.
13.4 Estoppel Certificates .
Upon written request at any time during the Term, Manager shall issue to Owner or any Lender, within no less than thirty (30) days after
Manager’s receipt of such request from Owner, an estoppel certificate, comfort letter or other documents as may be reasonably requested by a
Lender: (a) certifying that this Agreement has not been modified and is in full force and effect (or, if there have been modifications, specifying
the modifications and that the same is in full force and effect as modified); and (b) stating whether, to the knowledge of the signatory of such
certificate, any default by Owner exists, and if so, specifying each default of which the signatory has knowledge. Similarly, Manager shall be
entitled to (and Owner shall provide upon written request) an estoppel certificate from Owner, any Lender, or any ground lessor (with respect
to any ground lease), upon the same notice and terms for an estoppel certificate issued by Manager.
13.5 Amendments to Agreement .
In the event any Lender or proposed Lender, directly or indirectly as a condition of closing the proposed Financing, requires any
commercially reasonable modification of any terms or provisions of this Agreement, the Parties shall comply with such request; provided , that
in no event shall Manager be required to agree to any requested modification or amendment to this Agreement that would increase Manager’s
obligations under this Agreement or diminish the fees or reimbursements becoming due to Manager.
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ARTICLE XIV.
BUSINESS INTERRUPTION
14.1 Business Interruption.
At all times during the Term, Manager shall assist Owner in procuring, at Owner’s Expense, and Owner shall maintain Business
Interruption Insurance for the Managed Facilities in accordance with the requirements set forth in Exhibit E attached hereto. If any event,
including a Force Majeure Event, occurs that results in an interruption in the Operation of the Managed Facilities (a “ Business Interruption
Event ”), Manager shall use commercially reasonable efforts to reduce Operating Expenses, Centralized Services Charges and Reimbursable
Expenses to levels commensurate with the levels of reduced revenues and business activity. All Centralized Service Charges and Reimbursable
Expenses actually incurred during the period of the Business Interruption Event shall continue to be payable in accordance with the provisions
this Agreement, regardless of whether there are sufficient Business Interruption Insurance proceeds to cover such amounts. Owner shall also be
obligated to pay to Manager, in accordance with this Agreement, Management Fees based on the prior year’s actual Net Operating Revenues
and EBITDA (as measured as of the date immediately prior to the commencement of the Business Interruption Event) during the period of the
Business Interruption Event.
14.2 Proceeds of Business Interruption Insurance .
The net proceeds of the Business Interruption Insurance maintained in accordance with Section 14.1 (after the application of any
deductible) shall be deposited in the Operating Account and used by Manager in the same manner as funds generated from the Operation of the
Managed Facilities are used by Manager in accordance with this Agreement, including the payment of Operating Expenses, Management Fees,
the Centralized Services Charges and Managed Facilities Personnel Costs and all other Operating Expenses as provided in Section 14.1 .
ARTICLE XV.
CASUALTY OR CONDEMNATION
15.1 Casualty .
15.1.1 Notices . If the Managed Facilities or any portion thereof is damaged by a Casualty, Manager shall immediately notify
Owner thereof.
15.1.2 Casualty . If the Managed Facilities are damaged or destroyed by a Casualty and, thereafter, the business operations at the
Managed Facilities substantially cease, then a Force Majeure Event shall be deemed to exist and the Term of this Agreement shall be extended
for each day that such Force Majeure Event continues. If Owner elects to commence and complete the Restoration of the Managed Facilities
following such Casualty, the Term of this Agreement shall recommence upon the completion of such Restoration. If Owner chooses not to
complete such Restoration and sells the Managed Facilities (or any material portion of the Managed Facilities or the parking structure)
following such Casualty, then Manager, upon written notice to Owner, may elect to terminate this Agreement in accordance with
Section 16.2.4 and Owner, upon written notice to Manager, may elect to terminate this Agreement in accordance with Section 16.3.4 .
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15.2 Condemnation .
15.2.1 Notices . If either Party receives notice of any actual, pending or contemplated Condemnation (or other action in lieu thereof)
of all or a portion of the Managed Facilities, such party shall promptly notify the other Party thereof.
15.2.2 Total Condemnation . If all or substantially all of the Managed Facilities is taken in a Condemnation, or if a portion of the
Managed Facilities shall be so taken such that Owner determines that the cost of Restoration is not justified in comparison to the anticipated
profitability of the Managed Facilities during the remaining Term or the remaining portion cannot be Operated as a casino, either Party, upon
written notice to the other Party, may terminate this Agreement. The proceeds of any condemnation award for the condemnation of all, or
substantially all, of the Managed Facilities shall be equitably allocated between Manager and Owner based on their respective interests in the
Managed Facilities; provided , however , that in no event shall Manager receive from the Condemnation award an amount in excess of the fee
that would be payable to Manager in accordance with Section 16.3.4 (assuming a fee would be payable thereunder) based on the date of
termination of this Agreement. The provisions of this Section 15.2.2 shall survive the termination or expiration of this Agreement.
15.2.3 Partial Condemnation . If all or a portion of the Managed Facilities shall be taken by Condemnation and this Agreement is
not terminated by either Party in accordance with Section 15.2.2 , or the Condemnation is only on a temporary basis, this Agreement shall not
terminate and Owner shall promptly commence and complete the Restoration, but only to a viable architectural unit and provided , that Owner
shall not be obligated to expend any funds in excess of the amount of Condemnation proceeds actually received by Owner. In the event of a
partial condemnation, the proceeds of any condemnation award shall be payable solely to Owner.
15.2.4 Exception . Notwithstanding anything in this Agreement to the contrary, Owner shall not be liable for any inconvenience or
annoyance to Manager or injury to Manager’s business relating in any way from such Condemnation or repair or restoration.
15.3 Coordination with Financing Documents . To the extent this Agreement is in effect and the provisions of Section 15.1 or 15.2 are in
conflict with any of the provisions of the Financing Documents with respect to any casualty or condemnation affecting the Managed Facilities
or the Financing Documents, as applicable, shall control.
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ARTICLE XVI.
DEFAULTS AND TERMINATIONS
16.1 Events of Default .
16.1.1 Owner Events of Default . Each of the following actions and events may be deemed an “ Owner Event of Default ”:
16.1.1.1 A failure by Owner within the time periods specified in this Agreement to pay the amount due and payable under
this Agreement to Manager or its Affiliates for the Management Fees, Reimbursable Expenses or Centralized Services Charges and that is not
cured within sixty (60) days after notice to Owner specifying such failure; provided , that in the event sufficient funds are available in the
Operating Account to pay such amounts then due and Manager has the right to withdraw, transfer or apply such funds to the payment of such
amounts then due, then such failure of Owner to pay such amount shall not be an Event of Default;
16.1.1.2 Except as set forth in Section 16.1.1.1 , a failure by Owner to pay any amount of money to Manager when due and
payable under this Agreement that is not cured within sixty (60) days after notice to Owner;
16.1.1.3 A failure by Owner to materially perform or comply with any of the covenants, duties or obligations set forth in this
Agreement to be performed by Owner that is not cured within thirty (30) days following notice of such default from Manager to Owner;
provided , that if: (a) the default is not susceptible of cure within a thirty (30) day period; (b) the default cannot be cured solely by the payment
of a sum of money; and (c) the default would not expose Manager to an imminent and material risk of criminal liability or of material damage
to its business reputation, the thirty (30) day cure period shall be extended for such time as is necessary (but in no event longer than ninety
(90) days) to cure the default so long as Owner commences to cure the default within such thirty (30) day period and thereafter proceeds with
reasonable diligence to complete such cure; and
16.1.1.4 (i) Owner’s failure generally to pay its debts as such debts become due; (ii) a general assignment by Owner for the
benefit of its creditors, or any similar arrangement with its creditors by Owner; (iii) the entry of a judgment of insolvency against Owner;
(iv) the filing by the Owner of a petition for relief under applicable bankruptcy, insolvency, or similar debtor relief laws; (v) the filing of a
petition for relief under applicable bankruptcy, insolvency or similar debtor relief laws by any Person against Owner which is consented to by
Owner; (vi) the appointment (or petition or application for appointment) of a receiver, custodian, trustee, conservator, or liquidator to oversee
all or any substantial part of Owner’s assets or the conduct of its business; (vii) any action by Owner for dissolution of its operations; or
(viii) any other similar proceedings in any relevant jurisdiction affecting Owner.
Notwithstanding the foregoing, there shall be no Owner Event of Default if the basis for any asserted Owner Event of Default is in the
process of being resolved pursuant to Sections 5.1.3 and 5.1.4 or Article XVII .
16.1.2 Manager Events of Default . Each of the following actions and events may be deemed a “ Manager Event of Default ”:
16.1.2.1 A failure by Manager to pay any amount of money to Owner when due and payable under this Agreement that is
not cured within sixty (60) days after notice to Manager;
16.1.2.2 A failure by Manager or CLC to materially perform or comply with any of the covenants, duties or obligations set
forth in this Agreement to be performed by
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Manager or CLC, as applicable, that is not cured within thirty (30) days following notice of such default from Owner to Manager; provided,
that if: (a) the default is not susceptible of cure within a thirty (30) day period; (b) the default cannot be cured solely by the payment of a sum
of money; and (c) the default would not expose Owner to an imminent and material risk of criminal liability or of material damage to its
business reputation, the thirty (30) day cure period shall be extended for such time as is necessary (but in no event longer than ninety (90) days)
to cure the default so long as Manager commences to cure the default within such thirty (30) day period and thereafter proceeds with
reasonable diligence to complete such cure; and
16.1.2.3 (i) Manager’s failure generally to pay its debts as such debts become due; (ii) a general assignment by Manager
and/or CLC for the benefit of its creditors, or any similar arrangement with its creditors by Manager and/or CLC; (iii) the entry of a judgment
of insolvency against Manager and/or CLC; (iv) the filing by the Manager and/or CLC of a petition for relief under applicable bankruptcy,
insolvency, or similar debtor relief laws; (v) the filing of a petition for relief under applicable bankruptcy, insolvency or similar debtor relief
laws by any Person against Manager and/or CLC which is consented to by Manager and/or CLC, as applicable; (vi) the appointment (or
petition or application for appointment) of a receiver, custodian, trustee, conservator, or liquidator to oversee all or any substantial part of
Manager’s assets or the conduct of its business; (vii) any action by Manager for dissolution of its operations; (viii) the appointment (or petition
or application for appointment) of a receiver, custodian, trustee, conservator, or liquidator to oversee all or any substantial part of CLC’s assets
or the conduct of its business; (ix) any action by CLC for dissolution of its operations; or (x) any other similar proceedings in any relevant
jurisdiction affecting Manager and/or CLC.
Notwithstanding the foregoing, there shall be no Manager Event of Default if the basis for any asserted Manager Event of Default is in
the process of being resolved pursuant to Sections 5.1.3 and 5.1.4 or Article XVII .
16.1.3 Remedies for Event of Default . Subject to the terms of this Agreement, if any Event of Default shall have occurred, the
non-defaulting Party shall have the right to terminate this Agreement in accordance with this Section 16.1 and to exercise against the defaulting
Party any other rights and remedies available to the non-defaulting Party under this Agreement (subject to the provisions hereof) at law or in
equity; provided , however , Owner shall not have the right to terminate this Agreement by reason of the occurrence of any Event of Default
and Manager shall not have the right to terminate this Agreement by reason of the occurrence of an Event of Default under this Section 16.1 ,
unless: (a) the Event of Default is material in amount or in its adverse effect on the Operation, ownership or possession of the Managed
Facilities; (b) the Event of Default constitutes intentional misconduct, reckless behavior or repeated Events of Default of a similar nature by the
defaulting Party; or (c) the remedies under this Agreement are inadequate to redress such Event of Default; provided , that the foregoing
limitations and the cure period set forth in Section 16.1.2.1 shall not be applicable in the event of any breach by the Manager under Section 5.4
of this Agreement involving at least One Million Dollars ($1,000,000) and a ten (10) day cure period shall instead be applicable after written
notice is received by Manager from Owner. For the avoidance of doubt, in the event of any payment by Manager that is the subject of a breach
notice as contemplated by the foregoing sentence, Manager may cure the breach by placing the amount of the payment into a mutually
agreeable escrow to be held for its benefit pending the outcome of dispute resolution in
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accordance with this Agreement (which shall include, in the case of Management Fees, Expert Resolution pursuant to Article XVII ).
Notwithstanding the foregoing, Manager may not terminate this Agreement by reason of the occurrence of an Event of Default under
Section 16.1.1.1 or Section 16.1.1.2 unless the nonpayment giving rise to the Event of Default is greater than One Million Dollars
($1,000,000). If, following a Service Co Assignment, a Manager Event of Default occurs and Owner terminates this Agreement, Owner may
(in addition to the other rights and remedies available to Owner under this Agreement) terminate Transferring Manager’s right to receive the
Retained Rights.
16.1.4 Notice of Termination . If termination of this Agreement is a remedy elected by a non-defaulting Party pursuant to this
Section 16.1 , such remedy shall be exercised by the non-defaulting Party only by irrevocable and unconditional written notice of termination
to the defaulting Party, in which case this Agreement shall terminate on the date specified by the non-defaulting Party in the termination notice,
which date shall be no less than ninety (90) days nor later than twelve (12) months after the delivery of such notice. The right of termination
shall be in addition to, and not in lieu of, any other rights or remedies at law or in equity by reason of the occurrence of any such Event of
Default, it being understood and agreed that the exercise of the remedy of termination shall not constitute an election of remedies and shall be
without prejudice to any such other rights or remedies otherwise available to the non-defaulting Party.
16.2 Manager Termination Rights .
16.2.1 In Connection with Certain Assignments . Manager shall have the right to terminate this Agreement if there shall be (a) any
Assignment in violation of Article XI , (b) any Transfer of Ownership Interests to a Manager Prohibited Person or (c) any Change of Control,
such termination to be effective (i) twelve (12) months after delivery of such notice (unless Owner shall agree to an earlier termination date) or
(ii) if such Assignment or Transfer of Ownership Interests involves a Manager Prohibited Person, such earlier date as is required by any
Gaming Authority. Such right of termination shall be exercisable until the date which is of ninety (90) days after Manager receives written
notice of such an Assignment, Transfer of Ownership Interests or Change of Control from Owner.
16.2.2 In Connection with a Managed Facilities Transfer . Manager shall have the right to terminate this Agreement if there shall be
a Managed Facilities Transfer, such termination to be effective twelve (12) months after delivery of such notice (unless Owner shall agree to an
earlier termination date). Such right of termination shall be exercisable until the date which is of ninety (90) days after Manager receives
written notice of such Managed Facilities Transfer from Owner.
16.2.3 Upon an Operating Deficiency . If, at any time during the Term, Manager determines in the exercise of its good faith
judgment that it cannot Operate the Managed Facilities in all material respects in accordance with the Operating Standard and Operating
Limitations as provided herein and that the proximate cause thereof is an Operating Deficiency Cause, Manager shall be entitled to provide
notice of such determination to Owner (an “ Operating Deficiency Notice ”), which Operating Deficiency Notice shall allege with reasonable
specificity the details of the non-compliance with the Operating Standard or Operating Limitations. For purposes of the preceding sentence, an
“ Operating Deficiency
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Cause ” shall mean any one or more of the following: (a) any failure by Owner to fund a Funds Request issued pursuant to Section 5.5.2 ; or
(b) any interference by Owner or its agents or representatives in any material respect with the Operation of the Managed Facilities. Within
fifteen (15) days after receipt of any Operating Deficiency Notice, Owner shall respond in detail to such allegation and, if the matter is not
resolved by the Parties within forty five (45) days after Owner’s response, the matter shall be referred to the Expert for Expert Resolution in
accordance with Article XVII . If the Expert determines that the Managed Facilities are not being Operated in accordance with the Operating
Standard or Operating Limitations in one or more material respects as provided herein and that the proximate cause of such non-compliance is
an Operating Deficiency Cause, then an “ Operating Limitations Deficiency ” shall be deemed to exist, and, unless Owner shall within fifteen
(15) days of the Expert’s determination fund the subject Funds Request or cease the actions that interfere with the Operation of the Managed
Facilities by Manager, then Manager shall have the right, in its discretion, exercisable within thirty (30) days of the Expert’s determination by
written notice to Owner, to terminate this Agreement, such termination to be effective twelve (12) months following delivery of Manager’s
notice of termination unless Owner shall agree to an earlier termination date. A Termination Fee shall not be payable by Owner upon a
termination by Manager pursuant to this Section 16.2.3 .
16.2.4 Upon a Casualty or Condemnation . Manager shall have the right to terminate this Agreement as provided in Section 15.1.2
due to a Casualty only if Owner elects not to undertake Restoration and sells any material portion of the remaining Managed Facilities and
interest in the Premises (the “ Remainder ”). Manager shall have the right to terminate this Agreement as provided in Section 15.2.2 due to a
Condemnation and Manager shall share in the condemnation proceeds as set forth in Section 15.2.2 . Such termination shall be effective as of
the date set forth in the notice of termination. A Termination Fee shall not be payable by Owner upon a termination by Manager pursuant to
this Section 16.2.4 .
16.2.5 Upon a Failure to Amend . Manager shall have the right to terminate this Agreement as provided in Section 19.2.10 of this
Agreement by written notice to Owner to terminate this Agreement, such termination to be effective thirty (30) days following delivery of
Manager’s notice of termination. No termination fee or penalty shall be payable by Owner upon a termination of this Agreement pursuant to
this Section 16.2.5 .
16.2.6 Upon a Licensing Event . Manager shall have the right, in its discretion, to terminate this Agreement upon no less than ninety
(90) days’ nor more than twelve (12) months’ written notice of termination to Owner following a Licensing Event which is not cured within the
period required by the applicable Gaming Authorities. No termination fee or penalty shall be payable by Owner upon a termination of this
Agreement pursuant to this Section 16.2.6 .
16.2.7 Notice of Termination . If termination of this Agreement is elected by Manager pursuant to this Section 16.2 , such remedy
shall be exercised by Manager only by irrevocable and unconditional written notice of termination to Owner and shall not be an exclusive
remedy.
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16.3 Owner Termination Rights .
16.3.1 Termination Upon a Managed Facilities Transfer . Owner shall have the right, in its discretion, to terminate this Agreement
upon no less than ninety (90) days’ nor more than twelve (12) months’ written notice of termination to Manager following a Managed Facilities
Transfer. Such right of termination shall be exercisable until the date which is ninety (90) days after such Managed Facilities Transfer. Upon
and as a condition to such termination by Owner, Owner shall pay to Manager a Termination Fee.
16.3.2 Upon a Licensing Event . Owner shall have the right, in its discretion, to terminate this Agreement upon no less than ninety
(90) days’ nor more than twelve (12) months’ written notice of termination to Manager, without payment of any termination fee or penalty, if,
as a result of a final, non-appealable determination by any applicable Gaming Authority, Manager shall have failed to obtain or maintain any
license, qualification or approval from any Gaming Authority necessary for Manager to manage the Managed Facilities unless such failure was
attributable, in whole or in part, to Owner or one or more direct or indirect members or other equity holders of Owner (other than any such
Person who is an Affiliate of Manager). No termination fee or penalty shall be payable by Owner upon a termination pursuant to this
Section 16.3.2 .
16.3.3 Upon a Failure to Amend . Owner shall have the right to terminate this Agreement, without payment of any termination fee
or penalty, as provided in Section 19.2.10 of this Agreement, upon written notice of termination to Manager, such termination to be effective
thirty (30) days following delivery of Owner’s notice of termination. No termination fee or penalty shall be payable by Owner upon a
termination pursuant to this Section 16.3.3 .
16.3.4 Upon a Casualty or Condemnation . Owner shall have the right to terminate this Agreement as provided in Section 15.2 due
to a Casualty only if Owner elects not to undertake Restoration and sells the Remainder, in which event (a) if the Remainder is sold to a third
party and the purchaser agrees for the benefit of Manager not to build a casino on the Premises for the Trailing Period following such Casualty,
Owner shall not be obligated to pay to Manager any termination fee or penalty and (b) if the Remainder is sold to a third party and such third
party does not agree for the benefit of Manager that it will not build a casino on the Premises for the Trailing Period following such Casualty,
then Owner shall pay to Manager the Termination Fee. Owner shall have the right to terminate this Agreement as provided in Section 15.2.2
due to a Condemnation and Manager shall share in the condemnation proceeds as set forth in Section 15.2.2 ; provided , that if the Remainder
remaining after the Condemnation is subsequently sold to a third party and such third party does not agree (in favor of Manager) that it will not
build a casino on the Premises at any time during the Trailing Period following such Casualty, then Owner shall pay to Manager the
Termination Fee less the amount of the condemnation award received by Manager in accordance with Section 15.2.2 . Such termination shall
be effective as of the date set forth in the notice of termination. For purposes hereof, “ Trailing Period ” means (a) if during the Initial Term, the
period of time that this Agreement would have continued to be in effect if the Initial Term had not terminated, (b) if during the Renewal Term,
the period of time that this Agreement would have continued to be in effect if the Renewal Term had not terminated, and (c) during any
Continuing Term, there shall be no Trailing Period.
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16.3.5 In Connection with Certain Assignments . If there shall be any Assignment by Manager in violation of Section 11.2 or to an
Owner Prohibited Person, Owner shall have the right to terminate this Agreement, such termination to be effective (i) twelve (12) months after
delivery of such notice (unless Manager shall agree to an earlier termination date) or (ii) if such Assignment involves an Owner Prohibited
Person, such earlier date as is required by any Gaming Authority. Such right of termination shall be exercisable until the date which is ninety
(90) days after Owner receives written notice of such an Assignment, transfer of Ownership Interest or Change of Control from Manager. No
termination fee or penalty shall be payable by Owner upon a termination pursuant to this Section 16.3.8 .
16.3.6 Notice of Certain Assignments, Change of Control, Managed Facilities Transfer . Owner shall provide prompt written notice
to Manager of any Assignment, Transfer of Ownership Interests, Change of Control or Managed Facilities Transfer, in each case both at the
time of execution of any definitive agreement with respect thereto and at the time of the consummation of such transaction.
16.3.7 Notice of Termination . If termination of this Agreement is elected by Owner pursuant to this Section 16.3 , such remedy
shall be exercised by Owner only by irrevocable and unconditional written notice of termination to Manager and shall not be an exclusive
remedy.
16.4 Actions To Be Taken on Termination .
The Parties shall take the following actions upon the expiration or termination of this Agreement pursuant to this Section 16 or otherwise
pursuant to this Agreement (in addition to the rights of the non-defaulting Party to pursue all other remedies available to it under this
Agreement if such termination is due to an Event of Default):
16.4.1 Payment of Expenses for Termination . In the event of termination of this Agreement due to an Event of Default of the
Owner, all commercially reasonable direct expenses arising as a result of the cessation of Managed Facilities operations by Manager (including
expenses arising under this Section 16.4 ) shall be for the sole account of Owner, and Owner shall reimburse Manager within fifteen (15) days
following receipt of any invoice from Manager for any such expenses, including those arising from or in connection with severing the
employment of Managed Facilities Personnel not engaged by Owner in accordance with Section 16.6.9 (with severance benefits calculated in
accordance with policies applicable generally to employees of Other Managed Resorts or any applicable employment agreement or union
agreement that had been reflected in the Annual Budget or otherwise approved by Owner) incurred by Manager in the course of effecting the
termination of this Agreement.
16.4.2 Payment of Amounts Due to Manager . Upon the expiration or termination of this Agreement, Owner shall pay to Manager
(a) the Base Management Fee through the effective date of such expiration or termination, (b) Managed Facilities Personnel Costs, (c) other
Reimbursable Expenses, (d) the Centralized Services Charges, (e) any Incentive Management Fees which were due but not yet paid, (f) any
other amounts due Manager under this Agreement through the effective date of expiration or termination and (g) if applicable, any termination
fee that may be due in accordance with (and for the avoidance of doubt, no termination fee or penalty shall be due in the event of any other
termination), Section 16.3.1
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(Managed Facilities Transfer) or Section 16.3.4 (Casualty/Condemnation), (subject, in the case of termination pursuant to Section 16.3.4 , to
the terms thereof). This obligation is unconditional and shall survive the expiration or termination of this Agreement (including all amounts
owed to Manager that are not fully ascertainable as of the expiration or termination date), and Owner shall not have or exercise any rights of
setoff, except to the extent of any outstanding and undisputed payments owed to Owner by Manager under this Agreement. Manager
acknowledges that the payment of any termination fee under this Section 16.4.2 and the payment of all other amounts under this Section 16.4 ,
as and when paid, shall be the sole and exclusive remedy of Manager in the case of any termination by Owner or Manager under circumstances
in which any such termination fee is to be paid. The Parties further acknowledge that any such termination fee does not represent a penalty or
punitive clause but represents an agreed measure of damages, the amount of which is impossible to determine on the date this Agreement is
signed. Any disputes regarding amounts owed to Manager under this Section 16.4.2 shall be referred to the Expert for Expert Resolution
pursuant to Article XVII . In addition, all provisions in this Agreement that specifically survive the expiration or termination of this Agreement
shall continue to survive as provided herein and, notwithstanding the limitations contained in this Section 16.4.2 , Manager shall continue to
have a right to receive any and all payments which would be due and payable in connection with such surviving provisions.
16.4.3 Surrender of Managed Facilities; Cooperation . Manager shall peacefully vacate and surrender the Managed Facilities to
Owner on the effective date of such expiration or termination, and the Parties shall execute and deliver any expiration or termination or other
necessary agreements either Party shall request for the purpose of evidencing the expiration or termination of this Agreement, and Manager
shall deliver to Owner all keys, passwords, combinations, and take all such additional actions as Owner may reasonably request to ensure the
orderly transition of Operation of the Managed Facilities to Owner or such Person as Owner may designate.
16.4.4 Proprietary Information and Systems; Service Mark Rights .
16.4.4.1 Upon the expiration or termination of this Agreement, Owner, at its expense, shall immediately commence and
diligently pursue to completion during a transition period of twelve (12) months following termination or expiration of this Agreement (the “
Transition Period ”) the following actions:
(a) the discontinuation of all use in any manner of any Proprietary Information and Systems and any and all Service
Mark Rights (other than the Licensed Brand or the Owner Primary Marks); provided that, with respect to the Proprietary Information and
Systems, Manager shall (i) reasonably cooperate with Owner, at Owner’s expense, to develop, construct and install such hardware and software
systems as are reasonably necessary to continue to Operate the Managed Facilities in substantially the same manner and functionality as
Operated by Manager prior to such termination, and (ii) provide Owner reasonably in advance of such discontinuation with a list that describes
with reasonable specificity the Proprietary Information and Systems to which the obligation described in this Section 16.4.4.1(a) applies and
their respective functions;
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(b) the cancellation of all fictitious or assumed name registrations relating to Owner’s use of any Proprietary
Information and Systems;
(c) notification to Owner and all telephone directory publishers of the termination or expiration of Owner’s right to use
any telephone number and any regular, classified or other telephone directory listings associated with any Proprietary Information and Systems
and authorization to transfer such number to Manager or at Manager’s direction; provided, that nothing herein shall be deemed to require
Owner to change or surrender any telephone number used exclusively by the Managed Facilities;
(d) removal from the Managed Facilities, and discontinuation for any purpose, of all publicly observable FF&E,
Supplies, signage and other materials to the extent displaying any aspect of the Service Mark Rights (other than the Licensed Brand or the
Owner Primary Marks); and
(e) the cessation of use of Manuals, policy statements and the like to the extent displaying any Service Mark Right
(other than the Licensed Brand or the Owner Primary Marks).
16.4.4.2 From and after the conclusion of the Transition Period:
(a) Owner shall not, copy, reproduce, use or retain any of the Proprietary Information and Systems, other than
historical materials relating to the Managed Facilities that include incidental Proprietary Information and Systems;
(b) Owner shall not hold itself or the Managed Facilities out to the public as being or remaining (or otherwise
associated with) any other Managed Resorts, or any project or resort managed by Manager or its Affiliates; and
(c) Owner shall provide to Manager evidence reasonably satisfactory to Manager of Owner’s compliance with its
obligations under this Section 16.4.4 .
16.4.5 Assignment and Transfers to Owner . Upon the expiration or termination of this Agreement, Manager shall assign and
transfer to Owner:
16.4.5.1 all leases and contracts to which Manager, CLC, or any of their Affiliates is a party, if any, (including collective
bargaining agreements and pension plans, equipment leases, leases, licenses and concession agreements and maintenance and service contracts)
in effect that relate exclusively to the Managed Facilities or the Owner Owned IP as of the date of expiration or termination of this Agreement
which are assignable without third party consent or as to which consent to assignment may be and has been obtained without cost to Manager,
and Owner shall, effective as of the date of such termination, assume all liabilities and obligations thereunder, and Owner shall confirm its
assumption of such liabilities and obligations in writing; provided , that Manager shall provide to Owner a list of all contracts and agreements
with CLC, and any Affiliates of Manager, and Manager shall assign, and Owner shall assume only such contracts and agreements between the
Managed Facilities, on the one hand, and CLC or an Affiliate of Manager, on the other hand, as Owner shall elect (and Manager shall
terminate, at Manager’s sole cost and expense) all Affiliate contracts and agreements not so assumed by Owner);
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16.4.5.2 all of Manager’s right, title and interest in and to all Approvals, including liquor licenses, if any, held by Manager in
connection with the Operation of the Managed Facilities, but only to the extent such assignment or transfer is permitted under Applicable Law;
provided , that Owner shall reimburse Manager for any funds Manager has expended in obtaining any such Approvals (if not otherwise paid or
reimbursed by Owner). In addition, if Manager or any Affiliate of Manager is the holder of any liquor license for the Managed Facilities which
is not assignable to Owner or its designee upon termination of this Agreement, then, upon the request of Owner, Manager (or such Affiliate)
shall enter into a temporary lease, license or such other agreement as may be permitted under Applicable Law to permit the continuous and
uninterrupted sale of alcohol beverages at the Managed Facilities consistent with prior operations. In such event, Manager (or its Affiliate, if
applicable) shall not be entitled to compensation in connection with such arrangement, but shall not incur any cost or liability in connection
therewith and shall be named as an additional insured on any “dramshop” or other liability insurance pertaining to the sale of alcoholic
beverages at the Managed Facilities. Any such temporary lease, license or other arrangement shall include an indemnification of Manager and
its Affiliates from Owner and shall provide for the termination of all obligations of Manager and its Affiliates thereunder within one hundred
twenty (120) days following the date of termination of this Agreement. In addition, to the extent permitted under Applicable Law, any other
permits or licenses that may not be assigned to Owner shall be maintained by Manager for Owner’s benefit at Owner’s cost and expense until
such time (but no later than one hundred twenty (120) days following the termination of this Agreement) as Owner may secure permits and
licenses in its own name, subject to Owner’s provision of an indemnification of Manager and its Affiliates from Owner; and
16.4.5.3 all books and records of the Managed Facilities (but excluding any Manager Confidential Information); provided ,
that Manager may retain one or more archival copies of such books and records for Manager’s independent use.
16.4.6 Bookings and Reservations . Owner shall honor, and shall cause any successor manager to honor, all business confirmed for
the Managed Facilities with reservations (including reservations made by Manager pursuant to Manager’s other promotional programs) dated
after the effective date of the expiration or termination of this Agreement in accordance with such bookings as accepted by Manager. Manager
shall transfer to Owner and will assume responsibility for all advance deposits received by Manager for the Managed Facilities.
16.4.7 Bank Accounts; Receivables . On the expiration or termination of this Agreement, Manager shall either, at Owner’s election,
(a) terminate all Bank Accounts and disburse all funds therein to Owner or (b) terminate the authority of Manager’s authorized signatories to
draw funds from the Bank Accounts and cause the Persons designated by Owner to become authorized signatories. All receivables of the
Managed Facilities outstanding as of the effective date of termination or expiration of this Agreement shall continue to be the property of
Owner. Manager will turn over to Owner any receivables collected directly by Manager after the effective date of termination or expiration of
this Agreement.
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16.4.8 Final Accounting . Within thirty (30) days following the expiration or termination of this Agreement, Manager shall render a
full accounting to Owner (including all statements and reports in the forms required herein) for the final month ending on the date of expiration
or termination of this Agreement. At the request of Owner, Manager shall cause to be prepared and delivered to Owner within ninety (90) days
following the expiration or termination of this Agreement Certified Financial Statements for the final Operating Year, containing the reports
and other items and prepared on the same basis as under Section 10.4 . The cost of preparing the Certified Financial Statements pursuant to this
Section 16.4.8 shall be an Operating Expense attributable to the final Operating Year. The final Certified Financial Statements delivered
pursuant to this Section 16.4.8 , and all information contained therein, shall be binding and conclusive on the Parties unless, within sixty
(60) days following the delivery thereof, either Party shall deliver to the other Party written notice of its objection thereto setting forth in
reasonable detail the nature of such objection. If the Parties are unable thereafter to resolve any disputes between them with respect to the
matters set forth in the final Certified Financial Statements within sixty (60) days after delivery by either Party of the aforesaid written notice,
either Party shall have the right to cause such dispute to be resolved by Expert Resolution in accordance with the provisions of Article XVII .
16.4.9 Managed Facilities Personnel . From and after expiration or termination of this Agreement the Managed Facilities Personnel
shall not be restrained by this Agreement in making their own decision as to whether to be employed by Owner, Manager or their respective
Affiliates and Manager and its Affiliates may employ any of the Senior Executive Personnel or any other Managed Facilities Personnel who
desire employment with Manager or its Affiliates and who Owner does not employ. Manager shall make reasonably available to Owner from
time to time during the Transition Period any Managed Facilities Personnel employed by Manager or its Affiliates to answer questions that
Owner may have regarding the Managed Facilities.
16.4.10 Centralized Services and Purchasing Program . In consideration of the continued payment of the Centralized Services
Charges (as set forth in Section 4.1.1 ), the charges for Reimbursable Expenses (as set forth in Section 3.3 ) and for participation in Purchasing
Programs (as contemplated by Section 5.6 ), Manager shall, during the Transition Period (or such shorter period as requested by Owner),
continue to provide Centralized Services and allow the Owner to purchase through the Purchasing Program, in each case to the extent Manager
and its Affiliates are permitted to do so pursuant to the terms of any applicable third party arrangements.
16.4.11 Survival . This Section 16.4 shall survive the expiration or termination of this Agreement.
ARTICLE XVII.
DISPUTE RESOLUTION
17.1 Generally .
17.1.1 Except for disputes specifically provided in this Agreement to be referred to Expert Resolution, all claims, demands,
controversies, disputes, actions or causes of action of any nature or character arising out of or in connection with this Agreement, whether
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legal or equitable, known or unknown, contingent or otherwise shall be resolved in the United States District Court for Nevada and any
appellate courts thereto, or if federal jurisdiction is lacking, then in the State Courts of Nevada. The Parties agree that service of process for
purposes of any such litigation or legal proceeding need not be personally served or served within the State of Nevada, but may be served with
the same effect as if the Party in question were served within the State of Nevada, by giving notice containing such service to the intended
recipient (with copies to counsel) in the manner provided in Section 19.5 . This provision shall survive and be binding upon the Parties after
this Agreement is no longer in effect.
17.1.2 If any dispute between any of the Parties or any of their respective Affiliates is pending in any state or federal court located
in the State of Nevada with respect to this Agreement (or this Agreement), and any subsequent dispute arises between one or more Parties or
any of their respective Affiliates which is not required by this Agreement to be referred to Expert Resolution and is pending in any other state
or federal court, the Parties shall (to the extent permissible under applicable rules) jointly move to consolidate such subsequent dispute in the
same court with the pending dispute, and in the event that the court declines to consolidate the disputes (or consolidation is not permissible
under applicable rules), the Parties shall request that the court refer the subsequent dispute to the judge presiding over the pending dispute as a
related case, it being the intent of the Parties to keep any litigation relating to this Agreement within the same court to the fullest extent possible
under the law.
17.2 Expert Resolution .
With respect to any dispute to be submitted to an Expert pursuant to this Agreement, any Party that is party to such dispute may require
that the dispute be submitted to final and binding arbitration (without appeal or review) in Las Vegas, Nevada (“ Expert Resolution ”),
administered by an independent arbitration tribunal consisting of three (3) arbitrators, one of which is appointed by each Party and the third
arbitrator shall be selected by the other two arbitrators (collectively, the “ Expert ”). Such Expert Resolution shall be conducted by the
American Arbitration Association in accordance with the Commercial Arbitration Rules of the American Arbitration Association. The Expert
shall be a person having not less than ten (10) years’ experience in the area of expertise on which the dispute is based and having no conflict of
interest with either Party. With respect to any dispute to be submitted to an Expert pursuant to this Agreement, the use of the Expert shall be the
exclusive remedy of the Parties and neither Party shall attempt to adjudicate such dispute in any other forum. The decision of the Expert shall
be final and binding on the Parties and shall not be capable of challenge, whether by Expert Resolution, arbitration, in court or otherwise.
17.2.1 Related Disputes .
17.2.1.1 Any two (2) or more disputes which are required to be submitted to an Expert under this Agreement shall be
considered related for purposes of this section if they involve the same or substantially similar issues of law or fact. In the event any Party to a
dispute (the “ Subsequent Related Dispute ”) designates it as being related to a prior or pending dispute (the “ Prior Related Dispute ”), the
Subsequent Related Dispute shall be referred for resolution to the Expert to whom the Prior Related Dispute was referred (the “ Initial Expert
”). If a Party objects to the designation of a Subsequent Related Dispute as being related
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to a Prior Related Dispute, the objection shall be resolved by the Initial Expert. If the Initial Expert concludes that the disputes are related, the
Subsequent Related Dispute shall be resolved by the Initial Expert in accordance with this Section 17.2 , and to the extent practical issues in the
Subsequent Related Dispute that are the same or substantially similar as in the Prior Related Dispute shall be resolved in a manner consistent
with the resolution of such issues in the Prior Related Dispute. If the Initial Expert concludes that the Subsequent Related Dispute is not related
to the Prior Related Dispute, the Subsequent Related Dispute shall be referred to an Expert selected in accordance with the introductory
paragraph of this Section 17.2 .
17.2.1.2 Notwithstanding anything to the contrary contained in this Agreement, if a claim is asserted involving an alleged
Event of Default under this Agreement (or under this Agreement) (a “ Default Claim ”), any and all issues, whether legal, factual or otherwise,
relating to such Default Claim shall be resolved exclusively by a state or federal court located in the State of Nevada in accordance with the
provisions hereof regardless of whether any of such issues would otherwise be required to be referred to an Expert for resolution under a
provision of this Agreement; provided , that any decision by an Expert made in accordance with this Agreement which was rendered prior to
the assertion of a Default Claim and which relates to such Default Claim shall be considered final and binding in any court proceeding
involving such Default Claim, it being the intent and understanding of the Parties that, except for specific issues that were determined by an
Expert before a Default Claim is asserted, all issues relating to such Default Claim shall be resolved exclusively by the court in the action or
proceeding involving the Default Claim.
17.2.2 Restrictions on Expert . THE EXPERT SHALL HAVE NO AUTHORITY TO VARY OR IGNORE THE TERMS OF THIS
AGREEMENT, INCLUDING SECTION 17.7.5 , AND SHALL BE BOUND BY APPLICABLE LAW. ALL PROCEEDINGS, AWARDS
AND DECISIONS UNDER ANY EXPERT RESOLUTION PROCEEDING SHALL BE STRICTLY PRIVATE AND CONFIDENTIAL,
EXCEPT AS MAY BE NECESSARY TO ENFORCE THE SAME.
17.3 Time Limit .
Any Expert Resolution of a dispute must be commenced within twelve (12) months from the date on which either Party first gave written
notice to the other of the existence of the dispute, and any Party who fails to commence litigation or Expert Resolution within such twelve
(12) month period shall be deemed to have waived any of its affirmative rights and claims in connection with the dispute and shall be barred
from asserting such rights and claims at any time thereafter except as a defense to any related or similar claims subsequently raised by the other
party. An Expert Resolution shall be deemed commenced by a Party when the Party sends a notice to the other Party and to the American
Arbitration Association, identifying the dispute and requesting Expert Resolution. Litigation shall be deemed commenced by a Party when the
Party serves a complaint (or, as the case may be, a counterclaim) on the other Party with respect to the dispute.
17.4 Prevailing Party’s Expenses .
The prevailing Party in any Expert Resolution, litigation or other legal action or proceeding arising out of or related to this Agreement
shall be entitled to recover from the losing
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Party all reasonable fees, costs and expenses incurred by the prevailing Party in connection with such Expert Resolution, litigation or other
legal action or proceeding (including any appeals and actions to enforce any Expert Resolution awards and court judgments), including
reasonable fees, expenses and disbursements for attorneys, experts and other third parties engaged in connection therewith and its share of the
fees and costs of the Expert. If a Party prevails on some, but not all, of its claims, such Party shall be entitled to recover an equitable amount of
such fees, expenses and disbursements, as determined by the applicable Expert(s) or court. All amounts recovered by the prevailing Party under
this Section 17.4 shall be separate from, and in addition to, any other amount included in any Expert Resolution award or judgment rendered in
favor of such Party.
17.5 WAIVERS.
17.5.1 JURISDICTION AND VENUE . OWNER AND MANAGER WAIVE, TO THE FULLEST EXTENT PERMITTED BY
LAW, ALL DEFENSES BASED ON LACK OF JURISDICTION OR INCONVENIENT VENUE OR FORUM FOR ANY LITIGATION OR
OTHER LEGAL ACTION OR PROCEEDING PURSUED BY MANAGER OR OWNER IN THE JURISDICTION AND VENUE
SPECIFIED IN SECTION 17.1 .
17.5.2 TRIAL BY JURY . EACH PARTY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, TRIAL BY JURY
OF ALL CLAIMS ARISING OUT OF OR RELATING TO THIS AGREEMENT.
17.5.3 CLASS ACTIONS . OWNER AGREES THAT, FOR MANAGER’S AND ITS AFFILIATES’ CHAIN OF BRANDED
HOTELS AND CASINOS TO FUNCTION PROPERLY, MANAGER SHOULD NOT BE BURDENED WITH THE COSTS OF
ARBITRATING OR LITIGATING SYSTEM WIDE CLAIMS. ACCORDINGLY, OWNER AGREES THAT ANY DISAGREEMENT
BETWEEN OWNER AND MANAGER SHALL BE CONSIDERED UNIQUE AS TO ITS FACTS AND SHALL NOT BE BROUGHT AS
A CLASS ACTION, AND OWNER WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ALL RIGHTS TO BRING A CLASS
ACTION OR MULTI-PLAINTIFF, CONSOLIDATED OR COLLECTIVE ACTION AGAINST MANAGER OR ANY OF ITS
AFFILIATES. FOR AVOIDANCE OF DOUBT, THE FOREGOING RESTRICTION SHALL NOT BE CONSTRUED TO PROHIBIT
EITHER PARTY OR ITS AFFILIATES FROM JOINING WITH OTHER PARTIES TO THE AFFILIATE MANAGEMENT
AGREEMENTS TO BRING ACTIONS RELATING TO ONE OR MORE OF SUCH AFFILIATE MANAGEMENT AGREEMENTS.
17.5.4 DECISIONS IN PRIOR CLAIMS . SUBJECT TO SECTION 17.2.1.2 , OWNER AND MANAGER AGREE THAT IN
ANY EXPERT RESOLUTION OR LITIGATION BETWEEN THE PARTIES, THE EXPERT(S) OR COURT SHALL NOT BE
PRECLUDED FROM MAKING ITS OWN INDEPENDENT DETERMINATION OF THE ISSUES IN QUESTION, NOTWITHSTANDING
THE SIMILARITY OF ISSUES IN ANY OTHER EXPERT RESOLUTION OR LITIGATION INVOLVING MANAGER AND ANY
OTHER OWNER OR ANY OF THEIR AFFILIATES, AND EACH PARTY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
LAW, ALL RIGHTS TO CLAIM THAT A PRIOR DISPOSITION OF THE SAME OR SIMILAR ISSUES PRECLUDES SUCH
INDEPENDENT DETERMINATION.
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17.5.5 PUNITIVE, CONSEQUENTIAL AND CERTAIN OTHER DAMAGES . NOTWITHSTANDING ANYTHING TO THE
CONTRARY IN THIS AGREEMENT OR UNDER APPLICABLE LAW, IN ANY EXPERT RESOLUTION, LAWSUIT, LEGAL ACTION
OR PROCEEDING BETWEEN THE PARTIES ARISING FROM OR RELATING TO THIS AGREEMENT OR THE MANAGED
FACILITIES, THE PARTIES UNCONDITIONALLY AND IRREVOCABLY WAIVE AND DISCLAIM TO THE FULLEST EXTENT
PERMITTED UNDER APPLICABLE LAW ALL RIGHTS TO ANY CONSEQUENTIAL, LOST PROFITS, PUNITIVE, EXEMPLARY,
STATUTORY OR TREBLE DAMAGES (OTHER THAN STATUTORY RIGHTS AND MANAGER’S RIGHT TO RECEIVE ANY
TERMINATION FEE IN ACCORDANCE WITH THIS AGREEMENT, AND EXCEPT FOR A CLAIM FOR RECOVERY OF ANY SUCH
DAMAGES THAT THE CLAIMING PARTY IS REQUIRED BY A COURT OF COMPETENT JURISDICTION OR THE EXPERT TO
PAY TO A THIRD PARTY), AND ACKNOWLEDGE AND AGREE THAT THE RIGHTS AND REMEDIES IN THIS AGREEMENT,
AND ALL OTHER RIGHTS AND REMEDIES AT LAW AND IN EQUITY, WILL BE ADEQUATE IN ALL CIRCUMSTANCES FOR
ANY CLAIMS THE PARTIES MIGHT HAVE WITH RESPECT TO DAMAGES.
17.6 Survival and Severance .
This Article XVII shall survive the expiration or termination of this Agreement. The provisions of this Article XVII are severable from
the other provisions of this Agreement and shall survive and not be merged into any termination or expiration of this Agreement or any
judgment or award entered in connection with any dispute, regardless of whether such dispute arises before or after termination or expiration of
this Agreement, and regardless of whether the related Expert Resolution or litigation proceedings occur before or after termination or expiration
of this Agreement. If any part of this Article XVII is held to be unenforceable, it shall be severed and shall not affect either the duties to submit
any dispute to Expert Resolution or any other part of this Article XVII .
17.7 ACKNOWLEDGEMENTS .
OWNER AND MANAGER EACH ACKNOWLEDGE AND CONFIRM TO THE OTHER THAT:
17.7.1 INFORMED INVESTOR . THE ACKNOWLEDGING PARTY HAS HAD THE BENEFIT OF LEGAL COUNSEL AND
ALL OTHER ADVISORS DEEMED NECESSARY OR ADVISABLE TO ASSIST IT IN THE NEGOTIATION AND PREPARATION OF
THIS AGREEMENT, AND THE OTHER PARTY’S ATTORNEYS HAVE NOT REPRESENTED THE ACKNOWLEDGING PARTY, OR
PROVIDED ANY LEGAL COUNSEL OR OTHER ADVICE TO THE ACKNOWLEDGING PARTY, WITH RESPECT TO THIS
AGREEMENT.
17.7.2 BUSINESS RISKS . THE ACKNOWLEDGING PARTY (A) IS A SOPHISTICATED PERSON, WITH SUBSTANTIAL
EXPERIENCE IN THE OWNERSHIP
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AND OPERATION OF COMMERCIAL DEVELOPMENT PROJECTS; (B) RECOGNIZES THE TRANSACTIONS CONTEMPLATED
BY THIS AGREEMENT INVOLVE SUBSTANTIAL BUSINESS RISKS; AND (C) HAS MADE AN INDEPENDENT INVESTIGATION
OF ALL ASPECTS OF THIS AGREEMENT SUCH PARTY DEEMS NECESSARY OR ADVISABLE.
17.7.3 NO ADDITIONAL REPRESENTATIONS OR WARRANTIES . NO PARTY HAS MADE ANY PROMISES,
REPRESENTATIONS, WARRANTIES OR GUARANTIES OF ANY KIND WHATSOEVER TO ANY OTHER PARTY, EXCEPT AS
SPECIFICALLY SET FORTH IN THIS AGREEMENT, AND NO PERSON IS AUTHORIZED TO MAKE ANY PROMISES,
REPRESENTATIONS, WARRANTIES OR GUARANTIES ON BEHALF OF A PARTY, EXCEPT AS SPECIFICALLY SET FORTH IN
THIS AGREEMENT.
17.7.4 NO RELIANCE . NO PARTY HAS RELIED UPON ANY STATEMENTS OR PROJECTIONS OF REVENUE, SALES,
EXPENSES, INCOME, GAMING WIN, RATES, AVERAGE DAILY RATE, CONTRIBUTION, PROFITABILITY, VALUE OF THE
MANAGED FACILITIES OR SIMILAR INFORMATION PROVIDED BY ANY OTHER PARTY BUT HAS INDEPENDENTLY
CONFIRMED THE ACCURACY AND RELIABILITY OF ANY SUCH INFORMATION AND IS SATISFIED WITH THE RESULTS OF
SUCH INDEPENDENT CONFIRMATION.
17.7.5 LIMITATION ON FIDUCIARY DUTIES . TO THE EXTENT ANY FIDUCIARY DUTIES THAT MAY EXIST AS A
RESULT OF THE RELATIONSHIP OF THE PARTIES ARE INCONSISTENT WITH, OR WOULD HAVE THE EFFECT OF
EXPANDING, MODIFYING, LIMITING OR RESTRICTING ANY OF THE EXPRESS TERMS OF THIS AGREEMENT, (A) THE
EXPRESS TERMS OF THIS AGREEMENT SHALL CONTROL AND (B) ANY LIABILITY OF THE PARTIES FOR MONETARY
DAMAGES OR MONETARY RELIEF SHALL BE BASED SOLELY ON PRINCIPLES OF CONTRACT LAW AND THE EXPRESS
TERMS OF THIS AGREEMENT. ACCORDINGLY, NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT,
TO THE FULLEST EXTENT PERMITTED UNDER APPLICABLE LAW, THE PARTIES HEREBY UNCONDITIONALLY AND
IRREVOCABLY WAIVE AND DISCLAIM ANY POWER OR RIGHT SUCH PARTY MAY HAVE TO CLAIM ANY PUNITIVE,
EXEMPLARY, STATUTORY OR TREBLE DAMAGES OR CONSEQUENTIAL OR INCIDENTAL DAMAGES FOR ANY BREACH OF
FIDUCIARY DUTIES.
17.7.6 IRREVOCABILITY OF CONTRACT . IN ORDER TO REALIZE THE FULL BENEFITS CONTEMPLATED BY THE
PARTIES, THE PARTIES INTEND THAT THIS AGREEMENT SHALL BE NON-TERMINABLE, EXCEPT FOR THE SPECIFIC
TERMINATION RIGHTS IN FAVOR OF A PARTY SET FORTH IN THIS AGREEMENT. ACCORDINGLY, NOTWITHSTANDING
ANYTHING TO THE CONTRARY IN THIS AGREEMENT, TO THE FULLEST EXTENT PERMITTED UNDER APPLICABLE LAW,
THE PARTIES HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVE AND DISCLAIM ALL RIGHTS TO TERMINATE THIS
AGREEMENT AT LAW OR IN EQUITY, EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT.
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17.8 Survival .
The provisions of this Article XVII shall survive the expiration or termination of this Agreement.
ARTICLE XVIII.
GAMING LAW PROVISIONS
18.1 Regulatory Matters; Initial Suitability Review .
18.1.1 Manager’s Regulatory Environment . Owner acknowledges that Manager, CEOC and their respective Affiliates (a) conduct
business in an industry that is subject to and exists because of privileged licenses issued by Governmental Authorities in multiple jurisdictions,
(b) are subject to extensive gaming regulation and oversight, and are required to adhere to strict laws and regulations regarding vendor and
other business relationships, and (c) have adopted strict internal controls and compliance policies governing their own activities and those of
certain parties with whom they do business.
18.1.2 Suitability Investigations . As an initial matter, Owner acknowledges and agrees that Manager, CEOC and their respective
Affiliates must perform a background check, suitability review and such other due diligence with respect to the Subject Group, but excluding
Manager and its Affiliates and those individuals associated with Owner previously subject to CEOC’s suitability review, as required under
applicable gaming regulations and/or the corporate policies of Manager, CEOC and their respective Affiliates. Accordingly, Owner hereby
(a) acknowledges and understands that Manager, CEOC and their respective Affiliates must perform such investigations and inquiries with
respect to the Subject Group regarding the financial and credit condition, the existence and status of any litigation, criminal proceedings and
convictions, character and personal qualifications of any such Person, (b) agrees to promptly provide the information regarding the Subject
Group required by the CEC Business Information Form (Revised 6/22/05) and such other information as is reasonably requested by Manager,
CEOC or their respective Affiliates for such purposes (collectively, the “ Requested Information ”), and (c) agrees to cooperate with Manager,
CEOC and their respective Affiliates in the completion of its due diligence and gaming suitability and background checks of the Subject Group.
Manager acknowledges receipt and completion of such investigation and inquiries on the persons or entities within the Subject Group as of the
date of this Agreement.
18.2 Licensing Event .
If there shall occur a Licensing Event and any aspect of such Licensing Event is attributable to a member of the Subject Group, then
Manager shall notify Owner as promptly as practicable after becoming aware of such Licensing Event (but in no event later than twenty
(20) days after becoming aware of such Licensing Event). In such event, Owner shall and shall cause the other members of the Subject Group
to use commercially reasonable efforts to assist Manager and its Affiliates in resolving such Licensing Event within the time period required by
the applicable Gaming Authorities by submitting to investigation by the relevant Gaming Authorities and cooperating with any reasonable
requests made by such Gaming Authorities (including filing requested forms and delivering information to the Gaming Authorities). If, despite
these efforts, such Licensing Event cannot be resolved to the satisfaction of the
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applicable Gaming Authorities within the time period required by such Gaming Authorities, Manager shall have the right to terminate this
Agreement to the extent provided in Section 16.2.6 or, if applicable, Owner shall have the right to terminate this Agreement to the extent
provided in Section 16.3.2 .
18.3 Unlawful Payments .
Neither Party nor any Person for or on behalf of such Party, shall make, and each Party acknowledges that the other Party will not make,
any expenditure for any unlawful purposes in the performance of its obligations under this Agreement and in connection with its activities in
relation thereto. Neither Party nor any Person for or on behalf of such Party, shall, and each Party acknowledges that the other Party will not,
make any illegal offer, payment or promise to pay, authorize the payment of any money, or offer, promise or authorize the giving or anything
of value, to (a) any government official, any political party or official thereof, or any candidate for political office; or (b) any other Person
while knowing or having reason to know that all or a portion of such money or thing of value will be offered, given, or promised, directly or
indirectly, to any such official, to any such political party or official thereof, or to any candidate for political office for the purpose of
(i) influencing any action or decision of such official party or official thereof, or candidate in his or its capacity, including a decision to fail to
perform his or its official functions; or (ii) inducing such official party or official thereof, or candidate to use his or its influence with any
Governmental Authority to effect or influence any act or decision of such Governmental Authority. Each Party represents and warrants to the
other Party that no government official nor any candidate for political office has any direct or indirect ownership or investment interest in the
revenues or profit of such Party or the Managed Facilities. CLC shall be a “Party” for purposes of this Section 18.3 .
ARTICLE XIX.
GENERAL PROVISIONS
19.1 Governing Law .
This Agreement shall be construed under the laws of the State of Nevada, without regard to any conflict of law principles.
19.2 Construction of this Agreement .
The Parties and CLC (which shall be a “Party” for purposes of this Section 19.2 ) intend that the following principles (and no others not
consistent with them) be applied in construing and interpreting this Agreement:
19.2.1 Presumption Against a Party . The terms and provisions of this Agreement shall not be construed against or in favor of a
Party hereto merely because such Party is the Manager hereunder or such Party or its counsel is the drafter of this Agreement.
19.2.2 Severability . If any term or provision of this Agreement is held invalid, illegal or unenforceable by a court of competent
jurisdiction or the Expert for any reason, the remainder of this Agreement shall in no way be affected and shall remain valid and enforceable
for all purposes, each Party hereby declaring that it (i) would have executed this
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Agreement without inclusion of such term or provision; and (ii) execute and deliver to the other Party any additional documents that may be
reasonably requested by a Party to fully effectuate this Section 19.2.2 .
19.2.3 Certain Words and Phrases . All words in this Agreement shall be deemed to include any number or gender as the context or
sense of this Agreement requires. The words “will,” “shall,” and “must” in this Agreement indicate a mandatory obligation. The use of the
words “include,” “includes,” and “including” followed by one (1) or more examples is intended to be illustrative and is not a limitation on the
scope of the description or term for which the examples are provided. All dollar amounts set forth in this Agreement are stated in U.S. dollars,
unless otherwise specified. The words “day” and “days” refer to calendar days unless otherwise stated. The words “month” and “months” refer
to calendar months unless otherwise stated. The words “hereof”, “hereto” and “herein” refer to this Agreement, and are not limited to the
article, section, paragraph or clause in which such words are used. If any decision, approval or other determination is required or permitted to
be made hereunder in a Party’s “discretion”, the word “discretion” shall be interpreted to mean such Party’s sole discretion. If the Operating
Year is a fiscal year other than a calendar year, all references in this Agreement to January 1 shall mean the first day of such fiscal year.
19.2.4 Headings . The table of contents, headings and captions contained herein are for the purposes of convenience and reference
only and are not to be construed as a part of this Agreement. All references to any article, section or exhibits in this Agreement are to articles,
sections or exhibits of this Agreement, unless otherwise noted.
19.2.5 Approvals . Unless expressly stated otherwise in this Agreement, whenever a matter is submitted to a Party for approval or
consent in accordance with the terms of this Agreement, that Party has a duty to act reasonably and timely in rendering a decision on the
matter.
19.2.6 Entire Agreement . This Agreement (including the attached Exhibits), together with the Transaction Agreement, constitutes
the entire agreement between the Parties with respect to the subject matter contemplated herein and supersedes all prior agreements and
understandings, written or oral. No undertaking, promise, duty, obligation, covenant, term, condition, representation, warranty, certification or
guaranty shall be deemed to have been given or be implied from anything said or written in negotiations between the Parties prior to the
execution of this Agreement, except as expressly set forth in this Agreement. Neither Party shall have any remedy in respect of any untrue
statement made by the other Party on which that Party relied in entering into this Agreement (unless such untrue statement was made
fraudulently), except to the extent that such statement is expressly set forth in this Agreement.
19.2.7 Third-Party Beneficiary . Except as set forth in Section 12.3 , no third-party shall be a beneficiary of Owner’s or Manager’s
rights or benefits under this Agreement; provided , that each of CEC, CEOC, CERP the Transferring Manager, CLC and their respective
Affiliates shall be express beneficiaries of this Agreement to the extent related to the Service Mark Rights or to other intellectual property
rights or confidential information owned by them, the Retained Rights, Article XVIII and any other provision of this Agreement that
specifically identifies it.
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19.2.8 Time of the Essence . Time is of the essence for all purposes of this Agreement.
19.2.9 Remedies Cumulative . Except as otherwise expressly provided in this Agreement, the remedies provided in this Agreement
are cumulative and not exclusive of the remedies provided by Applicable Law, and a Party’s exercise of any one or more remedies for any
default shall not preclude the Party from exercising any other remedies at any other time for the same default.
19.2.10 Amendments . Neither this Agreement nor any of its terms or provisions may be amended, modified, changed, waived or
discharged, except: (a) for Manager’s right to make changes to the Operating Limitations, Total Rewards System, and Centralized Services as
permitted under this Agreement; (b) by an instrument in writing signed by the Party against whom the enforcement of the amendment,
modification, change, waiver or discharge is sought; and (c) if any Governmental Authority requires, as a condition of its approval of the initial
effectiveness of this Agreement, directly or indirectly, the modification of any terms or provisions of this Agreement, the Parties shall use their
commercially reasonable efforts to comply with such request; provided , that if such requested modification would materially and adversely
affect either Party’s rights or obligations under this Agreement, then either Party shall have the right to terminate this Agreement by giving
written notice to the other Party within thirty (30) days after receipt of such request for modification, with no liability whatsoever to the
terminating Party for such termination.
19.2.11 Survival . The expiration or termination of this Agreement does not terminate or affect Owner’s or Manager’s covenants
and obligations that either expressly or by their nature survive the expiration or termination of this Agreement. This Section 19 shall survive the
expiration or termination of this Agreement.
19.3 Limitation on Liabilities .
19.3.1 Projections in Annual Budget . Owner acknowledges that: (a) all budgets and financial projections prepared by Manager or
its Affiliates prior to the date of this Agreement or under this Agreement, including the Annual Budget, are intended to assist in Operating the
Managed Facilities, but are not to be relied on by Owner or any third-party as to the accuracy of the information or the results predicted therein;
and (b) Manager does not guarantee the accuracy of the information nor the results in such budgets and projections. Accordingly, Owner agrees
that (i) neither Manager nor its Affiliates shall be liable to Owner or any third-party for divergence between such budgets and projections and
actual operating results achieved except as otherwise provided in this Agreement, including limits on incurring expenses; (ii) the failure of the
Managed Facilities to achieve any Annual Budget for any Operating Year shall not constitute a default by Manager or give Owner the right to
terminate this Agreement; and (iii) if Owner provides any such budgets or projections to a third-party, Owner shall advise such third-party in
writing of the substance of the disclaimer of liability set forth in this Section 19.3.1 . Manager represents that it shall prepare all budgets and
financial projections and operating plans prepared by Manager under this Agreement in good faith based upon Manager’s experience and
knowledge.
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19.3.2 Approvals and Recommendations . Each party acknowledges that in granting any consents, approvals or authorizations under
this Agreement, and in providing any advice, assistance, recommendation or direction under this Agreement, neither party nor any Affiliates
guarantee success or a satisfactory result from the subject of such consent, approval, authorization, advice, assistance, recommendation or
direction. Accordingly, each agrees that neither party shall have any liability whatsoever to the other or any third person by reason of: (a) any
consent, approval or authorization, or advice, assistance, recommendation or direction, given or withheld; or (b) any delay or failure to provide
any consent, approval or authorization, or advice, assistance, recommendation or direction (except in the event of a breach of a covenant herein
not to unreasonably withhold or delay any consent or approval); provided , however , each agrees to act in good faith when dealing with or
providing any advice, consent, assistance, recommendation or direction.
19.3.3 Technical Advice . Owner acknowledges that any review, advice, assistance, recommendation or direction provided by
Manager with respect to the design, construction, equipping, furnishing, decoration, alteration, improvement, renovation or refurbishing of the
Managed Facilities (a) is intended solely to assist Owner in the development, construction, maintenance, repair and upgrading of the Managed
Facilities and Owner’s compliance with its obligations under this Agreement; and (b) does not constitute any representation, warranty or
guaranty of any kind whatsoever that (i) there are no errors in the plans and specification, (ii) there are no defects in the design of construction
of the Managed Facilities or installation of any building systems or FF&E therein or (iii) the plans, specifications, construction and installation
work will comply with all Applicable Laws (including laws or regulations governing public accommodations for Individuals with disabilities).
Accordingly, Owner agrees that neither Manager nor its Affiliates shall have any liability whatsoever to Owner or any third-party for any
(A) errors in the plans and specifications; (B) defects in the design of construction of the Managed Facilities or installation of any building
systems or FF&E therein; or (C) noncompliance with any engineering and structural design standards or Applicable Laws.
19.3.4 Owner Limitation . Manager agrees that in no event shall Owner’s liability to Manager with respect to lost or future
Management Fees upon any Owner Event of Default exceed the amount of the termination fee that would be payable to Manager under
Section 16.4.2 upon a termination of this Agreement as of the date of such Owner Event of Default.
19.4 Waivers .
Except as set forth in Section 17.3 of this Agreement, no failure or delay by a Party to insist upon the strict performance of any term of
this Agreement, or to exercise any right or remedy consequent on a breach thereof, shall constitute a waiver of any breach or any subsequent
breach of such term. No waiver of any default shall alter this Agreement, but each and every term of this Agreement shall continue in full force
and effect with respect to any other then existing or subsequent breach.
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19.5 Notices .
All notices, consents, determinations, requests, approvals, demands, reports, objections, directions and other communications required or
permitted to be given under this Agreement shall be in writing and delivered by: (a) personal delivery; (b) overnight DHL, FedEx, UPS or other
similar courier service; or (c) facsimile transmission ( provided , that a copy of such facsimile transmission together with confirmation of such
facsimile transmission is delivered to the addressee in the manner provided in clause (a) or (b) above by no later than the second
(2nd) business day following such transmission, addressed to the Parties at the addresses specified below, or at such other address as the Party
to whom the notice is sent has designated in accordance with this Section 19.5 , and shall be deemed to have been received by the Party to
whom such notice or other communication is sent upon (i) delivery to the address (or facsimile number) of the recipient Party; provided , that
such delivery is made prior to 5:00 p.m. (local time for the recipient Party) on a business day, otherwise the following business day; or (ii) the
attempted delivery of such Notice if such recipient Party refuses delivery, or such recipient Party is no longer at such address number, and
failed to provide the sending Party with its current address pursuant to this Section 19.5 (unless the sending Party had actual knowledge of such
current address)). Notwithstanding the foregoing, any notice or other communication delivered to a Party by email that is actually received by
such Party (and for which such Party has sent an acknowledgement of receipt by return email) shall be deemed to have been sufficiently given
for purposes of this Agreement and shall be deemed to have been received at the time described in clause (i) above, as if such notice had been
delivered by one of the methods described in clauses (a) through (c) above. Notwithstanding anything to the contrary contained in this
Agreement, if any documents or materials delivered under this Agreement are delivered by email (with confirmation of receipt from the
intended recipient), no additional copies of such documents or materials shall be required to be delivered.
OWNER:
Parball NewCo, LLC One Caesars Palace Drive
Las Vegas, Nevada 89109
Attention:
General Counsel
with a copy to:
Caesars Acquisition Company
One Caesars Palace Drive
Las Vegas, Nevada 89109
Attention:
General Counsel
MANAGER:
Bally’s Las Vegas Manager, LLC
One Caesars Palace Drive
Las Vegas, Nevada 89109
Attention:
General Counsel
Facsimile:
(702) 407-6418
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19.6 Party Representatives .
Owner has designated Mitch Garber to act as representative for Owner (“ Owner’s Representative ”), and Manager shall have the right to
rely on all actions by, and communications with, Owner’s Representative as binding on Owner. Owner shall provide to Manager the name,
address, telephone and fax numbers, email address and other relevant contact information for the Owner’s Representative within ten (10) days
of any change thereto. Manager has designated Tom Jenkins to act as representative for Manager (“ Manager’s Representative ”), and Owner
shall have the right to rely on all actions by, and communications with, Manager’s Representative as binding on Manager. Manager shall
provide to Owner the name, address, telephone and fax numbers, email address and other relevant contact information for the Manager’s
Representative within ten (10) days of any change thereto. Subject to compliance with applicable Gaming Laws, Owner’s Representative shall
have access at all reasonable times to all books and records maintained by Manager with respect to the Managed Facilities, copies of all leases,
contracts, agreements, permits and approvals related to the Managed Facilities and all associated files, and all physical areas of the Managed
Facilities, other than private offices.
19.7 No Recordation .
Neither this Agreement nor any memorandum hereof shall be recorded against the Project, the Managed Facilities or the Premises and
any recordation or attempted recordation of this Agreement or any memorandum of this Agreement by Manager shall constitute an Event of
Default, and in addition to any other remedies therefor, Owner is hereby granted a power of attorney (which power is coupled with an interest
and shall be irrevocable) to execute and record on behalf of Manager a notice or memorandum removing this Agreement or such memorandum
of this Agreement from the public records or evidencing the termination hereof (as the case may be).
19.8 Further Assurances .
The Parties shall do and cause to be done all such acts, matters and things and shall execute and deliver all such documents and
instruments as shall be required to enable the Parties to perform their respective obligations under, and to give effect to the transactions
contemplated by, this Agreement.
19.9 Relationship of the Parties .
The Parties acknowledge and agree that (a) the relationship between them shall be that of principal (in the case of Owner) and agent (in
the case of Manager), which relationship may not be terminated by Owner except in strict accord with the termination provisions of this
Agreement; (b) Manager shall have the authority to bind the Owner with respect to third Persons to the extent Manager is performing its
obligations under and consistent with this Agreement; (c) Manager’s agency established with the Owner is, and is intended to be, an agency
coupled with an interest; (d) this Agreement does not create joint venturers, partners or joint owners with respect to the Managed Facilities; and
(e) nothing in this Agreement shall be construed as creating a partnership, joint venture or similar relationship between the Parties. The Parties
further acknowledge and agree that in Operating the Managed Facilities, including entering into
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leases and contracts, accepting reservations, and conducting financial transactions for the Managed Facilities, (i) Manager assumes no
independent contractual liability; and (ii) Manager shall have no obligation to extend its own credit with respect to any obligation incurred in
Operating the Managed Facilities or performing its obligation under this Agreement.
19.10 Force Majeure .
In the event of a Force Majeure Event, the obligations of the Parties and the time period for the performance of such obligations (other
than an obligation to pay any amount hereunder) shall be extended for each day that such Party is prevented, hindered or delayed in such
performance during the period of such Force Majeure Event, except as expressly provided otherwise in this Agreement. Upon the occurrence of
a Force Majeure Event, the affected Party shall give prompt notice of such Force Majeure Event to the other Party. If Manager is unable to
perform its obligations under this Agreement due to a Force Majeure Event, or Manager reasonably deems it necessary to close and cease the
Operation of all or any portion of the Managed Facilities due to a Force Majeure Event in order to protect the Managed Facilities or the health,
safety or welfare of the its guests or Managed Facilities Personnel, then Manager may close or cease Operation of all or a portion of the
Managed Facilities for such time and in such manner as Manager reasonably deems necessary as a result of such Force Majeure Event, and
reopen or recommence the Operation of the Managed Facilities when Manager again is able to perform its obligations under this Agreement,
and determines that there is no unreasonable risk to the Managed Facilities or health, safety or welfare or its guests or Managed Facilities
Personnel. Notwithstanding anything contained herein to the contrary, Owner and Manager each acknowledge and agree that the Term of this
Agreement shall be extended for each day that a Force Majeure Event continues.
19.11 Terms of Other Management Agreements .
Manager makes no representation or warranty that any past or future forms of its management agreement do or will contain terms
substantially similar to those contained in this Agreement. In addition, Owner acknowledges and agrees that Manager may, due to local
business conditions or otherwise, waive or modify any comparable terms of other management agreements heretofore or hereafter entered into
by Manager or its Affiliates.
19.12 Compliance with Law .
Owner and, subject to the Operating Limitations, Manager shall each exercise their respective rights, perform their respective obligations
and take all other actions required or permitted to be taken by each of them hereunder in compliance with all Applicable Laws.
19.13 Centralized Services, Insurance Programs and Purchasing Arrangements Generally .
The Parties hereby agree that Manager and its Affiliates shall administer, implement and make available to Owner and the Managed
Facilities, the Centralized Services, the Insurance Programs and any multi-party purchasing programs and arrangements contemplated
hereunder on commercially reasonable terms and on a Non-Discriminatory basis and in such a manner that, in each case, there shall be no
(i) mark-up, margin or other premium charged or otherwise passed
74
through to Owner in connection therewith (except as may be payable to a third party), and (ii) duplication of any reimbursable expense
otherwise payable by Owner to Manager or its Affiliates.
19.14 Execution of Agreement .
This Agreement may be executed in counterparts, each of which when executed and delivered shall be deemed an original, and such
counterparts together shall constitute one and the same instrument.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date and year first above written.
Parball NewCo, LLC , a Delaware limited liability
company
By: Parball Parent, LLC
its sole member
By: Parball Corporation
its sole member
By:
Name:
Title:
/s/ Eric Hession
Eric Hession
President and Treasurer
Bally’s Las Vegas Manager , LLC, a Delaware limited
liability company
By: Caesars Entertainment Operating Company, Inc.
its sole member
By:
Name:
Title:
/s/ Eric Hession
Eric Hession
Senior Vice President and Treasurer
Solely for purposes of Article VII and Sections 16.1.2,
17.5.5, 17.7.3, 17.7.4, 17.7.5, 18.3 and 19.2
CAESARS LICENSE COMPANY, LLC,
a Delaware limited liability company
By: Caesars Entertainment Operating Company, Inc.
its sole member
By:
Name:
Title:
76
/s/ Eric Hession
Eric Hession
Senior Vice President and Treasurer
CEOC hereby irrevocably and unconditionally guarantees to Owner the prompt and complete payment and performance when due of all of the
covenants, agreements, promises, liabilities and obligations of Manager to Owner under this Management Agreement, whether now existing or
hereafter arising, including, without limitation, Manager’s indemnification obligations under Section 12.3.2 and the obligation to pay all other
amounts due and owing or to become due and owing by Manager to Owner under the Management Agreement; provided , however , that
CEOC’s obligations pursuant to this paragraph shall be void and of no further force or effect on the earliest to occur of (a) that date on which
neither CEOC nor an Affiliate of CEOC owns, directly or indirectly, any Ownership Interest in Manager, (b) the date on which neither CAC
nor one of its Controlled subsidiaries Controls Owner and (c) assignment of this Agreement by Manager to Services Co or a Controlled
subsidiary of Services Co.
CAESARS ENTERTAINMENT OPERATING
COMPANY, INC., a Delaware corporation
By:
Name:
Title:
[Signature Page to the Management Agreement]
/s/ Gregory J. Miller
Gregory J. Miller
Executive Vice President of Domestic
Development
Exhibit 10.4
EXECUTION VERSION
FIRST LIEN CREDIT AGREEMENT
Dated as of May 5, 2014,
Among
CAESARS GROWTH PROPERTIES PARENT, LLC,
as Holdings,
CAESARS GROWTH PROPERTIES HOLDINGS, LLC,
as Borrower,
THE LENDERS PARTY HERETO,
CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH,
as Administrative Agent,
and
CREDIT SUISSE SECURITIES (USA) LLC,
as Sole Lead Arranger and Bookrunner
TABLE OF CONTENTS
Page
ARTICLE I
Definitions
SECTION 1.01.
SECTION 1.02.
SECTION 1.03.
SECTION 1.04.
SECTION 1.05.
SECTION 1.06.
Defined Terms
Terms Generally
Effectuation of Transactions
Exchange Rates; Currency Equivalents
Times of Day
Timing of Payment or Performance
1
69
70
70
70
70
ARTICLE II
The Credits
SECTION 2.01.
SECTION 2.02.
SECTION 2.03.
SECTION 2.04.
SECTION 2.05.
SECTION 2.06.
SECTION 2.07.
SECTION 2.08.
SECTION 2.09.
SECTION 2.10.
SECTION 2.11.
SECTION 2.12.
SECTION 2.13.
SECTION 2.14.
SECTION 2.15.
SECTION 2.16.
SECTION 2.17.
SECTION 2.18.
SECTION 2.19.
SECTION 2.20.
SECTION 2.21.
SECTION 2.22.
Commitments
Loans and Borrowings
Requests for Borrowings
[Reserved]
The Letter of Credit Commitment
Funding of Borrowings
Interest Elections
Termination and Reduction of Commitments
Repayment of Loans; Evidence of Debt
Repayment of Term Loans and Revolving Facility Loans
Prepayment of Loans
Fees
Interest
Alternate Rate of Interest
Increased Costs
Break Funding Payments
Taxes
Payments Generally; Pro Rata Treatment; Sharing of Set-offs
Mitigation Obligations; Replacement of Lenders
Illegality
Incremental Commitments
Defaulting Lenders
71
71
72
73
73
82
83
84
85
85
87
92
93
94
95
96
96
100
101
103
103
111
ARTICLE III
Representations and Warranties
SECTION 3.01.
SECTION 3.02.
SECTION 3.03.
SECTION 3.04.
Organization; Powers
Authorization
Enforceability
Governmental Approvals
113
114
114
114
i
SECTION 3.05.
SECTION 3.06.
SECTION 3.07.
SECTION 3.08.
SECTION 3.09.
SECTION 3.10.
SECTION 3.11.
SECTION 3.12.
SECTION 3.13.
SECTION 3.14.
SECTION 3.15.
SECTION 3.16.
SECTION 3.17.
SECTION 3.18.
SECTION 3.19.
SECTION 3.20.
SECTION 3.21.
SECTION 3.22.
SECTION 3.23.
SECTION 3.24.
Financial Statements
No Material Adverse Effect
Title to Properties; Possession Under Leases
Subsidiaries
Litigation; Compliance with Laws
Federal Reserve Regulations
Investment Company Act
Use of Proceeds
Tax Returns
No Material Misstatements
Employee Benefit Plans
Environmental Matters
Security Documents
Location of Real Property and Leased Premises
Solvency
Labor Matters
No Default
Intellectual Property; Licenses, Etc.
Senior Debt
Anti-Money Laundering and Economic Sanctions Laws
114
115
115
115
116
116
116
117
117
117
118
118
119
120
120
121
121
121
121
121
ARTICLE IV
Conditions of Lending
SECTION 4.01.
SECTION 4.02.
All Credit Events
First Credit Event
122
123
ARTICLE V
Affirmative Covenants
SECTION 5.01.
SECTION 5.02.
SECTION 5.03.
SECTION 5.04.
SECTION 5.05.
SECTION 5.06.
SECTION 5.07.
SECTION 5.08.
SECTION 5.09.
SECTION 5.10.
SECTION 5.11.
SECTION 5.12.
Existence; Businesses and Properties
Insurance
Taxes
Financial Statements, Reports, etc.
Litigation and Other Notices
Compliance with Laws
Maintaining Records; Access to Properties and Inspections
Use of Proceeds
Compliance with Environmental Laws
Further Assurances; Additional Security
Real Property Development Matters
Quad Capex Equity Contribution
126
126
127
128
130
131
131
131
131
131
135
137
ARTICLE VI
Negative Covenants
SECTION 6.01.
Indebtedness
137
ii
SECTION 6.02.
SECTION 6.03.
SECTION 6.04.
SECTION 6.05.
SECTION 6.06.
SECTION 6.07.
SECTION 6.08.
SECTION 6.09.
SECTION 6.10.
SECTION 6.11.
SECTION 6.12.
Liens
Sale and Lease-Back Transactions
Investments, Loans and Advances
Mergers, Consolidations, Sales of Assets and Acquisitions
Restricted Payments
Transactions with Affiliates
Business of the Borrower and the Subsidiaries
Limitation on Payments and Modifications of Indebtedness; Modifications of Certificate of Incorporation,
By-Laws and Certain Other Agreements; etc.
[Reserved]
No Other “Designated Senior Debt”
Fiscal Year
144
150
150
155
159
162
165
165
168
168
168
ARTICLE VIA
Holdings Negative Covenants
ARTICLE VII
Events of Default
SECTION 7.01.
Events of Default
168
ARTICLE VIII
The Agents
SECTION 8.01.
SECTION 8.02.
SECTION 8.03.
SECTION 8.04.
SECTION 8.05.
SECTION 8.06.
SECTION 8.07.
SECTION 8.08.
SECTION 8.09.
SECTION 8.10.
SECTION 8.11.
SECTION 8.12.
SECTION 8.13.
SECTION 8.14.
SECTION 8.15.
Appointment
Delegation of Duties
Exculpatory Provisions
Reliance by Agents
Notice of Default
Non-Reliance on Administrative Agent, Collateral Agent and Other Lenders
Indemnification
Agents in their Individual Capacity
Successor Agents
Payments Set Aside
Administrative Agent May File Proofs of Claim
Collateral and Guaranty Matters
Arranger
First Lien Intercreditor Agreement and Collateral Matters
Withholding Tax
171
172
172
173
173
173
174
174
175
176
176
177
177
177
177
ARTICLE IX
Miscellaneous
SECTION 9.01.
SECTION 9.02.
Notices; Communications
Survival of Agreement
178
179
iii
SECTION 9.03.
SECTION 9.04.
SECTION 9.05.
SECTION 9.06.
SECTION 9.07.
SECTION 9.08.
SECTION 9.09.
SECTION 9.10.
SECTION 9.11.
SECTION 9.12.
SECTION 9.13.
SECTION 9.14.
SECTION 9.15.
SECTION 9.16.
SECTION 9.17.
SECTION 9.18.
SECTION 9.19.
SECTION 9.20.
SECTION 9.21.
SECTION 9.22.
SECTION 9.23.
Binding Effect
Successors and Assigns
Expenses; Indemnity
Right of Set-off
Applicable Law
Waivers; Amendment
Interest Rate Limitation
Entire Agreement
WAIVER OF JURY TRIAL
Severability
Counterparts
Headings
Jurisdiction; Consent to Service of Process
Confidentiality
Platform; Borrower Materials
Release of Liens, Guarantees and Pledges
Judgment Currency
USA PATRIOT Act Notice
No Advisory or Fiduciary Responsibility
Application of Gaming Laws
Affiliate Lenders
180
180
185
187
188
188
192
192
192
192
192
193
193
193
194
195
197
197
198
198
199
Exhibits and Schedules
Exhibit A
Exhibit B
Exhibit C
Exhibit D
Exhibit E
Exhibit F
Exhibit G
Exhibit H
Exhibit I
Exhibit J
Exhibit K
Exhibit L
Exhibit M
Exhibit N
Exhibit O
Exhibit P
Exhibit Q
Form of Assignment and Acceptance
Form of Borrowing Request
[Reserved]
Form of Interest Election Request
Form of Mortgage
Form of Permitted Loan Purchase Assignment and Acceptance
Form of Discounted Prepayment Option Notice
Form of Lender Participation Notice
Form of Discounted Voluntary Prepayment Notice
Form of Solvency Certificate
Form of Global Intercompany Note
Form of Subordination, Non-Disturbance and Attornment Agreement
Form of Collateral Agreement
Form of Subsidiary Guarantee Agreement
Form of Holdings Guarantee Agreement
Form of First Lien Intercreditor Agreement
Form of Second Lien Intercreditor Agreement
Schedule 1.01(A)
Schedule 1.01(B)
Schedule 1.01(C)
Schedule 1.01(D)
Mortgaged Properties
[Reserved]
Subsidiary Loan Parties
Undeveloped Land
iv
Schedule 1.01(E)
Schedule 2.01
Schedule 3.01
Schedule 3.04
Schedule 3.08(a)
Schedule 3.08(b)
Schedule 3.22
Schedule 4.02(b)
Schedule 5.10
Schedule 6.01
Schedule 6.02(a)
Schedule 6.04
Schedule 6.07
Schedule 9.01
Closing Date Unrestricted Subsidiaries
Commitments
Organization; Powers
Governmental Approvals
Subsidiaries
Subscriptions
Intellectual Property Rights
Local Counsel
Post-Closing Items
Existing Indebtedness
Existing Liens
Existing Investments
Transactions with Affiliates
Notice Information
v
FIRST LIEN CREDIT AGREEMENT dated as of May 5, 2014 (this “ Agreement ”), among CAESARS GROWTH PROPERTIES
PARENT, LLC, a Delaware limited liability company (“ Holdings ”), CAESARS GROWTH PROPERTIES HOLDINGS, LLC, a Delaware
limited liability company (the “ Borrower ”), the LENDERS party hereto from time to time and Credit Suisse AG, Cayman Islands Branch, as
administrative agent and collateral agent for the Lenders.
WHEREAS, in connection with the consummation of the Acquisition, the Borrower has requested the Lenders to extend credit in
the form of Term B Loans on the Closing Date, in an aggregate principal amount of $700.0 million.
NOW, THEREFORE, the Lenders are willing to extend such credit to the Borrower on the terms and subject to the conditions set
forth herein. Accordingly, the parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Defined Terms . As used in this Agreement, the following terms shall have the meanings specified below:
“ ABR ” shall mean, for any day, a fluctuating rate per annum equal to the highest of (a) the Federal Funds Rate in effect for such
day plus 1/2 of 1%, (b) the Prime Rate in effect on such day and (c) the Adjusted Eurocurrency Rate for a one-month Interest Period on such
day (or if such day is not a Business Day, the immediately preceding Business Day) plus 1.00%; provided , that for the avoidance of doubt, the
Eurocurrency Rate for any day shall be based on the rate determined on such day at approximately 11:00 a.m. (London time) by reference to
ICE LIBOR (or the successor thereto if the Intercontinental Exchange Benchmark Administration Ltd. is no longer making a Eurocurrency
Rate available) for deposits in Dollars (as set forth by any service selected by the Administrative Agent that has been nominated by the
Intercontinental Exchange Benchmark Administration Ltd. (or the successor thereto if the Intercontinental Exchange Benchmark
Administration Ltd. is no longer making a Eurocurrency Rate available) as an authorized vendor for the purpose of displaying such rates). Any
change in such rate due to a change in the Prime Rate, the Federal Funds Rate or the Adjusted Eurocurrency Rate shall be effective from and
including the effective date of such change in the Prime Rate, the Federal Funds Rate or the Adjusted Eurocurrency Rate, as the case may be.
“ ABR Borrowing ” shall mean a Borrowing comprised of ABR Loans.
“ ABR Loan ” shall mean any ABR Term Loan or ABR Revolving Loan.
“ ABR Revolving Facility Borrowing ” shall mean a Borrowing comprised of ABR Revolving Loans.
“ ABR Revolving Loan ” shall mean any Revolving Facility Loan bearing interest at a rate determined by reference to the ABR in
accordance with the provisions of Article II.
“ ABR Term Loan ” shall mean any Term Loan bearing interest at a rate determined by reference to the ABR in accordance with
the provisions of Article II.
“ Acceptable Discount ” shall have the meaning assigned to such term in Section 2.11(g)(iii).
“ Acceptance Date ” shall have the meaning assigned to such term in Section 2.11(g)(ii).
“ Accepting Lender ” shall have the meaning assigned to such term in Section 2.11(e).
“ Acquired Business Representations ” shall mean each of the representations made with respect to the Purchased Properties and
their subsidiaries in the Purchase Agreement that are material to the interests of the Lenders (in their capacities as such) (but only to the extent
that the Borrower has the right to terminate its obligations under the Purchase Agreement as a result of a breach of such representations in the
Purchase Agreement).
“ Acquisition ” shall mean the acquisition, directly or indirectly and in a single transaction or a series of related transactions, by the
Borrower of the Purchased Properties and certain other assets pursuant to the Purchase Agreement.
“ Act of Terrorism ” shall mean an act of any person directed towards the overthrowing or influencing of any government de jure or
de facto, or the inducement of fear in or the disruption of the economic system of any society, by force or by violence, including (i) the
hijacking or destruction of any conveyance (including an aircraft, vessel, or vehicle), transportation infrastructure or building, (ii) the seizing or
detaining, and threatening to kill, injure, or continue to detain, or the assassination of, another individual, (iii) the use of any (a) biological
agent, chemical agent, or nuclear weapon or device, or (b) explosive or firearm, with intent to endanger, directly or indirectly, the safety of one
or more individuals or to cause substantial damage to property and (iv) a credible threat, attempt, or conspiracy to do any of the foregoing.
“ Additional Mortgage ” shall have the meaning assigned to such term in Section 5.10(c).
“ Adjusted Eurocurrency Rate ” shall mean, with respect to any Eurocurrency Borrowing for any Interest Period, an interest rate per
annum equal to the greater of (x) (a) the Eurocurrency Rate in effect for such Interest Period divided by (b) one minus the Statutory Reserves
applicable to such Eurocurrency Borrowing, if any, and (y) in the case of Eurocurrency Borrowings composed of Eurocurrency Term Loans,
1.00%.
“ Administrative Agent ” shall mean Credit Suisse AG, Cayman Islands Branch, in its capacity as administrative agent under any of
the Loan Documents, together with its successors and assigns.
“ Administrative Agent Fees ” shall have the meaning assigned to such term in Section 2.12(c).
2
“ Administrative Agent’s Office ” shall mean, with respect to any currency, the Administrative Agent’s address and, as appropriate,
account as set forth on Schedule 9.01 with respect to such currency, or such other address or account with respect to such currency as the
Administrative Agent may from time to time notify to the Borrower and the Lenders.
“ Administrative Questionnaire ” shall mean an Administrative Questionnaire in a form supplied by the Administrative Agent.
“ Affiliate ” shall mean, when used with respect to a specified 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.
“ Affiliate Lender ” shall have the meaning assigned to such term in Section 9.23(a).
“ Agent Parties ” shall have the meaning assigned to such term in Section 9.17.
“ Agents ” shall mean the Administrative Agent and the Collateral Agent.
“ Agreement ” shall have the meaning assigned to such term in the introductory paragraph of this Agreement.
“ Agreement Currency ” shall have the meaning assigned to such term in Section 9.19.
“ All-in Yield ” shall mean, as to any Loans, the yield thereon payable to all Lenders providing such Loans or in the primary
syndication thereof, as reasonably determined by the Administrative Agent, whether in the form of interest rate, margin, original issue discount,
up-front fees, rate floors or otherwise; provided , that original issue discount and up-front fees shall be equated to interest rate assuming a
4-year life to maturity (or, if less, the life of such Loans); and provided , further , that “All-in Yield” shall not include arrangement,
commitment, underwriting, structuring or similar fees and customary consent fees for an amendment paid generally to consenting lenders.
“ Anti-Money Laundering Laws ” shall mean any and all laws, judgments, orders, executive orders, decrees, ordinances, rules,
regulations, statutes, case law or treaties applicable to a Loan Party, its Subsidiaries or Affiliates, related to terrorism financing or money
laundering including any applicable provision of the USA PATRIOT Act and The Currency and Foreign Transactions Reporting Act (also
known as the “Bank Secrecy Act,” 31 U.S.C. §§ 5311-5330 and 12 U.S.C. §§ 1818(s), 1820(b) and 1951-1959), as amended from time to time
and any successors thereto.
“ Apollo ” shall mean, collectively, Apollo Management VI, L.P. and other affiliated co-investment partnerships.
“ Applicable Commitment Fee ” shall mean, for any day, the “Applicable Commitment Fee” set forth in the applicable Incremental
Assumption Agreement.
3
“ Applicable Date ” shall have the meaning assigned to such term in Section 9.08(f).
“ Applicable Discount ” shall have the meaning assigned to such term in Section 2.11(g)(iii).
“ Applicable Margin ” shall mean for any day (i) (a) from the Closing Date to June 5, 2014, with respect to any Term B Loan,
6.00% per annum in the case of any Eurocurrency Loan and 5.00% per annum in the case of any ABR Loan, (b) from June 6, 2014 to the Initial
Maturity Date, with respect to any Term B Loan, 7.00% per annum in the case of any Eurocurrency Loan and 6.00% per annum in the case of
any ABR Loan and (c) from and after the Initial Maturity Date, with respect to any Term B Loan, 8.00% per annum in the case of any
Eurocurrency Loan and 7.00% per annum in the case of any ABR Loan, (ii) with respect to any Other Term Loan, the “Applicable Margin” set
forth in the Incremental Assumption Agreement relating thereto and (iii) with respect to any Incremental Revolving Facility Loan, the
“Applicable Margin” set forth in the Incremental Assumption Agreement relating thereto.
“ Applicable Period ” shall mean an Excess Cash Flow Period.
“ Approved Fund ” shall have the meaning assigned to such term in Section 9.04(b).
“ Arranger ” shall mean Credit Suisse Securities (USA) LLC.
“ Asset Sale ” shall mean any loss, damage, destruction or condemnation of, or any sale, transfer or other disposition (including any
sale and leaseback of assets and any mortgage or lease of Real Property) to any person of any asset or assets of the Borrower or any Subsidiary.
“ Assignee ” shall have the meaning assigned to such term in Section 9.04(b).
“ Assignment and Acceptance ” shall mean an assignment and acceptance entered into by a Lender and an Assignee, and accepted
by the Administrative Agent and the Borrower (if required by Section 9.04), in the form of Exhibit A or such other form as shall be approved
by the Administrative Agent and reasonably satisfactory to the Borrower.
“ Auto-Extension Letter of Credit ” shall have the meaning assigned to such term in Section 2.05(b)(iii).
“ Auto-Reinstatement Letter of Credit ” shall have the meaning assigned to such term in Section 2.05(b)(iv).
“ Availability Period ” shall mean, with respect to any Class of Revolving Facility Commitments under any Revolving Facility, the
period from and including the effective date for such Class of Revolving Facility Commitments to but excluding the earlier of the Revolving
Facility Maturity Date with respect to such Class and, in the case of each of the Revolving Facility Loans, Revolving Facility Borrowings and
Letters of Credit under such Revolving Facility, the date of termination in full of the Revolving Facility Commitments of such Class.
4
“ Available Unused Commitment ” shall mean, with respect to a Revolving Facility Lender under any Revolving Facility at any
time, an amount equal to the amount by which (a) the Revolving Facility Commitment under such Revolving Facility of such Revolving
Facility Lender at such time exceeds (b) the Revolving Facility Credit Exposure under such Revolving Facility of such Revolving Facility
Lender at such time.
“ Bally’s LV Entities ” shall mean, collectively, FHR NewCo, LLC, LVH NewCo, LLC, Flamingo-Laughlin NewCo, LLC and
Parball NewCo, LLC, each a Delaware limited liability company.
“ Board ” shall mean the Board of Governors of the Federal Reserve System of the United States of America.
“ Board of Directors ” shall mean, as to any person, the board of directors or other governing body of such person, or if such person
is owned or managed by a single entity, the board of directors or other governing body of such entity. With respect to the Borrower, the Board
of Directors of the Borrower may include the Board of Directors of any direct or indirect parent of the Borrower.
“ Borrower ” shall have the meaning assigned to such term in the introductory paragraph of this Agreement.
“ Borrower Materials ” shall have the meaning assigned to such term in Section 9.17.
“ Borrowing ” shall mean a group of Loans of a single Type in a single currency under a single Facility and made on a single date
and, in the case of Eurocurrency Loans, as to which a single Interest Period is in effect.
“ Borrowing Minimum ” shall mean $5.0 million except, in the case of ABR Loans, $1,000,000.
“ Borrowing Multiple ” shall mean $1.0 million except, in the case of ABR Loans, $500,000.
“ Borrowing Request ” shall mean a request by the Borrower in accordance with the terms of Section 2.03 and substantially in the
form of Exhibit B .
“ Budget ” shall have the meaning assigned to such term in Section 5.04(e).
“ Business Day ” shall mean any day other than a Saturday, Sunday or other day on which commercial banks in New York City are
authorized or required by law to remain closed; provided , that when used in connection with a Eurocurrency Loan, the term “Business Day”
shall also exclude any day on which banks are not open for dealings in deposits in Dollars in the London interbank market.
“ CAC ” shall mean Caesars Acquisition Company, a Delaware corporation.
5
“ Capital Expenditures ” shall mean, for any person in respect of any period, (a) the aggregate of all expenditures (whether paid in
cash or accrued as liabilities and including in all events amounts expended or capitalized under Capital Lease Obligations) incurred by such
person during such period that, in accordance with GAAP, are or should be included in “additions to property, plant or equipment” or similar
items reflected in the statement of cash flows of such person and (b) Capitalized Software Expenditures.
“ Capital Lease Obligations ” of any person shall mean the obligations of such person to pay rent or other amounts under any lease
of (or other similar arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required
to be classified and accounted for as capital leases on a balance sheet of such person under GAAP and, for purposes hereof, the amount of such
obligations at any time shall be the capitalized amount thereof at such time determined in accordance with GAAP; provided that any
obligations that would not be accounted for as Capital Lease Obligations under GAAP as of the Closing Date shall not be included in Capital
Lease Obligations after the Closing Date due to any changes in GAAP or interpretations thereunder or otherwise.
“ Capitalized Software Expenditures ” shall mean, for any period, the aggregate of all expenditures (whether paid in cash or accrued
as liabilities) by a person during such period in respect of licensed or purchased software or internally developed software and software
enhancements that, in accordance with GAAP, are or are required to be reflected as capitalized costs on the combined or consolidated balance
sheet of such person and its subsidiaries.
“ Cash Collateral ” shall have the meaning assigned to such term in Section 2.05(g)(ii).
“ Cash Collateralize ” shall have the meaning assigned to such term in Section 2.05(g)(ii).
“ Cash Interest Expense ” shall mean, with respect to the Borrower and the Subsidiaries on a combined or consolidated basis for any
period, Interest Expense for such period, less the sum of, without duplication, (a) pay in kind Interest Expense or other non-cash Interest
Expense (including as a result of the effects of purchase accounting), (b) to the extent included in Interest Expense, the amortization of any debt
issuance costs, commissions, financing fees paid by, or on behalf of, the Borrower or any Subsidiary, including such fees paid in connection
with the Transactions or upon entering into a Permitted Receivables Financing, and the expensing of any bridge, commitment or other
financing fees, including those paid in connection with the Transactions or upon entering into a Permitted Receivables Financing or any
amendment of this Agreement and (c) the amortization of debt discounts, if any, or fees in respect of Swap Agreements.
“ Cash Management Agreement ” shall mean any agreement to provide to Holdings, the Borrower or any Subsidiary cash
management services for collections, treasury management services (including controlled disbursement, overdraft, automated clearing house
fund transfer services, return items and interstate depository network services), any demand deposit, payroll, trust or operating account
relationships, commercial credit cards, merchant card, purchase or debit cards, non-card e-payables services, and other cash management
services, including electronic funds transfer services, lockbox services, stop payment services and wire transfer services.
6
“ Cash Management Bank ” shall mean any person that, at the time it enters into a Cash Management Agreement (or on the Closing
Date), is an Agent, the Arranger, a Lender or an Affiliate of any such person, in each case, in its capacity as a party to such Cash Management
Agreement.
“ CEC ” shall mean Caesars Entertainment Corporation, a Delaware corporation, together with its successors and assigns.
“ CFC ” shall mean a “controlled foreign corporation” within the meaning of Section 957(a) of the Code.
“ CGP ” shall mean Caesars Growth Partners, LLC, a Delaware limited liability company, together with its successors and assigns.
A “ Change in Control ” shall be deemed to occur if:
(a) at any time, a “change of control” (or similar event) shall occur under the Second Priority Senior Secured Notes Indenture, the
Escrowed Credit Agreement or any Permitted Refinancing Indebtedness in respect thereof that constitutes Material Indebtedness; or
(b) any combination of Permitted Holders in the aggregate shall fail to have the power, directly or indirectly, to vote or direct the
voting of Equity Interests representing at least a majority of the ordinary voting power for the election of directors of the Borrower; provided
that the occurrence of the foregoing event shall not be deemed a Change in Control if,
(i) at any time prior to a Qualified IPO, (A) any combination of Permitted Holders in the aggregate otherwise have the right,
directly or indirectly, to designate a majority of the Board of Directors of the Borrower at such time or (B) any combination of
Permitted Holders in the aggregate own, directly or indirectly, a majority of the ordinary voting Equity Interests of the Borrower at
such time, or
(ii) at any time upon or after a Qualified IPO, (A) no person or “group” (within the meaning of Section 13(d) or 14(d) of the
Exchange Act, but excluding any employee benefit plan of such person or “group” and its subsidiaries and any person or entity
acting its capacity as trustee, agent or other fiduciary or administrator of any such plan), other than any combination of the
Permitted Holders, shall have acquired beneficial ownership (as defined in Rules 13d-3 and 13d-5 under the Exchange Act as in
effect on the Closing Date) of more than the greater of (x) 35% on a fully diluted basis of the ordinary voting Equity Interests of the
Borrower and (y) the percentage of the ordinary voting Equity Interests of the Borrower owned, directly or indirectly, in the
aggregate by the Permitted Holders on a fully diluted basis and (B) during each period of twelve (12) consecutive months, a
majority of the seats (other than vacant seats) on the Board of Directors of the Borrower shall be occupied by persons who were
either (1) nominated by the Board of Directors of the Borrower or a Permitted Holder, (2) appointed by directors so nominated or
(3) appointed by a Permitted Holder.
7
“ Change in Law ” shall mean (a) the adoption of any law, rule or regulation after the Closing Date, (b) any change in law, rule or
regulation or in the interpretation or application thereof by any Governmental Authority after the Closing Date or (c) compliance by any Lender
or L/C Issuer (or, for purposes of Section 2.15(b), by any lending office of such Lender or by such Lender’s or L/C Issuer’s holding company,
if any) with any written request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued
after the Closing Date; provided , however , that notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall Street Reform and
Consumer Protection Act and all requests, rules, guidelines, requirements and directives thereunder, issued in connection therewith or in
implementation thereof and (ii) all requests, rules, guidelines, requirement and directives promulgated by the Bank of 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, issued or
implemented, but only to the extent a Lender is imposing applicable increased costs or costs in connection with capital adequacy requirements
similar to those described in clauses (a) and (b) of Section 2.15 generally on other similarly situated borrowers of loans under United States of
America credit facilities.
“ Charges ” shall have the meaning assigned to such term in Section 9.09.
“ CIC ” shall mean Corner Investment Company, LLC, a Nevada limited liability company.
“ Class ” (a) when used in reference to any Loan or Borrowing, shall refer to whether such Loan, or the Loans comprising such
Borrowing, are Term B Loans, Other Term Loans or Incremental Revolving Facility Loans; and (b) when used in reference to any
Commitment, shall refer to whether such Commitment is in respect of a commitment to make Term B Loans, Other Term Loans or Incremental
Revolving Facility Loans. Other Term Loans or Incremental Revolving Facility Loans that have different terms and conditions (together with
the Commitments in respect thereof) from the Term B Loans, or from other Other Term Loans or other Incremental Revolving Facility Loans,
as applicable, shall be construed to be in separate and distinct Classes.
“ Class Loans ” shall have the meaning assigned to such term in Section 9.08(f).
“ Closing Date ” shall mean May 5, 2014.
“ Closing Fee ” shall have the meaning assigned to such term in Section 2.12(e).
“ Code ” shall mean the Internal Revenue Code of 1986, as amended.
“ Collateral ” shall mean all the “Collateral” (or equivalent term) as defined in any Security Document and shall also include the
Mortgaged Properties and all other property that is subject to any Lien in favor of the Collateral Agent for the benefit of the Secured Parties
pursuant to any Security Documents.
8
“ Collateral Agent ” shall mean the Administrative Agent acting as collateral agent for the Secured Parties.
“ Collateral Agreement ” shall mean the Collateral Agreement (First Lien) substantially in the form of Exhibit M , dated and
effective as of the Closing Date, among the Borrower, each Subsidiary Loan Party and the Collateral Agent, as amended, restated,
supplemented, waived or otherwise modified from time to time.
“ Collateral Requirement ” shall mean the requirement that (in each case subject to Sections 5.10(d), (e) and (g) and Schedule 5.10
):
(a) on the Closing Date, the Collateral Agent shall have received (x) from the Borrower and each Subsidiary Loan Party, a
counterpart of the Collateral Agreement, (y) from each Subsidiary Loan Party, a counterpart of the Subsidiary Guarantee Agreement and
(z) from Holdings, a counterpart of the Holdings Guarantee Agreement, in each case duly executed and delivered on behalf of such
person;
(b) on the Closing Date, (i) the Collateral Agent shall have received (A) a pledge of all the issued and outstanding Equity Interests
owned on the Closing Date directly by the Loan Parties (other than Holdings), other than Excluded Securities and (ii) the Collateral
Agent shall have received all certificates or other instruments (if any) representing such Equity Interests, together with stock powers or
other instruments of transfer with respect thereto endorsed in blank;
(c) (i) on the Closing Date and at all times thereafter, all Indebtedness of the Borrower and each Subsidiary having, in the case of
each instance of Indebtedness, an aggregate principal amount in excess of $15.0 million (other than (A) intercompany current liabilities in
connection with the cash management operations of the Borrower and the Subsidiaries or (B) to the extent that a pledge of such
promissory note or instrument would violate applicable law) that is owing to a Loan Party, other than Excluded Securities, shall be
evidenced by a promissory note or an instrument and shall have been pledged pursuant to the Collateral Agreement (or other applicable
Security Document as reasonably required by the Collateral Agent), and (ii) the Collateral Agent shall have received all such promissory
notes or instruments required to be delivered pursuant to the applicable Security Documents, together with note powers or other
instruments of transfer with respect thereto endorsed in blank;
(d) in the case of any person that becomes a Subsidiary Loan Party after the Closing Date, subject to Section 5.10(g), the Collateral
Agent shall have received (i) a supplement to the Collateral Agreement and the Subsidiary Guarantee Agreement and (ii) supplements to
the other Security Documents, if applicable, in the form specified therein, duly executed and delivered on behalf of such Subsidiary Loan
Party;
9
(e) after the Closing Date, (i) all the outstanding Equity Interests of (A) any person that becomes a Subsidiary Loan Party after the
Closing Date and (B) subject to Section 5.10(g), all the Equity Interests that are directly acquired by a Loan Party (other than Holdings)
after the Closing Date (including, without limitation, the Equity Interests of any Special Purpose Receivables Subsidiary established after
the Closing Date), other than Excluded Securities, shall have been pledged pursuant to the Collateral Agreement, and (ii) the Collateral
Agent shall have received all certificates or other instruments (if any) representing such Equity Interests, together with stock powers or
other instruments of transfer with respect thereto endorsed in blank;
(f) on the Closing Date and at all times thereafter, except as otherwise contemplated by this Agreement or any Security Document,
all documents and instruments, including Uniform Commercial Code financing statements, required by law or reasonably requested by
the Collateral Agent to be filed, registered or recorded to create the Liens intended to be created by the Security Documents (in each case,
including any supplements thereto) and perfect such Liens to the extent required by, and with the priority required by, the Security
Documents, shall have been filed, registered or recorded or delivered to the Collateral Agent for filing, registration or the recording
concurrently with, or promptly following, the execution and delivery of each such Security Document;
(g) within (x) 120 days after the Closing Date with respect to the Mortgaged Properties set forth on Schedule 1.01(A) (or such later
date as the Collateral Agent may agree in its reasonable discretion) and (y) within the time periods set forth in, and solely to the extent
required by, Section 5.10(c), 5.10(d), 5.10(h) or 5.11 with respect to the Mortgaged Properties encumbered pursuant to said
Section 5.10(c), 5.10(d), 5.10(h) or 5.11, the Collateral Agent shall have received (i) counterparts of each Mortgage to be entered into
with respect to each such Mortgaged Property duly executed and delivered by the record owner of such Mortgaged Property and suitable
for recording or filing and (ii) such other documents including, but not limited to, any consents, agreements and confirmations of third
parties, as the Collateral Agent may reasonably request with respect to any such Mortgage or Mortgaged Property;
(h) within (x) 120 days after the Closing Date with respect to the Mortgaged Properties set forth on Schedule 1.01(A) (or such later
date as the Collateral Agent may agree in its reasonable discretion) and (y) within the time periods set forth in, and solely to the extent
required by, Section 5.10(c), 5.10(d), 5.10(h) or 5.11 with respect to Mortgaged Properties encumbered pursuant to said Section 5.10(c),
5.10(d), 5.10(h) or 5.11, the Collateral Agent shall have received (i) a completed “Life-of-Loan” Federal Emergency Management
Agency Standard Flood Hazard Determination with respect to each Mortgaged Property on which a “Building” (as defined in 12 CFR
Chapter III, Section 339.2) is located (together with a notice about special flood hazard area status and flood disaster assistance duly
executed by the Borrower and each Loan Party relating thereto), (ii) a copy of, or a certificate as to coverage under, and a declaration
page relating to, the insurance policies required by Section 5.02 (including, without limitation, flood insurance policies), each of which
shall (A) be endorsed or otherwise amended to include a “standard” lender’s loss payable or mortgagee endorsement (as applicable),
(B) name the Collateral Agent, on behalf of the Secured Parties, as additional insured, (C) in the case of flood insurance, (1) identify the
addresses of each Building located in a
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special flood hazard area, (2) indicate the applicable flood zone designation, the flood insurance coverage and the deductible relating
thereto, (3) provide that the insurer will give the Collateral Agent forty-five (45) days’ written notice of cancellation (or such shorter
period acceptable to the Administrative Agent) and (4) otherwise be in form and substance reasonably satisfactory to the Administrative
Agent, (iii) to the extent required to mortgage a leasehold interest in Real Property that must be mortgaged pursuant to the terms of this
Agreement, estoppel and consent agreements executed by each of the lessors of such leased Real Property, along with (A) a
memorandum of lease in recordable form with respect to such leasehold interest, executed and acknowledged by the owner of the affected
real property, as lessor, or (B) evidence that the applicable lease with respect to such leasehold interest or a memorandum thereof has
been recorded in all places necessary or desirable, in the Administrative Agent’s reasonable judgment, to give constructive notice to
third-party purchasers of such leasehold interest, or (C) if such leasehold interest was acquired or subleased from the holder of a recorded
leasehold interest, the applicable assignment or sublease document, executed and acknowledged by such holder, in each case in form
sufficient to give such constructive notice upon recordation and otherwise in form satisfactory to the Administrative Agent, provided ,
that the Borrower and the Subsidiaries shall be deemed to have complied with the immediately preceding requirements of this clause
(iii) if the Borrower and the Subsidiaries will have provided the Administrative Agent with an officer’s certificate confirming that the
Borrower and the Subsidiaries have made commercially reasonable efforts to fulfill the aforementioned requirements, (iv) opinions
addressed to the Administrative Agent and the Collateral Agent for its benefit and for the benefit of the Secured Parties of (A) local
counsel for the Borrower in each jurisdiction where the Mortgaged Property is located with respect to the enforceability of the Mortgages
and other matters customarily included in such opinions and (B) counsel for the Borrower regarding due authorization, execution and
delivery of the Mortgages, in each case, in form and substance reasonably satisfactory to the Administrative Agent, (v) a policy or
policies or marked-up unconditional binder of title insurance, as applicable, paid for by the Borrower or the Subsidiaries or a Parent
Entity, issued by a nationally recognized title insurance company insuring the Lien of each Mortgage to be entered into on the Closing
Date or thereafter in accordance with Sections 5.10(c), 5.10(d), 5.10(h) and 5.11 as a valid Lien on the Mortgaged Property described
therein, free of any other Liens except Permitted Liens, together with such customary endorsements (including zoning endorsements
where reasonably appropriate and available or, in lieu of such zoning endorsements, where available at commercially reasonable rates in
the jurisdiction where the applicable Mortgaged Property is located, a zoning report from a recognized vendor or a zoning compliance
letter from the applicable municipality in a form reasonably acceptable to the Collateral Agent), coinsurance and reinsurance as the
Collateral Agent may reasonably request and which are available at commercially reasonable rates in the jurisdiction where the applicable
Mortgaged Property is located, (vi) if the finalization of the title insurance policies pursuant to clause (v) hereof and the Surveys (as
hereinafter defined) pursuant to clause (vii) hereof occurs after delivery of any Mortgage pursuant to clause (g), then, to the extent
required to correct and/or confirm the Mortgaged Property encumbered by such Mortgage is consistent with that so insured and surveyed
and/or confirm the Collateral Agent’s mortgage lien on and security interests in such Mortgaged
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Property, (A) an amendment to any such applicable Mortgage (or to the extent required, a new Mortgage) duly authorized, executed and
acknowledged, in recordable form and otherwise in form and substance reasonably acceptable to the Administrative Agent with respect to
each such applicable Mortgaged Property and (B) such other documents, including, but not limited to, any supplemental consents,
agreements and/or confirmations of third parties, and supplemental local counsel opinions, as Collateral Agent may reasonably request in
order to effectuate the same, and (vii) a survey of each Mortgaged Property (including all improvements, easements and other customary
matters thereon reasonably required by the Collateral Agent), as applicable, for which all necessary fees (where applicable) have been
paid (such surveys, collectively, the “ Surveys ”). Such Surveys shall be certified to the Borrower, Collateral Agent and the title insurance
company, and shall meet minimum standard detail requirements for ALTA/ACSM Land Title Surveys in all material respects and shall
be sufficient and satisfactory to the title insurance company so as to enable the title insurance company to issue coverage over all general
survey exceptions and to issue all endorsements reasonably requested by Collateral Agent. All such Surveys shall be dated (or redated)
not earlier than six months prior to the date of delivery thereof (unless otherwise acceptable to the title insurance company issuing the
title insurance);
(i) on the Closing Date, the Collateral Agent shall have received evidence of the insurance required by the terms of this Agreement;
(j) after the Closing Date, the Collateral Agent shall have received (i) such other Security Documents as may be required to be
delivered pursuant to Sections 5.10 and 5.11, and (ii) upon reasonable request by the Collateral Agent, evidence of compliance with any
other requirements of Sections 5.10 and 5.11; and
(k) after the date upon which the Indebtedness in respect of the Second Priority Senior Secured Notes is no longer outstanding,
(i) the Collateral Agent shall have received a pledge of all the issued and outstanding Equity Interests of the Borrower owned by Holdings
and (ii) the Collateral Agent shall have received all certificates or other instruments (if any) representing such Equity Interests, together
with stock powers or other instruments of transfer with respect thereto endorsed in blank.
“ Commitment Fee ” shall have the meaning assigned to such term in Section 2.12(a).
“ Commitments ” shall mean, with respect to any Lender, such Lender’s Revolving Facility Commitment and Term Facility
Commitment.
“ Commodity Exchange Act ” shall mean the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and
any successor statute.
“ Conduit Lender ” shall mean any special purpose corporation organized and administered by any Lender for the purpose of
making Loans otherwise required to be made by such Lender and designated by such Lender in a written instrument; provided , that the
designation by any Lender of a Conduit Lender shall not relieve the designating Lender of any of
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its obligations to fund a Loan under this Agreement if, for any reason, its Conduit Lender fails to fund any such Loan, and the designating
Lender (and not the Conduit Lender) shall have the sole right and responsibility to deliver all consents and waivers required or requested under
this Agreement with respect to its Conduit Lender; provided , further , that no Conduit Lender shall (a) be entitled to receive any greater
amount pursuant to Section 2.15, 2.16, 2.17 or 9.05 than the designating Lender would have been entitled to receive in respect of the extensions
of credit made by such Conduit Lender, unless the designation of such Conduit Lender is made with the Borrower’s prior written consent (not
to be unreasonably withheld or delayed), which consent shall specify that it is being made pursuant to the second proviso in the definition of
Conduit Lender and provided that that designating Lender provides such information as the Borrower reasonably requests in order for the
Borrower to determine whether to provide its consent or (b) be deemed to have any Commitment.
“ Consolidated Debt ” at any date shall mean the sum of (without duplication) all Indebtedness (other than letters of credit or bank
guarantees, to the extent undrawn) consisting of Capital Lease Obligations, Indebtedness for borrowed money and Disqualified Stock of the
Borrower and the Subsidiaries determined on a combined or consolidated basis on such date in accordance with GAAP.
“ Consolidated Net Income ” shall mean, with respect to the Borrower and the Subsidiaries for any period, the aggregate of the Net
Income of the Borrower and its subsidiaries for such period, on a combined or consolidated basis; provided , however , that, without
duplication,
(i) any net after tax extraordinary, nonrecurring or unusual gains or losses or income or expense or charge (less all fees and
expenses relating thereto) including, without limitation, any severance, relocation or other restructuring expenses, any expenses related to
any reconstruction, decommissioning, recommissioning or reconfiguration of fixed assets for alternative uses, fees, expenses or charges
relating to facilities closing costs, curtailments or modifications to pension and post-retirement employee benefit plans, excess pension
charges, acquisition integration costs, facilities opening costs, project start-up costs, business optimization costs, signing, retention or
completion bonuses, and expenses or charges related to any offering of Equity Interests or debt securities of the Borrower or any Parent
Entity, any Investment, acquisition, disposition, recapitalization or issuance, repayment, refinancing, amendment or modification of
Indebtedness (in each case, whether or not successful), and any fees, expenses, charges or change in control payments related to the
Transactions (including any costs relating to auditing prior periods, transition-related expenses, and Transaction Expenses incurred
before, on or after the Closing Date), in each case, shall be excluded,
(ii) any net after-tax income or loss from disposed, abandoned, transferred, closed or discontinued operations and any net after-tax
gain or loss on disposal of disposed, abandoned, transferred, closed or discontinued operations shall be excluded,
(iii) any net after-tax gain or loss (less all fees and expenses or charges relating thereto) attributable to business dispositions or asset
dispositions other than in the ordinary course of business (as determined in good faith by the management of the Borrower) shall be
excluded,
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(iv) any net after-tax income or loss (less all fees and expenses or charges relating thereto) attributable to the early extinguishment
of indebtedness, Swap Agreements or other derivative instruments shall be excluded,
(v) (A) the Net Income for such period of any person that is not a subsidiary of such person, or is an Unrestricted Subsidiary or a
Qualified Non-Recourse Subsidiary or that is accounted for by the equity method of accounting, shall be included only to the extent of the
amount of dividends or distributions or other payments paid in cash (or to the extent converted into cash) to the referent person or a
subsidiary thereof (other than an Unrestricted Subsidiary or a Qualified Non-Recourse Subsidiary of such referent person) in respect of
such period and (B) the Net Income for such period shall include any ordinary course dividend, distribution or other payment in cash
received from any person in excess of the amounts included in clause (A),
(vi) Consolidated Net Income for such period shall not include the cumulative effect of a change in accounting principles during
such period,
(vii) effects of purchase accounting adjustments (including the effects of such adjustments pushed down to such person and its
Subsidiaries) in component amounts required or permitted by GAAP, including those resulting from the application of purchase
accounting in relation to the Transactions or any consummated acquisition, or the amortization or write-off of any amounts thereof, net of
taxes, shall be excluded,
(viii) any impairment charges or asset write-offs, in each case pursuant to GAAP, and the amortization of intangibles adjustments
arising pursuant to GAAP, shall be excluded,
(ix) any non-cash compensation charge or expenses realized or resulting from stock option plans, employee benefit plans or
post-employment benefit plans, or grants or sales of stock, stock appreciation or similar rights, stock options, restricted stock, preferred
stock or other rights shall be excluded,
(x) accruals and reserves that are established or adjusted within twelve months after the Closing Date and that are so required to be
established or adjusted in accordance with GAAP or as a result of adoption or modification of accounting policies shall be excluded,
(xi) non-cash gains, losses, income and expenses resulting from fair value accounting required by the applicable standard under
GAAP and related interpretations shall be excluded,
(xii) any currency translation gains and losses related to currency remeasurements of Indebtedness, and any net loss or gain
resulting from Swap Agreements for currency exchange risk, shall be excluded,
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(xiii) (i) the non-cash portion of “straight-line” rent expense shall be excluded and (ii) the cash portion of “straight-line” rent
expense which exceeds the amount expensed in respect of such rent expense shall be included,
(xiv) (1) to the extent covered by insurance and actually reimbursed, or, so long as such person 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, and (2) amounts estimated in good faith to be received from insurance in respect of lost
revenues or earnings in respect of liability or casualty events or business interruption shall be included (with a deduction for amounts
actually received up to such estimated amount to the extent included in Net Income in a future period),
(xv) without duplication, an amount equal to the amount of distributions actually made to any parent or equity holder of such person
in respect of such period in accordance with Section 6.06(b)(y) shall be included as though such amounts had been paid as income taxes
directly by such person for such period, and
(xvi) non-cash charges for deferred tax asset valuation allowances shall be excluded.
“ Consolidated Total Assets ” shall mean, as of any date of determination, the total assets of the Borrower and the consolidated
Subsidiaries without giving effect to any amortization of the amount of intangible assets since March 31, 2014, determined in accordance with
GAAP, as set forth on the combined or consolidated balance sheet of the Borrower as of the last day of the fiscal quarter most recently ended
for which financial statements have been (or were required to be) delivered pursuant to Section 5.04(a) or 5.04(b), as applicable, calculated on a
Pro Forma Basis after giving effect to any acquisition or disposition of a person or assets that have occurred on or after the last day of such
fiscal quarter.
“ Control ” shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or
policies of a person, whether through the ownership of voting securities, by contract or otherwise, and “ Controlling ” and “ Controlled ” shall
have meanings correlative thereto.
“ Covenant Resumption Date ” shall have the meaning assigned to such term in the definition of “Covenant Suspension Period.”
“ Covenant Suspension Period ” shall mean the period commencing on the date of any Qualifying Act of Terrorism and continuing
until (and including) the last day of the second full fiscal quarter following the fiscal quarter in which the Qualifying Act of Terrorism occurs;
provided , however , that if a separate and distinct Qualifying Act of Terrorism occurs during any Covenant Suspension Period, such Covenant
Suspension Period shall continue until (and including) the last day of the second full fiscal quarter following the fiscal quarter in which such
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subsequent Qualifying Act of Terrorism shall occur. Notwithstanding the foregoing, the Borrower may, in its sole discretion, elect that any
Covenant Suspension Period end on any date prior to the date that such Covenant Suspension Period would otherwise end absent such election.
The first day following the end of the Covenant Suspension Period is the “ Covenant Resumption Date .”
“ Credit Event ” shall have the meaning assigned to such term in Article IV.
“ Cromwell Entities ” shall mean, collectively, (i) CIC and (ii) Corner Investment Holdings, LLC and Corner Investment Propco,
LLC, each a Delaware limited liability company.
“ Cumulative Credit ” shall mean, at any date, an amount, not less than zero in the aggregate, determined on a cumulative basis
equal to, without duplication (and without duplication of amounts that otherwise increased the amount available for Investments pursuant to
Section 6.04):
(a) an amount (which amount shall not be less than zero) equal to the Cumulative Retained Excess Cash Flow Amount at such time,
plus
(b) the aggregate amount of proceeds received after the Closing Date and prior to such time that would have constituted Net
Proceeds pursuant to clause (a) of the definition thereof except for the operation of clause (x) or (y) of the second proviso thereof, plus
(c) the cumulative amount of proceeds (including cash and the fair market value (as determined in good faith by the Borrower) of
property other than cash) from the sale of Equity Interests of the Borrower or any Parent Entity after the Closing Date and on or prior to
such time (including upon exercise of warrants or options) which proceeds have been contributed as common equity to the capital of the
Borrower; provided , that this clause (d) shall exclude Excluded Contributions, Management Fee Contributions, the Quad Capex Equity
Contribution, Investments pursuant to Section 6.04(q), sales of Equity Interests financed as contemplated by Section 6.04(e) or used as
described in clause (ix) of the definition of EBITDA and any amounts used to finance the payments or distributions in respect of any
Junior Financing pursuant to Section 6.09(b)(i)(C), plus
(d) 100% of the aggregate amount of contributions to the common capital of the Borrower received in cash (and the fair market
value (as determined in good faith by the Borrower) of property other than cash) after the Closing Date (subject to the same exclusions as
are applicable to clause (c) above), plus
(e) 100% of the aggregate principal amount of any Indebtedness (including the liquidation preference or maximum fixed repurchase
price, as the case may be, of any Disqualified Stock) of the Borrower or any Subsidiary thereof issued after the Closing Date (other than
Indebtedness issued to a Subsidiary), which has been converted into or exchanged for Equity Interests (other than Disqualified Stock) in
the Borrower or any Parent Entity, plus
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(f) 100% of the aggregate amount received by the Borrower or any Subsidiary in cash (and the fair market value (as determined in
good faith by the Borrower) of property other than cash received by the Borrower or any Subsidiary) after the Closing Date from:
(A) the sale (other than to the Borrower or any Subsidiary) of the Equity Interests of an Unrestricted Subsidiary, or
(B) any dividend or other distribution by an Unrestricted Subsidiary, plus
(g) in the event any Unrestricted Subsidiary has been redesignated as a Subsidiary or has been merged, consolidated or
amalgamated with or into, or transfers or conveys its assets to, or is liquidated into, Holdings, the Borrower or any Subsidiary, the fair
market value (as determined in good faith by the Borrower) of the Investments of Holdings, the Borrower or any Subsidiary in such
Unrestricted Subsidiary at the time of such redesignation, combination or transfer (or of the assets transferred or conveyed, as applicable),
plus
(h) amounts constituting Declined Proceeds not applied to the prepayment of Term Loans, plus
(i) an amount equal to any returns (including dividends, interest, distributions, returns of principal, profits on sale, repayments,
income and similar amounts) actually received by the Borrower or any Subsidiary in respect of any Investments made pursuant to
Section 6.04(j) after the Closing Date prior to such time, minus
(j) any amounts thereof used to make Investments pursuant to Section 6.04(j)(ii) after the Closing Date prior to such time, minus
(k) any amounts thereof used to make payments or distributions in respect of Junior Financings pursuant to Section 6.09(b)(i)(E)
after the Closing Date prior to such time.
“ Cumulative Retained Excess Cash Flow Amount ” shall mean, at any date, an amount (which shall not be less than zero in the
aggregate) determined on a cumulative basis equal to the aggregate cumulative sum of the Retained Percentage of Excess Cash Flow for all
Excess Cash Flow Periods ending after the Closing Date and prior to such date.
“ Current Assets ” shall mean, with respect to the Borrower and the Subsidiaries on a combined or consolidated basis at any date of
determination, the sum of (a) all assets (other than cash and Permitted Investments or other cash equivalents) that would, in accordance with
GAAP, be classified on a combined or consolidated balance sheet of the Borrower and the Subsidiaries as current assets at such date of
determination, other than amounts related to current or deferred Taxes based on income or profits, and (b) in the event that a Permitted
Receivables Financing is accounted for off balance sheet, (x) gross accounts receivable comprising part of the Receivables Assets subject to
such Permitted Receivables Financing less (y) collections against the amounts sold pursuant to clause (x).
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“ Current Liabilities ” shall mean, with respect to the Borrower and the Subsidiaries on a combined or consolidated basis at any date
of determination, all liabilities that would, in accordance with GAAP, be classified on a combined or consolidated balance sheet of the
Borrower and the Subsidiaries as current liabilities at such date of determination, other than (a) the current portion of any Indebtedness,
(b) accruals of Interest Expense (excluding Interest Expense that is due and unpaid), (c) accruals for current or deferred Taxes based on income
or profits, (d) accruals, if any, of transaction costs resulting from the Transactions, (e) accruals of any costs or expenses related to (i) severance
or termination of employees prior to the Closing Date or (ii) bonuses, pension and other post-retirement benefit obligations, and (f) accruals for
add-backs to EBITDA included in clauses (a)(iv) through (a)(vi) of the definition of such term.
“ Debt Fund Affiliate Lender ” shall mean a Lender that is an Affiliate of the Borrower 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 for which no personnel making investment decisions in respect of any
equity fund which has a direct or indirect equity investment in Holdings, the Borrower or the Subsidiaries has the right to make any investment
decisions.
“ Debt Service ” shall mean, with respect to the Borrower and the Subsidiaries on a combined or consolidated basis for any period,
Cash Interest Expense of the Borrower and the Subsidiaries for such period plus scheduled principal amortization of Consolidated Debt of the
Borrower and the Subsidiaries for such period.
“ Debtor Relief Laws ” shall mean the Bankruptcy Code of the United States, and all other liquidation, conservatorship, bankruptcy,
assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief laws of the
United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.
“ Declined Proceeds ” shall have the meaning assigned to such term in Section 2.11(e).
“ Default ” shall mean any event or condition which, but for the giving of notice, lapse of time or both would constitute an Event of
Default.
“ Defaulting Lender ” shall mean, subject to Section 2.22, any Lender that (a) has failed to (i) fund all or any portion of its Loans
within two Business Days of the date such Loans were required to be funded hereunder or (ii) pay to the Administrative Agent, any L/C Issuer
or any other Lender any other amount required to be paid by it hereunder (including in respect of its participation in Letters of Credit) within
two Business Days of the date when due, (b) has notified the Borrower, Administrative Agent or any L/C Issuer in writing that it does not
intend to comply with its funding obligations, or has made a public statement to that effect with respect to its funding obligations hereunder,
(c) has failed, within three Business Days after written
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request by the Administrative Agent or the Borrower, to confirm in writing to the Administrative Agent and the Borrower that it will comply
with its prospective funding obligations hereunder ( provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c)
upon receipt of such written confirmation by the Administrative Agent and the Borrower) or (d) has, or has a direct or indirect parent company
that has, (i) become the subject of a proceeding under any Debtor Relief Law or (ii) had appointed for it a receiver, custodian, conservator,
trustee, administrator, assignee for the benefit of creditors or similar person charged with reorganization or liquidation of its business or assets,
including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity; provided , that
a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or
indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with
immunity from the jurisdiction of courts within the United States of America or from the enforcement of judgments or writs of attachment on
its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made
with such Lender. Any determination by the Administrative Agent that a Lender is a Defaulting Lender under any one or more of clauses (a)
through (d) above shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to
Section 2.22) upon delivery of written notice of such determination to the Borrower, each L/C Issuer and each Lender.
“ Deplanements ” shall have the meaning assigned to such term in the definition of “Qualifying Acts of Terrorism.”
“ Designated Non-Cash Consideration ” shall mean the fair market value (as determined in good faith by the Borrower) of non-cash
consideration received by the Borrower or any Subsidiary in connection with an Asset Sale that is so designated as Designated Non-Cash
Consideration pursuant to a certificate of a Responsible Officer of the Borrower, setting forth the basis of such valuation, less the amount of
cash or cash equivalents received in connection with a subsequent sale of such Designated Non-Cash Consideration.
“ Discount Range ” shall have the meaning assigned to such term in Section 2.11(g)(ii).
“ Discounted Prepayment Option Notice ” shall have the meaning assigned to such term in Section 2.11(g)(ii).
“ Discounted Voluntary Prepayment ” shall have the meaning assigned to such term in Section 2.11(g)(i).
“ Discounted Voluntary Prepayment Notice ” shall have the meaning assigned to such term in Section 2.11(g)(v).
“ Disinterested Director ” shall mean, with respect to any person and transaction, a member of the Board of Directors of such person
who does not have any material direct or indirect financial interest in or with respect to such transaction.
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“ Disqualification ” shall mean, with respect to any Lender:
(a) the failure of that person timely to file pursuant to applicable Gaming Laws:
(i) any application requested of that person by any Gaming Authority in connection with any licensing required of that person
as a lender to the Borrower; or
(ii) any required application or other papers in connection with determination of the suitability of that person as a lender to the
Borrower;
(b) the withdrawal by that person (except where requested or permitted by the Gaming Authority) of any such application or other
required papers;
(c) any finding by a Gaming Authority that there is reasonable cause to believe that such person may be found unqualified or
unsuitable; or
(d) any final determination by a Gaming Authority pursuant to applicable Gaming Laws:
(i) that such person is “unsuitable” as a lender to the Borrower;
(ii) that such person shall be “disqualified” as a lender to the Borrower; or
(iii) denying the issuance to that person of any license or other approval required under applicable Gaming Laws to be held by
all lenders to the Borrower.
“ Disqualified Holder ” shall have the meaning assigned to such term in Section 9.22(c).
“ Disqualified 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 or other Equity Interests into which it is convertible or for which it is redeemable or exchangeable), or upon the happening of
any event or condition (a) matures or is mandatorily redeemable (other than solely for Qualified Equity Interests), pursuant to a sinking fund
obligation or otherwise (except as a result of a change of control or asset sale so long as any rights of the holders thereof upon the occurrence of
a change of control or asset sale event shall be subject to the prior repayment in full of the Loans and all other Loan Obligations that are
accrued and payable and the termination of the Commitments), (b) is redeemable at the option of the holder thereof (other than solely for
Qualified Equity Interests), in whole or in part, (c) provides for the scheduled payments of dividends in cash or (d) at the option of the holders
thereof, is or becomes convertible into or exchangeable for Indebtedness or any other Equity Interests that would constitute Disqualified Stock,
in each case, prior to the date that is ninety-one (91) days after the earlier of (x) the latest Term Facility Maturity Date in effect on the date of
issuance and (y) the date on which the Loans and all other Loan Obligations that are accrued and payable are repaid in full and the
Commitments are terminated; provided , however , that only the portion of the Equity Interests
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that so mature or are mandatorily redeemable, are so convertible or exchangeable or are so redeemable at the option of the holder thereof prior
to such date shall be deemed to be Disqualified Stock; provided further , however , that if such Equity Interests are issued to any employee or to
any plan for the benefit of employees of the Borrower or the Subsidiaries or by any such plan to such employees, such Equity Interests shall not
constitute Disqualified Stock solely because they may be required to be repurchased by the Borrower in order to satisfy applicable statutory or
regulatory obligations or as a result of such employee’s termination, death or disability; provided further , however , that any class of Equity
Interests of such person that by its terms authorizes such person to satisfy its obligations thereunder by delivery of Equity Interests that are not
Disqualified Stock shall not be deemed to be Disqualified Stock.
“ Dollar Equivalent ” shall mean, at any time, (a) with respect to any amount denominated in Dollars, such amount, and (b) with
respect to any amount denominated in any currency other than Dollars, the equivalent amount thereof in Dollars as determined by the
Administrative Agent or the L/C Issuer, as applicable, at such time on the basis of the Spot Rate (determined in respect of the applicable date of
determination) for the purchase of Dollars with such currency.
“ Dollars ” or “ $ ” shall mean lawful money of the United States of America.
“ Domestic Subsidiary ” shall mean any Subsidiary that is not a Foreign Subsidiary.
“ EBITDA ” shall mean, with respect to the Borrower and the Subsidiaries on a combined or consolidated basis for any period, the
Consolidated Net Income of the Borrower and the Subsidiaries for such period plus (a) the sum of (in each case without duplication and to the
extent the respective amounts described in subclauses (i) through (xi) of this clause (a) otherwise reduced such Consolidated Net Income for
the respective period for which EBITDA is being determined):
(i) provision for Taxes based on income, profits or capital of the Borrower and the Subsidiaries for such period, including, without
limitation, state, franchise and similar taxes and foreign withholding taxes (including penalties and interest related to taxes or arising from
tax examinations),
(ii) Interest Expense (and to the extent not included in Interest Expense, (x) all cash dividend payments (excluding items eliminated
in consolidation) on any series of preferred stock or Disqualified Stock and (y) costs of surety bonds in connection with financing
activities) of the Borrower and the Subsidiaries for such period (net of interest income of the Borrower and the Subsidiaries for such
period),
(iii) depreciation and amortization expenses of the Borrower and the Subsidiaries for such period including, without limitation, the
amortization of intangible assets, deferred financing fees and Capitalized Software Expenditures and amortization of unrecognized prior
service costs and actuarial gains and losses related to pensions and other post-employment benefits,
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(iv) any expenses or charges (other than depreciation or amortization expense as described in the preceding clause (iii)) related to
any issuance of Equity Interests, Investment, acquisition, New Project, disposition, recapitalization or the incurrence, modification or
repayment of Indebtedness permitted to be incurred by this Agreement (including a refinancing thereof) (whether or not successful),
including (w) such fees, expenses or charges related to the offering of the Second Priority Senior Secured Notes and this Agreement,
(x) any amendment or other modification of the Obligations or other Indebtedness, (y) any “additional interest” with respect to the
Second Priority Senior Secured Notes and (z) commissions, discounts, yield and other fees and charges (including any interest expense)
related to any Permitted Receivables Financing,
(v) business optimization expenses and other restructuring charges or reserves (which, for the avoidance of doubt, shall include,
without limitation, the effect of inventory optimization programs, facility closure, facility consolidations, retention, severance, systems
establishment costs, contract termination costs, future lease commitments and excess pension charges) and, in each case, expected to be
achieved, completed or realized within 24 months, in the good faith determination of the Borrower,
(vi) any other non-cash charges; provided , that, for purposes of this subclause (vi) of this clause (a), any non-cash charges or losses
shall be treated as cash charges or losses in any subsequent period during which cash disbursements attributable thereto are made (but
excluding, for the avoidance of doubt, amortization of a prepaid cash item that was paid in a prior period),
(vii) the amount of management, consulting, monitoring, transaction and advisory fees and related expenses paid in accordance with
Section 6.07 (or any accruals related to such fees and related expenses) during such period,
(viii) the amount of loss on sale of receivables and related assets to a Special Purpose Receivables Subsidiary in connection with a
Permitted Receivables Financing,
(ix) any costs or expense incurred pursuant to any management equity plan or stock option plan or any other management or
employee benefit plan or agreement or any stock subscription or shareholder agreement, to the extent that such cost or expenses are
funded with cash proceeds contributed to the capital of any Loan Party solely to the extent that such net cash proceeds are excluded from
the calculation of the Cumulative Credit,
(x) any deductions (less any additions) attributable to minority interests except, in each case, to the extent of cash paid or received,
and
(xi) Pre-Opening Expenses,
minus (b) the sum of (without duplication and to the extent the amounts described in this clause (b) increased such Consolidated Net Income
for the respective period for which EBITDA is being determined) non-cash items increasing Consolidated Net Income of the Borrower and the
Subsidiaries for such period (but excluding any such items (A) in respect of which cash was received in a prior period or will be received in a
future period or (B) which represent the reversal of any accrual of, or cash reserve for, anticipated cash charges that reduced EBITDA in any
prior period).
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Notwithstanding anything to the contrary contained herein and subject to adjustments permitted hereunder with respect to
acquisitions, dispositions and other transactions occurring following the Closing Date and/or pursuant to the definition of “Pro Forma Basis,”
for purposes of determining EBITDA under this Agreement, EBITDA of The Quad in respect of each fiscal quarter until (and including) the
fiscal quarter ending March 31, 2015 will be deemed to be equal to the greater of (i) $17.0 million for such fiscal quarter and (ii) actual
EBITDA of The Quad for such fiscal quarter.
“ Economic Sanctions Laws ” shall mean (i) the Trading with the Enemy Act (50 U.S.C. App. §§ 5(b) and 16, as amended), the
International Emergency Economic Powers Act, (50 U.S.C. §§ 1701-1706, as amended), Executive Order 13224 (effective September 24,
2001), as amended from time to time and any successor thereto, and the regulations administered and enforced by OFAC and (ii) any and all
other laws, judgments, orders, executive orders, decrees, ordinances, rules, regulations, statutes, case law or treaties applicable to a Loan Party,
its Subsidiaries or Affiliates relating to economic sanctions and terrorism financing.
“ Embargoed Person ” shall mean (i) any country or territory that is the subject of a comprehensive sanctions program administered
by OFAC, Syria, and North Korea or (ii) any Person that (x) is publicly identified on the most current list of “Specially Designated Nationals
and Blocked Persons” published by the U.S. Treasury Department’s Office of Foreign Assets Control (“ OFAC ”) or (y) resides, is organized or
chartered, or has a place of business in a country or territory that is the subject of a comprehensive sanctions program administered by OFAC.
As of the Closing Date, comprehensive sanctions programs administered by OFAC are the Iran, Sudan, and Cuba sanctions programs.
“ environment ” shall mean ambient and indoor air, surface water and groundwater (including potable water, navigable water and
wetlands), the land surface or subsurface strata, natural resources such as flora and fauna, the workplace or as otherwise defined in any
Environmental Law.
“ Environmental Laws ” shall mean all applicable laws (including common law), rules, regulations, codes, ordinances, orders,
decrees or judgments, promulgated or entered into by any Governmental Authority, relating in any way to the environment, preservation or
reclamation of natural resources, the generation, management, Release or threatened Release of, or exposure to, any Hazardous Material or to
human health and safety matters (to the extent relating to the environment or Hazardous Materials).
“ Escrowed Credit Agreement ” shall mean that certain First Lien Credit Agreement, dated after the Closing Date, among Holdings,
the Borrower, the lenders party thereto and Credit Suisse AG, Cayman Islands Branch, as administrative agent.
“ Escrowed Credit Agreement Escrow Agreement ” shall mean that certain Escrow Agreement, dated after the Closing Date, among
Caesars Growth Properties Holdings, LLC, as borrower under the Escrowed Credit Agreement, Credit Suisse AG, Cayman Islands Branch, in
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its capacities as administrative agent and collateral agent under the Escrowed Credit Agreement and U.S. Bank National Association, in its
capacity as escrow agent, as amended, restated, supplemented or otherwise modified from time to time.
“ Escrowed Credit Agreement Escrow Collateral ” shall mean all “Collateral” as defined in the Escrowed Credit Agreement Escrow
Agreement.
“ Equity Financing ” shall have the meaning assigned to such term in Section 4.02(m).
“ Equity Interests ” of any person shall mean any and all shares, interests, rights to purchase or otherwise acquire, warrants, options,
participations or other equivalents of or interests in (however designated) equity or ownership of such person, including any preferred stock,
any limited or general partnership interest and any limited liability company membership interest, and any securities or other rights or interests
convertible into or exchangeable for any of the foregoing.
“ ERISA ” shall mean the Employee Retirement Income Security Act of 1974, as the same may be amended from time to time and
any final regulations promulgated and the rulings issued thereunder.
“ ERISA Affiliate ” shall mean any trade or business (whether or not incorporated) that, together with Holdings, the Borrower or
any Subsidiary, is treated as a single employer under Section 414(b) or (c) of the Code, or, solely for purposes of Section 302 of ERISA and
Section 412 of the Code, is treated as a single employer under Section 414 of the Code.
“ ERISA Event ” shall mean (a) any Reportable Event or the requirements of Section 4043(b) of ERISA apply with respect to a
Plan; (b) with respect to any Plan, the failure to satisfy the minimum funding standard under Section 412 of the Code or Section 302 of ERISA,
whether or not waived; (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 Plan, the failure to make by its due date a required installment under Section 430(j) of the Code
with respect to any Plan or the failure to make any required contribution to a Multiemployer Plan; (d) the incurrence by Holdings, the
Borrower, any Subsidiary or any ERISA Affiliate of any liability under Title IV of ERISA with respect to the termination of any Plan or
Multiemployer Plan; (e) the receipt by Holdings, the Borrower, any Subsidiary or any ERISA Affiliate from the PBGC or a plan administrator
of any notice relating to an intention to terminate any Plan or to appoint a trustee to administer any Plan under Section 4042 of ERISA; (f) the
incurrence by Holdings, the Borrower, any Subsidiary or any ERISA Affiliate of any liability with respect to the withdrawal or partial
withdrawal from any Plan or Multiemployer Plan; (g) the receipt by Holdings, the Borrower, any Subsidiary or any ERISA Affiliate of any
notice, or the receipt by any Multiemployer Plan from Holdings, the Borrower, any Subsidiary or any ERISA Affiliate of any notice,
concerning the impending imposition of Withdrawal Liability 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, or in “endangered” or “critical” status, within the meaning of Section 432 of the
Code or Section 305 of ERISA; (h) the conditions for imposition of a lien under Section 303(k) of ERISA shall have
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been met with respect to any Plan; (i) with respect to a Plan, the provision of security pursuant to Section 206(g) of ERISA; or (j) the
withdrawal of Holdings, the Borrower, any Subsidiary or any ERISA Affiliate from a Plan subject to Section 4063 of ERISA during a plan year
in which such 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.
“ Eurocurrency Borrowing ” shall mean a Borrowing comprised of Eurocurrency Loans.
“ Eurocurrency Loan ” shall mean any Eurocurrency Term Loan or Eurocurrency Revolving Loan.
“ Eurocurrency Rate ” shall mean, for any Interest Period with respect to a Eurocurrency Loan, the rate per annum equal to the
Intercontinental Exchange Benchmark Administration Ltd. LIBOR (“ ICE LIBOR ”), as published by Reuters (or other commercially available
source providing quotations of ICE LIBOR as designated by the Administrative Agent from time to time) at approximately 11:00 a.m., London
time, two Business Days prior to the commencement of such Interest Period, for deposits in the relevant currency (for delivery on the first day
of such Interest Period) with a term equivalent to such Interest Period. If such rate is not available at such time for any reason, then the
“Eurocurrency Rate” for such Interest Period shall be the rate per annum determined by the Administrative Agent to be the rate at which
deposits in the relevant currency for delivery on the first day of such Interest Period in Same Day Funds in the approximate amount of the
Eurocurrency Loan being made, continued or converted by the Administrative Agent and with a term equivalent to such Interest Period would
be offered by the Administrative Agent’s London Branch (or other branch or Affiliate of the Administrative Agent) to major banks in the
London or other offshore interbank market for such currency at their request at approximately 11:00 a.m. (London time) two Business Days
prior to the commencement of such Interest Period.
“ Eurocurrency Revolving Facility Borrowing ” shall mean a Borrowing comprised of Eurocurrency Revolving Loans.
“ Eurocurrency Revolving Loan ” shall mean any Revolving Facility Loan bearing interest at a rate determined by reference to the
Adjusted Eurocurrency Rate in accordance with the provisions of Article II.
“ Eurocurrency Term Loan ” shall mean any Term Loan bearing interest at a rate determined by reference to the Adjusted
Eurocurrency Rate in accordance with the provisions of Article II.
“ Event of Default ” shall have the meaning assigned to such term in Section 7.01.
“ Excess Cash Flow ” shall mean, with respect to the Borrower and the Subsidiaries on a combined or consolidated basis for any
Applicable Period, EBITDA of the Borrower and the Subsidiaries on a combined or consolidated basis for such Applicable Period, minus ,
without duplication, (A):
(a) Debt Service for such Applicable Period,
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(b) the amount of any voluntary prepayment permitted hereunder of term Indebtedness during such Applicable Period (other than
any voluntary prepayment of the Loans, which shall be the subject of Section 2.11(c)) and the amount of any voluntary prepayments of
revolving Indebtedness to the extent accompanied by permanent reductions of any revolving facility commitments during such
Applicable Period, so long as the amount of such prepayment is not already reflected in Debt Service,
(c) (i) Capital Expenditures or New Project expenditures by the Borrower and the Subsidiaries on a combined or consolidated basis
during such Applicable Period that are paid in cash and (ii) the aggregate consideration paid in cash during the Applicable Period in
respect of Permitted Business Acquisitions and other Investments permitted hereunder less any amounts received in respect thereof as a
return of capital,
(d) Capital Expenditures, Permitted Business Acquisitions, New Project expenditures or other permitted Investments that the
Borrower or any Subsidiary shall, during such Applicable Period, become obligated to make or otherwise anticipated to make payments
with respect thereto but that are not made during such Applicable Period; provided , that (i) the Borrower shall deliver a certificate to the
Administrative Agent not later than 90 days after the end of such Applicable Period, signed by a Responsible Officer of the Borrower and
certifying that payments in respect of such Capital Expenditures and the delivery of the related equipment or Permitted Business
Acquisitions, New Project expenditures or other permitted Investments are expected to be made in the following Applicable Period, and
(ii) any amount so deducted shall not be deducted again in a subsequent Applicable Period,
(e) Taxes paid in cash by the Borrower and the Subsidiaries on a combined or consolidated basis during such Applicable Period or
that will be paid within six months after the close of such Applicable Period; provided , that with respect to any such amounts to be paid
after the close of such Applicable Period, (i) any amount so deducted shall not be deducted again in a subsequent Applicable Period, and
(ii) appropriate reserves shall have been established in accordance with GAAP,
(f) an amount equal to any increase in Working Capital of the Borrower and the Subsidiaries for such Applicable Period,
(g) cash expenditures made in respect of Swap Agreements during such Applicable Period, to the extent not reflected in the
computation of EBITDA or Interest Expense,
(h) permitted Restricted Payments made in cash by the Borrower during such Applicable Period and permitted Restricted Payments
made by any Subsidiary to any person other than the Borrower or any of the Subsidiaries during such Applicable Period, in each case in
accordance with Section 6.06,
(i) amounts paid in cash during such Applicable Period on account of (A) items that were accounted for as non-cash reductions of
Net Income in determining Consolidated Net Income or as non-cash reductions of Consolidated Net Income in determining EBITDA of
the Borrower and the Subsidiaries in a prior Applicable Period and (B) reserves or accruals established in purchase accounting,
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(j) to the extent not deducted in the computation of Net Proceeds in respect of any asset disposition or condemnation giving rise
thereto, the amount of any mandatory prepayment of Indebtedness (other than Indebtedness created hereunder or under any other Loan
Document), together with any interest, premium or penalties required to be paid (and actually paid) in connection therewith, and
(k) the amount related to items that were added to or not deducted from Net Income in calculating Consolidated Net Income or were
added to or not deducted from Consolidated Net Income in calculating EBITDA to the extent such items represented a cash payment
(which had not reduced Excess Cash Flow upon the accrual thereof in a prior Applicable Period), or an accrual for a cash payment, by the
Borrower and the Subsidiaries or did not represent cash received by the Borrower and the Subsidiaries, in each case on a combined or
consolidated basis during such Applicable Period,
plus , without duplication, (B):
(l) an amount equal to any decrease in Working Capital for such Applicable Period,
(m) all amounts referred to in clauses (A)(b), (A)(c) and (A)(d) above to the extent funded with the proceeds of the issuance or the
incurrence of Indebtedness (including Capital Lease Obligations and purchase money Indebtedness, but excluding proceeds of extensions
of credit under any revolving credit facility), the sale or issuance of any Equity Interests (including any capital contributions) and any
loss, damage, destruction or condemnation of, or any sale, transfer or other disposition (including any sale and leaseback of assets and
any mortgage or lease of Real Property) to any person of any asset or assets, in each case to the extent there is a corresponding deduction
from Excess Cash Flow above,
(n) to the extent any permitted Capital Expenditures referred to in clause (A)(d) above and the delivery of the related equipment do
not occur in the following Applicable Period of the Borrower specified in the certificate of the Borrower provided pursuant to
clause (A)(d) above, the amount of such Capital Expenditures that were not so made in such following Applicable Period,
(o) cash payments received in respect of Swap Agreements during such Applicable Period to the extent (i) not included in the
computation of EBITDA or (ii) such payments do not reduce Cash Interest Expense,
(p) any extraordinary or nonrecurring gain realized in cash during such Applicable Period (except to the extent such gain consists of
Net Proceeds subject to Section 2.11(b)),
(q) to the extent deducted in the computation of EBITDA, cash interest income, and
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(r) the amount related to items that were deducted from or not added to Net Income in connection with calculating Consolidated Net
Income or were deducted from or not added to Consolidated Net Income in calculating EBITDA to the extent either (i) such items
represented cash received by the Borrower or any Subsidiary or (ii) such items do not represent cash paid by the Borrower or any
Subsidiary, in each case on a combined or consolidated basis during such Applicable Period.
“ Excess Cash Flow Period ” shall mean each fiscal year of the Borrower, commencing with the fiscal year of the Borrower ending
on December 31, 2015.
“ Exchange Act ” shall mean the Securities Exchange Act of 1934, as amended.
“ Excluded Contributions ” shall mean the cash or other assets (valued at their fair market value as determined by the Borrower in
good faith) received by the Borrower after the Closing Date from: (a) contributions to its common Equity Interests, and (b) the sale (other than
to a Subsidiary of the Borrower or to any Subsidiary management equity plan or stock option plan or any other management or employee
benefit plan or agreement) of Qualified Equity Interests of the Borrower, in each case designated at the time of or promptly after such
contribution as Excluded Contributions pursuant to a certificate of a Responsible Officer of the Borrower .
“ Excluded Indebtedness ” shall mean all Indebtedness not incurred in violation of Section 6.01.
“ Excluded Property ” shall have the meaning assigned to such term in Section 5.10(g).
“ Excluded Securities ” shall mean any of the following:
(a) any Equity Interests or Indebtedness with respect to which the Collateral Agent and the Borrower reasonably agree that the cost
or other consequences of pledging such Equity Interests or Indebtedness in favor of the Secured Parties under the Security Documents are
likely to be excessive in relation to the value to be afforded thereby;
(b) in the case of any pledge of voting Equity Interests of any Foreign Subsidiary or FSHCO (in each case, that is owned directly by
a Loan Party) to secure the Obligations, any voting Equity Interest of such Foreign Subsidiary or FSHCO in excess of 65% of the
outstanding Equity Interests of such class;
(c) any Equity Interests or Indebtedness to the extent and for so long as the pledge thereof would not be effective under, or would be
prohibited by, any Requirement of Law (including any Gaming Laws);
(d) any Equity Interests of any person that is not a Wholly-Owned Subsidiary to the extent (A) that a pledge thereof to secure the
Obligations is prohibited by (i) any applicable organizational documents, joint venture agreement or shareholder agreement or (ii) any
other contractual obligation with an unaffiliated third party not in violation of Section 6.09(c) (other than, in this subclause (A)(ii),
non-assignment provisions which
28
are ineffective under Article 9 of the Uniform Commercial Code or other applicable Requirements of Law), (B) any organizational
documents, joint venture agreement or shareholder agreement (or other contractual obligation referred to in subclause (A)(ii) above)
prohibits such a pledge without the consent of any other party; provided , that this clause (B) shall not apply if (1) such other party is a
Loan Party or a Wholly-Owned Subsidiary or (2) consent has been obtained to consummate such pledge (it being understood that the
foregoing shall not be deemed to obligate the Borrower or any Subsidiary to obtain any such consent) and for so long as such
organizational documents, joint venture agreement or shareholder agreement or replacement or renewal thereof is in effect, or (C) a
pledge thereof to secure the Obligations would give any other party (other than a Loan Party or a Wholly-Owned Subsidiary) to any
organizational documents, joint venture agreement or shareholder agreement governing such Equity Interests (or other contractual
obligation referred to in subclause (A)(ii) above) the right to terminate its obligations thereunder (other than, in the case of other
contractual obligations referred to in subclause (A)(ii), non-assignment provisions which are ineffective under Article 9 of the Uniform
Commercial Code or other applicable Requirement of Law);
(e) any Equity Interests of any Immaterial Subsidiary, any Unrestricted Subsidiary and any Qualified Non-Recourse Subsidiary;
(f) any Equity Interests of any Subsidiary of, or other Equity Interests owned by, a Foreign Subsidiary;
(g) any Equity Interests of any Subsidiary to the extent that the pledge of such Equity Interests could reasonably be expected to
result in material adverse tax consequences to the Borrower or any Subsidiary as reasonably determined in good faith by the Borrower;
(h) any Margin Stock; and
(j) (x) any Equity Interests owned by Holdings and (y) any Indebtedness owned by Holdings.
“ Excluded Subsidiary ” shall mean any of the following (except as otherwise provided in clause (b) of the definition of Subsidiary
Loan Party):
(a) each Immaterial Subsidiary,
(b) each Domestic Subsidiary that is not a Wholly-Owned Subsidiary (for so long as such Subsidiary remains a non-Wholly-Owned
Subsidiary),
(c) each Domestic Subsidiary that is prohibited from guaranteeing or granting Liens to secure the Obligations by any Requirement
of Law (including Gaming Law) or that would require consent, approval, license or authorization of a Governmental Authority to
guarantee or grant Liens to secure the Obligations (unless such consent, approval, license or authorization has been received),
29
(d) each Domestic Subsidiary that is prohibited by any applicable contractual requirement from guaranteeing or granting Liens to
secure the Obligations on the Closing Date or at the time such Subsidiary becomes a Subsidiary not in violation of Section 6.09(c) (and
for so long as such restriction or any replacement or renewal thereof is in effect),
(e) any Special Purpose Receivables Subsidiary and any Qualified Non-Recourse Subsidiary,
(f) any Foreign Subsidiary,
(g) any Domestic Subsidiary (i) that is an FSHCO or (ii) that is a Subsidiary of a Foreign Subsidiary,
(h) any other Domestic Subsidiary with respect to which, (x) the Administrative Agent and the Borrower reasonably agree that the
cost or other consequences of providing a Guarantee of or granting Liens to secure the Obligations are likely to be excessive in relation to
the value to be afforded thereby or (y) providing such a Guarantee or granting such Liens could reasonably be expected to result in
material adverse tax consequences as determined in good faith by the Borrower, and
(i) each Unrestricted Subsidiary.
“ Excluded Swap Obligation ” shall mean, with respect to any Guarantor, any Swap Obligation if, and to the extent that, all or a
portion of the Guarantee of such Guarantor of, or the grant by such Guarantor of a security interest to secure, such Swap Obligation (or any
Guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures
Trading Commission (or the application or official interpretation of any thereof) by virtue of such Guarantor’s failure for any reason to
constitute an “eligible contract participant” as defined in the Commodity Exchange Act and the regulations thereunder at the time the
Guarantee of such Guarantor or the grant of such security interest becomes effective with respect to such Swap Obligation, unless otherwise
agreed between the Administrative Agent and the Borrower. 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 the Administrative Agent, any Lender, any L/C Issuer or any other recipient of any
payment to be made by or on account of any Loan Party under any Loan Document, (a) income or franchise Taxes imposed on (or measured
by) such recipient’s net income by a jurisdiction as a result of such recipient being organized in, having its principal office in or, in the case of
any Lender, having its applicable lending office in, such jurisdiction or as a result of any other present or former connection with such
jurisdiction (other than any connection arising solely from such recipient having executed, delivered, enforced, become a party to, performed
its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to,
and/or enforced, any Loan Documents) and, for the avoidance of doubt, including any backup
30
withholding in respect of such a tax under Section 3466 of the Code (or any similar provision of state, local or foreign law), (b) any branch
profits Tax under Section 884(a) of the Code, or any similar Tax, that is imposed by any jurisdiction described in clause (a) above, (c) in the
case of a Lender (other than an assignee selected by the Borrower pursuant to a request by the Borrower under Section 2.19(b)), any
withholding tax imposed by the United States federal government that is imposed on amounts payable to such Lender pursuant to laws in effect
at the time such Lender becomes a party to this Agreement (or designates a new lending office), except to the extent that such Lender (or its
assignor, if any) was entitled, immediately prior to designation of a new lending office (or assignment), to receive additional amounts from a
Loan Party with respect to such withholding tax pursuant to Section 2.17, (d) any withholding tax attributable to a Lender’s failure to comply
with Section 2.17(e), (f), (g), or (i) or the Administrative Agent’s failure to comply with Section 2.17(l), and (e) any Taxes imposed pursuant to
FATCA.
“ Existing Class Loans ” shall have the meaning assigned to such term in Section 9.08(f).
“ Extended Revolving Facility Commitment ” shall have the meaning assigned to such term in Section 2.21(e).
“ Extended Term Loan ” shall have the meaning assigned to such term in Section 2.21(e).
“ Extending Lender ” shall have the meaning assigned to such term in Section 2.21(e).
“ Extension ” shall have the meaning assigned to such term in Section 2.21(e).
“ Extension Fee ” shall have the meaning assigned to such term in Section 2.12(f).
“ Facility ” shall mean the respective facility and commitments utilized in making Loans and credit extensions hereunder, it being
understood that as of the Closing Date there is one Facility, i.e ., the Term B Facility, and thereafter, the term “Facility” may include any
Incremental Term Facility and any Revolving Facility consisting of Incremental Revolving Facility Commitments.
“ FATCA ” shall mean Sections 1471 through 1474 of the Code, as of the date of this Agreement (and any amended or successor
version that is substantively comparable and not materially more onerous to comply with), any current or future Treasury regulations
promulgated thereunder, or other official governmental interpretations thereof, any agreements entered into or applicable pursuant to current
Section 1471(b)(1) of the Code (or any amended or successor version described above) or any intergovernmental agreement (or related law or
official administrative guidance) implementing the foregoing.
“ Federal Funds Rate ” shall mean, for any day, the rate per annum equal to the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal
Reserve Bank of New York on the Business Day next succeeding such day; provided , that (a) if such day is not a Business Day, the Federal
Funds Rate for such day shall be such rate
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on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so
published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate of quotations for such day for
such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by it.
“ Fee Letter ” shall mean that certain Fee Letter, dated as of May 5, 2014, as amended, by and between the Borrower and Credit
Suisse AG, Cayman Islands Branch.
“ Fees ” shall mean the Commitment Fees, the L/C Participation Fees, the L/C Issuer Fees, the Administrative Agent Fees, the
Closing Fee and the Extension Fee.
“ Financial Officer ” of any person shall mean the Chief Financial Officer, principal accounting officer, Treasurer, Assistant
Treasurer or Controller of such person.
“ First Lien Intercreditor Agreement ” shall mean the First Lien Intercreditor Agreement substantially in the form of Exhibit P , as
amended, restated, supplemented or otherwise modified from time to time.
“ First Lien Notes ” shall mean (i) any Future First Lien Notes and (ii) any Permitted Refinancing Indebtedness incurred in respect
thereof.
“ First Lien Obligations ” shall mean the Obligations and the Other First Lien Obligations.
“ First Lien Secured Parties ” shall mean the Secured Parties and the Other First Lien Secured Parties.
“ Flood Insurance Laws ” shall mean, collectively, (i) National Flood Insurance Reform Act of 1994 (which comprehensively
revised the National Flood Insurance Act of 1968 and the Flood Disaster Protection Act of 1973) as now or hereafter in effect or any successor
statute thereto, (ii) the Flood Insurance Reform Act of 2004 as now or hereafter in effect or any successor statute thereto and (iii) the
Biggert-Waters Flood Insurance Reform Act of 2012 as now or hereafter in effect or any successor statute thereto.
“ Foreign Lender ” shall mean any Lender (a) that is not disregarded as separate from its owner for U.S. federal income tax
purposes and that is not a “United States Person” as defined by Section 7701(a)(30) of the Code or (b) that is disregarded as separate from its
owner for U.S. federal income tax purposes and whose regarded owner is not a “United States Person” as defined in Section 7701(a)(30) of the
Code.
“ Foreign Subsidiary ” shall mean any Subsidiary that is incorporated or organized under the laws of any jurisdiction other than the
United States of America, any State thereof or the District of Columbia.
“ Fronting Exposure ” shall mean, at any time there is a Defaulting Lender under any Revolving Facility, with respect to the L/C
Issuer, such Defaulting Lender’s Revolving Facility Percentage of the outstanding L/C Obligations under such Revolving Facility other than
L/C Obligations as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders or Cash Collateralized in
accordance with the terms hereof.
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“ FSHCO ” shall mean any Subsidiary that owns no material assets other than the Equity Interests of one or more Foreign
Subsidiaries that are CFCs and/or of one or more FSHCOs.
“ Funds ” shall mean the persons referred to in clauses (ii) through (iv) of the definition of the term “Sponsors.”
“ Future First Lien Notes ” shall mean senior secured loans or notes of the Borrower (which notes or loans may either be secured by
a first priority Lien on the Collateral that is pari passu with the Lien securing the Obligations or may be secured by a Lien ranking junior to the
Lien on the Collateral securing the Obligations) incurred after the Closing Date (a) the terms of which do not provide for any scheduled
repayment, mandatory redemption or sinking fund obligations prior to the latest Term B Facility Maturity Date in effect on the date of
incurrence (other than customary offers to repurchase upon a change of control, asset sale or event of loss and customary acceleration rights
after an event of default), (b) the covenants, events of default, guarantees, collateral and other terms of which (other than interest rates, fees,
floors, funding discounts and redemption or prepayment premiums), taken as a whole, are not more restrictive to the Borrower and the
Subsidiaries than those set forth in this Agreement; provided that a certificate of the Chief Financial Officer of the Borrower delivered to the
Administrative Agent in good faith at least three Business Days (or such shorter period as the Administrative Agent may reasonably agree)
prior to the incurrence of such Indebtedness, together with a reasonably detailed description of the material terms and conditions of such
Indebtedness or drafts of the documentation relating thereto, stating that the Borrower has determined in good faith that such terms and
conditions satisfy the foregoing requirement shall be conclusive evidence that such terms and conditions satisfy the foregoing requirement and
(c) of which no Subsidiary of the Borrower is a borrower or guarantor other than any Subsidiary Loan Party. Notes issued by the Borrower in
exchange for any Future First Lien Notes in accordance with the terms of a registration rights agreement entered into in connection with the
issuance of such Future First Lien Notes shall also be considered Future First Lien Notes.
“ GAAP ” shall mean generally accepted accounting principles in effect from time to time in the United States, applied on a
consistent basis, subject to the provisions of Section 1.02; provided that any reference to the application of GAAP in Sections 3.13(b), 3.20,
5.03, 5.07 and 6.02(e) to a Foreign Subsidiary (and not as a consolidated Subsidiary of the Borrower) shall mean generally accepted accounting
principles in effect from time to time in the jurisdiction of organization of such Foreign Subsidiary.
“ Gaming Authority ” shall mean, in any jurisdiction in which the Borrower or any of its subsidiaries manages or conducts any
casino, gaming business or activities, the applicable gaming board, commission, or other governmental gaming regulatory body or agency
which (a) has, or may at any time after the Closing Date have, jurisdiction over the gaming activities at the Borrower’s or its subsidiaries’
properties or any successor to such authority or (b) is, or may at any time after the Closing Date be, responsible for interpreting, administering
and enforcing the Gaming Laws.
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“ Gaming Laws ” shall mean all applicable constitutions, treaties, laws, rules, agreements, regulations and orders and statutes
pursuant to which any Gaming Authority possesses regulatory, licensing or permit authority over gaming, gambling or casino activities and all
rules, rulings, orders, ordinances, regulations of any Gaming Authority applicable to the gambling, casino, gaming businesses or activities of
the Borrower or any of its subsidiaries in any jurisdiction, as in effect from time to time, including the policies, interpretations and
administration thereof by the Gaming Authorities.
“ Global Intercompany Note ” shall mean a promissory note substantially in the form of Exhibit K , evidencing Indebtedness owed
among Loan Parties and their Subsidiaries.
“ Governmental Authority ” shall mean any federal, state, local or foreign court or governmental agency, authority, instrumentality
or regulatory or legislative body.
“ Guarantee ” of or by any person (the “ guarantor ”) shall mean (a) any obligation, contingent or otherwise, of the guarantor
guaranteeing or having the economic effect of guaranteeing any Indebtedness or other monetary obligation payable or performable by another
person (the “ primary obligor ”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect,
(i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation, (ii) to purchase or
lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof,
(iii) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the
primary obligor to pay such Indebtedness or other obligation or (iv) entered into for the purpose of assuring in any other manner the holders of
such Indebtedness or other obligation of the payment thereof or to protect such holders against loss in respect thereof (in whole or in part), or
(b) any Lien on any assets of the guarantor securing any Indebtedness (or any existing right, contingent or otherwise, of the holder of
Indebtedness to be secured by such a Lien) of any other person, whether or not such Indebtedness or other obligation is assumed by the
guarantor; provided , however , the term “Guarantee” shall not include endorsements for deposit or collection in the ordinary course of business
or customary and reasonable indemnity obligations in effect on the Closing Date or entered into in connection with any acquisition or
disposition of assets permitted by this Agreement (other than such obligations with respect to Indebtedness). The amount of any Guarantee
shall be deemed to be an amount equal to the stated or determinable amount of the Indebtedness in respect of which such Guarantee is made or,
if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by such person in good faith.
“ guarantor ” shall have the meaning assigned to such term in the definition of the term “Guarantee.”
“ Guarantor ” shall mean each of the Loan Parties other than the Borrower.
“ Harrah’s New Orleans Entities ” shall mean, collectively, (i) JCC Holding and (ii) Jazz Casino Co., LLC and JCC Fulton
Development, LLC, each, in the case of this clause (ii), a Louisiana limited liability company.
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“ Hazardous Materials ” shall mean all pollutants, contaminants, wastes, chemicals, materials, substances and constituents,
including, without limitation, explosive or radioactive substances or petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls or radon gas, of any nature subject to regulation or which can give rise to liability under any
Environmental Law.
“ Hedge Bank ” shall mean any person that is (or an Affiliate thereof is) an Agent, the Arranger or a Lender on the Closing Date (or
any person that becomes an Agent, the Arranger or Lender or Affiliate thereof after the Closing Date) and that enters into a Swap Agreement,
in each case, in its capacity as a party to such Swap Agreement.
“ Holdings ” shall have the meaning assigned to such term in the introductory paragraph of this Agreement.
“ Holdings Guarantee Agreement ” shall mean the Holdings Guarantee Agreement (First Lien) substantially in the form of Exhibit
O , dated and effective as of the Closing Date, between Holdings and the Collateral Agent, as amended, restated, supplemented, waived or
otherwise modified from time to time.
“ Honor Date ” shall have the meaning assigned to such term in Section 2.05(c)(i).
“ ICE LIBOR ” shall have the meaning assigned to such term in the definition of “Eurocurrency Rate.”
“ Immaterial Subsidiary ” shall mean any Subsidiary that (a) did not, as of the last day of the fiscal quarter of the Borrower most
recently ended for which financial statements have been (or were required to be) delivered pursuant to Section 5.04(a) or 5.04(b), have assets
with a value in excess of 1.0% of the Consolidated Total Assets or revenues representing in excess of 1.0% of total revenues of the Borrower
and the Subsidiaries on a combined or consolidated basis as of such date and (b) taken together with all Immaterial Subsidiaries as of the last
day of the fiscal quarter of the Borrower most recently ended, did not have assets with a value in excess of 5.0% of Consolidated Total Assets
or revenues representing in excess of 5.0% of total revenues of the Borrower and the Subsidiaries on a combined or consolidated basis as of
such date; provided , that the Borrower may elect in its sole discretion to exclude as an Immaterial Subsidiary any Subsidiary that would
otherwise meet the definition thereof.
“ Increased Amount ” of any Indebtedness shall mean any increase in the amount of such Indebtedness in connection with any
accrual of interest, the accretion of accreted value, the amortization of original issue discount, the payment of interest in the form of additional
Indebtedness or in the form of common stock of the Borrower, the accretion of original issue discount or liquidation preference and increases in
the amount of Indebtedness outstanding solely as a result of fluctuations in the exchange rate of currencies.
“ Increased Amount Date ” shall have the meaning assigned to such term in Section 2.21(a).
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“ Incremental Amount ” shall mean, at any time, the excess, if any, of (a) $150.0 million; over (b) the aggregate principal amount of
all outstanding Incremental Term Loans and Incremental Revolving Facility Commitments established after the Closing Date pursuant to
Section 2.21 (other than Incremental Term Loans and Incremental Revolving Facility Commitments in respect of Refinancing Term Loans,
Extended Term Loans, Extended Revolving Facility Commitments or Replacement Revolving Facility Commitments, respectively).
“ Incremental Assumption Agreement ” shall mean an Incremental Assumption Agreement among the Borrower, the Administrative
Agent and one or more Incremental Term Lenders and/or Incremental Revolving Facility Lenders entered into pursuant to Section 2.21.
“ Incremental Loans ” shall mean any Loans made by one or more Lenders to the Borrower under an Incremental Term Facility or a
Revolving Facility consisting of Incremental Revolving Facility Commitments.
“ Incremental Revolving Facility Commitment ” shall mean any increased or incremental Revolving Facility Commitment provided
pursuant to Section 2.21.
“ Incremental Revolving Facility Lender ” shall mean a Lender with a Revolving Facility Commitment or an outstanding Revolving
Facility Loan as a result of an Incremental Revolving Facility Commitment.
“ Incremental Revolving Facility Loan ” shall mean a Loan made by an Incremental Revolving Facility Lender pursuant to
Section 2.01(b).
“ Incremental Term Borrowing ” shall mean a Borrowing comprised of Incremental Term Loans.
“ Incremental Term Facility ” shall mean any Class of Incremental Term Loan Commitments and the Incremental Term Loans
made hereunder.
“ Incremental Term Facility Maturity Date ” shall mean, with respect to any Class of Incremental Term Loans established pursuant
to an Incremental Assumption Agreement, the maturity date for such Class as set forth in such Incremental Assumption Agreement.
“ Incremental Term Lender ” shall mean a Lender with an Incremental Term Loan Commitment or an outstanding Incremental
Term Loan.
“ Incremental Term Loan Commitment ” shall mean the commitment of any Lender, established pursuant to Section 2.21, to make
Incremental Term Loans to the Borrower.
“ Incremental Term Loan Installment Date ” shall have, with respect to any Class of Incremental Term Loans established pursuant
to an Incremental Assumption Agreement, the meaning assigned to such term in Section 2.10(a)(ii).
“ Incremental Term Loans ” shall mean Term Loans made by one or more Lenders to the Borrower pursuant to Section 2.01(c).
Incremental Term Loans may be made in the form of additional Term B Loans or, to the extent permitted by Section 2.21 and provided for in
the relevant Incremental Assumption Agreement, Other Term Loans (including in the form of Extended Term Loans or Refinancing Term
Loans, as applicable).
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“ Indebtedness ” of any person shall mean, if and to the extent (other than with respect to clause (h) below) the same would
constitute indebtedness or a liability in accordance with GAAP, 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 issued or
assumed as the deferred purchase price of property or services (other than such obligations accrued in the ordinary course), to the extent the
same would be required to be shown as a long-term liability on a balance sheet prepared in accordance with GAAP, (d) all Capital Lease
Obligations of such person, (e) all net payments that such person would have to make in the event of an early termination, on the date
Indebtedness of such person is being determined, in respect of outstanding Swap Agreements, (f) the principal component of all obligations,
contingent or otherwise, of such person as an account party in respect of letters of credit, (g) the principal component of all obligations of such
person in respect of bankers’ acceptances, (h) all Guarantees by such person of Indebtedness described in clauses (a) to (g) above and (i) the
amount of all obligations of such person with respect to the redemption, repayment or other repurchase of any Disqualified Stock (excluding
accrued dividends that have not increased the liquidation preference of such Disqualified Stock); provided , that Indebtedness shall not include
(A) trade and other ordinary course payables, accrued expenses and intercompany liabilities arising in the ordinary course of business,
(B) prepaid or deferred revenue arising in the ordinary course of business, (C) purchase price holdbacks arising in the ordinary course of
business in respect of a portion of the purchase prices of an asset to satisfy unperformed obligations of the seller of such asset or (D) earn-out
obligations until such obligations become a liability on the balance sheet of such person in accordance with GAAP. The Indebtedness of any
person shall include the Indebtedness of any partnership in which such person is a general partner, other than to the extent that the instrument
or agreement evidencing such Indebtedness expressly limits the liability of such person in respect thereof. To the extent not otherwise included,
Indebtedness shall include the amount of any Receivables Net Investment.
“ Indemnified Taxes ” shall mean all Taxes imposed on or with respect to or measured by any payment by or on account of any
obligation of any Loan Party hereunder or under any other Loan Document other than Excluded Taxes and Other Taxes.
“ Indemnitee ” shall have the meaning assigned to such term in Section 9.05(b).
“ Ineligible Institution ” shall mean the persons identified as “Disqualified Lenders” in writing to the Arranger by Holdings or the
Borrower on or prior to the Closing Date, and bona fide competitors of the Borrower as may be identified in writing to the Administrative
Agent by Holdings or the Borrower from time to time after the Closing Date, with the consent of the Administrative Agent (not to be
unreasonably withheld or delayed), by delivery of a notice thereof to the Administrative Agent setting forth such person or persons (or the
person or persons previously identified to the Administrative Agent that are to be no longer considered “Ineligible Institutions”).
“ Information ” shall have the meaning assigned to such term in Section 3.14(a).
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“ Intellectual Property Right ” shall have the meaning assigned to such term in Section 3.22.
“ Interest Coverage Ratio ” shall mean, on any date, the ratio of (a) EBITDA for the Test Period most recently ended as of such date
to (b) Interest Expense (other than Interest Expense in respect of Qualified Non-Recourse Debt) for such Test Period, all determined on a
combined or consolidated basis in accordance with GAAP; provided , that the Interest Coverage Ratio shall be determined for the relevant Test
Period on a Pro Forma Basis; provided , further , however , that for purposes of calculating the Interest Coverage Ratio from and after any
Covenant Resumption Date, (i) EBITDA for the fiscal quarter in which the relevant Qualifying Act of Terrorism shall have occurred,
(ii) EBITDA for any fiscal quarter following such quarter referred to in clause (i) in which a Material Disruption existed and (iii) EBITDA for
the next succeeding fiscal quarter after the latest quarter to occur of any quarter referred to in clause (i) or (ii) shall, in each case, be the greater
of (1) Substituted EBITDA and (2) actual EBITDA for such quarter. For the purposes of the foregoing, “ Substituted EBITDA ” shall mean the
EBITDA for the fiscal quarter immediately preceding the fiscal quarter referred to in clause (i) of the previous sentence, in each case subject to
customary seasonal adjustments (as determined in good faith by the Borrower and set forth in a certificate of a Responsible Officer of the
Borrower delivered to the Administrative Agent).
“ Interest Election Request ” shall mean a request by the Borrower to convert or continue a Term Borrowing or Revolving Facility
Borrowing in accordance with Section 2.07.
“ Interest Expense ” shall mean, with respect to any person for any period, the sum of (a) gross interest expense of such person for
such period on a combined or consolidated basis, including (i) the amortization of debt discounts, (ii) the amortization of all fees (including
fees with respect to Swap Agreements) payable in connection with the incurrence of Indebtedness to the extent included in interest expense and
(iii) the portion of any payments or accruals with respect to Capital Lease Obligations allocable to interest expense, (b) capitalized interest of
such person, and (c) commissions, discounts, yield and other fees and charges incurred in connection with any Permitted Receivables Financing
which are payable to any person other than a Loan Party. For purposes of the foregoing, gross interest expense shall be determined after giving
effect to any net payments made or received and costs incurred by the Borrower and the Subsidiaries with respect to Swap Agreements, and
interest on a Capital Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by the Borrower to be the rate of
interest implicit in such Capital Lease Obligation in accordance with GAAP.
“ Interest Payment Date ” shall mean, (a) as to any Loan other than an ABR Loan, the last day of each Interest Period applicable to
such Loan and the scheduled maturity date of such Loan; provided , however , that if any Interest Period for a Eurocurrency Loan exceeds three
months, the respective dates that fall every three months after the beginning of such Interest Period shall also be Interest Payment Dates; and
(b) as to any ABR Loan, the last Business Day of each March, June, September and December and the scheduled maturity date of such Loan.
“ Interest Period ” shall mean, as to each Eurocurrency Loan, the period commencing on the date such Eurocurrency Loan is
disbursed or converted to or continued as a Eurocurrency Loan and ending on the date one, two, three or six months (or twelve months if
agreed to by each applicable Lender or such period of shorter than one month as may be consented to by the Administrative Agent) thereafter,
as selected by the Borrower; provided that:
(a) any Interest Period that would otherwise end on a day that is not a Business Day shall be extended to the next succeeding
Business Day unless such Business Day falls in another calendar month, in which case such Interest Period shall end on the next
preceding Business Day;
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(b) any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at
the end of such Interest Period; and
(c) no Interest Period for any Loan shall extend beyond the maturity date of such Loan.
Interest shall accrue from and including the first day of an Interest Period to but excluding the last day of such Interest Period.
“ Investment ” shall have the meaning assigned to such term in Section 6.04.
“ ISP ” shall mean, with respect to any Letter of Credit, the “International Standby Practices 1998” published by the Institute of
International Banking Law & Practice (or such later version thereof as may be in effect at the time of issuance).
“ Issuer Documents ” shall mean, with respect to any Letter of Credit, the Letter of Credit Application, and any other document,
agreement and instrument entered into by the L/C Issuer and the Borrower (or any Subsidiary) or in favor of the L/C Issuer and relating to such
Letter of Credit.
“ JCC Holding ” shall mean JCC Holding Company II, LLC, a Delaware limited liability company.
“ Judgment Currency ” shall have the meaning assigned to such term in Section 9.19.
“ Junior Financing ” shall have the meaning assigned to such term in Section 6.09(b).
“ L/C Advance ” shall mean, with respect to each Lender, such Lender’s funding of its participation in any L/C Borrowing in
accordance with its Revolving Facility Percentage under the applicable Revolving Facility. All L/C Advances shall be denominated in Dollars
or other currency other than Dollars as may be acceptable to the Administrative Agent and each L/C Issuer in their sole discretion.
“ L/C Borrowing ” shall mean an extension of credit resulting from a drawing under any Letter of Credit which has not been
reimbursed on the date when made or refinanced as an ABR Revolving Loan. All L/C Borrowings shall be denominated in Dollars or other
currency other than Dollars as may be acceptable to the Administrative Agent and each L/C Issuer in their sole discretion.
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“ L/C Credit Extension ” shall mean, with respect to any Letter of Credit, the issuance thereof or extension of the expiry date
thereof, or the increase of the amount thereof.
“ L/C Issuer ” shall mean each L/C Issuer designated pursuant to Section 2.05(k), in each case in its capacity as an issuer of Letters
of Credit hereunder, and its successors in such capacity as provided in Section 8.09. An L/C Issuer may, in its discretion, arrange for one or
more Letters of Credit to be issued by Affiliates of such L/C Issuer, in which case the term “L/C Issuer” shall include any such Affiliate with
respect to Letters of Credit issued by such Affiliate. In the event that there is more than one L/C Issuer at any time, references herein and in the
other Loan Documents to the L/C Issuer shall be deemed to refer to the L/C Issuer in respect of the applicable Letter of Credit or to all L/C
Issuers, as the context requires.
“ L/C Issuer Fees ” shall have the meaning assigned to such term in Section 2.12(b).
“ L/C Obligations ” shall mean, as at any date of determination, the aggregate amount available to be drawn under all outstanding
Letters of Credit plus the aggregate of all Unreimbursed Amounts, including all L/C Borrowings. For all purposes of this Agreement, if on any
date of determination a Letter of Credit has expired by its terms but any amount may still be drawn thereunder by reason of the operation of
Rule 3.14 of the ISP, such Letter of Credit shall be deemed to be “outstanding” in the amount so remaining available to be drawn.
“ L/C Participation Fee ” shall have the meaning assigned such term in Section 2.12(b).
“ Lender ” shall mean each financial institution listed on Schedule 2.01 (other than any such person that has ceased to be a party
hereto pursuant to an Assignment and Acceptance in accordance with Section 9.04), as well as any person that becomes a “Lender” hereunder
pursuant to Section 9.04 or Section 2.21.
“ lending office ” shall mean, as to any Lender, the applicable branch, office or Affiliate of such Lender designated by such Lender
to make Loans.
“ Lender Participation Notice ” shall have the meaning assigned to such term in Section 2.11(g)(iii).
“ Letter of Credit ” or “ L/C ” shall mean any letter of credit issued hereunder. A Letter of Credit may be a commercial letter of
credit or a standby letter of credit.
“ Letter of Credit Application ” shall mean an application and agreement for the issuance or amendment of a Letter of Credit in the
form from time to time in use by the L/C Issuer.
“ Letter of Credit Commitment ” shall mean, with respect to each L/C Issuer, the commitment of such L/C Issuer to issue Letters of
Credit pursuant to Section 2.05.
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“ Letter of Credit Expiration Date ” shall mean, with respect to any Revolving Facility, the day that is five days prior to the
Revolving Facility Maturity Date for such Revolving Facility then in effect (or, if such day is not a Business Day, the next preceding Business
Day).
“ Letter of Credit Sublimit ” shall mean the aggregate Letter of Credit Commitments of the L/C Issuers, in an amount not to exceed
the Revolving Facility Commitment or such lesser amount set forth in an Incremental Assumption Agreement. The Letter of Credit Sublimit is
part of, and not in addition to, the Revolving Facility Commitments.
“ License Revocation ” shall mean the revocation, failure to renew or suspension of, or the appointment of a receiver, supervisor,
conservator or similar official with respect to, any casino, gambling or gaming license issued by any Gaming Authority covering any casino or
gaming facility of the Borrower or any of its Subsidiaries.
“ Lien ” shall mean, with respect to any asset, (a) any mortgage, deed of trust, lien, hypothecation, pledge, charge, security interest
or similar encumbrance in or on such asset and (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title
retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset;
provided that in no event shall an operating lease or an agreement to sell be deemed to constitute a Lien.
“ Liquor Authorities ” shall mean, in any jurisdiction in which the Borrower or any of its Subsidiaries sells and distributes liquor,
the applicable alcoholic beverage commission or other Governmental Authority responsible for interpreting, administering and enforcing the
Liquor Laws.
“ Liquor Laws ” shall mean the laws, rules, regulations and orders applicable to or involving the sale and distribution of liquor by
the Borrower or any of its Subsidiaries in any jurisdiction, as in effect from time to time, including the policies, interpretations and
administration thereof by the applicable Liquor Authorities.
“ Loan Documents ” shall mean (i) this Agreement, (ii) the Subsidiary Guarantee Agreement, (iii) the Holdings Guarantee
Agreement, (iv) the Security Documents, (v) each Incremental Assumption Agreement, (vi) any Note issued under Section 2.09(e) and (vii) the
Fee Letter; provided that for purposes of the expense reimbursement and indemnity provisions in Section 8.07 and Section 9.05 only, the First
Lien Intercreditor Agreement and any agreements governing any First Lien Notes, in each case, if applicable, shall be deemed to be “ Loan
Documents .”
“ Loan Obligations ” shall mean (a) the due and punctual payment by the Borrower of (i) the unpaid principal of and interest
(including interest accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether
allowed or allowable in such proceeding) on the Loans made to the Borrower under this Agreement, when and as due, whether at maturity, by
acceleration, upon one or more dates set for prepayment or otherwise, (ii) each payment required to be made by the Borrower under this
Agreement in respect of any Letter of Credit, when and as due, including payments in respect of
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reimbursement of disbursements, interest thereon (including interest accruing during the pendency of any bankruptcy, insolvency, receivership
or other similar proceeding, regardless of whether allowed or allowable in such proceeding) and obligations to provide Cash Collateral and
(iii) all other monetary obligations of the Borrower owed under or pursuant to this Agreement and each other Loan Document, including
obligations to pay fees, expense reimbursement obligations and indemnification obligations, whether primary, secondary, direct, contingent,
fixed or otherwise (including monetary obligations incurred during the pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding), and (b) the due and punctual payment of all obligations of each
other Loan Party under or pursuant to each of the Loan Documents.
“ Loan Parties ” shall mean Holdings (prior to a Qualified IPO of the Borrower), the Borrower and the Subsidiary Loan Parties.
“ Loans ” shall mean the Term Loans and the Revolving Facility Loans.
“ Local Time ” shall mean Las Vegas, Nevada local time (daylight or standard, as applicable).
“ Majority Lenders ” of any Facility shall mean, at any time, Lenders under such Facility having Loans and unused Commitments
representing more than 50% of the sum of all Loans outstanding under such Facility and unused Commitments under such Facility at such time.
The Loans, Commitments and Revolving Facility Credit Exposures of any Defaulting Lender shall be disregarded in determining Majority
Lenders at any time.
“ Management Fee Contribution ” shall have the meaning assigned to such term in Section 6.07(b)(xiv).
“ Management Group ” shall mean the group consisting of the directors, executive officers and other management personnel of the
Borrower any Parent Entity (including CEC) or the Subsidiaries, as the case may be, on the Closing Date together with (x) any new directors
whose election by such boards of directors or whose nomination for election by the shareholders of the Borrower or any Parent Entity, as the
case may be, was approved by a vote of a majority of the directors of the Borrower or any Parent Entity, as the case may be, then still in office
who were either directors on the Closing Date or whose election or nomination was previously so approved and (y) executive officers and other
management personnel of the Borrower, any Parent Entity (including CEC) or the Subsidiaries, as the case may be, hired at a time when the
directors on the Closing Date together with the directors so approved constituted a majority of the directors of the Borrower or Holdings, as the
case may be.
“ Margin Stock ” shall have the meaning assigned to such term in Regulation U.
“ Material Adverse Effect ” shall mean a material adverse effect on the business, property, operations or financial condition of the
Borrower and the Subsidiaries, taken as a whole, or the validity or enforceability of any of the material Loan Documents or the rights and
remedies of the Administrative Agent and the Lenders thereunder.
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“ Material Disruption ” shall have the meaning assigned to such term in the definition of “Qualifying Act of Terrorism.”
“ Material Indebtedness ” shall mean Indebtedness (other than Loans and Letters of Credit and, prior to any release from escrow,
Indebtedness in respect of the Escrowed Credit Agreement and the Second Priority Senior Secured Notes) of any one or more of the Borrower
or any Subsidiary in an aggregate principal amount exceeding $25.0 million.
“ Material Subsidiary ” shall mean any Subsidiary other than Immaterial Subsidiaries.
“ Maximum Rate ” shall have the meaning assigned to such term in Section 9.09.
“ Moody’s ” shall mean Moody’s Investors Service, Inc.
“ Mortgaged Properties ” shall mean the Owned Real Properties owned or leased by any Loan Party that are set forth on
Schedule 1.01(A) and each additional Owned Real Property encumbered by a Mortgage or Additional Mortgage pursuant to Section 5.10(c),
5.10(d), 5.10(h) or 5.11.
“ Mortgages ” shall mean, collectively, the mortgages, trust deeds, deeds of trust, deeds to secure debt, assignments of leases and
rents, and other security documents delivered with respect to Mortgaged Properties, substantially, in the case of mortgages, in the form of
Exhibit E (with such changes as are reasonably acceptable to the Collateral Agent), as amended, restated, supplemented or otherwise modified
from time to time. For the avoidance of doubt, the term “Mortgages” shall include, without limitation, the Additional Mortgages.
“ Multiemployer Plan ” shall mean a multiemployer plan as defined in Section 4001(a)(3) of ERISA to which Holdings, the
Borrower or any Subsidiary or any ERISA Affiliate (other than one considered an ERISA Affiliate only pursuant to subsection (m) or (o) of
Code Section 414) is making or accruing an obligation to make contributions, or has within any of the preceding six plan years made or
accrued an obligation to make contributions.
“ Non-Bank Certificate ” shall have the meaning assigned to such term in Section 2.17(e).
“ Net Income ” shall mean, with respect to any person, the net income (loss) of such person, determined in accordance with GAAP
and before any reduction in respect of preferred stock dividends.
“ Net Proceeds ” shall mean:
(a) 100% of the cash proceeds actually received by the Borrower or any Subsidiary (including any cash payments received by way
of deferred payment of principal pursuant to a note or installment receivable or purchase price adjustment receivable or otherwise and
including casualty insurance settlements and condemnation awards, but only as and when received) from any Asset Sale under
Section 6.05(g), net of (i) attorneys’ fees, accountants’ fees, investment banking fees, survey costs, title
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insurance premiums, and related search and recording charges, transfer taxes, deed or mortgage recording taxes, required debt payments
and required payments of other obligations relating to the applicable asset to the extent such debt or obligations are secured by a Lien
permitted hereunder (other than pursuant to the Loan Documents, any First Lien Obligations or Junior Financing) on such asset, other
customary expenses and brokerage, consultant and other customary fees actually incurred in connection therewith, (ii) Taxes paid or
payable (in the good faith determination of the Borrower) as a result thereof, and (iii) the amount of any reasonable reserve established in
accordance with GAAP against any adjustment to the sale price or any liabilities (other than any taxes deducted pursuant to clause (i) or
(ii) above) (x) related to any of the applicable assets and (y) retained by the Borrower or any of the Subsidiaries including, without
limitation, pension and other post-employment benefit liabilities and liabilities related to environmental matters or against any
indemnification obligations (however, the amount of any subsequent reduction of such reserve (other than in connection with a payment
in respect of any such liability) shall be deemed to be cash proceeds of such Asset Sale occurring on the date of such reduction); provided
, that, if the Borrower shall deliver a certificate of a Responsible Officer of the Borrower to the Administrative Agent promptly following
receipt of any such proceeds setting forth the Borrower’s intention to use any portion of such proceeds, to acquire, maintain, develop,
construct, improve, upgrade or repair assets useful in the business of the Borrower and the Subsidiaries or to make Permitted Business
Acquisitions and other permitted Investments hereunder (except for Permitted Investments or intercompany Investments in Subsidiaries),
in each case within 15 months of such receipt, such portion of such proceeds shall not constitute Net Proceeds except to the extent not,
within 15 months of such receipt, so used or contractually committed to be so used (it being understood that if any portion of such
proceeds are not so used within such 15-month period but within such 15-month period are contractually committed to be used, then upon
the termination of such contract, such remaining portion if not so used by such time shall constitute Net Proceeds as of the date of such
termination or expiry without giving effect to this proviso); provided , further , that (x) no net cash proceeds calculated in accordance
with the foregoing realized in any fiscal year shall constitute Net Proceeds in such fiscal year until the aggregate amount of all such net
cash proceeds in such fiscal year shall exceed $12.5 million (and thereafter only net cash proceeds in excess of such amount shall
constitute Net Proceeds), and (y) in any event, no net cash proceeds calculated in accordance with the foregoing realized in a single
transaction or series of related transactions shall constitute Net Proceeds unless such net cash proceeds shall exceed $5.0 million (and
thereafter only net cash proceeds in excess of such amount shall constitute Net Proceeds); and
(b) 100% of the cash proceeds from the incurrence, issuance or sale by the Borrower or any Subsidiary Loan Party of any
Indebtedness (other than Excluded Indebtedness), net of all taxes and fees (including investment banking fees), commissions, costs and
other expenses, in each case incurred in connection with such issuance or sale.
“ New Class Loans ” shall have the meaning assigned to such term in Section 9.08(f).
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“ New Project ” shall mean each capital project which is either a new project or a new feature at an existing project owned by the
Borrower or its Subsidiaries which receives a certificate of completion or occupancy and all relevant licenses, and in fact commences
operations.
“ New York Courts ” shall have the meaning assigned to such term in Section 9.15.
“ Non-Consenting Lender ” shall have the meaning assigned to such term in Section 2.19(c).
“ Non-Defaulting Lender ” shall mean, at any time, each Lender that is not a Defaulting Lender at such time.
“ Non-Extension Notice Date ” shall have the meaning assigned to such term in Section 2.05(b).
“ Non-Reinstatement Deadline ” shall have the meaning assigned to such term in Section 2.05(b).
“ Note ” shall have the meaning assigned to such term in Section 2.09(e).
“ Notes Offering Memorandum ” shall mean the final offering memorandum, dated April 14, 2014, in respect of the Second Priority
Senior Secured Notes.
“ Obligations ” shall mean, collectively, (a) the Loan Obligations, (b) obligations in respect of the Overdraft Line, (c) obligations in
respect of any Secured Cash Management Agreement and (d) obligations in respect of any Secured Swap Agreement; provided , that no
obligations in respect of the Overdraft Line, Secured Cash Management Agreements and Secured Swap Agreements shall constitute
Obligations while the Escrowed Credit Agreement is outstanding.
“ OFAC ” shall have the meaning set forth in the definition of “Embargoed Person.”
“ Offered Loans ” shall have the meaning assigned to such term in Section 2.11(g)(iii).
“ Operations Management Agreement ” shall mean (i) each of the real estate management agreements, shared service agreements
and any other operating management agreement entered into by the Borrower or any of its Subsidiaries with CEC or with any other direct or
indirect subsidiary or affiliate of CEC, (ii) each of the agreements identified as an “Operations Management Agreement” on Schedule 6.07 and
(iii), in each case, any and all modifications thereto, substitutions therefore and replacements thereof so long as such modifications,
substitutions and replacements are not materially less favorable, taken as a whole, to the Borrower and the Subsidiaries than the terms of such
agreements as in effect on the Closing Date, as determined by the Borrower in good faith.
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“ Other First Lien Obligations ” shall mean the “Other First Lien Obligations” as defined in the Collateral Agreement, including any
interest accruing after commencement of any bankruptcy or insolvency proceeding with respect to any holder of Other First Lien Obligations
whether or not allowed in such proceeding.
“ Other First Lien Secured Parties ” shall mean the “Other First Lien Secured Parties” as defined in the Collateral Agreement.
“ Other Taxes ” shall mean all present or future stamp or documentary Taxes or any other excise, transfer, sales, property,
intangible, mortgage recording, or similar Taxes, charges or levies arising from any payment made under any Loan Document or from the
execution, registration, delivery or enforcement of, or otherwise with respect to, the Loan Documents, and, for the avoidance of doubt,
excluding any Excluded Taxes.
“ Other Term Loans ” shall have the meaning assigned to such term in Section 2.21(a).
“ Outstanding Amount ” shall mean (i) with respect to any Loans on any date, the Dollar Equivalent amount of the aggregate
outstanding principal amount thereof after giving effect to any borrowings and prepayments or repayments of such Loans occurring on such
date; and (ii) with respect to any L/C Obligations on any date, the Dollar Equivalent amount of the aggregate outstanding amount of such L/C
Obligations on such date after giving effect to any L/C Credit Extension occurring on such date and any other changes in the aggregate amount
of the L/C Obligations as of such date, including as a result of any reimbursements by the Borrower of Unreimbursed Amounts.
“ Overdraft Line ” shall have the meaning assigned to such term in Section 6.01(w).
“ Overnight Rate ” shall mean, for any day, the greater of (i) the Federal Funds Rate and (ii) an overnight rate determined by the
Administrative Agent or the L/C Issuer, as the case may be, in accordance with banking industry rules on interbank compensation.
“ Owned Real Property ” shall mean each parcel of Real Property that is located in the United States and is owned in fee by any
Loan Party that has an individual fair market value (on a per property basis and as determined by the Borrower in good faith) of at least $15.0
million (x) as of the Closing Date, for Real Property owned on the Closing Date or (y) as of the date of acquisition, for Real Property acquired
after the Closing Date ( provided that such $15.0 million threshold shall not be applicable in the case of Real Property that is integrally related
to the ownership or operation of a Mortgaged Property or otherwise necessary for such Mortgaged Property to be in compliance with all
requirements of law applicable to such Mortgaged Property); provided that, with respect to any Real Property that is partially owned in fee and
partially leased by any Loan Party, Owned Real Property will include both that portion of such material real property that is owned in fee and
that portion that is so leased to the extent that (i) such leased portion is integrally related to the ownership or operation of the balance of such
material real property or is otherwise necessary for such real property to be in compliance with all Requirements of Law applicable to such
material real property in fee and only if (ii) such
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portion that is owned in fee has an individual fair market value (as determined by the Borrower in good faith) of at least $15.0 million (x) as of
the Closing Date, for Real Property so partially owned and partially leased on the Closing Date or (y) as of the date of acquisition, for Real
Property acquired after the Closing Date so partially owned and partially leased ( provided that such $15.0 million threshold shall not be
applicable in the case of Real Property that is integrally related to the ownership or operation of a Mortgaged Property or otherwise necessary
for such Mortgaged Property to be in compliance with all requirements of law applicable to such Mortgaged Property) and (iii) a mortgage in
favor of the Collateral Agent (for the benefit of the Secured Parties) is permitted on such Real Property by applicable law and by the terms of
any lease, or other applicable document governing any leased portion of such Real Property, or with the consent of the applicable lessor or
grantor (to the extent obtained after the applicable Loan Party has utilized commercially reasonable efforts to obtain same).
“ Parent Entity ” shall mean Holdings and any other direct or indirect parent of the Borrower.
“ Participant ” shall have the meaning assigned to such term in Section 9.04(c)(i).
“ Participant Register ” shall have the meaning assigned to such term in Section 9.04(c)(ii).
“ PBGC ” shall mean the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity
performing similar functions.
“ Perfection Certificate ” shall mean the Perfection Certificate with respect to the Borrower and the other Loan Parties in a form
reasonably satisfactory to the Administrative Agent, as the same may be supplemented from time to time to the extent required by
Section 5.04(f).
“ Permitted Business Acquisition ” shall mean any acquisition of all or substantially all the assets of, or all or substantially all the
Equity Interests (other than directors’ qualifying shares) in, or merger, consolidation or amalgamation with, a person or division or line of
business of a person (or any subsequent investment made in a person, division or line of business previously acquired in a Permitted Business
Acquisition), if immediately after giving effect thereto: (i) no Event of Default shall have occurred and be continuing or would result
therefrom; (ii) all transactions related thereto shall be consummated in accordance with applicable laws; (iii) with respect to any such
acquisition or investment with a fair market value (as determined in good faith by the Borrower) in excess of $10.0 million, after giving effect
to such acquisition or investment and any related transactions, the Borrower shall be in Pro Forma Compliance; (iv) any acquired or newly
formed Subsidiary shall not be liable for any Indebtedness except for Indebtedness permitted by Section 6.01; (v) to the extent required by
Section 5.10, any person acquired in such acquisition, if acquired by a Loan Party, shall be merged into a Loan Party or become, following the
consummation of such acquisition in accordance with Section 5.10, a Loan Party; (vi) the aggregate outstanding amount of such acquisitions
and investments by Loan Parties in assets that are not owned by the Loan Parties or in Equity Interests in persons that are not Loan Parties or
do not become Loan Parties following the consummation of such acquisition shall not exceed the greater of (x) 4.0% of Consolidated
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Total Assets as of the end of the fiscal quarter immediately prior to the date of such acquisition or investment for which financial statements
have been delivered pursuant to Section 5.04(a) or 5.04(b) and (y) $50.0 million; and (vii) if the date of the consummation of such acquisition
shall occur during a Covenant Suspension Period, the sum of (1) the aggregate Available Unused Commitments under the Revolving Facilities
plus (2) all Unrestricted Cash and Permitted Investments of the Borrower and the Subsidiaries on such date shall not be less than $50.0 million;
provided that this clause (vii) shall not apply to any acquisition consummated pursuant to binding commitments in existence at or prior to the
date on which the relevant Covenant Suspension Period began.
“ Permitted Holder Group ” shall have the meaning assigned to such term in the definition of “Permitted Holder.”
“ Permitted Holder ” shall mean each of (i) the Sponsors, (ii) the Management Group, (iii) CEC, CAC and CGP and (iv) any Person
that has no material assets other than the capital stock of the Borrower, any Parent Entity or other Permitted Holders and that, directly or
indirectly, holds or acquires beneficial ownership of 100% on a fully diluted basis of the voting Equity Interests of the Borrower, and of which
no other Person or “group” (within the meaning of Rules 13d-3 and 13d-5 under the Exchange Act as in effect on the Closing Date), other than
any of the other Permitted Holders specified in clauses (i) through (iv), beneficially owns more than 50% (or, following a Qualified IPO, the
greater of 35% and the percentage beneficially owned by the Permitted Holders specified in clauses (i) through (iv)) on a fully diluted basis of
the voting Equity Interests thereof, and (v) any “group” (within the meaning of Rules 13d-3 and 13d-5 under the Exchange Act as in effect on
the Closing Date) the members of which include any of the other Permitted Holders specified in clauses (i) through (iv) above and that, directly
or indirectly, hold or acquire beneficial ownership of the voting Equity Interests of the Borrower (a “ Permitted Holder Group ”), so long as
(1) each member of the Permitted Holder Group has voting rights proportional to the percentage of ownership interests held or acquired by
such member and (2) no Person or other “group” (other than the other Permitted Holders specified in clauses (i) through (iv)) beneficially owns
more than 50% (or, following a Qualified IPO, the greater of 35% and the percentage beneficially owned by the Permitted Holders specified in
clauses (i) through (iv)) on a fully diluted basis of the voting Equity Interests held by the Permitted Holder Group.
“ Permitted Investments ” shall mean:
(a) direct obligations of the United States of America or any member of the European Union or any agency thereof or obligations
guaranteed by the United States of America or any member of the European Union or any agency thereof, in each case with maturities not
exceeding two years;
(b) time deposit accounts, certificates of deposit and money market deposits maturing within 180 days of the date of acquisition
thereof issued by a bank or trust company that is organized under the laws of the United States of America, any state thereof or any
foreign country recognized by the United States of America having capital, surplus and undivided profits in excess of $250.0 million and
whose long-term debt, or whose parent holding company’s long-term debt, is rated A (or such similar equivalent rating or higher by at
least one nationally recognized statistical rating organization (as defined in Rule 436 under the Securities Act));
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(c) repurchase obligations with a term of not more than 180 days for underlying securities of the types described in clause (a) above
entered into with a bank meeting the qualifications described in clause (b) above;
(d) commercial paper, maturing not more than one year after the date of acquisition, issued by a corporation (other than an Affiliate
of the Borrower) organized and in existence under the laws of the United States of America or any foreign country recognized by the
United States of America with a rating at the time as of which any investment therein is made of P-1 (or higher) according to Moody’s, or
A-1 (or higher) according to S&P (or such similar equivalent rating or higher by at least one nationally recognized statistical rating
organization (as defined in Rule 436 under the Securities Act));
(e) securities with maturities of two years or less from the date of acquisition issued or fully guaranteed by any State,
commonwealth or territory of the United States of America, or by any political subdivision or taxing authority thereof, and rated at least
A by S&P or A by Moody’s (or such similar equivalent rating or higher by at least one nationally recognized statistical rating
organization (as defined in Rule 436 under the Securities Act));
(f) shares of mutual funds whose investment guidelines restrict 95% of such funds’ investments to those satisfying the provisions of
clauses (a) through (e) above;
(g) money market funds that (i) comply with the criteria set forth in Rule 2a-7 under the Investment Company Act of 1940, (ii) are
rated AAA by S&P and Aaa by Moody’s and (iii) have portfolio assets of at least $5,000.0 million; and
(h) time deposit accounts, certificates of deposit and money market deposits in an aggregate face amount not in excess of 0.5% of
the total assets of the Borrower and the Subsidiaries, on a combined or consolidated basis, as of the end of the Borrower’s most recently
completed fiscal year; and
(i) instruments equivalent to those referred to in clauses (a) through (h) above denominated in any foreign currency comparable in
credit quality and tenor to those referred to above and commonly used by corporations for cash management purposes in any jurisdiction
outside the United States to the extent reasonably required in connection with any business conducted by any Subsidiary organized in
such jurisdiction.
“ Permitted Junior Intercreditor Agreement ” shall mean, with respect to any Liens on Collateral that are intended to be junior to
any Liens securing the Term B Loans (including, for the avoidance of doubt, junior Liens pursuant to Section 2.21(b)(ii)), either (as the
Borrower shall elect) (x) any Second Lien Intercreditor Agreement if such Liens secure “Second Priority Claims” (as defined therein),
(y) another intercreditor agreement not materially less favorable to the Lenders vis-à-vis such junior Liens than such Second Lien Intercreditor
Agreement (as determined by the Borrower in good faith) or (z) another intercreditor agreement the terms of
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which are consistent with market terms governing security arrangements for the sharing of liens on a junior basis at the time such intercreditor
agreement is proposed to be established, as determined by the Borrower and the Administrative Agent in the reasonable exercise of reasonable
judgment.
“ Permitted Liens ” shall have the meaning assigned to such term in Section 6.02.
“ Permitted Loan Purchase Assignment and Acceptance ” shall mean an assignment and acceptance entered into by a Lender as an
Assignor and Holdings, the Borrower or any Subsidiary as an Assignee, and accepted by the Administrative Agent, in the form of Exhibit F or
such other form as shall be approved by the Administrative Agent and the Borrower (such approval not to be unreasonably withheld or
delayed).
“ Permitted Loan Purchases ” shall have the meaning assigned to such term in Section 9.04(i).
“ Permitted Pari Passu Intercreditor Agreement ” shall mean, with respect to any Liens on Collateral that are intended to be secured
on a pari passu basis with the Liens securing the Term B Loans, either (as the Borrower shall elect) (x) the First Lien Intercreditor Agreement,
(y) another intercreditor agreement not materially less favorable to the Lenders vis-à-vis such pari passu Liens than the First Lien Intercreditor
Agreement (as determined by the Borrower in good faith) or (z) another intercreditor agreement the terms of which are consistent with market
terms governing security arrangements for the sharing of liens on a pari passu basis at the time such intercreditor agreement is proposed to be
established, as determined by the Borrower and the Administrative Agent in the exercise of reasonable judgment.
“ Permitted Receivables Documents ” shall mean all documents and agreements evidencing, relating to or otherwise governing a
Permitted Receivables Financing.
“ Permitted Receivables Financing ” shall mean one or more transactions pursuant to which (i) Receivables Assets or interests
therein are sold to or financed by one or more Special Purpose Receivables Subsidiaries, and (ii) such Special Purpose Receivables Subsidiaries
finance their acquisition of such Receivables Assets or interests therein, or the financing thereof, by selling or borrowing against Receivables
Assets; provided , that recourse to the Borrower or any Subsidiary (other than the Special Purpose Receivables Subsidiaries) in connection with
such transactions shall be limited to the extent customary for similar transactions in the applicable jurisdictions (including, to the extent
applicable, in a manner consistent with the delivery of a “true sale”/“absolute transfer” opinion with respect to any transfer by the Borrower or
any Subsidiary (other than a Special Purpose Receivables Subsidiary)).
“ Permitted Refinancing Indebtedness ” shall mean any Indebtedness issued in exchange for, or the net proceeds of which are used
to extend, refinance, renew, replace, defease or refund (collectively, to “ Refinance ”), the Indebtedness being Refinanced (or previous
refinancings thereof constituting Permitted Refinancing Indebtedness) (and, in the case of revolving Indebtedness being Refinanced, to effect a
corresponding reduction in the commitments with respect to such revolving Indebtedness being Refinanced); provided , that with
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respect to any Indebtedness being Refinanced, (a) the principal amount (or accreted value, if applicable) of such Permitted Refinancing
Indebtedness does not exceed the principal amount (or accreted value, if applicable) of the Indebtedness so Refinanced (plus unpaid accrued
interest and premium (including tender premiums) thereon and underwriting discounts, defeasance costs, fees, commissions, expenses, plus an
amount equal to any existing commitment utilized thereunder and letters of credit undrawn thereunder), (b) except with respect to
Section 6.01(i) and 6.01(z), the weighted average life to maturity of such Permitted Refinancing Indebtedness is greater than or equal to the
shorter of (i) the weighted average life to maturity of the Indebtedness being Refinanced and (ii) the weighted average life to maturity that
would result if all payments of principal on the Indebtedness being Refinanced that were due on or after the date that is one year following the
latest Term B Facility Maturity Date in effect on the date of incurrence were instead due on the date that is one year following such Term B
Facility Maturity Date, (c) if the Indebtedness being Refinanced is subordinated in right of payment to the Loan Obligations under this
Agreement, such Permitted Refinancing Indebtedness shall be subordinated in right of payment to such Loan Obligations on terms in the
aggregate not materially less favorable to the Lenders as those contained in the documentation governing the Indebtedness being Refinanced
and (d) no Permitted Refinancing Indebtedness shall have greater guarantees or security than the Indebtedness being Refinanced (except that a
Loan Party may be added as an additional obligor) unless such security is otherwise permitted by Section 6.02 at such time of incurrence;
provided further , that with respect to a Refinancing of Indebtedness permitted hereunder that is subordinated, such Permitted Refinancing
Indebtedness shall (i) be subordinated to the guarantee by Subsidiary Loan Parties of the Loan Obligations, and (ii) be otherwise on terms
(excluding interest rate and redemption premiums), taken as a whole, not materially less favorable to the Lenders than those contained in the
documentation governing the Indebtedness being Refinanced.
“ person ” shall mean any natural person, corporation, business trust, joint venture, association, company, partnership, limited
liability company or government, individual or family trusts, or any agency or political subdivision thereof.
“ PH Contribution ” shall mean, directly or indirectly and in a single transaction or a series of related transactions, the contribution
by CGP of all outstanding equity interests of the PH Entities to the capital of the Borrower.
“ PH Entities ” shall mean, collectively, PHWLV, LLC, a Nevada limited liability company and TSP Owner, LLC, a Delaware
limited liability company.
“ Plan ” shall mean any employee pension benefit plan (other than a Multiemployer Plan) that is, (i) subject to the provisions of
Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and (ii) sponsored or maintained (at the time of determination or at
any time within the five years prior thereto) by Holdings, the Borrower or any ERISA Affiliate, and (iii) in respect of which Holdings, the
Borrower, any Subsidiary or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be)
an “employer” as defined in Section 3(5) of ERISA.
“ Platform ” shall have the meaning assigned to such term in Section 9.17(a).
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“ Pledged Collateral ” shall have the meaning assigned to such term in the Collateral Agreement.
“ Pre-Opening Expenses ” shall mean, with respect to any fiscal period, the amount of expenses (other than interest expense)
incurred with respect to capital projects which are classified as “pre-opening expenses” or “project opening costs” (or any similar or equivalent
caption) on the applicable financial statements of the Borrower and the Subsidiaries for such period, prepared in accordance with GAAP.
“ primary obligor ” shall have the meaning given such term in the definition of the term “Guarantee.”
“ Prime Rate ” shall mean the rate of interest per annum determined from time to time by Credit Suisse AG as its prime rate in
effect at its principal office in New York City and notified to the Borrower. The Prime Rate is a rate set by Credit Suisse AG based upon
various factors including Credit Suisse AG’s costs and desired return, general economic conditions and other factors, and is used as a reference
point for pricing some loans, which may be priced at, above or below such rate.
“ Pro Forma Basis ” shall mean, as to any person, for any events as described below that occur subsequent to the commencement of
a period for which the financial effect of such events is being calculated, and giving effect to the events for which such calculation is being
made, such calculation as will give pro forma effect to such events as if such events occurred on the first day of the four consecutive fiscal
quarter period ended on or before the occurrence of such event (the “ Reference Period ”): (i) in making any determination on a Pro Forma
Basis, pro forma effect shall be given to any Asset Sale, any acquisition, Investment, capital expenditure, construction, repair, replacement,
improvement, development, disposition, merger, amalgamation, consolidation (including the Transactions) (or any similar transaction or
transactions not otherwise permitted under Section 6.04 or 6.05 that require a waiver or consent of the Required Lenders and such waiver or
consent has been obtained), any dividend, distribution or other similar payment, any designation of any Subsidiary as an Unrestricted
Subsidiary and any Subsidiary Redesignation, New Project, and any restructurings of the business of the Borrower or any of its Subsidiaries
that the Borrower or any of its Subsidiaries has determined to make and/or made and are expected to have a continuing impact and are factually
supportable, which would include cost savings resulting from head count reduction, closure of facilities and similar operational and other cost
savings, which adjustments the Borrower determines are reasonable as set forth in a certificate of a Financial Officer of the Borrower (the
foregoing, together with any transactions related thereto or in connection therewith, the “ relevant transactions ”), in each case that occurred
during the Reference Period (or occurring during the Reference Period or thereafter and through and including the date upon which the
respective Permitted Business Acquisition or relevant transaction is consummated), (ii) in making any determination on a Pro Forma Basis,
(x) all Indebtedness (including Indebtedness issued, incurred or assumed as a result of, or to finance, any relevant transactions and for which
the financial effect is being calculated, whether incurred under this Agreement or otherwise, but excluding normal fluctuations in revolving
Indebtedness incurred for working capital purposes and amounts outstanding under any Permitted Receivables Financing, in each case not to
finance any acquisition) issued, incurred, assumed or permanently repaid during the
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Reference Period (or occurring during the Reference Period or thereafter and through and including the date upon which the respective
Permitted Business Acquisition or relevant transaction is consummated) shall be deemed to have been issued, incurred, assumed or
permanently repaid at the beginning of such period, (y) Interest Expense of such person attributable to interest on any Indebtedness, for which
pro forma effect is being given as provided in preceding clause (x), bearing floating interest rates shall be computed on a pro forma basis as if
the rates that would have been in effect during the period for which pro forma effect is being given had been actually in effect during such
periods, and (z) with respect to each New Project which commences operations and records not less than one full fiscal quarter’s operations
during the Reference Period, the operating results of such New Project shall be annualized on a straight line basis during such period and
(iii) (A) any Subsidiary Redesignation then being designated, effect shall be given to such Subsidiary Redesignation and all other Subsidiary
Redesignations after the first day of the relevant Reference Period and on or prior to the date of the respective Subsidiary Redesignation then
being designated, collectively, and (B) any designation of a Subsidiary as an Unrestricted Subsidiary, effect shall be given to such designation
and all other designations of Subsidiaries as Unrestricted Subsidiaries after the first day of the relevant Reference Period and on or prior to the
date of the then applicable designation of a Subsidiary as an Unrestricted Subsidiary, collectively.
Pro forma calculations made pursuant to the definition of the term “Pro Forma Basis” shall be determined in good faith by a
Responsible Officer of the Borrower and may include, (i) adjustments to reflect (1) operating expense reductions and other operating
improvements, synergies or cost savings reasonably expected to result from such relevant pro forma event (including, to the extent applicable,
the Transactions) and (2) all adjustments of the type used in connection with the calculation of “Projected Run-Rate Adjusted EBITDA – Pro
Forma” as set forth in the Notes Offering Memorandum to the extent such adjustments, without duplication, continue to be applicable to such
Reference Period. The Borrower shall deliver to the Administrative Agent a certificate of a Financial Officer of the Borrower setting forth such
demonstrable or additional operating expense reductions, other operating improvements, or synergies and adjustments pursuant to clause
(2) above or cost savings and information and calculations supporting them in reasonable detail.
For purposes of this definition, any amount in a currency other than Dollars will be converted to Dollars based on the average
exchange rate for such currency for the most recent twelve month period immediately prior to the date of determination in a manner consistent
with that used in calculating EBITDA for the applicable period.
“ Pro Forma Compliance ” shall mean, at any date of determination, that the Borrower and the Subsidiaries shall, after giving effect
on a Pro Forma Basis to the relevant transactions (including the assumption, the issuance, incurrence and permanent repayment of
Indebtedness), not be in Default under this Agreement.
“ Pro Rata Share ” shall have the meaning assigned to such term in Section 9.08(f).
“ Project ” shall mean (i) any and all buildings, structures, fixtures, construction, development and other improvements of any
nature to be constructed, added to, or made on, under or about any Real Property (exclusive of any personal property) with respect to which the
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cost of such construction, additions or development is at least equal to $15.0 million and (ii) any planning processes or preparatory steps
undertaken to implement or further any such construction, additions or developments contemplated by the foregoing clause (i) of this definition
(including, without limitation, (a) the combination of two or more individual land parcels into one parcel, (b) the separation or division of one
or more individual land parcels into two or more parcels, (c) the re-zoning of parcels, and (d) demolition work on parcels).
“ Project Financing ” shall mean (1) any Capital Lease Obligation, mortgage financing, purchase money Indebtedness or other
similar Indebtedness incurred to finance the acquisition, lease, construction, repair, replacement, or improvement of any Undeveloped Land or
any refinancing of any such Indebtedness and (2) any Sale and Lease-Back Transaction of any Undeveloped Land.
“ Project Notice ” shall mean a notice delivered by a Responsible Officer of the Borrower pursuant to Section 5.11(a) identifying
the applicable Mortgaged Property constituting Undeveloped Land, providing a reasonable description of the applicable Project that the
Borrower anticipates in good faith will be undertaken with respect to such Undeveloped Land and identifying the Project Financing to be
entered into in connection with the financing of such Project.
“ Projections ” shall mean the projections of the Borrower and the Subsi