EX-2.1 2 d942263dex21.htm EX-2.1 EX-2.1

Exhibit 2.1

 

 

 

 

 

 

 

AMENDED & RESTATED BUSINESS COMBINATION AGREEMENT

by and among

DMY TECHNOLOGY GROUP, INC.,

RUSH STREET INTERACTIVE, LP,

THE SELLERS SIGNATORY HERETO,

DMY SPONSOR, LLC

and

RUSH STREET INTERACTIVE GP, LLC, IN ITS CAPACITY

AS THE SELLERS’ REPRESENTATIVE HEREUNDER

DATED AS OF OCTOBER 9, 2020

 

 

 

 

 

 

 

 

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Table of Contents

 

          Page  

ARTICLE I CERTAIN DEFINITIONS

     9  

Section 1.1

   Certain Definitions      9  

ARTICLE II PURCHASE AND SALE TRANSACTIONS

     29  

Section 2.1

  

Purchase and Sale of Acquired Company Units; Issuance of Buyer Class V Voting Stock

     29  

Section 2.2

   Purchase Price and Closing Date Payments      31  

Section 2.3

   Transaction Statement; Available Closing Date Cash; Third Party Invoices      32  

Section 2.4

   Example Pro Forma Calculations      34  

Section 2.5

   Closing Transactions      34  

Section 2.6

   Conditions to the Obligations of the Parties      34  

Section 2.7

   Company and Sellers Closing Deliveries      36  

Section 2.8

   Buyer Closing Deliveries      37  

Section 2.9

   Earnout      37  

Section 2.10

   Withholding      40  

ARTICLE III REPRESENTATIONS AND WARRANTIES REGARDING THE RSI COMPANIES

     41  

Section 3.1

   Organization; Authority; Enforceability      41  

Section 3.2

   Noncontravention      41  

Section 3.3

   Capitalization      42  

Section 3.4

   Financial Statements; No Undisclosed Liabilities      43  

Section 3.5

   No Material Adverse Effect      44  

Section 3.6

   Absence of Certain Developments      44  

Section 3.7

   Real Property      44  

Section 3.8

   Tax Matters      44  

Section 3.9

   Contracts      46  

Section 3.10

   Intellectual Property      48  

Section 3.11

   Data Security; Data Privacy      50  

Section 3.12

   Information Supplied      51  

Section 3.13

   Litigation      51  

Section 3.14

   Brokerage      51  

Section 3.15

   Labor Matters      51  

Section 3.16

   Employee Benefit Plans      53  

Section 3.17

   Insurance      54  

Section 3.18

   Compliance with Laws; Permits      54  

Section 3.19

   [Reserved]      55  

Section 3.20

   Title to and Sufficiency of Assets; No Bankruptcy      55  

Section 3.21

   Gaming      55  

Section 3.22

   Trade & Anti-Corruption Compliance      56  

Section 3.23

   Anti-Money Laundering Compliance      56  

Section 3.24

   Affiliate Transactions      57  

Section 3.25

   Compliance with Applicable Sanctions and Embargo Laws      57  

Section 3.26

   Inspections; Buyer’s Representations      57  

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF SELLERS

     58  

Section 4.1

   Organization; Authority; Enforceability      58  

Section 4.2

   Capitalization      58  

Section 4.3

   Noncontravention      59  

Section 4.4

   Information Supplied      59  

Section 4.5

   Litigation      59  

Section 4.6

   Brokerage      59  

Section 4.7

   Investment Intent      59  

 

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          Page  

Section 4.8

   Compliance with Laws      60  

Section 4.9

   Inspections; Buyer’s Representations      60  

ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE BUYER

     61  

Section 5.1

   Organization; Authority; Enforceability      61  

Section 5.2

   Capitalization      61  

Section 5.3

   Brokerage      62  

Section 5.4

   Trust Account      62  

Section 5.5

   Buyer SEC Documents; Controls      63  

Section 5.6

   Information Supplied; Proxy Statement      64  

Section 5.7

   Litigation      64  

Section 5.8

   Listing      64  

Section 5.9

   Investment Company      64  

Section 5.10

   Noncontravention      64  

Section 5.11

   Business Activities      65  

Section 5.12

   Investment Intent      65  

Section 5.13

   Tax Matters      66  

Section 5.14

   Compliance with Laws      67  

Section 5.15

   Inspections; Company and Sellers’ Representations      67  

Section 5.16

   Subscription Agreements      67  

ARTICLE VI INTERIM OPERATING COVENANTS

     68  

Section 6.1

   Interim Operating Covenants      68  

Section 6.2

   Interim Operating Covenants (Buyer)      71  

ARTICLE VII PRE-CLOSING AGREEMENTS

     72  

Section 7.1

   Commercially Reasonable Efforts; Further Assurances      72  

Section 7.2

   Trust & Closing Funding      72  

Section 7.3

   Listing      73  

Section 7.4

   LTIP      73  

Section 7.5

   Confidential Information      73  

Section 7.6

   Access to Information      73  

Section 7.7

   Notification of Certain Matters      74  

Section 7.8

   Regulatory Approvals; Efforts.      74  

Section 7.9

   Communications; Press Release; SEC Filings      75  

Section 7.10

   Expenses      78  

Section 7.11

   Releases      79  

Section 7.12

   Directors and Officers      80  

Section 7.13

   Employee Matters      81  

Section 7.14

   Chief Financial Officer      81  

Section 7.15

   Equity Financing; Cooperation      81  

Section 7.16

   [Reserved]      82  

Section 7.17

   Stock Transactions      83  

Section 7.18

   [Reserved.]      83  

Section 7.19

   Buyer A&R Certificate of Incorporation and Buyer A&R Bylaws      83  

Section 7.20

   Name Change      83  

Section 7.21

   Exclusivity      83  

Section 7.22

   GP Company LLCA      83  

Section 7.23

   Additional Special Limited Partner      84  

ARTICLE VIII ADDITIONAL AGREEMENTS

     84  

Section 8.1

   Access to Books and Records      84  

Section 8.2

   Transferred Names      85  

ARTICLE IX TAX MATTERS

     85  

Section 9.1

   Certain Tax Matters      85  

 

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          Page  

ARTICLE X TERMINATION

     90  

Section 10.1

   Termination      90  

Section 10.2

   Effect of Termination      91  

ARTICLE XI MISCELLANEOUS

     92  

Section 11.1

   Amendment and Waiver      92  

Section 11.2

   Waiver of Remedies; Survival of Representations and Warranties      92  

Section 11.3

   Sellers’ Representative      92  

Section 11.4

   Notices      94  

Section 11.5

   Assignment      94  

Section 11.6

   Severability      94  

Section 11.7

   Interpretation      94  

Section 11.8

   Entire Agreement      95  

Section 11.9

   Counterparts; Electronic Delivery      96  

Section 11.10

   Governing Law; Waiver of Jury Trial; Jurisdiction      96  

Section 11.11

   Trust Account Waiver      96  

Section 11.12

   Specific Performance      97  

Section 11.13

   No Third-Party Beneficiaries      97  

Section 11.14

   Disclosure Letters and Exhibits      97  

Section 11.15

   No Recourse      98  

Section 11.16

   Legal Representation      99  

Section 11.17

   Acknowledgement      100  

Section 11.18

   Equitable Adjustments      101  

 

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EXHIBITS

Exhibit A – Buyer A&R Certificate of Incorporation

Exhibit B – Buyer A&R Bylaws

Exhibit C – Founder Holders Forfeiture Agreement

Exhibit D – Company A&R LPA

Exhibit E – Tax Receivable Agreement

Exhibit F – Investor Rights Agreement

Exhibit G – Company and Sellers Bring-Down Certificate

Exhibit H – Buyer Bring-Down Certificate

Exhibit I – Unit Power

Exhibit J – Amended Sponsor Letter

Exhibit K – Services Agreement

Exhibit L – Example Pro Forma Calculations

Exhibit M – GP Company LLCA

Exhibit N – Form of Put-Call Agreement

 

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AMENDED & RESTATED BUSINESS COMBINATION AGREEMENT

This Amended & Restated Business Combination Agreement (as may be further amended, restated or amended and restated from time to time, this “Agreement”) is made and entered into as of October 9, 2020, by and among (i) dMY Technology Group, Inc., a Delaware corporation (the “Buyer”), (ii) Rush Street Interactive, LP, a Delaware limited partnership (the “Company”), (iii) the sellers set forth on the signatures pages hereto (collectively, the “Sellers” and each, a “Seller”), (iv) dMY Sponsor, LLC, a Delaware limited liability company (the “Sponsor”), and (v) Rush Street Interactive GP, LLC, a Delaware limited liability company, in its capacity as the Sellers’ Representative (in such capacity, the “Sellers’ Representative”). Each of the Buyer, the Company, the Sponsor, the Sellers’ Representative and each Seller is also referred to herein as a “Party” and, collectively, as the “Parties”.

RECITALS

 

(A)

WHEREAS, on July 27, 2020 (the “Effective Date”), the Parties entered into that certain Business Combination Agreement (the “Original Agreement”);

 

(B)

WHEREAS, the Company and each of the Put-Call Sellers (as defined herein) have agreed to enter into a Put-Call Agreement substantially in the form attached hereto as Exhibit N (each, a “Put-Call Agreement” and collectively, the “Put-Call Agreements”), pursuant to which, on the terms and subject to the conditions set forth therein, if, and only if, the Closing occurs on or prior to December 20, 2020 (the “Put-Call Threshold Date”), the Company will have certain call rights and such Put-Call Sellers will have certain put rights, in each case, with respect to such Put-Call Seller’s Put-Call Units (as defined herein) and such Put-Call Units will not be transferred, sold or assigned to the Buyer as Purchased Closing Company Units and/or redeemed by the Company as Redeemed Post-Closing Company Units (each as defined herein) on the terms and subject to the conditions of this Agreement; provided that, if the Closing occurs after the Put-Call Threshold Date, the Put-Call Agreements will automatically be terminated and of no force or effect and the Put-Call Units will be transferred, sold and assigned by the Put-Call Sellers to the Buyer as Purchased Closing Company Units and/or redeemed by the Company as Redeemed Post-Closing Company Units, as applicable, on the terms and subject to the conditions of this Agreement;

 

(C)

WHEREAS, the Parties desire to amend and restate the Original Agreement in order to incorporate certain changes necessitated by the Put-Call Agreements, including changes to clarify that if the Closing occurs on or prior to the Put-Call Threshold Date, the Purchased Closing Company Units and the Redeemed Post-Closing Company Units will not include the Put-Call Units and that the Contribution Amount (as defined herein), will include the Aggregate Put-Call Consideration Amount (as defined herein);

 

(D)

WHEREAS, as of the Effective Date the Sellers are, and as of immediately prior to the Closing the Sellers will be, the record and beneficial owners of one hundred percent (100%) of the issued and outstanding Company Interests;

 

(E)

WHEREAS, the Buyer is a special purpose acquisition company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses;

 

(F)

WHEREAS, not later than immediately prior to the Closing, the Buyer will amend and restate (i) the Buyer Certificate of Incorporation by adopting the Second Amended and Restated Certificate of Incorporation of Buyer substantially in the form attached hereto as Exhibit A (the “Buyer A&R Certificate of Incorporation”) and (ii) the Buyer Bylaws by adopting the Amended and Restated Bylaws of Buyer substantially in the form attached hereto as Exhibit B (the “Buyer A&R Bylaws”), to (among other things) establish a structure containing Buyer Class A Common Stock, which will carry such economic and voting rights as set forth in the Buyer A&R Certificate of Incorporation and Buyer A&R Bylaws, and Buyer Class V Voting Stock, which will carry only such voting rights as set forth in the Buyer A&R Certificate of Incorporation and Buyer A&R Bylaws;

 

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(G)

WHEREAS, pursuant to the terms and conditions of the Buyer Certificate of Incorporation, in connection with the Closing, all then-outstanding shares of Buyer Class B Common Stock will be converted into shares of Buyer Class A Common Stock (after giving effect to the Amended Sponsor Letter (as defined below)) on a one-for-one basis and into an aggregate number of 5,750,000 shares of Buyer Class A Common Stock (the “Buyer Class B Common Stock Conversion”);

 

(H)

WHEREAS, in connection with Closing, on the Closing Date (i) the Founder Holders (on a pro rata basis) will collectively subject one million two hundred twelve thousand eight hundred thirteen (1,212,813) shares of Buyer Class A Common Stock held by them that formerly constituted shares of Buyer Class B Common Stock held by the Founder Holders (the “Founder Holders Earnout Shares”) to certain restrictions and potential forfeiture pending the achievement (if any) of certain earnout targets pursuant to the terms of this Agreement; (ii) the Founder Holders will agree to forfeit for no consideration up to one million two hundred five thousand nine hundred thirty-seven (1,205,937) shares of Buyer Class A Common Stock in the aggregate (the “Founder Holders Forfeiture Shares”) to the extent that the Aggregate Available Cash does not equal at least two hundred forty five million dollars ($245,000,000), as more fully set forth in, and subject to the terms and conditions of a Founder Holders Forfeiture Agreement, by and among the Founder Holders, the Sellers’ Representative and the Buyer, in the form attached hereto as Exhibit C (the “Founder Holders Forfeiture Agreement”);

 

(I)

WHEREAS, as of the Effective Date, the Founder Holders have agreed, at and conditioned upon the Closing, to waive any and all anti-dilution rights described in Buyer’s Certificate of Incorporation or otherwise with respect to the shares of Buyer Class A Common Stock (that formerly constituted shares of Buyer Class B Common Stock held by the Founder Holders) held by the Founder Holders, as more fully set forth in, and subject to the terms and conditions of, an Amendment to Sponsor Letter and Founder Holders’ Representative Appointment, by and between the Founder Holders, the Sellers’ Representative, the Company and the Buyer, in the form attached hereto as Exhibit J (the “Amended Sponsor Letter”);

 

(J)

WHEREAS, in connection with Closing, on the Closing Date, the Buyer will subject one million two hundred twelve thousand eight hundred thirteen (1,212,813) Issued Company Units (the “Buyer Earnout Company Units”) to certain restrictions and potential forfeiture pending the achievement (if any) of certain earnout targets pursuant to the terms of this Agreement;

 

(K)

WHEREAS, prior to the Closing, the Company will effectuate a recapitalization, pursuant to which all Common A-1 Company Units, the Common A-2 Company Units, the Common B-1 Company Units, the Common B-2 Company Units and the Preferred Company Units held by the Sellers will be converted or exchanged (whether by direct exchange, merger or otherwise) into a number of Company Units designated as “Class A Common Units” in the amounts determined in accordance with the Recapitalization Agreement and to be set forth in the Company A&R LPA (as defined below), the result of which will be that the Sellers will collectively hold a single class of Company Units as of immediately prior to the Closing (the “Recapitalization”);

 

(L)

WHEREAS, within three (3) Business Days following the Effective Date, the Buyer (A) (i) formed the GP Company as further described in Section 7.22, for purposes of acting as the general partner of the Company from and after the Closing and holding the non-economic general partner Equity Interests of the Company, and (ii) caused the GP Company and the Buyer to enter into a limited liability agreement of the GP Company in the form attached hereto as Exhibit M (the “GP Company LLCA”) and (B) formed the Additional Special Limited Partner as further described in Section 7.23, for the purposes set forth therein;

 

(M)

WHEREAS, in connection with the adoption of the Buyer A&R Certificate of Incorporation and Buyer A&R Bylaws, the Buyer will change its name from “dMY Technology Group, Inc.” to “Rush Street Interactive, Inc.” (the “Name Change”);

 

(N)

WHEREAS, simultaneously with the Closing, the Sellers shall amend and restate the Company’s LPA by adopting the Amended and Restated Limited Partnership Agreement of the Company in the form attached hereto as Exhibit D (the “Company A&R LPA”) to, among other things, reflect the Recapitalization, to

 

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  permit the issuance and ownership of the Equity Interests of the Company as contemplated to be issued and owned upon consummation of the transactions contemplated by this Agreement (collectively, the “Company Units”), admit the GP Company as the general partner of the Company, otherwise amend and restate the rights and preferences of the Company Units and set forth the rights and preferences of the Company Units, and establish the ownership of the Company Units by the Persons indicated in the Company A&R LPA, in each case, as set forth in the Company A&R LPA;

 

(O)

WHEREAS, in connection with Closing, on the Closing Date, the Sellers (on a pro rata basis) will collectively subject (i) fifteen million (15,000,000) Retained Company Units held by them (the “Sellers Earnout Company Units” and together with the Buyer Earnout Company Units, the “Earnout Company Units”) and (ii) fifteen million (15,000,000) shares of the Buyer Class V Voting Stock distributed to them by the Company (the “Sellers Earnout Voting Shares” and together with the Founder Holders Earnout Shares, the “Earnout Shares”) to certain restrictions and potential forfeiture pending the achievement (if any) of certain earnout targets pursuant to the terms of this Agreement;

 

(P)

WHEREAS, upon the terms and subject to the conditions set forth in this Agreement, (a) the Buyer wishes to acquire (i) the Issued Company Units (including the Buyer Earnout Company Units) from the Company in exchange for the Contribution Amount and that number of shares of Buyer Class V Voting Stock equal to the number of Retained Company Units (including the Sellers Earnout Voting Shares) and (ii) the Purchased Closing Company Units from the Sellers in exchange for the Purchased Company Unit Closing Cash Consideration, and certain rights under the Tax Receivable Agreement, in each case, in accordance with the terms of this Agreement and (b) the Company and the Buyer wish to effect the contribution and redemption transactions in respect of the Redeemed Post-Closing Company Units;

 

(Q)

WHEREAS, simultaneously with the Closing, Sellers, the Sellers’ Representative, the Company and the Buyer will enter into a Tax Receivable Agreement in the form attached hereto as Exhibit E (the “Tax Receivable Agreement”);

 

(R)

WHEREAS, simultaneously with the Closing, the Sellers, the Sellers’ Representative, the Founder Holders and the Buyer will enter into an Investor Rights Agreement in the form attached hereto as Exhibit F (the “Investor Rights Agreement”);

 

(S)

WHEREAS, simultaneously with the Closing, the Company and certain Interested Parties will enter into a Services Agreement in the form attached hereto as Exhibit K (the “Services Agreement”);

 

(T)

WHEREAS, (i) prior to the Effective Date, the Company provided to the Buyer copies of the employment agreements between each Key Company Employee and the Company that exist as of the Closing (if any), which such agreements will continue to be in effect as of the Closing and (ii) simultaneously with and conditioned upon the Closing, the Company and Gregory A. Carlin will enter into an employment agreement in form and substance reasonably mutually acceptable to the parties thereto, which agreement shall, for the avoidance of doubt, not require that the full business time and attention of Gregory A. Carlin be devoted to the Company and/or its Subsidiaries (the agreement in clause (ii), the “Employment Agreement”);

 

(U)

WHEREAS, on or prior to the Effective Date, the Buyer and the Company have obtained commitments from certain Equity Financing Sources (as defined herein) for a private placement of shares of Buyer Class A Common Stock pursuant to the terms of one or more Subscription Agreements (as defined herein), such private placements to be consummated prior to or upon the consummation of the transactions contemplated by this Agreement, and whereas from and after the Closing until the Post-Closing Financing End Date (as defined herein), the Buyer and the Company may enter into one or more Subscription Agreements with Equity Financing Sources in accordance with the terms and subject to the conditions set forth herein and in such Subscription Agreement(s); and

 

(V)

WHEREAS, as a condition to the consummation of the transactions contemplated by this Agreement and by the Ancillary Agreements, the Buyer shall provide an opportunity to the Buyer Stockholders to exercise their rights to participate in the Buyer Share Redemption, on the terms and subject to the conditions and

 

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  limitations, set forth in this Agreement and the applicable Buyer Governing Documents in conjunction with, inter alia, obtaining approval from the Buyer Stockholders for the transactions contemplated by this Agreement and by the Ancillary Agreements.

NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth in this Agreement, and subject to the terms and conditions set forth in this Agreement, the Parties, intending to be legally bound, hereby agree as follows:

ARTICLE I

CERTAIN DEFINITIONS

Section 1.1    Certain Definitions. For purposes of this Agreement, capitalized terms used in this Agreement but not otherwise defined herein shall have the meanings set forth below.

Acquired Closing Company Units” means that number of Company Units equal to the aggregate number of shares of Buyer Class A Common Stock outstanding as of the Closing (after giving effect to the Buyer Class B Common Stock Conversion, Buyer Share Redemptions and any Buyer Class A Common Stock purchased in connection with any Permitted Equity Financing at or prior to the Closing, if any).

Additional Buyer Filings” has the meaning set forth in Section 7.9(f).

Adjusted Company Enterprise Value” has the meaning set forth in Section 2.3(b)(vi).

Affiliate” of any particular Person means any other Person controlling, controlled by or under common control with such Person, where “control” means the possession, directly or indirectly, of the power to direct the management and policies of a Person whether through the ownership of voting securities, its capacity as a sole or managing member or otherwise.

Affiliate Employee Benefit Plan” means each Company Employee Benefit Plan in which any of the RSI Companies participates that is not maintained by any of the RSI Companies.

Affiliated Transactions” has the meaning set forth in Section 3.24(a).

Aggregate Available Cash” means, as of the time of determination, an amount equal to the sum of (without duplication) (a) the Available Closing Date Cash plus (b) the aggregate proceeds received by the Buyer from any Permitted Equity Financing to the extent consummated after the Closing and on or prior to the Post-Closing Financing End Date.

Aggregate Put-Call Consideration Amount” means the sum of all Put-Call Consideration Amounts (if any).

Agreement” has the meaning set forth in the Preamble.

Amended Sponsor Letter” has the meaning set forth in the Recitals.

Ancillary Agreements” means the Founder Holders Forfeiture Agreement, the Company A&R LPA, the GP Company LLCA, the Tax Receivable Agreement, the Investor Rights Agreement, the Services Agreement, the Employment Agreement, the Amended Sponsor Letter, the Subscription Agreements, the Unit Powers, the Put-Call Agreements, and each other agreement, instrument and certificate required by this Agreement to be executed by any of the Parties as contemplated by this Agreement, in each case only as applicable to the relevant Party or Parties to such Ancillary Agreement, as indicated by the context in which such term is used.

 

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Anti-Corruption Laws” means applicable Laws related to corruption and bribery, including the U.S. Foreign Corrupt Practices Act of 1977, the Canada Corruption of Foreign Public Officials Act of 1999, legislation adopted in furtherance of the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, and any other applicable Law that prohibits bribery, corruption, fraud or other improper payments.

Anti-Money Laundering Laws” means applicable Laws related to money laundering, including the Currency and Foreign Transaction Reporting Act of 1970, as amended (also known as the Bank Secrecy Act), the Money Laundering Control Act of 1986, as amended, and any other applicable Law related to money laundering of any jurisdictions in which any RSI Company conducts business, including any anti-racketeering laws involving money laundering or bribery as a racketeering act.

Applicable Gaming Law” means all applicable laws, statutes, regulations, by-laws, subordinate legislation, regulatory policies (including any requirement, standard, guidance, announcement or notice of any Gaming Regulatory Authority) or industry codes of practice or conduct which are relevant to the RSI Companies’ gaming activities and which, in each case, have a binding legal effect.

Available Closing Date Cash” means, as of immediately prior to the Closing, an aggregate amount equal to the sum of (without duplication) (a) the cash in the Trust Account, less amounts required for the Buyer Share Redemptions and less the aggregate amount of Transaction Expenses incurred by the Parties plus (b) the aggregate proceeds received by the Buyer from any Permitted Equity Financing to the extent consummated at, or prior to, the Closing.

Business Combination” has the meaning ascribed to such term in the Buyer Certificate of Incorporation and the Buyer Bylaws.

Business Day” means any day except a Saturday, a Sunday or any other day on which commercial banks are required or authorized to close in the State of New York.

Buyer” has the meaning set forth in the Preamble.

Buyer A&R Bylaws” has the meaning set forth in the Recitals.

Buyer A&R Certificate of Incorporation” has the meaning set forth in the Recitals.

Buyer Board” means, at any time, the board of directors of the Buyer.

Buyer Board Recommendation” has the meaning set forth in Section 5.1.

Buyer Bylaws” means the bylaws of the Buyer, dated as of February 20, 2020, as in effect on the Effective Date.

Buyer Capital Stock” means (a) prior to the Closing, the Buyer Class A Common Stock and the Buyer Class B Common Stock and (b) following the Closing, the Buyer Class A Common Stock and the Buyer Class V Voting Stock.

Buyer Certificate of Incorporation” means the amended and restated certificate of incorporation of Buyer, dated as of February 20, 2020, as in effect on the Effective Date.

Buyer Class A Common Stock” means the Class A common stock of the Buyer, par value one ten-thousandth of one dollar ($0.0001) per share, authorized pursuant to the Buyer Certificate of Incorporation and the Buyer A&R Certificate of Incorporation.

 

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Buyer Class B Common Stock” means the Class B common stock of the Buyer, par value one ten-thousandth of one dollar ($0.0001) per share, authorized pursuant to the Buyer Certificate of Incorporation.

Buyer Class B Common Stock Conversion” has the meaning set forth in the Recitals.

Buyer Class V Voting Stock” means the Class V common stock of the Buyer, par value one ten-thousandth of one dollar ($0.0001) per share, authorized pursuant to the Buyer A&R Certificate of Incorporation.

Buyer Competing Transaction” means any transaction involving, directly or indirectly, any merger or consolidation with or acquisition of, purchase of all or substantially all of the assets or equity of, consolidation or similar business combination with or other transaction that would constitute a Business Combination with or involving the Buyer and a third party, other than the Sellers or the RSI Companies; provided that, notwithstanding anything herein to the contrary, “Buyer Competing Transaction” shall be deemed to exclude any transaction, arrangement, Contract or understanding involving any Person (other than the Buyer) that is the Sponsor, an Affiliate of the Sponsor or the Sponsor’s equityholders so long as such transaction, arrangement, Contract or understanding does not (i) involve the Buyer or any assets (including, for this purpose, the Trust Account and the Permitted Equity Financing) or Equity Interests or debt securities of the Buyer or (ii) impede, interfere with or prevent, or that would not reasonably be expected to materially delay, the transactions contemplated hereby.

Buyer’s Disclosure Letter” means the Disclosure Letter delivered by the Buyer to Sellers concurrently with the execution and delivery of this Agreement.

Buyer Earnout Company Units” has the meaning set forth in the Recitals.

Buyer Executives” means Niccolo de Masi and Harry You.

Buyer Fundamental Representations” means the representations and warranties set forth in Section 5.1 (Organization; Authority; Enforceability), Section 5.2 (Capitalization), Section 5.3 (Brokerage), Section 5.4 (Trust Account) and Section 5.12 (Investment Intent).

Buyer Governing Documents” means, at any time prior to the Closing, the Buyer Certificate of Incorporation and the Buyer Bylaws, and, at any time following the Closing, the Buyer A&R Certificate of Incorporation and the Buyer A&R Bylaws, as in effect at such time.

Buyer Material Adverse Effect” means any event, circumstance or state of facts that, individually or in the aggregate, has had or would be reasonably expected to have a material and adverse effect upon the ability of the Buyer to perform its obligations and to consummate the transactions contemplated by this Agreement and the Ancillary Agreements; provided that the consummation of any Buyer Share Redemptions shall not be deemed to constitute a Buyer Material Adverse Effect.

Buyer Parties” has the meaning set forth in Section 11.2(a).

Buyer Post-Closing Representation” has the meaning set forth in Section 11.16(b)(i).

Buyer Public Securities” has the meaning set forth in Section 5.8.

Buyer SEC Documents” has the meaning set forth in Section 5.5(a).

Buyer SEC Filings” means the forms, reports, schedules, registration statements and other documents required to be filed by the Buyer with the SEC, including the Proxy Statement, Additional Buyer Filings, the Signing Form 8-K and the Closing Form 8-K, and all amendments, modifications and supplements thereto.

 

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Buyer Share Redemption” means the election of an eligible holder of the Buyer Class A Common Stock (as determined in accordance with the applicable Buyer Governing Documents and the Trust Agreement) to redeem all or a portion of such holder’s Buyer Class A Common Stock, at the per-share price, payable in cash, equal to such holder’s pro rata share of the Trust Account (as determined in accordance with the applicable Buyer Governing Documents and the Trust Agreement), by tendering such holders Buyer Class A Common Stock for redemption not later than 5:00 p.m. Eastern Time on the date that is two (2) Business Days prior to the date of the Buyer Stockholder Meeting.

Buyer Stockholder Meeting” means a special meeting of the Buyer Stockholders to vote on the Buyer Stockholder Voting Matters.

Buyer Stockholder Voting Matters” means, collectively, proposals to approve (a) the adoption of this Agreement and the transactions contemplated by this Agreement, (b) the proposed Buyer A&R Certificate of Incorporation, (c) the adoption of the LTIP, (d) the issuance of the Buyer Class A Shares and Buyer Class V Voting Stock, including the Earnout Shares, pursuant to this Agreement, to the extent required by the Stock Exchange, and (e) any other proposals that are required for the consummation of the transactions contemplated by this Agreement that are submitted to, and require the vote of, the Buyer Stockholders in the Proxy Statement and agreed to by the Buyer and the Company.

Buyer Stockholders” means the holders of the Buyer Class A Common Stock and Buyer Class B Common Stock, in each case, as of immediately prior to the Closing.

Buyer Warrants” has the meaning set forth in Section 5.2(a).

Change of Control” means, solely for purposes of Section 2.9, (a) a direct or indirect sale, lease, transfer or other disposition of all or substantially all of the assets of the RSI Companies (taken as a whole) in any transaction or series of related transactions to a Person or a “group” (as such term is defined under Regulation 13D under the Securities Exchange Act) that is not an Interested Party whereby the proceeds available for distribution in connection with such transaction or series of transactions is equal to or greater than ten dollars ($10) per share of Buyer Class A Common Stock or per Company Unit, as applicable (as adjusted for any stock split, reverse stock split, recapitalization, reclassification, reorganization or the like), (b) any merger, consolidation or reorganization to which Buyer or the Company, on the one hand, and a Person or a “group” (as such term is defined under Regulation 13D under the Securities Exchange Act) that is not an Interested Party, on the other hand, are parties in which the price per share of Buyer Class A Common Stock or the price per Company Unit, as applicable, in such transaction is equal to or greater than ten dollars ($10) per share of Buyer Class A Common Stock or per Company Unit, as applicable (as adjusted for any stock split, reverse stock split, recapitalization, reclassification, reorganization or the like), except for a merger, consolidation or reorganization in which, after giving effect to such merger, consolidation or reorganization, the holders of the Buyer’s or the Company’s outstanding Equity Interests (on a fully-diluted basis) immediately prior to the merger, consolidation or reorganization will own directly or indirectly, immediately following the merger, consolidation or reorganization, Equity Interests representing a majority of the Buyer Class A Common Stock or Company Units, as applicable, (c) any sale, transfer or issuance or series of related sales, transfers and/or issuances of the Equity Interests of the Buyer or the Company which results in a Person or a “group” (as such term is defined under Regulation 13D under the Securities Exchange Act) that is not an Interested Party beneficially owning Equity Interests representing a majority of the Equity Interests of the Buyer or the Company if the price per share of Buyer Class A Common Stock or the price per Company Unit, as applicable, in such transaction or series of transactions is equal to or greater than ten dollars ($10) per share of Buyer Class A Common Stock or per Company Unit, as applicable (as adjusted for any stock split, reverse stock split, recapitalization, reclassification, reorganization or the like); or (d) one or both of the following has occurred on or prior to the three (3)-year anniversary of the Closing Date: (x) any sale, transfer or issuance or series of related sales, transfers and/or issuances of the Equity Interests of the Buyer or the Company by one or more Sellers (or their Permitted Transferees (as defined in the Investor Rights Agreement), such that, following such sale, transfer or issuance,

 

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Sellers and their Permitted Transferees (taken together) hold less than fifty percent (50%) of the issued and outstanding Equity Interests of the Buyer or the Company and (y) which results in a “person” or a “group” (as such term is defined under Regulation 13D under the Securities Exchange Act) that is not Seller or a Permitted Transferee of a Seller beneficially owning a percentage of the Equity Interests of the Buyer or the Company that is greater than the percentage of the Equity Interests of the Buyer or the Company beneficially owned by Sellers and their Permitted Transferees (taken together). For the avoidance of doubt, the Recapitalization shall not constitute a Change of Control.

Clayton Act” means the Clayton Act of 1914.

Closing Form 8-K” has the meaning set forth in Section 7.9(g).

Closing Press Release” has the meaning set forth in Section 7.9(g).

Code” means the Internal Revenue Code of 1986, and any reference to any particular Code section shall be interpreted to include any revision of or successor to that Section regardless of how numbered or classified.

Common A-1 Company Units” means the Units (as defined in the Company’s LPA) issued and outstanding immediately prior to the consummation of the Recapitalization which are Common A-1 Units (as defined in the Company’s LPA).

Common A-2 Company Units” means the Units (as defined in the Company’s LPA) issued and outstanding immediately prior to the consummation of the Recapitalization which are Common A-2 Units (as defined in the Company’s LPA).

Common B-1 Company Units” means the Units (as defined in the Company’s LPA) issued and outstanding immediately prior to the consummation of the Recapitalization which are Common B-1 Units (as defined in the Company’s LPA).

Common B-2 Company Units” means the Units (as defined in the Company’s LPA) issued and outstanding immediately prior to the consummation of the Recapitalization which are Common B-2 Units (as defined in the Company’s LPA).

Company” has the meaning set forth in the Preamble.

Company 2021 Net Revenue” means the consolidated net revenue of the RSI Companies for the fiscal year ending December 31, 2021, calculated (a) using the results of the RSI Companies’ completed financial audit for such fiscal year and (b) consistently with the past practices and methodologies of the RSI Companies as illustrated by the net revenue calculations for the fiscal year ending December 31, 2019 set forth on Section 1.1(a) of the Company and Sellers’ Disclosure Letter.

Company 2021 Net Revenue Earnout Achievement Percentage” means, (a) if Company 2021 Net Revenue equals (but does not exceed) $270,000,000, twenty-five percent (25%), (b) if Company 2021 Net Revenue exceeds $270,000,000 but is less than $300,000,000, the percentage calculated as the sum of, (i) twenty-five percent (25%) plus (ii) the product of (represented as a percentage) (x) seventy-five percent (75%) multiplied by (y) the quotient of, (1) the difference of (A) the Company 2021 Net Revenue minus (B) two hundred seventy million dollars ($270,000,000) divided by (2) thirty million dollars ($30,000,000), and (c) if Company 2021 Net Revenue equals or exceeds $300,000,000, one hundred percent (100%); provided that in no event may the Company 2021 Net Revenue Earnout Achievement Percentage exceed one hundred percent (100%).

Company A&R LPA” has the meaning set forth in the Recitals.

 

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Company and Sellers’ Disclosure Letter” means the Disclosure Letter delivered by Sellers and the Company to the Buyer concurrently with the execution and delivery of this Agreement.

Company Dispute Notice” has the meaning set forth in Section 2.3(b)(iv).

Company Employee Benefit Plan” means each “employee benefit plan” (as such term is defined in Section 3(3) of ERISA, whether or not subject to ERISA) and each equity, phantom equity, or equity-based compensation, retirement, pension, savings, profit sharing, bonus, incentive, severance, separation, employment, individual consulting or individual independent contractor, change in control, retention, deferred compensation, vacation, paid time off, medical, dental, life or disability, retiree or post-termination health or welfare, salary continuation, fringe or other compensatory or benefit plan, program, policy, arrangement or Contract, in each case, that is maintained, sponsored or contributed to (or required to be contributed to) by any of the RSI Companies or under or with respect to which any of the RSI Companies has any Liability.

Company Enterprise Value” means an amount equal to one billion seven hundred twenty five million dollars ($1,725,000,000).

Company Fundamental Representations” means the representations and warranties set forth in Section 3.1 (Organization; Authority; Enforceability), Section 3.3 (Capitalization), and Section 3.14 (Brokerage).

Company Interests” means the issued and outstanding limited partnership interests of the Company as of the Effective Date.

Company Post-Closing Representation” has the meaning set forth in Section 11.16(a)(i).

Company Subsidiaries” means the direct and indirect Subsidiaries of the Company.

Company Transaction Expense Cap” shall be an amount equal to Twelve Million Five Hundred Thousand Dollars ($12,500,000).

Company Transaction Expenses” means the aggregate Transaction Expenses incurred by, or attributable to, (i) any of the Sellers, (ii) any equityholder of a Seller or (iii) the RSI Companies, in each case, as set forth herein, and in the case of Sellers or any equityholder of any Seller, only to the extent an RSI Company is obligated to pay, has paid or agreed to pay such Transaction Expense, in each case, as set forth herein.

Company Transaction Expenses Certificate” has the meaning set forth in Section 2.3(b)(i).

Company Units” has the meaning set forth in the Recitals.

Company’s LPA” means the Limited Partnership Agreement of the Company, dated as of December 19, 2019, as in effect as of the Effective Date and as of immediately prior to the Closing.

Competing Transaction” means (a) any transaction involving, directly or indirectly, any Seller or any RSI Company, which upon consummation thereof, would (x) result in any RSI Company entity becoming a public company or (y) which would impede, interfere with or prevent the transactions contemplated hereby, or otherwise agree to, make, implement or consummate any of the foregoing, (b) any direct or indirect sale (including by way of a merger, consolidation, license, transfer, sale, option, right of first refusal with respect to a sale or similar preemptive right with respect to a sale or other business combination or similar transaction) of any material portion of the assets (including Intellectual Property) or business of the RSI Companies, taken as a whole (but excluding the sale of assets in the Ordinary Course of Business that in the aggregate could not reasonably be expected to impede, interfere with, prevent, or would reasonably be expected to materially delay the transactions contemplated hereby), (c) any direct or indirect sale (including by way of an issuance, dividend,

 

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distribution, merger, consolidation, license, transfer, sale, option, right of first refusal with respect to a sale or similar preemptive right with respect to a sale or other business combination or similar transaction) of equity, voting interests or debt securities of any RSI Company (excluding any such sale between or among the RSI Companies), or rights, or securities that grant rights, to receive the same including profits interests, phantom equity, options, warrants, convertible or preferred stock or other equity-linked securities (except, in each case, as contemplated by this Agreement), (d) any direct or indirect acquisition (whether by merger, acquisition, share exchange, reorganization, recapitalization, joint venture, consolidation or similar business combination transaction), but excluding procurement of assets in the Ordinary Course of Business (but not the acquisition of a Person or business via an asset transfer), by any RSI Company of the equity or voting interests of, or a material portion of the assets or business of, a third party (except, in each case, as contemplated by this Agreement), or (e) any liquidation or dissolution (or the adoption of a plan of liquidation or dissolution) of any RSI Company (except to the extent contemplated by the terms of this Agreement), in all cases of clauses (a) through (e), either in one or a series of related transactions, where such transaction(s) is to be entered into with a Competing Buyer (including any Interested Party or any representatives of any Interested Party); provided that, notwithstanding anything herein to the contrary, “Competing Transaction” shall be deemed to exclude any transaction, arrangement, Contract or understanding involving any Person (other than an RSI Company) that is an Affiliate of any Seller or any Interested Party so long as such transaction, arrangement, Contract or understanding does not involve any RSI Company or any assets or Equity Interests or debt securities of the RSI Companies.

Confidentiality Agreement” means that certain Confidentiality Agreement, dated as of May 15, 2020, between the Buyer, Sponsor and the Company, as amended by the parties thereto on July 9, 2020 and as further amended or modified from time to time.

Contract” means any written or oral contract, agreement, license or Lease.

Contribution Amount” means the Available Closing Date Cash minus the Purchased Company Unit Closing Cash Consideration. For the avoidance of doubt, the Contribution Amount shall include the Aggregate Put-Call Consideration Amount (if any).

Copyleft Terms” has the meaning set forth in Section 3.10(d).

COVID-19 Measures” means any applicable quarantine, “shelter in place,” “stay at home,” workforce reduction, social distancing, shut down, closure, sequester or any other applicable Law, Order, directive, guidelines or recommendations by an applicable Governmental Entity in connection with or in response to the COVID-19 pandemic, including, but not limited to, the Coronavirus Aid, Relief, and Economic Security Act (CARES).

D&O Provisions” has the meaning set forth in Section 7.12(a).

Disclosure Letters” means the Buyer’s Disclosure Letter and the Company and Sellers’ Disclosure Letter.

Dispute Notice” has the meaning set forth in Section 2.3(b)(iv).

Earnout Company Units” has the meaning set forth in the Recitals.

Earnout Notice” has the meaning set forth in Section 2.9(b)(ii).

Earnout Restrictions” has the meaning set forth in Section 2.9(b)(iv).

Earnout Revenue Objection” has the meaning set forth in Section 2.9(b)(vi).

Earnout Shares” has the meaning set forth in the Recitals.

 

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Earnout Statement” has the meaning set forth in Section 2.9(b)(vi).

Effective Date” has the meaning set forth in the Preamble.

Employment Agreement” has the meaning set forth in the Recitals.

Equity Financing Sources” means Persons that have entered into Subscription Agreements to purchase for cash Buyer Class A Common Stock from the Buyer pursuant to a Permitted Equity Financing on or prior to the Post-Closing Financing End Date.

Equity Interests” means, with respect to any Person, all of the shares of capital stock, or equity of (or other ownership or profit interests in) such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock or equity of (or other ownership or profit interests in) such Person, all of the securities convertible into or exchangeable for shares of capital stock or equity of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares or equity (or such other interests), restricted stock awards, restricted stock units, equity appreciation rights, phantom equity rights, profit participation and all of the other ownership or profit interests of such Person (including partnership or member interests therein), whether voting or nonvoting.

ERISA” means the Employee Retirement Income Security Act of 1974.

Example Pro Forma Calculations” means the example pro forma calculations attached hereto as Exhibit L, which have been prepared in full and complete accordance with the definitions contained herein and, notwithstanding anything herein to the contrary and for the avoidance of doubt, shall be used for illustrative purposes only.

Executives” means Neil Bluhm, Greg Carlin, Richard Schwartz, Einar Roosileht and Mattias Stetz.

Export Control Laws” means export, import, deemed export, transfer, and retransfer controls contained in the U.S. Export Administration Regulations.

Extended Outside Date” has the meaning set forth in Section 10.1(c).

Family Members” means (a) (i) the Executives, (ii) the spouse and lineal descendants (whether natural or adopted) of any Executive, (iii) any spouse of any of the individuals described in clause (ii), and (iv) a trust solely for the benefit of any individuals described in the foregoing clauses (i) through (iii); and (b) any siblings or parents of any of the individuals described in clause (a)(i) through (iii); provided, that, with respect any representation or warranty related to an Interested Party or Family Member, clause (b) shall be limited to the Knowledge of the Company.

Federal Trade Commission Act” means the Federal Trade Commission Act of 1914.

Final Company Transaction Expenses” has the meaning set forth in Section 2.3(b)(iv).

Final Sponsor Transaction Expenses” has the meaning set forth in Section 2.3(b)(iv).

Founder Holders” means each of the Sponsor, Darla Anderson, Francesca Luthi and Charles E. Wert.

Founder Holders Earnout Shares” has the meaning set forth in the Recitals.

Founder Holders Forfeiture Agreement” has the meaning set forth in the Recitals.

Founder Holders Forfeiture Shares” has the meaning set forth in the Recitals.

 

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Fraud” means actual common law fraud committed by a Party with respect to the making of the representations and warranties set forth in this Agreement or any Ancillary Agreement, as applicable.

GAAP” means United States generally accepted accounting principles, consistently applied.

Gaming Regulatory Authority” means the competent Governmental Entity in any jurisdiction regulating the gambling, betting and gaming activities (if any), including, for the avoidance of doubt, the Governmental Entities issuing the RSI Companies Relevant Licenses.

Governing Documents” means (a) in the case of a corporation, its certificate of incorporation (or analogous document) and bylaws; (b) in the case of a limited liability company, its certificate of formation (or analogous document) and limited liability company operating agreement; or (c) in the case of a Person other than a corporation or limited liability company, the documents by which such Person (other than an individual) establishes its legal existence or which govern its internal affairs.

Governmental Entity” means any nation or government, any state, province, county, municipal or other political subdivision thereof, any entity exercising executive, legislative, tribal, judicial, regulatory or administrative functions of or pertaining to government, including any court, arbitrator (public or private) or other body or administrative, regulatory or quasi-judicial authority, agency, department, board, commission or instrumentality of any federal, state, local or foreign jurisdiction, including any Gaming Regulatory Authority.

GP Company” has the meaning set forth in the Recitals.

GP Company LLCA” has the meaning set forth in the Recitals.

HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

Income Tax Returns” means Tax Returns relating to Income Taxes.

Income Taxes” means Taxes (a) imposed on, or with reference to, net income or gross receipts, or (b) imposed on, or with reference to, multiple bases including net income or gross receipts.

Indebtedness” means, with respect to a Party, without duplication: (a) all indebtedness for borrowed money or indebtedness issued or incurred in substitution or exchange for indebtedness for borrowed money; (b) all indebtedness evidenced by any note, bond, debenture, mortgage or other debt instrument or debt security; (c) all indebtedness for borrowed money of any Person for which such Party has guaranteed payment; (d) all capitalized Lease obligations or obligations required to be capitalized in accordance with GAAP; (e) any Liabilities in respect of deferred purchase price for property or services with respect to which such Person is liable, contingently or otherwise, as obligor or otherwise for additional purchase price (excluding any purchase commitments for capital expenditures or otherwise incurred in the Ordinary Course of Business); (f) reimbursement obligations under any drawn letters of credit; and (g) obligations under derivative financial instruments, including hedges, currency and interest rate swaps and other similar instruments; provided, however, that, in the case of the RSI Companies, ‘Indebtedness’ shall not include any Indebtedness between or among the Company and any of its Subsidiaries that are directly or indirectly wholly-owned by the Company.

Independent Accountant” has the meaning set forth in Section 2.9(b)(i).

Intellectual Property” means all of the following in any jurisdiction throughout the world: (a) all inventions (whether patentable or unpatentable and whether or not reduced to practice) and invention disclosures, all improvements thereto, and all patents, utility models and industrial designs and all applications for any of the foregoing, together with all reissuances, provisionals, continuations, continuations-in-part, divisionals, extensions, renewals and reexaminations thereof, (b) all trademarks, service marks, certification marks, trade

 

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dress, logos, slogans, trade names, corporate and business names, and other indicia of source, including all goodwill associated therewith, and all applications, registrations, and renewals in connection therewith (collectively, “Trademarks”), (c) Internet domain names and rights of publicity and in social media usernames, handles, and accounts; (d) all works of authorship, copyrightable works, all copyrights and rights in databases, and all applications, registrations, and renewals in connection therewith and all moral rights associated with any of the foregoing, (e) all mask works and design rights and all applications, registrations, and renewals in connection therewith, (f) all trade secrets and confidential business information (including confidential ideas, research and development, know-how, formulas, compositions, algorithms, source code, data analytics, manufacturing and production processes and techniques, technical data and information, designs, drawings, specifications, customer and supplier lists, pricing and cost information, and business and marketing plans and proposals), and (g) all rights in Software.

Interested Party” means (i) the Seller Executives, (ii) the Sellers, (iii) in the case of any Seller that is an entity, any direct or indirect equityholder of such Seller or any of its respective Affiliates (other than any RSI Company), and (iv) in the case of the Seller Executives and any Seller that is an individual, any Family Member or Affiliate of such Seller Executive or Seller (other than any RSI Company).

Investor Rights Agreement” has the meaning set forth in the Recitals.

Issued Company Units” means the number of Acquired Closing Company Units minus the number of Purchased Closing Company Units.

IT Assets” means Software, systems, servers, computers, hardware, firmware, middleware, networks, data communications lines, routers, hubs, switches and all other information technology equipment, and all associated documentation, in each case, owned by one of the RSI Companies or outsourced, used, or held for use in the operation of the RSI Companies.

K&E” has the meaning set forth in Section 11.16(a)(i).

Key Company Employees” means the employees of the RSI Companies listed on Section 1.1(b) of the Company and Sellers’ Disclosure Letter.

Knowledge” (a) as used in the phrase “to the Knowledge of the Company” or phrases of similar import means the actual knowledge of any of the Executives, (b) as used in the phrase “to the Knowledge of Sellers” or phrases of similar import means the actual knowledge of any of the Seller Executives, (c) as used in the phrase “to the Knowledge of such Seller” or phrases of similar import means the actual knowledge of the applicable Seller, and (d) as used in the phrase “to the Knowledge of the Buyer” or phrases of similar import means the actual knowledge of the Buyer Executives.

Latest Balance Sheet” has the meaning set forth in Section 3.4(a).

Laws” means all laws, acts, statutes, constitutions, treaties, ordinances, codes, rules, regulations and rulings of a Governmental Entity, including common law and Applicable Gaming Law. All references to “Laws” shall be deemed to include any amendments thereto, and any successor Law, unless the context otherwise requires.

Leased Real Property” means all leasehold or subleasehold estates and other rights to use or occupy any land, buildings, structures, improvements, fixtures or other interest in real property held by the RSI Companies.

Leases” means all leases, subleases, licenses, concessions and other Contracts pursuant to which any RSI Company holds any Leased Real Property.

Liability” or “Liabilities” means any and all debts, liabilities and obligations, whether accrued or fixed, known or unknown, absolute or contingent, matured or unmatured or determined or determinable.

 

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Liens” means, with respect to any specified asset, any and all liens, mortgages, hypothecations, claims, encumbrances, options, pledges, licenses, rights of priority, easements, covenants, restrictions and security interests thereon.

Lookback Date” means the date which is two (2) years prior to the Effective Date.

LTIP” has the meaning set forth in Section 7.4.

Material Adverse Effect” means any event, circumstance or state of facts that, individually or in the aggregate, has had or would reasonably be expected to have, a material and adverse effect upon (a) the business, results of operations or financial condition of the RSI Companies, taken as a whole, or (b) the ability of Sellers or the RSI Companies, taken as a whole, to perform their respective obligations and to consummate the transactions contemplated by this Agreement and the Ancillary Agreements; provided, however, that, with respect to the foregoing clause (a), none of the following (or the effect of the following), alone or in combination, will constitute a Material Adverse Effect, or will be considered in determining whether a Material Adverse Effect has occurred: (i) changes that are the result of factors generally affecting the industries or markets in which the RSI Companies operate; (ii) the public announcement or pendency of the transactions contemplated by this Agreement; (iii) changes in Law or GAAP or the interpretation thereof, in each case effected after the Effective Date; (iv) any failure of any RSI Company to achieve any projected revenue, earnings, expense, sales or other projections, forecasts, predictions or budgets prior to the Closing (it being understood that the underlying event, circumstance or state of facts giving rise to such failure that are not otherwise excluded from the definition of Material Adverse Effect may be taken into account in determining whether a Material Adverse Effect has occurred); (v) changes that are the result of economic factors affecting the national, regional or world economy or financial markets; (v) any change in the financial, banking, or securities markets; (vii) any strike, embargo, labor disturbance, riot, earthquake, hurricane, tsunami, tornado, flood, mudslide, wild fire, other weather-related or meteorological event, pandemic (including the COVID-19 pandemic and any COVID-19 Measures), epidemic, disease outbreak or other natural disaster or act of god; (viii) any national or international political conditions in or affecting any jurisdiction in which the RSI Companies conduct business; (ix) the engagement by the United States in hostilities or the escalation thereof, whether or not pursuant to the declaration of a national emergency or war, or the occurrence or the escalation of any military or terrorist attack upon the United States, or any United States territories, possessions or diplomatic or consular offices or upon any United States military installation, equipment or personnel; (x) any consequences arising from any action by a Party required by this Agreement (other than the Company’s compliance with Section 6.1(a) hereof, except as a result of the failure of Buyer to consent to an action following request for such consent by such Party in accordance with this Agreement); or (xi) any consequences arising from any action taken (or omitted to be taken) by any Seller or any RSI Company at the written request of Buyer; provided, however, that any event, circumstance or state of facts resulting from a matter described in any of the foregoing clauses (i), (iii), (v), (vi) and (ix) may be taken into account in determining whether a Material Adverse Effect has occurred or would reasonably be likely to occur only to the extent such event, circumstance or state of facts has a material and disproportionate effect on the RSI Companies, taken as a whole, relative to other comparable entities operating in the industries or markets in which the RSI Companies operate.

Material Leases” means all Leases for each Leased Real Property which provides for a current monthly base rent of more than $50,000.00.

Material Suppliers” means the top five (5) suppliers (determined by the amount purchased) of the RSI Companies, taken as a whole, for the fiscal year ended December 31, 2019.

Minimum Stock Sale Price” means a price per share of Buyer Class A Common Stock that is ten dollars ($10.00).

Net Company Enterprise Value Adjustment Amount” means the positive or negative amount, as the case may be, calculated as the difference between (a) the aggregate amount (if any) by which the aggregate Final

 

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Sponsor Transaction Expenses exceed the Sponsor Transaction Expense Cap minus (b) the aggregate amount (if any) by which the aggregate Final Company Transaction Expenses exceed the Company Transaction Expense Cap, in each case as finally determined in accordance with Section 2.3(b); provided, that if (i) the Final Company Transaction Expenses exceed the Company Transaction Expense Cap and (ii) one or more of the Sellers, in their sole respective discretion, elects to pay all or any portion of the amount by which the Final Company Transaction Expenses exceed the Company Transaction Expense Cap, as applicable, then the Net Company Enterprise Value Adjustment Amount shall not be reduced by the amount of any such excess actually paid by such Seller(s); provided that such payment does not come from cash from any of the RSI Companies.

Non-Party Affiliate” has the meaning set forth in Section 11.15.

Order” means any order, writ, judgment, injunction, temporary restraining order, stipulation, determination, decree or award entered by or with any Governmental Entity or arbitral institution.

Ordinary Course of Business” means, with respect to any Person, (a) any action taken or not taken by such Person in the ordinary course of business consistent with past practice, and (b) any other action taken or not taken by such Person in response to the actual or anticipated effect on such Person’s business of COVID-19 or any COVID-19 Measures, in each case with respect to this clause (b) in connection with or in response to COVID-19.

Ordinary Course Tax Sharing Agreement” means any written commercial agreement entered into in the Ordinary Course of Business of which the principal subject matter is not Tax but which contains customary Tax indemnification provisions.

Owned Intellectual Property” means all Intellectual Property owned or purported to be owned by any of the RSI Companies.

Party” or “Parties” has the meaning set forth in the Recitals.

PCAOB” means the Public Company Accounting Oversight Board.

Permitted Affiliate Transactions” means Tax Distributions and any item set forth on Section 1.1(c) of the Company and Sellers’ Disclosure Letter.

Permitted Equity Financing” means purchases of Buyer Class A Common Stock at a price per share no less than the Minimum Stock Sale Price consummated (a) on or before the Closing Date, in accordance with Section 5.16 or (b) after the Closing and on or before the Post-Closing Financing End Date by Equity Financing Sources pursuant to Section 7.15.

Permitted Inducement” shall have the meaning given to such term in the definition of “Transaction Expenses.”

Permitted Liens” means (a) Liens securing obligations under capital leases; (b) easements, permits, rights of way, restrictions, covenants, reservations or encroachments, minor defects, irregularities in and other similar Liens of record affecting title to the property which do not materially impair the use or occupancy of such real property in the operation of the business of any of the RSI Companies as currently conducted thereon; (c) Liens for Taxes, assessments or governmental charges or levies imposed with respect to property which are not yet due and payable or which are being contested in good faith (provided appropriate reserves required pursuant to GAAP have been made in respect thereof on the books and records of the RSI Companies); (d) Liens in favor of suppliers of goods for which payment is not yet due or delinquent (provided appropriate reserves required pursuant to GAAP have been made in respect thereof); (e) mechanics’, materialmen’s, workmen’s, repairmen’s, warehousemen’s, carrier’s and other similar Liens arising or incurred in the Ordinary Course of Business which are not yet due and payable or which are being contested in good faith (provided appropriate reserves required

 

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pursuant to GAAP have been made in respect thereof); (f) Liens arising under workers’ compensation Laws or similar legislation, unemployment insurance or similar Laws; (g) Liens arising under municipal bylaws, development agreements, restrictions or regulations, and zoning, entitlement, land use, building or planning restrictions or regulations, in each case, promulgated by any Governmental Entity, which do not restrict or are not violated by the RSI Companies’ current use of its real property; (h) in the case of Leased Real Property, any Liens to which the underlying fee interest in the leased premises (or the land on which or the building in which the leased premises may be located) is subject, including rights of the landlord under the Lease and all superior, underlying and ground Leases and renewals, extensions, amendments or substitutions thereof; provided that any Material Lease shall provide for automatic subordination, non-disturbance and attornment of mortgage liens for the benefit of the Company or applicable Subsidiary or for which a subordination, non-disturbance and attornment agreement has been provided for the benefit of the Company or applicable Subsidiary; (i) Securities Liens; (j) non-exclusive licenses of Owned Intellectual Property granted to customers or casinos in the Ordinary Course of Business; and (k) those Liens set forth on the Section 1.1(d) of the Company and Sellers’ Disclosure Letter.

Person” means any natural person, sole proprietorship, partnership, joint venture, trust, unincorporated association, corporation, limited liability company, entity or Governmental Entity.

Personal Information” means information that identifies an individual or can be used to contact an individual including name, address, retina or iris scan, fingerprint, voiceprint, scan of hand or face geometry and all other biometric data, geolocation information, credit or debit card or bank account number, or any other personally identifiable information.

Post-Closing Financing End Date” means the fifth (5th) Business Day following the Closing Date.

Post-Closing Issued Company Units” has the meaning set forth Section 2.1(b)(ii).

Pre-Closing Tax Period” means any taxable period ending on or before the Closing Date and the portion of any Straddle Period through and including the Closing Date.

Preferred Company Units” means the Units (as defined in the Company’s LPA) issued and outstanding immediately prior to the consummation of the Recapitalization which are Preferred Units (as defined in the Company’s LPA).

Premium Cap” has the meaning set forth in Section 7.12(b)(ii).

Privacy and Security Requirements” means (a) all applicable Privacy Laws, (b) all applicable information, network and technology security laws and contractual requirements, (c) provisions relating to Processing of Personal Information in all applicable Privacy Contracts, (d) all applicable Privacy Policies and (e) the Payment Card Industry Data Security Standard.

Privacy Contracts” means all Contracts between any RSI Company and any Person that govern the Processing of Personal Information.

Privacy Laws” means all Laws pertaining to the collection, storage, use, access, disclosure, processing, security, modification, destruction, and transfer of Personal Information.

Privacy Policies” means all written, external-facing policies of any RSI Company relating to the Processing of Personal Information, including all website and mobile application privacy policies.

Proceeding” means any action, suit, charge, litigation, arbitration, notice of violation or citation received, or other proceeding at law or in equity (whether civil, criminal or administrative) by or before any Governmental Entity.

 

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Process” or “Processing” means the creation, collection, use (including for the purposes of sending telephone calls, text messages and emails), storage, maintenance, processing, recording, distribution, transfer, transmission, receipt, import, export, protection (including safeguarding, security measures and notification in the event of a breach of security), access, disposal or disclosure or other activity regarding Personal Information (whether electronically or in any other form or medium).

Prohibited Affiliate Transactions” means, except for (a) Permitted Affiliate Transactions, (b) those Prohibited Affiliate Transactions consented to (not to be unreasonably withheld, conditioned or delayed) in writing by Buyer after the Effective Date, and (c) the transactions contemplated by this Agreement or the Ancillary Agreements, any of the following transactions:

(a)    the declaration, making or payment of any dividend, other distribution or return of capital (whether in cash or in kind) to any Seller (or if any Seller transfers its Company Interests before the Closing Date to another Interested Party, then such Interested Party) by any RSI Company, other than to another RSI Company;

(b)    any payment by any RSI Company to any Interested Party in connection with any redemption, purchase or other acquisition of shares of capital stock, partnership interests or other securities of any RSI Company;

(c)    any (i) loan made or owed by any RSI Company to any Interested Party, or (ii) payment made or Liability incurred, assumed or indemnified, whether in cash or kind, by any RSI Company to, or on behalf of, or for the benefit of, any Interested Party or any payments made to any officer, director, employee or independent contractor of an Interested Party solely to the extent such payment is made to such officer, director, employee or independent contractor in his, her or its capacity as an officer, director, employee or independent contractor of an Interested Party, other than compensation, benefits or expense reimbursement (in each case, of the types available to the Executives or otherwise on arms’ length terms) paid or provided in the Ordinary Course of Business to individuals who are employees of any RSI Company;

(d)    any Lien (other than those Permitted Liens referenced in clause (j) of the definition of Permitted Liens) made, created or granted over any asset of any RSI Company in favor of any Interested Party;

(e)    any guarantee by any RSI Company of any Liability of any Interested Party;

(f)    any discharge, forgiveness or waiver by any RSI Company of any Liability owed by any Interested Party to any RSI Company;

(g)    material increases in the compensation or bonus payable by any RSI Company to any Interested Party;

(h)    the sale, purchase, transfer, license, sublicense, covenant not to assert, or disposal of any Intellectual Property or material equipment owned by any RSI Company to or in favor of an Interested Party;

(i)    the sale, purchase, transfer or disposal of any material asset or right of any RSI Company not referenced in clause (h) above to or in favor of an Interested Party, other than in the Ordinary Course of Business;

(j)    except as set forth on Section 3.14 or Section 4.6 of the Company and Sellers’ Disclosure Letter or as included as a Company Transaction Expense, any Liability, in connection with this Agreement or the Ancillary Agreements, or the transactions contemplated hereby or thereby, that would result in the obligation of any Seller, RSI Company or the Buyer to pay any financial advisor fee, investment banker fee, finder’s fee, brokerage or agent’s commissions or other similar payments or reimburse expenses of any of the foregoing; and

(k)    any commitment or agreement to do any of the foregoing.

Pro Rata Basis” means (a) with respect to each Seller, in accordance with the ratio calculated by dividing (x) the number of Retained Company Units held by such Seller as of immediately following the Closing, by

 

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(y) the aggregate number of Retained Company Units held by all of the Sellers as of immediately following the Closing, and (b) with respect to each Founder Holder, in accordance with the ratio calculated by dividing (x) the number of Buyer Class A Common Stock (following the Buyer Class B Common Stock Conversion) held by such Founder Holder as of immediately following the Closing, by (y) the aggregate number of Buyer Class A Common Stock (following the Buyer Class B Common Stock Conversion) held by all of the Founder Holders as of immediately following the Closing.

Proxy Statement” means the Proxy Statement on Schedule 14A to be filed with the SEC by the Buyer in connection with the Buyer Stockholder Meeting.

Publicly Available Software” means any Software (or portion thereof) (i) that is distributed (A) as free Software or open source Software (including, for example, Software distributed under the GNU General Public License, the GNU Lesser General Public License, the Affero General Public License, Mozilla Public License, or Apache Software License), or (B) pursuant to open source, copyleft or similar licensing and distribution models, or (ii) that requires as a condition of use, modification and/or distribution of such Software that such Software or other Software incorporated into, derived from or distributed with such Software (A) be disclosed or distributed in source code form, (B) be licensed for the purpose of making derivative works or (C) be redistributable at no or minimal charge.

Purchased Closing Company Units” means that number of Company Units equal to the quotient of (a) the Purchased Company Unit Closing Cash Consideration divided by (b) ten dollars ($10.00). For the avoidance of doubt, the Purchased Closing Company Units shall not include any Sellers Earnout Company Units and if, and only if, the Closing occurs on or prior to the Put-Call Threshold Date, the Purchased Closing Company Units shall not include any Put-Call Units.

Purchased Company Unit Closing Cash Consideration” means the amount equal to (1) the sum of (a) the Available Closing Date Cash less one hundred sixty million dollars ($160,000,000) (provided that the amount of cash attributable to this clause (a) shall in no event be less than zero or exceed sixty million dollars ($60,000,000)) plus (b) the positive product (if any) of (i) fifty percent (50%) multiplied by (ii) the amount (if any) by which (x) Available Closing Date Cash exceeds (y) two hundred twenty million dollars ($220,000,000) (provided that the amount of cash attributable to this clause (b) shall in no event be less than zero or exceed sixty-five million dollars ($65,000,000)) minus (2) the Aggregate Put-Call Consideration Amount (if any).

Put-Call Agreement” has the meaning set forth in the Recitals.

Put-Call Consideration Amount” means, with respect to a Put-Call Seller, if, and only if, the Closing occurs on or prior to the Put-Call Threshold Date, the amount equal to (A) the Seller Proportion applicable to such Put-Call Seller multiplied by (B) the amount equal to (1) the sum of (a) the Available Closing Date Cash less one hundred sixty million dollars ($160,000,000) (provided that the amount of cash attributable to this clause (a) shall in no event be less than zero or exceed sixty million dollars ($60,000,000)) plus (b) the positive product (if any) of (i) fifty percent (50%) multiplied by (ii) the amount (if any) by which (x) Available Closing Date Cash exceeds (y) two hundred twenty million dollars ($220,000,000) (provided that the amount of cash attributable to this clause (b) shall in no event be less than zero or exceed sixty-five million dollars ($65,000,000)). For the avoidance of doubt, if, and only if, the Closing occurs after the Put-Call Threshold Date, the Put-Call Consideration Amount with respect to each Put-Call Seller shall be equal to zero dollars ($0).

Put-Call Units” means, with respect to a Put-Call Seller, if, and only if, the Closing occurs on or prior to the Put-Call Threshold Date, the number of Company Units equal to the quotient of (a) the Put-Call Consideration Amount applicable to such Put-Call Seller divided by (b) ten dollars ($10.00). For the avoidance of doubt, (i) in no event shall Put-Call Units include any Sellers Earnout Company Units and (ii) if, and only if, the Closing occurs after the Put-Call Threshold Date, the number of Put-Call Units for each Put-Call Seller shall be equal to zero (0).

 

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Put-Call Sellers” means each of Richard Schwartz, Einar Roosileht and Mattias Stetz.

Put-Call Threshold Date” has the meaning set forth in the Recitals.

Recapitalization” has the meaning set forth in the Recitals.

Recapitalization Agreement” means a recapitalization agreement, dated as of the Effective Date, by and among the Company, the Sellers’ Representative (in its capacity as the general partner of the Company) and the Sellers.

Redeemed Post-Closing Company Units” has the meaning set forth in Section 2.1(b)(iii).

Redemption Amount” means, without duplication, the amount (which shall not be less than zero (0)) equal to the difference of (a) the amount equal to the sum of (i) the Aggregate Available Cash less one hundred sixty million dollars ($160,000,000) (provided that the amount of cash attributable to this clause (i) shall in no event be less than zero or exceed sixty million dollars ($60,000,000)) plus (ii) the positive product (if any) of (A) fifty percent (50%) multiplied by (B) the amount by which (x) Aggregate Available Cash less (y) two hundred twenty million dollars ($220,000,000) (provided that the amount of cash attributable to this clause (ii) shall in no event be less than zero or exceed sixty-five million dollars ($65,000,000)) minus (b) the Purchased Company Unit Closing Cash Consideration (if any) minus (c) if, and only if, the Closing occurs on or prior to the Put-Call Threshold Date, the Aggregate Put-Call Consideration Amount.

Required Vote” means the vote of the Buyer Stockholders set forth in the Proxy Statement to the extent required to approve the Buyer Stockholder Voting Matters, as determined in accordance with applicable Law and the Buyer A&R Certificate of Incorporation.

Retained Company Units” means the aggregate number of Company Units held by the Sellers immediately following the Closing, calculated such that the Sellers’ aggregate percentage ownership in the Company is equal to the percentage determined as the quotient of (a) the Company Enterprise Value divided by (b) the sum of (i) the Company Enterprise Value plus (ii) the product of (x) the total number of outstanding shares of Buyer Class A Common Stock issued and outstanding as of immediately prior to the Closing (after giving effect to any Buyer Share Redemptions, the Buyer Class B Common Stock Conversion and any Buyer Class A Common Stock purchased in connection with any Permitted Equity Financing completed at or prior to the Closing, if any) multiplied by (y) ten dollars ($10). For the avoidance of doubt, Retained Company Units shall (A) be calculated prior to giving effect to the transfer of Purchased Closing Company Units in accordance with Section 2.1(a)(i)(B) and (B) include the Put-Call Units (if any).

RSI Companies” means, collectively, the Company and the Company Subsidiaries.

RSI Companies Relevant Licenses” means all licenses, permissions, authorizations, permits and consents issued by any Gaming Regulatory Authority to any RSI Company or any officers, directors or employees thereof which are necessary to operate the business of the RSI Companies in accordance with the Applicable Gaming Laws.

RSI Flow-Thru Company” means any RSI Company (a) that is a treated for U.S. federal income tax purposes as a partnership, a disregarded entity, a “controlled foreign corporation” within the meaning of Code Section 957, a “specified foreign corporation” within the meaning of Code Section 965 or a “passive foreign investment company” within the meaning of Code Section 1297 and (b) with respect to which any Seller is liable for the Income Tax Liabilities on such RSI Company’s Income Tax Returns under applicable Laws.

RSI Indemnified Person” has the meaning set forth in Section 7.12(a).

 

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Sanctioned Country” means any country or region that is, or has been in the five (5) years prior to the Effective Date, the subject or target of a comprehensive embargo under Sanctions (including Cuba, Iran, North Korea, Syria and the Crimea region of Ukraine) in effect at the time.

Sanctioned Person” means any Person that is: (a) listed on any applicable U.S. or non-U.S. sanctions-related restricted party list, including the U.S. Department of Treasury Office of Foreign Assets Control’s (“OFAC”) Specially Designated Nationals and Blocked Persons List, the EU Consolidated List and HM Treasury’s Consolidated List of Persons Subject to Financial Sanctions; (b) in the aggregate, fifty percent (50%) or greater owned, directly or indirectly, or otherwise controlled by a Person or Persons described in clause (a); or (c) organized, resident or located in a Sanctioned Country.

Sanctions” means all Laws and Orders relating to economic or trade sanctions administered or enforced by the United States (including by OFAC, the U.S. Department of State and the U.S. Department of Commerce), Canada, the United Kingdom, the United Nations Security Council, the European Union, or any other EU Guarantor State, or any other relevant Governmental Entity.

SEC” means the United States Securities and Exchange Commission.

Securities Act” means the Securities Act of 1933.

Securities Exchange Act” means the Securities Exchange Act of 1934.

Securities Liens” means Liens arising out of, under or in connection with (a) applicable federal, state and local securities Laws and (b) restrictions on transfer, hypothecation or similar actions contained in any Governing Documents.

Security Breach” means a data security breach or breach of Personal Information under applicable Privacy and Security Requirements or any other applicable Laws.

Security Incident” means any unauthorized access, use, disclosure, modification or destruction of information or interference with IT Assets that adversely impacts the confidentiality, integrity or availability of such information and IT Assets.

Self-Help Code” means any back door, time bomb, drop dead device, or other Software routine designed to disable a computer program without input from, knowledge of, or notice to the user of the program.

Seller” or “Sellers” has the meaning set forth in the Recitals.

Seller Executives” means Neil Bluhm, Greg Carlin, and Richard Schwartz.

Seller Parties” has the meaning set forth in Section 11.2(a).

Seller Proportions” has the meaning set forth in Section 2.1(a)(i)(B).

Sellers Earnout Company Units” has the meaning set forth in the Recitals.

Sellers Earnout Voting Shares” has the meaning set forth in the Recitals.

Sellers Fundamental Representations” means the representations and warranties set forth in Section 4.1 (Organization; Authority; Enforceability); Section 4.2 (Capitalization; Ownership); Section 4.6 (Brokerage) and Section 4.7 (Investment Intent).

Sellers’ Representative” has the meaning set forth in the Preamble.

 

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Sellers’ Representative Notice” has the meaning set forth in Section 2.1(a)(i)(B).

Services Agreement” has the meaning set forth in the Recitals.

Sherman Act” means the Sherman Antitrust Act of 1890.

Signing Form 8-K” has the meaning set forth in Section 7.9(b).

Signing Press Release” has the meaning set forth in Section 7.9(b).

Software” means all computer software, applications, and programs (and all versions, releases, fixes, upgrades and updates thereto, as applicable), including software compilations, development tools, compilers, files, scripts, manuals, design notes, programmers’ notes, architecture, application programming interfaces, mobile applications, algorithms, data, databases, and compilations of data, comments, user interfaces, menus, buttons, icons, and other items and documentation related thereto or associated therewith as well as any foreign language versions, fixes, upgrades, updates, enhancements, new versions, previous versions, new releases and previous releases thereof, in each case, whether in source code, object code or human readable form.

SPD” has the meaning set forth in Section 3.16(a).

Sponsor” has the meaning set forth in the Preamble.

Sponsor Dispute Notice” has the meaning set forth in Section 2.3(b)(iv).

Sponsor Transaction Expense Cap” means an amount equal to seventeen million dollars ($17,000,000).

Sponsor Transaction Expenses” shall mean the aggregate Transaction Expenses incurred by, or attributable to, any of the Sponsor or the Buyer, in each case, as set forth herein.

Sponsor Transaction Expenses Certificate” has the meaning set forth in Section 2.3(b)(i).

Stock Exchange” means the New York Stock Exchange.

Straddle Period” means any taxable period that begins on or before (but does not end on) the Closing Date.

Subscription Agreement” means a Contract executed by an Equity Financing Source (a) on or before the Effective Date or (b) following the Effective Date, but on or before the Post-Closing Financing End Date, in each case, in connection with a Permitted Equity Financing and in accordance with Section 7.15.

Subsidiaries” means, of any Person, any corporation, association, partnership, limited liability company, joint venture or other business entity of which more than fifty percent (50%) of the voting power or equity is owned or controlled directly or indirectly by such Person, or one (1) or more of the Subsidiaries of such Person, or a combination thereof.

Tail Policy” has the meaning set forth in Section 7.12(b)(ii).

Tax” or “Taxes” means all United States federal, state, local, foreign, and other net or gross income, net or gross receipts, net or gross proceeds, payroll, employment, excise, severance, stamp, occupation, windfall or excess profits, profits, customs, capital stock, withholding, social security, unemployment, disability, real property, personal property (tangible and intangible), sales, use, transfer, value added, alternative or add-on minimum, capital gains, user, leasing, lease, natural resources, ad valorem, franchise, gaming license, capital, estimated, goods and services, fuel, interest equalization, registration, recording, premium, turnover,

 

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environmental or other taxes, charges, duties, fees, levies or other governmental charges of any kind whatsoever, including all interest, penalties, assessments and additions imposed with respect to the foregoing, imposed by (or otherwise payable to) any Governmental Entity, and, in each case, whether disputed or not, whether payable directly or by withholding and whether or not requiring the filing of a Tax Return.

Tax Distributions” means “Minimum Distribution for Taxes” (as defined in, calculated, and made by the Company to Sellers in accordance with the Company’s LPA) to the extent provided in or permitted by the Company’s LPA including in respect of estimated taxable income of the Company from January 1, 2020 through the Closing Date; provided that, for the avoidance of doubt, with respect to the fiscal quarter of the Company that includes the Closing Date, such Tax Distributions shall be treated as permitted by the Company’s LPA notwithstanding that such Tax Distributions are not with respect to the entire fiscal quarter.

Tax Proceeding” means any audit, examination, claim or Proceeding with respect to Taxes, Tax matters, or Tax Returns.

Tax Receivable Agreement” has the meaning set forth in the Recitals.

Tax Returns” means all United States federal, state, local and foreign returns, declarations, reports, claims for refund, information returns, elections, disclosures, statements, or other documents (including any related or supporting schedules, attachments, statements or information, and including any amendments thereof) filed or required to be filed with a Taxing Authority in connection with, or relating to, Taxes.

Tax Sharing Agreement” means any agreement or arrangement (including any provision of a Contract) pursuant to which any RSI Company or the Buyer is or may be obligated to indemnify any Person for, or otherwise pay, any Tax of or imposed on another Person, or indemnify, or pay over to, any other Person any amount determined by reference to actual or deemed Tax benefits, Tax assets, or Tax savings, excluding, for the avoidance of doubt, the Tax Receivable Agreement.

Taxing Authority” means any Governmental Entity having jurisdiction over the assessment, determination, collection, administration or imposition of any Tax.

Trademark License Agreement” has the meaning set forth in Section 8.2.

Transaction Expenses” means:

(a)    all fees, costs and expenses designated as Sponsor Transaction Expenses or Company Transaction Expenses in this Agreement;

(b)    only to the extent Buyer is or becomes obligated to pay, has paid or has agreed to pay, all fees, costs, bonuses and expenses (including fees, costs and expenses of third-party advisors, legal counsel, investment bankers, or other representatives) incurred or payable by the Buyer or the Sponsor through the Closing in connection with the preparation of the financial statements, the negotiation, preparation and execution of this Agreement, the Ancillary Agreements, and the Proxy Statement and the consummation of the transactions contemplated hereby and thereby (including due diligence) or in connection with the Buyer’s pursuit of a Business Combination with the Company, and the performance and compliance with all agreements and conditions contained herein or therein to be performed or complied with (which fees, costs and expenses shall be deemed Sponsor Transaction Expenses hereunder);

(c)    only to the extent an RSI Company is obligated to pay, has paid or has agreed to pay, all fees, costs and expenses (including fees, costs and expenses of third-party advisors, legal counsel, investment bankers, or other representatives) incurred or payable by any of the RSI Companies, the Sellers’ Representative or the Sellers (or the Sellers’ equityholders) through the Closing in connection with the preparation of the financial statements, the negotiation, preparation and execution of this Agreement, the

 

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Ancillary Agreements and the Proxy Statement and the consummation of the transactions contemplated hereby and thereby (including due diligence) or in connection with the Sellers’ pursuit of the transactions contemplated by this Agreement, and the performance and compliance with all agreements and conditions contained herein or therein to be performed or complied with (which fees, costs and expenses shall be deemed Company Transaction Expenses hereunder);

(d)    any fees, costs and expenses incurred or payable by the Buyer, any of the RSI Companies, the Sponsor, the Sellers’ Representative or the Sellers in connection with entry into the Subscription Agreements and the consummation of the transactions contemplated by the Subscription Agreements and in connection with the negotiation, preparation and execution of any Permitted Equity Financing, including any fees or other inducements related thereto (which fees, costs, expenses and inducements shall be deemed Sponsor Transaction Expenses hereunder, to the extent incurred or payable by the Buyer, and Company Transaction Expenses, to the extent incurred or payable by any RSI Company or any Seller; provided that, notwithstanding the foregoing, (i) in connection with any Permitted Equity Financing(s) other than the PIPE (as defined in the LOI), to the extent that any Equity Financing Source providing such financing seeks commitment fees or other inducements to enter into a Subscription Agreement, one hundred percent (100%) of such commitment fees or other inducements shall be deemed Sponsor Transaction Expenses hereunder, and (ii) in connection with any Permitted Equity Financing(s) that comprise the PIPE (as defined in the LOI), to the extent that any Equity Financing Sources providing such financing seeks commitment fees or other inducements to enter into a Subscription Agreement, fifty percent (50%) of such commitment fees or other inducements approved by the Company in writing (email being sufficient) shall be deemed Company Transaction Expenses hereunder and fifty percent (50%) of such commitment fees or other inducements shall be deemed Sponsor Transaction Expenses hereunder), which fees and inducements the Parties agree are equal to zero dollars ($0) with respect to Subscription Agreements entered into on or prior to the Effective Date (each such commitment fees or inducement under subclauses (d)(i) and (ii), a “Permitted Inducement”);

(e)    any Liability of the RSI Companies in the nature of compensation under any sale, change-of-control, “stay around,” retention, severance or similar bonus or payment plans or similar arrangements paid or payable to current or former directors, officers or employees of the RSI Companies, in whole or in part, as a result of or in connection with the transactions contemplated this Agreement or any Ancillary Agreement (which fees, costs and expenses shall be deemed Company Transaction Expenses hereunder);

(f)    all fees, costs and expenses paid or payable pursuant to the Tail Policy (which fees, costs and expenses shall be deemed Sponsor Transaction Expenses hereunder); all filing fees paid or payable to a Governmental Entity in connection with any filing made under the HSR Act or Applicable Gaming Law, in each case if required (fifty percent (50%) of such fees shall be deemed Company Transaction Expenses hereunder and fifty percent (50%) of such fees shall be deemed Sponsor Transaction Expenses hereunder); and

(g)    all Transfer Taxes (fifty percent (50%) of such Transfer Taxes shall be deemed Company Transaction Expenses hereunder and fifty percent (50%) of such Transfer Taxes shall be deemed Sponsor Transaction Expenses hereunder).

Transfer Taxes” means all transfer, documentary, sales, use, stamp, registration, notarial fees and other similar Taxes and fees incurred in connection with the transactions contemplated by this Agreement.

Transferred Names” has the meaning set forth in Section 8.2.

Transferred Names Assignment Agreement” has the meaning set forth in Section 8.2.

Treasury Regulations” means the United States Treasury Regulations promulgated under the Code, and any reference to any particular Treasury Regulation section shall be interpreted to include any final or temporary revision of or successor to that Section regardless of how numbered or classified.

 

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Triggering Event” has the meaning set forth in Section 2.9(c).

Trust Account” means the trust account established by the Buyer pursuant to the Trust Agreement.

Trust Agreement” means that certain Investment Management Trust Agreement, dated of February 20, 2020, by and between the Buyer and Continental Stock Transfer & Trust Company, a New York corporation.

Trust Amount” has the meaning set forth in Section 5.4.

Trust Distributions” has the meaning set forth in Section 11.11.

Trustee” means Continental Stock Transfer & Trust Company, acting as trustee of the Trust Account.

Unaudited Financial Statements” has the meaning set forth in Section 3.4(a).

Unauthorized Code” means any virus, Trojan horse, worm, or other Software routines or hardware components designed to permit unauthorized access, to disable, erase, or otherwise harm Software, hardware or data that is not developed or authorized by any RSI Company or the licensor of the Software or hardware components.

Volume Weighted Average Share Price” means the volume-weighted average share price of Buyer Class A Common Stock as displayed on Buyer’s page on Bloomberg (or any successor service) in respect of the period from 9:30 a.m. to 4:00 p.m., New York City time, on such trading day.

Waiving Parties” has the meaning set forth in Section 11.16(a)(i).

WARN Act” means the Worker Adjustment and Retraining Notification Act of 1988, or any similar or related Law.

W&C” has the meaning set forth in Section 11.16(b)(i).

ARTICLE II

PURCHASE AND SALE TRANSACTIONS

Section 2.1    Purchase and Sale of Acquired Company Units; Issuance of Buyer Class V Voting Stock.

(a)    Closing Date Transactions. Upon the terms and subject to the conditions set forth in this Agreement, at the Closing:

(i)    The Buyer will acquire the Acquired Closing Company Units and the Sellers and the Company will cause such Acquired Closing Company Units to be sold, transferred, assigned or issued to the Buyer, as applicable, in the following sequence:

 

  (A)

(x) The Buyer will (1) transfer to the Company the Contribution Amount plus the aggregate amount of the Transaction Expenses in exchange for the Issued Company Units (including the Buyer Earnout Company Units), free and clear of all Liens (other than Securities Liens), and (2) issue to the Company the Buyer Class V Voting Stock as set forth in Section 2.1(a)(iii) below (including the Sellers Earnout Voting Shares which shall be subject to vesting and potential forfeiture in accordance with Section 2.9) and (y) the Company will issue to the Buyer the Issued Company Units (including the Buyer Earnout Company Units which shall be subject to vesting and potential forfeiture in accordance with Section 2.9), free and clear of all Liens (other than Securities Liens); and

 

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  (B)

The Buyer will (x) pay to the Sellers ((i) excluding the Put-Call Sellers if the Closing occurs on or prior to the Put-Call Threshold Date or (ii) including the Put-Call Sellers if the Closing occurs after the Put-Call Threshold Date), by wire transfer of immediately available funds to the account or accounts designated in writing by the applicable Sellers no later than three (3) Business Days prior to the Closing, an aggregate amount in cash equal to the Purchased Company Unit Closing Cash Consideration (if any), which amount shall be allocated among the Sellers ((i) excluding the Put-Call Sellers if the Closing occurs on or prior to the Put-Call Threshold Date or (ii) including the Put-Call Sellers if the Closing occurs after the Put-Call Threshold Date) in accordance with each Seller’s proportion set forth in a writing delivered by the Sellers’ Representative to the Company and the Buyer at least two (2) days prior to the Closing Date (the “Sellers Representative Notice” and such proportions, the “Seller Proportions”), and (y) agree to provide certain rights under the Tax Receivable Agreement, in exchange for the Purchased Closing Company Units held by the Sellers ((i) excluding the Put-Call Sellers if the Closing occurs on or prior to the Put-Call Threshold Date or (ii) including the Put-Call Sellers if the Closing occurs after the Put-Call Threshold Date), free and clear of all Liens (other than Securities Liens), and (y) each Seller ((i) excluding the Put-Call Sellers if the Closing occurs on or prior to the Put-Call Threshold Date or (ii) including the Put-Call Sellers if the Closing occurs after the Put-Call Threshold Date) will sell, assign and transfer to the Buyer the Purchased Closing Company Units and a corresponding number of shares of Buyer Class V Voting Stock held by such Seller, free and clear of all Liens (other than Securities Liens).

(ii)    Substantially simultaneously with the transactions set forth in Section 2.1(a)(i), the Sellers and the Company will adopt the Company A&R LPA and in connection with such transactions, including the issuance to the Company (for further distribution to the Sellers in accordance with Section 2.1(a)(iv) below) of the Buyer Class V Voting Stock as set forth in Section 2.1(a)(iii) below, the GP Company shall be admitted as the general partner of the Company pursuant to the terms of the Company A&R LPA.

(iii)    The Buyer shall (A) issue to the Company, in the aggregate, one (1) share of Buyer Class V Voting Stock for each Retained Company Unit held by the Sellers, free and clear of all Liens (other than Securities Liens), and (B) make appropriate book entries evidencing the issuance to the Company of such shares of Buyer Class V Voting Stock.

(iv)    Immediately after the transactions set forth in Section 2.1(a)(i), Section 2.1(a)(ii), and Section 2.1(a)(iii), (A) the Company shall distribute the shares of Buyer Class V Voting Stock received by the Company under Section 2.1(a)(iii) to the Sellers, and (B) the Buyer shall make appropriate book entries (to the accounts designated by Sellers in writing prior to Closing) evidencing the distribution to the Sellers of such shares of Buyer Class V Voting Stock.

(b)    Post-Closing Permitted Equity Financings. To the extent that one or more Permitted Equity Financings is consummated following the Closing, but on or prior to the Post-Closing Financing End Date in accordance with the terms and conditions set forth in this Agreement (including, without limitation, Section 7.15) and the Subscription Agreement applicable thereto:

(i)    the applicable Equity Financing Source shall pay to the Buyer the purchase price (which price per share, for the avoidance of doubt, shall not be less than the Minimum Stock Sale Price), and the Buyer shall issue the number of shares of Buyer Class A Common Stock to such Equity Financing Source, in each case, as set forth in and in accordance with the terms and conditions set forth in the applicable Subscription Agreement;

(ii)    (x) the Buyer shall promptly (and in any event no later than three (3) Business Days following the Post-Closing Financing End Date) thereafter contribute to the Company the Aggregate Available Cash received in connection with any such Permitted Equity Financings and (y) the Company shall issue to Buyer a number of Company Units equal to the number of shares of Buyer

 

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Class A Common Stock so issued pursuant to the Permitted Equity Financing at the price at which the corresponding shares of Buyer Class A Common Stock were sold (such number of Company Units, the “Post-Closing Issued Company Units”); and

(iii)    the Company shall promptly (and in any event no later than three (3) Business Days following the contribution by the Buyer to the Company contemplated in Section 2.1(b)(ii)) thereafter pay to the Sellers ((1) excluding the Put-Call Sellers if the Closing occurs on or prior to the Put-Call Threshold Date or (2) including the Put-Call Sellers if the Closing occurs after the Put-Call Threshold Date), by wire transfer of immediately available funds to the account or accounts designated in writing by the applicable Sellers no later than three (3) Business Days prior to the Closing, an aggregate amount in cash equal to the Redemption Amount (if any), which amount shall be allocated among the Sellers ((1) excluding the Put-Call Sellers if the Closing occurs on or prior to the Put-Call Threshold Date or (2) including the Put-Call Sellers if the Closing occurs after the Put-Call Threshold Date) as set forth in the Sellers’ Representative Notice and in accordance with the applicable Seller Proportions and (x) the Company shall redeem from the Sellers ((1) excluding the Put-Call Sellers if the Closing occurs on or prior to the Put-Call Threshold Date or (2) including the Put-Call Sellers if the Closing occurs after the Put-Call Threshold Date), in accordance with the applicable Seller Proportions, and the Sellers ((1) excluding the Put-Call Sellers if the Closing occurs on or prior to the Put-Call Threshold Date or (2) including the Put-Call Sellers if the Closing occurs after the Put-Call Threshold Date) shall sell, assign and transfer to the Company (in accordance with the applicable Seller Proportions), a number of Company Units (which shall not, for the avoidance of doubt, include any Sellers Earnout Company Units) equal to (1) the Redemption Amount (if any) divided by (2) ten dollars ($10.00) (the “Redeemed Post-Closing Company Units”) and (ii) the Sellers ((1) excluding the Put-Call Sellers if the Closing occurs on or prior to the Put-Call Threshold Date or (2) including the Put-Call Sellers if the Closing occurs after the Put-Call Threshold Date) shall forfeit to the Buyer the corresponding number of shares of Buyer Class V Voting Stock held by such Sellers (in accordance with the applicable Seller Proportions), in each case, free and clear of all Liens (other than Securities Liens), and each such Redeemed Post-Closing Company Unit and share of Buyer Class V Voting Stock shall automatically be cancelled by the Company and the Buyer, respectively, without any further action by any Person.

(c)    Put-Call Transactions. If, and only if, the Closing occurs on or prior to the Put-Call Threshold Date, upon the terms and subject to the conditions set forth in the Put-Call Agreements, each Put-Call Seller shall be entitled to exercise his put right and the Company shall be entitled to exercise its call right, in each case, in respect of such Put-Call Seller’s Put-Call Units in exchange for the Put-Call Consideration Amount as set forth in the applicable Put-Call Agreement.

Section 2.2    Purchase Price and Closing Date Payments. Subject to the satisfaction or waiver of the conditions set forth in Section 2.6 (other than those conditions that by their nature are to be satisfied at Closing, but subject to the satisfaction or waiver of those conditions), at the Closing and in consideration for the acquisition of the Acquired Closing Company Units as specifically set forth in Section 2.1(a)(i) above, the Buyer shall, subject to this Agreement and the Trust Agreement, disburse all Available Closing Date Cash plus the aggregate amount of Transaction Expenses incurred by the Parties for the following purposes and in the following order of priority:

(a)    first, contribution to the Company of the Contribution Amount plus the aggregate amount of Transaction Expenses incurred by the Parties, which shall be used by the Company as follows:

(i)    first, payment of the Transaction Expenses by wire transfer of immediately available funds on behalf of the Persons that incurred such Transaction Expenses or by whom such Transaction Expenses are payable; and

(ii)    second, the Contribution Amount shall be retained by the Company for use by any RSI Company (including for payment by the Company of the Put-Call Consideration Amounts payable to the Put-Call Sellers pursuant to the Put-Call Agreements, as applicable); and

 

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(b)    second, payment to Sellers, by wire transfer of immediately available funds to the account or accounts designated in writing by the applicable Sellers no later than three (3) Business Days prior to the Closing, an aggregate amount in cash equal to the Purchased Company Unit Closing Cash Consideration (if any) and which amount shall be allocated among Sellers in accordance with the Seller Proportions.

Section 2.3    Transaction Statement; Available Closing Date Cash; Third Party Invoices.

(a)    Available Closing Date Cash. At least two (2) Business Days prior to the Closing Date, the Buyer shall prepare and deliver to the Company and Sellers a certificate, duly executed and certified by an executive officer of the Buyer, setting forth in reasonable detail the Buyer’s good faith calculation (and attaching reasonable supporting details to enable a review thereof by Sellers) of Available Closing Date Cash.

(b)    Third Party Invoices.

(i)    At least three (3) Business Days prior to the Closing Date, (A) the Sellers’ Representative shall deliver to the Sponsor copies of all invoices for Company Transaction Expenses (whether payable on, prior to or after the Closing), as well as a certificate, duly executed and certificated by an executive officer of the Company, setting forth in reasonable detail the Company’s good faith calculation of the aggregate amount of Company Transaction Expenses (the “Company Transaction Expenses Certificate”) and any W-9 or other tax forms reasonably requested in connection with payment thereof, and (B) the Sponsor shall deliver to the Sellers’ Representative copies of all invoices for Sponsor Transaction Expenses (whether payable on, prior to or after the Closing), as well as a certificate, duly executed and certificated by an executive officer of the Sponsor, setting forth in reasonable detail the Sponsor’s good faith calculation of the aggregate amount of Sponsor Transaction Expenses (the “Sponsor Transaction Expenses Certificate”) and any W-9 or other tax forms reasonably requested in connection with payment thereof.

(ii)    Each of the Sellers’ Representative and the Sponsor shall be obligated to promptly notify (in reasonable detail) the other Party upon discovery or determination by such Party of any inaccurate amounts reflected on the Company Transaction Expenses Certificate or the Sponsor Transaction Expenses Certificate, as applicable, during the thirty (30) days following the Closing Date.

(iii)    No later than thirty (30) days following the Closing Date, (A) the Sponsor shall notify the Sellers’ Representative in writing whether it accepts or disputes the accuracy of the calculation of the Company Transaction Expenses set forth on the Company Transaction Expenses Certificate, and (B) the Sellers’ Representative shall notify the Sponsor in writing whether it accepts or disputes the accuracy of the calculation of the Sponsor Transaction Expenses set forth on the Sponsor Transaction Expenses Certificate. If the Sponsor accepts the calculation of the Company Transaction Expenses set forth on the Company Transaction Expenses Certificate, or fails within such thirty (30) day period to notify the Sellers’ Representative of any dispute with respect thereto, then the calculation of the Company Transaction Expenses set forth on the Company Transaction Expenses Certificate shall be deemed final and conclusive and binding upon all Parties in all respects. If the Sellers’ Representative accepts the calculation of the Sponsor Transaction Expenses set forth on the Sponsor Transaction Expenses Certificate, or fails within such thirty (30) day period to notify the Sponsor of any dispute with respect thereto, then the calculation of the aggregate amount of Sponsor Transaction Expenses set forth on the Sponsor Transaction Expenses Certificate shall be deemed final and conclusive and binding upon all Parties in all respects.

(iv)    If the Sponsor disputes the accuracy of the calculation of Company Transaction Expenses set forth on the Company Transaction Expenses Certificate, the Sponsor shall provide written notice to the Sellers’ Representative no later than thirty (30) days following the Closing Date (the “Sponsor Dispute Notice”), setting forth in reasonable detail those items that the Sponsor disputes. If the Sellers’ Representative disputes the accuracy of the calculation of Sponsor Transaction Expenses set forth on the Sponsor Transaction Expenses Certificate, the Sellers’ Representative shall provide written notice

 

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to the Sponsor no later than thirty (30) days following the Closing Date (the “Company Dispute Notice” and each of the Sponsor Dispute Notice and the Company Dispute Notice, a “Dispute Notice”), setting forth in reasonable detail those items that the Sellers’ Representative disputes. During the fifteen (15) day period following delivery of a Dispute Notice, Sponsor and the Sellers’ Representative shall negotiate in good faith with a view to resolving their disagreements over the disputed items. During such fifteen (15) day period and until the final determination of Sponsor Transaction Expenses and Company Transaction Expenses in accordance with this Section 2.3(b)(iv) or Section 2.3(b)(v), as the case may be (as so determined, or as determined pursuant to Section 2.3(b)(iii) above, “Final Sponsor Transaction Expenses” and “Final Company Transaction Expenses,” respectively), the Sponsor and its representatives shall be provided with reasonable access to the financial books and records of the RSI Companies and the Sellers, and the Sellers’ Representative and its representatives shall be provided with reasonable access to the financial books and records of the Sponsor and the Buyer, in each case as it may reasonably request to enable it to address all matters set forth in any Dispute Notice. If the Sponsor and the Sellers’ Representative resolve their differences over the disputed items in accordance with the foregoing procedure, Final Sponsor Transaction Expenses and the Final Company Transaction Expenses shall be the amounts agreed upon by them. If the Sponsor and the Sellers’ Representative fail to resolve their differences over the disputed items within such fifteen (15) period, then Sponsor and the Sellers’ Representative shall forthwith jointly request that an Independent Accountant, as shall be mutually agreed by Sponsor and the Sellers’ Representative, make a binding determination as to the disputed items in accordance with this Agreement.

(v)    The Independent Accountant will under the terms of its engagement have no more than thirty (30) days from the date of referral and no more than fifteen (15) Business Days from the final submission of information and testimony by the Sponsor and the Sellers’ Representative within which to render its written decision with respect to the disputed items (and only with respect to any unresolved disputed items set forth in the applicable Dispute Notice(s)) and the final calculation of Sponsor Transaction Expenses and Company Transaction Expenses, as applicable, shall be based solely on the resolution of such disputed items. The Independent Accountant shall review such submissions and base its determination solely on such submissions. In resolving any disputed item, the Independent Accountant may not assign a value to any item greater than the maximum value for such item claimed by either party or less than the minimum value for such item claimed by either party. The decision of the Independent Accountant shall be deemed final and binding upon the parties and enforceable by any court of competent jurisdiction and the Independent Accountant’s final calculation of the Sponsor Transaction Expenses shall be deemed the “Final Sponsor Transaction Expenses” and the Independent Accountant’s final calculation of the Company Transaction Expenses shall be deemed the “Final Company Transaction Expenses.” The fees and expenses of the Independent Accountant shall be allocated to be paid by the Sponsor, on the one hand, and the Company, on the other, based upon the percentage that the portion of the contested amount not awarded to each Party bears to the amount actually contested by such Party, as determined by the Independent Accountant, which amounts shall be added to the Final Sponsor Transaction Expenses or the Final Company Transaction Expenses, as applicable.

(vi)    Following the determination of the Final Sponsor Transaction Expenses and Final Company Transaction Expenses pursuant to Section 2.3(b)(iii), Section 2.3(b)(iv) and/or Section 2.3(b)(v), the Company Enterprise Value shall be recalculated by adding the Net Company Enterprise Value Adjustment Amount (which, for clarity, may be a negative amount) (the “Adjusted Company Enterprise Value”). If the Adjusted Company Enterprise Value is greater than the Company Enterprise Value, then (A) the Company shall issue additional Company Units to the Sellers, on a Pro Rata Basis, in an aggregate amount equal to the quotient of (x) the absolute value of the Net Company Enterprise Value Adjustment Amount divided by (y) ten dollars ($10), (B) the Buyer shall issue a corresponding number of additional shares of Buyer Class V Voting Stock to the Company, and (C) the Company shall distribute such additional shares of Buyer Class V Voting Stock received as set forth in clause (B) above to each Seller, on a Pro Rata Basis. If the Adjusted Company Enterprise Value is less than

 

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the Company Enterprise Value, then (A) the Sellers shall automatically forfeit for no consideration, on a Pro Rata Basis, an aggregate number of Company Units and shares of Buyer Class V Voting Stock equal to the quotient of (x) the absolute value of the Net Company Enterprise Value Adjustment Amount divided by (y) ten dollars ($10), and (B) the Company and the Buyer shall automatically cancel and retire such Company Units and shares of Buyer Class V Voting Stock, respectively, with no further action by any other Person. The Parties agree to treat the issuance or forfeiture of any Company Units with respect to Sellers pursuant to this Section 2.3(b)(vi) as an adjustment to the Sellers’ initial post-closing capital account for U.S. federal (and applicable state and local) income Tax purposes, as appropriate.

Section 2.4    Example Pro Forma Calculations. The transactions contemplated by Section 2.1(a) shall be effectuated in accordance with and based upon the definitions contained herein. The Example Pro Forma Calculations set forth on Exhibit L have been prepared in full and complete accordance with the definitions contained herein and shall be for illustrative purposes only.

Section 2.5    Closing Transactions. The closing of the transactions contemplated by this Agreement (the “Closing”) shall take place (a) by conference call and by exchange of signature pages by email, fax or other electronic transmission as promptly as practicable (and in any event no later than 9:00 a.m. eastern time on the third (3rd) Business Day after the conditions set forth in Section 2.6 have been satisfied, or, if permissible, waived by the Party entitled to the benefit of the same (other than those conditions which by their terms are required to be satisfied at the Closing, but subject to the satisfaction or waiver of such conditions) or (b) such other date and time as the Parties mutually agree (the date upon which the Closing occurs, the “Closing Date”).

Section 2.6    Conditions to the Obligations of the Parties.

(a)    Conditions to the Obligations of Each Party. The obligation of each Party to consummate the transactions to be performed by it in connection with the Closing is subject to the satisfaction or written waiver, as of the Closing Date, of each of the following conditions:

(i)    Hart-Scott-Rodino Act. If a filing is required in connection with the consummation of the transactions contemplated by this Agreement under the HSR Act, the waiting period applicable to the consummation of the transactions contemplated by this Agreement under the HSR Act shall have expired or been terminated.

(ii)    No Orders or Illegality. There shall not be any applicable Law in effect that makes the consummation of the transactions contemplated by this Agreement illegal or any Order in effect preventing the consummation of the transactions contemplated by this Agreement.

(iii)    Required Vote. The Required Vote shall have been obtained.

(b)    Conditions to Obligations of the Buyer. The obligations of the Buyer to consummate the transactions to be performed by the Buyer in connection with the Closing is subject to the satisfaction or written waiver, at or prior to the Closing Date, of each of the following conditions:

(i)    Representations and Warranties.

 

  (A)

The representations and warranties of the Company set forth in Article III of this Agreement (other than the Company Fundamental Representations and the representations and warranties of the Company set forth in Section 3.22 and Section 3.23) and of Sellers set forth in Article IV of this Agreement (other than the Sellers Fundamental Representations), in each case, without giving effect to any materiality or Material Adverse Effect qualifiers contained therein (other than in respect of the defined term ‘Material Contract’), shall be true and correct as of the Effective Date and as of the Closing Date as though then made (or if such representations and warranties relate to a specific date, such representations and warranties shall be true and correct as of such date), except in each case, to the extent such failure of the representations and warranties to be so true and correct, individually or in the aggregate, has not had and would not reasonably be expected to have a Material Adverse Effect;

 

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  (B)

the representations and warranties of the Company set forth in Section 3.22 and Section 3.23 of this Agreement, in each case, without giving effect to any materiality or Material Adverse Effect qualifiers contained therein, shall be true and correct as of the Effective Date and as of the Closing Date as though then made (or if such representations and warranties relate to a specific date, such representations and warranties shall be true and correct as of such date), except in each case, to the extent such failure of such representations and warranties to be so true and correct, individually or in the aggregate, has not had and would not reasonably be expected to have a material and adverse effect on the RSI Companies, taken as a whole; and

 

  (C)

the Company Fundamental Representations and the Sellers Fundamental Representations, in each case, without giving effect to any materiality or Material Adverse Effect qualifiers contained therein, shall be true and correct in all material respects as of the Effective Date and as of the Closing Date as though then made (or if such representations and warranties relate to a specific date, such representations and warranties shall be true and correct in all material respects as of such date).

(ii)    Performance and Obligations of the Company and Sellers. The Company and Sellers shall have performed or complied in all material respects with all covenants required by this Agreement to be performed or complied with by the Company or Sellers, as applicable, on or prior to the Closing Date.

(iii)    Material Adverse Effect. Since the Effective Date, there has been no Material Adverse Effect.

(iv)    Officers Certificate. (A) The Company shall deliver to the Buyer, a duly executed certificate from an authorized Person of the Company in the form attached hereto as Exhibit G, dated as of the Closing Date, certifying that the conditions set forth in Section 2.6(b)(i), Section 2.6(b)(ii), and Section 2.6(b)(iii) with respect to the Company have been satisfied, and (B) and the Sellers’ Representative shall deliver to the Buyer, a duly executed certificate on behalf of Sellers in the form attached hereto as Exhibit G, dated as of the Closing Date, certifying that the conditions set forth in Section 2.6(b)(i) and Section 2.6(b)(ii) with respect to Sellers have been satisfied.

(v)    Recapitalization. The Recapitalization shall have been effectuated as described in the Recitals and in compliance with the terms and conditions of the Company’s LPA.

(vi)    Company and Sellers Closing Deliveries. The Buyer shall have received the closing deliveries set forth in Section 2.7.

(vii)    PCAOB Financial Statements. The Company shall have delivered to the Buyer the PCAOB Financial Statements.

(c)    Conditions to Obligations of Sellers and the Company. The obligation of Sellers and the Company to consummate the transactions to be performed by Sellers and the Company, as applicable, in connection with the Closing is subject to the satisfaction or written waiver, at or prior to the Closing Date, of each of the following conditions:

(i)    Representations and Warranties.

 

  (A)

The representations and warranties of the Buyer set forth in Article V of this Agreement (other than the Buyer Fundamental Representations), in each case, without giving effect to any materiality or material adverse effect qualifiers contained therein, shall be true and correct as of the Effective Date and as of the Closing Date as though then made (or if such representations and warranties relate to a specific date, such representations and warranties shall be true and correct as of such date), except in each case, to the extent such failure of the representations and warranties to be so true and correct, individually or in the aggregate, has not had and would not reasonably be expected to have a Buyer Material Adverse Effect; and

 

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  (B)

the Buyer Fundamental Representations, in each case, without giving effect to any materiality or material adverse effect qualifiers contained therein, shall be true and correct in all material respects as of the Effective Date and as of the Closing Date as though then made (or if such representations and warranties relate to a specific date, such representations and warranties shall be true and correct in all material respects as of such date).

(ii)    Performance and Obligations of the Buyer. The Buyer shall have performed or complied in all material respects with all covenants required by this Agreement to be performed or complied with by the Buyer on or prior to the Closing Date.

(iii)    Officers Certificate. The Buyer shall deliver to the Sellers’ Representative, a duly executed certificate from an officer of the Buyer, in the form attached hereto as Exhibit H, dated as of the Closing Date, certifying that the conditions set forth in Section 2.6(c)(i) and Section 2.6(c)(ii) have been satisfied.

(iv)    Available Closing Date Cash. Available Closing Date Cash shall not be less than one hundred sixty million dollars ($160,000,000) minus (y) the amount of the excess, if any, of the Company Transaction Expenses set forth on the Company Transaction Expenses Certificate over the Company Transaction Expense Cap.

(v)    Buyer Governing Documents. The Buyer A&R Certificate of Incorporation shall have been filed with the Secretary of State of the State of Delaware, and the Buyer shall have adopted the Buyer A&R Bylaws.

(vi)    Buyer Closing Deliveries. The Sellers’ Representative shall have received the closing deliveries set forth in Section 2.8.

(vii)    Gaming Regulatory Conditions. All approvals, determinations, grants, confirmations and other conditions with respect to Gaming Regulatory Authorities required in connection with the transactions contemplated by this Agreement and the Ancillary Agreements shall have been made, obtained, satisfied or given and shall be in full force and effect, as applicable.

(viii)    No Material Adverse Regulatory Event. There shall not have occurred and be continuing any event or circumstance involving any Gaming Regulatory Authority relating to this Agreement or the Business Combination (including any statement or notice by or from a Gaming Regulatory Authority), that has had or is reasonably likely to have (A) a material adverse impact on the eligibility of any RSI Company to continue to operate under their material operating licenses or registrations in any material respect, (B) an adverse impact in any material respect on any pending material applications of any RSI Company (other than any RSI Company formed or incorporated filed with a Gaming Regulatory Authority, or (C) otherwise impair the ability of any RSI Company (other than any RSI Company formed or incorporated to operate its business as conducted on the Effective Date in any material respect following the Closing.

(d)    Frustration of Closing Conditions. None of Sellers, the Company or the Buyer may rely on the failure of any condition set forth in this Section 2.6 to be satisfied if such failure was caused by such Party’s failure to act in good faith or to use commercially reasonable efforts to cause the closing conditions of such other Party to be satisfied.

(e)    Waiver of Closing Conditions. Upon the occurrence of the Closing, any condition set forth in this Section 2.6 that was not satisfied as of the Closing shall be deemed to have been waived as of and from the Closing.

Section 2.7    Company and Sellers Closing Deliveries.

(a)    Company and Sellers Deliveries. At the Closing, the Company or the Sellers’ Representative shall deliver to the Buyer:

(i)    a unit power, duly executed by each applicable Seller with respect to the Purchased Closing Company Units owned by such Seller in the form attached hereto as Exhibit I (the “Unit Powers”);

 

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(ii)    a properly completed and duly executed IRS Form W-9 (collectively, the “W-9s”) from each Seller;

(iii)    the Company A&R LPA, duly executed by the Company and the Sellers;

(iv)    evidence that the Recapitalization has been effectuated as described in the Recitals;

(v)    the Tax Receivable Agreement, duly executed by the Sellers, the Company and the Sellers’ Representative;

(vi)    the Investor Rights Agreement, duly executed by the Sellers and the Sellers’ Representative;

(vii)    the Founder Holders Forfeiture Agreement, duly executed by the Sellers’ Representative;

(viii)    the Services Agreement, duly executed by the Company and Rush Street Gaming, LLC;

(ix)    the Amended Sponsor Letter, executed by the Sellers’ Representative and the Company;

(x)    the Transferred Names Assignment Agreement, duly executed by the Company and the Sellers (and applicable Affiliates);

(xi)    the Trademark License Agreement, duly executed by the Company and the Sellers; and

(xii)    the Put-Call Agreements, duly executed by the Company and the Put-Call Sellers.

Section 2.8    Buyer Closing Deliveries.

(a)    Buyer Closing Deliveries. At the Closing, the Buyer (on behalf of itself, the Sponsor and/or the Founder Holders, as applicable) shall deliver to the Sellers:

(i)    the Unit Powers, duly executed by Buyer;

(ii)    the Founder Holders Forfeiture Agreement, duly executed by the Buyer and the Founder Holders;

(iii)    the Amended Sponsor Letter, duly executed by the Buyer and the Founder Holders;

(iv)    the Company A&R LPA, duly executed by the Buyer and the GP Company;

(v)    the Tax Receivable Agreement, duly executed by the Buyer;

(vi)    the Investor Rights Agreement, duly executed by the Buyer and the Founder Holders;

(vii)    evidence that, immediately after the Closing, the Buyer Board is comprised of nine (9) directors and that the Seller Directors (as defined in the Investor Rights Agreement) have been appointed to the Buyer Board; and

(viii)    the Put-Call Agreements, duly executed by the Buyer.

Section 2.9    Earnout.

(a)    Earnout Shares and Earnout Company Units. Upon the Closing (for the avoidance of doubt, following the Buyer Class B Common Stock Conversion), on the Closing Date, the Earnout Shares and Earnout Company Units will be subject to restrictions on transfer and voting, as more fully described in Section 2.9(b)(iv), and subject to forfeiture in the event such Earnout Shares and Earnout Company Units are not earned in accordance with Section 2.9(c). The Sellers Earnout Company Units and the Sellers Earnout Voting Shares shall be allocated to Sellers on a Pro Rata Basis, the Founder Holders Earnout Shares shall be allocated to the Founder Holders (on a Pro Rata Basis) and the Buyer Earnout Company Units shall be allocated to the Buyer, in each case in accordance with this Section 2.9.

(b)    Procedures Applicable to the Earnout of the Earnout Shares and Earnout Company Units.

(i)    At the Closing, (x) the Buyer shall place the restrictive legends, in substantially the form set forth in Section 2.9(b)(i)(A), on the certificates or book entries representing the Earnout Shares, and

 

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(y) the Company shall place the restrictive legends, in substantially the form set forth in Section 2.1(a)(i)(B), on the certificates or book entries representing the Earnout Company Units:

 

(A)

“THESE SECURITIES ARE SUBJECT TO THE VOTING AND TRANSFER RESTRICTIONS SET FORTH IN THE BUSINESS COMBINATION AGREEMENT, DATED JULY 27, 2020 (THE “COMBINATION AGREEMENT”), BY AND AMONG DMY TECHNOLOGY GROUP, INC. (THE “CORPORATION”), RUSH STREET INTERACTIVE, LP AND CERTAIN OTHER PARTIES THERETO, AS AMENDED AND RESTATED BY THE PARTIES THERETO ON SEPTEMBER [    ], 2020, AND AS THE SAME MAY BE AMENDED, RESTATED OR AMENDED & RESTATED FROM TIME TO TIME, AND NO TRANSFER OF THESE SECURITIES WILL BE VALID OR EFFECTIVE UNTIL THE CONDITIONS CONTAINED IN THE COMBINATION AGREEMENT, IF ANY, HAVE BEEN FULFILLED.”

 

(B)

“THESE SECURITIES ARE SUBJECT TO THE VOTING AND TRANSFER RESTRICTIONS SET FORTH IN THE BUSINESS COMBINATION AGREEMENT, DATED JULY 27, 2020 (THE “COMBINATION AGREEMENT”), BY AND AMONG DMY TECHNOLOGY GROUP, INC., RUSH STREET INTERACTIVE, LP (THE “COMPANY”) AND CERTAIN OTHER PARTIES THERETO, AS AMENDED AND RESTATED BY THE PARTIES THERETO ON OCTOBER 9, 2020, AND AS THE SAME MAY BE AMENDED, RESTATED OR AMENDED & RESTATED FROM TIME TO TIME, AND NO TRANSFER OF THESE SECURITIES WILL BE VALID OR EFFECTIVE UNTIL THE CONDITIONS CONTAINED IN THE COMBINATION AGREEMENT, IF ANY, HAVE BEEN FULFILLED.”

(ii)    Promptly upon the occurrence of any Triggering Event, or as soon as practicable after the Buyer or the Company becomes aware of the occurrence of such Triggering Event or receives written notice of a Triggering Event from the Sponsor or the Sellers’ Representative, the Buyer shall prepare and deliver, or cause to be prepared and delivered, in consultation with the Company, a mutually agreeable written notice to the Sponsor and the Sellers’ Representative (each, an “Earnout Notice”), which Earnout Notice shall set forth in reasonable detail the Triggering Event giving rise to the Earnout Shares and Earnout Company Units becoming earned and the number of Earnout Shares and Earnout Company Units that are so earned. The Buyer, the Sponsor and the Sellers’ Representative shall use commercially reasonable efforts to resolve any disputes in good faith that may arise between any of them with respect to the determination of the occurrence of a Triggering Event and the preparation of the applicable Earnout Notice. In the event the Buyer, the Sponsor and the Sellers’ Representative are unable to reach mutual agreement with each other with respect to the determination of the occurrence of a Triggering Event, all unresolved disputed items shall be promptly referred to an impartial nationally recognized firm of independent certified public accountants appointed by mutual agreement of the Buyer, the Sponsor and the Sellers’ Representative (the “Independent Accountant”). The Independent Accountant shall be directed to render a written report on the unresolved disputed items with respect to the applicable Triggering Event and related Earnout Notice as promptly as practicable and to resolve only those unresolved disputed items. The Buyer, the Sponsor and the Sellers’ Representative shall each furnish to the Independent Accountant such work papers, schedules and other documents and information relating to the unresolved disputed items as the Independent Accountant may reasonably request. The Independent Accountant shall resolve the disputed items based solely on the terms and conditions in this Agreement and the presentations made on behalf of the Buyer, the Sponsor and the Sellers’ Representative and not by independent review. The resolution of any such dispute by the Independent Accountant shall be final and binding on the parties hereto absent manifest error in its determination, in which case the matter will be brought back to the Independent Accountant for correction no more than one time by the Buyer, the Sponsor or the Sellers’ Representative, after which the determination of the Independent Accountant shall be final and binding. The fees and expenses of the Independent Accountant shall be borne equally by the Founder Holders and the Sellers.

(iii)    Promptly following the date of an Earnout Notice (or the final resolution of any disputes with respect to such Earnout Notice in accordance with Section 2.9(b)(ii)), the Buyer (with respect to

 

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the Earnout Shares that are so determined to have been earned) and the Company (with respect to the Earnout Company Units that are finally determined to have been earned) shall cause the restrictive legends set forth in Section 2.9(b)(i) to be removed from certificates or book entries representing such Earnout Shares and Earnout Company Units, as applicable.

(iv)    Subject to the terms of the Investor Rights Agreement and/or the Company A&R LPA, as may be applicable, the holders of the Earnout Shares and/or Earnout Company Units shall not (A) directly or indirectly, sell, transfer, assign, pledge, encumber, hypothecate or similarly dispose of, either voluntarily or involuntarily, any of the Earnout Shares or Earnout Company Units or (B) vote any Earnout Shares or Earnout Company Units, in each case until the date on which the relevant Triggering Events have been satisfied as described in Section 2.9(c) below and it is finally determined that such Earnout Shares or Earnout Company Units have been earned pursuant to Section 2.9(b)(ii) (the restrictions in clauses (A) & (B), the “Earnout Restrictions”), and thereafter, such Earnout Shares and Earnout Company Units shall continue to be subject to the terms and restrictions of the Investor Rights Agreement, the Buyer A&R Certificate of Incorporation, the Buyer A&R Bylaws and the Company A&R LPA.

(v)    For the avoidance of doubt, no additional shares of Buyer Capital Stock or Company Units will subject to the Earnout Restrictions in this Section 2.9, and upon the earlier of (i) all of the Earnout Shares and Earnout Company Units becoming earned in accordance with Section 2.9, or (ii) the final determination that no un-earned Earnout Shares and the Earnout Company Units will become earned, the provisions of this Section 2.9 shall no longer have any force or effect. Notwithstanding the foregoing, any Earnout Shares and Earnout Company Units that are not earned in accordance with the terms of Section 2.9 as of the end of the day on the three (3)-year anniversary of the Closing Date shall thereafter be forfeited to the Buyer, with respect to the Earnout Shares, and the Company, with respect to the Earnout Company Units, and cancelled and retired and the Sponsor, Founder Holders, the Buyer and/or the Sellers, as applicable, shall not have any rights with respect thereto.

(vi)    Company 2021 Net Revenue Earnout Statement. As soon as practicable (but in any event no later than fifteen (15) Business Days) following the completion of the audited financial statements of the RSI Companies for the fiscal year ending on December 31, 2021, the Buyer and/or the Company shall prepare, or cause to be prepared, and shall furnish to the Sponsor and the Sellers’ Representative a statement (in reasonable detail) reflecting the Company 2021 Net Revenue for such fiscal year (such statement, the “Earnout Statement”). Unless the Sponsor or the Sellers’ Representative, within forty-five (45) days after receipt of the Earnout Statement, provides the Buyer, the Company and the Sellers’ Representative (in the case of a dispute by the Sponsor) or the Sponsor (in the case of a dispute by the Sellers’ Representative) with a written notice objecting thereto and specifying, in reasonable detail, the basis for such objection and the amount in dispute (an “Earnout Revenue Objection”), the Earnout Statement shall be binding upon the Parties. During such forty-five (45) day period after receipt of an Earnout Statement, the Sponsor and the Sellers’ Representative shall have access to the books and records and personnel of the RSI Companies, and work papers prepared by or on behalf of the Buyer and/or the Company, in each case, to the extent they relate to the Earnout Statement as the Sponsor or the Sellers’ Representative may reasonably request for the purposes of reviewing the Earnout Statement and/or preparing an Earnout Revenue Objection. In the event there is a dispute between the Sponsor or the Sellers’ Representative, as applicable, on one hand, and the Buyer and/or the Company, on the other hand, regarding the existence of a Triggering Event pursuant to Section 2.9(c)(ii) or the Earnout Statement, the Sponsor or the Sellers’ Representative timely provides the Buyer and the Company with an Earnout Revenue Objection, and such dispute is not resolved within thirty (30) days of receipt by the Buyer and the Company of the applicable Earnout Revenue Objection, the Sponsor, the Sellers’ Representative, the Sponsor, the Buyer and the Company shall engage the Independent Accountant to resolve the dispute in a manner consistent with the process set forth in Section 2.9(b)(i).

 

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(c)    Triggering Events. The Earnout Shares and the Earnout Company Units shall be earned, and as a result no longer subject to the Earnout Restrictions, as follows (each such event, a “Triggering Event”):

(i)    if a Change of Control is consummated on or prior to the third (3rd) anniversary of the Closing Date, one hundred percent (100%) of the Earnout Shares and the Earnout Company Units shall be earned and no longer subject to the Earnout Restrictions;

(ii)    promptly (but no later than three (3) Business Days) following the final determination of the Company 2021 Net Revenue in accordance with Section 2.9(b)(iv)), a percentage of the Founder Holders Earnout Shares, the Buyer Earnout Company Units, the Sellers Earnout Voting Shares, and the Sellers Earnout Company Units, in each case, equal to Company 2021 Net Revenue Earnout Achievement Percentage, shall be earned and no longer subject to the Earnout Restrictions;

(iii)    if, on or any time prior to the third (3rd) anniversary of the Closing Date, the Volume Weighted Average Share Price equals or exceeds twelve dollars ($12.00) per share for ten (10) trading days of any twenty (20) consecutive trading day period following the Closing, 50% of each of the Founder Holders Earnout Shares, the Buyer Earnout Company Units, the Sellers Earnout Voting Shares, and the Sellers Earnout Company Units shall be earned and no longer subject to the Earnout Restrictions; and

(iv)    if, on or any time prior to the third (3rd) year anniversary of the Closing Date, the Volume Weighted Average Share Price equals or exceeds fourteen dollars ($14.00) per share for ten (10) trading days of any twenty (20) consecutive trading day period following the Closing, 100% of each of the Founder Holders Earnout Shares, the Buyer Earnout Company Units, the Sellers Earnout Voting Shares, and the Sellers Earnout Company Units shall be earned and no longer subject to the Earnout Restrictions.

(d)    Achievement of Multiple of Triggering Events. For the avoidance of doubt, if the condition for more than one Triggering Event is met pursuant to Section 2.9(c), (i) the Earnout Shares and Earnout Company Units earned in connection with each such Triggering Event shall be earned and no longer subject to the Earnout Restrictions accordance with this Section 2.9, and shall be cumulative with the Earnout Shares and Earnout Company Units earned prior to such time in connection with the satisfaction of any other Triggering Event (if any) and (ii) in no event shall the Founder Holders, the Buyer, the Sellers or any other Person be entitled to a number of Earnout Shares or Earnout Company Units, as applicable, which is greater than the number of Founder Holders Earnout Shares, Buyer Earnout Company Units, Sellers Earnout Company Units, and Sellers Earnout Voting Shares, as applicable.

Section 2.10    Withholding.

(a)    The Buyer, the Additional Special Limited Partner, and the Company (and any of their respective representatives) shall be entitled to deduct and withhold (or cause to be deducted and withheld) from any amount otherwise payable under this Agreement such amounts as are required to be deducted and withheld with respect to the making of such payment under the Code or any other provision of applicable Laws; provided, however, that the relevant payor will reasonably cooperate with the relevant payee prior to the making of such deductions and withholding payments to determine whether any such deductions or withholding payments (other than with respect to compensatory payments, if any) are required under applicable Law and in obtaining any available exemption or reduction of, or otherwise minimizing to the extent permitted by applicable Law, such deduction and withholding. To the extent that such withheld amounts are paid over to or deposited with the applicable Governmental Entity, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the Person in respect of which such deduction and withholding were made. The Buyer, the Additional Special Limited Partner and the Sellers acknowledge that no withholding is required under applicable U.S. federal income Tax Law as in effect as of the Effective Date (other than with respect to compensatory payments or any deduction or withholding required by reason of the failure by any Seller to timely provide a duly executed and properly completed IRS Form W-9s) with respect to any amounts payable by the Buyer or the Additional Special Limited Partner to the Sellers under this Agreement.

 

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(b)    If a Seller is unable to provide a duly executed and properly completed IRS Form W-9, then (i) such Seller shall provide a certificate substantially in the form described in Proposed Regulations Section 1.1446(f)-2(c)(2)(ii)(B) or (ii) the Company shall deliver a certificate substantially in in the form described in Proposed Regulations Section 1.1446(f)-2(c)(2)(ii)(C), in each case setting forth the liabilities of the Company allocated to the Company Units sold or deemed to be sold pursuant to this Agreement under Section 752 of the Code, and the Buyer, the Additional Special Limited Partner, or the Company, as applicable, shall be permitted to withhold from the amount realized by such Seller in respect of such Company Units as provided in Section 1446(f) of the Code and Proposed Regulations thereunder and consistent with the certificate provided pursuant to clause (i) or (ii) of this sentence, as applicable.

ARTICLE III

REPRESENTATIONS AND WARRANTIES REGARDING THE RSI COMPANIES

As an inducement to the Buyer to enter into this Agreement and consummate the transactions contemplated by this Agreement, except as set forth in the applicable section of the Company and Sellers’ Disclosure Letter, the Company represents and warrants to the Buyer as of the Effective Date and as of the Closing Date as follows:

Section 3.1    Organization; Authority; Enforceability. Each RSI Company is (a) duly organized or formed, validly existing, and in good standing (or the equivalent) under the Laws of its jurisdiction of organization or formation (or, if continued in another jurisdiction, under the Laws of its current jurisdiction of registration (as applicable)), (b) qualified to do business and is in good standing (or the equivalent) in the jurisdictions in which the conduct of its business or locations of its assets and/or its leasing, ownership, or operation of properties makes such qualification necessary, except where the failure to be so qualified to be in good standing (or the equivalent) would not reasonably be expected to have a Material Adverse Effect and (c) each RSI Company has the requisite corporate or limited liability company, as the case may be, power and authority to own, lease and operate its properties and to carry on its businesses as presently conducted. The Company has the limited liability company power and authority to execute and deliver this Agreement and the Ancillary Agreements to which it is a party and to consummate the transactions contemplated hereby and thereby, and each of the RSI Companies have taken all corporate or other legal entity action necessary in order to execute, deliver and perform their respective obligations hereunder and to consummate the transactions contemplated hereby and thereby. The general partner of the Company has duly approved this Agreement and the Ancillary Agreements to which it is a party and the transactions contemplated hereby and thereby and has duly authorized the execution, delivery and performance of this Agreement by the Company and the Ancillary Agreement to which it is a party. No other limited liability company or equivalent proceedings on the part of any RSI Company are necessary to approve and authorize the execution, delivery and performance of this Agreement and the Ancillary Agreement to which it is a party and to consummate the transactions contemplated hereby and thereby. This Agreement has been duly executed and delivered by the Company and constitutes the valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, subject to bankruptcy, insolvency, reorganization or other Laws affecting creditors’ rights generally and by general equitable principles. Correct and complete copies of the Governing Documents of each RSI Company, as in effect on the Effective Date, have been made available to the Buyer. Except as set forth on Section 3.1 of the Company and Sellers’ Disclosure Letter, none of the RSI Companies is the subject of any bankruptcy, dissolution, liquidation, reorganization or similar proceeding.

Section 3.2    Noncontravention. Except as set forth on Section 3.2 of the Company and Sellers’ Disclosure Letter, the filings pursuant to Section 7.8, the filings with Gaming Regulatory Authorities required pursuant to Section 2.6(c)(vii), and any arrangement set forth on Section 3.16(c) of the Company and Sellers’ Disclosure Letter, the consummation by the Company of the transactions contemplated by this Agreement and the Ancillary Agreements to which the Company is a party do not (a) conflict with or result in any breach of any of the material terms, conditions or provisions of, (b) constitute a material default under (whether with or without the giving of notice, the passage of time or both), (c) result in a material violation of, (d) give any third party the

 

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right to terminate or accelerate, or cause any termination or acceleration of, any material right or material obligation under, (e) result in the creation of any Lien upon the Company Units under, (f) require any approval from, or (g) require any filing with, (i) any Material Contract or Material Lease, (ii) any Governing Document of an RSI Company or (iii) any Governmental Entity under or pursuant to any Law or Order to which any RSI Company is bound or subject, with respect to clauses (d) through (g), which would have a Material Adverse Effect. No RSI Company is in violation of any of the Governing Documents of such RSI Company except as would not have a Material Adverse Effect.

Section 3.3    Capitalization.

(a)    Section 3.3(a) of the Company and Sellers’ Disclosure Letter sets forth with respect to each RSI Company as of the Effective Date, (i) its name and jurisdiction of organization or formation, (ii) its form of organization or formation and (iii) the Equity Interests issued by each RSI Company (including the number and class (as applicable) of vested and unvested Equity Interests) and the record and beneficial ownership (including the percentage interests held thereby) thereof. The Equity Interests set forth on Section 3.3(a) of the Company and Sellers’ Disclosure Letter comprise all of the capital stock, limited liability company interests or other equity interests, as applicable, of the RSI Companies that are issued and outstanding as of the Effective Date, immediately prior to giving effect to the transactions occurring on the Closing Date (including prior to the Recapitalization) set forth in this Agreement and in the Ancillary Agreements.

(b)    Except as set forth on Section 3.3(b) of the Company and Sellers’ Disclosure Letter, or set forth in this Agreement, the Recapitalization Agreement, the Put-Call Agreements, and if applicable, as further detailed in the Ancillary Agreements or the Governing Documents of the RSI Companies:

(i)    there are no outstanding options, warrants, Contracts, calls, puts, rights to subscribe, conversion rights or other similar rights to which any RSI Company is a party or which are binding upon any RSI Company providing for the offer, issuance, redemption, exchange, conversion, voting, transfer, disposition or acquisition of any of its Equity Interests;

(ii)    none of the RSI Companies is subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any of its Equity Interests;

(iii)    none of the RSI Companies is a party to any voting trust, proxy or other agreement or understanding with respect to the voting of any of its Equity Interests;

(iv)    there are no contractual equityholder preemptive or similar rights, rights of first refusal, rights of first offer or registration rights in respect of Equity Interests of any of the RSI Companies to which any RSI Company is a party;

(v)    none of the RSI Companies has violated in any material respect any applicable securities Laws or any preemptive or similar rights created by Law, Governing Document or Contract to which such RSI Company is a party in connection with the offer, sale or issuance of any of its Equity Interests; and

(vi)    other than pursuant to applicable Law (including Applicable Gaming Law), there are no contractual restrictions which prevent the payment of dividends or distributions by any of the RSI Companies.

(c)    All of the issued and outstanding Equity Interests of the RSI Companies (including the Acquired Closing Company Units) have been duly authorized, validly issued, fully paid and non-assessable and free of any preemptive rights in respect thereto, and were not issued in violation of any preemptive rights, call options, rights of first refusal, subscription rights, transfer restrictions (other than Securities Liens and other than as set forth in the Governing Documents of the RSI Companies) or similar rights of any Person or applicable Law, other than in each case Securities Liens. Upon delivery of and payment for the Acquired Closing Company Units at the Closing, (i) Buyer will acquire good and valid title to all of the Acquired Closing Company Units, free and clear of any Liens (other than Securities Liens and other than as set forth

 

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in the Company’s LPA, this Agreement or the Ancillary Agreements) and (ii) the Acquired Closing Company Units (including the Buyer Earnout Company Units) together with the Retained Company Units (including the Sellers Earnout Company Units), will represent all of the Equity Interests of the Company, other than as set forth in the Company’s LPA.

(d)    Except as set forth on Section 3.3(d) of the Company and Sellers’ Disclosure Letter, no RSI Company currently owns, directly or indirectly, any Equity Interests in any Person (other than another RSI Company), and no RSI Company has agreed to acquire any Equity Interests of any Person or has any branch, division, establishment or operations outside the jurisdiction in which it is incorporated, formed or organized (as applicable).

Section 3.4    Financial Statements; No Undisclosed Liabilities.

(a)    Attached as Section 3.4(a) of the Company and Sellers’ Disclosure Letter are (x) the unaudited consolidated balance sheets of the RSI Companies as of March 31, 2020 (the “Latest Balance Sheet”), December 31, 2019 and December 31, 2018, and (y) the related unaudited consolidated statements of operations for the fiscal periods then ended (together with the Latest Balance Sheet, the “Unaudited Financial Statements”).

(b)    Except as set forth on Section 3.4(b) of the Company and Sellers’ Disclosure Letter, each of the Unaudited Financial Statements has been, and the PCAOB Financial Statements will be, when delivered to Buyer pursuant to Section 7.9(h), derived from the books and records of the RSI Companies. Except as set forth on Section 3.4(b) of the Company and Sellers’ Disclosure Letter, (A) each of the Unaudited Financial Statements has been, and the PCAOB Financial Statements will be, when delivered to Buyer pursuant to Section 7.9(h), prepared in all material respects in accordance with GAAP applied on a consistent basis throughout the periods indicated therein and (B) each of the Unaudited Financial Statements fairly presents, and the PCAOB Financial Statements will, when delivered to Buyer pursuant to Section 7.9(h), fairly present, in all material respects, the combined assets, liabilities, and financial condition as of the respective dates thereof and the operating results of the RSI Companies for the periods covered thereby, except in each of clauses (A) and (B): (w) as otherwise noted therein, (x) that the Unaudited Financial Statements do not include footnotes, schedules, statements of equity and statements of cash flow and disclosures required by GAAP, (y) that the Unaudited Financial Statements have not been prepared in accordance with Regulation S-X of the SEC or the standards of the PCAOB, and (z) that the Unaudited Financial Statements do not include all year-end adjustments required by GAAP, in each case of clauses (x), (y) or (z), which are not, material, individually or in the aggregate, in amount or effect).    For the avoidance of doubt, the PCAOB Financials, when delivered to the Buyer in accordance with Section 7.9(h), will be prepared in accordance with Regulation S-X of the SEC or the standards of the PCAOB.

(c)    Each of the independent auditors for the RSI Companies, with respect to their report as will be included in the PCAOB Financial Statements, is an independent registered public accounting firm within the meaning of the Securities Act and the applicable rules and regulations adopted by the SEC and, with respect to the PCAOB Financial Statements, the PCAOB.

(d)    Except as set forth on Section 3.4(d) of the Company and Sellers’ Disclosure Letter, the RSI Companies have no material Liabilities that are required to be disclosed on a balance sheet in accordance with GAAP, other than (i) Liabilities set forth in or reserved against in the Unaudited Financial Statements or the notes thereto or books and records of the RSI Companies; (ii) Liabilities which have arisen after the date of the Latest Balance Sheet in the Ordinary Course of Business (none of which results from, arises out of, or was caused by any breach of warranty, breach of Contract or infringement or violation of Law); (iii) Liabilities arising under this Agreement, the Ancillary Agreements and/or the performance by the Company of its obligations hereunder or thereunder or incurred in connection with the transactions contemplated by this Agreement, including the Transaction Expenses; (iv) Liabilities disclosed in the Company and Sellers’ Disclosure Letter; or (v) Liabilities for Company Transaction Expenses.

(e)    Except as set forth on Section 3.4(e) of the Company and Sellers’ Disclosure Letter, as of the Effective Date, the RSI Companies do not have any outstanding (i) indebtedness for borrowed money;

 

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(ii) indebtedness evidenced by any note, bond, debenture, mortgage or other debt instrument or debt security; or (iii) indebtedness for borrowed money of any Person for which such RSI Company has guaranteed payment.

(f)    No RSI Company maintains any “off-balance sheet arrangement” within the meaning of Item 303 of Regulation S-K of the Securities and Exchange Commission.

Section 3.5    No Material Adverse Effect. Since December 31, 2019 through the Effective Date, there has been no Material Adverse Effect.

Section 3.6    Absence of Certain Developments. Except as set forth on Section 3.6 of the Company and Sellers’ Disclosure Letter, since December 31, 2019, (a) each RSI Company has conducted its business in all material respects in the Ordinary Course of Business and (b) no RSI Company has taken (or has had taken on its behalf) any action that would, if taken after the Effective Date, require the Buyer’s consent under Section 6.1(a).

Section 3.7    Real Property.

(a)    Neither the Company nor any other RSI Company owns, or has ever owned, any real property.

(b)    Set forth on Section 3.7(b) of the Company and Sellers’ Disclosure Letter is a correct and complete list (with the address) of all Material Leases. Except as set forth on Section 3.7(b) of the Company and Sellers’ Disclosure Letter, with respect to each of the Material Leases: (i) no RSI Company subleases, licenses or otherwise grants to any Person the right to use or occupy the Leased Real Property or any portion thereof; (ii) the applicable RSI Company’s possession and quiet enjoyment of the Leased Real Property under such Material Lease, to the extent applicable, is not being disturbed, (iii) each applicable RSI Company has made available to the Buyer a correct and complete copy of all Material Leases; (iv) all rent and other material undisputed amounts due and payable with respect to the Material Leases on or prior to the Effective Date have been paid when due, and all rent and other material undisputed amounts due and payable with respect to the Leased Real Property on or prior to the Closing Date, to the extent then due and payable, will have been paid prior to the Closing Date; and (v) the Company is not in material default under any such Material Lease nor, to the Company’s Knowledge, has an event occurred which would, with the giving of notice or the expiration of time, result in such material default by it or by any other party to such Material Lease. All landlords with respect to the Leased Real Property have consented, or prior to Closing will have consented, (where such consent is necessary) to the consummation of the transactions contemplated by this Agreement.

(c)    The Leased Real Property comprises all of the real property used in the business of the RSI Companies.

(d)    Except as set forth on Section 3.7(d) of the Company and Sellers’ Disclosure Letter since the Lookback Date, no portion of the Leased Real Property that is the subject of a Material Lease has suffered damage by fire or other casualty loss, which has not been repaired and restored in all material respects.

Section 3.8    Tax Matters. Except as set forth on Section 3.8 of the Company and Sellers’ Disclosure Letter:

(a)    Each RSI Company has timely filed all Income and other material Tax Returns required to be filed by it on or prior to the Closing Date pursuant to applicable Laws (taking into account any validly obtained extensions of time within which to file). All Income and other material Tax Returns filed by each of the RSI Companies are correct and complete in all material respects and have been prepared in material compliance with all applicable Laws. All Income and other material amounts of Taxes and all Income and other material amounts of Tax Liabilities due and payable by each of the RSI Companies for which the applicable statute of limitations remains open have been timely paid (whether or not shown as due and payable on any Tax Return).

(b)    Each RSI Company has timely and properly withheld or collected and paid to the applicable Taxing Authority all material amounts of Taxes required to have been withheld and paid by it in connection

 

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with any amounts paid or owing to any employee, independent contractor, creditor, equityholder or other third party and all material sales, use, ad valorem, value added, and similar Taxes and has otherwise complied in all material respects with all applicable Laws relating to such withholding, collection and payment of Taxes.

(c)    No written claim has been made by a Taxing Authority in a jurisdiction where an RSI Company does not file a particular type of Tax Return, or pay a particular type of Tax, that such RSI Company is or may be subject to taxation of that type by, or required to file that type of Tax Return in, that jurisdiction, which claim has not been settled or resolved. The Income Tax Returns made available to the Buyer reflect all of the jurisdictions in which the RSI Companies are required to remit material amounts of Income Tax.

(d)    No RSI Company is currently or has been within the past five (5) years the subject of any Tax Proceeding with respect to any Taxes or Tax Returns of or with respect to any RSI Company, no such Tax Proceeding is pending, and, to the Knowledge of the Company, no such Tax Proceeding has been threatened in writing, in each case, that has not been settled or resolved. No RSI Company has commenced a voluntary disclosure proceeding in any jurisdiction that has not been resolved or settled. All material deficiencies for Taxes asserted or assessed in writing against any RSI Company have been fully and timely (taking into account applicable extensions) paid, settled or withdrawn, and, to the Knowledge of the Company, no such deficiency has been threatened or proposed in writing against any RSI Company.

(e)    There are no outstanding agreements extending or waiving the statute of limitations applicable to any Tax or Tax Return with respect to any RSI Company or extending a period of collection, assessment or deficiency for Taxes due from or with respect to any RSI Company, which period (after giving effect to such extension or waiver) has not yet expired, and no written request for any such waiver or extension is currently pending. No RSI Company is the beneficiary of any extension of time (other than an automatic extension of time not requiring the consent of the applicable Governmental Entity) within which to file any Tax Return not previously filed. No private letter ruling, administrative relief, technical advice, or other similar ruling or request has been granted or issued by, or is pending with, any Governmental Entity that relates to any Taxes or Tax Returns of any RSI Company that would have a material adverse effect on any RSI Company following the date of the Latest Balance Sheet.

(f)    No Seller or RSI Company has been a party to any “listed transaction” within the meaning of Treasury Regulations Section 1.6011-4(b)(2) (or any similar provision of U.S. state or local or non-U.S. Tax Law).

(g)    The Company is and at all times since its formation has been classified as a partnership for U.S. federal income tax purposes and each of the Company Subsidiaries is and at all times since its formation been classified as an entity disregarded as separate from the Company for U.S. federal income tax purposes.

(h)    No RSI Company will be required to include any material item of income, or exclude any material item of deduction, for any period (or portion thereof) after the Closing Date (determined with and without regard to the transactions contemplated by this Agreement) as a result of: (i) an installment sale transaction occurring on or before the Closing Date governed by Code Section 453 (or any similar provision of state, local or non-U.S. Laws) or open transaction; (ii) a disposition occurring on or before the Closing Date reported as an open transaction for U.S. federal income Tax purposes (or any similar doctrine under state, local, or non-U.S. Laws); (iii) any prepaid amounts received on or prior to the Closing Date or deferred revenue realized, accrued or received outside the Ordinary Course of Business on or prior to the Closing Date; (iv) a change in method of accounting with respect to a Pre-Closing Tax Period that occurs or was requested on or prior to the Closing Date (or as a result of an impermissible method used in a Pre-Closing Tax Period); (v) an agreement entered into with any Governmental Entity (including a “closing agreement” under Code Section 7121) on or prior to the Closing Date; or (vi) an election (including a protective election) pursuant to Code Section 108(i) (or any similar provision of state, local, or non-U.S. Laws). No RSI Company uses the cash method of accounting for income Tax purposes. No RSI Company has any “long-term contracts” that are subject to a method of accounting provided for in Code Section 460 or has any deferred income pursuant to IRS Revenue Procedure 2004-34, Treasury Regulation

 

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Section 1.451-5, Section 455 of the Code, or Section 456 of the Code (or any corresponding provision of state or local Law). No RSI Company has owned any “controlled foreign corporation” within the meaning of Code Section 957.

(i)    There is no Lien for Taxes on any of the assets of any RSI Company, other than Permitted Liens.

(j)    No RSI Company has any Liability for Taxes of any other Person (other than any RSI Company) as a successor or transferee, by contract, by operation of Law, or otherwise (other than pursuant to an Ordinary Course Tax Sharing Agreement). No RSI Company is party to or bound by any Tax Sharing Agreement, except for any Ordinary Course Tax Sharing Agreement (and except that the Company’s LPA provides for the payment of Tax Distributions).

(k)    The unpaid Taxes of the RSI Companies (i) did not, as of the date of the Latest Balance Sheet, materially exceed the reserves for Tax liabilities (excluding any reserve for deferred Taxes established to reflect timing differences between book and Tax income) included in the Latest Balance Sheet and (ii) do not materially exceed such reserves as adjusted for the passage of time through the Closing Date in accordance with the past practices of the RSI Companies in filing their Tax Returns.

(l)    Except as set forth on Section 3.8(l) of the Company and Sellers’ Disclosure Letter, no Seller is a foreign person within the meaning of Code Section 1445 or Code Section 1446(f).

(m)    No election has been made under Treasury Regulation Section 301.9100-22 (or any similar provision of state, local, or non-U.S. Laws) with respect to any RSI Company.

(n)    The Company has a valid election under Section 754 of the Code (and any similar provision of state, local or non-U.S. Law) in effect, and such elections will remain in effect for any taxable period that includes the Closing Date.

(o)    No Section 197 intangible (within the meaning of Section 197 of the Code) of any of the RSI Companies existing as of the end of the day on the Closing Date will be excluded from the term “amortizable section 197 intangible” pursuant to Section 197(f)(9) of the Code and Treasury Regulations Section 1.197-2(h).

Section 3.9    Contracts.

(a)    Except as set forth on Section 3.9(a) of the Company and Sellers’ Disclosure Letter, no RSI Company is a party to, or bound by, any (other than any Contracts that are no longer in effect and under which no RSI Company has any continuing or potential material Liability):

(i)    collective bargaining agreement;

(ii)    Contract with any Material Supplier which required payments to such Material Supplier by one or more RSI Companies during the 2019 calendar year of an aggregate amount exceeding $1,000,000;

(iii)    Material Lease;

(iv)    (x) Contract for the employment or engagement of any directors, officers, employees or individual independent contractors providing for an annual base compensation in excess of $250,000, (y) Contract providing for severance payments in excess of $300,000, in the aggregate or (z) Contract requiring the payment of any compensation by any RSI Company that is triggered as a result of the consummation of the transactions contemplated by this Agreement;

(v)    Contract under which any RSI Company has created, incurred, assumed or borrowed any money or issued any note, indenture or other evidence of Indebtedness or guaranteed Indebtedness of others, in each case having an outstanding principal amount in excess of $5,000,000 (other than borrowings under the existing credit facilities of the RSI Companies);

(vi)    written license or royalty Contract licensing-in or granting to any RSI Company any right in or immunity under any Intellectual Property, other than Contracts (w) concerning uncustomized,

 

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commercially available Software (whether software, software-as-a-service services, platform-as-a-service services, and/or infrastructure-as-a-service services) licensed for less than $500,000 in annual fees; (x) that are immaterial to the business of the RSI Companies; (y) that include a license in of any commercially available Intellectual Property pursuant to stock, boilerplate, or other generally non-negotiable terms, such as, for example, website and mobile application terms and conditions or terms of use, stock photography licenses, and similar Contracts; or (z) whereby Intellectual Property is implicitly licensed;

(vii)    written license or royalty Contract licensing out or granting any rights in or immunity under any Owned Intellectual Property to any Person (other than another RSI Company), other than Contracts (w) pursuant to which an RSI Company grants non-exclusive licenses that are immaterial to the business of the RSI Companies; (x) (y) whereby Owned Intellectual Property is non-exclusively implicitly licensed or non-exclusively licensed to service providers, subcontractors, or suppliers of any RSI Company solely to the extent necessary for such Person to provide services thereto; or (x) pursuant to which an RSI Company grants non-exclusive licenses of Owned Intellectual Property to customers or casinos in the Ordinary Course of Business;

(viii)    Contract that the Company reasonably expects will require aggregate future payments to or from any RSI Company in excess of $2,000,000 in the 12-month period following Closing, other than the Ancillary Agreements attached hereto as Exhibits and other than those agreements that can be terminated without material penalty by such RSI Company upon ninety (90) days’ notice or less and can be replaced with a similar Contract on materially equivalent terms in the Ordinary Course of Business; provided that the listing of a Contract on Section 3.9(a)(viii) of the Company and Sellers’ Disclosure Letter is not a representation or warranty that such Contract will actually require aggregate future payments in such period in excess of $2,000,000;

(ix)    joint venture, partnership or similar Contract;

(x)    other than this Agreement and the Put-Call Agreements, Contract for the sale or disposition of any material assets or Equity Interests of any RSI Company with an aggregate fair market value greater than $1,000,000 (other than those providing for sales or dispositions of (x) assets and inventory in the Ordinary Course of Business, (y) assets no longer used in the businesses of the RSI Companies, and (z) non-exclusive licenses of Owned Intellectual Property granted to customers or casinos in the Ordinary Course of Business), in each case, under which there are material outstanding obligations of the applicable RSI Company (including any sale or disposition agreement that has been executed, but has not closed);

(xi)    Contract that materially limits or restricts, or purports to limit or restrict, any RSI Company (or after the Closing, the Buyer or any RSI Company) from engaging or competing in any line of business or material business activity in any jurisdiction;

(xii)    Contract that contains a provision providing for the sharing of any revenue or cost-savings with any other Person in excess of $2,000,000 in any one-year period;

(xiii)    Contract involving the payment of any earnout or similar contingent payment with a value in excess of $1,000,000 in any single instance or in excess of $5,000,000 in the aggregate;

(xiv)    Contract involving the settlement, conciliation or similar agreement of any Proceeding or threatened Proceeding (y) involving payments (exclusive of attorney’s fees) in excess of $1,000,000 in any single instance or in excess of $5,000,000 in the aggregate, or (z) that by its terms limits or restricts any RSI Company from engaging or competing in any line of business in any jurisdiction;

(xv)    Contract requiring any capital commitment or capital expenditure (or series of capital commitments or expenditures) following the Closing Date by any RSI Company in an amount in excess of $2,000,000 annually or $10,000,000 over the life of the Contract;

(xvi)    Contract that relates to the future acquisition of material business, assets or properties by any RSI Company (including the acquisition of any business, stock or material assets of any Person or

 

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any real property and whether by merger, sale of stock, sale of assets or otherwise) for a purchase price in excess of $2,500,000 in any single instance or in excess of $5,000,000 in the aggregate, except for (x) any agreement related to the transactions contemplated by this Agreement, (y) any non-disclosure, indications or interest, term sheets, letters of intent or similar agreements entered into in connection with such acquisitions, and (z) any agreement for the purchase of inventory or other assets or properties in the Ordinary Course of Business;

(xvii)    Contract pursuant to which any Person (other than an RSI Company) has guaranteed the Liabilities of an RSI Company; or

(xviii)    Contract set forth on Section 3.24 of the Company and Sellers’ Disclosure Letter.

(b)    Except as set forth on Section 3.9(b) of the Company and Sellers’ Disclosure Letter, each Contract listed on Section 3.9(a) of the Company and Sellers’ Disclosure Letter (each, a “Material Contract”) is in full force and effect and is valid, binding and enforceable against the applicable RSI Company party thereto and against each other party thereto, except as such may be limited by bankruptcy, insolvency, reorganization or other Laws affecting creditors’ rights generally and by general equitable principles and except as would not have a Material Adverse Effect. The Company has made available to the Buyer a copy of each Material Contract. With respect to all Material Contracts, none of the RSI Companies or, to the Knowledge of the Company, any other party to any such Material Contract is in breach or default thereunder, which breach or default would have a Material Adverse Effect (or is alleged in writing to be in breach or default thereunder, which breach or default would have a Material Adverse Effect), and, to the Knowledge of the Company, there does not exist under any Material Contract any event or circumstance which, with the giving of notice or the lapse of time (or both), would constitute such a breach or default by any RSI Company thereunder (which breach or default would have a Material Adverse Effect) or any other party to such Material Contract (which breach or default would have a Material Adverse Effect). During the last twelve (12) months, no RSI Company or any Seller has received any written claim or notice, or, to the Knowledge of the Company, oral claim or notice, of breach of or default under any such Material Contract (which breach or default would have a Material Adverse Effect).

(c)    Set forth on Section 3.9(c) of the Company and Sellers’ Disclosure Letter is a list of the Material Suppliers. Since December 31, 2019, no such Material Supplier has canceled, terminated or, to the Knowledge of the Company, materially and adversely altered its relationship with any RSI Company (in each case, which would have a Material Adverse Effect) or threatened in writing to cancel, terminate or materially and adversely alter its relationship with any RSI Company (in each case, which would have a Material Adverse Effect). There have been no disputes between any RSI Company and any Material Supplier since the Lookback Date which would have a Material Adverse Effect.

(d)    Other than as set forth in their Governing Documents, no RSI Company is subject to any obligation (contingent or otherwise) to repurchase or otherwise retire any Equity Interests of another Person which is not an RSI Company.

Section 3.10    Intellectual Property.

(a)    Except as set forth on Section 3.10(a)(i) of the Company and Sellers’ Disclosure Letter, and except where it would not be material to the RSI Companies, taken as a whole, (x) to the Knowledge of the Company, the former and current products and services and operation of the business of the RSI Companies, in each case, as advertised, marketed, offered for sale, sold, or performed (as applicable), have not, in the past six (6) years, infringed, misappropriated or otherwise violated, and do not currently infringe, misappropriate or otherwise violate, any Intellectual Property rights of any Person, and (y) there are no Proceedings pending (or, to the Knowledge of the Company, threatened, and, in the past six (6) years, no RSI Company has received any written charge, complaint, claim, demand, or notice that has not been fully resolved with prejudice) alleging any such infringement, misappropriation or other violation (including any claim that such RSI Company must license or refrain from using any material Intellectual Property rights of any Person) or challenging the ownership, registration, validity or enforceability of any Owned Intellectual

 

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Property. To the Knowledge of the Company, except as set forth on Section 3.10(a)(ii) of the Company and Sellers’ Disclosure Letter, no Person is, infringing upon, misappropriating or otherwise violating any Owned Intellectual Property in a manner that is material to any of the RSI Companies.

(b)    Except as set forth on Section 3.10(b)(i) of the Company and Sellers’ Disclosure Letter, and except where the failure to so own or have the right to use would not be material to the RSI Companies, taken as a whole, the RSI Companies are the sole and exclusive owner of all right, title, and interest in and to all Owned Intellectual Property, free and clear of all Liens (other than Permitted Liens) and each RSI Company owns, or has the valid right to use, all other Intellectual Property and IT Assets that are used in or necessary for the conduct of the business of such RSI Company as currently conducted, in all material respects, and none of the foregoing will be materially adversely impacted by (nor will require the payment or grant of additional material amounts or material consideration as a result of) the execution, delivery, or performance of this Agreement or any Ancillary Agreement the consummation of the transactions contemplated hereby or thereby. Set forth on Section 3.10(b)(ii) of the Company and Sellers’ Disclosure Letter is a true and complete listing of each active and subsisting patent issuance, Trademark registration, Internet domain name, and copyright registration, and all active and subsisting applications for patents, Trademarks, and copyrights filed with a Governmental Entity, in each case which is owned by an RSI Company or, with respect to Internet domain names, is registered in the name of an RSI Company. Except as set forth on Section 3.10(b)(iii) of the Company and Sellers’ Disclosure Letter, all the Intellectual Property required to be disclosed on Section 3.10(b)(ii) of the Company and Sellers’ Disclosure Letter is subsisting and, to the Knowledge of the Company, valid and enforceable. Except as set forth on Section 3.10(b)(iv) of the Company and Sellers’ Disclosure Letter, the Owned Intellectual Property is not subject to any outstanding Order restricting the use or licensing thereof by such RSI Company or the business of the RSI Companies. All the Owned Intellectual Property required to be disclosed on Section 3.10(b)(ii) of the Company and Sellers’ Disclosure Letter that is an issued patent, patent application, registration, or application for registration has been maintained effective, subject to any expiration of term under applicable Law, by the filing of all necessary filings, maintenance and renewals and timely payment of requisite fees, except in the event the RSI Companies have decided in the exercise of good business judgment not to maintain such application, registration, or issuance.

(c)    Section 3.10(c) of the Company and Sellers’ Disclosure Letter sets forth a true and complete list of all Software that is Owned Intellectual Property and material to the RSI Companies. All such Software (i) conforms and functions, and is designed to function, in all material respects in accordance with all specifications, representations, warranties and other descriptions established in written Contracts by the RSI Companies or in other documents conveyed thereby to their customers or other licensees, (ii) has been maintained for its intended purpose and is free of any material defects or material deficiencies and, to the Knowledge of the Company, does not contain any Self-Help Code or Unauthorized Code or similar programs; and (iii) is in all material respects sufficient for the RSI Companies’ current and reasonably anticipated future needs. No Person other than an RSI Company possesses, or has a right to possess, a copy, in any form (print, electronic or otherwise), of any source code for such Software (other than employees, contractors, and consultants of the RSI Companies that have strict confidentiality obligations to the RSI Companies with respect to such source code and solely to the extent necessary for them to maintain and develop such Software for an RSI Company) and all such source code is in the sole possession of the RSI Companies and has been maintained as strictly confidential.

(d)    All Publicly Available Software used by the RSI Companies in connection with the RSI Companies’ business has been used in all material respects in accordance with the terms of its governing license. None of the RSI Companies has used any Publicly Available Software in connection with Owned Intellectual Property, nor licensed or distributed to any third party any combination of Publicly Available Software and Owned Intellectual Property, in each case, in a manner that (i) requires, or conditions the use or distribution of any Software that is Owned Intellectual Property on, the disclosure, licensing or distribution of any source code for any Owned Intellectual Property or (ii) otherwise imposes any limitation, restriction or condition on the right or ability of the RSI Companies to use, distribute or enforce Owned

 

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Intellectual Property in any manner (the terms of such Publicly Available Software giving rise to the events in clauses (i) and (ii), “Copyleft Terms”).

(e)    No current or former director, officer, manager, employee, agent or third-party representative of an RSI Company has any right, title or interest, directly or indirectly, in whole or in part, in any material Intellectual Property owned or used by the RSI Companies, in each case except as would not be material to the RSI Companies. Each RSI Company has obtained from all Persons (including all current and former founders, officers, directors, stockholders, employees, contractors, consultants and agents) who have contributed to the creation of any Owned Intellectual Property a valid and enforceable written present assignment of all rights, title, and interest in and to any such Owned Intellectual Property to such RSI Company, or all such rights, title, and interest in and to such Owned Intellectual Property have vested in such RSI Company by operation of Law, in each case except where the failure to do so is not material to the RSI Companies. To the Knowledge of the Company, no Person is in violation of any such written assignment agreements.

(f)    Each RSI Company has taken commercially reasonable measures to protect the confidentiality of all trade secrets and any other material confidential information (including material proprietary source code) owned by such RSI Company (and any confidential information owned by any Person to whom any of the RSI Companies has a confidentiality obligation). Except as required by Law or as part of any audit or examination by a regulatory authority or self-regulatory authority, no such trade secret or confidential information has been disclosed by any RSI Company to any Person other than to Persons subject to a duty of confidentiality or pursuant to a written agreement restricting the disclosure and use of such trade secrets or any other confidential information by such Person. To the Knowledge of the Company, no Person is in violation of any such written confidentiality agreements.

(g)    The IT Assets are sufficient in all material respects for the current business operations of the RSI Companies. The RSI Companies have in place commercially reasonable disaster recovery and security plans and procedures and have taken commercially reasonable steps to safeguard the confidentiality, availability, security and integrity of the IT Assets owned by the RSI Companies and all confidential or sensitive data and information stored thereon, such as Personal Information, including from unauthorized access and infection by Unauthorized Code. The RSI Companies have maintained in the Ordinary Course of Business all required licenses and service contracts, including the purchase of a sufficient number of license seats, for all Software material to the operation of the RSI Companies as currently conducted.

(h)    Except as set forth on Section 3.10(h) of the Company and Sellers’ Disclosure Letter, each item of Intellectual Property owned or used by the RSI Companies immediately prior to the Closing will be owned or available for use by the RSI Companies immediately subsequent to the Closing on identical terms and conditions as owned or used by the RSI Companies immediately prior to the Closing.

Section 3.11    Data Security; Data Privacy.

(a)    Except as set forth on Section 3.11(a) of the Company and Sellers’ Disclosure Letter, the RSI Companies have not, to the Knowledge of the Company, experienced any material Security Breaches or material Security Incidents or a material failure of the IT Assets since the Lookback Date, and no RSI Company has received any uncured written notices, claims or complaints from any Person regarding such a material Security Breach or material Security Incident or material failure of the IT Assets since the Lookback Date. Since the Lookback Date, no RSI Company has received any uncured written complaint, claim, demand, inquiry or other notice, including a notice of investigation, from any Person (including any Governmental Entity or self-regulatory authority or entity) regarding any of the RSI Companies’ Processing of Personal Information or compliance with applicable Privacy and Security Requirements.

(b)    Except as set forth on Section 3.11(b) of the Company and Sellers’ Disclosure Letter or as would not constitute a Material Adverse Effect, each RSI Company is, and since the Lookback Date has been, in compliance with all applicable Privacy and Security Requirements. The RSI Companies have a valid and legal right (whether contractually, by Law or otherwise) to access or use all Personal Information that is

 

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processed by or on behalf of the RSI Companies in connection with the use and/or operation of its products and business, in the manner such Personal Information is accessed and used by the RSI Companies except where the failure to have such right would not be material to the RSI Companies. The execution, delivery, or performance of this Agreement and the consummation of the transactions contemplated by this Agreement will not violate any applicable Privacy and Security Requirements or result in or give rise to any right of termination or other right to impair or limit the RSI Companies’ right to own or process any Personal Information used in or necessary for the conduct of the business of the RSI Companies.

Section 3.12    Information Supplied. The information supplied in writing by the Company with respect to the RSI Companies expressly for inclusion in the Proxy Statement, any other document submitted to any other Governmental Entity or any announcement or public statement regarding the transactions contemplated by this Agreement (including the Signing Press Release and the Closing Press Release), which information with respect to the RSI Companies shall be provided by the Company, shall not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances in which they are made, not misleading at (a) the time such information is filed, submitted or made publicly available, (b) the time the Proxy Statement (or any amendment thereof or supplement thereto) is first mailed to the Buyer Stockholders, or (c) the time of the Buyer Stockholder Meeting (in each case, subject to the qualifications and limitations set forth in the materials provided by the Company or that are included in such filings and/or mailings), except that no warranty or representation is made by the Company with respect to (i) statements made or incorporated by reference therein based on information supplied by Buyer or its Affiliates for inclusion in such materials or (ii) any projections or forecasts included in such materials.

Section 3.13    Litigation. Except (a) for Proceedings under any Tax Law (as to which certain representations and warranties are made pursuant to Section 3.8) and (b) as set forth on Section 3.13(a) of the Company and Sellers’ Disclosure Letter, there are no Proceedings (or to the Knowledge of the Company, investigations by a Governmental Entity) in which the reasonably expected damages are in excess of $5,000,000 pending or, to the Knowledge of the Company, threatened in writing against any RSI Company or any director or officer of an RSI Company (in their capacity as such), and since the Lookback Date the RSI Companies have not been subject to or bound by any material outstanding Orders. Except as set forth on Section 3.13(b) of the Company and Sellers’ Disclosure Letter, there are no Proceedings in which the reasonably expected damages are in excess of $5,000,000 pending or threatened by any RSI Company against any other Person. To the Knowledge of the Company, there are no ongoing internal investigations by any RSI Company with respect to any current employee of an RSI Company.

Section 3.14    Brokerage. Except as set forth on Section 3.14 of the Company and Sellers’ Disclosure Letter, no RSI Company has any Liability in connection with this Agreement or the Ancillary Agreements, or the transactions contemplated hereby or thereby, that would result in the obligation of any RSI Company or the Buyer to pay any finder’s fee, brokerage or agent’s commissions or other like payments.

Section 3.15    Labor Matters.

(a)    Section 3.15(a) of the Company and Sellers’ Disclosure Letter sets forth a complete list of all employees of the RSI Companies as of on or about July 26, 2020 and, as applicable, their classification as exempt or non-exempt under the Fair Labor Standards Act, title and/or job description, job location (city and state) and base compensation and any bonuses paid with respect to the last fiscal year. As of the Effective Date, to the Knowledge of the Company, all employees of the RSI Companies are legally permitted to be employed by the RSI Companies in the jurisdiction in which such employees are employed in their current job capacities.

(b)    Except as set forth on Section 3.15(b)(i) of the Company and Sellers’ Disclosure Letter, no RSI Company is a party to or negotiating any collective bargaining agreement with respect to employees of any RSI Company. There are no strikes, work stoppages, slowdowns or other material labor disputes pending or, to the Knowledge of the Company, threatened against any RSI Company, and no such strikes, work

 

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stoppages, slowdowns or other material disputes have occurred since the Lookback Date. Except as set forth on Section 3.15(b)(ii) of the Company and Sellers’ Disclosure Letter, since the Lookback Date, (i) no labor union or other labor organization, or group of employees of any RSI Company, has made a written demand for recognition or certification with respect to any employees of any RSI Company, and there are no representation or certification proceedings presently pending or, to the Knowledge of the Company, threatened to be brought or filed with the National Labor Relations Board or any similar labor relations tribunal or authority, (ii) to the Knowledge of the Company, there have been no pending or threatened union organizing activities with respect to employees of any RSI Company, (iii) there has been no actual or, to the Knowledge of the Company, threatened, material unfair labor practice charges against any RSI Company.

(c)    Except as set forth on Section 3.15(c)(i) of the Company and Sellers’ Disclosure Letter and except as would not reasonably be expected to result in material Liabilities to the RSI Companies, the RSI Companies, are, and since the Lookback Date have been, in compliance, in all material respects, with all applicable Laws relating to the employment of labor, including (where applicable) provisions thereof relating to wages and hours, classification (including employee, independent contractor classification and the proper classification of employees as exempt employees and nonexempt employees under the Fair Labor Standards Act and applicable state and local Laws), equal opportunity, employment harassment, discrimination or retaliation, disability rights, workers’ compensation, affirmative action, collective bargaining, workplace health and safety, immigration (including the completion of Forms I-9 for all employees and the proper confirmation of employee visas), whistleblowing, plant closures and layoffs (including the WARN Act), employee trainings and notices, labor relations, employee leave issues, unemployment insurance, and the payment of social security and other Taxes. Except as set forth on Section 3.15(c)(ii) of the Company and Sellers’ Disclosure Letter, since the Lookback Date, none of the RSI Companies has implemented any plant closing or mass layoff of their employees triggering notice requirements under the WARN Act, nor is there presently any outstanding liability under the WARN Act with respect to any such actions, and as of the Effective Date, no such plant closings or employee layoffs are currently planned or announced by the RSI Companies.

(d)    Except as would not reasonably be expected to result in material Liabilities to the RSI Company, since the Lookback Date, (i) each of the RSI Companies has withheld all amounts required by Law or by agreement to be withheld from the wages, salaries, and other payments that have become due and payable to employees; (ii) no RSI Company has been liable for any arrears of wages, compensation or related Taxes, penalties or other sums with respect to its employees; (iii) each of the RSI Companies has paid in full to all employees and individual independent contractors all wages, salaries, commissions, bonuses and other compensation due and payable to or on behalf of such employees and such individual independent contractors; and (iv) to the Knowledge of the Company, each individual who since the Lookback Date has provided or is providing services to any RSI Company, and has been classified as (y) an independent contractor, consultant, leased employee, or other non-employee service provider, or (z) an exempt employee, has been properly classified as such under all applicable Laws relating to wage and hour and Tax.

(e)    To the Knowledge of the Company, no employee or individual independent contractor of any RSI Company is, with respect to his or her employment by or relationship with any RSI Company, in material breach of the terms of any employment agreement, nondisclosure agreement, noncompetition agreement, nonsolicitation agreement, restrictive covenant or similar obligation (i) owed to the RSI Companies; or (ii) owed to any third party with respect to such Person’s employment or engagement by the RSI Companies. No senior executive has provided, to the Knowledge of the Company, oral or written notice, and no key employee of the RSI Companies has provided written notice of any present intention to terminate his or her relationship with any RSI Company within the first twelve (12) months following the Closing.

(f)    Since the Lookback Date, the RSI Companies have used reasonable best efforts to investigate all sexual harassment, or other discrimination, or retaliation allegations which have been reported to the appropriate individuals at the RSI Companies responsible for reviewing such allegations in accordance with the policies and procedures established by the RSI Companies. With respect to each such allegation with

 

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potential merit, the RSI Companies have taken such corrective action that is reasonably calculated to prevent further improper conduct. The RSI Companies do not reasonably expect any material Liabilities with respect to any such allegations.

Section 3.16    Employee Benefit Plans.

(a)    Section 3.16(a) of the Company and Sellers’ Disclosure Letter sets forth a list of each material Company Employee Benefit Plan. With respect to each material Company Employee Benefit Plan that is not an Affiliate Employee Benefit Plan, Sellers have made available to the Buyer correct and complete copies of, as applicable, (i) the current plan document (and all amendments thereto), (ii) the most recent summary plan description (“SPD”) (with all summaries of material modifications thereto), (iii) the most recent determination, advisory or opinion letter received from the Internal Revenue Service (the “IRS”), (iv) the most recently filed Form 5500 annual report with all schedules and attachments as filed, and (v) all current related material insurance Contracts, trust agreements or other funding arrangements. With respect to each material Affiliate Employee Benefit Plan, Sellers have made available to the Buyer copies of, as applicable the most recent SPD and the most recent determination, advisory or opinion letter received from the IRS.

(b)    Except as set forth on Section 3.16(b) of the Company and Sellers’ Disclosure Letter, (i) no RSI Company has any current or contingent obligation to provide, retiree or post-employment health or life insurance or any other retiree or post-employment welfare-type benefits to any Person other than as required under Section 4980B of the Code or any similar state Law and for which the covered Person pays the full cost of coverage, (ii) no RSI Company sponsors, maintains or contributes to (or is required to contribute to), or has any Liability under or with respect to a “defined benefit plan” (as defined in Section 3(35) of ERISA) or a plan that is or was subject to Title IV of ERISA or Section 412 or 430 of the Code and (iii) no RSI Company contributes to or has any obligation to contribute to, or has any Liability under or with respect to, any “multiemployer plan,” as defined in Section 3(37) of ERISA. Except as set forth on Section 3.16(b) of the Company and Sellers’ Disclosure Letter, no Company Employee Benefit Plan is (x) a “multiple employer plan” within the meaning of Section 413(c) of the Code or Section 210 of ERISA, or (y) a “multiple employer welfare arrangement” (as defined in Section 3(40) of ERISA). No RSI Company has any, or is reasonably expected to have any, Liability under Title IV of ERISA or on account of being considered a single employer under Section 414 of the Code with any other Person.

(c)    Except as set forth on Section 3.16(c) of the Company and Sellers’ Disclosure Letter, to the Knowledge of the Company, each Affiliate Employee Benefit Plan that is intended to be qualified within the meaning of Section 401(a) of the Code has received, or may rely upon, a current favorable determination, advisory or opinion letter from the IRS, and to the Knowledge of the Company, nothing has occurred with respect to the participation of the RSI Companies in such plan that would reasonably be expected to cause the loss of the tax-qualified status or to materially adversely affect the qualification of such Affiliate Employee Benefit Plan. Each Company Employee Benefit Plan other than any Affiliate Employee Benefit Plan, and to the Knowledge of the Company each Affiliate Employee Benefit Plan, has been established, operated, maintained, funded and administered in accordance in all material respects with its respective terms and in compliance in all material respects with all applicable Laws, including ERISA and the Code. No RSI Company, nor to the Knowledge of the Company, any other Person, has engaged in any material “prohibited transactions” within the meaning of Section 4975 of the Code or Sections 406 or 407 of ERISA that are not otherwise exempt under Section 408 of ERISA and to the Knowledge of the Company, no material breaches of fiduciary duty (as determined under ERISA) have occurred with respect to any Company Employee Benefit Plan since the Lookback Date. There is no Proceeding (other than routine claims for benefits) pending or, to the Knowledge of the Company, threatened, with respect to any Company Employee Benefit Plan or against the assets of any Company Employee Benefit Plan, in each case (i) that would result in material liability to the RSI Companies and (ii)_ to the Knowledge of the Company, with respect to any Affiliate Employee Benefit Plan. The RSI Companies have complied in all material respects with the requirements of the Patient Protection and Affordable Care Act, including the Health Care and Education Reconciliation Act of 2010 (the “ACA”), and none of the RSI Companies have incurred (whether

 

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or not assessed), nor is reasonably expected to incur, any material penalty or Tax under the ACA (including with respect to the reporting requirements under Sections 6055 and 6056 of the Code, as applicable) or under Section 4980H, 4980B or 4980D of the Code. With respect to the participation of the RSI Companies in each Affiliate Employee Benefit Plan, all contributions, distributions, reimbursements and premium payments that are required to be made or paid by any of the RSI Companies have been timely made in all material respects in accordance with the terms of the Affiliate Employee Benefit Plan and in all material respects in compliance with the requirements of applicable Law and all contributions, distributions, reimbursements and premium payments required to be made or paid by any of the RSI Companies for any period ending on or before the Closing Date that are not yet due have in all material respects been made or properly accrued.

(d)    Except as set forth on Section 3.16(d) of the Company and Sellers’ Disclosure Letter, the consummation of the transactions contemplated by this Agreement, alone or together with any other event will not (i) result in any material payment or benefit becoming due or payable, to any current or former officer, employee, director or individual independent contractor under a Company Employee Benefit Plan, (ii) increase the amount or value of any benefit or compensation otherwise payable or required to be provided to any current or former officer, employee, director or individual independent contractor under a Company Employee Benefit Plan or otherwise, (iii) result in the acceleration of the time of payment, vesting or funding, or forfeiture, of any such benefit or compensation under a Company Employee Benefit Plan or otherwise, or (iv) result in the forgiveness in whole or in part of any outstanding loans made by the RSI Companies to any current or former officer, employee, director or individual independent contractor.

(e)    Except as set forth on Section 3.16(e) of the Company and Sellers’ Disclosure Letter, no Person has any right against the RSI Companies to be grossed up for, reimbursed or otherwise indemnified for any Tax or interest imposed under Section 409A of the Code or otherwise.

(f)    Neither the execution or delivery of this Agreement nor the consummation of the transactions contemplated by this Agreement could reasonably be expected to, either alone or in conjunction with any other event, result in the payment of any amount that could, individually or in combination with any other payment, constitute a “parachute payment” (as defined in Section 280G(b)(2) of the Code). Except as set forth on Section 3.16(f) of the Company and Sellers’ Disclosure Letter, no RSI Company has agreed to pay, gross-up, reimburse or otherwise indemnify any Person for any Tax imposed under Section 4999 of the Code.

Section 3.17    Insurance. The RSI Companies have in effect policies of insurance (including all policies of property, fire and casualty, liability, workers’ compensation, directors and officers and other forms of insurance as may be applicable to the businesses of the RSI Companies) in amounts and scope of coverage as are customary for companies of a similar nature and size operating in the industries in which the RSI Companies operate (the “Insurance Policies”). As of the Effective Date: (a) all of the material Insurance Policies held by, or for the benefit of, the RSI Companies as of the Effective Date with respect to policy periods that include the Effective Date are in full force and effect, and (b) no RSI Company has received a written notice of cancellation of any of the Insurance Policies or of any material changes that are required in the conduct of the business of the Company or any of its Subsidiaries as a condition to the continuation of coverage under, or renewal of, any of the Insurance Policies. No RSI Company is in material breach or material default under, nor has it taken any action or failed to take any action which, with notice or the lapse of time, or both, would constitute a material breach or material default under, or permit a material increase in premium, cancellation, material reduction in coverage, material denial or non-renewal with respect to any Insurance Policy. Except as set forth on Section 3.17 of the Company and Sellers’ Disclosure Letter, during the twelve (12) months prior to the Effective Date, there have been no material claims by or with respect to the RSI Companies under any Insurance Policy as to which coverage has been denied or disputed in any material respect by the underwriters of such Insurance Policy.

Section 3.18    Compliance with Laws; Permits.

(a)    Except (i) with respect to compliance with Tax Laws (as to which certain representations and warranties are made pursuant to Section 3.8), (ii) as set forth on Section 3.18(a) of the Company and Sellers’

 

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Disclosure Letter and (iii) as would not constitute a Material Adverse Effect, each RSI Company is and, since the Lookback Date has been, in compliance with all Laws applicable to the conduct of the business of the RSI Companies and, since the Lookback Date, no uncured written notices have been received by any RSI Company from any Governmental Entity or any other Person alleging a material violation of any such Laws.

(b)    Each RSI Company holds all material permits, licenses, registrations (excluding Intellectual Property registrations and certifications), approvals, consents, accreditations, waivers, exemptions and authorizations of any Governmental Entity, required for the ownership and use of its assets and properties or the conduct of their businesses (including for the occupation and use of the Leased Real Property) as currently conducted (collectively, “Permits”) and are in compliance in all material respects with all material terms and conditions of such Permits. All of such Permits are valid and in full force and effect and none of such Permits will be terminated as a result of, or in connection with, the consummation of the transactions contemplated by this Agreement. No RSI Company is in material default under any such Permit and to the Knowledge of the Company, no condition exists that, with the giving of notice or lapse of time or both, would constitute a material default under such Permit, and no Proceeding is pending or, to the Knowledge of the Company, threatened, to suspend, revoke, withdraw, modify or limit any such Permit in a manner that has had or would reasonably be expected to have a material adverse effect on the ability of the applicable RSI Company to use such Permit or conduct its business.

Section 3.19    [Reserved].

Section 3.20    Title to and Sufficiency of Assets; No Bankruptcy.

(a)    Each RSI Company has good and marketable title to, or, in the case of leased or subleased assets, a valid and binding leasehold interest in, or, in the case of licensed assets, a valid license in, all of its tangible or intangible assets, properties and rights free and clear of all Liens other than Permitted Liens (collectively, the “Assets”). All such tangible Assets that are material to the operation of the business of the RSI Companies are in reasonably good condition and in a state of reasonably good maintenance and repair (ordinary wear and tear excepted) and are suitable for the purposes used.

(b)    Assuming that the approvals, determinations, grants, confirmations and other conditions with respect to Gaming Regulatory Authorities required in connection with the transactions contemplated by this Agreement and the Ancillary Agreements as set forth in Section 2.5(c)(vii) are obtained, the Assets, collectively with the assets and services provided to the Buyer and the RSI Companies under the Services Agreement beginning as of the Closing, constitute all of the material tangible and intangible assets, properties and rights necessary to conduct the business of the RSI Companies immediately after the Closing, in all material respects, as it has been operated for the six (6) months leading up to the Effective Date.

(c)    None of the RSI Companies is the subject of any bankruptcy, dissolution, liquidation, reorganization or similar Proceeding.

Section 3.21    Gaming.

(a)    Except as set forth on Section 3.21(a) of the Company and Sellers’ Disclosure Letter, no RSI Company has (i) made any application for a license, certificate, registration or finding of suitability from any Gaming Regulatory Authority that has not been issued, granted or given (for whatever reason) or (ii) withdrawn any such application (for whatever reason).

(b)    Where required to do so under Applicable Gaming Law or as requested by any Gaming Regulatory Authority, all relevant directors, officers, contractors and employees of the RSI Companies have obtained and hold personal management licenses (or local equivalent license) and those licenses, registrations or findings of suitability are in full force and effect.

(c)    Since the Lookback Date, no RSI Company has, to the Knowledge of the Company, done or omitted to do anything in material breach of the Applicable Gaming Laws of any jurisdictions in which it holds an RSI Companies Relevant License.

 

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(d)    Except as set forth on Section 3.21(d) of the Company and Sellers’ Disclosure Letter, since the Lookback Date, no RSI Company has received a written notice from a Governmental Entity alleging that the business of any RSI Company infringes or violates any Applicable Gaming Law in any material respect or is in breach of the terms of any RSI Companies Relevant License or that such Governmental Entity intends to pursue any review or investigation which might conclude with the imposition of any sanction on any RSI Company.

(e)    Except as set forth on Section 3.21(e) of the Company and Sellers’ Disclosure Letter, as of the Effective Date, no RSI Company has been or is subject to any investigation, inquiry or criminal proceeding or other disciplinary action, whether pending or to the Knowledge of the Company, threatened, relating to Applicable Gaming Laws, and there are no facts, matters or circumstances (i) to the Knowledge of the Company or (ii) that first arose (regardless of whether the Company has Knowledge) at any time since the Lookback Date which would reasonably give rise to any such investigation, inquiry, proceeding or action that may result in the imposition of material sanctions in connection with an RSI Companies Relevant License, may result in the revocation of an RSI Companies Relevant License or could reasonably be expected to have a Material Adverse Effect.

(f)    To the Knowledge of the Company, there are no circumstances relating to any of the directors, management team or stockholder of the Company which has affected, or could materially affect, the ability of any RSI Company to obtain or maintain any RSI Companies Relevant License.

Section 3.22    Trade & Anti-Corruption Compliance

(a)    Since January 1, 2016, in connection with or relating to the business of the RSI Companies, no RSI Company, and to the Knowledge of the Company, no director, officer, manager, employee, agent or third-party representative of a RSI Company (in their capacities as such) (i) has made, authorized, solicited or received any unlawful bribe, rebate, payoff, influence payment or kickback, (ii) has used or is using any corporate funds for any contributions, gifts, entertainment, hospitality, travel, in each case, to the extent illegal, or (iii) has, directly or indirectly, made, offered, authorized, facilitated, received or promised to make or receive, any payment, contribution, gift, entertainment, bribe, rebate, kickback, financial or other advantage, or anything else of value, regardless of form or amount, to or from any officer of a Governmental Entity or other Person in violation of applicable Anti-Corruption Laws. There are no pending legal, regulatory, or administrative Proceedings, filings, Orders, or, to the Knowledge of the Company, governmental investigations, alleging (i) any such payments, contributions, gifts, entertainment, bribes, rebates, kickbacks, financial or other advantages or (ii) any other violation of any Anti-Corruption Law.

(b)    The transactions of the RSI Companies are accurately reflected on their respective books and records in compliance in all material respects with applicable Anti-Corruption Laws.

Section 3.23    Anti-Money Laundering Compliance.

(a)    The RSI Companies maintain and implement policies and procedures designed to reasonably prevent money laundering and otherwise ensure material compliance with all applicable Anti-Money Laundering Laws. There are no matters of material non-compliance with any Anti-Money Laundering Law that any Governmental Entity has required the Company to correct since January 1, 2016, unless otherwise disclosed in Section 3.23 of the Company and Sellers’ Disclosure Letter.

(b)    No RSI Company nor, to the Knowledge of the Company, any of their respective directors, officers, managers, employees, agents or third-party representatives (in their capacities as such) has knowingly engaged in a transaction that involves the proceeds of crime in violation of any Anti-Money Laundering Laws.

(c)    There are no legal, regulatory, or administrative Proceedings, filings, Orders, or, to the Knowledge of the Company, governmental investigations, alleging any violations of any Anti-Money Laundering Laws by any RSI Company or any of their respective directors, officers, managers, or employees.

 

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Section 3.24    Affiliate Transactions.

(a)    Except (A) as set forth on Section 3.24(a) of the Company and Sellers’ Disclosure Letter, (B) the Services Agreement, and (C) the Put-Call Agreements, (x) there are no Contracts (except for the Governing Documents) between any of the RSI Companies, on the one hand, and any Interested Party (other than another RSI Company) on the other hand and (y) no Interested Party (other than another RSI Company) (i) owes any amount to any RSI Company, (ii) owns any material assets, tangible or intangible, necessary for the conduct of the business of any RSI Company as it has been operated for the twelve (12) months prior to the Effective Date or (iii) owns any interest in, or is a director, officer, or owner of, or lender to or borrower from, or has the right to participate in the profits of, any Person which is a competitor, supplier, or landlord of any RSI Company (other than in connection with ownership of less than five percent (5%) of the stock of a publicly traded company) (such Contracts or arrangements described in clauses (x) and (y), “Affiliated Transactions”).

(b)    Except as set forth on Section 3.24(b) of the Company and Sellers’ Disclosure Letter, there have been no Prohibited Affiliate Transactions since December  31, 2019.

Section 3.25    Compliance with Applicable Sanctions and Embargo Laws.

(a)    Since January 1, 2016, no RSI Company, nor to the Knowledge of the Company, any of their respective directors, officers, managers, employees, agents or third party representatives (in their capacities as such) is (i) a person or entity named on the List of Specially Designated Nationals and Blocked Persons administered by OFAC, the OFAC Consolidated Sanctions List or in any Executive Order issued by the President of the United States and administered by OFAC, or a person or entity prohibited by any OFAC sanctions program or a person or entity whose property and interests in property subject to U.S. jurisdiction are otherwise blocked under any U.S. Laws, Executive orders or regulations; (ii) an entity owned, directly or indirectly, individually or in the aggregate, fifty (50%) percent or more by one (1) or more persons described in clause (i); (iii) a person or entity listed on the Sectoral Sanctions Identifications List (“SSI List”) maintained by OFAC or otherwise determined by OFAC to be subject to one (1) or more of the Directives issued under Executive Order 13662 of March 20, 2014, at the time that it is or was in effect, or an entity owned, directly or indirectly, individually or in the aggregate, fifty percent (50%) or more by one (1) or more persons or entities that are subject to the SSI List restrictions; or (iv) a person or entity named on the U.S. Department of Commerce, Bureau of Industry and Security Denied Persons List, Entity List, or Unverified List.

(b)    No RSI Company nor, to the Knowledge of the Company, any of their directors, officers, managers, employees, agents or third-party representatives, is or since January 1, 2016, has been: (i) a Sanctioned Person; (ii) operating in, organized in, conducting business with, or otherwise engaging in dealings with or for the benefit of any Sanctioned Person or in any Sanctioned Country in material violation of applicable Sanctions in connection with the business of any RSI Company; or (iii) in material violation of any applicable Sanctions or applicable Export Control Laws or U.S. anti-boycott requirements (the “Trade Control Laws”), in connection with the business of any RSI Company.

(c)    The RSI Companies have not, since January 1, 2016, violated in any material respect the Trade Control Laws.

(d)    There are no legal, regulatory, or administrative Proceedings, filings, Orders, or, to the Knowledge of the Company, governmental investigations, alleging any violations by any RSI Company of the Trade Control Laws.

Section 3.26    Inspections; Buyers Representations. The Company has undertaken such investigation and has been provided with and has evaluated such documents and information as it has deemed necessary to enable it to make an informed and intelligent decision with respect to the execution, delivery and performance of this Agreement. The Company agrees to engage in the transactions contemplated by this Agreement based upon its own inspection and examination of Buyer and on the accuracy of the representations and warranties set forth in

 

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Article V and any Ancillary Agreement or certificate delivered by Buyer pursuant to this Agreement and hereby disclaims reliance upon any express or implied representations or warranties of any nature made by Buyer or its Affiliates or representatives, except for those set forth in Article V and in any Ancillary Agreement or certificate delivered by Buyer pursuant to this Agreement. The Company specifically acknowledges and agrees to Buyer’s disclaimer of any representations or warranties other than those set forth in Article V and in any Ancillary Agreement or certificate delivered by Buyer pursuant to this Agreement, whether made by either Buyer or any of its Affiliates or representatives, and of all Liability and responsibility for any representation, warranty, projection, forecast, statement, or information made, communicated, or furnished (orally or in writing) to the Company, Sellers, their Affiliates or representatives (including any opinion, information, projection, or advice that may have been or may be provided to the Company, Sellers, their Affiliates or representatives by Buyer or any of its Affiliates or representatives), other than those set forth in Article V and in any Ancillary Agreement or certificate delivered by Buyer pursuant to this Agreement. The Company specifically acknowledges and agrees that, without limiting the generality of this Section 3.26, neither Buyer nor any of its Affiliates or representatives has made any representation or warranty with respect to any projections or other future forecasts. The Company specifically acknowledges and agrees that except for the representations and warranties set forth in Article V and in any Ancillary Agreement or certificate delivered by Buyer pursuant to this Agreement, Buyer has not made any other express or implied representation or warranty with respect to Buyer, its assets or Liabilities, the businesses of Buyer or the transactions contemplated by this Agreement or the Ancillary Agreements.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF SELLERS

As an inducement to the Buyer to enter into this Agreement and consummate the transactions contemplated by this Agreement, except as set forth in the applicable section of the Company and Sellers’ Disclosure Letter, each Seller (severally (and not jointly) and solely in respect of such Seller) represents and warrants to the Buyer as of the Effective Date and as of the Closing Date as follows:

Section 4.1    Organization; Authority; Enforceability. To the extent that such Seller is not an individual, such Seller (a) is an entity validly existing, and in good standing under the Laws of the jurisdiction in which it is formed and (b) is qualified to do business and is in good standing as a foreign entity in each jurisdiction in which the character of its properties, or in which the transaction of its business, makes such qualification necessary, except where the failure to be so qualified and in good standing (or equivalent) would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on such Seller’s ability to consummate the transactions contemplated hereby. Such Seller has the requisite legal entity power and authority to execute and deliver this Agreement and the Ancillary Agreements to which such Seller is a party and to consummate the transactions contemplated hereby and thereby. No other limited liability company or other proceedings on the part of such Seller are necessary to approve and authorize the execution, delivery and performance of this Agreement and the Ancillary Agreements to which such Seller is a party and the consummation of the transactions contemplated hereby and hereby. This Agreement has been duly executed and delivered by such Seller and constitutes the valid and binding agreement of such Seller, enforceable against such Seller in accordance with its terms, except as such may be limited by bankruptcy, insolvency, reorganization or other Laws affecting creditors’ rights generally and by general equitable principles. Such Seller is not the subject of any bankruptcy, dissolution, liquidation, reorganization or similar proceeding.

Section 4.2    Capitalization. Such Seller has good and valid title to the Company Interests held by such Seller as of the Effective Date and, as of the Closing, such Seller will have good and valid title to the Company Units owned by such Seller, free and clear of all Liens, in each case, other than Securities Liens and other than as set forth in the Company’s LPA. Except as set forth on Section 4.2 of the Company and Sellers’ Disclosure Letter and other than a Put-Call Agreement (as applicable), such Seller is not a party to (a) any option, warrant, purchase right or other Contract (other than this Agreement, the Recapitalization Agreement and a Put-Call Agreement (as applicable)) that would reasonably require such Seller to sell, transfer or otherwise dispose of any

 

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of the Company Units owned by such Seller or (b) any voting trust, proxy, or other Contract with respect to the voting of the Company Units owned by such Seller. Other than the Company Units owned by such Seller, such Seller does not own or have the right to acquire any other Equity Interests of any RSI Company.

Section 4.3    Noncontravention. Except as set forth on Section 4.3 of the Company and Sellers’ Disclosure Letter, the filings pursuant to Section 7.8, the filings with Gaming Regulatory Authorities required pursuant to Section 2.6(c)(vii), the consummation by such Seller of the transactions contemplated by this Agreement and the Ancillary Agreements to which such Seller is a party do not (a) conflict with or result in any breach of any of the material terms, conditions or provisions of, (b) constitute a material default under (whether with or without the giving of notice, the passage of time or both), (c) result in a material violation of, (d) give any third party the right to terminate or accelerate, or cause any termination or acceleration of, any material right or material obligation under, (e) result in the creation of any Lien upon the Company Units under, (f) require any approval under, from or pursuant to, or (g) require any filing with, (i) any material Contract to which such Seller is a party, (ii) any Governing Document of such Seller or (iii) any Governmental Entity under or pursuant to any Law or Order to which such Seller is bound or subject, with respect to clauses (d) through (g), that are or would reasonably be expected to have a material adverse effect on such Seller’s ability to consummate the transactions contemplated hereby. Such Seller is not in material violation of any of the Governing Documents of such Seller.

Section 4.4    Information Supplied. The information supplied or to be supplied, in each case, in writing, by such Seller with respect to such Seller for inclusion in the Proxy Statement, any other document submitted to any other Governmental Entity or any announcement or public statement regarding the transactions contemplated by this Agreement (including the Signing Press Release and the Closing Press Release) shall not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances in which they are made, not misleading at (a) the time such information is filed, submitted or made publicly available, (b) the time the Proxy Statement (or any amendment thereof or supplement thereto) is first mailed to the Buyer Stockholders, or (c) the time of the Buyer Stockholder Meeting (in each case, subject to the qualifications and limitations set forth in the materials provided by such Seller or that are included in such filings and/or mailings), except that no warranty or representation is made by such Seller with respect to statements made or incorporated by reference therein based on information supplied by Buyer or its Affiliates for inclusion in such materials or (ii) any projections or forecasts included in such materials.

Section 4.5    Litigation. Except as set forth on Section 4.5 of the Company and Sellers’ Disclosure Letter, there are no material Proceedings (or to the Knowledge of such Seller, investigations) pending or, to the Knowledge of such Seller, threatened against such Seller in writing that would reasonably be expected to have a material adverse effect on such Seller’s ability to consummate the transactions contemplated hereby.

Section 4.6    Brokerage. Except as set forth on Section 4.6 of the Company and Sellers’ Disclosure Letter, such Seller has not incurred any Liability in connection with this Agreement or the Ancillary Agreements, or the transactions contemplated hereby or thereby, that would result in the obligation of any RSI Company or the Buyer to pay any finder’s fee, brokerage or agent’s commissions or other like payments.

Section 4.7    Investment Intent.

(a)    Such Seller understands and acknowledges that the acquisition of the Buyer Class V Voting Stock (and the Buyer Class A Common Stock into which the Buyer Class V Voting Stock and the Retained Company Units may be exchanged into pursuant to the Company A&R LPA) involves substantial risk. Such Seller can bear the economic risk of its investment (which such Seller acknowledges may be for an indefinite period) and has such knowledge and experience in financial or business matters that such Seller is capable of evaluating the merits and risks of its investment in the Buyer Class V Voting Stock (and the Buyer Class A Common Stock into which the Buyer Class V Voting Stock and the Retained Company Units may be exchanged into pursuant to the Company A&R LPA).

(b)    Such Seller is acquiring the Buyer Class V Voting Stock (and the Buyer Class A Common Stock into which the Buyer Class V Voting Stock and the Retained Company Units may be exchanged into

 

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pursuant to the Company A&R LPA) for its own account, for investment purposes only and not with a view toward, or for sale in connection with, any distribution thereof, or with any present intention of distributing or selling any Buyer Class V Voting Stock (and the Buyer Class A Common Stock into which the Buyer Class V Voting Stock and the Retained Company Units may be exchanged into pursuant to the Company A&R LPA), in each case, in violation of the federal securities Laws, any applicable foreign or state securities Laws or any other applicable Law.

(c)    Such Seller qualifies as an “accredited investor,” as such term is defined in Rule 501(a) promulgated pursuant to the Securities Act.

(d)    Such Seller understands and acknowledges that the issuance, sale or resale of the Buyer Class V Voting Stock has not been registered under the Securities Act, any United States state securities Laws or any other applicable foreign Law. Such Seller acknowledges that such securities may not be transferred, sold, offered for sale, pledged, hypothecated or otherwise disposed of without registration under the Securities Act and any other provision of applicable United States federal, United States state, or other Law or pursuant to an applicable exemption therefrom. Such Seller acknowledges that there is no public market for the Buyer Class V Voting Stock and that there can be no assurance that a public market will develop.

Section 4.8    Compliance with Laws. Each Seller is, and has been since the Lookback Date, in compliance in all material respects with Laws applicable to its ownership of Equity Interest of the Company, and no uncured written notices have been received by any Seller from any Governmental Entity or any other Person alleging a material violation of any such Laws.

Section 4.9    Inspections; Buyers Representations. Such Seller is an informed and sophisticated purchaser, and has engaged advisors, experienced in the evaluation and investment in businesses such as the Buyer. Such Seller has undertaken such investigation and has been provided with and has evaluated such documents and information as it has deemed necessary to enable it to make an informed and intelligent decision with respect to the execution, delivery and performance of this Agreement. Such Seller agrees to engage in the transactions contemplated by this Agreement based upon its own inspection and examination of the Buyer and on the accuracy of the representations and warranties set forth in Article V and any Ancillary Agreement or certificate delivered by Buyer pursuant to this Agreement and hereby disclaims reliance upon any express or implied representations or warranties of any nature made by Buyer or its Affiliates or representatives, except for those set forth in Article V and in any Ancillary Agreement or certificate delivered by Buyer pursuant to this Agreement. Such Seller specifically acknowledges and agrees to Buyer’s disclaimer of any representations or warranties other than those set forth in Article V and in any Ancillary Agreement or certificate delivered by Buyer pursuant to this Agreement, whether made by either Buyer or any of its Affiliates or representatives, and of all Liability and responsibility for any representation, warranty, projection, forecast, statement, or information made, communicated, or furnished (orally or in writing) to the Company, Sellers, their Affiliates or representatives (including any opinion, information, projection, or advice that may have been or may be provided to the Company, Sellers, their Affiliates or representatives by Buyer or any of its Affiliates or representatives), other than those set forth in Article V and in any Ancillary Agreement or certificate delivered by Buyer pursuant to this Agreement. Such Seller specifically acknowledges and agrees that, without limiting the generality of this Section 4.9, neither Buyer nor any of its Affiliates or representatives has made any representation or warranty with respect to any projections or other future forecasts. Such Seller specifically acknowledges and agrees that except for the representations and warranties set forth in Article V and in any Ancillary Agreement or certificate delivered by Buyer pursuant to this Agreement, Buyer has not made any other express or implied representation or warranty with respect to Buyer, its assets or Liabilities, the businesses of Buyer or the transactions contemplated by this Agreement or the Ancillary Agreements.

 

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ARTICLE V

REPRESENTATIONS AND WARRANTIES OF THE BUYER

As an inducement to Sellers and the Company to enter into this Agreement and consummate the transactions contemplated by this Agreement, except (a) for all representations and warranties of the Buyer, as set forth in the applicable section of the Buyer’s Disclosure Letter, or (b) for all representations and warranties of the Buyer other than those set forth in Section 5.1, Section 5.2(a), Section 5.2(b), Section 5.2(c), Section 5.2(e), Section 5.3, Section 5.8, Section 5.9, Section 5.12 and Section 5.15, as disclosed in any report, schedule, form statement or other document filed with, or furnished to, the SEC by the Buyer and publicly available prior to the Effective Date, the Buyer represents and warrants to each of the Sellers and the Company as of the Effective Date and as of the Closing Date as follows:

Section 5.1    Organization; Authority; Enforceability. The Buyer is a corporation duly incorporated, validly existing and in good standing under the Laws of the State of Delaware. The Buyer is qualified to do business and is in good standing as a foreign entity in each jurisdiction in which the character of its properties, or in which the transaction of its business, makes such qualification necessary, except where the failure to be so qualified and in good standing (or equivalent) would not have a Buyer Material Adverse Effect. The Buyer has the requisite power and authority to execute and deliver this Agreement and the Ancillary Agreements to which it is a party and to consummate the transactions contemplated hereby and thereby. The execution, delivery and performance of this Agreement, the Ancillary Agreements to which the Buyer is a party and the transactions contemplated hereby and thereby have been duly approved and authorized by all requisite Buyer Board action on the part of the Buyer (the “Buyer Board Recommendation”). No other proceedings on the part of the Buyer (including any action by the Buyer Board or the Buyer Stockholders), except for the receipt of the Required Vote, are necessary to approve and authorize the execution, delivery or performance of this Agreement and the Ancillary Agreements to which the Buyer is a party and the consummation of the transactions contemplated hereby and thereby. This Agreement has been, and the Ancillary Agreements to be executed and delivered by the Buyer at Closing will be, duly executed and delivered by Buyer and constitute valid and binding agreement of the Buyer, enforceable against the Buyer in accordance with their respective terms, except as such may be limited by bankruptcy, insolvency, reorganization or other Laws affecting creditors’ rights generally and by general equitable principles. The Buyer is not the subject of any bankruptcy, dissolution, liquidation, reorganization or similar proceeding.

Section 5.2    Capitalization.

(a)    The authorized share capital of Buyer consists of (i) 380,000,000 shares of Buyer Class A Common Stock, (ii) 20,000,000 shares of Buyer Class B Common Stock, and (iii) 1,000,000 preferred shares, par value $0.0001 per share (“Buyer Preferred Shares”). As of the Effective Date and as of immediately prior to the Closing (without giving effect to the Buyer Share Redemptions, the Buyer Class B Common Stock Conversion, or any Permitted Equity Financings), (1) 23,000,000 shares of Buyer Class A Common Stock are and will be issued and outstanding, (2) 5,750,000 shares of Buyer Class B Common Stock are and will be issued and outstanding, (3) no Buyer Preferred Shares are and will be issued and outstanding, and (4) 18,100,000 warrants of Buyer are and will be issued and outstanding, in such amounts, type, exercise price and with such expiration date as set forth on Section 5.2(a) of the Buyer’s Disclosure Letter (the “Buyer Warrants”). The exercise price of each Buyer Warrant has not been reduced to an amount less than $11.50 per Buyer Warrant. The Equity Interests set forth in this Section 5.2(a) comprise all of the Equity Interests of the Buyer that are issued and outstanding (without giving effect to the Buyer Share Redemptions, the Buyer Class B Common Stock Conversion, or the Permitted Equity Financing).

(b)    Except as (x) set forth on Section 5.2(b) of the Buyer’s Disclosure Letter, or (y) set forth in this Agreement (including as set forth in Section 5.2(a)), the Ancillary Agreements or the Governing Documents of the Buyer:

(i)    there are no outstanding options, warrants, Contracts, calls, puts, bonds, debentures, notes rights to subscribe, conversion rights or other similar rights to which the Buyer is a party or which are

 

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binding upon Buyer providing for the offer, issuance, redemption, exchange, conversion, voting, transfer, disposition or acquisition of any of its Equity Interests;

(ii)    Buyer is not subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any of its Equity Interests;

(iii)    Buyer is not a party to any voting trust, proxy or other agreement or understanding with respect to the voting of any of its Equity Interests;

(iv)    there are no contractual equityholder preemptive or similar rights, rights of first refusal, rights of first offer or registration rights in respect of Equity Interests of Buyer; and

(v)    Buyer has not violated in any material respect any applicable securities Laws or any preemptive or similar rights created by Law, Governing Document or Contract to which Buyer is a party in connection with the offer, sale or issuance of any of its Equity Interests.

(c)    All of the issued and outstanding Equity Interests of the Buyer, have been duly authorized, validly issued, fully paid and non-assessable and free of any preemptive rights in respect thereto, and were not issued in violation of any preemptive rights, call options, rights of first refusal or similar rights of any Person or applicable Law, other than in each case Securities Liens.

(d)    Except as set forth on Section 5.2(d) of the Buyer’s Disclosure Letter, the Buyer does not own, directly or indirectly, any Equity Interests, participation or voting right or other investment (whether debt, equity or otherwise) in any Person (including any Contract in the nature of a voting trust or similar agreement or understanding) or any other equity equivalents in or issued by any other Person.

(e)    Upon issuance and delivery of the Buyer Class V Voting Stock to the Company at the Closing, and upon the further distribution of the Buyer Class V Voting Stock to the Sellers, such Buyer Class V Voting Stock will (i) be duly authorized and validly issued, and fully paid and nonassessable, (ii) be issued in compliance in all material respects with applicable Law, (iii) not be issued in breach or violation of any preemptive rights or any Contract, (iv) be issued to the Company with good and valid title, free and clear of any Liens other than Securities Liens, and (v) represent all of the Buyer Class V Voting Stock issued or outstanding.

(f)    Other than up to $1,500,000 of working capital loans convertible into Class A Common Stock of the Buyer at $10.00 per share that may be incurred during the Pre-Closing Period (and (x) for the avoidance of doubt, to the extent such working capital loans are used to pay Sponsor Transaction Expenses, such amounts shall constitute Sponsor Transaction Expenses for all purposes of this Agreement and (y) at the election of the Company can be repaid by the Company at the Closing on behalf of the Buyer from the Contribution Amount), the Buyer has no Liability with respect to indebtedness for borrowed money.

Section 5.3    Brokerage. Except as set forth on Section 5.3 of the Buyer’s Disclosure Letter, the Buyer has not incurred any Liability in connection with this Agreement or the Ancillary Agreements, or the transactions contemplated hereby or thereby, that would result in the obligation of the Sellers, any RSI Company or Buyer to pay a finder’s fee, brokerage or agent’s commissions or other like payments.

Section 5.4    Trust Account. As of the Effective Date, the Buyer has at least two hundred thirty million dollars ($230,000,000) (the “Trust Amount”) in the Trust Account, with such funds invested in United States government securities or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act of 1940, and held in trust by the Trustee pursuant to the Trust Agreement. The Trust Agreement is in full force and effect and is a legal, valid and binding obligation of the Buyer, enforceable in accordance with its terms. The Trust Agreement has not been terminated, repudiated, rescinded, amended, supplemented or modified, in any respect by the Buyer or the Trustee, and no such termination, repudiation, rescission, amendment, supplement or modification is contemplated by the Buyer. The Buyer is not party to or bound by any side letters with respect to the Trust Agreement or (except for the Trust Agreement) any Contracts, arrangements or understandings, whether written or oral, with the Trustee or any other Person that would

 

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(a) cause the description of the Trust Agreement in the Buyer SEC Documents to be inaccurate in any material respect or (b) explicitly by their terms, entitle any Person (other than (i) the Buyer Stockholders who shall have exercised their rights to participate in the Buyer Share Redemptions, (ii) the underwriters of the Buyer’s initial public offering, who are entitled to the Deferred Discount (as such term is defined in the Trust Agreement) and (iii) the Buyer with respect to income earned on the proceeds in the Trust Account to cover any of its Tax obligations and up to one hundred thousand dollars ($100,000) of interest on such proceeds to pay dissolution expenses) to any portion of the proceeds in the Trust Account. There are no Proceedings (or to the Knowledge of the Buyer, investigations) pending or, to the Knowledge of the Buyer, threatened with respect to the Trust Account.

Section 5.5    Buyer SEC Documents; Controls.

(a)    The Buyer has timely filed or furnished all material forms, reports, schedules, statements and other documents required to be filed by it with the SEC since the consummation of the initial public offering of the Buyer’s securities, together with any material amendments, restatements or supplements thereto, and all such forms, reports, schedules, statements and other documents required to be filed or furnished under the Securities Act or the Securities Exchange Act (excluding Section 16 under the Securities Exchange Act) (all such forms, reports, schedules, statements and other documents filed with the SEC, the “Buyer SEC Documents”). As of their respective dates, each of the Buyer SEC Documents, as amended (including all financial statements included therein, exhibits and schedules thereto and documents incorporated by reference therein), complied in all material respects with the applicable requirements of the Securities Act, or the Securities Exchange Act, as the case may be, and the rules and regulations of the SEC thereunder applicable to such Buyer SEC Documents. None of the Buyer SEC Documents contained, when filed or, if amended prior to the Effective Date, as of the date of such amendment with respect to those disclosures that are amended, any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. To the Knowledge of Buyer, as of the Effective Date, (i) none of the Buyer SEC Documents are the subject of ongoing SEC review or outstanding SEC comment and (ii) neither the SEC nor any other Governmental Entity is conducting any investigation or review of any Buyer SEC Document.

(b)    Each of the financial statements of the Buyer included in the Buyer SEC Documents, including all notes and schedules thereto, complied in all material respects, when filed or if amended prior to the Effective Date, as of the date of such amendment, with the rules and regulations of the SEC with respect thereto, were prepared in accordance with GAAP applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto or, in the case of the unaudited statements, as permitted by Rule 10-01 of Regulation S-X of the SEC) and fairly present in all material respects in accordance with applicable requirements of GAAP (subject, in the case of the unaudited statements, to normal year-end audit adjustments) the financial position of the Buyer, as of their respective dates and the results of operations and the cash flows of the Buyer, for the periods presented therein. Each of the financial statements of the Buyer included in the Buyer SEC Documents were derived from the books and records of the Buyer, which books and records are, in all material respects, correct and complete and have been maintained in all material respects in accordance with commercially reasonable business practices.

(c)    No notice of any SEC review or investigation of the Buyer or Buyer SEC Documents has been received by the Buyer. Since the consummation of its initial public offering, all comment letters received by the Buyer from the SEC or the staff thereof and all responses to such comment letters filed by or on behalf of the Buyer are publicly available on the SEC’s EDGAR website.

(d)    Since the consummation of the initial public offering of the Buyer’s securities, the Buyer has timely filed all certifications and statements required by (x) Rule 13a-14 or Rule 15d-14 under the Securities Exchange Act or (y) 18 U.S.C. Section 1350 (Section 906 of the Sarbanes-Oxley Act of 2002) with respect to any Buyer SEC Document. Each such certification is correct and complete. The Buyer maintains disclosure controls and procedures required by Rule 13a-15 or Rule 15d-15 under the Securities Exchange Act; such controls and procedures are reasonably designed to ensure that all material information

 

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concerning the Buyer is made known on a timely basis to the individuals responsible for the preparation of the Buyer’s SEC Filings. As used in this Section 5.5(d), the term “file” shall be broadly construed to include any manner in which a document or information is furnished, supplied or otherwise made available to the SEC.

(e)    The Buyer has designed and maintains a system of internal controls over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) of the Securities Exchange Act, sufficient to provide reasonable assurances regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. The Buyer maintains a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability and (iii) access to assets is permitted only in accordance with management’s general or specific authorization.

Section 5.6    Information Supplied; Proxy Statement. The information supplied or to be supplied by the Buyer for inclusion in the Proxy Statement, the Additional Buyer Filings, any other Buyer SEC Filing, any document submitted to any other Governmental Entity or any announcement or public statement regarding the transactions contemplated by this Agreement (including the Signing Press Release and the Closing Press Release) shall not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances in which they are made, not misleading at (a) the time such information is filed, submitted or made publicly available, (b) the time the Proxy Statement (or any amendment thereof or supplement thereto) is first mailed to the Buyer Stockholders, or (c) the time of the Buyer Stockholder Meeting (subject to the qualifications and limitations set forth in the materials provided by the Buyer or that are included in such filings and/or mailings), except that (i) no warranty or representation is made by the Buyer with respect to statements made or incorporated by reference therein based on information supplied by the RSI Companies, the Sellers or their Affiliates for inclusion therein and (ii) or (ii) any projections or forecasts included in such materials. The Proxy Statement will comply in all material respects with the applicable requirements of the Securities Exchange Act and the rules and regulations of the SEC thereunder applicable to the Proxy Statement.

Section 5.7    Litigation. There are no material Proceedings (or to the Knowledge of the Buyer, investigations) pending or, to the Knowledge of the Buyer, threatened against the Buyer or, to the Knowledge of the Buyer, any director, officer or employee of the Buyer (in their capacity as such) and during the past two (2) years there have not been any such Proceedings and the Buyer is not subject to or bound by any material outstanding Orders. There are no material Proceedings pending or threatened by the Buyer against any other Person.

Section 5.8    Listing. The issued and outstanding Buyer Class A Common Stock and the Buyer Warrants (the foregoing, collectively, the “Buyer Public Securities”) are registered pursuant to Section 12(b) of the Securities Exchange Act and are listed for trading on the Stock Exchange. There is no Proceeding or investigation pending or, to the Knowledge of the Buyer, threatened against the Buyer by the Stock Exchange or the SEC with respect to any intention by such entity to deregister the Buyer Public Securities or prohibit or terminate the listing of the Buyer Public Securities on the Stock Exchange. The Buyer has taken no action that is designed to terminate the registration of the Buyer Public Securities under the Securities Exchange Act. The Buyer has not received any written or, to the Knowledge of the Buyer, oral deficiency notice from the Stock Exchange relating to the continued listing requirements of the Buyer Public Securities.

Section 5.9    Investment Company. The Buyer is not an “investment company” within the meaning of the Investment Company Act of 1940.

Section 5.10    Noncontravention. Except for the filings pursuant to Section 7.9, the consummation by the Buyer of the transactions contemplated by this Agreement and the Ancillary Agreements do not (a) conflict with

 

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or result in any breach of any of the material terms, conditions or provisions of, (b) constitute a material default under (whether with or without the giving of notice, the passage of time or both), (c) result in a material violation of, (d) give any third party the right to terminate or accelerate, or cause any termination or acceleration of, any material right or material obligation under, (e) result in the creation of any Lien upon its Equity Interests under, (f) require any approval under, from or pursuant to, or (g) require any filing with, (i) any Contract or lease to which the Buyer is a party, (ii) any Governing Document of the Buyer, or (iii) any Governmental Entity under or pursuant to any Law or Order to which the Buyer is bound or subject, with respect to clauses (i) and (iii) that are or would reasonably be expected to be material to Buyer. The Buyer is not in material violation of any of its Governing Documents.

Section 5.11    Business Activities.

(a)    Since its organization, other than as described in the Buyer SEC Documents, the Buyer has not conducted any material business activities other than activities directed toward the accomplishment of a Business Combination. Except as set forth in the Buyer Governing Documents, there is no Contract, commitment, or Order binding upon the Buyer or to which the Buyer is a party which has or would reasonably be expected to have the effect of prohibiting or impairing any business practice of the Buyer or any acquisition of property by the Buyer or the conduct of business by the Buyer after the Closing, other than such effects, individually or in the aggregate, which are not, and would not reasonably be expected to be, material to the Buyer.

(b)    Except for this Agreement and the transactions contemplated by this Agreement, the Buyer has no interests, rights, obligations or Liabilities with respect to, and the Buyer is not party to, bound by or has its assets or property subject to, in each case whether directly or indirectly, any Contract or transaction which is, or could reasonably be interpreted as constituting, a Business Combination.

(c)    The Buyer has no material Liabilities that are required to be disclosed on a balance sheet in accordance with GAAP, other than (i) Liabilities set forth in or reserved against in the balance sheet of the Buyer as of December 31, 2019 (the “Buyer Balance Sheet”); (ii) Liabilities which have arisen after the date of the Buyer Balance Sheet in the Ordinary Course of Business (none of which results from, arises out of, or was caused by any breach of warranty, breach of Contract or infringement or violation of Law); (iii) Liabilities arising under this Agreement, the Ancillary Agreements and/or the performance by the Buyer of its obligations hereunder or thereunder; or (iv) for fees, costs and expenses for advisors and Affiliates of the Buyer or the Sponsor, including with respect to legal, accounting or other advisors incurred by the Buyer in connection with the transactions contemplated by this Agreement.

Section 5.12    Investment Intent.

(a)    The Buyer understands and acknowledges that the acquisition of the Acquired Closing Company Units and any Post-Closing Issued Company Units involves substantial risk. The Buyer can bear the economic risk of its investment (which the Buyer acknowledges may be for an indefinite period) and has such knowledge and experience in financial or business matters that the Buyer is capable of evaluating the merits and risks of its investment in the Acquired Closing Company Units and Post-Closing Issued Company Units.

(b)    The Buyer is acquiring the Acquired Closing Company Units and Post-Closing Issued Company Units for its own account, for investment purposes only and not with a view toward, or for sale in connection with, any distribution thereof, or with any present intention of distributing or selling any Acquired Closing Company Units or Post-Closing Issued Company Units, in each case, in violation of the federal securities Laws, any applicable foreign or state securities Laws or any other applicable Law.

(c)    The Buyer qualifies as an “accredited investor,” as such term is defined in Rule 501(a) promulgated pursuant to the Securities Act.

(d)    The Buyer understands and acknowledges that the Acquired Closing Company Units and Post-Closing Issued Company Units have not been registered under the Securities Act, any United States state

 

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securities Laws or any other applicable foreign Law. The Buyer acknowledges that such securities may not be transferred, sold, offered for sale, pledged, hypothecated or otherwise disposed of without registration under the Securities Act and any other provision of applicable United States federal, United States state, or other Law or pursuant to an applicable exemption therefrom. The Buyer acknowledges that there is no public market for the Acquired Closing Company Units and Post-Closing Issued Company Units and that there can be no assurance that a public market will develop.

Section 5.13    Tax Matters. Except as set forth on Section 5.13 of the Buyer’s Disclosure Letter:

(a)    The Buyer has timely filed all Income and other material Tax Returns required to be filed by it on or prior to the Closing Date pursuant to applicable Laws (taking into account any validly obtained extension of time within which to file). All Income and other material amounts of Tax Returns filed by the Buyer are correct and complete in all material respects and have been prepared in material compliance with all applicable Laws. All Income and other material amounts of Taxes and all Income and other material amounts of Tax Liabilities due and payable by the Buyer for which the applicable statute of limitations remains open have been timely paid (whether or not shown as due and payable on any Tax Return).

(b)    The Buyer has timely and properly withheld or collected and paid to the applicable Taxing Authority all material amounts of Taxes required to have been withheld and paid by it in connection with any amounts paid or owing to any employee, individual independent contractor, creditor, equityholder or other third party and all material sales, use, ad valorem, value added, and similar Taxes and has otherwise complied in all material respects with all applicable Laws relating to such withholding, collection and payment of Taxes.

(c)    No written claim has been made by a Taxing Authority in a jurisdiction where the Buyer does not file a particular type of Tax Return, or pay a particular type of Tax, that the Buyer is or may be subject to taxation of that type by, or required to file that type of Tax Return in, that jurisdiction that has not been settled or resolved. The Income Tax Returns of the Buyer made available to the Sellers, if any, reflect all of the jurisdictions in which the Buyer is required to remit material Income Tax.

(d)    The Buyer is not currently and has not been within the past five (5) years the subject of any Tax Proceeding respect to any Taxes or Tax Returns of or with respect to the Buyer, no such Tax Proceeding is pending, and, to the Knowledge of the Buyer, no such Tax Proceeding has been threatened in writing, in each case, that has not been settled or resolved. The Buyer has not commenced a voluntary disclosure proceeding in any jurisdiction that has not been resolved or settled. All material deficiencies for Taxes asserted or assessed in writing against the Buyer have been fully and timely (taking into account applicable extensions) paid, settled or withdrawn, and, to the Knowledge of the Buyer, no such deficiency has been threatened or proposed in writing against the Buyer.

(e)    There are no outstanding agreements extending or waiving the statute of limitations applicable to any Tax or Tax Return with respect to the Buyer or extending a period of Tax collection, assessment or deficiency, which period (after giving effect to such extension or waiver) has not yet expired, and no written request for any such waiver or extension is currently pending. The Buyer is not the beneficiary of any extension of time (other than an automatic extension of time not requiring the consent of the applicable Governmental Entity) within which to file any Tax Return not previously filed. No private letter ruling, administrative relief, technical advice, or other similar ruling or request has been granted or issued by, or is pending with, any Governmental Entity that relates to any Taxes or Tax Returns of Buyer that would have a material adverse effect on Buyer following the date of the Buyer Balance Sheet.

(f)    The Buyer has not been a party to any “listed transaction” within the meaning of Treasury Regulations Section 1.6011-4(b)(2) (or any similar provision of U.S. state or local or non-U.S. Tax Law).

(g)    There is no Lien for Taxes on any of the assets of the Buyer, other than Permitted Liens.

(h)    The Buyer has not been a member of an affiliated group as defined in Section 1504 of the Code (or any analogous combined, consolidated or unitary group defined under state, local or non-U.S. Law) and

 

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does not have any liability for Taxes of any other Person as a result of Treasury Regulations Section 1.1502-6 (or any similar provision of state, local, or non-U.S. Laws), successor liability, transferee liability, joint or several liability, by contract, by operation of Law, or otherwise (other than pursuant to this Agreement or any of the Ancillary Agreements, if any). The Buyer is not party to or bound by any Tax Sharing Agreement except for any Ordinary Course Tax Sharing Agreement. All amounts payable by the Buyer with respect to (or reference to) Taxes pursuant to any Ordinary Course Tax Sharing Agreement have been timely paid in accordance with the terms of such contracts.

(i)    The unpaid Taxes of the Buyer (i) did not, as of December 31, 2019, materially exceed the reserves for Tax liabilities (excluding any reserve for deferred Taxes established to reflect timing differences between book and Tax income) included in the Buyer Balance Sheet and (ii) do not materially exceed such reserves as adjusted for the passage of time through the Closing Date in accordance with the past practices of the Buyer in filing its Tax Returns.

(j)    The Buyer has not distributed stock of another Person, or has had its stock distributed by another Person, in a transaction that was governed, or intended or reported to be governed, in whole or in part by Section 355 or Section 361 of the Code in the past two (2) years or that could otherwise constitute part of a “plan” or “series of related transactions” (within the meaning of Code Section 355(e)) that includes the transactions contemplated by this Agreement.

(k)    Since the date of its formation, the Buyer has been classified as a U.S. corporation for U.S. federal, state and local income Tax purposes.

Section 5.14    Compliance with Laws. Buyer is, and has been since September 27, 2019, in compliance in all material respects with all Laws applicable to the conduct of the business of the Buyer, and no uncured written notices have been received by Buyer from any Governmental Entity or any other Person alleging a material violation of any such Laws.

Section 5.15    Inspections; Company and Sellers Representations. Buyer is an informed and sophisticated purchaser, and has engaged advisors, experienced in the evaluation and investment in businesses such as the RSI Companies. Buyer has undertaken such investigation and has been provided with and has evaluated such documents and information as it has deemed necessary to enable it to make an informed and intelligent decision with respect to the execution, delivery and performance of this Agreement. Buyer agrees to engage in the transactions contemplated by this Agreement based upon its own inspection and examination of the RSI Companies and on the accuracy of the representations and warranties set forth in Article III, Article IV and any Ancillary Agreement or certificate delivered by any RSI Company, the Sellers’ Representative or the Sellers pursuant to this Agreement and hereby disclaims reliance upon any express or implied representations or warranties of any nature made by Sellers, the Company or their respective Affiliates or representatives, except for those set forth in Article III, Article IV and in any Ancillary Agreement or certificate delivered by any RSI Company, the Sellers’ Representative or the Sellers pursuant to this Agreement.

Section 5.16    Subscription Agreements.

(a)    Buyer has delivered to the Company true, correct and complete copies of each of the Subscription Agreements entered into by Buyer, the Company and the Sellers’ Representative with the applicable Equity Financing Sources named therein on or prior to the Effective Date, pursuant to which certain Equity Financing Sources have committed to provide equity financing to Buyer solely for purposes of consummating the transactions contemplated by this Agreement in the aggregate amount of $160,430,020 (the “PIPE Investment Amount”). To the Knowledge of Buyer, with respect to each such Equity Financing Source, the Subscription Agreement with such Equity Financing Source is in full force and effect and has not been withdrawn or terminated, or otherwise amended or modified, in any respect, and no withdrawal, termination, amendment or modification is contemplated by Buyer. Each Subscription Agreement is a legal, valid and binding obligation of Buyer and, to the Knowledge of Buyer, each Equity Financing Source, and neither the execution or delivery by any party thereto nor the performance of any party’s obligations under

 

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any such Subscription Agreement violates any Laws. Each such Subscription Agreement provides that the Company and the Sellers’ Representative is a party thereto and is entitled to enforce such agreements against the Equity Financing Source. There are no other agreements, side letters, or arrangements between Buyer and any Equity Financing Source relating to any such Subscription Agreement that could affect the obligation of such Equity Financing Sources to contribute to Buyer the applicable portion of the PIPE Investment Amount set forth in the Subscription Agreement of such Equity Financing Sources, and, as of the Effective Date, Buyer does not know of any facts or circumstances that may reasonably be expected to result in any of the conditions set forth in any Subscription Agreement not being satisfied, or the PIPE Investment Amount not being available to Buyer, on the Closing Date. No event has occurred that, with or without notice, lapse of time or both, would constitute a default or breach on the part of Buyer under any material term or condition of any such Subscription Agreement and, as of the Effective Date, Buyer has no reason to believe that it will be unable to satisfy in all material respects on a timely basis any term or condition of closing to be satisfied by it contained in any such Subscription Agreement. Such Subscription Agreements contain all of the conditions precedent (other than the conditions contained in the other Transaction Agreements) to the obligations of the Equity Financing Sources to contribute to Buyer the applicable portion of the PIPE Investment Amount set forth in such Subscription Agreements on the terms therein.

(b)    As of the Effective Date, no fees, consideration or other discounts are payable or have been agreed by Buyer or any of its Subsidiaries (including, from and after the Closing, the RSI Companies) to any Equity Financing Source, except as set forth in the Subscription Agreements.

ARTICLE VI

INTERIM OPERATING COVENANTS

Section 6.1    Interim Operating Covenants.

(a)    From the Effective Date until the earlier of: (1) the date this Agreement is terminated in accordance with Article X and (2) the Closing Date (such period, the “Pre-Closing Period”), unless the Buyer shall otherwise give prior consent (which consent shall not be unreasonably withheld, conditioned or delayed) in writing and except (x) as specifically contemplated by this Agreement or the Ancillary Agreements (including the Recapitalization and the transactions contemplated by Section 7.13), (y) as set forth on Section 6.1(a) of the Company and Sellers’ Disclosure Letter or (z) other than in respect of the restrictions set for in subclauses (i), (iii), (iv), (v) (x) or (xiv), to the extent that any action is taken or omitted to be taken in response to or related to the actual or anticipated effect on any of the RSI Companies’ businesses of COVID-19 or any COVID-19 Measures, in each case with respect to this clause (z) in connection with or in response to COVID-19, the Company shall, and Sellers shall cause the RSI Companies to, conduct and operate their business in all material respects in the Ordinary Course of Business and use its commercially reasonable efforts to preserve their existing relationships with material customers, suppliers and distributors, and the Company shall not, and Sellers shall cause the RSI Companies not to:

(i)    amend or otherwise modify any of the Governing Documents of any RSI Company in any manner that would be adverse to the Buyer or the Sponsor, except as otherwise required by Law;

(ii)    make any material changes to its accounting policies, methods or practices, other than as required by GAAP or applicable Law;

(iii)    sell, issue, redeem, assign, transfer, pledge (other than in connection with existing credit facilities), convey or otherwise dispose of (x) any Equity Interests of any RSI Company or (y) any options, warrants, rights of conversion or other rights or agreements, arrangements or commitments obligating any RSI Company to issue, deliver or sell any Equity Interests of any RSI Company;

(iv)    declare, make or pay any dividend, other distribution or return of capital (whether in cash or in kind) to any equityholder of the Company or any other RSI Company, other than (x) to another RSI

 

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Company, (y) Tax Distributions, which may be financed by an advance made by any Seller or an Affiliate of a Seller, and (z) repayments by the Company to any Seller or its Affiliates in respect of advances made by such Persons to the Company as set forth on Section 6.1(a)(iv) of the Company and Sellers’ Disclosure Letter or described in Section 6.1(a)(iv)(y);

(v)    adjust, split, combine or reclassify any of its Equity Interests;

(vi)    (x) incur, assume, guarantee or otherwise become liable for (whether directly, contingently or otherwise) any Indebtedness (other than (A) additional Indebtedness under existing credit facilities, (B) capital leases entered into in the Ordinary Course of Business, and (C) other Indebtedness not to exceed $15,000,000 in the aggregate), (y) make any advances or capital contributions to, or investments in, any Person, other than an RSI Company or in the Ordinary Course of Business, or (z) amend or modify in any material respect any Indebtedness;

(vii)    commit to, authorize or enter into any agreement in respect of, any capital expenditure (or series of commitments or capital expenditures), other than capital expenditures in an amount not to exceed $10,000,000;

(viii)    enter into any material amendment or termination (other than an expiration in accordance with the terms thereof) of, or waive compliance with, any material term of any Material Contract or Material Lease or enter into any Contract that if entered into prior to the Effective Date would be a Material Contract or Material Lease, in each case other than in the Ordinary Course of Business and solely to the extent such amendment, termination or waiver would not materially and adversely impact the RSI Companies, taken as a whole;

(ix)    other than inventory and other assets acquired in the Ordinary Course of Business, acquire the business, properties or assets, including Equity Interests of another Person, except, in each case, for acquisitions whose consideration in an aggregate amount (for all such acquisitions) is not greater than $10,000,000 and the consideration for which is payable only in cash, so long as, based upon the advice of the Company’s accountants, such acquisition, individually or in the aggregate, would not require any additional disclosure pursuant to the rules and regulations adopted by PCAOB (whether through merger, consolidation, share exchange, business combination or otherwise);

(x)    propose, adopt or effect any plan of complete or partial liquidation, dissolution, recapitalization or reorganization, or voluntarily subject to any material Lien, any of the material rights or material assets owned by, or leased or licensed to, any RSI Company, except for (x) Permitted Liens, (y) Liens under existing credit facilities or other Indebtedness permitted pursuant to Section 6.1(a)(iv) and (z) as required or contemplated by this Agreement;

(xi)    compromise, commence or settle any pending or threatened Proceeding (w) involving payments (exclusive of attorney’s fees) by an RSI Company not covered by insurance in excess of $500,000 in any single instance or in excess of $2,000,000 in the aggregate, (x) granting injunctive or other equitable remedy against an RSI Company, (y) which imposes any restrictions on the operations of businesses of the RSI Companies or (z) by the equityholders of the Company or any other Person which relates to the transactions contemplated by this Agreement;

(xii)    except as required under applicable Law, the terms of any Company Employee Benefit Plan existing as of the Effective Date or in the Ordinary Course of Business (A) materially increase in any manner the compensation, bonus, severance or termination pay of any of the current or former directors, officers, employees or individual consultants of the RSI Companies, other than increases to any such individuals who are not directors or officers of the RSI Companies in the ordinary course of business consistent with past practice that do not exceed five percent (5%) individually or three percent (3%) in the aggregate, (B) become a party to, establish, materially amend (other than as required by applicable Law or as part of an annual renewal for health and/or welfare benefits), commence participation in, or terminate any stock option plan or other stock-based compensation plan, or any material Company Employee Benefit Plan that is not an Affiliate Employee Benefit Plan with or for the

 

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benefit of any current or former directors, officers, employees or individual consultants of the RSI Companies (or newly hired employees), except in each case actions taken pursuant to Section 7.13, (C) accelerate the vesting of or lapsing of restrictions with respect to any stock-based compensation or other long-term incentive compensation under any Company Employee Benefit Plan, (D) grant any new awards under any Company Employee Benefit Plan, (E) amend or modify any outstanding award under any Company Employee Benefit Plan, (F) enter into, amend or terminate any collective bargaining agreement or other agreement with a labor union, works council or similar organization respecting employees of the RSI Companies, (G) forgive any loans, or issue any loans (other than advances issued in the Ordinary Course of Business) to an RSI Company’s directors, officers, contractors or employees, or (H) hire or engage any new employee or consultant or terminate the employment or engagement, other than for cause, of any employee or consultant if such new employee or consultant will receive, or does receive, annual base compensation (or annual base wages or fees) in excess of $250,000;

(xiii)     (A) sell, lease, assign, transfer, convey, license, sublicense, covenant not to assert, permit to lapse, abandon, allow to lapse, or otherwise dispose of, create, grant or issue any Liens (other than Permitted Liens), debentures or other securities in or on, any material rights or assets owned by, or leased or licensed to, any RSI Company, other than (w) inventory or products in the Ordinary Course of Business, (x) assets with an aggregate fair market value less than $10,000,000, (y) pursuant to non-exclusive licenses of Owned Intellectual Property granted by any RSI Company to customers or casinos in the Ordinary Course of Business, or (z) immaterial Owned Intellectual Property; or (B) subject any Owned Intellectual Property to Copyleft Terms;

(xiv)    disclose any trade secrets and any other material confidential information of an RSI Company to any Person (other than pursuant to a written confidentiality agreement with provisions restricting the use and disclosure of such trade secrets and confidential information);

(xv)    fail to take any action required to maintain any material insurance policies of any RSI Company in force (other than (i) substitution of an insurance policy by an insurance policy with a substantially similar coverage or (ii) with respect to any policy that covers any asset or matter that has been disposed or is no longer subsisting or application), or knowingly take or omit to take any action that could reasonably result in any such insurance policy being void or voidable (other than (i) substitution of an insurance policy by an insurance policy with a substantially similar coverage, (ii) with respect to any policy that covers any asset or matter that has been disposed or is no longer subsisting or application, (iii) actions in the Ordinary Course of Business, or (iv) actions set forth on Section 6.1(a)(xv) of the Company and Sellers’ Disclosure Letter); or

(xvi)    agree or commit to do any of the foregoing.

(b)    During the Pre-Closing Period, unless the Buyer shall otherwise give prior consent (which consent shall not be unreasonably withheld, conditioned or delayed) in writing and except (x) as contemplated by this Agreement or the Ancillary Agreements (including the Recapitalization and the transactions contemplated by Section 7.13), (y) as set forth on Section 6.1(b) of the Company and Sellers’ Disclosure Letter or (z) to the extent that any action is taken or not taken in response to the actual or anticipated effect on Buyer’s business of COVID-19 or any COVID-19 Measures, in each case with respect to this clause (z) in connection with or in response to COVID-19, the Company shall not, and Sellers shall cause the RSI Companies not to:

(i)    enter into, renew or modify any Prohibited Affiliate Transaction; or

(ii)    except to the extent required by applicable Law, (1) make, change or revoke any material election relating to Taxes outside the Ordinary Course of Business consistent with past practice (subject to changes in applicable Law), (2) enter into any agreement, settlement or compromise with any Taxing Authority relating to a material amount of Taxes, (3) consent to any extension or waiver of the statutory period of limitations applicable to any material Tax matter not disclosed in Section 3.8 of

 

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the Company and Sellers’ Disclosure Letter (other than at the request of a taxing authority), (4) file any amended material Tax Return, (5) fail to timely file (taking into account valid extensions) any material Tax Return required to be filed, (6) fail to pay any material amount of Tax as it becomes due, (7) enter into any Tax Sharing Agreement (other than an Ordinary Course Tax Sharing Agreement), (8) surrender any right to claim any refund of a material amount of Taxes, or (9) take any action that would reasonably be expected to prevent, impair or impede the Intended Tax Treatment.

(c)    Nothing contained in this Agreement shall be deemed to give the Buyer, directly or indirectly, the right to control or direct the Company or any operations of any RSI Company prior to the Closing. Prior to the Closing, the RSI Companies shall exercise, consistent with the terms and conditions of this Agreement, control over their respective businesses and operations.

Section 6.2    Interim Operating Covenants (Buyer).

(a)    During the Pre-Closing Period, unless Sellers shall otherwise give prior consent (which consent shall not be unreasonably withheld, conditioned or delayed) in writing and except as contemplated by this Agreement or the Ancillary Agreements or as set forth on Section 6.2(a) of the Buyer’s Disclosure Letter, the Buyer shall not:

(i)    conduct any activities or enter into any Contracts directed toward or in contemplation of an alternative Business Combination to the Business Combination contemplated by this Agreement;

(ii)    amend or otherwise modify the Trust Agreement, that certain Private Placement Warrants Purchase Agreement, dated February 20, 2020, by and among the Sponsor and the Buyer, or the Buyer Governing Documents in any material respect;

(iii)    withdraw any of the Trust Amount, other than as permitted by the Buyer Governing Documents or the Trust Agreement;

(iv)    make any material changes to its accounting policies, methods or practices, other than as required by GAAP or applicable Law;

(v)    except to the extent required by applicable Law, (1) make, change or revoke any material election relating to Taxes outside the Ordinary Course of Business consistent with past practice (subject to changes in applicable Law), (2) enter into any agreement, settlement or compromise with any Taxing Authority relating to a material amount of Taxes, (3) consent to any extension or waiver of the statutory period of limitations applicable to any material Tax matter not disclosed in Section 6.2 of the Buyer’s Disclosure Letter (other than at the request of a taxing authority), (4) file any amended material Tax Return, (5) fail to timely file (taking into account valid extensions) any material Tax Return required to be filed, (6) fail to pay any material amount of Tax as it becomes due, (7) enter into any tax sharing agreement (other than an Ordinary Course Tax Sharing Agreement), (8) surrender any right to claim any refund of a material amount of Taxes, or (9) take any action that would reasonably be expected to prevent, impair or impede the Intended Tax Treatment;

(vi)    other than in connection with the Required Vote, a Buyer Share Redemption or a Permitted Equity Financing, sell, issue, redeem, assign, transfer, convey or otherwise dispose of (w) any of its Equity Interests, or (x) any options, warrants, rights of conversion or other rights or agreements, arrangements or commitments obligating Buyer or Sponsor to issue, deliver or sell any Equity Interests of Buyer, other than Contracts for Indebtedness from the Sponsor or its Affiliates or any director or officer of the Buyer or the Sponsor incurred in order to finance working capital and Tax expenses needs and expenses in an amount not to exceed $1,300,000 on terms not materially different than those reflected in the form promissory note set forth on Section 5.2 of the Buyer’s Disclosure Letter;

(vii)    other than the Buyer Share Redemption, declare, make or pay any dividend, other distribution or return of capital (whether in cash or in kind) to the equityholders of the Buyer;

 

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(viii)    adjust, split, combine or reclassify (other than a reclassification pursuant to a conversion of shares of Buyer Class B Common Stock into shares Buyer Class A Common Stock pursuant to the Buyer Governing Documents) any of its Equity Interests;

(ix)    reduce the exercise price of any Buyer Warrant;

(x)    incur, assume, guarantee or otherwise become liable for (whether directly, contingently or otherwise) any Indebtedness, material Liabilities, debts or obligations other than Contracts for Indebtedness from the Sponsor or its Affiliates or any director or officer of the Buyer or the Sponsor incurred in order to finance working capital and Tax expenses needs and expenses in an amount not to exceed $1,500,000 on terms not materially different than those reflected in the promissory note dated November 27, 2019 between the Sponsor and the Buyer in the principal amount of $200,000;

(xi)    enter into any transaction or Contract with the Sponsor or any of its Affiliates for the payment of finder’s fees, consulting fees, monies in respect of any payment of a loan or other compensation paid by Buyer to the Sponsor, Buyer’s officers or directors, or any Affiliate of the Sponsor or Buyer’s officers, for services rendered prior to, or for any services rendered in connection with, the consummation of the transactions contemplated by this Agreement;

(xii)    compromise, commence or settle any pending or threatened Proceeding (w) involving payments (exclusive of attorney’s fees) by Buyer not covered by insurance in excess of $500,000 or in excess of $1,000,000 in the aggregate, (x) granting material injunctive or other equitable remedy against the Buyer (y) which imposes any material restrictions on the operations of businesses of the Buyer or (z) by the public stockholders or any other Person which relates to the transactions contemplated by this Agreement; or

(xiii)    agree or commit to do any of the foregoing.

(b)    Nothing contained in this Agreement shall be deemed to give the Sellers or the Company, directly or indirectly, the right to control or direct the Buyer prior to the Closing. Prior to the Closing, the Buyer shall exercise, consistent with the terms and conditions of this Agreement, control over its business.

ARTICLE VII

PRE-CLOSING AGREEMENTS

Section 7.1    Commercially Reasonable Efforts; Further Assurances. Subject to the terms and conditions set forth in this Agreement, and to applicable Laws, during the Pre-Closing Period, the Parties shall cooperate and use their respective commercially reasonable efforts to take, or cause to be taken, all appropriate action (including executing and delivering any documents, certificates, instruments and other papers that are necessary for the consummation of the transactions contemplated by this Agreement), and do, or cause to be done, and assist and cooperate with the other Parties in doing, all things necessary to consummate and make effective, in the most expeditious manner practicable (giving effect to the timing of the delivery of the PCAOB Financial Statements), the transactions contemplated by this Agreement. Each Seller shall use its commercially reasonable efforts, and the Buyer shall cooperate in all reasonable respects with Sellers, to solicit and obtain the consents of the Persons who are parties to the Contracts listed on Section 7.1 of the Company and Sellers’ Disclosure Letter prior to the Closing; provided, however, that no Party nor any of their Affiliates shall be required to pay or commit to pay any amount to (or incur any obligation in favor of) any Person from whom any such consent may be required (unless such payment is required in accordance with the terms of the relevant Contract requiring such consent). Any payment pursuant to the foregoing proviso shall be a Transaction Expense (which payment shall be treated as a Company Transaction Expense hereunder).

Section 7.2    Trust & Closing Funding. Subject to the satisfaction or waiver of the conditions set forth in Section 2.6 (other than those conditions that by their nature are to be satisfied at Closing, but subject to the satisfaction or waiver of those conditions) and provision of notice thereof to the Trustee (which notice the Buyer

 

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shall provide to the Trustee in accordance with the terms of the Trust Agreement), in accordance with the Trust Agreement and the Buyer Governing Documents, at the Closing, the Buyer shall (a) cause the documents, opinions and notices required to be delivered to the Trustee pursuant to the Trust Agreement to be so delivered, and (b) cause the Trustee to pay as and when due (x) all amounts payable to Buyer Stockholders who shall have validly elected to redeem their shares of Buyer Class A Common Stock pursuant to the Buyer Certificate of Incorporation and direct and use its best efforts to cause the Trustee to pay as and when due the Deferred Discount (as defined in the Trust Agreement) pursuant to the terms of the Trust Agreement, except to the extent that such Deferred Discount is waived, and (y) pay all amounts payable pursuant to Section 2.2.

Section 7.3    Listing. During the Pre-Closing Period, the Buyer shall remain listed as a public company on, and for the Buyer Class A Common Stock and Buyer Warrants to be listed on, the Stock Exchange.

Section 7.4    LTIP. Prior to the Closing Date, the Buyer shall approve and, subject to the approval of the Buyer Stockholders, adopt, an omnibus incentive equity plan, based on the terms and conditions as reasonably mutually agreed upon between Buyer and the Sellers to be effective upon and following the Closing (the “LTIP”). Nothing contained in this Section 7.4 (whether express or implied) shall confer any rights, remedies or benefits whatsoever (including any third-party beneficiary rights) on any Person other than the Parties to this Agreement.

Section 7.5    Confidential Information. During the Pre-Closing Period, each Party shall be bound by and comply with the provisions set forth in the Confidentiality Agreement as if such provisions were set forth herein, and such provisions are hereby incorporated herein by reference. Each Party acknowledges and agrees that each is aware, and each of their respective Affiliates and representatives is aware (or upon receipt of any material nonpublic information of the other Party, will be advised), of the restrictions imposed by the United States federal securities Laws and other applicable foreign and domestic Laws on Persons possessing material nonpublic information about a public company. Each Party hereby agrees, that during the Pre-Closing Period, except in connection with or support of the transactions contemplated by this Agreement (including any communications with potential Equity Financing Sources), while any of them are in possession of such material nonpublic information, none of such Persons shall, directly or indirectly (through its Affiliates or otherwise), acquire, offer or propose to acquire, agree to acquire, sell or transfer or offer or propose to sell or transfer any securities of the Buyer, communicate such information to any other Person or cause or encourage any Person to do any of the foregoing.

Section 7.6    Access to Information.

(a)    During the Pre-Closing Period, upon reasonable prior written notice, the RSI Companies shall afford the representatives of the Buyer reasonable access, during normal business hours, to the properties, books and records of the RSI Companies and furnish to the representatives of the Buyer such additional financial and operating data and other information regarding the business of the RSI Companies as the Buyer or its representatives may from time to time reasonably request for purposes of consummating the transactions contemplated by this Agreement, but only to the extent that Sellers and the RSI Companies may do so without violating any obligations to any third party and to the extent that Sellers and the RSI Companies have the authority to grant such access without breaching any restrictions binding on them (and provided that Buyer shall abide by the terms of the Confidentiality Agreement). Buyer agrees to be responsible for the reasonable and documented out-of-pocket expenses incurred by the RSI Companies as a result of providing such access (which shall be treated as Sponsor Transaction Expenses hereunder).

(b)    Buyer shall coordinate its access rights with the Sellers to reasonably minimize any inconvenience to or interruption of the conduct of the business of the RSI Companies.

(c)    Notwithstanding anything to the contrary in this Section 7.6, neither Sellers, the Sellers’ Representative nor any RSI Company or any of their respective representatives shall be required to disclose any information to Buyer during the Pre-Closing Period if such disclosure would (i) jeopardize any attorney-

 

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client or other applicable legal privilege, (ii) require disclosure of any trade secrets of the RSI Companies or of third parties, cause a violation of any RSI Company’s obligations with respect to confidentiality, or violate any Privacy and Security Requirement, or (iii) contravene any applicable Contracts or Laws. Prior to the Closing, without the prior written consent of Sellers, which may be withheld for any reason, Buyer shall not contact any suppliers to, or customers or other material business relationships of, any RSI Company in relation to the transactions contemplated by this Agreement and Buyer shall have no right to perform invasive or subsurface investigations of any of the Leased Real Property.

Section 7.7    Notification of Certain Matters.

(a)    During the Pre-Closing Period, each of Sellers and the Company shall disclose to the Buyer in writing any development, fact or circumstance of which Sellers or the Company has Knowledge, arising before or after the Effective Date, that would cause or would reasonably be expected to result in the failure of the conditions set forth in Section 2.6(a) or Section 2.6(b) to be satisfied.

(b)    During the Pre-Closing Period, Buyer shall disclose to Sellers in writing any development, fact or circumstance of which Buyer has Knowledge, arising before or after the Effective Date, that would cause or would reasonably be expected to result in the failure of the conditions set forth in Section 2.6(a) or Section 2.6(c) to be satisfied.

Section 7.8    Regulatory Approvals; Efforts.

(a)    The Parties will (i) (x) cause the Notification and Report Forms required pursuant to the HSR Act and (y) cause any filings or notifications as required by or advisable with respect to any Gaming Regulatory Authority, including as set forth on Section 7.8(a) of the Company and Sellers’ Disclosure Letter, in each case, with respect to the transactions contemplated by this Agreement to be filed as promptly as practicable after the execution of this Agreement, (ii) request early termination of the waiting period relating to such HSR Act filings, if early termination is being granted at the time of such filing, (iii) supply as promptly as practicable any additional information and documentary material that may be requested by a Gaming Regulatory Authority pursuant to Applicable Gaming Law or a Governmental Entity pursuant to the HSR Act and (iv) otherwise use its commercially reasonable efforts to cause the expiration or termination of the applicable waiting periods under the HSR Act with respect to the transactions contemplated by this Agreement as soon as practicable. The Parties shall use commercially reasonable efforts to promptly obtain, and to cooperate with each other to promptly obtain, all authorizations, approvals, clearances, consents, actions or non-actions of any Governmental Entity in connection with the above filings, applications or notifications. Each Party shall promptly inform the other Parties of any material communication between itself (including its representatives) and any Governmental Entity regarding any of the transactions contemplated by this Agreement. If a Party or any of its Affiliates receives any formal or informal request for supplemental information or documentary material from any Governmental Entity with respect to the transactions contemplated by this Agreement, then the Party, to the extent necessary and advisable, shall provide a reasonable response to such request as promptly as reasonably practicable. All fees or other payments required by applicable Law to any Governmental Entity in order to obtain any such approvals, consents, or Orders shall be Transaction Expenses, fifty percent (50%) of which shall be treated as Company Transaction Expenses hereunder and fifty percent (50%) of which shall be treated as Sponsor Transaction Expenses hereunder.

(b)    The Parties shall keep each other apprised of the status of matters relating to the completion of the transactions contemplated by this Agreement and, to the extent permissible, promptly furnish the other with copies of notices or other communications between any Party (including their respective Affiliates and representatives), as the case may be, and any third party and/or Governmental Entity with respect to such transactions. Each Party shall give the other Party and its counsel a reasonable opportunity to review in advance, to the extent permissible, and consider in good faith the views and input of the other Party in connection with, any proposed material written communication to any Governmental Entity relating to the transactions contemplated by this Agreement. Each Party agrees not to participate in any substantive

 

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meeting, conference or discussion, either in person or by telephone, with any Governmental Entity in connection with the transactions contemplated by this Agreement unless it consults with the other Party in advance and, to the extent not prohibited by such Governmental Entity, gives the other Party the opportunity to attend and participate.

(c)    Each Party shall use its commercially reasonable efforts to resolve objections, if any, as may be asserted by any Governmental Entity with respect to the transactions contemplated by this Agreement under the HSR Act, the Sherman Act, the Clayton Act, the Federal Trade Commission Act, and any other United States federal or state or foreign statutes, rules, regulations, Orders, decrees, administrative or judicial doctrines or other Laws that are designed to prohibit, restrict or regulate actions having the purpose or effect of monopolization or restraint of trade or constituting anticompetitive conduct (collectively, the “Antitrust Laws”). Subject to the other terms of this Section 7.8(c), each Party shall use its commercially reasonable efforts to take such action as may be required to cause the expiration of the notice periods under the HSR Act or other Antitrust Laws with respect to such transactions as promptly as possible after the execution of this Agreement.

(d)    The Buyer shall not take any action that would reasonably be expected to materially delay or prevent the consummation of the transactions contemplated by this Agreement as a result of the application of any Antitrust Law.

(e)    Notwithstanding anything in this Agreement to the contrary, but subject to compliance with Section 7.5, nothing in this Section 7.8 shall require Buyer, Sponsor, Sellers’ Representative or any Seller or any of their respective Affiliates to take any action with respect to any of their respective Affiliates (other than, with respect to Buyer and Sponsor, Buyer’s Subsidiaries and the RSI Companies), any of their respective affiliated investment funds or any portfolio company (as such term is commonly understood in the private equity industry) or investment of Buyer, Sponsor, Sellers’ Representative or any Seller or their respective Affiliates (other than, with respect to Buyer and Sponsor, Buyer’s Subsidiaries and the RSI Companies), or any interests therein, including selling, divesting or otherwise disposing of, licensing, holding separate, or otherwise restricting or limiting its freedom to operate with respect to, any business, products, rights, services, licenses, investments, or assets, of Buyer, Sponsor, Sellers’ Representative or any Seller or their respective Affiliates (other than, with respect to Buyer and Sponsor, Buyer’s Subsidiaries and the RSI Companies), any of their respective affiliated investment funds or any portfolio company (as such term is commonly understood in the private equity industry) or investment of Buyer, Sponsor, Sellers’ Representative or any Seller or their respective Affiliates (other than the RSI Companies), or any interests therein.

Section 7.9    Communications; Press Release; SEC Filings.

(a)    Prior to the Closing, any press or other public release or public announcement concerning this Agreement or the transactions contemplated by this Agreement or any matter contemplated by the foregoing shall not be issued without the prior written consent of each of the Buyer, the Sellers’ Representative and the Company, which consent shall not be unreasonably withheld, conditioned or delayed; provided, however, that each Party may make any public announcement that is required by applicable law or the requirements of any national securities exchange (it being understood that, to the extent practicable, the Party making such public announcement shall provide such announcement to the other Parties prior to release and consider in good faith any comments from such other Parties); and provided, further, that each Party may make announcements regarding this Agreement and the transactions contemplated hereby consisting solely of information contained in and otherwise consistent with any such mutually agreed press release or public announcement and the Buyer SEC Documents to their directors, officers, employees, customers, suppliers and other interested parties without the consent of the other Parties; and provided, further, that subject to this Section 7.9, the foregoing shall not prohibit any Party from communicating with third parties to the extent necessary for the purpose of seeking any third party consent.

(b)    As promptly as practicable following the Effective Date, the Buyer shall prepare and file a Current Report on Form 8-K pursuant to the Securities Exchange Act to report the execution of this

 

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Agreement (the “Signing Form 8-K”) and the Parties shall issue a mutually agreeable press release announcing the execution of this Agreement (the “Signing Press Release”). Buyer shall provide the Company with a reasonable opportunity to review and comment on the Signing Form 8-K prior to its filing and shall consider such comments in good faith. Buyer shall not file any such documents with the SEC without the prior written consent of the Company (such consent not to be unreasonably withheld, conditioned or delayed).

(c)    As promptly as reasonably practicable after the Effective Date, but in any event following delivery of any information required to be delivered by the Company pursuant to this Section 7.9, (i) the Buyer and the Company shall prepare and the Buyer shall file with the SEC a preliminary Proxy Statement, which shall comply as to form, in all material respects, with, as applicable, the provisions of the Securities Exchange Act and the rules and regulations promulgated thereunder, for the purpose of (A) providing Buyer Stockholders with the opportunity to participate in the Buyer Share Redemption and (B) soliciting proxies from the Buyer Stockholders to vote at the Buyer Stockholder Meeting in favor of the Buyer Stockholder Voting Matters. The Buyer shall file the definitive Proxy Statement with the SEC and cause the Proxy Statement to be mailed to its stockholders of record, as of the record date to be established by the Buyer Board in accordance with Section 7.9(j), at such time as reasonably agreed by Buyer and the Company promptly following (x) in the event the preliminary Proxy Statement is not reviewed by the SEC, the expiration of the waiting period in Rule 14a-6(a) under the Securities Exchange Act or (y) in the event the preliminary Proxy Statement is reviewed by the SEC, receipt of oral or written notification of the completion of the review by the SEC (the date in (x) or (y), the “Proxy Clearance Date”).

(d)    Prior to filing with the SEC, the Buyer will make available to the Company drafts of the Proxy Statement and any other documents to be filed with the SEC that relate to the transactions completed hereby, both preliminary and final, and drafts of any amendment or supplement to the Proxy Statement or such other document and will provide the Company with a reasonable opportunity to comment on such drafts and shall consider such comments in good faith. The Buyer will advise the Company promptly after it receives notice thereof, of (i) the time when the Proxy Statement has been filed, (ii) in the event the preliminary Proxy Statement is not reviewed by the SEC, the expiration of the waiting period in Rule 14a-6(a) under the Securities Exchange Act, (iii) in the event the preliminary Proxy Statement is reviewed by the SEC, receipt of oral or written notification of the completion of the review by the SEC, (iv) the filing of any supplement or amendment to the Proxy Statement, (v) any request by the SEC for amendment of the Proxy Statement, (vi) any comments, written or oral, from the SEC relating to the Proxy Statement and responses thereto and (vii) requests by the SEC for additional information in connection with the Proxy Statement. The Buyer shall promptly respond to any comments of the SEC on the Proxy Statement, and shall use its commercially reasonable efforts to have the Proxy Statement cleared by the SEC under the Securities Exchange Act as soon after filing as practicable; provided that prior to responding to any requests or comments from the SEC, Buyer will make available to the Company drafts of any such response and provide the Company with reasonable opportunity to comment on such drafts.

(e)    If at any time prior to the Closing (including prior to the Buyer Stockholder Meeting) any Party discovers or becomes aware of any information that is required to be set forth in an amendment or supplement to the Proxy Statement so that the Proxy Statement would not include any misstatement of a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, such Party shall promptly inform the other Parties hereto and the Parties shall cooperate reasonably in connection with preparing and, to the extent required by Law, disseminating (including by promptly transmitting to the Buyer Stockholders) any such amendment or supplement to the Proxy Statement containing such information; provided that no information received by the Buyer pursuant to this Section 7.9(e) shall operate as a waiver or otherwise affect any representation, warranty or agreement given or made hereunder by any Party, and no such information shall be deemed to change, supplement or amend the Schedules hereto.

(f)    The Parties acknowledge that a substantial portion of the Proxy Statement and certain other forms, reports and other filings required to be made by the Buyer under the Securities Exchange Act in connection

 

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with the transactions contemplated by this Agreement (collectively, “Additional Buyer Filings”) shall include disclosure regarding the RSI Companies and the business of the RSI Companies and the RSI Companies’ management, operations and financial condition. Accordingly, Sellers and the Company agree to, and agree to cause the RSI Companies to, as promptly as reasonably practicable, provide the Buyer with all information concerning Sellers, the Company and the RSI Companies, and their respective business, management, operations and financial condition, in each case, that is reasonably requested by the Buyer to be included in the Proxy Statement, Additional Buyer Filings or any other Buyer SEC Filing. Sellers and the Company shall make, and shall cause RSI Companies to, make, and shall cause their Affiliates, directors, officers, managers and employees to make, available to the Buyer and its counsel, auditors and other representatives in connection with the drafting of the Proxy Statement and Additional Buyer Filings, as reasonably requested by the Buyer, and responding in a timely manner to comments thereto from the SEC. The Buyer shall make all necessary filings with respect to the transactions contemplated by this Agreement under the Securities Act, the Securities Exchange Act and applicable blue sky Laws and the rules and regulations thereunder, and the Sellers and the Company shall reasonably cooperate in connection therewith.

(g)    At least five (5) days prior to Closing, the Buyer shall begin preparing a draft Current Report on Form 8-K in connection with and announcing the Closing, together with, or incorporating by reference, such information that is or may be required to be disclosed with respect to the transactions contemplated by this Agreement pursuant to Form 8-K (the “Closing Form 8-K”). Buyer shall provide the Company with a reasonable opportunity to review and comment on the Closing Form 8-K prior to its filing and shall consider such comments in good faith. Prior to the Closing, the Parties shall prepare a mutually agreeable press release announcing the consummation of the transactions contemplated by this Agreement (“Closing Press Release”). Buyer shall not file any such documents with the SEC without the prior written consent of the Company (such consent not to be unreasonably withheld, conditioned or delayed). Concurrently with the Closing, the Buyer shall distribute the Closing Press Release, and within four (4) Business Days thereafter, file the Closing Form 8-K with the SEC.

(h)    The Company shall provide to the Buyer as promptly as reasonably practicable after the Effective Date, (i) audited consolidated balance sheets of the RSI Companies as of December 31, 2019 and December 31, 2018, and related audited consolidated statements of operations, partners’ equity and cash flows for the fiscal years ended on such dates, together with all related notes and schedules thereto, accompanied by the reports thereon of the RSI Companies’ independent auditors (which reports shall be unqualified), prepared in accordance with GAAP, applied on a consistent basis throughout the covered periods and Regulation S-X of the SEC and in each case, audited in accordance with the standards of the PCAOB (the “PCAOB Financial Statements”), (ii) unaudited consolidated financial statements of the RSI Companies including consolidated balance sheets, statements of operations, statements of partners’ equity and statements of cash flows as of and for the fiscal period ended March 30, 2020 together with all related notes and schedules thereto, prepared in accordance with GAAP applied on a consistent basis throughout the covered periods and Regulation S-X of the SEC and reviewed by the RSI Companies’ independent auditor in accordance with Statement on Auditing Standards No. 100 issued by the American Institute of Certified Public Accountants, (iii) all other audited and unaudited financial statements of the RSI Companies and any company or business units acquired by the RSI Companies, as applicable, required under the applicable rules and regulations and guidance of the SEC to be included in the Proxy Statement and/or the Closing Form 8-K (including pro forma financial information), (iv) all selected financial data of the RSI Companies required by Item 301 of Regulation S-K, as necessary for inclusion in the Proxy Statement and Closing Form 8-K and (v) management’s discussion and analysis of financial condition and results of operations prepared in accordance with Item 303 of Regulation S-K of the SEC (as if the RSI Companies were subject thereto) with respect to the periods described in clauses (i) and (ii), and (iii) above, as necessary for inclusion in the Proxy Statement and Closing Form 8-K (including pro forma financial information).

(i)    Each Party covenants and agrees that the information supplied or to be supplied by such Party or its Affiliates for inclusion in the Proxy Statement, the Additional Buyer Filings, any other Buyer SEC Filing, any document submitted to any other Governmental Entity or any announcement or public statement

 

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regarding the transactions contemplated by this Agreement (including the Signing Press Release and the Closing Press Release) shall not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances in which they are made, not misleading at (i) the time such information is filed, submitted or made publicly available, (ii) the time the Proxy Statement (or any amendment thereof or supplement thereto) is first mailed to the Buyer Stockholders, (iii) the time of the Buyer Stockholder Meeting or (iv) the Closing (subject to the qualifications and limitations set forth in the materials provided by such Party or that are included in such filings and/or mailings).

(j)    Buyer shall, prior to or as promptly as practicable following the Proxy Clearance Date (and in no event later than the date the Proxy Statement is required to be mailed in accordance with Section 7.9(c)), establish a record date (which date shall be mutually agreed with the Company) for, duly call and give notice of, the Buyer Stockholder Meeting. Buyer shall convene and hold a meeting of Buyer Stockholders, for the purpose of obtaining the approval of the Buyer Stockholder Voting Matters, which meeting shall be held not more than 45 days after the date on which Buyer commences the mailing of the Proxy Statement to its stockholders. Buyer shall use its reasonable best efforts to take all actions necessary to obtain the approval of the Buyer Stockholder Voting Matters at the Buyer Stockholder Meeting, including as such Buyer Stockholder Meeting may be adjourned or postponed in accordance with this Agreement, including by soliciting proxies as promptly as practicable in accordance with applicable Law for the purpose of seeking the approval of the Buyer Stockholder Voting Matters. Buyer shall include the Buyer Board Recommendation in the Proxy Statement. The Buyer Board shall not (and no committee or subgroup thereof shall) change, withdraw, withhold, qualify or modify, or publicly propose to change, withdraw, withhold, qualify or modify, the Buyer Board Recommendation. Buyer agrees that its obligation to establish a record date for, duly call, give notice of, convene and hold the Buyer Stockholder Meeting for the purpose of seeking approval of the Buyer Stockholder Voting Matters shall not be affected by any intervening event or circumstance, and Buyer agrees to establish a record date for, duly call, give notice of, convene and hold the Buyer Stockholder Meeting and submit for the approval of the Buyer Stockholders the Buyer Stockholder Voting Matters, in each case as contemplated by this Section 7.9(j), regardless of whether or not there shall have occurred any intervening event or circumstance. Notwithstanding anything to the contrary contained in this Agreement, Buyer shall be entitled to (and in the case of the following clauses (ii) and (iv), at the request of the Company, shall) postpone or adjourn the Buyer Stockholder Meeting for a period of no longer than 15 Business Days: (i) to ensure that any supplement or amendment to the Proxy Statement that the Buyer Board has determined in good faith is required by applicable Law is disclosed to Buyer’s stockholders and for such supplement or amendment to be promptly disseminated to Buyer’s stockholders prior to the Buyer Stockholder Meeting; (ii) if, as of the time for which the Buyer Stockholder Meeting is originally scheduled (as set forth in the Proxy Statement), there are insufficient shares of outstanding capital stock of the Buyer represented (either in person or by proxy) to constitute a quorum necessary to conduct the business to be conducted at the Buyer Stockholder Meeting; (iii) to seek withdrawals of redemption requests from Buyer Stockholders; or (iv) in order to solicit additional proxies from stockholders for purposes of obtaining approval of the Buyer Stockholder Voting Matters; provided, that, in the event of any such postponement or adjournment, the Buyer Stockholder Meeting shall be reconvened as promptly as practicable following such time as the matters described in such clauses have been resolved.

Section 7.10    Expenses. Except as otherwise provided in this Agreement (including, without limitation, Section 2.1), each Party shall be solely liable for and pay all of its own costs and expenses (including attorneys’, accountants’ and investment bankers’ fees and other out-of-pocket expenses) incurred by such Party or its Affiliates in connection with the negotiation and execution of this Agreement and the Ancillary Agreements, the performance of such Party’s obligations hereunder and thereunder and the consummation of the transactions contemplated hereby and thereby.

 

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Section 7.11    Releases.

(a)    Subject to the other provisions in this Section 7.11, effective upon the Closing, each Seller, on behalf of itself and its current and former Subsidiaries, Affiliates (other than, in respect of such Seller, the other Sellers) and their respective successors and assigns (collectively, the “Seller Releasing Parties”), hereby releases and discharges the Buyer, Sponsor, each RSI Company and their respective Affiliates and each of their respective current and former managers, directors, officers, employees, members, stockholders, partners, benefit plan fiduciaries and administrators and their respective successors and assigns (the “Seller Released Parties”) from and against any and all Liabilities, and causes of actions of such Seller, of any kind or nature whatsoever arising out of such Seller’s ownership of any RSI Company (whether directly or indirectly) as to facts, conditions, transactions, events or circumstances prior to the Closing (the “Seller Released Matters”), and each Seller shall not, and shall cause the other Seller Releasing Parties not to, seek to recover any amounts in connection with such Seller Released Matters from any Seller Released Party; provided, however, that nothing contained in this Section 7.11(a) shall waive, release or discharge any Seller Released Party from (x) any Liability such Person may have to any Seller Releasing Party with respect to indemnification under the Governing Documents of the RSI Companies, (y) any Liability such Person may have to any Seller Releasing Party pursuant to a Put-Call Agreement (as applicable), or (z) any Liability such Person may have to any Seller Releasing Party pursuant to any contract, advance or balance set forth on Section 3.24(a) of the Company and Sellers’ Disclosure Letter that is not cancelled in connection with the transactions contemplated by this Agreement.

(b)    Subject to the other provisions in this Section 7.11, effective upon the Closing, Buyer, on behalf of itself and the RSI Companies, Buyer’s controlled Affiliates and their respective successors and assigns (collectively, the “Buyer Releasing Parties”), hereby releases and discharges each Seller and its Affiliates and each of their respective current and former managers, directors, officers, employees, members, stockholders, partners, benefit plan fiduciaries and administrators and their respective successors and assigns (the “Buyer Released Parties”) from and against any and all Liabilities, and causes of actions of any RSI Company, of any kind or nature whatsoever arising out of such Seller’s ownership of any RSI Company (whether directly or indirectly), as to facts, conditions, transactions, events or circumstances prior to the Closing (including any and all Liabilities of the Sellers’ Representative in its capacity as the general partner of the Company prior to the Closing, whether arising or asserted prior to or following the Closing) (the “Buyer Released Matters”), and Buyer shall not, and shall cause the other Buyer Releasing Parties not to, seek to recover any amounts in connection with such Buyer Released Matters from any Buyer Released Party; provided, however, that nothing contained in this Section 7.11(b) shall waive, release or discharge any Buyer Released Party from any Liability such Person may have to any Buyer Releasing Party with respect to indemnification under the Governing Documents of the Buyer or pursuant to any contract, advance or balance set forth on Section 5.2 of the Buyer’s Disclosure Letter.

(c)    Each Party acknowledges that it is aware of the California Civil Code Section 1542, which provides:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.

Being aware of this section, each Party hereby waives and relinquishes all rights and benefits which it may have under this section as well as any other statutes or common law principles of similar effect.

(d)    It is the intention of each Seller in executing the release contained in Section 7.11(a) and in giving and receiving the consideration called for in this Agreement, that this release shall be effective as a full and final accord and satisfaction and general release of and from all Seller Released Matters. Each Seller hereby severally and not jointly represents to the Buyer that such Seller has not voluntarily or involuntarily assigned or transferred or purported to assign or transfer to any Person any Seller Released Matters and that,

 

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to the Knowledge of such Seller, no Person other than Sellers has any interest in any Seller Released Matters by applicable Law or contract by virtue of any action or inaction by Sellers in a manner that would derogate from or otherwise prejudice the foregoing waiver.

(e)    It is the intention of Buyer in executing the release contained in Section 7.11(b) and in giving and receiving the consideration called for in this Agreement, that this release shall be effective as a full and final accord and satisfaction and general release of and from all Buyer Released Matters. Buyer represents to Sellers that Buyer has not voluntarily or involuntarily assigned or transferred or purported to assign or transfer to any Person any Buyer Released Matters and that, to the Knowledge of the Buyer, no Person other than Buyer has any interest in any Buyer Released Matters by applicable Law or contract by virtue of any action or inaction by Buyer in a manner that would derogate from or otherwise prejudice the foregoing waiver.

(f)    Notwithstanding anything to the contrary in this Section 7.11, nothing in this Section 7.11 shall waive, release, discharge, limit, modify, restrict, operate as a waiver with respect to or otherwise affect, any Liabilities or rights any Party may have (i) under this Agreement, any Ancillary Agreement or the transactions contemplated hereby and thereby, (ii) under the Confidentiality Agreement, (iii) arising out of actions or omissions occurring after the Closing or (iv) arising out of, or resulting from, Fraud of the released Person. The invalidity or unenforceability of any part of this Section 7.11 shall not affect the validity or enforceability of the remainder of this Section 7.11, which shall remain in full force and effect.

(g)    The Parties acknowledge and agree that from and after the Closing, the GP Company will serve as the general partner of the Company until removed or replaced in accordance with the Governing Documents of the Company. In furtherance of the foregoing, GP Company shall, in a writing in form and substance reasonably satisfactory to the Company and the Sellers’ Representative, from and after the Closing, assume, pay or discharge all Liabilities of the Sellers’ Representative in its capacity as the general partner of the Company prior to the Closing, whether arising or asserted prior to or following the Closing.

Section 7.12    Directors and Officers.

(a)    Beginning on the Closing Date and continuing until the sixth (6th) anniversary of the Closing Date, the Buyer (i) shall cause each RSI Company to maintain in effect all rights to indemnification, advancement of expenses, exculpation and other limitations on Liability to the extent provided in the Governing Documents of such RSI Company in effect as of the Effective Date (“D&O Provisions”) in favor of any current or former director, officer, or manager, or, to the extent authorized under the applicable D&O Provisions, any employee, agent or representative of any RSI Company (collectively, with such Person’s heirs, executors or administrators, the “RSI Indemnified Persons”), and (ii) shall not, and shall not permit any RSI Company to, amend, repeal or modify in a manner adverse to the beneficiary thereof any provision in the D&O Provisions as it relates to any RSI Indemnified Person, in each case relating to a state of facts existing prior to Closing, without the written consent of such affected RSI Indemnified Person (it being agreed that each RSI Indemnified Person shall be a third party beneficiary of this Section 7.12). After the Closing, in the event that any RSI Company or its successors (i) consolidates with or merges into any other Person and is not the continuing or surviving company or entity of such consolidation or merger or (ii) transfers or conveys all or substantially all of its properties and assets to any Person, then in each such case, Buyer shall cause proper provision to be made so that the successors of the RSI Company shall succeed to and be bound by the obligations set forth in this Section 7.12.

(b)    Tail Policy.

(i)    For a period of six (6) years from and after the Closing Date, the Buyer shall purchase and maintain in effect policies of directors’ and officers’ liability insurance covering (x) those Persons who are currently covered by such policies of the RSI Companies and the Buyer, in each case, with respect to claims arising from facts or events that occurred on or before the Closing and with no less favorable coverage and amounts as, and contain terms and conditions no less advantageous than, in the aggregate, the coverage currently provided by such current policy (as applicable) and (y) any current or former directors and officers of the Additional Special Limited Partner.

 

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(ii)    At or prior to the Closing Date, the Buyer shall purchase and maintain in effect for a period of six (6) years thereafter, “run-off” coverage as provided by any RSI Company’s and the Buyer’s fiduciary and employee benefit policies, in each case, covering those Persons who are covered on the Effective Date by such policies and with terms, conditions, retentions and limits of liability that are no less advantageous than the coverage provided under any RSI Company’s or the Buyer’s existing policies (the policies contemplated by the foregoing clauses (i) and (ii), collectively, the “Tail Policy”); provided that in no event shall the Buyer be required to expend on the premium thereof in excess of three hundred percent (300%) of the aggregate annual premiums currently payable by the Company and the Buyer with respect to such current policies (the “Premium Cap”); provided, further, that if such minimum coverage under any such Tail Policy is or becomes not available at the Premium Cap, then any such Tail Policy shall contain the maximum coverage available at the Premium Cap. No claims made under or in respect of such Tail Policy related to any fiduciary or employee of any RSI Company shall be settled without the prior written consent of Sellers.

Section 7.13    Employee Matters. Between the Effective Date and the Closing Date, the Parties will cooperate and take such actions as necessary to continue the participation of or to establish participation of the RSI Companies in appropriate benefit plans effective as of the Closing Date. Nothing contained in this Section 7.13 (whether express or implied) shall confer any rights, remedies or benefits whatsoever (including any third-party beneficiary rights) on any Person other than the Parties to this Agreement.

Section 7.14    Chief Financial Officer. Solely to the extent that the Company has not, on or prior to the Closing, identified a candidate to act as permanent Chief Financial Offer of the Company following the Closing, from and after the Closing, the Sellers’ Representative and the Buyer shall use commercially reasonable efforts to mutually select a candidate to act as interim Chief Financial Officer of the Company on terms mutually agreeable to the Sellers’ Representative and the Buyer, which interim Chief Financial Officer shall serve in such capacity until a permanent Chief Financial Officer is identified.

Section 7.15    Equity Financing; Cooperation.

(a)    During the Pre-Closing Period and for a period expiring at the close of business on the Post-Closing Financing End Date, the Buyer may effectuate the sale of Buyer Class A Common Stock pursuant to one or more Subscription Agreements (in form and substance reasonably acceptable to the Buyer, the Company and the Sellers’ Representative) with Equity Financing Sources that would constitute a Permitted Equity Financing; provided that, without the prior written consent of the Sellers’ Representative, (i) no such Subscription Agreement shall provide for a purchase price of Buyer Class A Common Stock at a price per share of less than the Minimum Stock Sale Price and (ii) all the Subscription Agreements (including those entered into on or prior to the Effective Date) shall not in the aggregate provide for payment for Buyer Class A Common Stock such that, following such payment to the Buyer, the Aggregate Available Cash exceeds two hundred forty-five million dollars ($245,000,000); provided, further, that to the extent the Buyer has received subscriptions (including pursuant to Subscription Agreements entered into on or prior to the Effective Date) from Equity Financing Sources in the Permitted Equity Financing in an aggregate amount that exceeds one hundred sixty million dollars ($160,430,020), the Company and the Buyer shall consult in good faith and mutually agree (after giving effect to the Subscription Agreements that have been executed and delivered on or prior to the Effective Date, which the Parties have mutually agreed to) on which Equity Financing Source(s) shall be permitted to participate in the Permitted Equity Financing (including, without limitation, the amount of each such Equity Financing Source’s subscription, which amounts, in the aggregate, shall not be less than one hundred sixty million dollars ($160,430,020) unless otherwise mutually agreed by the Company and the Buyer).

(b)    From and after the Effective Date until the earlier of the close of business on the Post-Closing Financing End Date and the termination of this Agreement pursuant to Section 10.1, Sellers and each RSI Company agree, and shall cause the appropriate officers and employees thereof, to use commercially reasonable efforts to cooperate in connection with (x) the arrangement of any Permitted Equity Financing,

 

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and (y) the marketing of the transactions contemplated by this Agreement and the Ancillary Agreements in the public markets and with existing equityholders of the Buyer (including in the case of clauses (x) with respect to the satisfaction of the relevant conditions precedent), in each case as may be reasonably requested by the Buyer, including by (i) upon reasonable prior notice, participating in meetings, calls, drafting sessions, presentations, and due diligence sessions (including accounting due diligence sessions) and sessions with prospective investors at mutually agreeable times and locations and upon reasonable advance notice (including the participation in any relevant “roadshow”), (ii) assisting with the preparation of customary materials, (iii) providing the financial statements and such other financial information regarding the RSI Companies readily available to the Sellers or the Company as is reasonably requested in connection therewith, subject to confidentiality obligations reasonably acceptable to Sellers and the Company, (iv) taking all corporate actions that are necessary or customary to obtain Permitted Equity Financing and market the transactions contemplated by this Agreement, and (v) otherwise reasonably cooperating in the Buyer’s efforts to obtain Permitted Equity Financing and market the transactions contemplated by this Agreement; provided, that (A) all fees and expenses incurred by the Parties in connection with any Permitted Equity Financing shall be allocated to the Sellers and/or the Buyer as set forth in the definition of “Transaction Expenses”, (B) nothing in this Section 7.15 shall require such cooperation to the extent it could unreasonably interfere with the business of any RSI Company, or conflict with or violate any applicable Law or Contract, or require any Seller or RSI Company to breach, waive or amend any terms of this Agreement, and (C) none of the Company, the Seller Representative nor any Seller shall have the obligation to provide or otherwise make available to any Person pursuant to this Section 7.15 any information pertaining to the Company or its Subsidiaries, other than information disclosed in either the Proxy Statement or the investor presentation previously provided to such Person.

(c)    From and after the Effective Date until the earlier of the close of business on the Post-Closing Financing End Date and the termination of this Agreement pursuant to Section 10.1, Buyer shall use commercially reasonable efforts to take, or cause to be taken, all actions and do, or cause to be done, all things necessary, proper or advisable to consummate the transactions contemplated by the Subscription Agreements entered into (x) on or prior to the Effective Date or (y) following the Effective Date but on or prior to the Closing Date, in each case, on the terms and conditions described therein, including maintaining in effect such Subscription Agreements and shall use its commercially reasonable efforts to: (i) satisfy in all material respects on a timely basis all conditions and covenants applicable to Buyer in such Subscription Agreements and otherwise comply with its obligations thereunder (and with respect to any shelf registration statement to be filed in a manner intended to allow for the inclusion of Buyer Class A Common Stock issuable upon the conversion of Company Common Units to be included thereon in accordance with the Investor Rights Agreement and not to interfere with the Proxy Statement) and (ii) in the event that all conditions in such Subscription Agreements (other than conditions that Buyer or any of its Affiliates control the satisfaction of and other than those conditions that by their nature are to be satisfied at the Closing) have been satisfied, consummate transactions contemplated by such Subscription Agreements at or prior to Closing. Without limiting the generality of the foregoing, Buyer shall give the Company, prompt written notice: (A) of any breach or default (or any event or circumstance that, with or without notice, lapse of time or both, could give rise to any breach or default) by any party to any Subscription Agreement known to Buyer; (B) of the receipt of any written notice or other written communication from any party to any Subscription Agreement with respect to any actual, potential, threatened or claimed expiration, lapse, withdrawal, breach, default, termination or repudiation by any party to any Subscription Agreement or any provisions of any Subscription Agreement and (C) if Buyer does not expect to receive all or any portion of the PIPE Investment Amount on the terms, in the manner or from the Equity Financing Sources contemplated by the Subscription Agreements. Buyer shall deliver all notices it is required to deliver under the Subscription Agreements on a timely basis in order to cause the Equity Financing Sources to consummate the transactions contemplated by the Subscription Agreements concurrently with the Closing.

Section 7.16    [Reserved].

 

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Section 7.17    Stock Transactions. During the Pre-Closing Period, except as otherwise contemplated by this Agreement, none of the Sellers nor the Company nor any of its Affiliates, directly or indirectly, shall engage in any transactions involving the securities of the Buyer without the prior written consent of the Buyer.

Section 7.18    [Reserved.].

Section 7.19    Buyer A&R Certificate of Incorporation and Buyer A&R Bylaws. Subject to receipt of the Required Vote, immediately prior to the Closing, the Buyer shall (a) file the Buyer A&R Certificate of Incorporation substantially in the form attached hereto as Exhibit A, in accordance with the provisions hereof and the DGCL and (b) adopt the Buyer A&R Bylaws substantially in the form attached hereto as Exhibit B as its bylaws until thereafter amended in accordance with the provisions thereof, the Buyer A&R Certificate of Incorporation and the DGCL.

Section 7.20    Name Change. In connection with the Closing, the Buyer will complete the Name Change.

Section 7.21    Exclusivity.

(a)    From the Effective Date, until the earlier of the Closing or the termination of this Agreement in accordance with Section 10.1, none of the Sellers nor the Company shall, directly or indirectly, (i) solicit, initiate or take any action to facilitate or encourage any inquiries or the making, submission or announcement of, any proposal or offer from any Person or group of Persons other than the Buyer and the Sponsor (and their respective representatives, acting in their capacity as such) (a “Competing Buyer”) that may constitute, or could reasonably be expected to lead to, a Competing Transaction; (ii) enter into, participate in, continue or otherwise engage in, any discussions or negotiations with any Competing Buyer regarding a Competing Transaction; (iii) furnish (including through any virtual data room) any information relating to any RSI Company or any of its assets or businesses, or afford access to the assets, business, properties, books or records of any RSI Company to a Competing Buyer, in all cases for the purpose of assisting with or facilitating, or that could otherwise reasonably be expected to lead to, a Competing Transaction; (iv) approve, endorse or recommend any Competing Transaction; or (v) enter into a Competing Transaction or any agreement, arrangement or understanding (including any letter of intent or term sheet) relating to a Competing Transaction or publicly announce an intention to do so; provided that none of the foregoing restrictions shall prohibit any RSI Company from taking the actions permitted by the exceptions set forth in Section 6.1(a)(xi) of this Agreement or the related sections of the Company and Sellers’ Disclosure Letter, and any such action shall not be deemed a violation of this Section 7.21(a).

(b)    From the Effective Date, until the earlier of the Closing or the termination of this Agreement in accordance with Section 10.1, the Sponsor and the Buyer shall not directly or indirectly, (i) solicit, initiate or take any action to facilitate or encourage any inquiries or the making, submission or announcement of, any proposal or offer from any Person or group of Persons other than the Company and the Sellers (and their respective representatives, acting in their capacity as such) (an “Alternative Target”) that may constitute or could reasonably be expected to lead to, a Buyer Competing Transaction, (ii) enter into, participate in, continue or otherwise engage in, any discussions or negotiations with any Alternative Target regarding a Buyer Competing Transaction; (iii) furnish (including through any virtual data room) any non-public information relating to Buyer or any of its assets or businesses, or afford access to the assets, business, properties, books or records of Buyer to an Alternative Target, in all cases for the purpose of assisting with or facilitating, or that could otherwise reasonably be expected to lead to, a Buyer Competing Transaction; (iv) approve, endorse or recommend any Buyer Competing Transaction; or (v) enter into a Buyer Competing Transaction or any agreement, arrangement or understanding (including any letter of intent or term sheet) relating to a Buyer Competing Transaction or publicly announce an intention to do so.

Section 7.22    GP Company LLCA. Within three (3) Business Days following the Effective Date, (a) the Buyer formed the GP Company as a Delaware limited liability company and wholly-owned subsidiary of the Buyer and (b) the Buyer caused the GP Company and the Buyer to enter into, and deliver an executed copy to the

 

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Sellers’ Representative of, the GP Company LLCA. From and after the date of the GP Company LLCA until the earlier of the termination of this Agreement in accordance with its terms or the Closing, Buyer shall not, without the prior written consent of the Company, cause or permit (i) the GP Company LLCA to be amended, restated or amended and restated, whether by merger or otherwise, or (ii) the removal, replacement or appointment of any Manager or Officer (as such terms are defined in the GP Company LLCA) of the GP Company other than as expressly permitted by the terms of the GP Company LLCA.

Section 7.23    Additional Special Limited Partner. Following the Effective Date, the Buyer formed a direct, wholly-owned Subsidiary of the Buyer that, at all times through the Closing and until such time as all payments under the Tax Receivable Agreement have been made in full, shall (A) be organized under the laws of the State of Delaware, (B) be classified as a corporation for U.S. federal (and applicable state and local) income tax purposes and (C) file a consolidated U.S. federal (and applicable state and local) income tax return with the Buyer (such Subsidiary, the “Additional Special Limited Partner”). The parties agree that, without limitation or duplication of the rights, restrictions or obligations of Buyer under this Agreement or any Ancillary Agreement with respect to Company Units, any purchase of Company Units (whether from the Company or the Sellers) pursuant to Section 2.1 and Section 2.2 shall be accomplished by Buyer contributing the funds for such purchase (including the Buyer Class V Voting Stock) to the Additional Special Limited Partner and the Additional Special Limited Partner acquiring the Company Units from the Company or the Sellers, as applicable, and all rights, restrictions and obligations with respect to the Company Units so acquired by the Additional Special Limited Partner. The parties shall cooperate to amend the A&R LPA prior to execution and delivery thereof at Closing to provide that if the Exchange or Direct Exchange is to be effected through the Additional Special Limited Partner, then (x) the Buyer shall contribute to the Additional Special Limited Partner any Stock Exchange Payment or Cash Exchange Payment, as applicable, with respect to such Exchange and (y) Section 14.1(b)(ii) and Section 14.1(b)(iii) of the A&R LPA, as applicable, shall then be applied substituting the term “Additional Special Limited Partner” for “Special Limited Partner” (and the remainder of Section 14.1 shall apply mutandis mutandis). The Company and the Buyer shall work in good faith to amend the A&R LPA to address the matters contemplated by this Section 7.23, to provide that the Additional Special Limited Partner shall have, without duplication, rights and obligations akin to the Special Limited Partner (except as provided in this Section 7.23 and as the context requires) and shall cause the Additional Special Limited Partner to execute and deliver a counterpart to the A&R LPA with respect to the matters contemplated hereby. The parties shall cooperate to amend, as the Buyer and the Company reasonably determine, prior to execution and delivery thereof at Closing this Agreement, the Tax Receivable Agreement and any other Ancillary Agreement to reflect the transactions contemplated hereby and that the Additional Special Limited Partner will be the holder of the Company Units from and after the Closing. Notwithstanding anything herein to the contrary, (x) whenever there is a reference herein to this Agreement, the A&R LPA, the Tax Receivable Agreement or any other Ancillary Agreement, it shall be deemed a reference to such agreement as amended or modified to reflect the matters set forth in this Section 7.23 and (y) whenever there is a requirement for delivery of any agreement referred to in clause (x) by Buyer, to the extent reasonably determined by the Buyer and the Company, Buyer shall cause the Additional Special Limited Partner to execute and deliver such agreement at or prior to the Closing.

ARTICLE VIII

ADDITIONAL AGREEMENTS

Section 8.1    Access to Books and Records. From and after the Closing, the Buyer and its Affiliates shall make or cause to be made available to the Sponsor and the Sellers (including the right to copy at the Sponsor’s or the Sellers’ sole expense, as applicable) all books, records and documents relating to periods prior to the Closing Date of any RSI Company (and the assistance of employees responsible for such books, records and documents) during regular business hours and upon reasonable prior written request as may be reasonably necessary for (a) investigating, settling, preparing for the defense or prosecution of, defending or prosecuting any Proceeding (other than an actual or potential Proceeding (i) brought or threatened to be brought by the Sponsor, the Sellers or their respective Affiliates arising under this Agreement or (ii) brought or threatened to be brought by the Buyer

 

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or their Affiliates against the Sponsor, the Sellers or their respective Affiliate relating to or arising under this Agreement), (b) preparing reports to Governmental Entities or (c) such other purposes (that do not involve an actual or potential Proceeding brought by the Sponsor, the Sellers or their respective Affiliates against the Buyer or by the Buyer or its Affiliates against the Sponsor or the Sellers arising under this Agreement) for which access to such documents is reasonably necessary. The Buyer shall (at the Company’s sole expense) cause each RSI Company to maintain and preserve all such books, records and other documents in the possession of the RSI Companies as of the Closing Date for the greater of (i) six (6) years after the Closing Date and (ii) any applicable statutory or regulatory retention period, as the same may be extended, and in each case, shall offer to transfer such records to Sellers, at the end of such period. Notwithstanding anything in this Agreement to the contrary, the Buyer shall not be required to provide any access or information to the Sponsor, the Sellers, their respective Affiliates or any of their respective representatives which constitutes information protected by attorney-client privilege or which would violate any obligation owed to a third party under Contract or Law. This Section 8.1 shall not apply to Taxes or Tax matters, which are the subject of Section 9.1.

Section 8.2    Transferred Names.

(a)    Prior to the Closing, Sellers will, and will cause their Affiliates to, irrevocably transfer and assign to the Company all of their rights, title, and interest, worldwide, in and to trademarks and domain names that include the term “RUSH,” together with all goodwill and common law rights with respect thereto (the “Transferred Names”) pursuant to an assignment agreement (the “Transferred Names Assignment Agreement”).

(b)    Simultaneously with such assignment, the Company and Rush Street Gaming, LLC will execute a written agreement (the “Trademark License Agreement”) pursuant to which the Company grants to Rush Street Gaming, LLC and its Affiliates (including Persons that become Affiliates of Rush Street Gaming, LLC after the Closing) an exclusive (in the field of use of the businesses of Rush Street Gaming, LLC and its Affiliates, exclusive of the current business of Company and its Subsidiaries), worldwide, perpetual, irrevocable, transferable, sublicensable, royalty free right and license to use, reproduce, advertise, market, display, affix, and otherwise exploit Transferred Names, including using the Transferred Names as part of the entity names of Rush Street Gaming, LLC and any current or future Affiliate of Rush Street Gaming, LLC, and in connection with domain names, associated websites, and social media accounts, in the field of use of the businesses of Rush Street Gaming, LLC and its Affiliates (exclusive of the current business of Company and its Subsidiaries).

ARTICLE IX

TAX MATTERS

Section 9.1    Certain Tax Matters.

(a)    Tax Returns.

(i)    The Sellers’ Representative shall prepare and file, or cause to be prepared and filed, at the cost and expense of the RSI Companies, (A) all Tax Returns of each RSI Company that are due on or prior to the Closing Date (taking into account applicable extensions) and (B) all Income Tax Returns of each RSI Flow-Thru Company for any taxable period ending on or prior to the Closing Date and for any Straddle Period, in each case, that are due after the Closing Date (collectively, the “Sellers Prepared Returns”). Each Sellers Prepared Return filed after the Closing Date shall be prepared in a manner consistent with the RSI Companies’ past practices except as otherwise required by applicable Law. Each Sellers Prepared Return filed after the Closing Date (taking into account applicable extensions) shall be submitted to the Buyer no later than thirty (30) days prior to the due date for filing such Tax Return (taking into account applicable extensions) for review. The Sellers’ Representative shall consider in good faith all reasonable comments received from the Buyer no later than ten (10) days prior to the due date for filing any such Tax Return (taking into account applicable

 

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extensions) and shall not file such Tax Return without the consent of the Buyer, such consent not to be unreasonably withheld, conditioned, or delayed. Except as otherwise required by law or would not reasonably be expected to have a material adverse effect on the Buyer, no filed Sellers Prepared Return may be amended after the Closing without the prior written consent of the Buyer, which consent shall not be unreasonably withheld, conditioned or delayed. The Buyer shall prepare and file, or cause to be prepared and filed, at the cost and expense of the RSI Companies, all Tax Returns of each RSI Company (other than Sellers Prepared Returns) for any Pre-Closing Tax Period or Straddle Period that are due after the Closing Date (taking into account applicable extensions) (the “Buyer Prepared Returns”). Each Buyer Prepared Return shall be prepared in a manner consistent with the RSI Companies’ past practices except as otherwise required by applicable Law. Each Buyer Prepared Return shall be submitted to the Sellers’ Representative no later than thirty (30) days prior to the due date for filing such Tax Return (taking into account applicable extensions) for review and approval, which approval shall not be unreasonably withheld, conditioned or delayed. Notwithstanding the foregoing, each Income Tax Return described in this Section 9.1(a) for a taxable period that includes the Closing Date (x) for which the “interim closing method” under Section 706 of the Code (or any similar provision of state, local or non-U.S. Law) is available shall be prepared in accordance with such method, (y) for which an election under Section 754 of the Code (or any similar provision of state, local or non-U.S. Law) may be made shall make such election and (z) shall be prepared in a manner such that any and all deductions, losses, or credits of any of the RSI Companies resulting from, attributable to or accelerated by the payment of the Transaction Expenses in connection with the transactions contemplated by this Agreement are reported by the RSI Companies and allocated to the taxable period beginning after the Closing Date (or the portion of any Straddle Period ending on the Closing Date) to the maximum extent permitted by applicable Law (and the parties agree that 70% of any success-based fees shall be deductible for U.S. federal or state income tax purposes pursuant to Revenue Procedure 2011-29, 2011-18 IRB to the extent permitted by applicable Law). For the avoidance of doubt, all Tax Returns of each RSI Company (other than Sellers Prepared Returns and Buyer Prepared Returns) that are filed after the Closing Date shall be prepared and filed in accordance with the terms of the Company A&R LPA.

(ii)    After the Closing, without the prior written consent of the Sellers’ Representative (which consent shall not be unreasonably withheld, conditioned or delayed), Buyer shall not (and shall neither cause nor permit any RSI Company to) take any of the following actions: (w) file (except for Sellers Prepared Returns and Buyer Prepared Returns as permitted under Section 9.1(a)(i)), amend, re-file or otherwise modify any Tax Return relating in whole or part to any RSI Company with respect to any Pre-Closing Tax Period or Straddle Period, (x) enter into an agreement to extend the statute of limitations with respect to Tax Returns relating in whole or part to any RSI Company with respect to any Pre-Closing Tax Period or Straddle Period, (y) make any Tax election or take any position on any Tax Return with respect to any RSI Company that would have retroactive effect to a Pre-Closing Tax Period or Straddle Period, or (z) initiate discussion, voluntary disclosure or examination with any Taxing Authority regarding Taxes or Tax Returns with respect to any RSI Company for any Pre-Closing Tax Period or Straddle Period (except that the Buyer and the RSI Companies shall be permitted to continue to comply with any voluntary disclosure program that was initiated prior to the Closing Date).

(iii)    Notwithstanding the deadlines set forth in Sections 9.1(a)(i) and Section 9.1(a)(ii) with respect to any Tax Return described therein, the Sellers’ Representative and Buyer shall reasonably cooperate to set later deadlines if it is reasonably necessary in order to allow sufficient time for preparation and review of such Tax Return prior to the due date of such Tax Return (including applicable extensions).

 

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(b)    For purposes of determining whether the following Taxes are attributable to a Pre-Closing Tax Period:

(i)    in the case of property Taxes and other similar Taxes imposed for a Straddle Period, the amounts that are allocable to the Pre-Closing Tax Period shall be deemed to be the amount of such Tax for the entire taxable period multiplied by a fraction, the numerator of which is the number of days in the portion of the taxable period ending on and including the Closing Date and the denominator of which is the number of days in the entire Straddle Period;

(ii)    in the case of all other Taxes for a Straddle Period (including Taxes based on or measured by income, receipts, payments, or payroll (to the extent not covered by clauses (i)-(ii) above)), the amount allocable to the Pre-Closing Tax Period shall be determined based on an interim closing of the books as of the end of the day on the Closing Date using a “closing of the books” methodology (including deductions under Section 168(k) of the Code); provided that for purposes of this clause (ii), any item determined on an annual or periodic basis (including amortization and depreciation deductions and the effects of graduated rates but not including deductions under Section 168(k) of the Code) shall be allocated to the portion of the Straddle Period ending on the Closing Date based on the mechanics set forth in clause (i) for periodic Taxes; and

(iii)    in the case of Taxes in the form of interest, penalties or additions, all such Taxes shall be treated as attributable to a Pre-Closing Tax Period to the extent relating to a Tax for a Pre-Closing Tax Period (determined in accordance with clauses (i) and (ii) above) whether such items are incurred, accrued, assessed or similarly charged on, before or after the Closing Date.

(c)    Each Party shall reasonably cooperate (and cause its Affiliates to reasonably cooperate), as and to the extent reasonably requested by each other Party, in connection with the preparation and filing of Tax Returns required to be filed by the Sellers and Tax Returns pursuant to Section 9.1(a), including Buyer signing Sellers Prepared Returns that have been prepared in accordance with Section 9.1(a)(i) on behalf of an RSI Company, the preparation of the Allocation, and any Tax Proceeding with respect to Taxes or Tax Returns of any RSI Company. Such cooperation shall include the provision of records and information which are reasonably relevant to any such Tax Return, Tax Proceeding or other Tax related matter and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder. Following the Closing, the Buyer, the Sellers (to the extent the Sellers have any such books and records in their possession) and the Company shall (and the Company shall cause the RSI Companies to) retain all books and records with respect to Tax matters pertinent to the RSI Companies relating to any taxable period beginning before the Closing Date until the seven (7) year anniversary of the Closing Date, and to abide by all record retention agreements entered into with any Taxing Authority. Sellers shall (and shall cause their respective Affiliates (other than the RSI Companies after the Closing) to) provide any information reasonably requested to allow the Buyer or any RSI Company to comply with any information reporting or withholding requirements contained in the Code or other applicable Laws or to compute the amount of payroll or other employment Taxes due with respect to any payment made in connection with this Agreement.

(d)    

(i)    Each Party shall promptly notify the other Parties in writing upon receipt by the applicable Party or its Affiliates of notice of any Tax Proceeding with respect to Taxes or Tax Returns of any RSI Company relating to any Pre-Closing Tax Period or Straddle Period. Such notification shall specify in reasonable detail the basis for such Tax Proceeding and shall include a copy of the relevant portion of any correspondence received from the Taxing Authority.

(ii)    The Sellers’ Representative shall have the right to control, at the cost and expense of the RSI Companies, any Tax Proceeding in respect of any RSI Flow-Thru Company with respect to any Income Tax matters for any Pre-Closing Tax Period or Straddle Period; provided, however, that (A) the Buyer shall have the right, at the cost and expense of the RSI Companies, to participate in any such Tax

 

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Proceeding, (B) the Sellers’ Representative shall provide the Buyer with a timely and reasonably detailed account of each stage of such Tax Proceeding, (C) the Sellers’ Representative shall not settle, compromise or abandon any such Tax Proceeding without obtaining the prior written consent of the Buyer, which consent shall not be unreasonably withheld, conditioned or delayed, but only if such settlement, compromise, or abandonment would reasonably be expected to materially and adversely affect the Tax liability of the Buyer and (D) the Sellers’ Representative shall defend such Tax Proceeding diligently and in good faith and consult with the Buyer in good faith concerning the appropriate strategy for contesting such Tax Proceeding; provided, further, that the Buyer, at the cost and expense of the RSI Companies, may control and contest any such Tax Proceeding for which the Sellers’ Representative would otherwise have the right to control under this Section 9.1(d)(ii) if the Sellers’ Representative elects in writing not to conduct such Tax Proceeding; provided, further, however, that if the Buyer exercises its right to control any such Tax Proceeding under the preceding clause, the Sellers’ Representative shall have the right, at the cost and expense of the RSI Companies, to participate in any such Tax Proceeding and the Buyer shall (x) provide the Sellers’ Representative with a timely and reasonably detailed account of each stage of such Tax Proceeding, (y) not settle, compromise or abandon any such Tax Proceeding without obtaining the prior written consent of the Sellers’ Representative, which consent shall not be unreasonably withheld, conditioned or delayed, and (z) consult with the Sellers’ Representative in good faith concerning the appropriate strategy for contesting such Tax Proceeding.

(e)    The Company shall prepare and file or shall cause the applicable RSI Company to prepare and file in a timely manner, all necessary Tax Returns and other documentation with respect to all Transfer Taxes, and, if required by applicable Law, the Sellers, the Company and the Buyer will, and will cause their respective Affiliates to, reasonably cooperate and join in the execution of any such Tax Returns and other documentation. The Parties shall reasonably cooperate to establish any available exemption from (or reduction in) any Transfer Tax. The Company shall provide the other Parties with evidence reasonably satisfactory to such other Party or Parties that such Transfer Taxes have been paid, or if the relevant transactions are exempt from Transfer Taxes, evidence of the filing of an appropriate certificate or other evidence of exemption.

(f)    The Parties acknowledge and agree that for U.S. federal (and, as applicable, state and local) income Tax purposes, they intend that (i) the transaction contemplated by Section 2.1(a)(i)(A) and Section 7.23 be treated as a contribution (x) by the Buyer to the Additional Special Limited Partner of the Contribution Amount and an amount equal to the Transaction Expenses that is a contribution to the capital of the Additional Special Limited Partner and (y) by the Additional Special Limited Partner to the Company of the Contribution Amount and an amount equal to the Transaction Expenses that is a contribution governed by Section 721 of the Code, (ii) the transaction contemplated by Section 2.1(a)(i)(B) and Section 7.23 be treated as (x) a contribution by the Buyer to the Additional Special Limited Partner of the Purchased Company Unit Closing Cash Consideration that is a contribution to the capital of the Additional Special Limited Partner and (y) sale as of the Closing Date of the Purchased Closing Company Units by Sellers to the Additional Special Limited Partner in exchange for the Purchased Company Unit Closing Cash Consideration and certain rights provided under the Tax Receivable Agreement, which sale is a taxable transaction under Section 741 of the Code and gives rise to an adjustment to the Additional Special Limited Partner’s tax basis in the direct and indirect assets of the Company pursuant to Section 743(b) of the Code, and (iii) the transaction contemplated by Section 2.1(b)(ii) and Section 2.1(b)(iii) be treated as a sale of the Redeemed Post-Closing Company Units by the Sellers to the Additional Special Limited Partner in exchange for the amount of cash distributed pursuant to Section 2.1(b)(iii) and certain rights provided under the Tax Receivable Agreement, which sale is a taxable transaction under Section 741 of the Code and gives rise to an adjustment to the Additional Special Limited Partner’s tax basis in the direct and indirect assets of the Company pursuant to Section 743(b) of the Code (the “Post-Closing Sale”) (collectively, the “Intended Tax Treatment”).

(g)    Within one hundred eighty (180) days following the final determination of the Final Sponsor Transaction Expenses and the Final Company Transaction Expenses, the Buyer will prepare, and deliver (or

 

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cause to be prepared and delivered) to Sellers’ Representative, (i) an allocation statement allocating the Purchased Company Unit Closing Cash Consideration and the amount of cash distributed pursuant to Section 2.1(b)(iii), and any other amounts treated as consideration for U.S. federal income Tax purposes with respect to the Sale and the Post-Closing Sale among the assets of the RSI Companies that are classified as entities that are disregarded as separate from the Company for U.S. federal income Tax purposes (the “Allocation”) and (ii) a balance sheet, as of the Closing Date, that sets out the Tax basis of the assets then owned by the RSI Companies that are classified as entities that are disregarded as separate from the Company for U.S. federal income Tax purposes on the Closing Date and the amount of the liabilities of the Company and such Company Subsidiaries on the Closing Date (the “Tax Basis Balance Sheet”). The Allocation shall contain sufficient detail to permit the Parties to make the computations and adjustments required under Sections 734(b), 743(b), 751 and 755 of the Code and the Treasury Regulations thereunder. Within thirty (30) days after the receipt of the Tax Basis Balance Sheet and Allocation, the Sellers’ Representative will propose any changes or will indicate its concurrence therewith. If the Buyer and Sellers’ Representative do not agree with the Tax Basis Balance Sheet or Allocation, then the Buyer and Sellers’ Representative shall attempt in good faith to reach agreement on the Tax Basis Balance Sheet or the Allocation, as applicable, in a manner consistent with applicable income Tax Law. If the Buyer and Sellers’ Representative cannot reach agreement on the Tax Basis Balance Sheet or the Allocation within fifteen (15) days after receipt of the Sellers’ Representative’s proposed changes, then the Buyer and Sellers’ Representative shall submit the dispute to a nationally recognized accounting firm mutually acceptable to the Buyer and Sellers’ Representative (the “Tax Accounting Firm”) for resolution, acting as an accounting expert (and not as an arbitrator). For this purpose, (x) the Tax Accounting Firm may not assign a value to any disputed item greater than the greatest value for such disputed item claimed by any party or less than the lowest value for such disputed item claimed by any party and (y) all fees and expenses relating to the work, if any, to be performed by the Tax Accounting Firm will be allocated between the Buyer on the one hand, and Sellers’ Representative, on the other hand, in the same proportion that the aggregate amount of the disputed items so submitted to the Tax Accounting Firm that is unsuccessfully disputed by each such Party (as finally determined by the Tax Accounting Firm) bears to the total amount of such disputed items so submitted. The Tax Basis Balance Sheet and the Allocation, as agreed to by the Buyer and Sellers’ Representative or as finally determined by the Tax Accounting Firm, as the case may be, shall be binding on all Parties (the “Final Tax Basis Balance Sheet” and the “Final Allocation,” respectively). Within thirty (30) days following each of the Sale and the Post-Closing Sale, the Buyer shall deliver a Section 743 notification to the Company in accordance with Treasury Regulation Section 1.743-1(k)(2). The Parties also agree that no value shall be allocated to the Buyer Class V Voting Stock and shall report consistently with such determination for U.S. federal (and applicable state and local) income Tax purposes.

(h)    The Parties shall, and shall cause each of their respective applicable Affiliates to: (1) prepare and file all Tax Returns consistent with the Final Tax Basis Balance Sheet, Final Allocation and Intended Tax Treatment (collectively, the “Tax Positions”); (2) take no position in any communication (whether written or unwritten) with any Governmental Entity or any other action inconsistent with the Tax Positions; (3) promptly inform each other of any challenge by any Governmental Entity to any portion of the Tax Positions; (4) consult with and keep one another informed with respect to the status of, and any discussion, proposal or submission with respect to, any such challenge to any portion of the Tax Positions; and (5) use their respective commercially reasonable efforts to defend the Tax Positions in any Tax Proceeding.

(i)    Without the prior written consent of the Buyer, Sellers and the Company shall not, and shall cause their respective Affiliates not to, make or cause to be made any election under Treasury Regulation Section 301.9100-22 (or any similar provision of state, local, or non-U.S. Laws) with respect to any RSI Company. With respect to any Tax Proceeding of any RSI Company treated as a partnership for federal income Tax purposes for any Pre-Closing Tax Period or any Straddle Period and for which the election provided for in Section 6226 of the Code (or any similar provision of state, local, or non-U.S. Laws) is available (such election a “Section 6226 Election”), the Company shall (and Buyer shall cause the Company to), and shall cause their respective eligible Subsidiaries to, timely make such Section 6226 Election in accordance with applicable Laws (and Sellers expressly consent to, and shall reasonably cooperate to the

 

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extent requested by Buyer in, the making of all such available elections). The Company shall (and Buyer shall cause the Company to), and shall cause all of its respective eligible Subsidiaries, if any, to, make or cause to remain in effect, as applicable, a valid election under Section 754 of the Code (and any similar provision of state, local or non-U.S. Law) for any taxable period that includes the Closing Date (and, with respect to the Company and its eligible Subsidiaries, if any, for any taxable period that includes the date of any Exchange (as defined in the Company A&R LPA)).

ARTICLE X

TERMINATION

Section 10.1    Termination. This Agreement may be terminated and the transactions contemplated by this Agreement abandoned at any time prior to the Closing only as follows:

(a)    by the mutual written consent of the Company, the Sellers’ Representative and the Buyer;

(b)    by the Company, the Sellers’ Representative or the Buyer by written notice to the other Party or Parties if any applicable Law is in effect making the consummation of the transactions contemplated by this Agreement illegal or any final, non-appealable Order is in effect permanently preventing the consummation of the transactions contemplated by this Agreement; provided, however, that the right to terminate this Agreement pursuant to this Section 10.1(b) shall not be available to any Party whose breach of any representation, warranty, covenant or agreement of this Agreement results in or causes such final, non-appealable Order or other action (including, with respect to the Company, any breach by any Seller);

(c)    by the Company, the Sellers’ Representative or the Buyer by written notice to the other Party or Parties if the consummation of the transactions contemplated by this Agreement shall not have occurred on or before April 27, 2021 (the “Outside Date”); provided that if the Sellers’ Representative and the Buyer approve an extension of the date required to consummate a Business Combination, the Outside Date shall automatically be extended to the earlier to occur of (i) such extension date, and (ii) the twelve (12) month anniversary of the Effective Date; provided, further, that if (A) any Proceeding with respect to this Agreement, any other Ancillary Agreement or otherwise with respect to the Business Combination is commenced or pending on or before the Outside Date (as may be extended in accordance with the other provisos set forth in this Section 10.1(c)), then the Outside Date shall be automatically extended without any further action by any Party until the earlier of (1) the date that is thirty (30) days following the date on which a final, non-appealable Order has been entered with respect to such Proceeding and (2) the date which is the twelve (12) month anniversary of the Effective Date, and in each case the Outside Date shall be deemed to be such later date for all purposes of this Agreement; (B) the Buyer Stockholder Meeting is adjourned or postponed to April 27, 2021 or a date thereafter, then the Outside Date (as may be extended in accordance with the other provisos set forth in this Section 10.1(c)) shall be automatically extended without any further action by any Party until the date that is three (3) Business Days following the date on which the Buyer Stockholder Meeting has been held (including any adjournment or postponement thereof); (C) one or more of the approvals, determinations, grants, confirmations, findings of suitability or other conditions with respect to Gaming Regulatory Authorities required to be obtained pursuant to Section 2.6(c)(vii) have not been received on or before the Outside Date (as may be extended in accordance with the other provisos set forth in this Section 10.1(c)) such that the condition set forth in Section 2.6(c)(vii) has not been satisfied or waived, then the Outside Date (as may be extended in accordance with the other provisos set forth in this Section 10.1(c)) may be extended, in the sole discretion of the Company and the Sellers’ Representative, by the Company and the Sellers’ Representative upon written notice to the other Parties, to the date which is the twelve (12) month anniversary of the Effective Date (any such extended outside date determined in accordance with this Section 10.1(c), the “Extended Outside Date”); provided, further, that the right to terminate this Agreement under this Section 10.1(c) shall not be available to any Party that has materially breached any of its representations, warranties, covenants or agreements under this Agreement (including, with respect to the Company, any breach by any Seller) and such material breach is the primary cause of or has resulted in the failure of the Business Combination to be consummated on or before such date;

 

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(d)    by the Company or the Sellers’ Representative, if Buyer breaches in any material respect any of its representations or warranties contained in this Agreement or breaches or fails to perform in any material respect any of its covenants contained in this Agreement, which breach or failure to perform (i) would render a condition precedent to Sellers’ obligations to consummate the transactions set forth in Section 2.6(a) or Section 2.6(c) of this Agreement not capable of being satisfied, and (ii) after the giving of written notice of such breach or failure to perform to the Buyer by the Company or the Sellers’ Representative, cannot be cured or has not been cured by the later of the Outside Date or the Extended Outside Date, as applicable, and thirty (30) Business Days after receipt of such written notice (in which case the Outside Date or Extended Outside Date, as applicable, shall automatically be extended until the end of such thirty (30) Business Day period, but in no event on more than one occasion) and the Sellers’ Representative or the Company have not waived in writing such breach or failure; provided, however, that the right to terminate this Agreement under this Section 10.1(d) shall not be available to the Company or the Sellers’ Representative if the Company or any Seller is then in material breach of any representation, warranty, covenant or agreement contained in this Agreement;

(e)    by any of the Buyer, the Company or the Sellers’ Representative, on or after the fifth (5th) Business Day following receipt of oral or written notice from a Governmental Entity by any Party of such Governmental Entity’s determination that one or more of the approvals, determinations, grants, confirmations, findings of suitability or other conditions with respect to Gaming Regulatory Authorities that are required to be obtained pursuant to Section 2.6(c)(vii) will not be granted or will be denied such that the condition precedent to Sellers’ obligations to consummate the transactions set forth in Section 2.6(c)(vii) is not capable of being satisfied and so long as the Sellers’ Representative has not waived in writing the failure of such condition with respect to the particular approval, determination, grant, confirmation, findings of suitability or other condition that will not be granted or will be denied on or prior to the fifth (5th) Business Day following the receipt of such notice; provided, however, that the right to terminate this Agreement under this Section 10.1(e) shall not be available to the Buyer, the Company or the Sellers’ Representative if the Buyer, the Company or any Seller has materially breached any of its representations, warranties, covenants or agreements contained in this Agreement and such material breach is the primary cause of or has resulted in the failure of such condition to be satisfied; and

(f)    by the Buyer, if the Company or any Seller breaches in any material respect any of their representations or warranties contained in this Agreement or the Company or any Seller breaches or fails to perform in any material respect any of its covenants contained in this Agreement, which breach or failure to perform (i) would render a condition precedent to the Buyer’s obligations to consummate the transactions set forth in Section 2.6(a) or Section 2.6(b) of this Agreement not capable of being satisfied, and (ii) after the giving of written notice of such breach or failure to perform to Sellers by the Buyer, cannot be cured or has not been cured by the later of the Outside Date or Extended Outside Date, as applicable, and thirty (30) Business Days after the delivery of such written notice (in which case the Outside Date or the Extended Outside Date, as applicable, shall automatically be extended until the end of such thirty (30) Business Day period, but in no event on more than one occasion) and the Buyer has not waived in writing such breach or failure; provided, however, that the right to terminate this Agreement under this Section 10.1(f) shall not be available to the Buyer if the Buyer is then in material breach of any representation, warranty, covenant or agreement contained in this Agreement.

Section 10.2    Effect of Termination. In the event of the termination of this Agreement pursuant to Section 10.1, this Agreement shall immediately become null and void, without any Liability on the part of any Party or any other Person, and all rights and obligations of each Party shall cease; provided that (a) the Confidentiality Agreement and the agreements contained in Section 7.9(a), Section 7.10, this Section 10.2 and Article XI of this Agreement survive any termination of this Agreement and remain in full force and effect and (b) no such termination shall relieve any Party from any Liability arising out of or incurred as a result of its Fraud or its willful and material breach of this Agreement.

 

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ARTICLE XI

MISCELLANEOUS

Section 11.1    Amendment and Waiver. No amendment of any provision of this Agreement shall be valid unless the same shall be in writing and signed by the Buyer, the Sponsor, the Company, and the Sellers’ Representative. No waiver of any provision or condition of this Agreement shall be valid unless the same shall be in writing and signed by the Party against which such waiver is to be enforced. No waiver by any Party of any default, breach of representation or warranty or breach of covenant hereunder, whether intentional or not, shall be deemed to extend to any other, prior or subsequent default or breach or affect in any way any rights arising by virtue of any other, prior or subsequent such occurrence. Any such amendment or waiver may occur after the approval of the Buyer Stockholder Voting Matters at the Buyer Stockholder Meeting.

Section 11.2    Waiver of Remedies; Survival of Representations and Warranties.

(a)    Except (i) in the case of Fraud, (ii) as set forth in Section 10.2 or (iii) claims to enforce the performance of the covenants required to be performed in whole or in part after the Closing in accordance with Section 11.12, the Seller Parties shall have no liability to the Buyer, the Sponsor, the RSI Companies or its and their respective successors and permitted assigns, officers, directors, managers, equityholders, members, partners, employees, Affiliates, agents and representatives (collectively, the “Buyer Parties”) for any and all losses that are sustained or incurred by any of the Buyer Parties by reason of, resulting from or arising out of any breach of or inaccuracy in any of the Sellers’ representations or warranties or breach of any covenant to the extent providing for performance prior to the Closing contained in this Agreement or any certificate delivered in connection with this Agreement. Except (i) in the case of Fraud, (ii) as set forth in Section 10.2 or (iii) claims to enforce the performance of the covenants required to be performed in whole or in part after the Closing in accordance with Section 11.12, the Buyer Parties shall have no liability to the Sellers and their respective successors and permitted assigns, officers, directors, managers, equityholders, members, partners, employees, Affiliates, agents and representatives (collectively, the “Seller Parties”) for any and all losses that are sustained or incurred by any of the Seller Parties by reason of, resulting from or arising out of any breach of or inaccuracy in any of the Buyer’s or the Sponsor’s representations or warranties or breach of any covenant to the extent providing for performance prior to the Closing contained in this Agreement or any certificate delivered in connection with this Agreement.

(b)    The representations and warranties of the Parties set forth in Article III, Article IV and Article V and all covenants of any of the Parties that are to be fully performed prior to Closing, shall not survive the Closing.

Section 11.3    Sellers Representative.

(a)    The Sellers hereby appoint the Sellers’ Representative as agent and attorney in fact for and on behalf of the Sellers to (i) interpret the terms and provisions of this Agreement and the Ancillary Agreements (other than the Employment Agreement and the Put-Call Agreements), (ii) execute, deliver and receive deliveries of all agreements, certificates, statements, notices, approvals, extensions, waivers, undertakings, amendments and other documents required or permitted to be given in connection with this Agreement, the Ancillary Agreements (other than the Employment Agreement and the Put-Call Agreements) and the consummation of the transactions contemplated hereby, (iii) receive service of process in connection with any claims under this Agreement, (iv) agree to, negotiate, enter into settlements and compromises of, assume the defense of any Proceedings, and demand arbitration and comply with orders of courts and awards of arbitrators with respect to such Proceedings, and to take all actions necessary or appropriate in the judgment of the Sellers’ Representative for the accomplishment of the foregoing, (v) give and receive notices and communications, (vi) make any determinations and settle any matters related to any Tax matters pursuant to Article IX, the matters contemplated by Section 2.9, (vii) administer, pay out, deduct, hold back or redirect any funds (including any Earnout Shares and/or Earnout Company Units), which may be payable or distributable to any Sellers pursuant to the terms of this Agreement or any Ancillary Agreement (other than the Employment Agreement and the Put-Call Agreements) for, (A) any

 

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amount that may be payable by the Sellers pursuant to this Agreement, including Section 2.9 and Article IX or (B) any costs, fees, expenses and other liabilities incurred by the Sellers’ Representative, acting in such capacity, in connection with this Agreement and the Ancillary Agreements (other than the Employment Agreement and the Put-Call Agreements), and (viii) take all actions necessary or appropriate in the judgment of the Sellers’ Representative on behalf of the Sellers in connection with this Agreement and the Ancillary Agreements (other than the Employment Agreement and the Put-Call Agreements).

(b)    The Sellers’ Representative, or any successor hereafter appointed, may resign at any time by written notice to the Buyer and the Sponsor. Any change in the Sellers’ Representative will become effective upon notice to the Buyer and the Sponsor in accordance with this Section 11.3. The Sellers’ Representative so designated must be reasonably acceptable to the Buyer and the Sponsor, except that the Parties hereby agree that, subject to the Seller providing prior written notice to the Buyer and the Sponsor, any Seller will be acceptable to the Buyer and the Sponsor as a successor Sellers’ Representative. All power, authority, rights and privileges conferred in this Agreement to the Sellers’ Representative will apply to any successor Sellers’ Representative.

(c)    The Sellers’ Representative will not be liable for any act done or omitted under this Agreement as Sellers’ Representative while acting in good faith, and any act taken or omitted to be taken pursuant to the advice of counsel will be conclusive evidence of such good faith. The Buyer agrees that it will not look to the assets of the Sellers’ Representative, acting in such capacity, for the satisfaction of any obligations to be performed by the RSI Companies or the Sellers, as the case may be. In performing any of its duties under this Agreement or any Ancillary Agreements (other than the Employment Agreement and the Put-Call Agreements), the Sellers’ Representative will not be liable to the Sellers for any losses that any such Person may incur as a result of any act, or failure to act, by the Sellers’ Representative under this Agreement or any Ancillary Agreements (other than the Employment Agreement and the Put-Call Agreements), and the Sellers’ Representative will be indemnified and held harmless by the Sellers for all losses, except to the extent that the actions or omissions of the Sellers’ Representative constituted fraud, gross negligence or willful misconduct. The limitation of liability provisions of this Section 11.3(c) will survive the termination of this Agreement and the resignation of the Sellers’ Representative.

(d)    The Buyer and the Sponsor shall be entitled to rely exclusively upon any notices and other acts of the Sellers’ Representative relating to the Sellers’ rights and obligations hereunder as being legally binding acts of each Seller individually and collectively.

(e)    The grant of authority providing for in this Section 11.3 (i) is coupled with an interest and shall be irrevocable and survive the death, incompetency, bankruptcy or liquidation of any Seller and (ii) shall survive the Closing.

 

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Section 11.4    Notices. All notices, demands and other communications to be given or delivered under this Agreement shall be in writing and shall be deemed to have been given (a) when personally delivered (or, if delivery is refused, upon presentment) or received by email (with confirmation of transmission) prior to 5:00 p.m. eastern time on a Business Day and, if otherwise, on the next Business Day, (b) one (1) Business Day following sending by reputable overnight express courier (charges prepaid) or (c) three (3) days following mailing by certified or registered mail, postage prepaid and return receipt requested. Unless another address is specified in writing pursuant to the provisions of this Section 11.4, notices, demands and other communications to the Company, the Buyer, and Sellers shall be sent to the addresses indicated below:

 

Notices to Sellers, and prior to the Closing, the Company    with copies to:

Rush Street Interactive, LP

900 N. Michigan Avenue, Suite 1600

Chicago, Illinois 60611

Attention: Neil Bluhm and Greg Carlin

Email:neilb@lambllc.com

            gcarlin@rushst.com

  

Kirkland & Ellis LLP

300 North LaSalle

Chicago, Illinois 60654

Attention:   Richard Campbell, P.C. and Karen E. Flanagan

E-mail:    richard.campbell@kirkland.com; karen.flanagan@kirkland.com

Notices to the Buyer, the Sponsor, and following the Closing, the Company:    with a copy to (which shall not constitute notice):

dMY Sponsor, LLC

1180 North Town Center Drive, Suite 100

Las Vegas, Nevada 89144

Attention: Niccolo de Masi

Harry L. You

Email: niccolo@dmytechnology.com

harry@dmytechnology.com

  

White & Case LLP

1221 Avenue of the Americas

New York NY 10020

Attention: Joel Rubinstein

Raymond Bogenrief

E-mail: joel.rubinstein@whitecase.com

raymond.bogenrief@whitecase.com

Section 11.5    Assignment. This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the Parties and their respective successors and assigns; provided that neither this Agreement nor any of the rights, interests or obligations hereunder may be assigned or delegated by any Party (including by operation of Law) without the prior written consent of the other Parties. Any purported assignment or delegation not permitted under this Section 11.5 shall be null and void.

Section 11.6    Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable Law, but if any provision of this Agreement or the application of any such provision to any Person or circumstance shall be held to be prohibited by or invalid, illegal or unenforceable under applicable Law in any respect by a court of competent jurisdiction, such provision shall be ineffective only to the extent of such prohibition or invalidity, illegality or unenforceability, without invalidating the remainder of such provision or the remaining provisions of this Agreement. Furthermore, in lieu of such illegal, invalid or unenforceable provision, there shall be added automatically as a part of this Agreement a legal, valid and enforceable provision as similar in terms to such illegal, invalid, or unenforceable provision as may be possible.

Section 11.7    Interpretation. The headings and captions used in this Agreement and the table of contents to this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Any capitalized terms used in any Disclosure Letter, Schedule or Exhibit attached hereto or delivered at the same time and not otherwise defined therein shall have the meanings set forth in this Agreement. The use of the word “including” herein shall mean “including without limitation.” The words “hereof,” “herein,” and “hereunder” and words of similar import, when used in this Agreement, shall refer to this Agreement as a

 

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whole and not to any particular provision of this Agreement. References herein to a specific Section, Subsection, Clause, Recital, Section of a Disclosure Letter, Schedule or Exhibit shall refer, respectively, to Sections, Subsections, Clauses, Recitals, Sections of a Disclosure Letter, Schedules or Exhibits of this Agreement. Terms defined in the singular shall have a comparable meaning when used in the plural, and vice versa. References herein to any gender shall include each other gender. The word “or” shall not be exclusive unless the context clearly requires the selection of one (1) (but not more than one (1)) of a number of items. References to “written” or “in writing” include in electronic form. References herein to any Person shall include such Person’s heirs, executors, personal representatives, administrators, successors and permitted assigns; provided, however, that nothing contained in this Section 11.7 is intended to authorize any assignment or transfer not otherwise permitted by this Agreement. References herein to a Person in a particular capacity or capacities shall exclude such Person in any other capacity. Any reference to “days” shall mean calendar days unless Business Days are specified; provided that if any action is required to be done or taken on a day that is not a Business Day, then such action shall be required to be done or taken not on such day but on the first succeeding Business Day thereafter. References herein to any Contract (including this Agreement) mean such Contract as amended, restated, supplemented or modified from time to time in accordance with the terms thereof; provided that with respect to any Contract listed (or required to be listed) on the Disclosure Letters, all material amendments and modifications thereto (but excluding any purchase orders, work orders or statements of work) must also be listed on the appropriate section of the applicable Disclosure Letter. With respect to the determination of any period of time, the word “from” means “from and including” and the words “to” and “until” each means “to but excluding.” References herein to any Law shall be deemed also to refer to such Law, as amended, and all rules and regulations promulgated thereunder. If any Party has breached any representation, warranty, covenant or agreement contained in this Agreement in any respect, the fact that there exists another representation, warranty, covenant or agreement relating to the same subject matter (regardless of the relative levels of specificity) which the Party has not breached shall not detract from or mitigate the fact that the Party is in breach of the first representation, warranty, covenant or agreement. The word “extent” in the phrase “to the extent” (or similar phrases) shall mean the degree to which a subject or other thing extends, and such phrase shall not mean simply “if.” An accounting term not otherwise defined in this Agreement has the meaning assigned to it in accordance with GAAP. Except where otherwise provided, all amounts in this Agreement are stated and shall be paid in United States dollars. The Parties and their respective counsel have reviewed and negotiated this Agreement as the joint agreement and understanding of the Parties, and the language used in this Agreement shall be deemed to be the language chosen by the Parties to express their mutual intent, and no rule of strict construction shall be applied against any Person. Any information or materials shall be deemed provided, made available or delivered to the Buyer if such information or materials have been uploaded to the electronic data room maintained by Sellers and their financial advisors on the Intralinks online-platform for purposes of the transactions contemplated by this Agreement (the “Data Room”) or otherwise provided to the Buyer’s representatives (including counsel) via electronic mail, in each case, prior to the Effective Date. The content of the Data Room as of the Effective Date will be stored on six (6) identical encrypted USB devices, and Sellers will cause three (3) such devices to be sent to the Buyer within thirty days of the Effective Date.

Section 11.8    Entire Agreement. This Agreement, the Ancillary Agreements and the Confidentiality Agreement (together with the Disclosure Letters and Exhibits to this Agreement) contain the entire agreement and understanding among the Parties with respect to the subject matter hereof and thereof and supersede all prior and contemporaneous agreements, understandings and discussions (including that certain non-binding letter of intent among the Buyer, the Sponsor, the Company and Neil Bluhm, dated as of June 19, 2020 (the “LOI”)), whether written or oral, relating to such subject matter in any way. The Parties have voluntarily agreed to define their rights and Liabilities with respect to the transactions contemplated by this Agreement exclusively pursuant to the express terms and provisions of this Agreement, and the Parties disclaim that they are owed any duties or are entitled to any remedies not set forth in this Agreement. Furthermore, this Agreement embodies the justifiable expectations of sophisticated parties derived from arm’s-length negotiations and no Person has any special relationship with another Person that would justify any expectation beyond that of an ordinary buyer and an ordinary seller in an arm’s-length transaction.

 

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Section 11.9    Counterparts; Electronic Delivery. This Agreement, the Ancillary Agreements and the other agreements, certificates, instruments and documents delivered pursuant to this Agreement may be executed and delivered in one or more counterparts and by fax, email or other electronic transmission, each of which shall be deemed an original and all of which shall be considered one and the same agreement. No Party shall raise the use of a fax machine or email to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through the use of a fax machine or email as a defense to the formation or enforceability of a Contract and each Party forever waives any such defense.

Section 11.10    Governing Law; Waiver of Jury Trial; Jurisdiction. The Law of the State of Delaware shall govern (a) all claims or matters related to or arising from this Agreement (including any tort or non-contractual claims) and (b) any questions concerning the construction, interpretation, validity and enforceability of this Agreement, and the performance of the obligations imposed by this Agreement, in each case without giving effect to any choice-of-law or conflict-of-law rules or provisions (whether of the State of Delaware or any other jurisdiction) that would cause the application of the Law of any jurisdiction other than the State of Delaware. EACH PARTY TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE BETWEEN OR AMONG ANY OF THE PARTIES (WHETHER ARISING IN CONTRACT, TORT OR OTHERWISE) ARISING OUT OF, CONNECTED WITH, RELATED OR INCIDENTAL TO THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT AND/OR THE RELATIONSHIPS ESTABLISHED AMONG THE PARTIES UNDER THIS AGREEMENT. THE PARTIES HERETO FURTHER WARRANT AND REPRESENT THAT EACH HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. Each of the Parties submits to the exclusive jurisdiction of first, the Chancery Court of the State of Delaware or if such court declines jurisdiction, then to the Federal District Court for the District of Delaware, in any Proceeding arising out of or relating to this Agreement, agrees that all claims in respect of the Proceeding shall be heard and determined in any such court and agrees not to bring any Proceeding arising out of or relating to this Agreement in any other courts. Nothing in this Section 11.10, however, shall affect the right of any Party to serve legal process in any other manner permitted by Law or at equity. Each Party agrees that a final judgment in any Proceeding so brought shall be conclusive and may be enforced by suit on the judgment or in any other manner provided by Law or at equity.

Section 11.11    Trust Account Waiver. Each of the Company and the Sellers acknowledges that the Buyer has established the Trust Account for the benefit of its public Buyer Stockholders, which holds proceeds of its initial public offering. For and in consideration of the Buyer entering into this Agreement and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, each of the Company and the Sellers, for itself and the Affiliates it has the authority to bind, hereby agrees it does not now and shall not at any time hereafter have any right, title, interest or claim of any kind in or to any assets in the Trust Account (or distributions therefrom to (i) the public Buyer Stockholders upon the redemption of their shares and (ii) the underwriters of Buyer’s initial public offering in respect of their deferred underwriting commissions held in the Trust Account, in each case as set forth in the Trust Agreement (collectively, the “Trust Distributions”)), and hereby waives any claims it has or may have at any time solely against the Trust Account (including the Trust Distributions) as a result of, or arising out of, any discussions, contracts or agreements (including this Agreement and the Subscription Agreements) among the Buyer, the Sellers and the Company and will not seek recourse against the Trust Account (including the Trust Distributions) for any reason whatsoever. Each of the Company and the Sellers agree and acknowledge that such irrevocable waiver is material to this Agreement and specifically relied upon by the Buyer and the Sponsor to induce Buyer and the Sponsor to enter in this Agreement, and the Company and the Sellers further intend and understand such waiver to be valid, binding and enforceable against the Company and the Sellers and each of their respective Affiliates that they have the authority to bind under applicable Law. To the extent the Company or any Seller or any of their respective Affiliates that the Company or such Seller, as applicable, has the authority to bind commences any action or proceeding against the Buyer or any of its Affiliates based upon, in connection with, relating to or arising out of any matter relating to the Buyer, its Affiliates or its representatives, which Proceeding seeks, in whole or in part, monetary relief against the

 

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Buyer, its Affiliates or its representatives, each of the Company and the Sellers hereby acknowledge and agree that the Company’s and the Sellers’ and such Affiliates’ sole remedy shall be against assets of the Buyer or such Affiliate or representatives not in the Trust Account and that such claim shall not permit the Company, the Sellers or such Affiliates (or any Person claiming on any of their behalves) to have any claim against the Trust Account (including the Trust Distributions) or any amounts contained in the Trust Account while in the Trust Account.

Section 11.12    Specific Performance. Each Party acknowledges that the rights of each Party to consummate the transactions contemplated by this Agreement are unique and recognize and affirm that in the event any of the provisions of this Agreement are not performed in accordance with their specific terms or otherwise are breached, money damages would be inadequate (and therefore the non-breaching Party would have no adequate remedy at Law) and the non-breaching Party would be irreparably damaged. Accordingly, each Party agrees that each other Party shall be entitled to specific performance, an injunction or other equitable relief (without posting of bond or other security or needing to prove irreparable harm) to prevent breaches of the provisions of this Agreement and to enforce specifically this Agreement and the terms and provisions hereof in any Proceeding, in addition to any other remedy to which such Person may be entitled. Each Party agrees that it will not oppose the granting of specific performance and other equitable relief on the basis that the other Parties have an adequate remedy at Law or that an award of specific performance is not an appropriate remedy for any reason at Law or equity. The Parties acknowledge and agree that any Party seeking an injunction to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in accordance with this Section 11.12 shall not be required to provide any bond or other security in connection with any such injunction. Without limiting the Company’s rights under any Subscription Agreement to which the Company is a party, with respect to any Subscription Agreement to which the Company is not a party, the Company shall be entitled, upon written notice to the Buyer, to (I) require the Buyer to enforce its rights under such Subscription Agreement through the initiation and pursuit of litigation (including seeking, or seek or obtain a court order against the counterparty(ies) to such Subscription Agreement for, injunctive relief, specific performance, or other equitable relief with respect to such Subscription Agreement) in the event the counterparty under such Subscription Agreement is in breach of its obligations thereunder, (II) have approval rights over Buyer’s selection of counsel for any such litigation (such approval not to be unreasonably withheld, conditioned or delayed), (III) select a separate counsel, which may be or include K&E, to participate alongside the Buyer’s counsel in any such litigation (at the expense of the Company), (IV) fund any such litigation, and (V) require the Buyer to promptly execute, and the Buyer hereby agrees to execute and comply with, any and all documents designed to implement or facilitate the execution of the rights contemplated in this sentence.

Section 11.13    No Third-Party Beneficiaries. This Agreement is for the sole benefit of the Parties and their permitted assigns and nothing herein expressed or implied shall give or be construed to give any Person, other than the Parties and such permitted assigns, any legal or equitable rights hereunder (other than in respect of the RSI Indemnified Persons and Non-Party Affiliates, each of whom is an express third-party beneficiary hereunder to the specific provisions in which such Person is referenced and entitled to enforce only such obligations hereunder).

Section 11.14    Disclosure Letters and Exhibits. The Disclosure Letters and Exhibits attached hereto or referred to in this Agreement are (a) each hereby incorporated in and made a part of this Agreement as if set forth in full herein and (b) qualified in their entirety by reference to specific provisions of this Agreement. Any fact or item disclosed in any Section of a Disclosure Letter shall be deemed disclosed in each other Section of the applicable Disclosure Letter to which such fact or item may apply so long as (i) such other Section is referenced by applicable cross-reference or (ii) it is reasonably apparent on the face of such disclosure that such disclosure is applicable to such other Section or portion of the Disclosure Letter. The headings contained in the Disclosure Letters are for convenience of reference only and shall not be deemed to modify or influence the interpretation of the information contained in the Disclosure Letters or this Agreement. The Disclosure Letters are not intended to constitute, and shall not be construed as, an admission or indication that any such fact or item is required to be disclosed. The Disclosure Letters shall not be deemed to expand in any way the scope or effect of any

 

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representations, warranties or covenants described in this Agreement. Any fact or item, including the specification of any dollar amount, disclosed in the Disclosure Letters shall not by reason only of such inclusion be deemed to be material, to establish any standard of materiality or to define further the meaning of such terms for purposes of this Agreement, and matters reflected in the Disclosure Letters are not necessarily limited to matters required by this Agreement to be reflected herein and may be included solely for information purposes; and no Party shall use the fact of the setting of the amounts or the fact of the inclusion of any item in the Disclosure Letters in any dispute or controversy between the Parties as to whether any obligation, item or matter not described or included in the Disclosure Letters is or is not required to be disclosed (including whether the amount or items are required to be disclosed as material or threatened) or is within or outside of the Ordinary Course of Business. No disclosure in the Disclosure Letters relating to any possible breach or violation of any Contract, Law or Order shall be construed as an admission or indication that any such breach or violation exists or has actually occurred. Moreover, in disclosing the information in the Disclosure Letters, Sellers do not waive any attorney-client privilege associated with such information or any protection afforded by the work-product doctrine with respect to any of the matters disclosed or discussed therein. The information contained in the Disclosure Letters shall be kept strictly confidential by the Parties and no third party may rely on any information disclosed or set forth therein.

Section 11.15    No Recourse. Notwithstanding anything that may be expressed or implied in this Agreement (except in the case of the immediately succeeding sentence) or any document, agreement, or instrument delivered contemporaneously herewith, and notwithstanding the fact that any Party may be a corporation, partnership or limited liability company, each Party hereto, by its acceptance of the benefits of this Agreement, covenants, agrees and acknowledges that no Persons other than the Parties shall have any obligation hereunder and that it has no rights of recovery hereunder against, and no recourse hereunder or under any documents, agreements, or instruments delivered contemporaneously herewith or in respect of any oral representations made or alleged to be made in connection herewith or therewith shall be had against, any former, current or future director, officer, agent, Affiliate, manager, assignee, incorporator, controlling Person, fiduciary, representative or employee of any Party (or any of their successors or permitted assignees), against any former, current, or future general or limited partner, manager, stockholder or member of any Party (or any of their successors or permitted assignees) or any Affiliate thereof or against any former, current or future director, officer, agent, employee, Affiliate, manager, assignee, incorporator, controlling Person, fiduciary, representative, general or limited partner, stockholder, manager or member of any of the foregoing, but in each case not including the Parties (each, but excluding for the avoidance of doubt, the Parties, a “Non-Party Affiliate”), whether by or through attempted piercing of the corporate veil, by or through a claim (whether in tort, Contract or otherwise) by or on behalf of such Party against the Non-Party Affiliates, by the enforcement of any assessment or by any Proceeding, or by virtue of any statute, regulation or other applicable Law, or otherwise; it being agreed and acknowledged that no personal Liability whatsoever shall attach to, be imposed on, or otherwise be incurred by any Non-Party Affiliate, as such, for any obligations of the applicable Party under this Agreement or the transactions contemplated by this Agreement, under any documents or instruments delivered contemporaneously herewith, in respect of any oral representations made or alleged to be made in connection herewith or therewith, or for any claim (whether in tort, Contract or otherwise) based on, in respect of, or by reason of, such obligations or their creation. Notwithstanding the forgoing, a Non-Party Affiliate may have obligations under any documents, agreements, or instruments delivered contemporaneously herewith or otherwise required by this Agreement if such Non-Party Affiliate is party to such document, agreement or instrument. Except to the extent otherwise set forth in, and subject in all cases to the terms and conditions of and limitations herein, this Agreement may only be enforced against, and any claim or cause of action of any kind based upon, arising out of, or related to this Agreement, or the negotiation, execution or performance of this Agreement, may only be brought against the entities that are named as Parties hereto and then only with respect to the specific obligations set forth herein with respect to such Party. Each Non-Party Affiliate is intended as a third-party beneficiary of this Section 11.15. Notwithstanding any provision of this Agreement to the contrary, in no event shall Sellers, the RSI Companies or any of their respective Affiliates or representatives (a) seek to enforce this Agreement against, make any claims for breach of this Agreement against, or seek to recover monetary damages from, any Equity Financing Source in connection with this Agreement or (b) seek to enforce the commitments against, make any claims for breach of any

 

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Subscription Agreement against, or seek to recover monetary damages from, or otherwise sue, any Equity Financing Source for the Permitted Equity Financing in connection with (i) this Agreement or (ii) the obligations of the Equity Financing Sources for the Permitted Equity Financing under the applicable Subscription Agreement. Nothing in this Section 11.15 shall in any way limit or qualify the rights and obligations of the Equity Financing Sources for the applicable Permitted Equity Financing, the Buyer and the other parties to the Subscription Agreement to each other thereunder or in connection therewith.

Section 11.16    Legal Representation.

(a)    Sellers.

(i)    Each Party hereby agrees, on its own behalf and on behalf of its directors, managers, officers, owners, employees and Affiliates and each of their successors and assigns (all such parties, the “Waiving Parties”), that Kirkland & Ellis LLP (or any successor thereto) (“K&E”) may represent any RSI Company or any direct or indirect director, manager, officer, owner, employee or Affiliate thereof, in connection with any dispute, claim, Proceeding or Liability arising out of or relating to this Agreement, any Ancillary Agreement or the transactions contemplated hereby or thereby (any such representation, the “Company Post-Closing Representation”) notwithstanding its representation (or any continued representation) of the RSI Companies in connection with the transactions contemplated by this Agreement, and each Party on behalf of itself and the Waiving Parties hereby consents thereto and irrevocably waives (and will not assert) any conflict of interest or any objection arising therefrom or relating thereto, even though the interests of the Company Post-Closing Representation may be directly adverse to the Waiving Parties.

(ii)    Each of the Sellers, the Buyer, the Sponsor and the Company acknowledges that the foregoing provision applies whether or not K&E provides legal services to the RSI Companies after the Closing Date. Each of the Sellers, the Buyer, the Sponsor and the Company, for itself and the Waiving Parties, hereby irrevocably acknowledges and agrees that all communications among K&E, the RSI Companies and/or any director, manager, officer, owner, employee or representative of any of the foregoing made in connection with the negotiation, preparation, execution, delivery and performance under, or any dispute, claim, Proceeding or Liability arising out of or relating to, this Agreement, any Ancillary Agreement or the transactions contemplated hereby or thereby or any matter relating to any of the foregoing, are privileged communications and the attorney-client privilege and the expectation of client confidence belongs solely to the RSI Companies and is exclusively controlled by the RSI Companies and shall not pass to or be claimed by the Sellers, the Sellers’ Representative, Buyer or the Sponsor. From and after the Closing, none of the Buyer, the Sponsor, any Seller or any Person purporting to act on behalf of or through the Buyer, the Sponsor, any Seller or any of the Waiving Parties, will seek to obtain the same by any process. From and after the Closing, each of the Buyer, the Sponsor and the Sellers, on behalf of itself and the Waiving Parties, irrevocably waives and will not assert any attorney-client privilege with respect to any communication among K&E, any RSI Company and/or any director, manager, officer, owner, employee or representative of any of the foregoing occurring prior to the Closing in connection with any Company Post-Closing Representation. Notwithstanding the foregoing, in the event that a dispute arises between the Buyer, the Sponsor or any Seller, on the one hand, and a third party other than an RSI Company, on the other hand, the Buyer, the Sponsor and any Seller may assert the attorney-client privilege to prevent disclosure of confidential communications to such third party; provided, however, that neither the Buyer nor the Sponsor nor any Seller may waive such privilege without the prior written consent of an RSI Company.

(b)    Buyer.

(i)    Each Waiving Party hereby agrees that White & Case LLP (or any successor thereto) (“W&C”) may represent Buyer or Sponsor or any direct or indirect director, manager, officer, owner, employee or Affiliate of Buyer or Sponsor (including the RSI Companies and Sponsor), in connection with any dispute, claim, Proceeding or Liability arising out of or relating to this Agreement, any

 

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Ancillary Agreement or the transactions contemplated hereby or thereby (any such representation, the “Buyer Post-Closing Representation”) notwithstanding its representation (or any continued representation) of the Buyer or Sponsor in connection with the transactions contemplated by this Agreement, and the Sellers and the Company, on behalf of themselves and the Waiving Parties, hereby consent thereto and irrevocably waive (and will not assert) any conflict of interest or any objection arising therefrom or relating thereto, even though the interests of the Buyer Post-Closing Representation may be directly adverse to the Waiving Parties.

(ii)    Each of the Buyer, the Sellers and the Company acknowledges that the foregoing provision applies whether or not W&C provides legal services to the Buyer or Sponsor after the Closing Date. Each of the Buyer, the Company and each Seller, for itself and the Waiving Parties, hereby irrevocably acknowledges and agrees that all communications among W&C, the Buyer, the Sponsor and/or any director, manager, officer, owner, employee or representative of any of the foregoing made in connection with the negotiation, preparation, execution, delivery and performance under, or any dispute, claim, Proceeding or Liability arising out of or relating to, this Agreement, any Ancillary Agreement or the transactions contemplated hereby or thereby or any matter relating to any of the foregoing, are privileged communications and the attorney-client privilege and the expectation of client confidence belongs solely to the Sponsor and is exclusively controlled by the Sponsor and shall not pass to or be claimed by the Buyer, any Seller or any of the RSI Companies. From and after the Closing, none of the Buyer, the Company, the Sellers nor any Person purporting to act on behalf of or through the Buyer, the Company, any Seller or any of the Waiving Parties, will seek to obtain the same by any process. From and after the Closing, each of the Buyer, the Company, each Seller, on behalf of itself and the Waiving Parties, irrevocably waives and will not assert any attorney-client privilege with respect to any communication among W&C, the Buyer, the Sponsor and/or any director, manager, officer, owner, employee or representative of any of the foregoing occurring prior to the Closing in connection with any Buyer Post-Closing Representation. Notwithstanding the foregoing, in the event that a dispute arises between the Buyer, the Company, any of the Sellers, on the one hand, and a third party other than the Sponsor, on the other hand, the Buyer, the Company, and any Seller may assert the attorney-client privilege to prevent disclosure of confidential communications to such third party; provided, however, that none of the Buyer, the Company or any Seller may waive such privilege without the prior written consent of the Sponsor.

Section 11.17    Acknowledgements.

(a)    Sellers. Each of the RSI Companies and the Sellers specifically acknowledges and agrees to Buyer’s disclaimer of any representations or warranties other than those set forth in Article V and any Ancillary Agreement or certificate delivered by Buyer or Sponsor pursuant to this Agreement, whether made by Buyer, Sponsor or any of their respective Affiliates or representatives, and of all Liability and responsibility for any representation, warranty, projection, forecast, statement, or information made, communicated, or furnished (orally or in writing) to the RSI Companies, the Sellers’ Representative and the Sellers, their Affiliates or representatives (including any opinion, information, projection, or advice that may have been or may be provided to Buyer, the Sponsor, their Affiliates or representatives by either Buyer or the Sponsor or any of their respective Affiliates or representatives), other than those set forth in Article V and any Ancillary Agreement or certificate delivered by Buyer or Sponsor pursuant to this Agreement. Buyer specifically acknowledges and agrees that, without limiting the generality of this Section 11.17, no Seller or RSI Company nor any of their respective Affiliates or representatives has made any representation or warranty with respect to any projections or other future forecasts. Buyer specifically acknowledges and agrees that except for the representations and warranties set forth in Article V and any Ancillary Agreement or certificate delivered by Buyer or Sponsor pursuant to this Agreement, neither Buyer nor Sponsor makes, nor has Buyer or Sponsor made, any other express or implied representation or warranty with respect to Buyer or Sponsor, their assets or Liabilities, the businesses of Buyer or Sponsor or the transactions contemplated by this Agreement or the Ancillary Agreements.

 

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(b)    Buyer. Buyer specifically acknowledges and agrees to Sellers’ disclaimer of any representations or warranties other than those set forth in Article III, Article IV and any Ancillary Agreement or certificate delivered by any RSI Company, the Sellers’ Representative or the Sellers pursuant to this Agreement, whether made by any Seller, the Company or any of their respective Affiliates or representatives, and of all Liability and responsibility for any representation, warranty, projection, forecast, statement, or information made, communicated, or furnished (orally or in writing) to Buyer, the Sponsor, their Affiliates or representatives (including any opinion, information, projection, or advice that may have been or may be provided to Buyer, the Sponsor, their Affiliates or representatives by either Seller, any RSI Company or any of their respective Affiliates or representatives), other than those set forth in Article III, Article IV and any Ancillary Agreement or certificate delivered by any RSI Company, the Sellers’ Representative or the Sellers pursuant to this Agreement. Buyer specifically acknowledges and agrees that, without limiting the generality of this Section 11.17, no Seller or RSI Company nor any of their respective Affiliates or representatives has made any representation or warranty with respect to any projections or other future forecasts. Buyer specifically acknowledges and agrees that except for the representations and warranties set forth in Article III, Article IV and any Ancillary Agreement or certificate delivered by any RSI Company, the Sellers’ Representative or the Sellers pursuant to this Agreement, neither the Company nor any Seller makes, nor has the Company or any Seller made, any other express or implied representation or warranty with respect to Sellers, the RSI Companies, their assets or Liabilities, the businesses of Sellers or the RSI Companies or the transactions contemplated by this Agreement or the Ancillary Agreements.

Section 11.18    Equitable Adjustments. If, during the Pre-Closing Period, the outstanding shares of Buyer Capital Stock shall have been changed into a different number of shares or a different class, with the prior written consent of the Sellers’ Representative to the extent required by this Agreement, by reason of any stock dividend, share capitalization, subdivision, reclassification, recapitalization, split, combination, consolidation or exchange of shares, or any similar event shall have occurred, then any number or amount contained in this Agreement which is based upon the number of shares of Buyer Capital Stock will be appropriately adjusted to provide to Sellers and the Buyer Stockholders the same economic effect as contemplated by this Agreement prior to such event.

[Signature Pages Follow]

 

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IN WITNESS WHEREOF, each of the undersigned has caused this Amended & Restated Business Combination Agreement to be duly executed as of the date first above written.

 

BUYER:
DMY TECHNOLOGY GROUP, INC.
By:  

  /s/ Niccolo de Masi

Name:     Niccolo de Masi
Title:     Chief Executive Officer

 

 

 

 

 

 

 

 

 

[Signature Page to Amended & Restated Business Combination Agreement]

 

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IN WITNESS WHEREOF, each of the undersigned has caused this Amended & Restated Business Combination Agreement to be duly executed as of the date first above written.

 

COMPANY:
RUSH STREET INTERACTIVE, LP
By:   Rush Street Interactive GP, LLC
Title:   General Partner
By:  

  /s/ Gregory Carlin

Name:     Gregory Carlin
Title:     Chief Executive Officer

 

 

 

 

 

 

 

 

[Signature Page to Amended & Restated Business Combination Agreement]

 

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IN WITNESS WHEREOF, each of the undersigned has caused this Amended & Restated Business Combination Agreement to be duly executed as of the date first above written.

 

SPONSOR:
dMY SPONSOR, LLC
By:  

  /s/ Harry L. You

Name:     Harry L. You
Title:     Managing Director

 

 

 

 

 

 

 

 

 

 

[Signature Page to Amended & Restated Business Combination Agreement]

 

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IN WITNESS WHEREOF, each of the undersigned has caused this Amended & Restated Business Combination Agreement to be duly executed as of the date first above written.

 

SELLERS’ REPRESENTATIVE:
RUSH STREET INTERACTIVE GP, LLC
By:  

  /s/ Gregory Carlin

Name:     Gregory Carlin
Title:     Chief Executive Officer

 

 

 

 

 

 

 

 

 

 

[Signature Page to Amended & Restated Business Combination Agreement]

 

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IN WITNESS WHEREOF, each of the undersigned has caused this Amended & Restated Business Combination Agreement to be duly executed as of the date first above written.

 

SELLERS:
RUSH STREET INTERACTIVE GP, LLC
By:  

  /s/ Gregory Carlin

Name:     Gregory Carlin
Title:     Chief Executive Officer
RUSH STREET INVESTORS, LLC
By:  

  /s/ Neil Bluhm

Name:     Neil Bluhm
Title:     Manager, Rush Street Interactive GP, LLC
NGB 2013 DYNASTY TRUST
By:  

  /s/ Neil Bluhm

Name:     Neil Bluhm
Title:     Trustee
GREG AND MARCY CARLIN FAMILY TRUST
By:  

  /s/ Gregory Carlin

Name:     Gregory Carlin
Title:     Chief Executive Officer

  /s/ Gregory Carlin

  Gregory Carlin

  /s/ Neil Bluhm

  Neil Bluhm

  /s/ Richard Schwartz

  Richard Schwartz

  /s/ Mattias Stetz

  Mattias Stetz

  /s/ Einar Roosileht

  Einar Roosileht

 

 

[Signature Page to Amended & Restated Business Combination Agreement]

 

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EXHIBIT A

BUYER A&R CERTIFICATE OF INCORPORATION

(See attached)

 

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EXHIBIT A

SECOND AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF

RUSH STREET INTERACTIVE, INC.

Rush Street Interactive, Inc., a corporation organized and existing under the laws of the State of Delaware (the “Corporation”), does hereby certify as follows:

1. The original certificate of incorporation of the Corporation was filed with the Secretary of State of the State of Delaware on September 27, 2019 (the “Original Certificate of Incorporation”). The name under which the Original Certificate of Incorporation was filed is “dMY Technology Group, Inc.”

2. An amended and restated certificate of incorporation which both restated and amended the provisions of the Original Certificate of Incorporation, was duly adopted in accordance with Sections 228, 242 and 245 of the General Corporation Law of the State of Delaware, as amended from time to time (the “DGCL”), and such amended and restated certificate of incorporation was filed with the Secretary of State of the State of Delaware on February 20, 2020 (the “First A&R Certificate of Incorporation”). The name under which the First A&R Certificate of Incorporation was filed is “dMY Technology Group, Inc.”

3. This Second Amended and Restated Certificate of Incorporation (this “Second A&R Certificate of Incorporation”) was duly adopted by the Board of Directors of the Corporation and the stockholders of the Corporation in accordance with Sections 228, 242 and 245 of the DGCL.

4. This Second A&R Certificate of Incorporation shall become effective on the date of filing with the Secretary of State of the State of Delaware.

5. The First A&R Certificate of Incorporation is being amended and restated in connection with the transactions contemplated by that certain Business Combination Agreement, dated as of July 27, 2020, by and among the Corporation, dMY Sponsor, LLC, a Delaware limited liability company (the “dMY Sponsor”), Rush Street Interactive, LP, a Delaware limited partnership, Rush Street Interactive GP, LLC, a Delaware limited liability company, in its capacity as the Sellers’ Representative, and the other parties thereto, as amended and restated by the parties thereto on October 9, 2020 (as further amended, modified, amended and restated, supplemented or waived from time to time, the “Combination Agreement”). As part of the transactions contemplated by the Combination Agreement, all 5,750,000 shares of the Class B Common Stock of the Corporation were converted on a 1-for-1 basis into 5,750,000 shares of Class A Common Stock of the Corporation such that, at the effectiveness of this Second A&R Certificate of Incorporation, only Class A Common Stock remains outstanding. All Class A Common Stock issued and outstanding prior to the effectiveness of this Second A&R Certificate of Incorporation and all Class A Common Stock issued as part of the Combination Agreement and the Subscription Agreements contemplated by the Combination Agreement shall be Class A Common Stock for all purposes of this Second A&R Certificate of Incorporation.

6. This Second A&R Certificate of Incorporation hereby amends and restates the provisions of the First A&R Certificate of Incorporation in its entirety as follows:

ARTICLE I

NAME

Section 1.1 Name. The name of the Corporation is Rush Street Interactive, Inc. (the “Corporation”).

 

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ARTICLE II

REGISTERED AGENT

Section 2.1 Address. The registered office of the Corporation in the State of Delaware is 251 Little Falls Drive, Wilmington, New Castle County, Delaware 19808; and the name of the Corporation’s registered agent at such address is Corporation Service Company.

ARTICLE III

PURPOSE

Section 3.1 Purpose. The purpose of the Corporation is to engage in any lawful act or activity for which corporations may now or hereafter be organized under the General Corporation Law of the State of Delaware (the “DGCL”).

ARTICLE IV

CAPITALIZATION

Section 4.1 Authorized Capital Stock. The total number of shares of all classes of stock that the Corporation is authorized to issue is 951,000,000 shares, consisting of (i) 1,000,000 shares of preferred stock, par value $0.0001 per share (“Preferred Stock”), (ii) 750,000,000 shares of Class A common stock, par value $0.0001 per share (“Class A Common Stock”), and (iii) 200,000,000 shares of Class V common stock, par value $0.0001 per share (“Class V Common Stock” and together with the Class A Common Stock, the “Common Stock”). The number of authorized shares of any of the Class A Common Stock, Class V Common Stock or Preferred Stock may be increased or decreased (but not below the number of shares of such class or series then outstanding) by the affirmative vote of the holders of a majority in voting power of the stock of the Corporation entitled to vote thereon irrespective of the provisions of Section 242(b)(2) of the DGCL (or any successor provision thereto), and no vote of the holders of any of the Class A Common Stock, the Class V Common Stock or Preferred Stock voting separately as a class shall be required therefor, unless a vote of any such holder is required pursuant to this Second Amended and Restated Certificate of Incorporation, (the “Second A&R Certificate of Incorporation”) or any certificate of designations relating to any series of Preferred Stock.

Section 4.2 Preferred Stock.

(a) The Board of Directors of the Corporation (the “Board”) is hereby expressly authorized, subject to any limitations prescribed by the DGCL, by resolution or resolutions, at any time and from time to time, to provide, out of the unissued shares of Preferred Stock, for one or more series of Preferred Stock and, with respect to each such series, to fix the number of shares constituting such series and the designation of such series, the voting powers (if any) of the shares of such series, and the powers, preferences and relative, participating, optional or other special rights, if any, and any qualifications, limitations or restrictions thereof, of the shares of such series and to cause to be filed with the Secretary of State of the State of Delaware a certificate of designations with respect thereto. The powers, preferences and relative, participating, optional and other special rights of each series of Preferred Stock, and the qualifications, limitations or restrictions thereof, if any, may differ from those of any and all other series at any time outstanding.

(b) Except as otherwise required by law, holders of a series of Preferred Stock, as such, shall be entitled only to such voting rights, if any, as shall expressly be granted thereto by this Second A&R Certificate of Incorporation (including any certificate of designations relating to such series).

 

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Section 4.3 Common Stock.

(a) Voting Rights.

(i) Except as otherwise provided in this Second A&R Certificate of Incorporation or as provided by law, each holder of record of Class A Common Stock, as such, shall be entitled to one (1) vote for each share of Class A Common Stock held of record by such holder on all matters on which stockholders generally are entitled to vote or holders of Class A Common Stock as a separate class are entitled to vote, including the election or removal of directors (whether voting separately as a class or together with one or more classes of the Corporation’s capital stock); provided, however, that to the fullest extent permitted by law, holders of Class A Common Stock, as such, shall have no voting power with respect to, and shall not be entitled to vote on, any amendment to this Second A&R Certificate of Incorporation (including any certificate of designations relating to any series of Preferred Stock) that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together with the holders of one or more other such series, to vote thereon pursuant to this Second A&R Certificate of Incorporation (including any certificate of designations relating to any series of Preferred Stock) or pursuant to the DGCL.

(ii) Except as otherwise provided in this Second A&R Certificate of Incorporation or as provided by law, each holder of record of Class V Common Stock, as such, shall be entitled to one (1) vote for each share of Class V Common Stock held of record by such holder on all matters on which stockholders generally or holders of Class V Common Stock as a separate class are entitled to vote, including the election or removal of directors (whether voting separately as a class or together with one or more classes of the Corporation’s capital stock); provided, however, to the fullest extent permitted by law, holders of Class V Common Stock, as such, shall have no voting power pursuant to this Second A&R Certificate of Incorporation with respect to, and shall not be entitled to vote on, any amendment to this Second A&R Certificate of Incorporation (including any certificate of designations relating to any series of Preferred Stock) that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together with the holders of one or more other such series, to vote thereon pursuant to this Second A&R Certificate of Incorporation (including any certificate of designations relating to any series of Preferred Stock) or pursuant to the DGCL.

(iii) Except as otherwise provided in this Second A&R Certificate of Incorporation or required by applicable law and without limiting the rights of any party to the investor rights agreement, dated on or about the date hereof, by and among the Corporation, the dMY Sponsor, LLC and the other parties party thereto (as may be amended, restated or otherwise modified from time to time in accordance with the terms thereof, the “Investor Rights Agreement”), the holders of Common Stock having the right to vote in respect of such Common Stock shall vote together as a single class (or, if the holders of one or more series of Preferred Stock are entitled to vote together with the holders of Common Stock having the right to vote in respect of such Common Stock, as a single class with the holders of such other series of Preferred Stock) on all matters submitted to a vote of the stockholders having voting rights generally.

(b) Dividends and Distributions.

(i) Class A Common Stock. Subject to applicable law and the rights, if any, of the holders of any outstanding series of Preferred Stock or any class or series of stock having a preference over or the right to participate with the Class A Common Stock with respect to the payment of dividends and other distributions in cash, stock of any corporation or property of the Corporation, the holders of Class A Common Stock shall be entitled to receive ratably such dividends and other distributions as may from time to time be declared by the Board in its discretion out of the assets of the Corporation that are by law available therefor at such times and in such amounts as the Board in its discretion shall determine.

 

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

(c) Liquidation, Dissolution or Winding Up. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation, after payment or provision for payment of the debts and other liabilities of the Corporation and of the preferential and other amounts, if any, to which the holders of Preferred Stock or any class or series of stock having a preference over the Class A Common Stock as to distributions upon dissolution or liquidation or winding up shall be entitled, the holders of all outstanding shares of Class A Common Stock shall be entitled to receive the remaining assets of the Corporation available for distribution ratably in proportion to the number of shares held by each such stockholder. The holders of shares of Class V Common Stock shall not be entitled to receive any assets of the Corporation in the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation.

(d) Cancellation of Class V Common Stock. In the event that any outstanding share of Class V Common Stock shall cease to be held directly or indirectly by the holder of the corresponding Common Unit (as defined in the Amended and Restated Limited Partnership Agreement of Rush Street Interactive, LP, a Delaware limited partnership (“RSI”), dated on or about the date hereof (the “RSI A&R LPA”), as set forth in the books and records of RSI, including by virtue of any divestiture by such holder of such corresponding Common Unit, such share of Class V Common Stock shall automatically and without further action on the part of the Corporation or any holder of Class V Common Stock be transferred to the Corporation and cancelled for no consideration. The Corporation shall not issue additional shares of Class V Common Stock after the closing date (such date, the “Closing Date”) of the transactions contemplated by the Combination Agreement, other than in connection with the valid issuance of Common Units in accordance with the RSI A&R LPA.

(e) Reservation of Stock. The Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Class A Common Stock an amount equal to at least the number of then-outstanding Common Units subject to Redemption (as defined in the RSI A&R LPA) from time to time.

(f) Splits. If the Corporation at any time combines or subdivides (by any stock split, stock dividend, recapitalization, reorganization, merger, amendment of this Second A&R Certificate of Incorporation, scheme, arrangement or otherwise) the number of shares of Class A Common Stock into a greater or lesser number of shares, the shares of Class V Common Stock outstanding immediately prior to such subdivision shall be proportionately similarly combined or subdivided such that the ratio of shares of outstanding Class V Common Stock to shares of outstanding Class A Common Stock immediately prior to such subdivision shall be maintained immediately after such combination or subdivision. Any adjustment described in this Section 4.3(f) shall become effective at the close of business on the date the combination or subdivision becomes effective.

ARTICLE V

BY-LAWS

Section 5.1 By-Laws. In furtherance and not in limitation of the powers conferred by the DGCL, the Board is expressly authorized to make, amend, alter, change, add to or repeal the by-laws of the Corporation (as the same may be amended from time to time, the “By-Laws”) without the consent or vote of the stockholders in any manner not inconsistent with the laws of the State of Delaware or this Second A&R Certificate of Incorporation and without limiting the rights of any party pursuant to the Investor Rights Agreement. Notwithstanding anything to the contrary contained in this Second A&R Certificate of Incorporation or any provision of law, (i) at any time when the Sellers and their Permitted Transferees (each as defined in the Investor Rights Agreement) beneficially own, in the aggregate, 40% or more of the voting power of the stock of the Corporation entitled to vote generally in the election of directors, and without limiting the rights of any party to the Investor Rights Agreement, the affirmative vote of the holders of at least a majority of the total voting power of all the then outstanding shares of stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class,

 

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shall be required in order for the stockholders of the Corporation to alter, amend, repeal or rescind, in whole or in part, any such provision of the By-Laws of the Corporation, or to adopt any provision inconsistent therewith and (ii) at any time when the Sellers and their Permitted Transferees (each as defined in the Investor Rights Agreement) beneficially own, in the aggregate, less than 40% of the voting power of the stock of the Corporation entitled to vote generally in the election of directors, and without limiting the rights of any party to the Investor Rights Agreement, the affirmative vote of the holders of at least 66 2/3% of the total voting power of all the then outstanding shares of stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class, shall be required in order for the stockholders of the Corporation to alter, amend, repeal or rescind, in whole or in part, any such provision of the By-Laws of the Corporation, or to adopt any provision inconsistent therewith.

ARTICLE VI

BOARD OF DIRECTORS

Section 6.1 Board of Directors.

(a) Board Powers. Except as otherwise provided in this Second A&R Certificate of Incorporation or the DGCL, the business and affairs of the Corporation shall be managed by or under the direction of the Board.

(b) Number, Election and Term.

(i) Without limiting the rights of any party to the Investor Rights Agreement with respect thereto or except as otherwise provided for or fixed in any certificate of designation with respect to any series of Preferred Stock, the total number of directors constituting the whole Board shall be determined from time to time by resolution adopted by the Board.

(ii) Without limiting the rights of any party pursuant to the Investor Rights Agreement, the directors (other than those directors elected by the holders of any series of Preferred Stock, voting separately as a series or together with one or more other such series, as the case may be) shall be divided into three classes designated Class I, Class II and Class III. Each class shall consist, as nearly as possible, of one-third of the total number of such directors. Class I directors shall initially serve for a term expiring at the first annual meeting of stockholders for the calendar year ended December 31, 2021, Class II directors shall initially serve for a term expiring at the second annual meeting of stockholders for the calendar year ended December 31, 2022 and Class III directors shall initially serve for a term expiring at the third annual meeting of stockholders for the calendar year ended December 31, 2023. At each annual meeting following the annual meeting of the stockholders for the calendar year ended December 31, 2021, successors to the class of directors whose term expires at that annual meeting shall be elected for a term expiring at the third succeeding annual meeting of stockholders. If the number of such directors is changed, any increase or decrease shall be apportioned among the classes so as to maintain the number of directors in each class as nearly equal as possible, and any such additional director of any class elected to fill a newly created directorship resulting from an increase in such class shall hold office for a term that shall coincide with the remaining term of that class, but in no case shall a decrease in the number of directors remove, or shorten the term of, any incumbent director. Subject to the rights granted to the holders of any one or more series of Preferred Stock then outstanding and without limiting the rights of any party pursuant to the Investor Rights Agreement, the election of directors shall be determined by a plurality of the votes cast by the stockholders present in person or represented by proxy at the meeting and entitled to vote thereon. The Board is authorized to assign members of the Board already in office to their respective class in accordance with the Investor Rights Agreement.

(iii) Any such director shall hold office until the annual meeting at which his or her term expires and until his or her successor shall be elected and qualified, or his or her earlier death, resignation, retirement, disqualification or removal from office.

 

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(iv) Directors of the Corporation need not be elected by written ballot unless the By-Laws shall so provide.

Section 6.2 Newly-Created Directorships and Vacancies. Subject to the rights granted to the holders of any one or more series of Preferred Stock then outstanding and without limiting the rights of any party granted pursuant to the Investor Rights Agreement, any newly-created directorship on the Board that results from an increase in the number of directors and any vacancy occurring in the Board (whether by death, resignation, retirement, disqualification, removal or other cause) shall be filled by the affirmative vote of a majority of the directors then in office, although less than a quorum, or by a sole remaining director (and not by the stockholders). Any director elected to fill a vacancy or newly created directorship shall hold office until the next election of the class for which such director shall have been chosen and until his or her successor shall be elected and qualified, or until his or her earlier death, resignation, retirement, disqualification or removal.

Section 6.3 Resignation and Removal. Any director may resign at any time upon notice to the Corporation given in writing or by any electronic transmission permitted by the By-Laws. Without limiting the rights of any party pursuant to the Investor Rights Agreement, any or all of the directors (other than the directors elected by the holders of any series of Preferred Stock of the Corporation, voting separately as a series or together with one or more other such series, as the case may be) may be removed only for cause and only upon the affirmative vote of the holders of a majority in voting power of all the then outstanding shares of stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class; provided that any director may be removed from office upon a good faith finding of the Board that such director is an Unsuitable Person pursuant to the terms of Article XIV. Without limiting the rights of any party pursuant to the Investor Rights Agreement, in case the Board or any one or more directors should be so removed, new directors may be elected pursuant to Section 6.2.

Section 6.4 Preferred Stock Directors. Whenever the holders of any one or more series of Preferred Stock issued by the Corporation shall have the right, voting separately as a series or separately as a class with one or more such other series, to elect directors at an annual or special meeting of stockholders, the election, term of office, removal and other features of such directorships shall be governed by the terms of this Second A&R Certificate of Incorporation (including any certificate of designations relating to any series of Preferred Stock) applicable thereto. Notwithstanding Section 6.1(b), the number of directors that may be elected by the holders of any such series of Preferred Stock shall be in addition to the number fixed pursuant to Section 6.1(b) hereof, and the total number of directors constituting the whole Board shall be automatically adjusted accordingly.

Section 6.5 Quorum. A quorum for the transaction of business by the directors shall be set forth in the By-Laws.

ARTICLE VII

CONSENT OF STOCKHOLDERS IN LIEU OF MEETING, ANNUAL AND SPECIAL

MEETINGS OF STOCKHOLDERS

Section 7.1 Consent of Stockholders in Lieu of Meeting. At any time when the Sellers and their Permitted Transferees beneficially own, in the aggregate, 40% or more of the voting power of the stock of the Corporation entitled to vote generally in the election of directors, any action required or permitted to be taken at any annual or special meeting of stockholders of the Corporation may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the Corporation by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the Corporation having custody of the books in which proceedings of meetings of stockholders are recorded. Delivery made to the Corporation’s registered office shall be made by hand, or by

 

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certified or registered mail, return receipt requested. At any time when the Sellers and their Permitted Transferees beneficially own, in the aggregate, less than 40% of the voting power of the stock of the Corporation entitled to vote generally in the election of directors, any action required or permitted to be taken by the stockholders of the Corporation must be effected at a duly called annual or special meeting of such holders and may not be effected by any consent in writing by such holders; provided, however, that any action required or permitted to be taken by the holders of Preferred Stock, voting separately as a series or separately as a class with one or more other such series, may be taken without a meeting, without prior notice and without a vote, to the extent expressly so provided by the applicable certificate of designation relating to such series of Preferred Stock.

Section 7.2 Meetings of Stockholders. Except as otherwise required by law and subject to the rights of the holders of any series of Preferred Stock, special meetings of the stockholders of the Corporation for any purpose or purposes may be called only by or at the direction of the Board, the Chairman of the Board or as otherwise provided in the By-Laws. An annual meeting of stockholders for the election of directors to succeed those whose terms expire and for the transaction of such other business as may properly come before the meeting, shall be held at such place, if any, on such date, and at such time as shall be fixed exclusively by resolution of the Board or a duly authorized committee thereof.

ARTICLE VIII

LIMITED LIABILITY; INDEMNIFICATION

Section 8.1 Limited Liability of Directors. To the fullest extent permitted by law, no director of the Corporation will have any personal liability to the Corporation or its stockholders for monetary damages for any breach of fiduciary duty as a director. If the DGCL is amended to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the Corporation shall be eliminated or limited to the fullest extent permitted by the DGCL, as so amended. Neither the amendment nor the repeal of this Article VIII shall eliminate, reduce or otherwise adversely affect any limitation on the personal liability of a director of the Corporation existing prior to such amendment or repeal.

Section 8.2 Indemnification and Advancement of Expenses.

(a) To the fullest extent permitted by applicable law, as the same exists or may hereafter be amended, the Corporation shall indemnify and hold harmless each person who is or was made a party or is threatened to be made a party to or is otherwise involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (for purposes of this Section 8.2, a “Proceeding”) by reason of the fact that he or she is or was a director or officer of the Corporation or, while a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, manager, officer, employee or agent of another corporation or of a partnership, limited liability company, joint venture, trust, other enterprise or nonprofit entity, including service with respect to an employee benefit plan (an “Indemnitee”), whether the basis of such Proceeding is alleged action in an official capacity as a director, officer, employee or agent, or in any other capacity while serving as a director, officer, employee or agent, against all liability and loss suffered and expenses (including, without limitation, attorneys’ fees, judgments, fines, Employee Retirement Income Security Act of 1974 (“ERISA”) excise taxes and penalties and amounts paid in settlement) reasonably incurred by such Indemnitee in connection with such Proceeding. The Corporation shall to the fullest extent not prohibited by applicable law pay the expenses (including attorneys’ fees) incurred by an Indemnitee in defending or otherwise participating in any Proceeding in advance of its final disposition; provided, however, that, to the extent required by applicable law, such payment of expenses in advance of the final disposition of the Proceeding shall be made only upon receipt of an undertaking, by or on behalf of the Indemnitee, to repay all amounts so advanced if it shall ultimately be determined that the Indemnitee is not entitled to be indemnified under this Section 8.2 or otherwise. The rights to indemnification and advancement of expenses conferred by this Section 8.2 shall be contract rights and such rights shall continue as to an Indemnitee who has ceased to be a director, officer, employee or agent and shall inure to the benefit of his or her heirs, executors and administrators.

 

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Notwithstanding the foregoing provisions of this Section 8.2(a), except for Proceedings to enforce rights to indemnification and advancement of expenses, the Corporation shall indemnify and advance expenses to an Indemnitee in connection with a Proceeding (or part thereof) initiated by such Indemnitee only if such Proceeding (or part thereof) was authorized by the Board.

(b) The rights to indemnification and advancement of expenses conferred on any Indemnitee by this Section 8.2 shall not be exclusive of any other rights that any Indemnitee may have or hereafter acquire under law, this Second A&R Certificate of Incorporation, the By-Laws, an agreement, vote of stockholders or disinterested directors, or otherwise.

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

(d) This Section 8.2 shall not limit the right of the Corporation, to the extent and in the manner authorized or permitted by law, to indemnify and to advance expenses to persons other than Indemnitees.

ARTICLE IX

DGCL SECTION 203

The Corporation hereby expressly elects not to be governed by Section 203 of the DGCL.

ARTICLE X

COMPETITION AND CORPORATE OPPORTUNITIES

Section 10.1 Competition and Corporate Opportunities.

(a) In recognition and anticipation that (i) certain directors, principals, officers, employees, equityholders and/or other representatives of the Sellers, the Sponsor and their respective Affiliates and Affiliated Entities (each, as defined below) may serve as directors, officers or agents of the Corporation, (ii) the Sellers, the Sponsor and their respective Affiliates and Affiliated Entities, including (I) any portfolio company in which they or any of their respective Affiliates or Affiliated Entities have made a debt or equity investment (and vice versa) or (II) any of their respective limited partners, non-managing members or other similar direct or indirect investors, may now engage and may continue to engage in the same or similar activities or related lines of business as those in which the Corporation, directly or indirectly, may engage and/or other businesses that overlap with or compete with those in which the Corporation, directly or indirectly, may engage, and (iii) members of the Board who are not employees of the Corporation (“Non-Employee Directors”) and their respective Affiliates and Affiliated Entities including (I) any portfolio company in which they or any of their respective Affiliates or Affiliated Entities have made a debt or equity investment (and vice versa) or (II) any of their respective limited partners, non-managing members or other similar direct or indirect investors may now engage and may continue to engage in the same or similar activities or related lines of business as those in which the Corporation, directly or indirectly, may now engage and may continue to engage in the same or similar activities or related lines of business as those in which the Corporation, directly or indirectly, may engage and/or other business activities that overlap with or compete with those in which the Corporation, directly or indirectly, may engage, the provisions of this Article X are

 

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set forth to regulate and define the conduct of certain affairs of the Corporation with respect to certain classes or categories of business opportunities as they may involve any Seller, the Sponsor, the Non-Employee Directors or their respective Affiliates or Affiliated Entities and the powers, rights, duties and liabilities of the Corporation and its directors, officers and stockholders in connection therewith.

(b) None of (i) any Seller, (ii) Sponsor or (iii) any Non-Employee Director or his or her Affiliates or Affiliated Entities (the Persons (as defined below) above being referred to, collectively, as “Identified Persons” and, individually, as an “Identified Person”) shall, to the fullest extent permitted by law, have any duty to refrain from directly or indirectly (1) engaging in and possessing interests in other business ventures of every type and description, including those engaged in the same or similar business activities or lines of business in which the Corporation or any of its subsidiaries now engages or proposes to engage or (2) competing with the Corporation or any of its subsidiaries, on its own account, or in partnership with, or as an employee, officer, director or shareholder of any other Person, and, to the fullest extent permitted by law, no Identified Person shall be liable to the Corporation or its stockholders or to any Affiliate of the Corporation for breach of any fiduciary duty solely by reason of the fact that such Identified Person engages in any such activities. To the fullest extent permitted from time to time by the laws of the State of Delaware, the Corporation hereby renounces any interest or expectancy in, or right to be offered an opportunity to participate in, any business opportunity which may be a corporate opportunity for an Identified Person and the Corporation or any of its Affiliates, except as provided in Section 10.1(b). Subject to Section 10.1(b), in the event that any Identified Person acquires knowledge of a potential transaction or other business opportunity or matter which may be a corporate or other business opportunity for itself, herself or himself and the Corporation or any of its, his or her Affiliates, such Identified Person shall, to the fullest extent permitted by law, have no duty (fiduciary, contractual or otherwise) to communicate, present or offer such transaction or other business opportunity or matter to the Corporation or any of its subsidiaries or any stockholder, as the case may be, and, to the fullest extent permitted by law, shall not be liable to the Corporation or its stockholders or to any subsidiary of the Corporation for breach of any duty (fiduciary, contractual or otherwise) as a stockholder, director or officer of the Corporation solely by reason of the fact that such Identified Person pursues or acquires such corporate opportunity for itself, herself or himself, or offers or directs such corporate opportunity to another Person or does not present such opportunity to the Corporation or any of its subsidiaries or stockholders.

(c) The Corporation does not renounce its interest in any corporate opportunity offered to any Non-Employee Director if such opportunity is expressly offered to such person solely and expressly in his or her capacity as a director or officer of the Corporation, such opportunity is one the Corporation is legally permitted to undertake and would otherwise be reasonable for the Corporation to pursue, in which case, the provisions of Section 10.1(b) shall not apply to any such corporate opportunity.

(d) In addition to and notwithstanding the foregoing provisions of this Article X, a corporate opportunity shall not be deemed to be a potential corporate opportunity for the Corporation if it is a business opportunity that (i) the Corporation is neither financially or legally able, nor contractually permitted to undertake, (ii) from its nature, is not in the line of the Corporation’s business or is of no practical advantage to the Corporation, (iii) is one in which the Corporation has no interest or reasonable expectancy, or (iv) is one presented to any account for the benefit of a member of the Board or such member’s Affiliate over which such member of the Board has no direct or indirect influence or control, including, but not limited to, a blind trust.

(e) For purposes of this Article X, (i) “Affiliate” shall mean (A) in respect of a Seller or the Sponsor, any Person that, directly or indirectly, is controlled by such Seller or the Sponsor (as applicable), controls such Seller or the Sponsor (as applicable) or is under common control with such Seller or the Sponsor (as applicable) and shall include any principal, member, director, partner, stockholder, officer, employee or other representative of any of the foregoing (other than the Corporation and any entity that is controlled by the Corporation), (B) in respect of a Non-Employee Director, any Person that, directly or indirectly, is controlled by such Non-Employee Director (other than the Corporation and any entity that is controlled by the Corporation) and (C) in respect of the Corporation, any Person that, directly or indirectly, is controlled

 

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by the Corporation; (ii) “Affiliated Entity” shall mean (A) any Person of which a Non-Employee Director serves as an officer, director, employee, agent or other representative (other than the Corporation and any entity that is controlled by the Corporation), (B) any direct or indirect partner, stockholder, member, manager or other representative of such Person or (C) any Affiliate of any of the foregoing; and (iii) “Person” shall mean any individual, corporation, general or limited partnership, limited liability company, joint venture, trust, association or any other entity.

(f) To the fullest extent permitted by law, any Person purchasing or otherwise acquiring any interest in any shares of capital stock of the Corporation shall be deemed to have notice of and to have consented to the provisions of this Article X.

(g) Any alteration, amendment, addition to or repeal of this Article X shall require the affirmative vote of at least 80% of the total voting power of all the then outstanding shares of stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class. Neither the alteration, amendment, addition to or repeal of this Article X, nor the adoption of any provision of this Second A&R Certificate of Incorporation (including any certificate of designations relating to any series of Preferred Stock) inconsistent with this Article X, shall eliminate or reduce the effect of this Article X in respect of any business opportunity first identified or any other matter occurring, or any cause of action, suit or claim that, but for this Article X, would accrue or arise, prior to such alteration, amendment, addition, repeal or adoption. This Article X shall not limit any protections or defenses available to, or indemnification or advancement rights of, any director or officer of the Corporation under this Second A&R Certificate of Incorporation, the By-Laws or applicable law.

ARTICLE XI

SEVERABILITY

Section 11.1 Severability. If any provision of this Second A&R Certificate of Incorporation shall be held to be invalid, illegal or unenforceable as applied to any circumstance for any reason whatsoever, the validity, legality and enforceability of such provision in any other circumstance and of the remaining provisions of this Second A&R Certificate of Incorporation (including, without limitation, each portion of any paragraph of this Second A&R Certificate of Incorporation containing any such provision held to be invalid, illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby.

ARTICLE XII

FORUM

Section 12.1 Forum. Unless the Corporation consents in writing to the selection of an alternative forum, (a) any derivative action or proceeding brought on behalf of the Corporation, (b) any action asserting a claim of breach of a fiduciary duty owed by any current or former director, officer, other employee or stockholder of the Corporation to the Corporation or the Corporation’s stockholders, or any claim for aiding and abetting such alleged breach, (c) any action asserting a claim against the Corporation or any director, officer, other employee or stockholder of the Corporation (i) arising pursuant to any provision of the DGCL, this Second A&R Certificate of Incorporation (as it may be amended or restated) or the By-Laws or (ii) as to which the DGCL confers jurisdiction on the Delaware Court of Chancery or (d) any action asserting a claim against the Corporation or any current or former officer or director or other employee or stockholder of the Corporation governed by the internal affairs doctrine of the law of the State of Delaware shall, in each case, to the fullest extent permitted by law, be solely and exclusively brought in the Delaware Court of Chancery; provided, however, that, in the event that the Delaware Court of Chancery lacks subject matter jurisdiction over any such action or proceeding, the sole and exclusive forum for such action or proceeding shall be another state or federal court located within the State of Delaware, in each such case, unless the Court of Chancery (or such other state or federal court located within the

 

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State of Delaware, as applicable) has dismissed a prior action by the same plaintiff asserting the same claims because such court lacked personal jurisdiction over an indispensable party named as a defendant therein. Unless the Corporation consents in writing to the selection of an alternative forum, the federal district courts of the United States of America shall, to the fullest extent permitted by law, be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act of 1933, as amended. Failure to enforce the foregoing provisions would cause the Corporation irreparable harm and the Corporation shall be entitled to equitable relief, including injunctive relief and specific performance, to enforce the foregoing provisions. To the fullest extent permitted by law, any person or entity purchasing or otherwise acquiring or holding any interest in shares of capital stock of the Corporation shall be deemed to have notice of and consented to the provisions of this Article XII.

ARTICLE XIII

AMENDMENTS

Section 13.1 Amendments. Notwithstanding anything contained in this Second A&R Certificate of Incorporation to the contrary, at any time when the Sellers and their Permitted Transferees (each as defined in the Investor Rights Agreement) beneficially own, in the aggregate, less than 40% in voting power of the stock of the Corporation entitled to vote generally in the election of directors, in addition to any vote required by law or as provided in Article X of this Second A&R Certificate of Incorporation and without limiting the rights of any party pursuant to the Investor Rights Agreement, the following provisions in this Second A&R Certificate of Incorporation may be amended, altered, repealed or rescinded, in whole or in part, or any provision inconsistent therewith or herewith may be adopted, only by the affirmative vote of the holders of at least 66 2/3% of the total voting power of all the then outstanding shares of stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class: Article V, Article VI, Article VII, Article VIII, Article IX, Article XII and this Article XIII. Except as expressly provided in the foregoing sentence and the remainder of this Second A&R Certificate of Incorporation (including Article X of this Section A&R Certificate of Incorporation and any certificate of designations relating to any services of Preferred Stock) and without limiting the rights of any party pursuant to the Investor Rights Agreement, this Second A&R Certificate of Incorporation may be amended by the affirmative vote of the holders of at least a majority of the total voting power of all the then outstanding shares of stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class.

ARTICLE XIV

UNSUITABLE PERSONS

Section 14.1 Finding of Unsuitability.

(a) The Equity Interests owned or controlled by an Unsuitable Person or an Affiliate of an Unsuitable Person (as applicable) shall be subject to mandatory sale and transfer on the terms and conditions set forth herein on the Transfer Date to either the Corporation or one or more Third Party Transferees and in such number and class(es)/series of Equity Interests as determined by the Board in good faith (following consultation with reputable outside and independent gaming regulatory counsel) pursuant to a resolution adopted by a majority of the directors of the Board; provided that any such sale or transfer shall occur subject to the following and shall not occur (and a Transfer Notice shall not be sent, and the Transfer Date shall be extended accordingly) until the later to occur of: (i) the delivery to such Person of a copy of a resolution duly adopted by the affirmative vote of a majority of the directors of the Board at a meeting thereof called and held for the purpose (after providing reasonable notice to such Person and a reasonable opportunity for such Person, together with the counsel of such Person, to be heard before the Board at such meeting and to provide documents and written arguments to the Board a reasonable length of time in advance of such meeting), finding that the Board has determined in good faith (following consultation with

 

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reputable outside and independent gaming regulatory counsel) that (A) such Person is an Unsuitable Person, and (B) it is necessary for such Person to sell and transfer such number and class(es)/series of Equity Interests in order for the Corporation or any Affiliated Company to: (1) obtain, renew, maintain or prevent the loss, rejection, rescission, suspension, revocation or non-renewal of a material Gaming License; (2) comply in any material respect with a material Gaming Law; (3) ensure that any material Gaming License held or desired in good faith to be held by the Corporation or any Affiliated Company, or the Corporation’s or any Affiliated Company’s application for, right to the use of, entitlement to, or ability to obtain or retain, any material Gaming License held or desired in good faith to be held by the Corporation or any Affiliated Company, is not precluded, delayed, impeded, impaired, threatened or jeopardized in any material respect; or (4) prevent the imposition of any materially burdensome terms or conditions on any material Gaming License held or desired in good faith to be held by the Corporation or any Affiliated Company, and specifying the reasoning for such determinations in reasonable detail and (ii) conclusion of the arbitration process described below (if applicable); provided further, that in the event that such Person reasonably believes that any of the above-described determinations by the Board were not made in good faith and such disagreement cannot be settled amicably by such Person and the Corporation, and solely to the extent that the Corporation has not received notice (oral or written) from any applicable Gaming Authority that an arbitration process or the time required to resolve such disagreement by arbitration would or is reasonably likely to materially and adversely affect the Corporation’s or any Affiliated Companies’ ability to (1) obtain, renew, maintain or prevent the loss, rejection, rescission, suspension, revocation or non-renewal of a material Gaming License; (2) comply in any material respect with a material Gaming Law; (3) ensure that any material Gaming License held or desired in good faith to be held by the Corporation or any Affiliated Company, or the Corporation’s or any Affiliated Company’s application for, right to the use of, entitlement to, or ability to obtain or retain, any material Gaming License held or desired in good faith to be held by the Corporation or any Affiliated Company, is not precluded, delayed, impeded, impaired, threatened or jeopardized in any material respect; or (4) prevent the imposition of any materially burdensome terms or conditions on any material Gaming License held or desired in good faith to be held by the Corporation or any Affiliated Company, such disagreement with respect to whether the Board’s determination(s) were correct may be finally, exclusively and conclusively settled by mandatory arbitration conducted expeditiously in accordance with the American Arbitration Association (“AAA”) rules, by a single independent arbitrator (to be chosen by mutual agreement of the Unsuitable Person and the Board, and if the parties are unable to agree, to be chosen as provided in the AAA rules) in an arbitration process that shall take place in Chicago, Illinois, with each party bearing its own legal fees and expenses, unless otherwise determined by the arbitrator. For the further avoidance of doubt, at the initial meeting described above with respect to whether a Person is an Unsuitable Person, the Board may defer making any such determination in order to conduct further investigation into the matter, but in connection with any future meeting of the Board regarding the matter, such Person shall be provided with reasonable notice and a reasonable opportunity for such Person, together with the counsel of such Person, to be heard before the Board at such meeting and to provide documents and written arguments to the Board a reasonable length of time in advance of such meeting. Following (x) the Board determining in good faith (following consultation with reputable outside and independent gaming regulatory counsel) and in accordance with the foregoing (including such determination being made pursuant to a resolution of the Board adopted by an affirmative vote of a majority of the directors of the Board), that such Person is an Unsuitable Person and it is necessary for such Person to sell and transfer a certain number and class(es)/series of Equity Interests for any of the reasons set forth above, and (y) if applicable, the arbitrator determining that such determinations were correctly made by the Board, the Corporation shall deliver a Transfer Notice to the Unsuitable Person or its Affiliate(s) (as applicable) and shall purchase and/or cause one or more Third Party Transferees to purchase such number and class(es)/series of Equity Interests determined in good faith by the Board in accordance with the foregoing and specified in the Transfer Notice on the Transfer Date and for the Purchase Price set forth in the Transfer Notice (which Purchase Price shall be determined in accordance with the definition of the Purchase Price set forth in this Article XIV); provided that an Unsuitable Person or its Affiliate(s) (as applicable) shall be permitted, during the forty five (45) day period commencing on the date of the Transfer Notice (or before a Transfer Notice is formally delivered), to effect and close a disposition of the number

 

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and class(es)/series of Equity Interests specified in the Transfer Notice (or a portion of them) to a Person that the Board determines in good faith (following consultation with reputable outside and independent gaming regulatory counsel) is not an Unsuitable Person, on terms agreed between the Unsuitable Person and such Person (an “Alternate Private Transaction”), it being agreed that in the event that the Board fails to make a determination in good faith that such Person is not an Unsuitable Person within fifteen (15) days from the date on which the Corporation was presented in writing with the identity of such Person and materials reasonably sufficient to make such determination, then the Unsuitable Person shall be entitled to consummate the Alternate Private Transaction with such Person; provided further that, no Unsuitable Person or its Affiliate(s) (as applicable) shall be permitted to consummate an Alternative Private Transaction to the extent any Gaming Authority has provided oral or written notice to the Corporation or any other Person prohibiting such Alternative Private Transaction. In the case of a sale and transfer to the Corporation, from and after the Transfer Date and subject only to the right to receive the Purchase Price for such Equity Interests, such Equity Interests shall, be deemed no longer outstanding and such Unsuitable Person or any Affiliate of such Unsuitable Person shall cease to be a stockholder with respect to such Equity Interests, and all rights of such Unsuitable Person or any Affiliate of such Unsuitable Person therein, other than the right to receive the Purchase Price, shall cease.

(b) In the case of an Alternate Private Transaction or a transfer to one or more Third Party Transferees otherwise determined by the Board above, from and after the earlier to occur of: (i) the Transfer Date, in the case of a transfer to one or more such Third Party Transferees, or (ii) consummation of an Alternate Private Transaction, subject only to the right to receive the Purchase Price for such Unsuitable Person’s Equity Securities, all rights and entitlements of the Unsuitable Person or any such Affiliates of an Unsuitable Person as a stockholder of the Corporation shall be terminated, including without limitation any such Person shall from such date no longer be entitled to: (i) receive any dividend, payment, distribution or interest with regard to the applicable Equity Interests which has been declared following such date or of which the due payment date according to the applicable declaration is following such date, other than the right to receive the Purchase Price, or (ii) to exercise, directly or indirectly or through any proxy, trustee, or nominee, any voting or other right (including without limitation observer and information rights) conferred by the underlying Equity Interests.

(c) The closing of a sale and transfer contemplated by clauses (a) and (b) above in this Article XIV other than an Alternate Private Transaction (the “Closing”) shall take place at the principal office of the Corporation or via electronic exchange of documents on the Transfer Date. At the Closing: (i) the Corporation or Third Party Transferee(s) (as applicable), shall deliver the aggregate applicable Purchase Price for the Equity Interests being purchased by each of the foregoing by wire transfer of immediately available funds to the account specified in writing by the Unsuitable Person and (ii) the Unsuitable Person or Affiliate of such Unsuitable Person (as applicable) shall deliver to the Corporation or each such Third Party Transferee (if applicable), such stock powers, assignment instruments and other agreement as are necessary or appropriate to fully convey all right, title and interest in and to the Equity Interests being purchased by each of the foregoing, free and clear of all liens and other encumbrances (other than restrictions on transfer under this Second A&R Certificate of Incorporation, the By-laws of the Corporation, the Investor Rights Agreement and applicable federal and state securities laws). Such stock powers, assignment instruments and other agreements shall be in a form reasonably acceptable to the Corporation and shall include no representations and warranties other than such representations and warranties as to title and ownership of the Equity Interests being sold, due authorization, execution and delivery of reasonably requested documents by the Unsuitable Person or any such Affiliates of such Unsuitable Person (as applicable), and the enforceability of relevant obligations of such party under the relevant documents). The sale and transfer of the applicable Equity Interests shall be effected at the Closing upon delivery of the Purchase Price described in this Section 14.1(c) without regard to the provision by the Unsuitable Person or Affiliate of such Unsuitable Person (as applicable) of the stock powers, assignment instruments and other agreements described above (and subject to their terms described above) and the Corporation may in its sole and absolute discretion execute and deliver such instruments or other documents described above necessary to effect such transfer under such terms (including any stock powers, assignment instruments and other

 

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agreements) and deemed by the Corporation in its sole and absolute discretion (acting in good faith) to be necessary or advisable in its name or in the name and on behalf of the Unsuitable Person or any Affiliate of such Unsuitable Person (as applicable) to effect the sale and transfer; provided, however, that the Unsuitable Person or Affiliate of such Unsuitable Person (as applicable) shall continue to have the obligation to the Corporation and the Third Party Transferees, as applicable, to provide such stock powers, assignment instruments and other agreements.

(d) To the extent that a sale and transfer to one or more Third Party Transferees is determined to be invalid or unenforceable for any reason, the Corporation shall be permitted to redeem or repurchase the Equity Interests owned or controlled by an Unsuitable Person or an Affiliate of an Unsuitable Person (as applicable) for the price and under the terms contemplated by this Article XIV promptly following any such determination.

Section 14.2 Indemnification. Any Unsuitable Person and any Affiliate of an Unsuitable Person that owns or controls Equity Interests shall indemnify and hold harmless the Corporation and its Affiliated Companies for any and all losses, costs and expenses, including attorneys’ costs, fees and expenses reasonably incurred by the Corporation and its Affiliated Companies as a result of, or arising out of, such Unsuitable Person’s or Affiliate’s continuing ownership or control of Equity Interests following the Transfer Date in breach of this Article XIV, the neglect, refusal or other failure to comply in any material respect with the provisions of this Article XIV, or failure to divest itself of any Equity Interests when and in the specific manner required by the Gaming Laws or this Article XIV and by acceptance of its Equity Interests any such Unsuitable Person or Affiliate of an Unsuitable Person shall be deemed to have agreed to so indemnify the Corporation. Notwithstanding anything in this Section 14.2 to the contrary, neither the Corporation nor any of its Affiliated Companies shall have any right to offset against any amount payable or otherwise owed by the Corporation or any of its Affiliated Companies to such Unsuitable Person or its Affiliates under this Article XIV (including, without limitation, the Purchase Price payable or otherwise owed in the event of a transaction contemplated by Section 14.1), any amounts of losses, costs or expenses for which the Corporation or any of its Affiliated Companies are entitled to indemnification under this Section 14.2.

Section 14.3 Non-Exclusivity of Rights. The right of the Corporation to purchase or cause to be purchased Equity Interests pursuant to this Article XIV shall not be exclusive of any other rights the Corporation may have or hereafter acquire under any agreement, provision of this Second A&R Certificate of Incorporation or the By-laws of the Corporation or otherwise. Notwithstanding the provisions of this Article XIV, the Corporation, the Unsuitable Person and any of their Affiliates shall have the right to propose that the parties, immediately upon or following the delivery of the Transfer Notice (subject to the outcome of any applicable arbitration proceeding pursuant to Section 14.1(a)), enter into an agreement or other arrangement (including based on any agreement that may be reached between the applicable Gaming Authority and an Unsuitable Person or its Affiliates in this regard), including, without limitation, a divestiture trust or divestiture plan, which will reduce or terminate an Unsuitable Person’s ownership or control of all or a portion of its Equity Interests over time (and, if such an agreement or arrangement is reached), the terms of such agreement or arrangement as agreed by the Corporation and such Unsuitable Person or Affiliate of such Unsuitable Person (including, without limitation, as to the purchase price at which the Equity Interests can be sold) shall apply and prevail over the terms of this Article XIV).

Section 14.4 Further Actions. Nothing contained in this Article XIV shall limit the authority of the Corporation to take such other action, to the extent permitted by law, as it deems necessary or advisable (including with consultation with reputable outside and independent gaming regulatory counsel) to protect the Corporation or its Affiliated Companies from the denial or threatened denial, loss or threatened loss or delayed issuance or threatened delayed issuance of any material Gaming License of the Corporation or any of its Affiliated Companies, provided that any forced disposal of Equity Interests shall be effected only in accordance with the terms of this Article XIV. In addition, the Corporation may, to the extent permitted by law, from time to time establish, modify, amend or rescind bylaws, regulations, and procedures of the Corporation to the extent

 

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they are not inconsistent with the express provisions of this Article XIV for the purpose of determining whether any Person is an Unsuitable Person and for the orderly application, administration and implementation of the provisions of this Article XIV, provided that the provisions of any such bylaws, regulations and procedures shall not be more adverse in any material respect to the stockholders of the Corporation than the provisions of this Article XIV. Such procedures and regulations shall be kept on file with the Secretary of the Corporation, the secretary of its Affiliated Companies and with the transfer agent, if any, of the Corporation and any Affiliated Companies, and shall be made available for inspection and, upon reasonable request, mailed to any record holder of Equity Interests. The Board shall have exclusive authority and power to administer this Article XIV and to exercise all rights and powers specifically granted to the Board or the Corporation, or as may be necessary or advisable in the administration of this Article XIV. Subject to the arbitration provisions set forth in Section 14.1(a), all such actions which are done or made by the Board in compliance with the provisions of this Article XIV shall be final, conclusive and binding on the Corporation and all other Persons; provided, however, the Board may delegate all or any portion of its duties and powers under this Article XIV to a committee of the Board as it deems necessary or advisable.

Section 14.5 Legend. The restrictions set forth in this Article XIV shall be noted conspicuously on any certificate evidencing Equity Interests in accordance with applicable law in such manner as may be determined by the Corporation in its sole and absolute discretion.

Section 14.6 Compliance with Gaming Laws. All Persons owning or controlling Equity Securities of the Corporation shall comply with all applicable Gaming Laws which apply to them in their capacity as owners or controllers of the Equity Interests, including any provisions of such Gaming Laws that require such Person to file applications for Gaming Licenses with, and provide information to, the applicable Gaming Authorities in respect of Gaming Licenses held or desired to be held by the Corporation or any Affiliated Companies, subject to any rights that such Persons may have under such Gaming Laws to seek waivers or similar relief from the applicable Gaming Authorities with respect to such requirements to file applications and provide information. Any purported transfer of Equity Interests in violation of Gaming Laws shall be void ab initio.

Section 14.7 Definitions. For the purposes of this Article XIV, the following definitions apply.

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

Equity Interest” means Class A Common Stock, Class V Common Stock or any other equity securities of the Corporation, or securities exchangeable or exercisable for, or convertible into, such other equity securities of the Corporation.

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

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

 

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Gaming Jurisdictions” means all jurisdictions, domestic and foreign, and their political subdivisions, in which Gaming Activities are or may be lawfully conducted, and in which or from which the Corporation or any of its Affiliated Companies conducts, or reasonably expects to conduct, Gaming Activities which are subject to Gaming Laws.

Gaming Laws” means all laws, statutes and ordinances pursuant to which any Gaming Authority possesses regulatory, permit and licensing authority over the conduct of Gaming Activities in which the Corporation or any of its Affiliated Companies engages, or the ownership or control of an Interest in any such entity that conducts Gaming Activities, in any Gaming Jurisdiction, all orders, decrees, rules and regulations promulgated thereunder, all written and unwritten policies of the Gaming Authorities with respect to the foregoing and all written and unwritten interpretations by the Gaming Authorities of such laws, statutes, ordinances, orders, decrees, rules, regulations and policies.

Gaming Licenses” shall mean all licenses, permits, approvals, orders, authorizations, registrations, findings of suitability, franchises, exemptions, waivers, concessions and entitlements issued by any Gaming Authority necessary for or relating to the conduct of Gaming Activities by the Corporation or any Affiliated Company or the ownership or control by any Person of an Interest in any of the foregoing entities, to the extent that it conducts or reasonably expects in good faith to conduct Gaming Activities.

Interest” means the capital stock or other securities of the Corporation or any Affiliated Company or any other interest or financial or other stake therein, including, without limitation, the Equity Interests.

Person” means an individual, corporation, limited liability company, partnership, association, trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

Purchase Price” means the fair value of the applicable Equity Interests based on the per share value of such Equity Interests as determined by the Board in good faith (it being agreed that in case of shares of Class A Common Stock or shares of Preferred Stock of the Corporation that are listed on a national securities exchange, such fair value per share shall be the average of the Volume Weighted Average Share Price of such share for the twenty (20) consecutive trading days preceding the date on which the Transfer Notice in respect of such Equity Interests is delivered by the Corporation to the Unsuitable Person or Affiliate of such Unsuitable Person (as applicable), if such information is available).

Third Party Transferees” means one or more third parties determined in accordance with the procedures set forth in Section 14.1(a) of this Second A&R Certificate of Incorporation to purchase some or all of the Equity Interests to be sold and transferred in accordance with a Transfer Notice and the terms of this Second A&R Certificate of Incorporation.

Transfer Date” means the date specified in the Transfer Notice as the date on which the Equity Interests owned or controlled by an Unsuitable Person or an Affiliate of an Unsuitable Person (as applicable) are to be sold and transferred to the Corporation or one or more Third Party Transferees in accordance with Article XIV of this Second A&R Certificate of Incorporation, which date shall be no less forty-six (46) days and no later than seventy-five (75) days after the date of the Transfer Notice.

Transfer Notice” means a notice of transfer delivered by the Corporation to an Unsuitable Person or an Affiliate of an Unsuitable Person (as applicable) if the Board deems it necessary or advisable, to cause such Unsuitable Person’s or Affiliate’s (as applicable) Equity Interests to be sold and transferred pursuant to Article XIV of this Second A&R Certificate of Incorporation. Each Transfer Notice shall set forth (i) the Transfer Date, (ii) the number and class/series of Equity Interests to be sold and transferred, (iii) the Purchase Price with respect to each class/series of such Equity Interests which will be determined in accordance with the terms of Article XIV of this Second A&R Certificate of Incorporation, (iv) the place where any certificates for such Equity Interests shall be surrendered, and (v) any other reasonable requirements of surrender of the Equity

 

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Interests imposed in good faith by the Corporation, including how certificates representing such Equity Interests are to be endorsed, if at all.

Unsuitable Person” means a stockholder who (i) fails or refuses to file an application within thirty (30) days (or such other period imposed by any Gaming Authority) after having been requested in writing and in good faith to do the same by the Corporation (based on consultation with independent gaming regulatory counsel), or has withdrawn or requested the withdrawal of a pending application (other than for technical reasons with the intent to promptly file an amended application following such withdrawal), to be found suitable by any Gaming Authority or for any Gaming License, in each case, when such finding of suitability or Gaming License is required by Gaming Laws or Gaming Authorities for the purpose of obtaining a material Gaming License for, or compliance with material Gaming Laws by, the Corporation or any Affiliated Company, (ii) is denied or disqualified from eligibility for any material Gaming License by any Gaming Authority, (iii) is determined by a Gaming Authority in any material Gaming Jurisdiction to be unsuitable to own or control any Equity Interests, or be Affiliated, associated or involved with a Person engaged in Gaming Activities, (iv) is determined by a Gaming Authority to have caused in whole or in part any material Gaming License of the Corporation or any Affiliated Company to be lost, rejected, rescinded, suspended, revoked or not renewed by any Gaming Authority, or to have caused in whole or in part the Corporation or any Affiliated Company to be threatened in writing by any Gaming Authority with the loss, rejection, rescission, suspension, revocation or non-renewal of any material Gaming License, or (v) is reasonably likely to (A) preclude or materially delay, impede, impair, threaten or jeopardize (1) any material Gaming License held or desired in good faith to be held by the Corporation or any Affiliated Company or (2) the Corporation’s or any Affiliated Company’s application for, right to the use of, entitlement to, or ability to obtain or retain, any material Gaming License held or desired in good faith to be field by the Corporation or any Affiliated Company, or (B) cause or otherwise be reasonably likely to result in the imposition of any materially burdensome terms or conditions on any material Gaming License held or desired to be held by the Corporation or any Affiliated Company.

Volume Weighted Average Share Price” means the volume-weighted average share price of the Class A Common Stock (or, if applicable, share of Preferred Stock of the Corporation) as displayed on the Corporation’s page on Bloomberg (or any successor service) in respect of the period from 9:30 a.m. to 4:00 p.m., New York City time, on such trading day.

[Signature Page Follows]

 

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IN WITNESS WHEREOF, Rush Street Interactive, Inc. has caused this Second Amended and Restated Certificate of Incorporation to be duly executed in its name and on its behalf by an authorized officer as of this [●] day of [●], [●].

 

RUSH STREET INTERACTIVE, INC.
By:    
Name:  
Title:  

 

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EXHIBIT B

BUYER A&R BYLAWS

(See attached)

[Exhibit B]

 

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EXHIBIT B

AMENDED AND RESTATED

BY-LAWS

OF

RUSH STREET INTERACTIVE, INC.

ARTICLE I

OFFICES

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

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

ARTICLE II

STOCKHOLDERS

Section 2.1 Annual Meetings. The annual meeting of the stockholders of the Corporation for the purpose of electing directors and for the transaction of such other business as may properly be brought before the meeting shall be held on such date, and at such time and place, if any, within or without the State of Delaware, or by means of remote communications, including by webcast, pursuant to Section 2.12(c)(ii), as may be designated from time to time by the Board. The Board may postpone, reschedule or cancel any annual meeting of stockholders previously scheduled.

Section 2.2 Special Meetings. Except as otherwise required by the General Corporation Law of the State of Delaware (the “DGCL”) or required or permitted by the certificate of incorporation of the Corporation (as amended, restated, modified or supplemented from time to time, the “Certificate of Incorporation”), and subject to the rights of the holders of any class or series of Preferred Stock (as defined in the Certificate of Incorporation), special meetings of the stockholders of the Corporation may be called only by or at the direction of the Board, the Chairman of the Board or the Chief Executive Officer. Special meetings may be held either at a place, within or without the State of Delaware, or by means of remote communications, including by webcast, pursuant to Section 2.12(c)(ii) as the Board may determine. The Board may postpone, reschedule or cancel any special meeting of stockholders previously scheduled.

Section 2.3 Notice of Meetings. Except as otherwise provided by the DGCL, the Certificate of Incorporation or these By-Laws, notice of the date, time, place (if any), the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such meeting, the record date for determining the stockholders entitled to vote at the meeting (if such date is different from the record date for stockholders entitled to notice of the meeting) and, in the case of a special meeting, the purpose or purposes of the meeting of stockholders shall be given not more than sixty (60), nor less than ten (10), days previous thereto (unless a different time is specified by law), to each stockholder entitled to vote at the meeting as of the record date for determining stockholders entitled to notice of the meeting. If mailed, such notice shall be deemed to be given when deposited in the United States mail, postage prepaid, directed to the stockholder at such

 

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stockholder’s address as it appears on the records of the Corporation. Without limiting the manner by which notices of meetings otherwise may be given effectively to stockholders, any such notice may be given by electronic transmission in the manner provided in Section 232 of the DGCL.

Section 2.4 Quorum; Adjournments. The holders of a majority in voting power of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business, except as otherwise provided herein, by applicable law or by the Certificate of Incorporation; but if at any meeting of stockholders there shall be less than a quorum present, the chairman of the meeting or, by a majority in voting power thereof, the stockholders present (either in person or by proxy) may, to the extent permitted by law, adjourn the meeting from time to time without further notice other than announcement at the meeting of the date, time and place, if any, and the means of remote communication, if any, by which stockholders may be deemed present in person and vote at such adjourned meeting, until a quorum shall be present or represented. Notwithstanding the foregoing, where a separate vote by a class or series or classes or series is required, a majority in voting power of the outstanding shares of such class or series or classes or series, present in person or represented by proxy, shall constitute a quorum entitled to take action with respect to that vote on that matter. At any adjourned meeting at which a quorum shall be present or represented by proxy, any business may be transacted which might have been transacted at the original meeting. Notice need not be given of any adjourned meeting if the time, date and place, if any, and the means of remote communication, if any, by which stockholders may be deemed present in person and vote at such adjourned meeting are announced at the meeting at which the adjournment is taken; provided, however, that if the adjournment is for more than sixty (60) days, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. If after the adjournment a new record date for stockholders entitled to vote is fixed for the adjourned meeting, the Board shall fix a new record date for notice of such adjourned meeting, and shall give notice of the adjourned meeting to each stockholder of record entitled to vote at such adjourned meeting as of the record date for notice of such adjourned meeting.

Section 2.5 Organization of Meetings. The Chairman of the Board, or in the absence of the Chairman of the Board, or at the Chairman of the Board’s discretion, the Chief Executive Officer, or in the Chief Executive Officer’s absence or at the Chief Executive Officer’s discretion, any officer of the Corporation, shall call all meetings of the stockholders to order and shall act as chairman of any such meetings. The Secretary of the Corporation or, in such officer’s absence, an Assistant Secretary, shall act as secretary of the meeting. If neither the Secretary nor an Assistant Secretary is present, the chairman of the meeting shall appoint a secretary of the meeting. The Board may adopt such rules and regulations for the conduct of the meeting of stockholders as it shall deem appropriate. Unless otherwise determined by the Board prior to the meeting, the chairman of the meeting shall determine the order of business and shall have the authority in his or her discretion to regulate the conduct of any such meeting, including, without limitation, convening the meeting and adjourning the meeting (whether or not a quorum is present), announcing the date and time of the opening and the closing of the polls for each matter upon which the stockholders will vote, imposing restrictions on the persons (other than stockholders of record of the Corporation or their duly appointed proxies) who may attend any such meeting, establishing procedures for the transaction of business at the meeting (including the dismissal of business not properly presented), maintaining order at the meeting and safety of those present, restricting entry to the meeting after the time fixed for commencement thereof and limiting the circumstances in which any person may make a statement or ask questions at any meeting of stockholders. Unless and to the extent determined by the Board or the chairman over the meeting, meetings of stockholders shall not be required to be held in accordance with the rules of parliamentary procedure.

Section 2.6 Proxies.

(i) At all meetings of stockholders, any stockholder entitled to vote thereat shall be entitled to vote in person or by proxy, subject to applicable law. Without limiting the manner in which a stockholder may authorize another person or persons to act for the stockholder as proxy pursuant to the DGCL, the following shall constitute a valid means by which a stockholder may grant such authority: (1) a

 

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stockholder may execute a writing authorizing another person or persons to act for the stockholder as proxy, and execution of the writing may be accomplished by the stockholder or the stockholder’s authorized officer, director, employee or agent signing such writing or causing his or her signature to be affixed to such writing by any reasonable means including, but not limited to, by facsimile signature; or (2) a stockholder may authorize another person or persons to act for the stockholder as proxy by transmitting or authorizing by means of electronic transmission to the person who will be the holder of the proxy or to a proxy solicitation firm, proxy support service organization or like agent duly authorized by the person who will be the holder of the proxy to receive such transmission but no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period; provided that any such means of electronic transmission must either set forth or be submitted with information from which it can be determined that the electronic transmission was authorized by the stockholder. If it is determined that such electronic transmissions are valid, the inspector or inspectors of stockholder votes or, if there are no such inspectors, such other persons making that determination shall specify the information upon which they relied.

(b) A proxy shall be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. A stockholder may revoke any proxy which is not irrevocable by attending the meeting and voting in person or by delivering to the Secretary of the Corporation a revocation of the proxy or a new proxy bearing a later date.

(c) Any copy, facsimile telecommunication or other reliable reproduction of the writing or transmission created pursuant to the preceding paragraphs of this Section 2.6 (including any electronic transmission) may be substituted or used in lieu of the original writing or transmission for any and all purposes for which the original writing or transmission could be used, provided that such copy, facsimile telecommunication or other reproduction shall be a complete reproduction of the entire original writing or transmission.

(d) Proxies shall be filed with the secretary of the meeting prior to or at the commencement of the meeting to which they relate.

Section 2.7 Voting. When a quorum is present at any meeting, the vote of the holders of a majority of the voting power of the outstanding shares of capital stock of the Corporation present in person or represented by proxy at the meeting and entitled to vote on the subject matter shall decide any question brought before such meeting, unless the question is one upon which by express provision of the Certificate of Incorporation, the Investor Rights Agreement (as defined in the Certificate of Incorporation), these By- Laws or the DGCL a different vote is required, in which case such express provision shall govern and control the decision of such question. Notwithstanding the foregoing, where a separate vote by a class or series or classes or series is required and a quorum is present, the affirmative vote of a majority of the votes cast by shares of such class or series or classes or series shall be the act of such class or series or classes or series, unless the question is one upon which by express provision of the Certificate of Incorporation, the Investor Rights Agreement, these By-Laws or the DGCL a different vote is required, in which case such express provision shall govern and control the decision of such question.

Section 2.8 Fixing Record Date.

(a) In order that the Corporation may determine the stockholders entitled to notice of any meeting of stockholders or any adjournment thereof, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board, and which record date shall, unless otherwise required by law, not be more than sixty (60) nor less than ten (10) days before the date of such meeting. If the Board so fixes a date, such date shall also be the record date for determining the stockholders entitled to vote at such meeting unless the Board determines, at the time it fixes such record date, that a later date on or before the date of the meeting shall be the date for making such determination. If no record date is fixed by the Board, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on

 

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which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board may fix a new record date for determination of stockholders entitled to vote at the adjourned meeting, and in such case shall also fix as the record date for stockholders entitled to notice of such adjourned meeting the same or an earlier date as that fixed for determination of stockholders entitled to vote in accordance herewith at the adjourned meeting.

(b) In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change or conversion or for the purpose of any other lawful action, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall not be more than sixty (60) days prior to such action. If no such record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board adopts the resolution relating thereto.

(c) Unless otherwise restricted by the Certificate of Incorporation, in order that the Corporation may determine the stockholders entitled to express consent to corporate action in writing without a meeting, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board, and which record date shall not be more than ten (10) days after the date upon which the resolution fixing the record date is adopted by the Board. If no record date for determining stockholders entitled to express consent to corporate action in writing without a meeting is fixed by the Board, (i) when no prior action of the Board is required by law, the record date for such purpose shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation in accordance with applicable law, and (ii) if prior action by the Board is required by law, the record date for such purpose shall be at the close of business on the day on which the Board adopts the resolution taking such prior action.

Section 2.9 Consents in Lieu of Meeting. At any time when action by one or more classes or series of stockholders of the Corporation is permitted to be taken by written consent pursuant to the terms and limitations set forth in the Certificate of Incorporation, the provisions of this section shall apply. All consents properly delivered in accordance with the Certificate of Incorporation and the DGCL shall be deemed to be recorded when so delivered. No written consent shall be effective to take the corporate action referred to therein unless, within sixty (60) days of the earliest dated consent delivered to the Corporation as required by the DGCL, written consents signed by the holders of a sufficient number of shares to take such corporate action are so delivered to the Corporation in accordance with the applicable provisions of the DGCL. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting if the record date for notice of such meeting had been the date that written consents signed by a sufficient number of holders to take the action were delivered to the Corporation as provided in the applicable provisions of the DGCL. Any action taken pursuant to such written consent or consents of the stockholders shall have the same force and effect as if taken by the stockholders at a meeting thereof. In order that the Corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the Board may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board, and which date shall not be more than ten (10) days after the date upon which the resolution fixing the record date is adopted by the Board. If no record date has been fixed by the Board, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board is required by the DGCL, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to the Corporation’s registered office shall be by hand or by certified or registered mail, return receipt requested. If no record date has been fixed by the Board and prior action by the Board is required by the DGCL,

 

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the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the day on which the Board adopts the resolution taking such prior action.

Section 2.10 List of Stockholders Entitled to Vote. The Corporation shall prepare, at least ten (10) days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting (provided, however, if the record date for determining the stockholders entitled to vote is less than ten (10) days before the date of the meeting, the list shall reflect the stockholders entitled to vote as of the tenth day before the meeting date), arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder for any purpose germane to the meeting for a period of at least ten (10) days prior to the meeting: (i) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting, or (ii) during ordinary business hours, at the principal place of business of the Corporation. In the event that the Corporation determines to make the list available on an electronic network, the Corporation may take reasonable steps to ensure that such information is available only to stockholders of the Corporation. If the meeting is to be held at a place, then a list of stockholders entitled to vote at the meeting shall be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. If the meeting is to be held solely by means of remote communication, then the list shall also be open to the examination of any stockholder during the whole time of the meeting on a reasonably accessible electronic network, and the information required to access such list shall be provided with the notice of the meeting.

Section 2.11 Inspectors. The Board, in advance of all meetings of the stockholders, may, and shall if required by law, appoint one or more inspectors of stockholder votes, who may be employees or agents of the Corporation or stockholders or their proxies, but who shall not be directors of the Corporation or candidates for election as directors. In the event that one or more inspectors of stockholder votes previously designated by the Board fails to appear or act at the meeting of stockholders, the chairman of the meeting may appoint one or more inspectors of stockholder votes to fill such vacancy or vacancies. Inspectors of stockholder votes appointed to act at any meeting of the stockholders, before entering upon the discharge of their duties, shall take and sign an oath to faithfully execute the duties of inspector of stockholder votes with strict impartiality and according to the best of their ability and the oath so taken shall be subscribed by them. The inspector or inspectors so appointed or designated shall (i) ascertain the number of shares of capital stock of the Corporation outstanding and the voting power of each such share, (ii) determine the shares of capital stock of the Corporation represented at the meeting and the validity of proxies and ballots, (iii) count all votes and ballots, (iv) determine and retain for a reasonable period a record of the disposition of any challenges made to any determination by the inspectors, and (v) certify their determination of the number of shares of capital stock of the Corporation represented at the meeting and such inspectors’ count of all votes and ballots. Such certification and report shall specify such other information as may be required by law. In determining the validity and counting of proxies and ballots cast at any meeting of stockholders of the Corporation, the inspectors may consider such information as is permitted by applicable law.

Section 2.12 Conduct of Meetings

(a) Annual Meetings of Stockholders.

(i) Nominations of persons for election to the Board and the proposal of other business to be considered by the stockholders may be made at an annual meeting of stockholders only (a) as provided in the Investor Rights Agreement, (b) pursuant to the Corporation’s notice of meeting (or any supplement thereto) delivered pursuant to Section 2.3, (c) by or at the direction of the Board or any authorized committee thereof or (d) by any stockholder of the Corporation who is entitled to vote on such election or such other business at the meeting, who has complied with the notice procedures set forth in subparagraphs (ii) and (iii) of this Section 2.12(a) and who was a stockholder of record at the time such notice was delivered to the Secretary of the Corporation.

(ii) (A) For nominations or other business to be properly brought before an annual meeting by a stockholder pursuant to clause (d) of Section 2.12(a)(i), the stockholder must have given timely notice

 

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thereof in writing to the Secretary of the Corporation (even if such matter is already the subject of any notice to the stockholders or a public announcement from the Board), and, in the case of business other than nominations of persons for election to the Board, such other business must be a proper matter for stockholder action. To be timely, a stockholder’s notice shall be delivered to the Secretary at the principal executive offices of the Corporation not less than ninety (90) days nor more than one hundred twenty (120) days prior to the first anniversary of the preceding year’s annual meeting; provided, however, that in the event that the date of the annual meeting is scheduled for more than thirty (30) days before, or more than seventy (70) days following, such anniversary date, or if no annual meeting was held in the preceding year, notice by the stockholder to be timely must be so delivered not later than the tenth day following the day on which public announcement of the date of such meeting is first made. For purposes of the application of Rule 14a-4(c) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (or any successor provision), the date for notice specified in this Section 2.12(a)(iii) shall be the earlier of the date calculated as hereinbefore provided or the date specified in paragraph (c)(1) of Rule 14a-4. For purposes of the first annual meeting of stockholders following the adoption of these By-Laws, the date of the preceding year’s annual meeting shall be deemed to be [•] of the preceding calendar year. In no event shall the public announcement of an adjournment or postponement of an annual meeting commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above. For the avoidance of doubt, a stockholder shall not be entitled to make additional or substitute nominations following the expiration of the time periods set forth in these By-Laws. Notwithstanding anything in this Section 2.12(a)(iii) to the contrary, in the event that the number of directors to be elected to the Board at an annual meeting is increased and there is no public announcement by the Corporation naming all of the nominees for director or specifying the size of the increased Board at least 100 calendar days prior to the first anniversary of the preceding year’s annual meeting of stockholders, then a stockholder’s notice required by this Section 2.12 shall be considered timely, but only with respect to nominees for any new positions created by such increase, if it is received by the Secretary of the Corporation not later than the close of business on the tenth calendar day following the day on which such public announcement is first made by the Corporation.

(iii) Such stockholder’s notice shall set forth (a) as to each person whom the stockholder proposes to nominate for election or re-election as a director all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors, or is otherwise required, in each case pursuant to Section 14(a) of the Exchange Act and the rules and regulations promulgated thereunder, including such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected; (b) as to any other business that the stockholder proposes to bring before the meeting, a brief description of the business desired to be brought before the meeting, the text of the proposal or business (including the text of any resolutions proposed for consideration and, in the event that such business includes a proposal to amend these By-Laws, the language of the proposed amendment), the reasons for conducting such business at the meeting and any substantial interest (within the meaning of Item 5 of Schedule 14A under the Exchange Act) in such business of such stockholder and the beneficial owner (within the meaning of Rule 13d-3 promulgated under the Exchange Act), if any, on whose behalf the proposal is made; (c) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made (i) the name and address of such stockholder, as they appear on the Corporation’s books and records, and of such beneficial owner, (ii) the class or series and number of shares of capital stock of the Corporation which are owned directly or indirectly, beneficially and of record by such stockholder and such beneficial owner, (iii) a representation that the stockholder is a holder of record of the stock of the Corporation at the time of the giving of the notice, will be entitled to vote at such meeting and will appear in person or by proxy at the meeting to propose such business or nomination, (iv) a representation whether the stockholder or the beneficial owner, if any, will be or is part of a group which will (A) deliver a proxy statement and/or form of proxy to holders of at least the percentage of the voting power of the Corporation’s outstanding capital stock required to approve or adopt the proposal or elect the nominee and/or (B) otherwise solicit proxies or votes from stockholders in support of such proposal or nomination, (v) a certification regarding whether such

 

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stockholder and beneficial owner, if any, have complied with all applicable federal, state and other legal requirements in connection with the stockholder’s and/or beneficial owner’s acquisition of shares of capital stock or other securities of the Corporation and/or the stockholder’s and/or beneficial owner’s acts or omissions as a stockholder of the Corporation and (vi) any other information relating to such stockholder and beneficial owner, if any, required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for, as applicable, the proposal and/or for the election of directors in an election contest pursuant to and in accordance with Section 14(a) of the Exchange Act and the rules and regulations promulgated thereunder; (d) a description of any agreement, arrangement or understanding with respect to the nomination or proposal and/or the voting of shares of any class or series of stock of the Corporation between or among the stockholder giving the notice, the beneficial owner, if any, on whose behalf the nomination or proposal is made, any of their respective affiliates or associates and/or any others acting in concert with any of the foregoing (collectively, “proponent persons”); and (e) a description of any agreement, arrangement or understanding (including without limitation any contract to purchase or sell, acquisition or grant of any option, right or warrant to purchase or sell, swap or other instrument) the intent or effect of which may be (i) to transfer to or from any proponent person, in whole or in part, any of the economic consequences of ownership of any security of the Corporation, (ii) to increase or decrease the voting power of any proponent person with respect to shares of any class or series of stock of the Corporation and/or (iii) to provide any proponent person, directly or indirectly, with the opportunity to profit or share in any profit derived from, or to otherwise benefit economically from, any increase or decrease in the value of any security of the Corporation. A stockholder providing notice of a proposed nomination for election to the Board or other business proposed to be brought before a meeting (whether given pursuant to this Section 2.12(a)(iii) or Section 2.12(b)) shall update and supplement such notice from time to time to the extent necessary so that the information provided or required to be provided in such notice shall be true and correct as of the record date for determining the stockholders entitled to notice of the meeting and as of the date that is fifteen (15) days prior to the meeting or any adjournment or postponement thereof, provided that if the record date for determining the stockholders entitled to vote at the meeting is less than fifteen (15) days prior to the meeting or any adjournment or postponement thereof, the information shall be supplemented and updated as of such later date. Any such update and supplement shall be delivered in writing to the Secretary at the principal executive offices of the Corporation not later than five (5) days after the record date for determining the stockholders entitled to notice of the meeting (in the case of any update or supplement required to be made as of the record date for determining the stockholders entitled to notice of the meeting), not later than ten (10) days prior to the date for the meeting or any adjournment or postponement thereof (in the case of any update or supplement required to be made as of fifteen (15) days prior to the meeting or any adjournment or postponement thereof) and not later than five (5) days after the record date for determining the stockholders entitled to vote at the meeting, but no later than the date prior to the meeting or any adjournment or postponement thereof (in the case of any update and supplement required to be made as of a date less than fifteen (15) days prior the date of the meeting or any adjournment or postponement thereof). The Corporation may require any proposed nominee to furnish such other information as it may reasonably require to determine the eligibility of such proposed nominee to serve as a director of the Corporation and to determine the independence of such director under the Exchange Act and rules and regulations thereunder and applicable stock exchange rules.

(A) The foregoing notice requirements of this Section 2.12(a)(iii) shall be deemed satisfied by a stockholder as to any proposal (other than nominations) if the stockholder has notified the Corporation of such stockholder’s intention to present such proposal at an annual meeting in compliance with Rule 14a-8 (or any successor thereof) of the Exchange Act, and such stockholder has complied with the requirements of such Rule for inclusion of such proposal in a proxy statement prepared by the Corporation to solicit proxies for such annual meeting. Nothing in this Section 2.12(a)(iii) shall be deemed to affect any rights of stockholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange Act.

 

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(iv) Notwithstanding anything in the second sentence of Section 2.12(a)(iii)(A) to the contrary, in the event that the number of directors to be elected to the Board is increased, effective after the time period for which nominations would otherwise be due under Section 2.12(a)(ii), and there is no public announcement naming all of the nominees for director or specifying the size of the increased Board made by the Corporation at least one hundred (100) days prior to the first anniversary of the preceding year’s annual meeting, a stockholder’s notice required by this Section 2.12 shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the tenth day following the day on which a public announcement of such increase is first made by the Corporation.

(b) Special Meetings of Stockholders. Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Corporation’s notice of meeting pursuant to Section 2.3. At any time that the stockholders are not prohibited from filling vacancies or newly created directorships on the Board, nominations of persons for election to the Board may be made at a special meeting of stockholders at which directors are to be elected pursuant to the Corporation’s notice of meeting (a) by or at the direction of the Board or a committee thereof, (b) as provided in the Investor Rights Agreement or (c) provided that the Board has determined that directors shall be elected at such meeting, by any stockholder of the Corporation who is entitled to vote on such election at the meeting, who has complied with the notice procedures set forth in this Section 2.12 and who is a stockholder of record at the time such notice is delivered to the Secretary of the Corporation. In the event the Corporation calls a special meeting of stockholders for the purpose of electing one or more directors to the Board, any such stockholder entitled to vote in such election of directors may nominate a person or persons (as the case may be) for election to such position(s) as specified in the Corporation’s notice of meeting if the stockholder’s notice as required by Section 2.12(a)(ii) is delivered to the Secretary at the principal executive offices of the Corporation not earlier than the close of business on the 120th day prior to such special meeting and not later than the close of business on the later of the 90th day prior to such special meeting or the tenth day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board to be elected at such meeting.

(c) General.

(i) (A) Only persons who are nominated in accordance with the procedures set forth in this Section 2.12 shall be eligible to be elected to serve as directors and only such business shall be conducted at a meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in this Section 2.12. Except as otherwise provided by law, the Certificate of Incorporation or these By-Laws, the chairman of the meeting shall have the power and duty to determine whether a nomination or any business proposed to be brought before the meeting was made in accordance with the procedures set forth in this Section 2.12 and, if any proposed nomination or business is not in compliance with this Section 2.12, to declare that such defective nomination shall be disregarded or that such proposed business shall not be transacted.

(B) Notwithstanding the foregoing provisions of this Section 2.12, if the stockholder (or a qualified representative of the stockholder) does not appear at the annual or special meeting of stockholders of the Corporation to present a nomination or business, such nomination shall be disregarded and such proposed business shall not be transacted, notwithstanding that proxies in respect of such vote may have been received by the Corporation. For purposes of this Section 2.12, to be considered a qualified representative of the stockholder, a person must be a duly authorized officer, manager or partner of such stockholder or must be authorized by a writing executed by such stockholder or an electronic transmission delivered by such stockholder to act for such stockholder as proxy at the meeting of stockholders and such person must produce such writing or electronic transmission, or a reliable reproduction of the writing or electronic transmission, at the meeting of stockholders.

 

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(ii) If authorized by the Board in its sole discretion, and subject to such rules, regulations and procedures as the Board may adopt, stockholders of the Corporation and proxyholders not physically present at a meeting of stockholders of the Corporation may, by means of remote communication participate in a meeting of stockholders of the Corporation and be deemed present in person and vote at a meeting of stockholders of the Corporation whether such meeting is to be held at a designated place or solely by means of remote communication; provided, however, that (i) the Corporation shall implement reasonable measures to verify that each person deemed present and permitted to vote at the meeting by means of remote communication is a stockholder of the Corporation or proxyholder; (ii) the Corporation shall implement reasonable measures to provide such stockholders of the Corporation and proxyholders a reasonable opportunity to participate in the meeting and to vote on matters submitted to the stockholders of the Corporation, including an opportunity to read or hear the proceedings of the meeting substantially concurrently with such proceedings; and (iii) if any stockholder of the Corporation or proxyholder votes or takes other action at the meeting by means of remote communication, a record of such vote or other action shall be maintained by the Corporation.

(iii) For purposes of this Section 2.12, “public announcement” shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service, in a document publicly filed or furnished by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act or otherwise disseminated in a manner constituting “public disclosure” under Regulation FD promulgated by the Securities and Exchange Commission.

(iv) No adjournment or postponement or notice of adjournment or postponement of any meeting shall be deemed to constitute a new notice (or extend any notice time period) of such meeting for purposes of this Section 2.12, and in order for any notification required to be delivered by a stockholder pursuant to this Section 2.12 to be timely, such notification must be delivered within the periods set forth above with respect to the originally scheduled meeting.

(v) Notwithstanding the foregoing provisions of this Section 2.12, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this Section 2.12; provided, however, that, to the fullest extent permitted by law, any references in these By-Laws to the Exchange Act or the rules and regulations promulgated thereunder are not intended to and shall not limit any requirements applicable to nominations or proposals as to any other business to be considered pursuant to this Section 2.12 (including clause (d) of Section 2.12(a)(i) and Section 2.12(b) hereof), and compliance with clause (d) of Section 2.12(a)(i) and Section 2.12(b) shall be the exclusive means for a stockholder to make nominations or submit other business. Nothing in this Section 2.12 shall apply to the right, if any, of the holders of any series of Preferred Stock to elect directors pursuant to any applicable provisions of the Certificate of Incorporation.

(vi) Notwithstanding anything to the contrary contained herein, for as long as the Investor Rights Agreement (as defined in the Certificate of Incorporation) remains in effect with respect to the Parties (as defined in the Certificate of Incorporation) (the “Investor Rights Agreement Parties”), the Investor Rights Agreement Parties (to the extent then subject to the Investor Rights Agreement) shall not be subject to the notice procedures set forth in Section 2.12(a)(ii), Section 2.12(a)(iii) or Section 2.12(b) with respect to any annual or special meeting of stockholders to the extent necessary to effect the transactions and rights set forth in the Investor Rights Agreement.

ARTICLE III

BOARD OF DIRECTORS

Section 3.1 Number; Election; Quorum; Voting. The Board shall consist, subject to the Certificate of Incorporation and the Investor Rights Agreement or any certificate of designation with respect to any series of

 

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Preferred Stock, of such number of directors as shall from time to time be fixed exclusively by resolution adopted by the Board. Directors shall (except as hereinafter provided for the filling of vacancies and newly created directorships and except as otherwise expressly provided in the Certificate of Incorporation or the Investor Rights Agreement) be elected by the holders of a plurality of the votes cast by the holders of shares present in person or represented by proxy at the meeting and entitled to vote on the election of such directors in accordance with the terms of the Certificate of Incorporation the Investor Rights Agreement, as applicable. A majority of the total number of directors then in office shall constitute a quorum for the transaction of business. Except as otherwise provided by law, these By-Laws, by the Certificate of Incorporation or by the Investor Rights Agreement, the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board. Directors need not be stockholders.

Section 3.2 Vacancies. Subject to the Certificate of Incorporation and the Investor Rights Agreement, unless otherwise required by the DGCL or Section 3.4, any newly created directorship on the Board that results from an increase in the number of directors and any vacancy occurring in the Board (whether by death, resignation, removal (including pursuant to the terms of the Certificate of Incorporation), retirement, disqualification or otherwise) shall be filled only by a majority of the directors then in office, although less than a quorum, by any authorized committee of the Board or by a sole remaining director.

Section 3.3 Meetings of the Board. Meetings of the Board shall be held at such place, if any, within or without the State of Delaware as may from time to time be fixed by resolution of the Board or as may be specified in the notice of any meeting. Regular meetings of the Board shall be held at such times as may from time to time be fixed by resolution of the Board and special meetings may be held at any time upon the call of the Chairman of the Board, the Chief Executive Officer, or by a majority of the total number of directors then in office, by written notice, including facsimile, e-mail or other means of electronic transmission, duly served on or sent and delivered to each director in accordance with Section 11.2. Notice of each special meeting of the Board shall be given, as provided in Section 11.2, to each director (i) at least twenty-four (24) hours before the meeting if such notice is oral notice given personally or by telephone or written notice given by hand delivery or by means of a form of electronic transmission and delivery; (ii) at least two (2) days before the meeting if such notice is sent by a nationally recognized overnight delivery service; and (iii) at least five (5) days before the meeting if such notice is sent through the United States mail. If the Secretary shall fail or refuse to give such notice, then the notice may be given by the officer who called the meeting or the directors who requested the meeting. The notice of any meeting need not specify the purposes thereof. A meeting of the Board may be held without notice immediately after the annual meeting of stockholders at the same place, if any, at which such meeting is held. Notice need not be given of regular meetings of the Board held at times fixed by resolution of the Board. Notice of any meeting need not be given to any director who shall attend such meeting (except when the director attends a meeting for the express purpose of objecting at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened), or who shall waive notice thereof, before or after such meeting, in writing (including by electronic transmission).

Section 3.4 Preferred Stock Directors. Notwithstanding the foregoing, whenever the holders of any one or more series of Preferred Stock issued by the Corporation shall have the right, voting separately as a series or separately as a class with one or more such other series, to elect directors at an annual or special meeting of stockholders, the election, term of office, removal, and other features of such directorships shall be governed by the terms of the Certificate of Incorporation (including any certificate of designation relating to any series of Preferred Stock) applicable thereto. The number of directors that may be elected by the holders of any such series of Preferred Stock shall be in addition to the total number of directors fixed by the Board pursuant to the Certificate of Incorporation and these By-Laws. Except as otherwise expressly provided in the terms of such series, the number of directors that may be so elected by the holders of any such series of stock shall be elected for terms expiring at the next annual meeting of stockholders, and vacancies among directors so elected by the separate vote of the holders of any such series of Preferred Stock shall be filled by the affirmative vote of a majority of the remaining directors elected by such series, or, if there are no such remaining directors, by the holders of such series in the same manner in which such series initially elected a director.

 

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Section 3.5 Committees. The Board may from time to time establish one or more committees of the Board to serve at the pleasure of the Board, which shall be comprised of such members of the Board, subject to the Investor Rights Agreement, and have such duties as the Board shall from time to time determine. Any director may belong to any number of committees of the Board. Subject to the Certificate of Incorporation and the Investor Rights Agreement, the Board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board to act at the meeting in the place of any such absent or disqualified member, subject to the Investor Rights Agreement. Subject to the Certificate of Incorporation and the Investor Rights Agreement, unless otherwise provided in the Certificate of Incorporation, these By-Laws or the resolution of the Board designating the committee, a committee may create one or more subcommittees, each subcommittee to consist of one or more members of the committee, and may delegate to a subcommittee any or all of the powers and authority of the committee. Any such committee, to the extent provided in the resolution of the Board establishing such committee, shall have and may exercise all the powers and authority of the Board in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to the following matters: (a) approving or adopting, or recommending to the stockholders, any action or matter (other than the election or removal of directors) expressly required by the DGCL to be submitted to stockholders for approval or (b) adopting, amending or repealing any By-Law of the Corporation. Each committee of the Board may fix its own rules of procedure and shall hold its meetings as provided by such rules, except as may otherwise be provided by a resolution of the Board designating such committee. Unless otherwise provided in such a resolution, the presence of at least a majority of the members of the committee shall be necessary to constitute a quorum unless the committee shall consist of one or two members, in which event one member shall constitute a quorum; and all matters shall be determined by a majority vote of the members present at a meeting of the committee at which a quorum is present. Unless otherwise provided in such a resolution, in the event that a member and that member’s alternate, if alternates are designated by the Board, of such committee is or are absent or disqualified, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board to act at the meeting in place of any such absent or disqualified member.

Section 3.6 Consent in Lieu of Meeting. Unless otherwise restricted by the Certificate of Incorporation or these By-Laws, any action required or permitted to be taken at any meeting of the Board or of any committee thereof may be taken without a meeting if all members of the Board or committee, as the case may be, consent thereto in writing (including by electronic transmission), and the writing or writings (including any electronic transmission or transmissions) are filed with the minutes of proceedings of the Board.

Section 3.7 Telephonic Meetings. The members of the Board or any committee thereof may participate in a meeting of such Board or committee, as the case may be, by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this subsection shall constitute presence in person at such a meeting.

Section 3.8 Compensation. The Board may establish policies for the compensation of directors and for the reimbursement of the expenses of directors, in each case, in connection with services provided by directors to the Corporation.

ARTICLE IV

OFFICERS

Section 4.1 Officers. The Board shall elect officers of the Corporation, including a Chief Executive Officer, a President and a Secretary. The Board may also from time to time elect such other officers as it may deem

 

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proper or may delegate to any elected officer of the Corporation the power to appoint and remove any such other officers and to prescribe their respective terms of office, authorities and duties. Any Vice President may be designated Executive, Senior or Corporate, or may be given such other designation or combination of designations as the Board or the Chief Executive Officer may determine. Any two or more offices may be held by the same person. The Board may also elect or appoint a Chairman of the Board, who may or may not also be an officer of the Corporation. The Board may elect or appoint co-Chairmen of the Board, co-Presidents or co-Chief Executive Officers and, in such case, references in these By-Laws to the Chairman of the Board, the President or the Chief Executive Officer shall refer to either such co-Chairman of the Board, co-President or co-Chief Executive Officer, as the case may be.

Section 4.2 Term; Removal. All officers of the Corporation elected by the Board shall hold office for such terms as may be determined by the Board or, except with respect to his or her own office, the Chief Executive Officer, or until their respective successors are chosen and qualified or until his or her earlier resignation or removal. Any officer may be removed from office at any time either with or without cause by the Board, or, in the case of appointed officers, by the Chief Executive Officer or any elected officer upon whom such power of removal shall have been conferred by the Board.

Section 4.3 Powers. Each of the officers of the Corporation elected by the Board or appointed by an officer in accordance with these By-Laws shall have the powers and duties prescribed by law, by these By-Laws or by the Board and, in the case of appointed officers, the powers and duties prescribed by the appointing officer, and, unless otherwise prescribed by these By-Laws or by the Board or such appointing officer, shall have such further powers and duties as ordinarily pertain to that office.

Section 4.4 Delegation. Unless otherwise provided in these By-Laws, in the absence or disability of any officer of the Corporation, the Board or the Chief Executive Officer may, during such period, delegate such officer’s powers and duties to any other officer or to any director and the person to whom such powers and duties are delegated shall, for the time being, hold such office.

ARTICLE V

INDEMNIFICATION AND ADVANCEMENT OF EXPENSES

Section 5.1 Right to Indemnification. Each person who was or is made a party or is threatened to be made a party to or is otherwise involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative or any other type whatsoever (hereinafter a “proceeding”), by reason of the fact that he or she is or was a director or an officer of the Corporation or, while a director or officer of the Corporation, is or was serving at the request of the Corporation as a director, manager, officer, employee, agent or trustee of another corporation or of a partnership, limited liability company, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (hereinafter an “indemnitee”), whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee, agent or trustee or in any other capacity while serving as a director, officer, employee, agent or trustee, shall be indemnified and held harmless by the Corporation to the fullest extent permitted by Delaware law, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than such law permitted the Corporation to provide prior to such amendment), against all expense, liability and loss (including attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such indemnitee in connection therewith; except as provided in Section 5.3 with respect to proceedings to enforce rights to indemnification or advancement of expenses or with respect to any compulsory counterclaim brought by such indemnitee, the Corporation shall indemnify any such indemnitee in connection with a proceeding (or part thereof) initiated by such indemnitee only if such proceeding (or part thereof) was authorized by the Board.

Section 5.2 Right to Advancement of Expenses. In addition to the right to indemnification conferred in Section 5.1, an indemnitee shall also have the right to be paid by the Corporation the expenses (including

 

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attorney’s fees) incurred in appearing at, participating in or defending any such proceeding in advance of its final disposition or in connection with a proceeding brought to establish or enforce a right to indemnification or advancement of expenses under this Article V (which shall be governed by Section 5.3) (hereinafter an “advancement of expenses”); provided, however, that, if (x) the DGCL requires or (y) in the case of an advance made in a proceeding brought to establish or enforce a right to indemnification or advancement, an advancement of expenses incurred by an indemnitee in his or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such indemnitee, including, without limitation, service to an employee benefit plan) shall be made solely upon delivery to the Corporation of an undertaking (hereinafter an “undertaking”), by or on behalf of such indemnitee, to repay all amounts so advanced if it shall ultimately be determined after final judicial decision from which there is no further right to appeal (hereinafter a “final adjudication”) that such indemnitee is not entitled to indemnification under this Article V or otherwise.

Section 5.3 Right of Indemnitee to Bring Suit. If a claim under Section 5.1 or Section 5.2 is not paid in full by the Corporation within (i) sixty (60) days after a written claim for indemnification has been received by the Corporation or (ii) twenty (20) days after a claim for an advancement of expenses has been received by the Corporation, the indemnitee may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim or to obtain advancement of expenses, as applicable. To the fullest extent permitted by law, if the indemnitee is successful in whole or in part in any such suit, or in a suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In (i) any suit brought by the indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the indemnitee to enforce a right to an advancement of expenses) it shall be a defense of the Corporation that, and (ii) any suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the Corporation shall be entitled to recover such expenses upon a final adjudication that, the indemnitee has not met any applicable standard for indemnification set forth in the DGCL. Neither the failure of the Corporation (including by its directors who are not parties to such action, a committee of such directors, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such suit that indemnification of the indemnitee is proper in the circumstances because the indemnitee has met the applicable standard of conduct set forth in the DGCL, nor an actual determination by the Corporation (including by its directors who are not parties to such action, a committee of such directors, independent legal counsel, or its stockholders) that the indemnitee has not met such applicable standard of conduct, shall create a presumption that the indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the indemnitee, be a defense to such suit. In any suit brought by the indemnitee to enforce a right to indemnification or to an advancement of expenses hereunder, or brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the burden of proving that the indemnitee is not entitled to be indemnified, or to such advancement of expenses, under this Article V or otherwise shall be on the Corporation.

Section 5.4 Non-Exclusivity of Rights; Indemnification by Other Persons.

(a) The provision of indemnification to or the advancement of expenses and costs to any indemnitee under this Article V, or the entitlement of any indemnitee to indemnification or advancement of expenses and costs under this Article V, shall not limit or restrict in any way the power of the Corporation to indemnify or advance expenses and costs to such indemnitee in any other way permitted by law or be deemed exclusive of, or invalidate, any right to which any indemnitee seeking indemnification or advancement of expenses and costs may be entitled under any law, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in such indemnitee’s capacity as an officer, director, employee or agent of the Corporation and as to action in any other capacity.

(b) Given that certain jointly indemnifiable claims (as defined below) may arise due to the service of the indemnitee as a director and/or officer of the Corporation or as a director, officer, employee, agent or trustee of another corporation or of a partnership, joint venture, trust or other enterprise at the request of the indemnitee-related entities (as defined below), the Corporation shall be fully and primarily responsible for

 

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the payment to the indemnitee in respect of indemnification or advancement of expenses in connection with any such jointly indemnifiable claims, pursuant to and in accordance with the terms of this Article V, irrespective of any right of recovery the indemnitee may have from the indemnitee-related entities. Under no circumstance shall the Corporation be entitled to any right of subrogation against or contribution by the indemnitee-related entities and no right of advancement, indemnification or recovery the indemnitee may have from the indemnitee-related entities shall reduce or otherwise alter the rights of the indemnitee or the obligations of the Corporation under this Article V. In the event that any of the indemnitee-related entities shall make any payment to the indemnitee in respect of indemnification or advancement of expenses with respect to any jointly indemnifiable claim, the indemnitee-related entity making such payment shall be subrogated to the extent of such payment to all of the rights of recovery of the indemnitee against the Corporation, and the indemnitee shall execute all papers reasonably required and shall do all things that may be reasonably necessary to secure such rights, including the execution of such documents as may be necessary to enable the indemnitee-related entities effectively to bring suit to enforce such rights. Each of the indemnitee- related entities shall be third-party beneficiaries with respect to this Section 5.4(b), entitled to enforce this Section 5.4(b). For purposes of this Section 5.4(b), the following terms shall have the following meanings:

(i) The term “indemnitee-related entities” means any corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise (other than the Corporation or any other corporation, limited liability company, partnership, joint venture, trust, employee benefit plan or other enterprise for which the indemnitee has agreed, on behalf of the Corporation or at the Corporation’s request, to serve as a director, officer, employee or agent and which service is covered by the indemnity described herein) from whom an indemnitee may be entitled to indemnification or advancement of expenses with respect to which, in whole or in part, the Corporation may also have an indemnification or advancement obligation.

(ii) The term “jointly indemnifiable claims” shall be broadly construed and shall include, without limitation, any action, suit or proceeding for which the indemnitee shall be entitled to indemnification or advancement of expenses from both the indemnitee- related entities and the Corporation pursuant to applicable law, any agreement, certificate of incorporation, by-laws, partnership agreement, operating agreement, certificate of formation, certificate of limited partnership or comparable organizational documents of the Corporation or the indemnitee-related entities, as applicable.

Section 5.5 Contract Rights. The rights conferred upon indemnitees in this Article V shall be contract rights and such rights shall continue as to an indemnitee who has ceased to be a director or officer and shall inure to the benefit of the indemnitee’s heirs, executors and administrators. Any amendment, alteration or repeal of this Article V that adversely affects any right of an indemnitee or its successors shall be prospective only and shall not limit, eliminate, or impair any such right with respect to any proceeding involving any occurrence or alleged occurrence of any action or omission to act that took place prior to such amendment or repeal.

Section 5.6 Insurance. The Corporation may purchase and maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the DGCL.

Section 5.7 Employees and Agents. The Corporation may, to the extent authorized from time to time by the Board, grant rights to indemnification and to the advancement of expenses to any employee or agent of the Corporation to the fullest extent of the provisions of this Article V with respect to the indemnification and advancement of expenses of directors and officers of the Corporation.

 

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ARTICLE VI

CORPORATE BOOKS

Section 6.1 Corporate Books. The books of the Corporation may be kept inside or outside of the State of Delaware at such place or places as the Board may from time to time determine.

ARTICLE VII

CHECKS, NOTES, PROXIES, ETC.

Section 7.1 Checks, Notes, Proxies, Etc. All checks and drafts on the Corporation’s bank accounts and all bills of exchange and promissory notes, and all acceptances, obligations and other instruments for the payment of money, shall be signed by such officer or officers or agent or agents as shall be authorized from time to time by the Board or such officer or officers who may be delegated such authority. Proxies to vote and consents with respect to securities of other corporations or other entities owned by or standing in the name of the Corporation may be executed and delivered from time to time on behalf of the Corporation by the Chairman of the Board, the Chief Executive Officer, or by such officers as the Chairman of the Board, the Chief Executive Officer or the Board may from time to time determine.

ARTICLE VIII

SHARES AND OTHER SECURITIES OF THE CORPORATION

Section 8.1 Certificated and Uncertificated Shares. The shares of the Corporation may be certificated or uncertificated, subject to the sole discretion of the Board and the requirements of the DGCL.

Section 8.2 Signatures. Each certificate representing capital stock of the Corporation shall be signed by or in the name of the Corporation by any two authorized officers of the Corporation, which authorized officers shall include, without limitation, the Chairman of the Board, the Chief Executive Officer, the President, any Vice President, the Chief Financial Officer, the Secretary or any Assistant Secretary of the Corporation. Any or all of the signatures on the certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, such certificate may be issued by the Corporation with the same effect as if such person were such officer, transfer agent or registrar on the date of issue.

Section 8.3 Lost, Destroyed or Wrongfully Taken Certificates.

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

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

 

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Section 8.4 Transfer of Stock.

(a) Transfers of record of shares of stock of the Corporation shall be made only upon the books administered by or on behalf of the Corporation and only upon proper transfer instructions, including by Electronic Transmission, pursuant to the direction of the registered holder thereof, such person’s attorney lawfully constituted in writing, or from an individual presenting proper evidence of succession, assignment or authority to transfer the shares of stock; or, in the case of stock represented by certificate(s) upon delivery of a properly endorsed certificate(s) for a like number of shares or accompanied by a duly executed stock transfer power.

(b) The Corporation shall have power to enter into and perform any agreement with any number of stockholders of any one or more classes of stock of the corporation to restrict the transfer of shares of stock of the Corporation of any one or more classes owned by such stockholders in any manner not prohibited by the DGCL.

Section 8.5 Registered Stockholders. Before due presentment for registration of transfer of a certificate representing shares of the Corporation or of an instruction requesting registration of transfer of uncertificated shares, the Corporation may treat the registered owner as the person exclusively entitled to inspect for any proper purpose the stock ledger and the other books and records of the Corporation, vote such shares, receive dividends or notifications with respect to such shares and otherwise exercise all the rights and powers of the owner of such shares, except that a person who is the beneficial owner of such shares (if held in a voting trust or by a nominee on behalf of such person) may, upon providing documentary evidence of beneficial ownership of such shares and satisfying such other conditions as are provided under applicable law, may also so inspect the books and records of the Corporation.

Section 8.6 Regulations. The Board shall have power and authority to make such additional rules and regulations, subject to any applicable requirement of law, as the Board may deem necessary and appropriate with respect to the issue, transfer or registration of transfer of shares of stock or certificates representing shares. The Board may appoint one or more transfer agents or registrars and may require for the validity thereof that certificates representing shares bear the signature of any transfer agent or registrar so appointed.

ARTICLE IX

FISCAL YEAR

Section 9.1 Fiscal Year. The fiscal year of the Corporation shall end on the Sunday of each calendar year that is closest to December 31, unless otherwise determined by resolution of the Board.

ARTICLE X

CORPORATE SEAL

Section 10.1 Corporate Seal. The corporate seal shall have inscribed thereon the name of the Corporation. In lieu of the corporate seal, when so authorized by the Board or a duly empowered committee thereof, a facsimile thereof may be impressed or affixed or reproduced.

ARTICLE XI

GENERAL PROVISIONS

Section 11.1 Notice. Whenever notice is required to be given by law or under any provision of the Certificate of Incorporation or these By-Laws, notice of any meeting need not be given to any person who shall attend such meeting (except when the person attends a meeting for the express purpose of objecting, at the

 

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beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened), or who shall waive notice thereof, before or after such meeting, in writing (including by electronic transmission).

Section 11.2 Means of Giving Notice. Except as otherwise set forth in any applicable law or any provision of the Certificate of Incorporation or these By-Laws, notice of any meeting shall be given by the following means:

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

(b) Electronic Transmission. “Electronic transmission” means any form of communication, not directly involving the physical transmission of paper, that creates a record that may be retained, retrieved and reviewed by a recipient thereof, and that may be directly reproduced in paper form by such a recipient through an automated process.

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

(d) Exceptions to Notice Requirements.

(i) Whenever notice is required to be given, under the DGCL, the Certificate of Incorporation or these By-Laws, to any person with whom communication is unlawful, the giving of such notice to such person shall not be required and there shall be no duty to apply to any governmental authority or agency for a license or permit to give such notice to such person. Any action or meeting that shall be taken or held without notice to any such person with whom communication is unlawful shall have the same force and effect as if such notice had been duly given. In the event that the action taken by the Corporation is such as to require the filing of a certificate with the Secretary of State of Delaware, the certificate shall state, if such is the fact and if notice is required, that notice was given to all persons entitled to receive notice except such persons with whom communication is unlawful.

(ii) Whenever notice is required to be given by the Corporation, under any provision of the DGCL, the Certificate of Incorporation or these By-Laws, to any stockholder to whom (x) notice of two consecutive annual meetings of stockholders and all notices of stockholder meetings or of the taking of action by written consent of stockholders without a meeting to such stockholder during the

 

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

Section 11.3 Headings. Section headings in these By-Laws are for convenience of reference only and shall not be given any substantive effect in limiting or otherwise construing any provision herein.

Section 11.4 Conflicts. In the event that any provision of these By-Laws is or becomes inconsistent with any provision of the Certificate of Incorporation or the DGCL, the provision of these By-laws shall not be given any effect to the extent of such inconsistency but shall otherwise be given full force and effect.

ARTICLE XII

AMENDMENTS

Section 12.1 Amendments. Subject to the terms of the Investor Rights Agreement, these By-Laws may be made, amended, altered, changed, added to or repealed as set forth in the Certificate of Incorporation.

 

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EXHIBIT C

FOUNDER HOLDERS FORFEITURE AGREEMENT

(See attached)

[Exhibit C]

 

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EXHIBIT C

FOUNDER HOLDERS FORFEITURE AGREEMENT

[●], 2020

dMY Technology Group, Inc.

1180 North Town Center Drive, Suite 100

Las Vegas NV 89144

Rush Street Interactive GP, LLC

900 N. Michigan Avenue, Suite 1600

Chicago, Illinois 60611

Attention: Neil Bluhm, Greg Carlin

Email: neilb@lambll.com, gcarlin@rushst.com

Re: Forfeiture of Founder Holders’ Buyer Class A Common Stock

Ladies and Gentlemen:

Reference is made to that certain Business Combination Agreement, dated as of July 27, 2020, by and among dMY Technology Group, Inc., a Delaware corporation (the “Buyer”), Rush Street Interactive, LP, a Delaware limited partnership (the “Company”), dMY Sponsor, LLC, a Delaware limited liability company (the “Sponsor”), the sellers set forth on the signatures pages thereto (collectively, the “Sellers” and each, a “Seller”) and Rush Street Interactive GP, LLC, in its capacity as the Sellers’ Representative thereunder (in such capacity, the “Sellers’ Representative”), as amended by that certain Amended & Restated Business Combination Agreement, dated as of October 9, 2020, by and among the Buyer, the Company, the Sponsor, the Sellers and the Sellers’ Representative (as may be further amended, restated, amended and restated, modified, or supplemented from to time, the “Combination Agreement”). Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the Combination Agreement.

In order to induce the Company, the Buyer and the Sellers to consummate the transactions contemplated by the Combination Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Buyer, Sponsor, Darla Anderson (“Anderson”), Francesca Luthi (“Luthi”), Charles E. Wert (“Wert” and together with Sponsor, Anderson and Luthi, the “Founder Holders”), and the Sellers’ Representative hereby agree to enter into this letter agreement (this “Letter Agreement”), and hereby agree as follows:

 

  1.

Forfeiture by Founder Holders.

(a) On the date on which the Company Transaction Expenses are finally determined in accordance with Section 2.3 of the Combination Agreement, up to one million two hundred five thousand nine hundred thirty-seven (1,205,937) shares of Buyer Class A Common Stock held by, or beneficially owned by, the Founder Holders, consisting of two hundred fifty-four thousand three hundred sixty-one (254,361) Founder Holders Earnout Shares and nine hundred fifty-one thousand five hundred seventy-six (951,576) shares of Buyer Class A Common Stock that are not Founder Holders Earnout Shares (collectively, the “Founder Holders Forfeiture Shares” and each Founder Holder’s portion of the Founder Holders Forfeiture Shares (determined on a Pro Rata Basis), the “Applicable Founder Holder’s Forfeiture Shares”), shall be automatically forfeited by the Founder Holders to the Buyer for no consideration and automatically cancelled in accordance with Section 1(b) and Section 2.

(b) Notwithstanding anything herein to the contrary, (i) any Founder Holders Forfeiture Shares forfeited pursuant to Section 2 shall be forfeited among the Founder Holders on a Pro Rata Basis, and (ii) with respect to a given Founder Holder, (x) 21.09 of the Founder Holders Forfeiture Shares forfeited pursuant to

 

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Section 2 shall be Founder Holders Earnout Shares and (y) the remainder of the Founder Holders Forfeiture Shares forfeited pursuant to Section 2 shall be shares of Buyer Class A Common Stock. Any Founder Holders Forfeiture Shares forfeited pursuant to this Section 1(b) shall be cancelled for no consideration and any certificates representing such Founder Holders Forfeiture Shares so forfeited shall be cancelled; provided, that to the extent any such certificate represents shares in addition to a Founder Holders Forfeiture Share, which shares are not forfeited pursuant to the terms hereof, the Company shall reissue such certificate with respect to the shares not so forfeited.

2. Calculation of Forfeited Founder Holders Forfeiture Shares. The number of Founder Holders Forfeiture Shares to be forfeited by the Founder Holders in accordance with Section 1(b) shall be calculated as follows:

(a) if the sum of (i) Aggregate Available Cash as determined as of 11:59 p.m. New York time on the Post-Closing Financing End Date plus (ii) the amount, if any, by which Company Transaction Expenses exceeded the Company Transaction Expense Cap (as finally determined in accordance with Section 2.3 of the Combination Agreement) (such sum, the “Total Measureable Cash Amount”) is less than or equal to one hundred sixty million dollars ($160,000,000), then one hundred percent (100%) of the Founder Holders Forfeiture Shares shall be automatically forfeited by the Founder Holders (on a Pro Rata Basis in accordance with Section 1(b)) to the Buyer for no consideration and canceled;

(b) if the Total Measureable Cash Amount is greater than one hundred sixty million dollars ($160,000,000), but less than two hundred forty-five million dollars ($245,000,000), then that number of Founder Holders Forfeiture Shares equal to (i) the Total Measureable Cash Forfeiture Percentage multiplied by (ii) the total number of Founder Holders Forfeiture Shares shall be automatically forfeited by the Founder Holders (on a Pro Rata Basis in accordance with Section 1(b)) to the Buyer for no consideration and canceled; and

(c) if the Total Measureable Cash Amount is equal to or greater than two hundred forty-five million dollars ($245,000,000), then none of the Founder Holders Forfeiture Shares shall be forfeited by the Founder Holders.

3. Definition of “Total Measurable Cash Forfeiture Percentage.” For purposes of this Letter Agreement, “Total Measureable Cash Forfeiture Percentage” means quotient of, represented as a percentage, (i) the difference of (x) two hundred forty-five million dollars ($245,000,000) minus (y) the Total Measureable Cash Amount divided by (ii) eighty-five million dollars ($85,000,000); provided that in no event may the Total Measureable Cash Forfeiture Percentage be less than zero percent (0%) or exceed one hundred percent (100%).

4. Transfer. Prior to the final determination of the number of Founder Holders Forfeiture Shares to be forfeited in accordance with this Agreement (if any), the Founder Holders shall not, directly or indirectly, transfer or otherwise dispose of any of the Founder Holders Forfeiture Shares, other than as may be expressly permitted by the Investor Rights Agreement and the Buyer A&R Certificate of Incorporation.

5. Founder Holder Representations. Each Founder Holder (as to itself and not any other Founder Holder), severally and not jointly, hereby represents and warrants to the Buyer and the Sellers’ Representative, as of the date hereof, that such Founder Holder owns, and holds of record, all of such Founder Holder’s Applicable Founder Holder’s Forfeiture Shares, free and clear of all Liens, other than Securities Liens and such Liens and other obligations imposed by applicable securities Laws, the Combination Agreement, the Buyer A&R Certificate of Incorporation, the Buyer A&R Bylaws and the Investor Rights Agreement.

6. Assignment. No party hereto may assign either this Letter Agreement or any of its rights, interests, or obligations hereunder without the prior written consent of each of the other parties hereto. Any purported assignment in violation of this Section 6 shall be void and ineffectual and shall not operate to transfer or assign any interest or title to the purported assignee. This Letter Agreement shall be binding on the Buyer and the Founder Holders and their respective successors and assigns.

 

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7. Notices. Any notice, consent, or request to be given in connection with any of the terms or provisions of this Letter Agreement shall be given to the Buyer and the Sellers’ Representative in accordance with Section 11.4 of the Combination Agreement, and to the Founder Holders in accordance with the notice information set forth on such Founder Holder’s signature page hereto; in each case, unless a party otherwise specifies a different address in a writing delivered to the other parties hereto.

8. Amendments. No amendment of any provision of this Letter Agreement shall be valid unless the same shall be in writing and signed by all of the parties hereto. No waiver of any provision or condition of this Letter Agreement shall be valid unless the same shall be in writing and signed by the party against which such waiver is to be enforced. No waiver by any party of any default, breach of representation or warranty or breach of covenant hereunder, whether intentional or not, shall be deemed to extend to any other, prior or subsequent default or breach or affect in any way any rights arising by virtue of any other, prior or subsequent such occurrence.

9. Miscellaneous. Section 11.2 (Waiver of Remedies; Survival of Representations and Warranties), Section 11.8 (Entire Agreement), Section 11.9 (Counterparts; Electronic Delivery), and Section 11.10 (Governing Law; Waiver of Jury Trial; Jurisdiction) of the Combination Agreement are hereby incorporated into this Letter Agreement, mutatis mutandis, as though set out in their entirety in this Section 9.

[Signature Pages Follow]

 

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IN WITNESS WHEREOF, the undersigned has caused this Letter Agreement to be duly executed as of the date first above written.

 

BUYER:
DMY TECHNOLOGY GROUP, INC.
By:    
Name:  
Title:  

[Signature Page to Founder Holders Forfeiture Agreement]

 

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IN WITNESS WHEREOF, the undersigned has caused this Letter Agreement to be duly executed as of the date first above written.

 

SELLERS’ REPRESENTATIVE:
RUSH STREET INTERACTIVE GP, LLC
By:    
Name:  
Title:  

[Signature Page to Founder Holders Forfeiture Agreement]

 

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IN WITNESS WHEREOF, the undersigned has caused this Letter Agreement to be duly executed as of the date first above written.

 

FOUNDER HOLDER:
DMY SPONSOR, LLC
By:    
Name:  
Title:  

 

NOTICE INFORMATION:
Address:    
   
   
Attention:    
Email:    

[Signature Page to Founder Holders Forfeiture Agreement]

 

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IN WITNESS WHEREOF, the undersigned has caused this Letter Agreement to be duly executed as of the date first above written.

 

FOUNDER HOLDER:
   
Name:   Darla Anderson

 

NOTICE INFORMATION:
Address:    
   
   
Email:    

[Signature Page to Founder Holders Forfeiture Agreement]

 

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IN WITNESS WHEREOF, the undersigned has caused this Letter Agreement to be duly executed as of the date first above written.

 

FOUNDER HOLDER:
   
Name:   Francesca Luthi

 

NOTICE INFORMATION:
Address:    
   
   
Email:    

[Signature Page to Founder Holders Forfeiture Agreement]

 

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IN WITNESS WHEREOF, the undersigned has caused this Letter Agreement to be duly executed as of the date first above written.

 

FOUNDER HOLDER:
   
Name:   Charles E. Wert

 

NOTICE INFORMATION:
Address:    
   
   
Email:    

[Signature Page to Founder Holders Forfeiture Agreement]

 

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ACKNOWLEDGED AND AGREED:
 
Niccolo de Masi

[Signature Page to Founder Holders Forfeiture Agreement]

 

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ACKNOWLEDGED AND AGREED:
 
Harry You

[Signature Page to Founder Holders Forfeiture Agreement]

 

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EXHIBIT D

COMPANY A&R LIMITED PARTNERSHIP AGREEMENT

(See attached)

 

[Exhibit D]

 

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EXHIBIT D

AMENDED AND RESTATED

AGREEMENT OF LIMITED PARTNERSHIP

OF

RUSH STREET INTERACTIVE, LP

a Delaware limited partnership

Dated as of [], 2020

 

 

THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR ANY OTHER APPLICABLE SECURITIES LAWS AND ARE BEING SOLD IN RELIANCE UPON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH LAWS. SUCH SECURITIES MUST BE ACQUIRED FOR INVESTMENT ONLY AND MAY NOT BE OFFERED FOR SALE, PLEDGED, HYPOTHECATED, SOLD, ASSIGNED OR TRANSFERRED AT ANY TIME EXCEPT IN COMPLIANCE WITH (I) THE SECURITIES ACT, ANY APPLICABLE STATE SECURITIES LAWS AND ANY OTHER APPLICABLE SECURITIES LAWS; AND (II) THE TERMS AND CONDITIONS OF THIS AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP IN THE ABSENCE OF SUCH REGISTRATION, UNLESS THE TRANSFEROR DELIVERS TO THE PARTNERSHIP AN OPINION OF COUNSEL SATISFACTORY TO THE PARTNERSHIP, TO THE EFFECT THAT THE PROPOSED SALE, TRANSFER OR OTHER DISPOSITION MAY BE EFFECTED WITHOUT REGISTRATION UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES OR “BLUE SKY” LAWS.

 

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TABLE OF CONTENTS

 

ARTICLE I DEFINED TERMS

     A-162  

Section 1.1

   Definitions      A-162  

Section 1.2

   Interpretation      A-173  

ARTICLE II GENERAL PROVISIONS

     A-174  

Section 2.1

   Formation      A-174  

Section 2.2

   Name      A-174  

Section 2.3

   Principal Place of Business; Other Places of Business      A-174  

Section 2.4

   Designated Agent for Service of Process      A-174  

Section 2.5

   Term      A-174  

Section 2.6

   No Concerted Action      A-174  

Section 2.7

   Business Purpose      A-175  

Section 2.8

   Powers      A-175  

Section 2.9

   Certificates; Filings      A-175  

Section 2.10

   Representations and Warranties by the Partners      A-175  

Section 2.11

   Gaming Laws      A-176  

Section 2.12

   References to Certain Equity Securities      A-176  

ARTICLE III CLASSES OF PARTNERSHIP INTERESTS; CAPITAL CONTRIBUTIONS

     A-176  

Section 3.1

   Classes of Partnership Interests; Capital Contributions of the Partners      A-176  

Section 3.2

   Issuances of Additional Partnership Interests      A-177  

Section 3.3

   Additional Funds and Capital Contributions      A-177  

Section 3.4

   Issuances; Repurchases and Redemptions; Recapitalizations.      A-178  

Section 3.5

   No Interest; No Return      A-180  

Section 3.6

   Capital Accounts.      A-180  

ARTICLE IV DISTRIBUTIONS

     A-181  

Section 4.1

   Distributions      A-181  

Section 4.2

   Tax Distributions      A-181  

Section 4.3

   Distributions in Kind      A-181  

Section 4.4

   Distributions to Reflect Additional Partnership Units      A-181  

Section 4.5

   Restricted Distributions      A-181  

Section 4.6

   Use of Distributions      A-182  

Section 4.7

   Earnout Company Units      A-182  

ARTICLE V ALLOCATIONS

     A-182  

Section 5.1

   General Allocations      A-182  

Section 5.2

   Additional Allocation Provisions      A-182  

Section 5.3

   Tax Allocations      A-184  

Section 5.4

   Other Allocation Rules      A-184  

Section 5.5

   Earnout Company Units      A-185  

ARTICLE VI OPERATIONS

     A-185  

Section 6.1

   Management      A-185  

Section 6.2

   Compensation and Advances      A-188  

Section 6.3

   Outside Activities      A-188  

Section 6.4

   Transactions with Affiliates      A-189  

Section 6.5

   Liability of Partners; Fiduciary and Other Duties; Indemnification      A-189  

Section 6.6

   Indemnification      A-190  

 

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ARTICLE VII RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS

     A-192  

Section 7.1

   Return of Capital      A-192  

Section 7.2

   Rights of Limited Partners Relating to the Partnership      A-192  

ARTICLE VIII BOOKS AND RECORDS

     A-192  

Section 8.1

   Books and Records      A-192  

Section 8.2

   Inspection      A-192  

ARTICLE IX TAX MATTERS

     A-192  

Section 9.1

   Preparation of Tax Returns      A-192  

Section 9.2

   Tax Elections      A-193  

Section 9.3

   Partnership Representative.      A-193  

Section 9.4

   Withholding Tax Indemnification      A-194  

ARTICLE X PARTNER TRANSFERS AND WITHDRAWALS

     A-195  

Section 10.1

   Transfer      A-195  

Section 10.2

   Transfer of General Partner’s Partnership Interest      A-195  

Section 10.3

   Limited Partners’ Rights to Transfer      A-195  

Section 10.4

   Substituted Limited Partners      A-196  

Section 10.5

   Assignees      A-197  

Section 10.6

   General Provisions      A-197  

ARTICLE XI ADMISSION OF PARTNERS

     A-198  

Section 11.1

   Admission of Successor General Partner      A-198  

Section 11.2

   Partners; Admission of Additional Limited Partners      A-199  

Section 11.3

   Limit on Number of Partners      A-199  

Section 11.4

   Admission      A-200  

ARTICLE XII DISSOLUTION, LIQUIDATION AND TERMINATION

     A-200  

Section 12.1

   No Dissolution      A-200  

Section 12.2

   Events Causing Dissolution      A-200  

Section 12.3

   Distribution upon Dissolution      A-200  

Section 12.4

   Rights of Holders      A-201  

Section 12.5

   Termination      A-201  

Section 12.6

   Reasonable Time for Winding-Up      A-201  

ARTICLE XIII AMENDMENTS; MEETINGS

     A-201  

Section 13.1

   Amendments      A-201  

Section 13.2

   Procedures for Meetings and Actions of the Partners      A-202  

ARTICLE XIV EXCHANGE RIGHTS

     A-203  

ARTICLE XV MISCELLANEOUS

     A-207  

Section 15.1

   Partnership Counsel      A-207  

Section 15.2

   Appointment of General Partner as Attorney-in-Fact      A-207  

Section 15.3

   Arbitration      A-208  

Section 15.4

   Accounting and Fiscal Year      A-209  

Section 15.5

   Entire Agreement      A-209  

Section 15.6

   Further Assurances      A-209  

Section 15.7

   Notices      A-209  

Section 15.8

   Governing Law      A-210  

Section 15.9

   Construction      A-210  

 

A-160


Section 15.10

   Binding Effect      A-210  

Section 15.11

   Severability      A-210  

Section 15.12

   Confidentiality      A-210  

Section 15.13

   Consent to Use of Name      A-212  

Section 15.14

   Consent by Spouse      A-212  

Section 15.15

   Counterparts      A-212  

Section 15.16

   Survival      A-212  

Section 15.17

   Anti-Money Laundering Representations and Undertakings      A-212  

Section 15.18

   Third Party Beneficiary      A-212  

Schedule I: Equity

Ownership Exhibit A: Capital Contributions

Exhibit B: Notice of Redemption

Exhibit C: Consent by Spouse

Exhibit D: Anti-Money Laundering Representations and Undertakings

 

A-161


AMENDED AND RESTATED AGREEMENT OF

LIMITED PARTNERSHIP OF RUSH STREET INTERACTIVE, LP

This Amended and Restated Agreement of Limited Partnership of Rush Street Interactive, LP (the “Partnership”), dated as of [●], 2020 is entered into by and among Rush Street Interactive GP, LLC, a Delaware limited liability company (in its capacity as such, the “Predecessor General Partner”), Rush Street Interactive, Inc., a Delaware corporation (formerly known as dMY Technology Group, Inc.) (“Pubco”), RSI ASLP, Inc., a Delaware corporation and direct, wholly-owned subsidiary of Pubco (in its capacity as a Limited Partner, the “Special Limited Partner”), and RSI GP LLC, a Delaware limited liability company (in its capacity as the General Partner, the “General Partner”), and the Limited Partners (as defined herein).

WHEREAS, the Partnership was formed as a limited partnership pursuant to the Delaware Revised Uniform Limited Partnership Act, 6 Del. C. Section 17-101, et seq. (as it may be amended from time to time, and any successor to such statute, the “Act”), by the filing of a Certificate of Limited Partnership of the Partnership in the Office of the Secretary of State of the State of Delaware on December 19, 2019 (the “Formation Date”);

WHEREAS, the Predecessor General Partner and the Original Limited Partners (as defined herein) entered into that certain Agreement of Limited Partnership of the Partnership, dated as of December 19, 2019 (the “Existing LPA”);

WHEREAS, in connection with a series of transactions effected pursuant to that certain Business Combination Agreement, dated as of July 27, 2020, by and among the Partnership, the Limited Partners, Pubco, and the other parties thereto, as amended and restated by the parties thereto by that certain Amended & Restated Business Combination Agreement, dated as of October 9, 2020 (as may be further amended, restated, amended and restated, modified, supplemented or waived from time to time in accordance with its terms, the “Business Combination Agreement”) (i) the General Partner was admitted to the Partnership as the “General Partner” and (ii) the Predecessor General Partner withdrew from the Partnership as general partner; and

WHEREAS, the Special Limited Partner (in its capacity as a Limited Partner), the General Partner (in its capacity as the General Partner) and the Original Limited Partners (as defined herein) now desire to amend and restate the Original Agreement to read in its entirety as set forth herein.

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

ARTICLE I

DEFINED TERMS

Section 1.1 Definitions. The following definitions shall be for all purposes, unless otherwise clearly indicated to the contrary, applied to the terms used in this Agreement:

Additional Limited Partner” means a Person who is admitted to the Partnership as a Limited Partner pursuant to the Act and Section 11.2, who is shown as such on the books and records of the Partnership, and who has not ceased to be a Limited Partner pursuant to the Act and this Agreement.

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

(a) credit to such Capital Account any amount that such Partner is obligated to restore under Regulations Section 1.704-1(b)(2)(ii)(c), as well as any addition thereto pursuant to the next to last sentences of Regulations

 

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Sections 1.704-2(g)(1) and 1.704-2(i)(5) after taking into account thereunder any changes during such year in Partnership Minimum Gain and Partner Minimum Gain; and

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

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

Affiliate” of any particular Person means any other Person, directly or indirectly, controlling, controlled by or under common control with such Person, where “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person whether through the ownership of voting securities, its capacity as a sole or managing member, by contract or otherwise.

Agreement” means this Amended and Restated Agreement of Limited Partnership of Rush Street Interactive, LP, together with the Schedules and Exhibits hereto, as now or hereafter amended, restated, modified, supplemented or replaced.

Appraiser FMV” means the fair market value of any Class A Share as determined by an independent appraiser mutually agreed upon by the General Partner and the relevant Exchanging Partner, whose determination shall be final and binding for those purposes for which Appraiser FMV is used in this Agreement. Appraiser FMV shall be the fair market value determined without regard to any discounts for minority interest, illiquidity or other discounts. The cost of any independent appraisal in connection with the determination of Appraiser FMV in accordance with this Agreement shall be borne by the Partnership.

Assets” means any assets and property of the Partnership, and “Asset” means any one such asset or property.

Assignee” means a Person to whom a Partnership Interest has been Transferred but who has not become a Substituted Limited Partner, and who has the rights set forth in Section 10.5.

Assumed Tax Liability” means, with respect to a Partner for a taxable period, an amount equal to the United States federal, state and local income taxes (including applicable estimated taxes) that the General Partner reasonably estimates would be due from such Partner as of such Tax Distribution Date for such taxable period, (i) assuming such Member earned solely the items of income, gain, deduction, loss, and/or credit allocated to such Partner by the Partnership for such taxable period, (ii) assuming that such Partner is subject to tax at the Assumed Tax Rate, and (iii) computed without regard to any increases to the tax basis in the Partnership pursuant to Sections 734(b) or 743(b) of the Code. In the case of the Special Limited Partner, such Assumed Tax Liability shall also be computed without regard to any other step-up in basis for which the Special Limited Partner is required to make payments under the Tax Receivable Agreement. In addition, for the avoidance of doubt, any item of income, gain, loss, or credit earned by the Partnership prior to the Closing Date shall be disregarded for purposes of calculating any Partner’s Assumed Tax Liability.

Assumed Tax Rate” means the higher of the highest combined maximum marginal United States federal, state and local income tax rate ((w) taking into account the tax on net investment income under Section 1411 of the Code, (x) not taking into account any deduction under Code Section 199A or any similar state or local law, (y) taking into account the character (e.g., capital gains or losses, dividends, ordinary income, etc.) of the applicable items of income, and (z) taking into account the deductibility of state and local taxes to the extent applicable), applicable to (A) an individual residing in New York, California or Illinois (whichever results in the application of the highest state and local tax rate) or (B) a corporation doing business in New York, California or Illinois (whichever results in the application of a higher state and local tax rate) during each applicable Fiscal

 

A-163


Quarter with respect to such taxable income as determined by the General Partner in good faith (and subject to the approval of the Original Limited Partner Representative).

Bankruptcy” means, with respect to any Person, the occurrence of any event specified in Section 17-402(a)(4) or (5) of the Act with respect to such Person, and the terms “Bankrupt” has a meanings correlative to the foregoing.

BBA Rules” means Code Sections 6221 through 6241, together with any guidance issued thereunder or successor provisions and any similar provision of state or local tax laws.

Board” means the Board of Directors of the Special Limited Partner.

Board of the General Partner” means Board of Directors of the General Partner, which shall initially consist of Neil Bluhm, Greg Carlin, and Richard Schwartz.

Business Day” means any day except a Saturday, a Sunday or any other day on which commercial banks are required or authorized to close in the State of New York.

Capital Account” means, with respect to any Partner, the capital account maintained by the General Partner for such Partner on the Partnership’s books and records in accordance with Section 3.6.

Capital Contribution” means, with respect to any Partner, the amount of money and the initial Gross Asset Value of any Contributed Asset (other than money) that such Partner contributes to the Partnership or is deemed to contribute pursuant to Article III. As of the date hereof, each Partner shall be deemed to have made Capital Contributions equal to the Closing Date Capital Account Balance of such Partner set forth next to such Partner’s name on Exhibit A hereto.

Capital Share” means a share of any class or series of stock of Pubco now or hereafter authorized, other than a Class A Share or a Class V Share.

Cash Exchange Class A 5-Day VWAP” means the arithmetic average of the VWAP for each of the five (5) consecutive Trading Days ending on the Trading Day immediately prior to the Exchange Notice Date.

Cash Exchange Payment” means with respect to a particular Exchange (including a Direct Exchange) for which the General Partner, on behalf of the Partnership, or the Special Limited Partner, as applicable, has elected to make a Cash Exchange Payment in accordance with Section 14.1(a)(ii):

(a) if the Class A Shares trade on a National Securities Exchange or automated or electronic quotation system, an amount of cash equal to the product of (x) the number of Class A Shares that would have been received by the Exchanging Partner in the Exchange (or Direct Exchange) for that portion of the Class A Common Units subject to the Exchange set forth in the Cash Exchange Notice if the Partnership or the Special Limited Partner, as applicable, had paid the Stock Exchange Payment with respect to such number of Class A Common Units, and (y) the Cash Exchange Class A 5-Day VWAP; or

(b) if the Class A Shares are not then traded on a National Securities Exchange or automated or electronic quotation system, as applicable, an amount of cash equal to the product of (x) the number of Class A Shares that would have been received by the Exchanging Partner in the Exchange (or Direct Exchange) for that portion of the Class A Common Units subject to the Exchange set forth in the Cash Exchange Notice if the Partnership had paid the Stock Exchange Payment with respect to such number of Class A Common Units, for which the General Partner has elected to make a Cash Exchange Payment and (y) the Appraiser FMV of one (1) Class A Share that would be obtained in an arms-length transaction between an informed and willing buyer

 

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and an informed and willing seller, neither of whom is under any compulsion to buy or sell, respectively, and without regard to the particular circumstances of the buyer or seller;

provided that, in each case, if a Holder in an Exchange Notice makes an Exchange (including a Direct Exchange) contingent (including as to timing) upon an event determined pursuant to the penultimate sentence of Section 14.1(a)(i), the Cash Exchange Payment shall in no event be less than an amount equal to the product of (x) the number of Class A Shares that would have been received by the Exchanging Partner in the Exchange (or Direct Exchange) for that portion of the Class A Common Units subject to the Exchange set forth in the Cash Exchange Notice if the Partnership had paid the Stock Exchange Payment with respect to such number of Class A Common Units, for which the General Partner has elected to make a Cash Exchange Payment and (y) the amount payable in respect of one (1) Class A Share in the event that the Exchange is made contingent upon.

Certificate” means the Certificate of Limited Partnership executed and filed in the Office of the Secretary of State of the State of Delaware (and any and all amendments thereto and restatements thereof) on behalf of the Partnership pursuant to the Act.

Class A Common Unit” means a fractional share of the Partnership Interests of all Partners issued pursuant to Sections 3.1 and 3.2.

Class A Share” means a share of Class A common stock of Pubco, par value one ten-thousandth of one dollar ($0.0001) per share.

Class V Share” means a share of Class V voting stock of Pubco, par value one ten-thousandth of one dollar ($0.0001) per share.

Closing Date” means the Closing Date under the Business Combination Agreement.

Code” means the United States Internal Revenue Code of 1986, as amended and in effect from time to time or any successor statute thereto. Any reference herein to a specific section or sections of the Code shall be deemed to include a reference to any corresponding provision of future law.

Contributed Asset” means each Asset or other asset, in such form as may be permitted by the Act, but excluding cash, contributed or deemed contributed to the Partnership.

Controlled Entity” means, as to any Person, (a) any corporation more than fifty percent (50%) of the outstanding voting stock of which is owned by such Person or such Person’s Family Members or Affiliates, (b) any trust, whether or not revocable, of which such Person or such Person’s Family Members or Affiliates are the sole beneficiaries, (c) any partnership of which such Person or an Affiliate of such Person is the managing partner or in which such Person or such Person’s Family Members or Affiliates hold partnership interests representing at least fifty percent (50%) of such partnership’s capital and profits and (d) any limited liability company of which such Person or an Affiliate of such Person is the manager or managing member or in which such Person or such Person’s Family Members or Affiliates hold membership interests representing at least fifty percent (50%) of such limited liability company’s capital and profits.

Debt” means, as to any Person, as of any date of determination, (i) all indebtedness of such Person for borrowed money or for the deferred purchase price of property or services; (ii) all amounts owed by such Person to banks or other Persons in respect of reimbursement obligations under letters of credit, surety bonds and other similar instruments guaranteeing payment or other performance of obligations by such Person; (iii) all indebtedness for borrowed money or for the deferred purchase price of property or services secured by any lien on any property owned by such Person, to the extent attributable to such Person’s interest in such property, even though such Person has not assumed or become liable for the payment thereof; and (iv) obligations of such Person as lessee under capital leases.

 

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