UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2023
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period to
Commission File No. 001-36629
CAESARS ENTERTAINMENT, INC.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of
incorporation or organization)
46-3657681
(I.R.S. Employer
Identification No.)
100 West Liberty Street, 12th Floor
Reno, Nevada 89501
(Address of principal executive offices)
Telephone: (775) 328-0100
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Common Stock, $0.00001, par value
Trading symbol
CZR
Name of each exchange on which registered
NASDAQ Stock Market
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒
Securities registered pursuant to section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past
90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T
(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth
company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange
Act.
Large accelerated filer
Smaller reporting company
☒
☐
Accelerated filer
Emerging growth company
☐
☐
Non-accelerated filer
☐
If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial
accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial
reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the
correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that require a recovery analysis of incentive-based compensation received by any of the
registrant’s executive officers during the relevant recovery period pursuant to Section §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
The aggregate market value of the common stock held by non-affiliates of the Registrant was $10.5 billion at June 30, 2023 based upon the closing price for the shares of
CZR’s common stock as reported by The Nasdaq Stock Market.
As of February 15, 2024, there were 216,299,768 outstanding shares of the Registrant’s Common Stock, net of treasury shares.
Portions of the Registrant’s definitive proxy statement to be filed with the Commission pursuant to Regulation 14A in connection with the Registrant’s Annual Meeting of
Stockholders (the “Proxy Statement”) are incorporated by reference into Part III of this report. Such Proxy Statement will be filed with the Commission not later than 120
days after the conclusion of the Registrant’s fiscal year ended December 31, 2023.
Documents Incorporated by Reference
CAESARS ENTERTAINMENT, INC.
ANNUAL REPORT FOR THE YEAR ENDED DECEMBER 31, 2023
TABLE OF CONTENTS
Part I
Item 1.
Item 1A.
Item 1B.
Item 1C.
Item 2.
Item 3.
Item 4.
Part II
Item 5.
Item 6.
Item 7.
Item 7A.
Item 8.
Item 9.
Item 9A.
Item 9B.
Item 9C.
Part III
Item 10.
Item 11.
Item 12.
Item 13.
Item 14.
Part IV
Item 15.
Item 16.
Signatures
Business
Risk Factors
Unresolved Staff Comments
Cybersecurity
Properties
Legal Proceedings
Mine Safety Disclosures
Market for Registrants’ Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
[Reserved]
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Quantitative and Qualitative Disclosures About Market Risk
Financial Statements and Supplementary Data
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Controls and Procedures
Other Information
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Directors, Executive Officers and Corporate Governance
Executive Compensation
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Certain Relationships and Related Transactions, and Director Independence
Principal Accounting Fees and Services
Exhibits and Financial Statement Schedules - Schedule I
Form 10-K Summary
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PART I
In this filing, Caesars Entertainment, Inc., a Delaware corporation, and its subsidiaries may be referred to as the “Company,” “CEI,” “Caesars,” “we,”
“us” or “our” or the “Registrant.”
We also refer to (i) our Consolidated Financial Statements as our “Financial Statements,” (ii) our Consolidated Statements of Operations and
Consolidated Statements of Comprehensive Income (Loss) as our “Statements of Operations,” (iii) our Consolidated Balance Sheets as our “Balance
Sheets,” and (iv) our Consolidated Statements of Cash Flows as our “Statements of Cash Flows,” which are prepared in accordance with accounting
principles generally accepted in the United States (“GAAP”). References to numbered “Notes” refer to Notes to our Consolidated Financial Statements
included in Item 8.
Item 1. Business
Overview
We are a geographically diversified gaming and hospitality company that was founded in 1973 by the Carano family with the opening of the Eldorado
Hotel Casino in Reno, Nevada. Beginning in 2005, we grew through a series of acquisitions, including the acquisition of MTR Gaming Group, Inc. in
2014, Isle of Capri Casinos, Inc. in 2017, Tropicana Entertainment, Inc. in 2018, Caesars Entertainment Corporation in 2020, and William Hill PLC (the
“William Hill Acquisition”) on April 22, 2021. Our ticker symbol on the NASDAQ Stock Market is “CZR.”
Our primary source of revenue is generated by our casino properties’ gaming operations, which includes our retail and online sports betting and online
gaming, and we utilize our hotels, restaurants, bars, entertainment, racing, retail shops and other services to attract customers to our properties.
As of December 31, 2023, we own, lease or manage an aggregate of 52 domestic properties in 18 states. We also operate and conduct sports wagering
across 31 jurisdictions in North America, 25 of which offer online sports betting, and operate iGaming in five jurisdictions in North America. We continue
to expand into additional markets as jurisdictions legalize forms of retail and online gaming and sports betting. In addition, we have other properties in
North America that are authorized to use the brands and marks of Caesars Entertainment, Inc., as well as other non-gaming properties. We lease certain real
property assets from third parties, including GLP Capital, L.P., the operating partnership of Gaming and Leisure Properties, Inc. (“GLPI”) and VICI
Properties L.P., a Delaware limited partnership (“VICI”). See Item 2, “Properties,” for more information about our properties.
Business Operations
Our consolidated business is composed of complementary businesses that reinforce, cross-promote, and build upon each other: casino, which includes our
retail and online sports betting and iGaming, food and beverage, hotel, casino management services, entertainment, retail and other business operations.
Casino Operations
Our casino operations generate revenues from approximately 51,300 slot machines, 2,700 table games, including poker, sports betting from our retail and
online sportsbooks, iGaming and other games such as keno, all of which comprised approximately 55% of our total net revenues in 2023. Slot revenues
generate the majority of our casino revenues.
Retail and Online Sports Betting and iGaming
We operate and conduct retail and online sports wagering across 31 jurisdictions in North America as of December 31, 2023. In addition to our online
poker operations, we operate iGaming in five jurisdictions in North America and continue to leverage the World Series of Poker (“WSOP”) brand and
license the WSOP trademarks for a variety of products and services. We offer hundreds of online casino games including slots, table games, live dealer and
video poker and we expect to increase our product offerings as iGaming is legalized in additional states.
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We launched our Caesars Sportsbook app on our owned and integrated technology platform we have labeled Liberty (“Liberty”) in 2021. The app offers
extensive pre-match and live markets, extensive odds and flexible limits, player props, and same-game parlays. In addition to the Caesars Sportsbook app,
the Company and NYRABets LLC, the official online wagering platform of the New York Racing Association, Inc., launched the Caesars Racebook app in
2022. The Caesars Racebook app operates in 20 states and provides access for pari-mutuel wagering at over 300 racetracks around the world as well as
livestreaming of races. Additionally, we launched our new Caesars Palace Online Casino application in states and territories where we operate iGaming in
2023. Wagers placed can earn credits towards the Caesars Rewards loyalty program or points which can be redeemed for free wagering credits. No
customers under 21 years old are allowed to wager on any of our Caesars Sportsbook, Caesars Racebook and iGaming mobile apps. Growth in the Caesars
Digital segment continues to be realized with the strategic expansion into new states as jurisdictions legalize retail and online sports betting and online
horse race wagering.
Sports Brand Partnerships — Caesars Sportsbook has partnerships with the NFL, NBA, NHL, MLB, and several individual teams. We have continued to
create new partnerships among professional sports teams and, in 2021, entered into a 20-year exclusive naming-rights partnership branding the Caesars
Superdome in New Orleans. Our strategy includes developing local and national partnerships that align our sportsbooks, casinos, resorts and brands with
sports fans. We have high-profile exclusive sports entertainment partnerships with the NFL, making Caesars the first-ever “Official Casino Sponsor” in the
history of the league. This historic partnership combines the NFL’s legendary events with our properties to bring unique experiences to our patrons. This
includes exclusive rights to use NFL trademarks to promote our properties and enabling Caesars to host exclusive special events and experiences. We
expect to continue to host brand activations at prominent, high-profile NFL events, including the NFL Draft, NFL playoffs, and the Super Bowl during this
multi-year partnership.
Food and Beverage Operations
Our food and beverage operations generate revenues from our dining venues, bars, nightclubs, and lounges located throughout our casinos and represented
approximately 15% of our total net revenues in 2023. Many of our properties include several dining options, ranging from upscale dining experiences to
moderately-priced restaurants, some of which offer pickup or in-room delivery options.
Hotel Operations
Hotel operations generate revenues from hotel stays at our properties in our approximately 44,700 guest rooms and suites worldwide and represented
approximately 18% of our total net revenues in 2023. Our properties operate at various price and service points, allowing us to host a variety of casino
guests, who are visiting our properties for gaming and other casino entertainment options, and non-casino guests who are visiting our properties for other
purposes, such as vacation travel or conventions.
Management and Branding Arrangements
We earn revenue from fees paid for the management of other hotels and casinos in North America. Managed properties represent Caesars-branded
properties where we provide certain staffing and management services under management agreements. In addition, we authorize the use of certain brands
and marks of Caesars Entertainment, Inc. from which we earn revenue from fees received based on the arrangements.
Entertainment and Other Non-Gaming Operations
We provide a variety of retail and entertainment offerings at our properties. We operate various entertainment venues across the United States, including the
Colosseum at Caesars Palace Las Vegas and Bakkt Theater at Planet Hollywood Resort & Casino. These award-winning entertainment venues host or have
announced plans to host, prominent headliners such as Garth Brooks, The Killers, Kelly Clarkson, Jerry Seinfeld, Shania Twain and Miranda Lambert.
The LINQ Promenade is an open-air dining, entertainment, and retail development located between The LINQ Hotel & Casino and Flamingo Las Vegas,
which features The High Roller, a 550-foot observation wheel, and Fly LINQ, the first and only zipline on the Las Vegas Strip. The retail stores offer guests
a wide range of options from high-end brands and accessories to souvenirs and decorative items.
CAESARS FORUM is a 550,000 square-foot state-of-the-art conference center located at the center of the Las Vegas Strip. CAESARS FORUM can
accommodate more than 10,000 participants and features more than 300,000 square feet of flexible meeting space, the two largest pillarless ballrooms in
the world, a LEED silver-rated FORUM Plaza, and the first 100,000 square-foot outdoor meeting and event space in Las Vegas.
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Market Activities
Trends
Economic Factors Impacting Discretionary Spending — Gaming and other leisure activities we offer represent discretionary expenditures which may be
sensitive to economic downturns. The resurgence of the Omicron variant of COVID-19 continued to impact the beginning of 2022, however, many of our
properties experienced positive trends during much of the year ended December 31, 2022 including higher hotel occupancy and rates, particularly in Las
Vegas, and increased gaming and food and beverage volumes coupled with improved product mix.
We continue to monitor the effects of recent inflation and the possible implications on certain customers most affected by lower discretionary income.
Although we have seen periods of reduced visitation from those customers, visitation from customers who are not as affected by inflation remains steady or
has slightly improved. In addition, our leases with VICI are impacted by inflation as they are subject to annual escalators based on the Consumer Price
Index (“CPI”).
We are also continuing to monitor rising interest rates which have a direct impact on certain of our debt instruments, in addition to an effect on consumer
spending. We evaluate projected changes in interest rates when entering into borrowing arrangements and manage our mix of fixed versus variable debt.
We continue to manage the economic challenges affecting our industry and our Company that arise including labor shortages, higher labor costs, supply
chain disruptions, increased costs of goods and services, among other impacts. Further discussion of the effects of these trends are described throughout
this Form 10-K. The extent and duration of these trends is uncertain and may intensify.
Online Betting and Gaming — Online betting and gaming is a rapidly developing sector of the e-commerce industry and we believe the digital segment of
the global betting and gaming industry will continue to grow in popularity and consumer confidence. The market for online betting platforms is being
driven by the increased use of digital processes and global, growing bettor demand. We anticipate that the United States market will continue to have a
strong and steady uptake in active wagers as state-by-state legislation in the United States continues to evolve resulting in new opportunities in the United
States sports betting market. The extent and future effects of online betting and gaming on our casino properties is uncertain but we expect that our online
betting and gaming offerings will be complementary to our brick-and-mortar casino business.
Competition
The casino entertainment business is highly competitive. The industry is comprised of a diverse group of competitors that vary considerably in size and
geographic diversity, quality of facilities and amenities available, marketing and growth strategies, and financial condition. In most regions, we compete
directly with other casino facilities operating in the immediate and surrounding areas. There has been increased competition from openings of newly
developed casinos and plans of development in certain regions, as well as increased competition from recent legalization of casino gambling and sports
betting in states such as Nebraska. In Las Vegas, our largest jurisdiction, competition is expected to increase in the coming years. In response to changing
trends, Las Vegas operators have been focused on expanding their non-gaming offerings, including upgrades to hotel rooms, new food and beverage
offerings, and new entertainment offerings. There have also been openings and proposals for other large scale gaming and non-gaming development
projects in Las Vegas by various other developers. Our Las Vegas Strip hotels and casinos also compete, in part, with each other.
In recent years, many casino operators, including us, have been reinvesting in existing facilities, developing or rebranding new casinos or complementary
facilities, and acquiring established facilities. These reinvestment and expansion efforts combined with aggressive marketing strategies by us and many of
our competitors have resulted in increased competition in many regions. As companies have completed new expansion projects, supply has grown at a
faster pace than demand in some areas. The expansion of properties and entertainment venues into new jurisdictions also presents competitive issues.
Our properties also compete with legalized gaming from casinos located on Native American tribal lands. While the competitive impact on operations in
Las Vegas from the continued growth of Native American gaming establishments in California remains uncertain, the proliferation of gaming in California
and other areas located in the same regions as our properties could have an adverse effect on our results of operations. In some instances, particularly in the
case of Native American casinos, our competitors pay lower taxes or no taxes. In addition, certain states have legalized, and others may legalize, casino
gaming in specific areas, including metropolitan areas from which we traditionally attract customers. These factors create additional challenges for us in
competing for customers and accessing cash flow or financing to fund improvements for our casino and entertainment products that enable us to remain
competitive.
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We also compete with other non-gaming resorts and vacation areas, various other entertainment businesses, and other forms of gaming, such as state
lotteries, on-track and off-track wagering, video lottery terminals, and card parlors. Our non-gaming offerings also compete with other retail facilities,
amusement attractions, food and beverage offerings, and entertainment venues. Internet gaming and sports betting also create additional competition for our
brick-and-mortar operations.
We face significant competition in our online sports betting, online horse racing wagering and iGaming businesses in jurisdictions where we currently
operate and those jurisdictions in which we wish to expand. Although we have experienced recent success in obtaining approval for sports betting and
iGaming licenses in new jurisdictions, new state launches may require significant upfront investment and may not be successful.
Resources Material to Business
Rewards Programs
We believe Caesars Rewards, one of the largest loyalty programs, enables us to compete more effectively and capture a larger share of our customers’
entertainment spending when they travel among regions or engage in online wagering and gaming versus that of a standalone property, which is core to our
cross-market strategy.
Caesars Rewards members earn Reward Credits for qualifying gaming activities, including sports betting, online gaming and iGaming apps and wagering
in the Caesars Sportsbook and Caesars Racebook apps. Members also earn Reward Credits for qualifying hotel, dining and retail spending at all Caesars
Entertainment destinations in the United States and Canada. Additionally, Reward Credits are earned when members use their Caesars Rewards VISA
credit card or make a purchase through a Caesars Rewards partner. Members can redeem their earned Reward Credits for those same experiences.
Caesars Rewards is structured by member tier level (designated as Gold, Platinum, Diamond, Diamond Plus, Diamond Elite or Seven Stars) and member
value. This structure allows a member to progressively access the full range of benefits available across our portfolio of destinations as they progress
through tier levels. Caesars Rewards is designed to cultivate a gratifying and frictionless relationship with our customers, motivating members to enhance
both their frequency of visits and expenditures. Additionally, member data is utilized in conjunction with diverse marketing promotions. This includes
campaigns spanning direct mail, email, our websites, mobile devices, social media, and interactive slot machines.
Intellectual Property and Resources
We use a variety of trade names, service marks, trademarks, patents and copyrights in our operations and believe that we have the rights necessary to
conduct our continuing operations. The development of intellectual property is part of our overall business strategy. We regard our intellectual property to
be an important element of our success. We file applications for and obtain patents, trademarks and copyrights in the United States and foreign countries
where we believe filing for such protection is appropriate. While our business as a whole is not substantially dependent on any one patent, trademark, or
copyright, we seek to establish and maintain our proprietary rights in our business operations and technology through the use of patents, trademarks,
copyrights, and trade secret laws. We also seek to maintain our trade secrets and confidential information by nondisclosure policies and through the use of
appropriate confidentiality agreements. Our United States patents have varying expiration dates.
We have not applied for the registration of all of our trademarks, copyrights, proprietary technology, or other intellectual property rights, as the case may
be, and may not be successful in obtaining all intellectual property rights for which we have applied. Despite our efforts to protect our proprietary rights,
parties may infringe upon our intellectual property and use information that we regard as proprietary, and our rights may be invalidated or unenforceable.
The laws of some foreign countries do not protect proprietary rights or intellectual property to as great of an extent as do the laws of the United States. In
addition, others may independently develop substantially equivalent intellectual property.
We own or have the right to use proprietary rights to a number of trademarks that we consider, along with the associated name recognition, to be valuable
to our business, including Eldorado, Silver Legacy, Isle, Lady Luck, Tropicana, Circus Circus, Caesars, Flamingo, Harrah’s, Horseshoe, Paris, Planet
Hollywood, Caesars Rewards, Caesars Sportsbook, William Hill and WSOP.
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As of December 31, 2023, our Caesars Sportsbook app is powered by our Liberty platform. The Liberty platform resulted in a significant upgrade to our
user interface and significant product upgrades including numerous pre-match and live markets, extensive odds and flexible limits, player props, and same-
game parlays. Our Liberty platform also integrates customers with the Caesars Rewards loyalty program. In addition, we and NYRABets LLC, the official
online wagering platform of the New York Racing Association, Inc., have launched the Caesars Racebook app in more than 20 jurisdictions. The Caesars
Racebook app provides access for pari-mutuel wagering at over 300 racetracks around the world. Wagers placed can earn credits towards the Caesars
Rewards loyalty program.
Industry Overview
See Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” See also Exhibit 99.1, “Gaming and Regulatory
Overview,” to this Annual Report on Form 10-K, which is incorporated herein by reference.
Seasonality
We believe that business at our regional properties outside of Las Vegas is subject to seasonality, including seasonality based on the weather in the region in
which they operate and the travel habits of visitors. Business in our properties can also fluctuate due to specific holidays or other significant events,
particularly when a holiday falls in a different quarter than the prior year, the timing of the WSOP tournament (with respect to our Las Vegas properties),
city-wide conventions, large sporting events or concerts, or visits by our premium players. We also believe that any seasonality, holiday, or other significant
event may affect our various properties or regions differently. We may also experience seasonality with retail and online sports betting which coincides
with certain sporting events, as well as seasons of professional sports teams.
Gaming Licenses and Governmental Regulations
The gaming and racing industries are highly regulated, and we must maintain our licenses and pay gaming taxes to continue our operations. We are subject
to extensive regulation under laws, rules and supervisory procedures. These laws, rules and regulations generally concern the responsibility, financial
stability and characters of the owners, managers, and persons with financial interests in the gaming operations. If additional gaming regulations are adopted
in a jurisdiction in which we operate, such regulations could impose restrictions or costs that could have a significant adverse effect on us. From time to
time, various proposals have been introduced in legislatures of jurisdictions in which we have operations that, if enacted, could adversely affect the tax,
regulatory, operational or other aspects of the gaming industry and us. We do not know whether or when such legislation will be enacted. Gaming
companies are currently subject to significant state and local taxes and fees in addition to normal federal and state corporate income taxes, and such taxes
and fees are subject to increase at any time. Any material increase in these taxes or fees could adversely affect us.
Some jurisdictions, including those in which we are licensed, empower their regulators to investigate participation by licensees in gaming outside their
jurisdiction and require access to periodic reports respecting those gaming activities. Violations of laws in one jurisdiction could result in disciplinary
action in other jurisdictions.
Under provisions of gaming laws in jurisdictions in which we have operations, and under our organizational documents, certain of our securities are subject
to restriction on ownership which may be imposed by specified governmental authorities. The restrictions may require a holder of our securities to dispose
of the securities or, if the holder refuses, or is unable to dispose of the securities, we may be required to repurchase the securities.
A more detailed description of the regulations to which we are subject is contained in Exhibit 99.1 to this Annual Report on Form 10-K, which is
incorporated herein by reference.
Internal Revenue Service Regulations
The Internal Revenue Service requires operators of casinos and online sports betting apps located in the United States to file information returns for U.S.
citizens, including names and addresses of winners for certain table games, keno, bingo, slot machine and retail and online sports betting winnings in
excess of stipulated amounts. The Internal Revenue Service also requires operators to withhold taxes on some table games, keno, bingo, slot machine and
retail and online sports betting winnings of nonresident aliens. We are unable to predict the extent to which these requirements, if extended, might impede
or otherwise adversely affect operations of, and/or income from, other games.
Regulations adopted by the Financial Crimes Enforcement Network of the Treasury Department (“FINCEN”) requires the reporting of currency
transactions in excess of $10,000 occurring within a gaming day, including identification of the patron by name and social security number. This reporting
obligation began in May 1985 and may have resulted in the loss of gaming revenues to jurisdictions outside the United States which are exempt from the
ambit of these regulations. In addition to currency transaction reporting requirements, suspicious financial activity is also required to be reported to
FINCEN.
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Other Laws and Regulations
Our businesses are subject to various federal, state and local laws and regulations in addition to gaming regulations. These laws and regulations include, but
are not limited to, restrictions and conditions concerning alcoholic beverages, food service, smoking, environmental matters, employees and employment
practices, currency transactions, taxation, zoning and building codes, and marketing and advertising. Such laws and regulations could change or could be
interpreted differently in the future, or new laws and regulations could be enacted. Material changes, new laws or regulations, or material differences in
interpretations by courts or governmental authorities could adversely affect our operating results.
The sale of alcoholic beverages is subject to licensing, control and regulation by applicable local regulatory agencies. All licenses are revocable and are not
transferable. The agencies involved have full power to limit, condition, suspend or revoke any license, and any disciplinary action could, and revocation
would, have a material adverse effect upon our operations.
We also deal with significant amounts of cash in our operations and are subject to various reporting and anti-money laundering regulations. Such laws and
regulations could change or could be interpreted differently in the future, or new laws and regulations could be enacted. Material changes, new laws or
regulations, or material differences in interpretations by courts or governmental authorities could adversely affect our operating results. See Item 1A, “Risk
Factors,” for additional discussion.
Taxation
Gaming companies are typically subject to significant taxes and fees in addition to normal federal, state and local income taxes, and such taxes and fees are
subject to increase at any time. We pay substantial taxes and fees with respect to our operations. From time to time, federal, state, local and provincial
legislators and officials have proposed changes in tax laws, or in the administration of such laws, affecting the gaming industry. It is not possible to
determine with certainty the likelihood of changes in tax laws or in the administration of such laws.
Environmental Matters
We are subject to various federal, state and local environmental, health and safety laws and regulations, including but not limited to air quality, indoor air
quality, water quality, bulk storage of regulated materials, and disposal of waste, including hazardous waste. Such laws and regulations can impose liability
on potentially responsible parties (owner/operators of real property) to clean up, or contribute to the cost of cleaning up, sites at which regulated materials
were disposed of or released. In addition to investigation and remediation liabilities that could arise under such laws and regulations, we could face
personal injury, property damage, fines or other claims by third parties concerning environmental compliance, contamination or exposure to hazardous
conditions. Environmental regulatory violations also include monetary penalties assessed by the jurisdictional regulatory agency and civil or criminal
penalties for intentional negligence. Occasionally and under certain circumstances, we have investigated and remediated (or contributed to remediation
costs) contamination located at or near our facilities. Examples included contamination related to underground storage tanks and groundwater
contamination arising from prior uses of land on which certain facilities are located. In addition, we have and continue to contain, manage, and dispose of
manure and wastewater generated by concentrated animal feeding operations due to our racetrack operations; manage, abate, or remove indoor air quality
concerns such as mold, lead, or asbestos-containing materials; and manage operations within applicable environmental permitting requirements. Although
we have incurred and expect to incur costs related to various environmental matters such as investigations, remediation, and management of hazardous
materials or conditions known or discovered to exist at our properties, those costs have not had, and are not expected to have, a material adverse effect on
our financial condition, results of operations or cash flow. However, such matters in the future could have a material adverse effect on our business.
Climate Change
There has been an increasing focus of international, national, state, regional and local regulatory bodies on greenhouse gas (“GHG”), including carbon
emissions, and climate change issues. The United States is a member of the Paris Agreement, a climate accord reached at the Conference of the Parties
(“COP 21”) in Paris, that set many new goals, and many related policies are still emerging. The Paris Agreement requires set GHG emission reduction
goals every five years beginning in 2020. Stronger GHG emission targets were set at COP 26 in Glasgow in November 2021.
Future regulation could impose stringent standards to substantially reduce GHG emissions. Legislation to regulate GHG emissions has periodically been
introduced in the U.S. Congress. The current Administration has taken steps to further regulate GHG emissions. Those reductions could be costly and
difficult to implement or estimate.
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Beyond financial and regulatory effects, the projected severe effects of climate change – such as property damage or supply chain issues stemming from
extreme weather events – has already and may continue to directly affect our facilities and operations. Caesars recognizes the impacts of climate change
and is engaged in long-term initiatives to identify, assess, and manage the risks and opportunities associated with climate change (see “Environmental
Stewardship” below).
Reporting and Record-Keeping Requirements
We are required periodically to submit detailed financial and operating reports and furnish any other information about us and our subsidiaries that gaming
authorities may require. We are required to maintain a current stock ledger that may be examined by gaming authorities at any time. If any securities are
held in trust by an agent or by a nominee, the record holder may be required to disclose the identity of the beneficial owner to gaming authorities. A failure
to make such disclosure may be grounds for finding the record holder unsuitable. Gaming authorities may, and in certain jurisdictions do, require
certificates for our securities to bear a legend indicating that the securities are subject to specified gaming laws.
Human Capital Management
We aim to provide a workplace that is engaging, empowering, inclusive and respectful for all employees (our “Team Members”), embracing a culture of
openness, passion for service and recognition. Our ongoing investment in professional training and development, safety, health and wellbeing, and Team
Member recognition linked to guest satisfaction are all important drivers of our success in delivering strong financial results and creating value for our
communities. We have approximately 51,000 Team Members throughout our organization, excluding the Team Members of certain of our tribal partners.
Labor Relations
Approximately 24,000, or 47% of our Team Members, are covered by collective bargaining agreements with certain of our subsidiaries. The majority of
these employees in various job positions are covered by the following agreements:
Approximate Number of
Active Employees
Represented
11,000
Union
Culinary Workers Union, Local 226
Date on which Collective Bargaining
Agreement Becomes Amendable
September 30, 2028
5,400
2,000
1,100
1,300
UNITE HERE, Local 54
May 31, 2026
United Auto Workers
Teamsters, Local 986
Bartenders Union, Local 165
*
September 30, 2023
March 31, 2024
September 30, 2028
Employee Group
Las Vegas Culinary Employees
Atlantic City Food & Beverage and
Hotel Employees
Las Vegas Dealers
Las Vegas Teamsters
Las Vegas Bartenders
____________________
*
The agreement is currently under negotiation.
Hiring and Development
We aim to support Team Members throughout their career with Caesars. We are committed to providing opportunities to help Team Members achieve their
professional goals. We maintain a wide range of channels for diverse recruiting, including outreach to academic institutions and nonprofits that help us
source diverse candidates. Our leadership receives training on our inclusive and equitable talent management recruitment and retention processes.
Additionally, to support hiring initiatives across the enterprise, we maintain a recruiting website that includes information describing our culture, benefits
and diversity initiatives. The website highlights our commitment to corporate social responsibility (“CSR”) diversity, equity and inclusion (“DEI”), and we
welcome candidates from all backgrounds.
We strive to inspire our Team Members through our mission, vision and values, and our Code of Commitment (described below). To evaluate our Team
Member experience and our retention efforts, we monitor a number of Team Member measures, such as turnover rates and Team Member satisfaction. We
send out Team Member experience surveys to help us further understand the drivers of engagement and areas where we can improve. These surveys are
completed on a regular basis alongside additional surveys targeted at specific events within a Team Member cycle such as new hire onboarding and exit
inquiries.
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Our compensation and benefits programs are designed to attract, retain and motivate our Team Members. In addition to competitive salaries and wages, we
provide a variety of short-term, long-term and incentive-based compensation programs to reward performance relative to key metrics relevant to our
business. We offer comprehensive benefit options including, but not limited to, retirement savings plans, health insurance coverage (including medical,
mental health, dental, vision and pharmacy), parental leave, educational assistance, training opportunities, company-paid life insurance and a Team
Member assistance program.
We place utmost importance on creating a safe workplace for our Team Members, embedding procedures so that all our Team Members have the
awareness, knowledge and tools to make safe working a habit.
We also maintain a wellness program to help our Team Members improve their health and wellbeing. This program has demonstrated improved health
metrics for participating Team Members and their covered family members helping reduce the cost of healthcare for Team Members and for the Company.
We continue to make enhancements to our offerings and wellness programs with a wide range of affordable options, mental health initiatives and onsite
primary care clinics across the US.
Diversity, Equity and Inclusion
We embrace diversity and aim to create an inclusive working environment that celebrates all our Team Members as individuals. Our diversity, equity and
inclusion framework identifies five pillars of activity: advocacy, Team Members, suppliers, communities and guests for a holistic approach to embedding
DEI in everything we do. We publish our DEI data in our annual CSR report (described below).
We set goals to increase the representation of women and people of color in leadership roles (supervisory and above). Our 2025 goals outlined 50% of
management roles to be held by women in both the mid-level and senior leadership populations, and 50% of leadership roles to be held by people of color.
We also committed to increase the representation of people of color in senior leadership roles by 50%. As of December 31, 2023, 45% of mid-level roles
and 29% of senior leadership roles in the Company were held by women. Additionally, 44% of leadership roles were held by people of color and the
representation of people of color in senior leadership positions has increased by 116% since October 2020.
Corporate Social Responsibility
Caesars’ Board of Directors (the “Board”) and senior executives view CSR as an integral element in the way we do business, with the belief that being a
good corporate citizen helps protect the Company against risk, contributes to improved performance and helps foster positive relationships with all those
with whom we connect. The Board and our executive management are committed to being an industry leader in CSR (which includes diversity, equity and
inclusion, social impact, and environmental sustainability). In 2023, the Board and our leadership continued to engage with our CEO-level external CSR
Advisory Board comprised of experts representing DEI, sustainability, business strategy, academia and investors, and used their guidance to confirm our
CSR priorities. These priorities are reflected in our 14th annual CSR report, published in 2023 in accordance with Global Reporting Initiative Standards.
CSR Committee of the Board
Caesars’ Board has a CSR committee that defines the duties and responsibilities of the Board in supporting delivery of our corporate purpose and CSR
strategy.
Code of Commitment
Caesars is committed to being a responsible corporate citizen and environmental steward through our CSR strategy, PEOPLE PLANET PLAY. This is
reflected in our Code of Commitment which is our public pledge to our guests, Team Members, communities, business partners and all those we reach that
we will honor the trust they have placed in us through ethical conduct and integrity. We commit to:
•
•
•
PEOPLE: Supporting the wellbeing of our Team Members, guests and local communities.
PLANET: Taking care of the world we all call home.
PLAY: Creating memorable experiences for our guests and leading responsible gaming practices in the industry.
PEOPLE PLANET PLAY Strategy
Our PEOPLE PLANET PLAY strategy defines how we meet the obligations of our Code of Commitment and is aligned with global priorities articulated by
the United Nations as the Sustainable Development Goals. PEOPLE PLANET PLAY establishes multi-year targets in key areas of impact, including
science-based greenhouse gas emissions-reduction goals aligning with global best practices on climate change action. In 2022, we conducted a
comprehensive CSR assessment to evaluate our
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assumptions. With the help of an external specialist, our assessment gathered input from internal and external stakeholders, reviewed multiple industry and
environmental, social and governance (“ESG”) disclosures, standards and frameworks and yielded 21 material topics. Our materiality assessment is
available on our website at www.investor.caesars.com within the ESG resource hub on our Corporate Social Responsibility page.
Responsible Gaming
For more than thirty years, Caesars has maintained its Responsible Gaming (“RG”) program. We train tens of thousands of Team Members each year and a
cohort of RG Ambassadors throughout our properties to identify guests in need of assistance and provide support. In recent years, Caesars has contributed
to the National Center for Responsible Gaming, the National Council on Problem Gaming and other state programs to help advance responsible practices in
the gaming industry. Caesars Digital also maintains responsible gaming programs tailored to each state in which it operates, participates in Caesars’
overarching Responsible Gaming program, and offers users in-application RG tools such as time on device restrictions and wagering limits. No customers
under 21 years old are allowed to wager on any of our Caesars Sportsbook, Caesars Racebook and iGaming mobile apps.
Caesars maintains a comprehensive risk-based Bank Secrecy Act (“BSA”) and Anti-Money Laundering (“AML”) program. It includes strong governance
and effective internal controls and procedures to comply with applicable BSA requirements, regulatory guidance, and any related laws, and to take
measures to prevent its affiliated casinos from being used for money laundering or other criminal activity. Execution of the program is governed with
reference to FINCEN’s guidance on the Culture of Compliance. Caesars’ internal AML Policy, Know Your Customer Policy and BSA Identification Policy
outline the Caesars AML Program and set the minimum standards for the related procedures and internal controls of the Caesars casino affiliates. Certain
employees are required to complete annual trainings related company policies, including AML.
Caesars also maintains a Code of Ethics and Business Conduct (the “Code”) that includes standards designed to deter wrongdoing and to promote, amongst
other standards, honest and ethical conduct and full, fair, accurate, timely and understandable disclosure in reports and documents that the Company files
with the Securities and Exchange Commission. Caesars’ Chief Legal Officer serves as the compliance officer of the Code and Caesars provides periodic
training regarding the contents and importance of the Code.
Caesars also maintains an Amended and Restated Gaming Compliance Plan (the “Plan”), which is approved by various gaming regulators. The Plan is
designed to implement procedures to enhance the likelihood that no activities of the Company or any affiliate of the Company will impugn the reputation
and integrity of Caesars. The Plan also establishes a Compliance Committee that assists the Company in implementing its strict policy that its business be
conducted with honesty and integrity, and in accordance with high moral, legal and ethical standards. Caesars’ Senior Vice President & Assistant General
Counsel – Regulatory & Compliance serves as the Compliance Officer as defined by the Plan.
Environmental Stewardship
We take a proactive approach to environmental sustainability through our CodeGreen strategy established in 2007, striving to improve our performance
across energy and GHG emissions efficiencies, reduction of water consumption and increasing diversion of waste from landfills. Caesars recognizes the
impact climate change can play both on our business and the guests we serve. Identifying, assessing, and managing the risks and opportunities therefore
plays a vital role in our long-term strategic thinking on climate and water, and how we approach our CSR goals. Our goals are based in science as part of
our strategy to reduce our environmental impact. In 2023, we began the process to establish new goals to align with a 1.5-degree Celsius limit to global
warming, measured against a 2019 base-year and we expect to announce our new goals in 2024.
Our existing GHG targets, established in 2018 to be in line with SBTi’s guidance to achieve a level of decarbonization required to keep global temperature
increase below 2 degrees Celsius, are (i) reducing absolute Scope 1 and 2 GHG emissions by 35% by 2025, and 100% by 2050, from a 2011 base-year and
(ii) having 60% of suppliers by spend institute science-based GHG reduction targets for their operations by 2023. Between 2011 and 2022, Caesars
estimated a reduction in absolute Scopes 1 and 2 GHG emissions of 41.8%, thereby achieving our interim Scope 1 and 2 reduction target ahead of schedule.
We fell short of our supplier engagement goal; however, in 2023 we revisited our Scope 3 emissions and intend to set an absolute reduction target in 2024
as part of our new GHG goals that better align with a 1.5-degree Celsius pathway.
To achieve our goals, we have taken initiatives such as pursuing renewable energy sources and low-carbon options, including on site solar developments.
For example, we have contracts to purchase energy from solar covered parking canopies recently completed at two Atlantic City properties and we installed
solar covered parking at Harrah’s Pompano Beach. Our long-term goals include a continued focus on energy efficiency and conservation as well as
evaluating renewable energy supply opportunities for each of our properties.
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We voluntarily participate in the CDP (formerly the Carbon Disclosure Project), an international nonprofit that runs a global disclosure system for
investors, companies, and regions to manage their environmental impacts. In 2023, Caesars scored an A-for water security and a B for climate change.
Approximately 2% of companies assessed by CDP in 2023 made the A List for either climate change or water security.
We are engaged in extensive waste reduction efforts across our facilities, including recycling, food donation, and manure composting. In 2022, we diverted
59% of our total waste from landfills.
Community Investment
Caesars contributes to our local communities to help them develop and prosper, through funding community projects, Team Member volunteering and cash
donations from the Caesars Foundation, a private foundation funded from our operating income. In 2023, the Caesars Foundation contributed $3.7 million
to communities across the United States. The Caesars Foundation also continued to support significant national relationships that support diversity, equity
and inclusion. During 2023, our Team Members volunteered over 82,000 hours through the HERO program.
We focus on multi-faceted support of our non-profit partners. For example, in 2023 we demonstrated our commitment to the mission of Boys & Girls Clubs
of America through regional giving to local Clubs, HERO volunteering, hosting fundraising events, collecting customer donations through Caesars Makes
Change, in addition to providing several Caesars Foundation grants at the national and local levels, all totaling nearly $1 million in value to the
organization and the communities where we operate.
We seek to encourage DEI dialogue in our communities as part of our advocacy approach to raise awareness. In 2023, we hosted our DEI Summit which
bring together corporate partners, nonprofit partners, advocacy groups and suppliers in supporting and promoting efforts to advance DEI initiatives. The
Summit included several educational sessions and panel discussions led by notable DEI leaders and practitioners.
Available Information
We are required to file annual, quarterly and other current reports and information with the Securities and Exchange Commission (“SEC”). Because we
submit filings to the SEC electronically, access to this information is available at the SEC’s website (www.sec.gov). This site contains reports and other
information regarding issuers that file electronically with the SEC.
We make our Annual Reports on Form 10-K, our Quarterly Reports on Form 10-Q, our Current Reports on Form 8-K, and all amendments to these reports,
available free of charge on our corporate website (www.caesars.com/corporate) as soon as reasonably practicable after such reports are filed with, or
furnished to, the SEC. In addition, our Code of Ethics and Business Conduct and charters of the Audit Committee, Compensation Committee, Corporate
Social Responsibility Committee, and the Nominating and Corporate Governance Committee are available on our website. We will provide reasonable
quantities of electronic or paper copies of filings free of charge upon request. In addition, we will provide a copy of the above referenced charters to
stockholders upon request.
References in this document to our website address do not incorporate by reference the information contained on the website into this Annual Report on
Form 10-K.
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Cautionary Statement Regarding Forward-Looking Information
This Annual Report on Form 10-K includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include statements regarding our strategies, objectives
and plans for future development or acquisitions of properties or operations, as well as expectations, future operating results, trends and other information
that is not historical information. When used in this report, the terms or phrases such as “anticipates,” “believes,” “projects,” “plans,” “intends,” “expects,”
“might,” “may,” “estimates,” “could,” “should,” “would,” “will likely continue,” and variations of such words or similar expressions and their negative
forms are intended to identify forward-looking statements. These statements are made on the basis of management’s current views and assumptions
regarding future events.
Forward-looking statements are based upon certain underlying assumptions, including any assumptions mentioned with the specific statements, as of the
date such statements were made. Such assumptions are in turn based upon internal estimates and analyses of market conditions and trends, management
plans and strategies, economic conditions and other factors. Such forward-looking statements are only predictions and involve known and unknown risks
and uncertainties, many of which are beyond our control, and are subject to change. By their nature, forward-looking statements involve risks and
uncertainties because they relate to events and depend upon future circumstances that may not occur. Actual results and trends may differ materially from
any future results, trends, performance or achievements expressed or implied by such statements. Forward-looking statements speak only as of the date they
are made, and we assume no duty to update forward-looking statements. Forward-looking statements should not be regarded as a representation by us or
any other person that the forward-looking statements will be achieved. Undue reliance should not be placed on any forward-looking statements. Some of
the contingencies and uncertainties to which any forward-looking statement contained herein are subject include, but are not limited to, the following:
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
our sensitivity to reductions in discretionary consumer spending as a result of downturns in the economy and other factors outside our control;
projections of future results of operations or financial condition;
expectations regarding our business and results of operations of our existing casino properties and prospects for future development;
the impact of economic trends, inflation and public health emergencies on our business and financial condition;
expectations regarding trends that will affect our market and the gaming industry generally, including expansion of internet betting and gaming,
and the impact of those trends on our business and results of operations;
our ability to comply with the covenants in the agreements governing our outstanding indebtedness and leases;
our ability to meet our projected debt service obligations, operating expenses, and maintenance capital expenditures;
expectations regarding availability of capital resources;
our intention to pursue development opportunities and additional acquisitions and divestitures;
the impact of regulation on our business and our ability to receive and maintain necessary approvals for our existing properties and future projects
and operation of online sportsbook, poker and gaming.
the impact of the Data Incident (as defined below) and any other future cybersecurity breaches on our business, financial conditions and results of
operations;
factors impacting our ability to successfully operate our digital betting and iGaming platform and expand its user base;
our ability to adapt to the very competitive environments in which we operate, including the online market;
the impact of economic downturns and other factors that impact consumer spending;
the impact of win rates and liability management risks on our results of operations;
our reliance on third parties for strategic relationships and essential services;
costs associated with investments in our online offerings and technological and strategic initiatives;
risk relating to fraud, theft and cheating;
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•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
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•
our ability to collect gaming receivables from our credit customers;
the impact of our substantial indebtedness and significant financial commitments, including our obligations under our lease arrangements;
restrictions and limitations in agreements governing our debt and leased properties could significantly affect our ability to operate our business and
our liquidity;
financial, operational, regulatory or other potential challenges that may arise as a result of leasing of a number of our properties;
the effect of disruptions or corruption to our information technology and other systems and infrastructure;
the ability to identify suitable acquisition opportunities and realize growth and cost synergies from any future acquisitions;
the impact of governmental regulation on our business and the cost of complying or the impact of failing to comply with such regulations;
changes in gaming taxes and fees in jurisdictions in which we operate;
risks relating to pending claims or future claims that may be brought against us;
changes in interest rates and capital and credit markets;
the effect of seasonal fluctuations;
our particular sensitivity to energy and water prices;
deterioration in our reputation or the reputation of our brands;
potential compromises of our information systems or unauthorized access to confidential information and customer data;
our reliance on information technology, particularly for our digital business;
our ability to protect our intellectual property rights;
our reliance on licenses to use the intellectual property of third parties and our ability to renew or extend our existing licenses;
the effect of war, terrorist activity, acts of violence, natural disasters, public health emergencies and other catastrophic events;
increased scrutiny and changing expectations regarding our environmental, social and governance practices and reporting;
our reliance on key personnel and the intense competition to attract and retain management and key employees in the gaming industry;
• work stoppages and other labor problems;
•
•
our ability to retain performers and other entertainment offerings on acceptable terms; and
other factors described in Part II, Item 1A. “Risk Factors” contained herein and our Quarterly Reports on Form 10-Q and Current Reports on Form
8-K filed with the SEC.
In light of these and other risks, uncertainties and assumptions, the forward-looking events discussed in this report might not occur. These forward-looking
statements speak only as of the date on which this statement is made, even if subsequently made available on our website or otherwise, and we do not
intend to update publicly any forward-looking statement to reflect events or circumstances that occur after the date on which the statement is made, except
as may be required by law.
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You should also be aware that while we from time to time communicate with securities analysts, we do not disclose to them any material non-public
information, internal forecasts or other confidential business information. Therefore, you should not assume that we agree with any statement or report
issued by any analyst, irrespective of the content of the statement or report. To the extent that reports issued by securities analysts contain projections,
forecasts or opinions, those reports are not our responsibility and are not endorsed by us.
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Item 1A. Risk Factors
Risks Relating to Operating Our Business
We face substantial competition and expect that such competition will continue.
The gaming industry is highly competitive and competition is intense in most of the markets in which we operate. We compete with a variety of gaming
operations, including land-based casinos, dockside casinos, riverboat casinos, casinos located on racing tracks, casinos located on Native American
reservations and other forms of legalized gaming such as video gaming terminals at bars, restaurants and truck stops and online gambling and sports
betting. We also compete, to a lesser extent, with other forms of legalized gaming and entertainment such as bingo, pull tab games, card parlors,
sportsbooks, fantasy sports websites, cruise line operations, pari-mutuel or telephonic betting on horse racing and dog racing, state-sponsored lotteries and,
in the future, may compete with gaming at other venues. In addition, we compete more generally with other forms of entertainment for the discretionary
spending of our customers. In some instances, particularly in the case of Native American casinos, our competitors pay lower taxes or no taxes.
In recent years, many casino and online gaming operators, including us, have reinvested in existing jurisdictions to attract new customers or to gain market
share, thereby increasing competition in those jurisdictions. In particular, we and other online betting and gaming operators have undertaken extensive
marketing campaigns and made significant investments in customer acquisition through pricing and promotional policies. In addition, in response to
changing trends, Las Vegas operators have focused on expanding their non-gaming offerings, including upgrades to hotel rooms, new food and beverage
offerings, and new entertainment offerings. The expansion of online betting and gaming in new jurisdictions and the growth of the number of competitors
in the online betting and gaming market, the expansion of existing casino entertainment properties, the increase in the number of properties, and the
aggressive marketing strategies of many of our competitors have increased competition in many markets in which we operate, and this intense competition
is expected to continue. These competitive pressures have and are expected to continue to adversely affect our financial performance.
Our brick-and-mortar operations face increasing competition as a result of the expansion of legalized online gaming and betting, including our own online
betting and gaming operations, in a number of the jurisdictions in which we operate. While we believe that we are well positioned to compete with new
entrants to the betting and gaming market through our online betting and gaming offerings, the competitive dynamic is evolving and we cannot assure you
that our results of operations will not be adversely impacted by the expansion of legalized online gaming and betting.
States that already have legalized casino gaming may further expand gaming, and other states that have not yet legalized gaming may do so in the future.
We also compete with Native American gaming operations in California and other jurisdictions where Native American tribes operate large-scale gaming
facilities or otherwise conduct gaming activities on Native American lands, which we expect will continue to expand. Further expansion of legalized casino
gaming in jurisdictions in or near our markets or changes to gaming laws in states in which we have operations and in states near our operations could
increase competition and could adversely affect our operations.
Increased competition may require us to make substantial expenditures in marketing, customer development and capital projects to maintain and enhance
the competitive positions of our online and brick and mortar operations to increase the attractiveness and add to the appeal of our facilities and product
offerings. Because a significant portion of our cash flow is required to pay obligations under our outstanding indebtedness and our lease obligations, there
can be no assurance that we will have sufficient funds to undertake, or that we will be able to obtain sufficient financing to fund, such expenditures. If we
are unable to make such expenditures, our competitive position could be negatively affected.
Our business is sensitive to reductions in discretionary consumer spending as a result of downturns in the economy and other factors outside our
control.
Consumer demand for casino hotel and racetrack properties and online betting and gaming is particularly sensitive to downturns in the economy and the
associated impact on discretionary spending on leisure activities. Changes in discretionary consumer spending or consumer preferences brought about by
factors such as perceived or actual general economic conditions, effects of declines in consumer confidence in the economy, the impact of high energy and
food costs, rising interest rates, the increased cost of travel, decreased disposable consumer income and wealth, fears of war and future acts of terrorism, or
widespread illnesses or epidemics, including COVID-19, can have a material adverse effect on leisure and business travel, discretionary spending and other
areas of economic behavior that directly impact the gaming and entertainment industries in general and could further reduce customer demand for the
amenities and products that we offer. In addition, increases in gasoline prices, including increases prompted by global political and economic instabilities,
can adversely affect our casino operations because most of our patrons travel to our properties by car or on airlines that may pass on increases in fuel costs
to passengers in the form of higher ticket prices.
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Win rates (hold rates) for our casino operations depend on a variety of factors, some of which are beyond our control, and participation in the sports
betting industry exposes us to trading, liability management and pricing risks. We may experience lower than expected profitability and potentially
significant losses as a result of factors beyond our control or a failure to accurately determine odds.
The gaming industry is characterized by an element of chance. Accordingly, we employ theoretical win rates to estimate what a certain type of game, on
average, will win or lose in the long run. In addition to the element of chance, win rates (hold percentages) are also affected by the spread of table limits
and factors that are beyond our control, such as a player’s skill, experience, and behavior, the mix of games played, the financial resources of players, the
volume of bets placed, and the amount of time players spend gambling. As a result of the variability in these factors, the actual win rates at our casinos may
differ from the theoretical win rates we have estimated and could result in the winnings of our gaming customers exceeding those anticipated. The
variability of win rates (hold rates) also have the potential to negatively impact our financial condition, results of operations, and cash flows.
Our fixed-odds betting products involve betting where winnings are paid on the basis of the amounts wagered and the odds quoted. Odds are determined
with the objective of providing an average return to the bookmaker over a large number of events. However, there can be significant variation in gross win
percentage event-by-event and day-by-day. We have systems and controls that seek to reduce the risk of daily losses occurring on a gross-win basis, but
there can be no assurance that these will be effective in reducing our exposure to this risk. As a result we may experience (and we have from time to time
experienced) significant losses with respect to individual events or betting outcomes, in particular if large individual bets are placed on an event or betting
outcome or series of events or betting outcomes. Any significant losses on a gross-win basis could have a material adverse effect on our business, financial
condition and results of operations.
In addition, the odds that we offer in our sportsbook operations may occasionally contain an obvious error. Examples of such errors are inverted lines
between teams, or odds that are significantly different from the true odds of the outcome in a way that all reasonable persons would agree is an error. If
regulatory restrictions do not permit us to void or re-set odds to correct odds on bets associated with large obvious errors in odds making, we could be
subject to covering significant liabilities.
We rely on third parties to provide services that are essential to the operation of our online betting and gaming business, including, player account
management, geolocation and identity verification, payment processing and sports data.
We rely on third parties to provide services that are essential to the operation of our online betting and gaming business, including player account
management, geolocation and identity verification systems to ensure we comply with laws and regulations, processing deposits and withdrawals made by
our online users and providing information regarding schedules, results, performance and outcomes of sporting events to determine when and how bets are
settled. The software, systems and services provided by our third-party providers may not meet our expectations, contain errors or weaknesses, be
compromised or experience outages. A failure of such third-party systems to perform effectively, or any service interruption to those systems, could
adversely affect our business by preventing users from accessing our online platform, delaying payment or resulting in errors in settling bets, which could
give rise to regulatory issues relating to the operation of our business. By way of example, incorrect or misleading geolocation and identity verification data
with respect to current or potential users received from third-party service providers may result in us inadvertently allowing access to our offerings to
individuals who are not permitted to access them or otherwise inadvertently denying access to individuals who are permitted to access them, and errors or
failures by our payment processors and sports data providers could result in a failure to timely and accurately process payments to and from users or errors
in settling bets. Any such errors or failures could result in violations of applicable regulatory requirements and adversely affect our reputation and our
ability to attract and retain our online users. Furthermore, negative publicity related to any of our third-party partners could adversely affect our reputation
and brand, and could potentially lead to increased regulatory or litigation exposure.
In addition, if any of our third-party services providers terminates its relationship with us, is unable to maintain necessary regulatory approvals, or refuses
to renew its agreement with us on commercially reasonable terms, we would have to find alternate service providers. We cannot be certain that we would
be able to secure favorable terms from alternative service providers that are critical to the operation of our business or enter into alternative arrangements in
a timely manner. Our digital business, results of operations and prospects would be adversely impacted by our inability or delay in securing replacement
services that are sufficient to support our online business or are on comparable terms.
The growth of our digital business will depend, in part, on the success of our strategic relationships with third parties.
We rely on relationships with sports leagues and teams, media companies and other third parties in order to attract users to our offerings. For example, in
2019 we entered into an exclusive sports entertainment partnership with the NFL, making us the first ever “Official Casino Sponsor” in the history of the
league. These relationships, along with providers of online services, search engines, social media, directories and other websites and e-commerce
businesses direct consumers to our offerings. While we
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believe there are other third parties that could drive users to our online offerings, adding or transitioning to them may disrupt our business and increase our
costs, and may require us to modify, limit or discontinue certain offerings. Furthermore, sports leagues, teams and venues may enter into exclusive
partnerships with our competitors which could adversely affect our ability to offer certain types of wagers. In the event that any of our existing relationships
or our future relationships fail to provide services to us in accordance with the terms of our arrangement, or at all, and we are not able to find suitable
alternatives, our ability to cost effectively attract consumers could be impacted and our online betting and gaming business, financial condition, results of
operations and prospects could be adversely affected.
The growth of our digital business will require investments in our online offerings, technology and strategic marketing initiatives, which could be costly
and negatively impact the economics of our online business.
The online betting and gaming industry is subject to rapid and frequent changes in standards, technologies, products and service offerings, as well as in
customer demands and preferences and regulations, which will require us to continually introduce and successfully implement new and innovative
technologies, marketing strategies, product offerings and enhancements to remain competitive and effectively stimulate customer demand, acceptance and
engagement. The process of developing new online offerings and systems is inherently complex and uncertain, and new offerings may not be well received
by users, even if they are well-reviewed and of high quality. Developing new offerings and marketing strategies can also divert our management’s attention
from other business issues and opportunities. New online offerings that attain market acceptance and aggressive marketing strategies implemented in the
competitive online market environment could impact the mix of our existing business, including our casino business, or the share of our patron’s wallets in
a manner that could negatively impact our results of operations. In addition, online betting and gaming operates in a competitive environment that requires
significant investment in marketing initiatives, including free play and use of a variety of free and paid marketing channels, including television, radio,
social media platforms, such as Facebook, Instagram, X (formerly known as Twitter), and other digital channels. We cannot be sure that our investments in
technology, products, service offerings and marketing initiatives will be successful or generate the return on investment that we expect. We have incurred
losses in the past in our digital business and cannot be sure that our profitability will continue. If new or existing competitors offer more attractive offerings
or engage in marketing initiatives that are better received by customers, we may lose users or users may decrease their spending on our offerings. Further,
new customer demands, superior competitive offerings, new industry standards or changes in the regulatory environment could render our offerings
unattractive, unmarketable or obsolete and require us to make substantial unanticipated changes to our technology or business model. Failure to adapt to a
rapidly changing market or evolving customer demands, and costs required to be incurred to react to dynamic market conditions, could harm our business,
financial condition, results of operations and prospects.
We face the risk of fraud, theft, and cheating.
We face the risk that gaming customers may attempt or commit fraud or theft or cheat in order to increase winnings. Such acts of fraud, theft, or cheating
could involve the use of counterfeit chips or other tactics, possibly in collusion with our employees. Internal acts of cheating could also be conducted by
employees through collusion with dealers, surveillance staff, floor managers, or other casino or gaming area staff. Additionally, we also face the risk that
customers may attempt or commit fraud or theft with respect to our non-gaming offerings or against other customers. Such risks include stolen credit or
charge cards or cash, falsified checks, theft of retail inventory and purchased goods, and unpaid or counterfeit receipts. Failure to discover such acts or
schemes in a timely manner could result in losses in our operations. Negative publicity related to such acts or schemes could have an adverse effect on our
reputation, potentially causing a material adverse effect on our business, financial condition, results of operations, and cash flows.
We extend credit to a portion of our customers, and we may not be able to collect gaming receivables from our credit customers.
We conduct our gaming activities on a credit and cash basis. Any such credit we extend is unsecured. High-stakes players typically are extended more
credit than customers who tend to wager lower amounts. High-end gaming is more volatile than other forms of gaming, and variances in win-loss results
attributable to high-end gaming may have a significant positive or negative impact on cash flow and earnings in a particular period. We extend credit to
those customers whose level of play and financial resources warrant, in the opinion of management, an extension of credit. These large receivables could
have a significant impact on our results of operations if deemed uncollectible. Gaming debts evidenced by a credit instrument, including what is commonly
referred to as a “marker,” and judgments on gaming debts are enforceable under the current laws of the jurisdictions in which we allow play on a credit
basis, and judgments on gaming debts in such jurisdictions are enforceable in all U.S. states under the Full Faith and Credit Clause of the U.S. Constitution;
however, other jurisdictions may determine that enforcement of gaming debts is against public policy. Although courts of some foreign nations will enforce
gaming debts directly and the assets in the U.S. of foreign debtors may be reached to satisfy a judgment, judgments on gaming debts from U.S. courts are
not binding on the courts of many foreign nations.
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In addition, the Chinese government has taken steps to prohibit the transfer of cash for the payment of gaming debts. These developments may have the
effect of reducing the collectability of gaming debts of players from China. It is unclear whether these and other measures will continue to be in effect or
become more restrictive in the future. These and any future foreign currency control policy developments that may be implemented by foreign jurisdictions
could significantly impact our business, financial condition and results of operations.
The outbreak of pandemics and other public health matters and related impacts have had, and may once again have, a significant impact on our
operations and results of operations.
Public health issues and mitigation measures recommended or required by public health officials have had a material adverse effect on our operations. For
example, all of our casino properties were temporarily closed for several weeks during 2020 due to orders issued by various government agencies and tribal
bodies. Following re-opening of our properties, our operations were affected by social distancing measures, including reduced gaming operations,
limitations on number of customers present in our facilities, restrictions on hotel, food and beverage outlets and limits on events that would otherwise
attract customers to our properties. While restrictions on our operations were eased in 2021 and we experienced positive operating trends, prolonged
impacts on the economy, our industry and our business continued, with increased challenges arising from labor shortages, higher labor costs, supply chain
challenges, increasing costs of goods and services, inflation and rising interest rates, among other impacts. The extent and duration of the impact of such
measures on our business is difficult to predict and such impacts may intensify.
Acts of terrorism, war, natural disasters, severe weather, and political, economic and military conditions may impede our ability to operate or may
negatively impact our financial results.
Terrorist attacks and other acts of war or hostility have created many economic and political uncertainties. For example, a substantial number of the
customers of our properties in Las Vegas use air travel. As a result of terrorist acts that occurred on September 11, 2001, domestic and international travel
was severely disrupted, which resulted in a decrease in customer visits to our properties in Las Vegas. Visitation to Las Vegas also declined for a period of
time following the mass shooting tragedy on October 1, 2017. We cannot predict the extent to which disruptions in air or other forms of travel as a result of
any further terrorist act, security alerts or war, uprisings, or hostilities in places such as Iraq, Afghanistan, Israel, Ukraine, and/or Syria or other countries
throughout the world, and governmental responses to those acts or hostilities, will directly or indirectly impact our business and operating results. For
example, a third party that is responsible for our player account management has employees located internationally in countries impacted by such hostility
and further negative developments in such countries could negatively impact our digital business. As a consequence of the threat of terrorist attacks and
other acts of war or hostility in the future, premiums for a variety of insurance products have increased, and some types of insurance may no longer be
available. If any such event were to affect our properties, we would likely be adversely affected.
In addition, natural and man-made disasters such as major fires, floods, severe snowstorms, hurricanes, earthquakes, and oil spills could also adversely
impact our business and operating results. Severe weather and natural disasters may increase in frequency and severity as a result of climate change. Such
events could lead to the loss of use of one or more of our properties for an extended period of time and disrupt our ability to attract customers to certain of
our gaming facilities. For example, our property in Lake Charles, Louisiana was closed in August 2020 until December 2022 due to damage resulting from
Hurricane Laura. Inadequate insurance or lack of available insurance for these and other certain types or levels of risk could expose us to significant losses
in the event that a catastrophe occurred for which we are underinsured. In most cases, we have insurance that covers portions of any losses from a natural
disaster, but it is subject to deductibles and maximum payouts in many cases. Although we may be covered by insurance from a natural disaster, the timing
of our receipt of insurance proceeds, if any, may be out of our control. In some cases, however, we may receive no proceeds from insurance. In addition, if
such events increase in frequency and/or severity, insurance premiums may increase significantly or insurance may not be available to protect against future
events. Further, if properties subject to our leases with VICI and GLPI are impacted by a casualty event, such leases require us to repair or restore the
affected properties even if the cost of such repair or restoration exceeds the insurance proceeds that we receive. Under such circumstances, the rent under
such leases is required to be paid during the period of repair or restoration even if all or a portion of the affected property is not operating. In addition to the
damage caused to our properties by a casualty loss, we may suffer business disruption as a result of the casualty event or be subject to claims by third
parties that may be injured or harmed. While we carry general liability insurance and business interruption insurance, there can be no assurance that
insurance will be available or adequate to cover all loss and damage to which our business or our assets might be subjected and the timing and receipt of
insurance proceeds, if any, may be out of our control.
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Increased scrutiny and changing expectations from investors, consumers, employees, regulators, and others regarding our environmental, social and
governance practices and reporting could cause us to incur additional costs, devote additional resources and expose us to additional risks, which could
adversely impact our reputation, customer attraction and retention, access to capital and employee recruitment and retention.
Companies across all industries are facing increasing scrutiny related to their environmental, social and governance (“ESG”) practices and reporting.
Investors, consumers, employees and other stakeholders have focused increasingly on ESG practices and placed increasing importance on the implications
and social cost of their investments, purchases and other interactions with companies. With this increased focus, public reporting regarding ESG practices
is becoming more broadly expected. If our ESG practices and reporting do not meet investor, consumer or employee expectations, which continue to
evolve, our brand, reputation and customer retention may be negatively impacted.
As ESG best practices and reporting standards continue to develop, we may incur increasing costs related to ESG monitoring and reporting and compliance
with ESG initiatives. We publish an annual Corporate Social Responsibility Report, which highlights, among other things, our climate change mitigation
activities and how we are supporting our workforce, including our diversity, equity, inclusion, and belonging efforts. Our disclosures on these matters, or a
failure to meet evolving stakeholder expectations for ESG practices and reporting, may potentially harm our reputation and customer relationships.
Furthermore, if our competitors’ ESG performance is perceived to be better than ours, potential or current investors may elect to invest with our
competitors instead. In addition, in the event that we communicate certain initiatives or goals regarding ESG matters, we could fail, or be perceived to fail,
in our achievement of such initiatives or goals, or we could be criticized for the scope of such initiatives or goals. If we fail to satisfy the expectations of
investors, customers, employees and other stakeholders, or our initiatives are not executed as planned, our business, financial condition, results of
operations and prospects could be adversely affected.
Our ability to achieve any ESG objective is subject to numerous risks, many of which are outside of our control. Examples of such risks include:
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the availability and cost of low- or non-carbon-based energy sources;
the evolving regulatory requirements affecting ESG standards or disclosures;
the availability of suppliers that can meet sustainability, diversity and other ESG standards that we may set;
our ability to recruit, develop and retain diverse talent in our labor markets; and
the success of our organic growth and acquisitions or dispositions of businesses or operations.
If we fail, or are perceived to be failing, to meet the standards or objectives included in any sustainability disclosure or the expectations of our various
stakeholders, it could negatively impact our reputation, customer attraction and retention, access to capital and employee retention. In addition, new
sustainability rules and regulations have been adopted and may continue to be introduced. Our failure to comply with any applicable rules or regulations
could lead to penalties and adversely impact our reputation, customer attraction and retention, access to capital and employee retention.
Climate change regulations and greenhouse gas effects may adversely impact our operations.
We may become subject to legislation and regulation regarding climate change, and compliance with any new rules could be difficult, burdensome and
costly. Concerned parties, such as legislators and regulators, stockholders and nongovernmental organizations, as well as companies in many business
sectors, are considering ways to reduce greenhouse gas (“GHG”) emissions. Many states have announced or adopted programs to stabilize and reduce GHG
emissions and, in the past, federal legislation has been proposed in Congress. We expect to incur increased energy, environmental and other costs and
capital expenditures to comply with new regulations and legislation. Further, regulation of GHG emissions may limit our customers’ ability to travel to our
properties (e.g. as a result of increased fuel costs or restrictions on transport-related emissions).
Our business may be subject to fluctuations due to seasonality and other factors that could result in volatility and have an adverse effect on our
operating results.
Our business may fluctuate due to seasonality and other factors. Our casino business is impacted by weather conditions that may deter or prevent customers
from reaching the facilities or undertaking trips, which would particularly affect customers who are traveling longer distances to visit our properties. Our
casino business can also fluctuate due to specific holidays or other significant events, particularly when the holiday falls in a different quarter than the prior
year, the World Series of Poker tournament (with respect to our Las Vegas properties), city-wide conventions, a large sporting event or a concert, or visits
by our premium players. Our sportsbook business may also be impacted by availability or scheduling of major sporting events or the cancellation or
postponement of sporting events or races, including lockouts, strikes or similar disruptions. Seasonality,
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holiday, or other significant events may affect our digital operations, properties or regions differently. These factors, among other things, could adversely
affect our business, financial condition, and operating results, cause volatility in the trading price of our stock and impact our cash flow from quarter to
quarter.
Our business is particularly sensitive to energy or water prices and a rise in these prices could harm our operating results.
We are a large consumer of electricity, water and other energy and utility services and, therefore, higher prices may have an adverse effect on our results of
operations. Accordingly, increases in energy costs may have a negative impact on our operating results. Additionally, higher electricity and gasoline prices
that affect our customers may result in reduced visitation to our resorts and a reduction in our revenues. Further, our operations or the operations of our
critical supplies could be negatively impacted by the duration of drought conditions, or other cause of water stress or shortages, such as those experienced
in the southwest United States, or other areas in which we operate. We may be indirectly impacted by regulatory requirements aimed at reducing the
impacts of climate change directed at up-stream utility providers, and we could experience potentially higher utility, fuel, water and transportation costs.
Any deterioration in our reputation or the reputation of our brands could adversely impact our business, financial condition, or results of operations.
Our business is dependent on the quality and reputation of our Company and brands. Events beyond our control could affect the reputation of one or more
of our properties, including our digital operations, or more generally impact our corporate or brand image. Other factors that could influence our reputation
include the quality of the services we offer and our actions with regard to social issues such as diversity, human rights and support for local communities.
Broad access to social media makes it easy for anyone to provide public feedback that can influence perceptions of us, our brands or our properties. It may
be difficult to control or effectively manage negative publicity, regardless of whether it is accurate. Negative events and publicity could quickly and
materially damage perceptions of us, our brands or our properties, which, in turn, could adversely impact our business, financial condition or results of
operations through loss of customers, loss of business opportunities, lack of acceptance of our Company to operate in host communities, employee
retention or recruiting difficulties or other difficulties.
Risks Relating to Information Systems and Technology
Compromises of our information systems or unauthorized access to confidential information or our customers’ personal information could materially
harm our reputation and business.
We collect and store confidential, personal information relating to our customers for various business purposes, including marketing and financial purposes,
and credit card information for processing payments. For example, we handle, collect and store personal information in connection with our customers
staying at our hotels and enrolling in Caesars Rewards. We may share this personal and confidential information with vendors or other third parties in
connection with processing of transactions, operating certain aspects of our business, or for marketing purposes. Our collection and use of personal data are
governed by state and federal privacy laws and regulations as well as the applicable laws and regulations in other countries in which we operate. Privacy
law is subject to frequent changes and varies significantly by jurisdiction. We may incur significant costs in order to ensure compliance with the various
applicable privacy requirements. In addition, privacy laws and regulations may limit our ability to market to our customers.
We assess and monitor the security of collection, storage, and transmission of customer information on an ongoing basis, including utilizing commercially
available software and technologies to monitor, assess and secure our network. Further, some of the systems currently used for transmission and approval
of payment card transactions and the technology utilized in payment cards themselves, all of which can put payment card data at risk, are determined and
controlled by the payment card industry, and other such systems are determined and controlled by us. Although we had taken steps designed to safeguard
our customers’ confidential personal information and important internal company data, on September 14, 2023, we announced that we identified suspicious
activity in our information technology network resulting from a social engineering attack on one of our outsourced IT support vendors and that we
determined that the unauthorized actor acquired a copy of, among other data, our loyalty program database, which includes driver’s license numbers and/or
social security numbers for a significant number of members in the database (the “Data Incident”). We took steps to ensure that the stolen data was deleted
by the unauthorized actor and are working with industry-leading third-party IT advisors, to harden our systems and implement corrective measures to
protect against future attacks that could pose a threat to our systems. We have also taken steps to require that the specific outsourced IT support vendor
involved in this matter implemented corrective measures to protect against future attacks that could pose a threat to our systems. While we took these
actions, we cannot assure that the stolen data was deleted by the unauthorized actor or that our network and other systems and those of third parties, such as
service providers, will not be compromised, damaged, or disrupted by a third-party breach of our system security or that of a third-party provider or as a
result of purposeful or accidental actions of third parties, our employees, or those employees of a third party, power outages, computer viruses, system
failures, natural disasters, or other catastrophic events in the future. Our third-party information
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system service providers face risks relating to cybersecurity similar to ours, and we do not directly control any of such parties’ information security
operations. As an example, the Data Incident arose from a social engineering attack on one of our outsourced IT vendors. Advances in computer and
software capabilities, encryption technology, new tools, and other developments may increase the risk of a future security breach. As a result of the Data
Incident, customer information and other data was accessed by an unauthorized actor. Any future security breach may also result in customer information
or other proprietary data being accessed or transmitted by or to a third party. Despite the measures we have implemented to safeguard our information,
including actions taken following the Data Incident, there can be no assurance that we are adequately protecting our information.
As a result of the Data Incident, we have become subject to multiple lawsuits and inquiries from state regulators and we may become subject to additional
lawsuits, claims and inquiries related to the Data Incident. While the Data Incident did not impact our customer-facing operations, we are unable to predict
the full impact of the Data Incident, including any regulatory effects or changes in guest behavior in the future, including whether a change in our guests’
behavior could negatively impact our financial condition and results of operations on an ongoing basis.
We have cybersecurity insurance to respond to a breach which is designed to cover expenses associated with a cybersecurity incident, including costs
related to notification, credit monitoring, investigation, crisis management, public relations and legal advice. We also carry other insurance which may
cover ancillary aspects of cybersecurity events. While we have submitted claims for insurance coverage relating to the costs incurred as a result of the Data
Incident, we are not certain of the extent to which such coverage or third-party indemnification will cover of such future costs.
Any future data security breaches giving rise to a loss, disclosure of, misappropriation of, or access to customers’ or other proprietary information or other
breach of our information security could result in additional legal claims or legal proceedings, including regulatory investigations and actions, or liability
for failure to comply with privacy and information security laws, including for failure to protect personal information or for misusing personal information
could damage our reputation, and expose us to additional claims from customers, financial institutions, regulators, payment card associations, employees,
and other persons, any of which could have an adverse effect on our financial condition, results of operations, and cash flow. Any such damages and claims
arising from a future breach may not be completely covered or may exceed the amount of any insurance available.
Our operations, and particularly our digital betting and gaming operations, are reliant on information technology and other systems and services, and
any failures, errors, defects or disruptions in our systems or services could adversely affect our operations.
Our technology infrastructure is critical to the performance of our digital betting and gaming operations and to user satisfaction and we rely significantly on
our computer systems and software to receive and properly process internal and external data, including data related to Caesars Rewards. We devote
significant resources to our technology infrastructure, but our systems may not be adequate to avoid performance delays or outages that could be harmful to
our online business. In addition, while we believe we have taken appropriate steps, working with industry-leading third-party IT advisors, to harden our
systems following the Data Incident and implement corrective measures to protect against future attacks that could pose a threat to our systems. We cannot
assure you that such measures or any additional measures we take to prevent cyber-attacks and protect our systems, data and user information and to
prevent outages, data or information loss, fraud and to prevent or detect security breaches will be sufficient to ensure uninterrupted operation of our digital
platform and provide absolute security. We have experienced, and we may in the future experience, website disruptions, outages and other performance
problems due to a variety of factors, including infrastructure changes, human or software errors and capacity constraints. Disruptions from unauthorized
access to, fraudulent manipulation of, or tampering with our computer systems and technological infrastructure, or those of third parties that provide
support to our operations, could result in a wide range of negative outcomes, each of which could materially adversely affect the operation of our online
business and our financial condition, results of operations and prospects.
Additionally, our computer systems and software may fail or may contain errors, bugs, flaws or corrupted data, and these defects may only become
apparent after the launch of our online products. These types of issues could disrupt our operations or render a product unavailable when users attempt to
access it or cause access to our offerings to be slower than our users expect. Inaccessibility or slow access to our products could make users less likely to
return to our digital platform as often, if at all, or to recommend our offerings to other potential users, which could harm our brand perception, cause our
users to stop utilizing our online offerings, divert our resources and delay market acceptance of our online offerings.
Our information systems are not fully redundant and our disaster recovery planning cannot account for all eventualities. If our systems are damaged,
breached, attacked, interrupted, or otherwise cease to function properly, we may have to make a significant investment to repair or replace them, and may
experience loss or corruption of critical data as well as suffer interruptions in our business operations in the interim.
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We expect that we will continue to expand our online betting and gaming offerings as our user base grows and we enter into new markets, which will
require an enhancement of our technical infrastructure, including network capacity and computing power, and may require additional reliance on third party
providers to support the growth of our digital business and to satisfy our users’ needs. Such infrastructure expansion may be complex and costly, and
unanticipated delays in completing these projects or availability of components may lead to increased project costs, operational inefficiencies, or
interruptions in the delivery or degradation of the quality of our offerings. In addition, there may be issues related to our online infrastructure that are not
identified during the testing phases of design and implementation and become evident after we have started to fully use the underlying equipment or
software, which could impact the user experience or increase our costs. An inability to effectively scale our technical infrastructure to accommodate
increased demands could adversely impact our ability to grow our digital betting and gaming business.
Our online business is dependent on the Internet and we rely on Amazon Web Services and other third-party technology, platforms and services to
deliver our offerings to users.
A substantial portion of the infrastructure that is required to enable users to access our digital betting and gaming offerings is provided by third parties,
including Internet service providers and other technology-based service providers. In particular, we currently host our online betting and gaming offerings
and support our operations using Amazon Web Services (“AWS”) and other third-party technology, platforms and services. Our third-party providers may
experience service interruptions, delays, outages or damage, including due to capacity constraints, an event causing an unusually high volume of Internet
use (such as a pandemic or public health emergency), infrastructure changes or upgrades (such as 5G or 6G services), human or software errors, website
hosting disruptions, natural disasters, cybersecurity attacks, terrorist attacks, power outages and similar events or acts of misconduct. We exercise little
control over our third-party providers and any difficulties that these providers experience, including the potential of certain network traffic receiving
priority over other traffic (i.e., lack of net neutrality), may adversely affect our business. Because our ability to provide our users with continuing and
uninterrupted access to our platform is critical to the success of our digital business, we use our best efforts to ensure that our facilities and infrastructure
and the facilities and infrastructure of our third-party providers support our current and expected operations and are designed to mitigate the impacts of
system malfunctions. Nevertheless, there can be no guarantee that such systems will be able to meet the demand of our current and future digital business,
the overall online betting and gaming industry and the growth of the Internet. Furthermore, if we do not maintain business relationships with our third-party
providers, and in particular, AWS, we may not be able to secure required third-party services on terms that are acceptable to us or on an acceptable time
frame. Any of these risks could result in a loss of revenue and cause us to incur unexpected costs that could be significant, which could have a material
adverse effect on our online business, financial condition, results of operations and prospects.
Our online business model depends upon the continued compatibility between our apps and the major mobile operating systems and upon third-party
platforms for the distribution of our product offerings, which depend on factors beyond our control such as the design of third-party operating systems
and continued access to our apps on third-party distribution platforms like the Apple App Store.
Our digital business is dependent on the interoperability of our technology with popular mobile operating systems, technologies, networks and standards as
our users access our online betting and gaming product offerings primarily on mobile devices. As a result, our business model depends upon the continued
compatibility between our app and the major mobile operating systems, such as the Android and iOS operating systems, and we rely upon third-party
platforms for distribution of our product offerings. We do not have formal or informal relationships with parties that control design of mobile devices and
operating systems and there is no guarantee that popular mobile devices will start or continue to support or feature our product offerings. Any changes,
bugs, technical or regulatory issues in such operating systems, our relationships with mobile manufacturers and carriers, or in their terms of service or
policies that degrade our offerings’ functionality, reduce or eliminate our ability to distribute our offerings, give preferential treatment to competitive
products, limit our ability to deliver high quality offerings, or impose fees or other charges related to delivering our offerings, could adversely affect our
product usage and monetization on mobile devices. In addition, if any of the third-party platforms used for distribution of our product offerings were to
limit or disable the availability of our app or advertising on their platforms, our ability to generate revenue could be harmed. These changes could
materially impact the way we do business, and if we are unable to adjust to those changes quickly and effectively, there could be an adverse effect on our
business, financial condition, results of operations and prospects.
Risks Related to Human Capital
We rely on our key personnel and we may face difficulties in attracting and retaining qualified employees for our casinos and racetracks.
Our future success will depend upon, among other things, our ability to keep our senior executives and highly qualified employees. The operation of our
business requires qualified executives, managers and skilled employees with gaming and horse
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racing industry experience and qualifications who are able to obtain the requisite licenses and approval from the applicable gaming authorities. We compete
with other potential employers for employees, and we may not succeed in hiring or retaining the executives and other employees that we need. A sudden
loss of or inability to replace key employees could have a material adverse effect on our business, financial condition and results of operations. Moreover,
there has from time to time been a shortage of skilled labor in our markets and the continued expansion of gaming near our facilities, including the
expansion of Native American gaming and internet betting and gaming, may make it more difficult for us to attract qualified candidates. While we believe
that we will continue to be able to attract and retain qualified employees, shortages of skilled labor will make it increasingly difficult and expensive to
attract and retain the services of a satisfactory number of qualified employees, and we may incur higher costs than expected as a result.
Work stoppages and other labor problems could negatively impact our future profits.
As of December 31, 2023, we had collective bargaining agreements covering approximately 24,000 employees. A lengthy strike or other work stoppages at
any of our casino properties could have an adverse effect on our business and results of operations. New contracts, such as the ones we signed in 2023,
increase our labor costs.
From time to time, we have also experienced attempts by labor organizations to organize certain of our non-union employees, which has achieved some
past success. We cannot provide any assurance that we will not experience additional and successful union activity in the future. The impact of this union
activity is undetermined and could negatively impact our results of operations.
We cannot assure you that we will be able to retain our performers and other entertainment offerings on acceptable terms or at all.
Historically, our performers have drawn customers to our properties and have been a significant source of our revenue. We cannot assure you that we will
be able to retain our performers or other shows on acceptable terms or at all. In addition, the third parties that we depend on for our properties’
entertainment offerings may become incapable or unwilling to provide their services at the level agreed upon or at all. Disruptions in the performance
schedule can leave us without entertainment offerings, which could negatively impact our business.
Risks Relating to Our Capital Structure
Our substantial indebtedness and the fact that a significant portion of our cash flow is used to make interest payments and rent payments under our
debt and lease agreements could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to changes in the
economy or our industry and prevent us from making debt service payments and rent payments.
As of December 31, 2023 we had $12.4 billion of outstanding indebtedness, in addition to leases with VICI and GLPI that require an annual rent payment
of $1.3 billion in 2024 and are subject to annual escalation, including annual escalations based on the CPI. See Note 10 for a description of our obligations
under our leases with VICI and GLPI and Note 12 for details regarding our debt outstanding and related restrictive covenants. As a result, a significant
portion of our cash flow is applied to make interest payments with respect to our outstanding debt and payments under our leases. These financial
obligations may have important negative consequences for us, including:
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limiting our ability to use operating cash flow in other areas of our business because we must dedicate a significant portion of these funds to make
payments on our debt and lease obligations;
limiting our flexibility in planning for, or reacting to, changes in our businesses and the markets in which we operate;
placing us at a competitive disadvantage compared to competitors with debt and rent obligations that are less than ours;
increasing our vulnerability to, and limiting our ability to react to, changing market conditions, public health emergencies and related public health
restrictions, changes in our industry and economic downturns;
limiting our ability to obtain additional financing to fund working capital requirements, capital expenditures, debt service, acquisitions, general
corporate or other obligations;
subjecting us to a number of restrictive covenants that, among other things, require us to make capital expenditures and limit our ability to pay
dividends and distributions, make acquisitions and dispositions, borrow additional funds and make other investments;
exposing us to interest rate risk due to the variable interest rate on borrowings under our credit facilities; and
affecting our ability to renew gaming and other licenses necessary to conduct our business.
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Our ability to service our current and future levels of indebtedness will depend upon, among other things, our future financial and operating performance,
which will be affected by prevailing economic conditions, including the interest rate environment and financial, business, regulatory and other factors,
some of which are beyond our control.
There is no assurance that we will generate cash flow from operations or that future debt or equity financings will be available to us to enable us to pay our
indebtedness or to fund other needs and we may be forced to take actions such as reducing or delaying business activities, acquisitions, investments or
capital expenditures, selling assets, restructuring or refinancing debt, reducing or discontinuing dividends we may pay in the future, or seeking additional
equity capital. These actions may not be effected on satisfactory terms, or at all. Any inability to generate sufficient cash flow or refinance our indebtedness
on favorable terms could have a material adverse effect on our business, results of operations and financial condition. While we expect to refinance or
replace our debt facilities when they mature, we cannot be sure that we will be able to obtain financing on commercially reasonable terms.
Despite our current indebtedness levels, we and our subsidiaries may still incur significant additional indebtedness. Incurring more indebtedness could
increase the risks associated with our substantial indebtedness.
We and our subsidiaries may be able to incur substantial additional indebtedness, including additional secured indebtedness, and may enter into financing
obligations similar to our leases with VICI and GLPI in the future. As of December 31, 2023, we had $2.1 billion of borrowing capacity under our CEI
Revolving Credit Facility, after consideration of $70 million in outstanding letters of credit and $46 million committed for regulatory purposes, and $40
million of other reserves which is only available for certain permitted uses. Further, our existing debt agreements currently permit, and we expect that
agreements governing debt that we incur in the future will permit, us to incur certain other additional secured and unsecured debt. Further, we may incur
other liabilities that do not constitute indebtedness. The risks that we face based on our outstanding indebtedness may intensify if we incur additional
indebtedness or financing obligations in the future.
Our variable rate indebtedness exposes us to interest rate volatility, which could cause our debt service obligations to increase significantly.
Borrowings under certain of our facilities are at variable rates of interest and expose us to interest rate volatility. As of December 31, 2023, $3.2 billion of
aggregate principal amount of our debt had variable rates. If interest rates increase, our debt service obligations on certain of our variable rate indebtedness
will increase even though the amount borrowed remains the same.
A significant portion of our casinos are located on leased property. If we default on one or more leases, the applicable lessors could terminate the
affected leases and we could lose possession of the affected casino.
We currently lease certain parcels of land on which a significant portion of our properties are located. As a ground lessee, we have the right to use the
leased land; however, we do not hold fee ownership of the underlying land. Accordingly, we have no interest in the leased land or improvements thereon at
the expiration of the ground leases. If our use of the land underlying our casino properties is disrupted permanently or for a significant period of time, then
the value of our assets could be impaired and our business and operations could be adversely affected. Our leases provide that they may be terminated for a
number of reasons, including failure to pay rent, taxes or other payment obligations or the breach of other covenants contained in the leases. In particular,
our leases with VICI and GLPI require annual rent payments of $1.3 billion in 2024, which is subject to escalation annually, and obligate us to make
specified minimum capital expenditures with respect to the leased properties. If our business and properties fail to generate sufficient earnings, the
payments required to service the rent obligations under our leases with VICI and GLPI could materially and adversely limit our ability to react to changes
in our business and make acquisitions and investments in our properties. If we were to default on any one or more of these leases, the applicable lessors
could terminate the affected leases and we could lose possession of the affected land and any improvements on the land, including the hotels and casinos. A
termination of our ground leases or our leases with GLPI or VICI could result in a default under our debt agreements and could have a material adverse
effect on our business, financial condition and results of operations. Further, in the event that any lessor of our leased properties, including GLPI or VICI,
encounters financial, operational, regulatory or other challenges, there can be no assurance that such lessor will be able to comply with its obligations under
the applicable lease.
Certain of our leases, including our leases with VICI and GLPI, are “triple-net” leases. Accordingly, in addition to rent, we are required to pay, among other
things, the following: (1) lease payments to the underlying ground lessor for properties that are subject to ground leases; (2) facility maintenance costs; (3)
all insurance premiums for insurance with respect to the leased properties and the business conducted on the leased properties; (4) taxes levied on or with
respect to the leased properties (other than taxes on the income of the lessor); and (5) all utilities and other services necessary or appropriate for the leased
properties and the business conducted on the leased properties. We are responsible for incurring the costs described in the preceding sentence
notwithstanding the fact that many of the benefits received in exchange for such costs shall in part accrue to the lessor
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26
as the owner of the associated facilities. In addition, we remain obligated for lease payments and other obligations under our leases with VICI and GLPI
and other ground leases even if one or more of such leased facilities is unprofitable or if we decide to withdraw from those locations. We could incur
special charges relating to the closing of such facilities including lease termination costs, impairment charges and other special charges that would reduce
our net income and could have a material adverse effect on our business, financial condition and results of operations.
Legal and Regulatory Risks
We are subject to extensive governmental regulation, taxation policies and licensing, and gaming authorities have significant control over our
operations, which could have an adverse effect on our business.
Licensing Requirements. The ownership and operation of casino gaming, online betting and gaming, riverboat and horse racing facilities are subject to
extensive federal, state and local regulation, and regulatory authorities at local, state and national levels have broad powers with respect to the licensing of
gaming businesses. We currently hold all state and local licenses and related approvals necessary to conduct our present gaming operations, but we must
periodically apply to renew many of our licenses and registrations. We cannot assure you that we will be able to obtain such renewals. Any failure to
maintain or renew our existing licenses, registrations, permits or approvals would have a material adverse effect on us. In addition, we are required to
provide information relating to our operations to various gaming regulatory agencies. A failure to provide accurate information could result in the
imposition of fines or other penalties by the relevant regulatory authority. Furthermore, if additional laws or regulations are adopted or existing laws or
regulations are amended or interpreted differently, these regulations could impose additional restrictions or costs that could have a significant adverse effect
on us.
Gaming authorities with jurisdiction over our operations may, in their discretion, require the holder of any securities issued by us to file applications, be
investigated, and be found suitable to own our securities, and, if a holder is found unsuitable, we can be sanctioned, including the loss of approvals that are
required for us to continue our gaming operations in the relevant jurisdictions, if such unsuitable person does not timely sell our securities. Our officers,
directors and key employees are also subject to similar findings of unsuitability and the gaming authorities may require us to terminate the employment of
any person who refuses to file appropriate applications. See “Item 1 - Gaming Licenses and Governmental Regulations” and Exhibit 99.1 for further
description of the regulations to which we are subject. We may be required under applicable gaming laws and regulations to obtain approval of applicable
gaming authorities to issue securities, incur debt and undertake other financing activities and our financing counterparties, including lenders, might be
subject to various licensing and related approval procedures in the various jurisdictions in which we operate gaming facilities.
Compliance with Other Laws. We are also subject to a variety of other federal, state and local laws, rules, regulations and ordinances that apply to non-
gaming businesses, including restrictions enacted in response to public health concerns such as pandemics, zoning, environmental, construction and land-
use laws and regulations governing smoking and the serving of alcoholic beverages. Our operations have been and may again be adversely impacted by
regulations enacted to limit the impact of public health concerns. In addition, legislation in various forms to ban indoor tobacco smoking has been enacted
or introduced in many states and local jurisdictions, including several of the jurisdictions in which we operate. If additional restrictions are enacted in our
jurisdictions, we could experience a significant decrease in gaming revenue and operating results at our properties and, particularly if such restrictions are
not applicable to all competitive facilities in that gaming market, our business could be materially adversely affected. The likelihood or outcome of similar
legislation in other jurisdictions and referendums in the future cannot be predicted, though any additional limitations on our operations would be expected
to negatively impact our financial performance.
Regulations adopted by FINCEN require us to report currency transactions in excess of $10,000 occurring within a gaming day. U.S. Treasury Department
regulations also require us to report certain suspicious activity, including any transaction that exceeds $5,000, if we know, suspect or have reason to believe
that the transaction involves funds from illegal activity or is designed to evade federal regulations or reporting requirements. Substantial penalties can be
imposed if we fail to comply with these regulations. FINCEN has recently increased its focus on gaming companies.
We are required to report certain customer’s gambling winnings via Form W-2G to comply with current Internal Revenue Service regulations. Should these
regulations change, we would expect to incur additional costs to comply with the revised reporting requirements.
Taxation and Fees. In addition, gaming companies are generally subject to significant revenue-based taxes and fees in addition to normal federal, state and
local income taxes, and such taxes and fees are subject to increase at any time. We pay substantial taxes and fees with respect to our operations. Tax laws
are dynamic and subject to change as new laws are passed and new interpretations of the law are issued or applied, affecting the gaming industry. The large
number of state and local governments with significant current or projected budget deficits makes it more likely that those governments that currently
permit gaming will seek to fund such deficits with new or increased gaming taxes and/or property taxes and worsening economic conditions
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27
could intensify those efforts. Any material increase, or the adoption of additional taxes or fees, could have a material adverse effect on our future financial
results.
The growth of our online betting and gaming business will depend on expansion of online betting and gaming into new jurisdictions and our ability to
obtain required licenses.
Our ability to achieve growth in our online betting and gaming business will depend, in large part, upon expansion of online betting and gaming into new
jurisdictions, the terms of regulations relating to online betting and gaming and our ability to obtain required licenses. Following the 2018 decision of the
U.S. Supreme Court to overturn the federal ban on sports betting, a number of jurisdictions have legalized sports betting and online gaming and we expect
that additional jurisdictions may do so in the future. Our ability to further expand our sports betting and online operations is dependent on the adoption of
regulations permitting such activities. However, the expansion of betting and online gaming in new jurisdictions is dependent on a number of factors that
are beyond our control and there can be no assurances of when, or if, such regulations will be adopted or the terms of such regulations, including
restrictions, tax rates and license fees and availability of such licenses to casino owners exclusively or at all.
We may not be able to protect the intellectual property rights we own or may be prevented from using intellectual property necessary for our business.
The development of intellectual property is part of our overall business strategy, and we regard our intellectual property to be an important element of our
success. We rely primarily on trade secret, trademark, domain name, copyright, and contract law to protect the intellectual property and proprietary
technology we own. We also actively pursue business opportunities in the United States and in international jurisdictions involving the licensing of our
trademarks to third parties. It is possible that third parties may copy or otherwise obtain and use our intellectual property or proprietary technology without
authorization or otherwise infringe on our rights. For example, while we have a policy of entering into confidentiality, intellectual property invention
assignment, and/or non-competition and non-solicitation agreements or restrictions with our employees, independent contractors, and business partners,
such agreements may not provide adequate protection or may be breached, or our proprietary technology may otherwise become available to or be
independently developed by our competitors. In addition, the laws of some foreign countries may not protect proprietary rights or intellectual property to as
great an extent as do the laws of the United States. Despite our efforts to protect our proprietary rights, the unauthorized use or reproduction of our
trademarks could diminish the value of our trademarks and our market acceptance, competitive advantages, or goodwill, which could adversely affect our
business.
Our technology contains software modules licensed to us by third-party authors under “open source” licenses. Use and distribution of open source software
may entail greater risks than use of third-party commercial software, as open source licensors generally do not provide support, warranties, indemnification
or other contractual protections regarding infringement claims or the quality of the code. In addition, the public availability of such software may make it
easier for others to compromise our technology and, under certain open source licenses, we could be required to release the source code of our proprietary
software to the public. This would allow our competitors to create similar offerings with lower development effort and time and ultimately could result in a
loss of our competitive advantages.
Third parties have alleged and may in the future allege that we are infringing, misappropriating, or otherwise violating their intellectual property rights.
Third parties may initiate litigation against us without warning or may send us letters or other communications that make allegations without initiating
litigation. We may elect not to respond to these letters or other communications if we believe they are without merit, or we may attempt to resolve these
disputes out of court by negotiating a license, but in either case it is possible that such disputes will ultimately result in litigation. Any such claims could
interfere with our ability to use technology or intellectual property that is material to the operation of our business. Such claims may be made by
competitors seeking to obtain a competitive advantage or by other parties, such as entities that purchase intellectual property assets for the purpose of
bringing infringement claims. We also periodically employ individuals who were previously employed by our competitors or potential competitors, and we
may therefore be subject to claims that such employees have used or disclosed the alleged trade secrets or other proprietary information of their former
employers.
We may have to rely on litigation to enforce our intellectual property rights, protect our trade secrets, determine the validity and scope of the proprietary
rights of others, or defend against claims of infringement or invalidity, including with respect to technology that we believe to be “open source.” Any such
litigation could result in substantial costs and the diversion of resources and the attention of management. If unsuccessful, such litigation could result in the
loss of important intellectual property rights, require us to pay substantial damages, subject us to injunctions that prevent us from using certain intellectual
property, require us to make admissions that affect our reputation in the marketplace, or require us to enter into license agreements that may not be
available on favorable terms, re-engineer our technology or discontinue or delay the provision of our offerings. Finally, even if we prevail in any litigation,
the remedy may not be commercially meaningful or fully compensate
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28
us for the harm we suffer or the costs we incur. Any of the foregoing could have a material adverse effect on our business, financial condition and results of
operations.
We rely on licenses to use the intellectual property rights of third parties which are incorporated into our products and services. Failure to renew or
expand existing licenses may require us to modify, limit or discontinue certain offerings.
We rely on products, technologies and intellectual property that we license from third parties, for use in our business-to-business and business-to-
consumers offerings. Certain of our offerings and services use intellectual property licensed from third parties and we expect that our future products will
require the use of third-party intellectual property. The future success of our business may depend, in part, on our ability to obtain, retain and/or expand
licenses for popular technologies and games in a competitive market. We cannot assure that third-party licenses that may be necessary or desirable for the
operation of our products, or support for such licensed products and technologies, will be available to us on commercially reasonable terms, if at all. If we
are unable to renew and/or expand existing licenses or obtain new licenses, including as a result of reluctance of third parties to subject themselves to
regulatory review that may be required to operate as our supplier, we may be required to discontinue or limit our use of the products that include or
incorporate the licensed intellectual property, which could adversely impact our business, results of operations and prospects.
We are or may become involved in legal proceedings that, if adversely adjudicated or settled, could impact our business and financial condition.
From time to time, we are named in lawsuits or other legal proceedings relating to our respective businesses. Some of these matters involve commercial or
contractual disputes, intellectual property claims, legal compliance, personal injury claims, and employment claims. As with all legal proceedings, no
assurances can be given as to the outcome of these matters. Moreover, legal proceedings can be expensive and time consuming, and we may not be
successful in defending or prosecuting these lawsuits, which could result in settlements or damages that could significantly impact our business, financial
condition and results of operations.
Item 1B. Unresolved Staff Comments
None.
Item 1C. Cybersecurity
Risk management and strategy
We maintain a cybersecurity team responsible for the development and implementation of a program intended to protect the confidentiality, integrity and
availability of our critical systems and information. A component of our program is a cybersecurity Incident Response Plan (“IRP”) which has been built
by the team utilizing current and historical industry knowledge and experience.
Key elements of our risk management procedures and processes include:
•
•
•
•
•
•
•
•
risk assessments to help mitigate material cybersecurity risks to our critical systems, information, services, and our broader enterprise IT
environment;
a team comprised of IT security, IT infrastructure, and IT compliance personnel principally responsible for directing (1) our cybersecurity risk
assessment processes, (2) our security processes, and (3) our response to cybersecurity incidents;
the use of external cybersecurity service providers, where appropriate, to assess, test or otherwise assist with aspects of our security processes;
formal information security training program for all team members as well as supplemental training on specific matters such as phishing and email
security best practices;
a cybersecurity incident response plan and Security Operations Center (SOC) to respond to cybersecurity incidents;
attack and response simulations at the technical level and execute tabletop response exercises at the management level;
a third-party risk management process for service providers; and
cybersecurity insurance to cover certain expenses in the event of a cybersecurity incident.
The cybersecurity team reports to the Chief Information Officer and in January 2024, we hired a Chief Information Security Officer (“CISO”) with
significant experience in leading cybersecurity teams to assume the leadership of management’s responsibilities and governance discussed below.
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29
We evaluate our cybersecurity risk management processes and continue to integrate our procedures into our overall enterprise risk management program,
which shares common methodologies, reporting channels and governance processes that apply across the enterprise risk management program to other
legal, compliance, strategic, operational, and financial risk areas.
Incidents are investigated by the cybersecurity team as they are identified and may be resolved or escalated based upon the specific details and severity of
each incident. Incidents are evaluated throughout the investigation and remediation processes and incidents determined to be insignificant may be resolved
by the cybersecurity team without further escalation at that time. Incidents determined to be more severe, such as those that may have compromised the
confidentiality, integrity and availability of our critical systems and information, are escalated by the cybersecurity team to notify legal counsel, our
Cybersecurity & Privacy Executive Steering Committee, our Board of Directors, or various regulators, as required.
Our cybersecurity team evaluates the risk profile of new third party service providers and maintains communication channels with key third party service
providers to evaluate and respond to possible effects of incidents within a service provider’s organization. We rely on, and in certain cases require, our third
parties to communicate such incidents timely.
As previously disclosed, on September 14, 2023, we announced that an unauthorized actor had gained access to our information technology network as a
result of a social engineering attack on an outsourced IT support vendor used by the Company, and acquired a copy of, among other data, our loyalty
program database (“Data Incident”). After detecting suspicious activity in our information technology network, we activated our IRP, which included
containment measures, and commenced an investigation of the incident. We also notified law enforcement and state gaming regulators, engaged legal
counsel and other third-party incident response and cybersecurity professionals, as well as forensic professionals.
We have received, and continue to pursue, reimbursements from insurance carriers for costs incurred as a result of the Data Incident. Based on our
assessment, the incident has not had a material impact, and we do not believe the incident has materially affected or will materially affect us, including our
operations, business strategy, results of operations, or financial condition.
As a result of the Data Incident, numerous putative class action lawsuits have been filed against us purporting to represent various classes of persons whose
personal information was affected by the Data Incident. These class actions assert a variety of common law and statutory claims based on allegations that
we failed to use reasonable security procedures and practices to safeguard customers’ personal information, and seek monetary and statutory damages,
injunctive relief and other related relief. In addition to those putative class action lawsuits, individual claims have been filed or threatened against us as
well.
We have also received inquiries from numerous state regulators related to the Data Incident. We are responding to these inquiries and cooperating fully
with regulators. See Note 11 for further discussion.
We face certain ongoing risks from cybersecurity threats that, if realized, are reasonably likely to materially affect us, including our operations, business
strategy, results of operations, or financial condition.
Governance
Our Board considers cybersecurity risk as critical to the enterprise and is responsible for reviewing our cybersecurity risk profile, including management’s
design, implementation and enforcement of our cybersecurity risk management program. The Board of Directors receives periodic updates from our Chief
Information Officer (“CIO”) on cybersecurity risks and threats. Board members also receive periodic presentations on cybersecurity topics from our CIO,
supported by our internal security staff, or external experts as part of the Board’s continuing education on topics that impact public companies.
The Board has determined that retaining responsibility for risks related to cybersecurity oversight is appropriate, given the complexity of the risks
associated with cybersecurity and the attention required to appropriately review and monitor such risks. The full Board lends its collective experience and
attention to discussing and overseeing potential risks identified by management and stays up to date on management’s risk-mitigation processes related to
cybersecurity.
Our CIO supervises efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which include briefings
from internal security personnel; threat intelligence and other information obtained from governmental, public or private sources, including external
cybersecurity service providers; and alerts and reports produced by security tools deployed in the IT environment.
Our CIO is responsible for assessing and managing our material risks from cybersecurity threats. Our CIO has the primary responsibility for leading our
overall cybersecurity risk management program and supervises both our internal cybersecurity personnel and our external cybersecurity service providers.
Our CIO has significant global experience in managing and leading IT and cybersecurity teams. Members of the cybersecurity team hold various
credentials and certificates with respect to information systems and they participate in continuing education.
Table of Contents
30
Item 2. Properties
As of December 31, 2023, the following are our properties, including properties that were divested during the year. All amounts are approximations.
Property
Location
Casino
Space–
Sq. Ft.
Slot
Machines
Table
Games
Hotel
Rooms and
Suites
(a)
Las Vegas Segment
Owned-Domestic
The Cromwell
Flamingo Las Vegas
Horseshoe Las Vegas
The LINQ Hotel & Casino
Paris Las Vegas
Planet Hollywood Resort & Casino
Leased
Caesars Palace Las Vegas
Harrah’s Las Vegas
Rio All-Suite Hotel & Casino
(a)
(b)
(c)
(d)
Regional Segment
Owned-Domestic
Caesars Virginia
Circus Circus Reno
Eldorado Gaming Scioto Downs
Eldorado Resort Casino Reno
Grand Victoria Casino
Harrah’s Columbus Nebraska
Harrah’s Hoosier Park Racing & Casino
Horseshoe Baltimore
Horseshoe Black Hawk
Horseshoe Indianapolis
Horseshoe Lake Charles
Isle of Capri Casino Boonville
Isle of Capri Casino Lula
Harrah’s Pompano Beach
Lady Luck Casino - Black Hawk
Silver Legacy Resort Casino
Leased
Caesars Atlantic City
Harrah’s Atlantic City
Harrah’s Council Bluffs
Harrah’s Gulf Coast
Harrah’s Joliet
Harrah’s Lake Tahoe
Harrah’s Laughlin
Harrah’s Metropolis
Harrah’s New Orleans
Harrah’s North Kansas City
Harrah’s Philadelphia
Harveys Lake Tahoe
Horseshoe Bossier City
Horseshoe Council Bluffs
Horseshoe Hammond
Horseshoe St. Louis
Las Vegas, NV
Las Vegas, NV
Las Vegas, NV
Las Vegas, NV
Las Vegas, NV
Las Vegas, NV
Las Vegas, NV
Las Vegas, NV
Las Vegas, NV
Danville, VA
Reno, NV
Columbus, OH
Reno, NV
Elgin, IL
Columbus, NE
Anderson, IN
Baltimore, MD
Black Hawk, CO
Shelbyville, IN
Westlake, LA
Boonville, MO
Lula, MS
Pompano Beach, FL
Black Hawk, CO
Reno, NV
Atlantic City, NJ
Atlantic City, NJ
Council Bluffs, IA
Biloxi, MS
Joliet, IL
Lake Tahoe, NV
Laughlin, NV
Metropolis, IL
New Orleans, LA
N. Kansas City, MO
Chester, PA
Lake Tahoe, NV
Bossier City, LA
Council Bluffs, IA
Hammond, IN
St. Louis, MO
40,600
72,300
61,100
39,100
96,700
63,800
124,500
88,800
117,300
40,000
65,500
108,400
70,000
42,400
6,300
86,100
133,300
26,900
99,300
63,000
28,000
59,300
71,700
11,200
90,100
114,800
150,100
27,600
37,200
39,000
54,000
58,200
23,500
111,100
57,500
88,700
48,900
34,000
59,200
109,600
75,000
350
840
770
620
840
820
1,310
1,020
910
820
420
1,870
780
750
240
1,170
1,600
610
1,520
800
780
520
1,260
290
840
1,750
1,840
690
640
770
720
730
600
1,010
920
1,580
580
960
1,230
1,650
980
30
60
50
40
70
70
160
60
40
30
10
—
40
50
—
40
170
30
90
50
20
10
40
—
60
110
130
10
30
20
60
30
20
110
60
50
30
60
50
80
30
190
3,450
2,060
2,240
3,670
2,500
3,980
2,540
2,520
—
1,570
—
810
—
—
—
—
400
—
250
140
150
—
—
1,680
1,140
2,580
250
500
200
510
1,510
210
450
390
—
740
600
150
—
490
Table of Contents
31
Property
Horseshoe Tunica
Isle Casino Bettendorf
Isle Casino Waterloo
Trop Casino Greenville
Tropicana Atlantic City
Tropicana Laughlin Hotel & Casino
Managed and Branded Segment
Managed
Harrah’s Ak-Chin
Harrah’s Cherokee
Harrah’s Cherokee Valley River
Harrah’s Resort Southern California
Caesars Windsor
(e)
Caesars Dubai
Branded
Caesars Southern Indiana
Harrah’s Northern California
Location
Tunica, MS
Bettendorf, IA
Waterloo, IA
Greenville, MS
Atlantic City, NJ
Laughlin, NV
Phoenix, AZ
Cherokee, NC
Murphy, NC
Funner, CA
Canada
United Arab Emirates
Elizabeth, IN
Ione, CA
Casino
Space–
Sq. Ft.
Slot
Machines
Table
Games
Hotel
Rooms and
Suites
63,000
41,200
39,200
22,800
121,100
43,200
65,200
222,600
66,000
72,900
100,000
—
74,400
30,100
930
870
820
450
1,630
640
1,150
3,260
970
1,450
1,680
—
980
740
90
20
20
—
100
10
30
160
50
50
80
—
90
10
510
510
190
—
2,360
1,490
530
1,830
300
1,090
760
580
500
—
____________________
(a)
In December 2023, the Company rebranded a hotel tower as the Versailles tower and moved 750 rooms from Horseshoe Las Vegas to Paris Las Vegas.
(b)
(c)
(d)
(e)
As of October 2, 2023, Caesars no longer operates the Rio All-Suite Hotel & Casino and all operations were assumed by the lessor.
Temporary gaming facility opened on May 15, 2023. The construction of the permanent facility of Caesars Virginia is expected to be completed in late 2024.
Temporary gaming facility opened on June 12, 2023. The construction of the permanent facility of Harrah’s Columbus Nebraska is expected to be completed in the second quarter of 2024.
On November 16, 2023, the Company exited the management agreement associated with Caesars Dubai and the property was renamed under new ownership.
Certain of our properties operate off-track betting locations, including Harrah’s Hoosier Park Racing & Casino, which operates Winner’s Circle
Indianapolis and Winner’s Circle New Haven, and Horseshoe Indianapolis, which operates Winner’s Circle Clarksville. Other properties of ours include
The LINQ Promenade, next to The LINQ Hotel & Casino (the “LINQ”) and the CAESARS FORUM conference center in our Las Vegas segment. The
LINQ Promenade is an open-air dining, entertainment, and retail promenade located on the east side of the Las Vegas Strip that features the High Roller, a
550-foot observation wheel, and the Fly LINQ Zipline attraction. The CAESARS FORUM is a 550,000 square feet conference center with 300,000 square
feet of flexible meeting space, two of the largest pillarless ballrooms in the world and direct access to the LINQ. We will also open our first non-gaming
hotel experience in the first half of 2024 with the opening of Caesars Republic Scottsdale featuring more than 250 hotel rooms, approximately 20,000
square feet of event space and hotel amenities including, pools, bars, lounges, and celebrity partnered restaurants.
Item 3. Legal Proceedings
For a discussion of our “Legal Proceedings,” refer to Note 11 to our Financial Statements located elsewhere in this Annual Report on Form 10-K.
Item 4. Mine Safety Disclosures
Not applicable.
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32
PART II
Item 5. Market for Registrants’ Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities
Our Common Stock is quoted on the NASDAQ Stock Market under the symbol “CZR”. As of February 15, 2024, there were approximately 297 holders of
record of our common stock.
We have not paid any cash dividends on our common stock. We intend to retain all of our earnings to finance the development of our business, and thus, do
not anticipate paying cash dividends on our common stock for the foreseeable future. Payment of any cash dividends in the future will be at the discretion
of our Board and will depend upon, among other things, our future earnings, operations and capital requirements, our general financial condition, general
business conditions and restrictions that may be in place under our borrowing arrangements or existing lease agreements.
Equity Compensation Plan Information
We maintain long-term incentive plans which allow for granting stock-based compensation awards for directors, employees, officers, and consultants or
advisers who render services to the Company or its subsidiaries, based on Company Common Stock, including stock options, restricted stock, restricted
stock units (“RSUs”), performance stock units (“PSUs”), market-based performance stock units (“MSUs”), stock appreciation rights, and other stock-based
awards or dividend equivalents. Forfeitures are recorded in the period in which they occur. See Note 15 for a description of our stock-based compensation
plans.
The following table sets forth information as of December 31, 2023, with respect to compensation plans under which equity securities that we have
authorized for issuance.
Plan Category
Number of securities to be
issued
upon exercise of
outstanding options,
(1)
warrants and rights
(a)
Weighted average
exercise price
of outstanding options,
(2)
warrants and rights
(b)
Number of securities
remaining
available for future
issuance under
equity compensation plans
(excluding
securities reflected in
column (a))
(c)
Equity compensation plans approved by security holders
3,122,668 $
—
3,937,123
___________________
(1)
Includes unvested RSUs, PSUs, and MSUs only, there were no outstanding options as of December 31, 2023.
(2)
RSUs, PSUs, and MSUs do not have an exercise price.
Changes to the Authorized Shares
On June 17, 2021, following receipt of required shareholder approvals, the Company amended its Certificate of Incorporation to increase the number of
authorized shares of common stock from 300 million to 500 million, and authorize the issuance of up to 150 million shares of preferred stock. As of
December 31, 2023, no shares of preferred stock have been issued.
Share Repurchase Program
In November 2018, our Board authorized a common stock repurchase program of up to $150 million of stock (the “Share Repurchase Program”) pursuant
to which we may, from time to time, repurchase shares of common stock on the open market (either with or without a 10b5-1 plan) or through privately
negotiated transactions. The Share Repurchase Program has no time limit and may be suspended or discontinued at any time without notice. There is no
minimum number of shares of common stock that we are required to repurchase under the Share Repurchase Program.
As of December 31, 2023, we have acquired 223,823 shares of common stock under this program since 2018 at an aggregate value of $9 million and an
average of $40.80 per share. No shares were repurchased during the years ended December 31, 2023 or 2022.
Recent Sales of Unregistered Securities
None.
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33
Stock Performance Graph
The graph depicted below compares the cumulative total stockholder return on our common stock with the cumulative total return on the Standard & Poor's
500 Stock Index (“S&P 500”) and the Dow Jones U.S. Gambling Total Stock Market Index (“Dow Jones U.S. Gambling”) for the period beginning on
December 31, 2018 and ending on December 31, 2023. NASDAQ OMX furnished the data. The performance graph assumes a $100 investment in our
stock and each of the two indices, respectively, on December 31, 2018, and that all dividends were reinvested. Stock price performance, presented for the
period from December 31, 2018 to December 31, 2023, is not necessarily indicative of future results.
The performance graph should not be deemed filed or incorporated by reference into any other of our filings under the Securities Act or the Exchange Act,
unless we specifically incorporate the performance graph by reference therein.
Item 6. [Reserved]
Not used.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion should be read in conjunction with, and is qualified in its entirety by, the audited consolidated financial statements and the notes
thereto and other financial information included elsewhere in this Annual Report on Form 10-K.
Caesars Entertainment, Inc., a Delaware corporation, and its subsidiaries, may be referred to as the “Company,” “CEI,” “Caesars,” “we,” “our,” “us,”
or the “Registrant.”
We also refer to (i) our Consolidated Financial Statements as our “Financial Statements,” (ii) our Consolidated Statements of Operations and
Consolidated Statements of Comprehensive Income (Loss) as our “Statements of Operations,” (iii) our Consolidated Balance Sheets as our “Balance
Sheets,” and (iv) our Consolidated Statements of Cash Flows as our “Statements of Cash Flows.” References to numbered “Notes” refer to Notes to our
Consolidated Financial Statements included in Item 8.
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34
The statements in this discussion regarding our expectations of our future performance, liquidity and capital resources, and other non-historical statements
are forward-looking statements. These forward-looking statements are subject to numerous risks and uncertainties. Our actual results may differ materially
from those contained in or implied by any forward-looking statements. See “Cautionary Statement Regarding Forward-Looking Information.”
Objective
This Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to be a narrative explanation of the
financial statements and other statistical data that should be read in conjunction with the accompanying financial statements to enhance an investor’s
understanding of our financial condition, changes in financial condition and results of operations. Our objectives are: (i) to provide a narrative explanation
of our financial statements that will enable investors to see the Company through the eyes of management; (ii) to enhance the overall financial disclosure
and provide the context within which financial information should be analyzed; and (iii) to provide information about the quality of, and potential
variability of, our earnings and cash flows so that investors can ascertain the likelihood of whether past performance is indicative of future performance.
Overview
We are a geographically diversified gaming and hospitality company that was founded in 1973 by the Carano family with the opening of the Eldorado
Hotel Casino in Reno, Nevada. Beginning in 2005, we grew through a series of acquisitions, including the acquisition of MTR Gaming Group, Inc. in
2014, Isle of Capri Casinos, Inc. in 2017, Tropicana Entertainment, Inc. in 2018, Caesars Entertainment Corporation in 2020, and William Hill PLC (the
“William Hill Acquisition”) on April 22, 2021. Our ticker symbol on the NASDAQ Stock Market is “CZR.”
We currently own, lease or manage an aggregate of 52 domestic properties in 18 states with approximately 51,300 slot machines, video lottery terminals
and e-tables, approximately 2,700 table games and approximately 44,700 hotel rooms as of December 31, 2023. In addition, we have other properties in
North America that are authorized to use the brands and marks of Caesars Entertainment, Inc. Our primary source of revenue is generated by our casino
properties’ gaming operations, which includes our retail and online sports betting and online gaming, and we utilize our hotels, restaurants, bars,
entertainment, racing, retail shops and other services to attract customers to our properties.
As of December 31, 2023, we owned 22 of our casinos and leased 24 casinos in the U.S. We lease 18 casinos from VICI Properties L.P., a Delaware limited
partnership (“VICI”) pursuant to a regional lease, a Las Vegas lease and a Joliet lease (collectively, “VICI Leases”). We also lease six casinos from GLP
Capital, L.P., the operating partnership of Gaming and Leisure Properties, Inc. (“GLPI”), pursuant to a Master Lease (as amended, the “GLPI Master
Lease”) and a Lumière lease (together with the GLPI Master Lease, the “GLPI Leases”). Additionally, we leased the Rio All-Suite Hotel & Casino (“Rio”)
from a separate third party until October 2, 2023, at which time operations were assumed by the lessor. See descriptions below under the “GLPI Leases”
and “VICI Leases.”
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35
We operate and conduct retail and online sports wagering across 31 jurisdictions in North America, 25 of which offer online sports betting. Additionally,
we operate iGaming in five jurisdictions in North America. The map below illustrates Caesars Digital’s presence as of December 31, 2023:
In 2022, we partnered with NYRABets LLC, the official online wagering platform of the New York Racing Association, Inc., and have launched the
Caesars Racebook app within 20 states as of December 31, 2023. Caesars Racebook also went live in Illinois in January 2024. The Caesars Racebook app
provides access for pari-mutuel wagering at over 300 racetracks around the world as well as livestreaming of races. Wagers placed can earn credits towards
our Caesars Rewards loyalty program or points which can be redeemed for free wagering credits.
We are also in the process of continuing the expansion of our Caesars Digital footprint into other states in the near term with our Caesars Sportsbook,
Caesars Racebook and iGaming mobile apps as jurisdictions legalize or provide necessary approvals. No customers under 21 years old are allowed to
wager on any of our Caesars Sportsbook, Caesars Racebook and iGaming mobile apps.
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36
We periodically divest of assets in order to raise capital or as a result of a determination that the assets are not core to our business, or due to regulatory
requirements. The following is a summary of recently completed divestitures as of December 31, 2023:
Segment
Property
Regional
Regional
Regional
MontBleu Casino Resort & Spa (“MontBleu”)
Tropicana Evansville (“Evansville”)
Belle of Baton Rouge Casino & Hotel (“Baton Rouge”)
Discontinued operations:
Regional
Harrah’s Louisiana Downs
Regional
N/A
N/A
Caesars Southern Indiana
Caesars UK Group
William Hill International
Date Sold
April 6, 2021
June 3, 2021
May 5, 2022
Sales Price
$15 million
$480 million
*
November 1, 2021
$22 million
(a)
September 3, 2021
July 16, 2021
July 1, 2022
$250 million
*
£2.0 billion
____________________
*
(a)
Not meaningful.
The proceeds of this sale were split between the Company and VICI.
In addition to the divestitures above, the operations of Rio were assumed by the lessor on October 2, 2023, and we exited our management agreement with
Caesars Dubai on November 16, 2023. See Item 8. Financial Statements and Supplementary Data — Note 4 for further discussion on these key transactions
and any applicable gain (loss) or impairment charges recorded.
Merger and Acquisitions Related Activities
William Hill Acquisition
On April 22, 2021, we completed the William Hill Acquisition for cash consideration of approximately £2.9 billion, or approximately $3.9 billion, based on
the GBP to USD exchange rate on the closing date.
We acquired William Hill PLC and its U.S. subsidiary, William Hill U.S. Holdco (“William Hill US” and together with William Hill PLC, “William Hill”)
to better position the Company to address the extensive usage of digital platforms, continued legalization in additional states and jurisdictions, and growing
bettor demand, which are driving the market for online sports betting platforms in the U.S. In addition, we continue to leverage the World Series of Poker
(“WSOP”) brand and license the WSOP trademarks for a variety of products and services across these digital platforms. At the time that the William Hill
Acquisition was consummated, our intent was to divest William Hill International and as such its results were presented in discontinued operations.
On September 8, 2021, we entered into an agreement to sell William Hill International to 888 Holdings Plc for approximately £2.2 billion. On April 7,
2022, we amended the agreement to sell William Hill International to 888 Holdings Plc for a revised enterprise value of approximately £2.0 billion. During
the year ended December 31, 2022, we recorded impairments to assets held for sale of $503 million within discontinued operations based on the revised
and final sales price. On July 1, 2022, we completed the sale of William Hill International to 888 Holdings Plc.
We recognized acquisition-related transaction costs of $21 million and $68 million for the years ended December 31, 2022 and 2021, respectively,
excluding additional transaction cost associated with sale of William Hill International. These costs were associated with legal, professional services and
certain severance and retention costs and were primarily recorded in Transaction and other costs on our Statements of Operations.
Consolidation of Horseshoe Baltimore
On August 26, 2021, we increased our ownership interest in CBAC Borrower, LLC (“Horseshoe Baltimore”), a property which we also managed, to
approximately 75.8% for cash consideration of $55 million. As a result of the increase in our ownership interest, our previously held investment was
remeasured and we recognized a gain of $40 million for the year ended December 31, 2021. Subsequent to the change in ownership, we determined that we
have a controlling financial interest and began to consolidate the operations of Horseshoe Baltimore.
Additionally, on July 10, 2023, we completed the acquisition of the remaining 24.2% equity ownership in Horseshoe Baltimore, utilizing cash on hand, for
a total of $66 million.
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37
Investments and Partnerships
We have investments in unconsolidated affiliates accounted for under the equity method which are recorded in Investment in and advances to
unconsolidated affiliates on the Balance Sheets. Certain significant investments as of December 31, 2023 and 2022 are discussed below.
Pompano Joint Venture
In April 2018, we entered into a joint venture with Cordish Companies (“Cordish”) to plan and develop a mixed-use entertainment and hospitality
destination expected to be located on unused land adjacent to the casino and racetrack at our Pompano property. As the managing member, Cordish will
operate the business and manage the development, construction, financing, marketing, leasing, maintenance and day-to-day operation of the various phases
of the project. Additionally, Cordish is responsible for the development of the master plan for the project with our input and will submit it for our review
and approval. In October 2023 and June 2021, the joint venture issued capital calls and we contributed $3 million each, respectively, for a total of
$7 million in cash contributions since inception of the joint venture. On February 12, 2021, we contributed 186 acres to the joint venture with a fair value
of $61 million. Total contributions of approximately 209 acres of land have been made with a fair value of approximately $69 million, and we have no
further obligation to contribute additional real estate or cash. During the year ended December 31, 2023, the Company recorded income related to the
investment of $64 million, primarily due to the joint venture’s gain on the sale of land. As of December 31, 2023 and 2022, our investment in the joint
venture was $147 million and $80 million, respectively, and is recorded in Investment in and advances to unconsolidated affiliates on the Balance Sheets.
While we hold a 50% variable interest in the joint venture, we are not the primary beneficiary; as such the investment in the joint venture is accounted for
using the equity method. We participate evenly with Cordish in the profits and losses of the joint venture, which are included in Transaction and other costs
on our Statements of Operations.
NeoGames
The acquired net assets of William Hill included an investment in NeoGames S.A. (“NeoGames”), a global leader of iLottery solutions and services to
national and state-regulated lotteries, and other investments. On September 16, 2021, we sold a portion of our shares of NeoGames common stock for
$136 million which decreased our ownership interest from 24.5% to approximately 8.4%. Additionally, on March 14, 2022 we sold our remaining 2 million
shares at fair value for $26 million. During the years ended December 31, 2022 and 2021, we recorded losses related to the investment in NeoGames of
$34 million and $54 million, respectively, which is included within Other income (loss) on the Statements of Operations.
Reportable Segments
Segment results in this MD&A are presented consistent with the way our management reviews operating results, assesses performance and makes decisions
on a “significant market” basis. Management views each of the Company’s casinos as an operating segment. Operating segments are aggregated based on
their similar economic characteristics, types of customers, types of services and products provided, and their management and reporting structure. Our
principal operating activities occur in four reportable segments: (1) Las Vegas, (2) Regional, (3) Caesars Digital, and (4) Managed and Branded, in addition
to Corporate and Other. See Item 2. “Properties” for listing of properties by segment.
Presentation of Financial Information
The financial information included in this Item 7 for the periods after our acquisition of William Hill on April 22, 2021, and of the increase in our
ownership percentage and subsequent consolidation of Horseshoe Baltimore on August 26, 2021, is not fully comparable to the periods prior to the
acquisitions. In addition, the presentation of financial information herein for the periods after the Company’s divestiture of various properties, described
above, is not fully comparable to the periods prior to the date of divestiture.
This MD&A is intended to provide information to assist in better understanding and evaluating our financial condition and results of operations. Our
historical operating results may not be indicative of our future results of operations because of the factors described in the preceding paragraph and the
changing competitive landscape in each of our markets, including changes in market and societal trends, increased competition, as well as by factors or
trends discussed elsewhere herein. We recommend that you read this MD&A together with our audited consolidated financial statements and the notes to
those statements included in this Annual Report on Form 10-K.
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38
Key Performance Metrics
Our primary source of revenue is generated by our gaming operations, which includes our retail and online sports betting and online gaming. Additionally,
we utilize our hotels, restaurants, bars, entertainment venues, retail shops, racing and other services to attract customers to our properties. Our operating
results are highly dependent on the volume and quality of customers staying at, or visiting, our properties and using our sports betting, horse racing and
iGaming applications.
Key performance metrics include volume indicators such as drop or handle, which refer to amounts wagered by our customers. The amount of volume we
retain, which is not fully controllable by us, is recognized as casino revenues and is referred to as our win or hold. Slot win percentage is typically in the
range of approximately 9% to 11% of slot handle for both the Las Vegas and Regional segments. Table game hold percentage is typically in the range of
approximately 16% to 23% of table game drop in both the Las Vegas and Regional segments. Sports betting hold is typically in the range of 5% to 10% and
iGaming hold typically ranges from 3% to 5%. In addition, hotel occupancy, which is the average percentage of available hotel rooms occupied during a
period, is a key indicator for our hotel business in the Las Vegas segment. See “Results of Operations” section below. Complimentary and discounted
rooms are treated as occupied rooms in our calculation of hotel occupancy. The key metrics we utilize to measure our profitability and performance are
Adjusted EBITDA and Adjusted EBITDA margin.
Significant Factors Impacting Financial Results
The following summary highlights the significant factors impacting our financial results during the years ended December 31, 2023, 2022 and 2021.
Acquisitions and Transaction Costs
• William Hill Acquisition – On April 22, 2021, we consummated the acquisition of the entire issued and to be issued share capital (other than shares
owned by the Company or held in treasury) of William Hill PLC, in an all-cash transaction of £2.9 billion, or approximately $3.9 billion. We
recognized acquisition-related transaction costs of $21 million and $68 million for the years ended December 31, 2022 and 2021, respectively,
excluding additional transaction costs associated with sale of William Hill International.
•
Consolidation of Horseshoe Baltimore – On August 26, 2021, we increased our ownership interest in Horseshoe Baltimore to approximately
75.8%. Prior to the purchase, we held an interest in Horseshoe Baltimore of approximately 44.3% which was accounted for as an equity method
investment. Subsequent to the change in ownership, we determined we have a controlling financial interest and consolidated the operations of
Horseshoe Baltimore. As a result of the consolidation, we recognized a gain of $40 million during the year ended December 31, 2021.
Additionally, on July 10, 2023, we completed the acquisition of the remaining 24.2% equity ownership in Horseshoe Baltimore, utilizing cash on
hand, for a total of $66 million.
Divestitures and Discontinued Operations
• Divestitures and Discontinued Operations – See “Overview” section above for detail of properties divested, including related discontinued
operations.
•
The operations of Rio were assumed by the lessor on October 2, 2023, and we exited our management agreement with Caesars Dubai on
November 16, 2023.
Financing Transactions
• Debt Transactions – We continue to utilize free cash flow to reduce our leverage, extend the maturity of our outstanding debt and balance our mix
of fixed and variable debt. The following are the key financing transactions and their effects on our operations, from the use of free cash flow,
unless otherwise noted:
◦
◦
◦
Issued $2.0 billion CEI Senior Secured Notes due 2030 and amended the CEI Credit Agreement and incurred a new $2.5 billion CEI
Term Loan B. Net proceeds received from these transactions were used to repay the $3.4 billion outstanding principal amount of the CRC
Term Loan and the $1.0 billion outstanding principal amount of the CRC Incremental Term Loan on February 6, 2023.
Fully repaid $267 million of the outstanding principal balance of the Baltimore Term Loan as of July 17, 2023.
Prepaid the outstanding $400 million Forum Convention Center Mortgage Loan on May 1, 2023.
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39
◦
◦
For the years ended December 31, 2023, 2022 and 2021, we recorded extinguishment charges of $200 million, $85 million and
$236 million, respectively, which are recorded within Loss on extinguishment of debt on the Statements of Operations due to the
aforementioned activity.
Refer to the Liquidity and Capital Resources section below for further discussion of our recent debt transactions, including our financing
transactions subsequent to December 31, 2023, in which we issued $1.5 billion of new CEI Senior Secured Notes due 2032 and a new
$2.9 billion CEI Term Loan B-1. Net proceeds received from these transactions, together with borrowings under our CEI Revolving
Credit Facility, were used to tender, redeem, repurchase, defease, and/or satisfy and discharge the CEI Senior Secured Notes due 2025
and the CRC Senior Secured Notes.
Other Significant Factors
•
•
•
•
•
New Developments and Re-openings – During the construction of the permanent facilities for Caesars Virginia and Harrah’s Columbus Nebraska,
we opened temporary gaming facilities during the second quarter of 2023. Caesars Virginia’s temporary facility opened on May 15, 2023 and
Harrah’s Columbus Nebraska’s temporary facility opened on June 12, 2023. In addition to the temporary facilities, the reopening of Horseshoe
Lake Charles in December 2022 has contributed to the Regional segment’s performance when compared to the prior year period.
Caesars Sportsbook, Caesars Racebook and iGaming mobile apps – During the year ended December 31, 2023, we launched Caesars Sportsbook
in new jurisdictions, migrated our sports betting platform to Liberty in Nevada, and launched our new online and mobile iGaming application,
Caesars Palace Online Casino. As new states and jurisdictions have legalized sports betting, we have made varying degrees of upfront investments
executed through marketing campaigns and promotional incentives to acquire new customers and establish our presence. For example, in
connection with the launch of our Caesars Sportsbook app in New York and Louisiana in January 2022, we experienced negative net revenue in
the first quarter of 2022 resulting from a substantial amount of bonus cash and matched deposits issued to customers as sign-on incentives, which
exceeded our gaming win. We continue to adjust our level of investment during the launch period in new jurisdictions based, in part, on prior
experience and do not expect such investment to continue at elevated levels subsequent to the initial launch period. During the year ended
December 31, 2023, promotional and marketing expenses have significantly decreased as compared to the prior year period.
Income Taxes – Management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated
to use existing deferred tax assets. During the second quarter of 2023, we evaluated our forecasted adjusted taxable income and objectively
verifiable evidence and placed substantial weight on our 2022 and 2023 quarterly earnings, adjusted for non-recurring items, including the interest
expense disallowed under current tax law. Accordingly, we determined it was more likely than not that a portion of the federal and state deferred
tax assets will be realized and, as a result, during the second quarter of 2023, we reversed the valuation allowance related to these deferred tax
assets and recorded an income tax benefit of $940 million. We are still carrying a valuation allowance on certain federal and state deferred tax
assets that are not more likely than not to be realized in the future. We have assessed the changes to the valuation allowance, including realization
of the disallowed interest expense deferred tax asset, using the integrated approach.
Economic Factors Impacting Discretionary Spending – Gaming and other leisure activities we offer represent discretionary expenditures which
may be sensitive to economic downturns, such as the resurgence of the Omicron variant of COVID-19 that negatively impacted the first quarter of
2022. We also monitor recent trends, including higher inflation and interest rates, and the related effects on our customers, and our operations.
Impairment Charges – As a result of our finalized and approved capital and operating plans and the completion of our 2023 annual impairment
testing, we recognized impairment charges during the year ended December 31, 2023 in our Regional segment. These impairments were primarily
due to a decrease in projected cash flows at certain regional properties mainly due to increased competition. We identified one reporting unit
where the estimated fair value of the associated gaming rights was less than the carrying value and recorded an impairment of $81 million. In
addition, we identified one reporting unit with an estimated fair value below its carrying value, resulting in total impairment of $14 million to
goodwill.
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During the year ended December 31, 2022, the Company recognized impairment charges in our Regional segment related to goodwill and gaming
rights totaling $78 million and $30 million, respectively, due to an increase in the related discount rates, which represents the higher required cost
of capital as a result of the macroeconomic environment and projected outlook.
In December 2021, we approved a capital plan which included the planned rebranding of certain of our properties. We utilized an income
approach to determine the fair value of the trademarks subject to rebranding based on their expected future cash flows, which resulted in an
impairment charge of $102 million during the year ended December 31, 2021.
• Weather Disruption – During the first quarter of 2023, our Regional segment was negatively impacted by severe winter weather, particularly in
northern Nevada, which caused poor and unsafe travel conditions reducing visitation to our Lake Tahoe and Reno properties. During the year
ended December 31, 2022, we reached a final settlement agreement with the insurance carriers for the damage and disruption caused by Hurricane
Laura to our Lake Charles property in 2020 for a total amount of $128 million, before our insurance deductible of $25 million. We recorded gains
of $38 million and $21 million during the years ended December 31, 2022 and 2021, respectively, which are included in Transaction and other
costs in our Statements of Operations, as proceeds received for the cost to replace damaged property were in excess of respective carrying value of
the assets.
Results of Operations
The following table highlights the results of our operations:
(Dollars in millions)
Net revenues:
Las Vegas
Regional
Caesars Digital
Managed and Branded
Corporate and Other
(a)
Total
Net income (loss)
Adjusted EBITDA
(b)
:
Las Vegas
Regional
Caesars Digital
Managed and Branded
Corporate and Other
(a)
Total
Net income (loss) margin
Adjusted EBITDA margin
Years Ended December 31,
2023
2022
2021
$
$
$
$
$
4,470
5,778
973
307
—
11,528
828
2,016
1,962
38
76
(154)
3,938
$
$
$
$
$
4,287
5,704
548
282
—
10,821
(910)
1,964
1,985
(666)
84
(124)
3,243
$
$
$
$
$
3,409
5,537
337
278
9
9,570
(1,016)
1,568
1,979
(476)
87
(168)
2,990
7.2 %
34.2 %
(8.4)%
30.0 %
(10.6)%
31.2 %
___________________
(a)
Corporate and Other includes revenues related to certain licensing arrangements and various revenue sharing agreements. Corporate and Other Adjusted EBITDA includes corporate
overhead costs, which consist of certain expenses, such as: payroll, professional fees and other general and administrative expenses.
(b)
See the “Supplemental Unaudited Presentation of Consolidated Adjusted Earnings before Interest, Taxes, Depreciation and Amortization (“Adjusted EBITDA”)” discussion later in this
MD&A for a description of Adjusted EBITDA and a reconciliation of net income (loss) to Adjusted EBITDA.
Consolidated comparison for the years ended December 31, 2023, 2022 and 2021
The following table highlights the results of our operations: Comparisons between 2023 and 2022 are described below. A discussion of changes in our
results of operations between year ended December 31, 2022 compared to 2021 has been omitted from this Annual Report on Form 10-K and can be found
in “Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations - Year Ended December 31, 2022 Compared to the
Year Ended December 31, 2021” of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022.
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41
Net Revenues
Net revenues were as follows:
(Dollars in millions)
Casino
Food and beverage
Hotel
Other
Net Revenues
Years Ended December 31,
Variance
Percent
Change
Variance
Percent
Change
2023
2022
2021
2023 vs 2022
2022 vs 2021
$
6,367 $
1,728
2,090
1,343
5,997 $
1,596
1,957
1,271
$
11,528 $
10,821 $
5,827 $
1,140
1,551
1,052
9,570 $
370
132
133
72
707
6.2 % $
8.3 %
6.8 %
5.7 %
6.5 % $
170
456
406
219
1,251
2.9 %
40.0 %
26.2 %
20.8 %
13.1 %
Consolidated net revenues increased for the year ended December 31, 2023 primarily due to higher gaming revenues in the Caesars Digital segment
resulting from higher sports betting hold and additional state launches of our online and retail Caesars Sportsbooks. Promotional allowances offered during
launches in new jurisdictions were significantly reduced year over year. Hotel occupancy rates within the Las Vegas segment continued to improve as
compared to the same prior year periods and also contributed to the increase in net revenues. The Regional segment benefited from the opening of two
temporary gaming facilities, Caesars Virginia on May 15, 2023 and Harrah’s Columbus Nebraska on June 12, 2023, as well as the reopening of Horseshoe
Lake Charles in December 2022. Further, the Omicron variant of COVID-19 negatively impacted prior year results during the first quarter of 2022 across
substantially all of our properties, including disruptions to group and conventions, banquets, and scheduled concert events. These improved results were
partially offset by increased competition associated with new casino resorts opening in some of our regional markets, construction disruptions, and
inclement weather across the country, particularly in northern Nevada, which restricted travel in the first quarter of 2023. The Company continues to
expand partnerships with iconic entertainers to host concerts and performances, and celebrity chefs to offer new food and beverage venues to drive new and
repeat visitation to our properties.
Operating Expenses
Operating expenses were as follows:
(Dollars in millions)
Casino
Food and beverage
Hotel
Other
General and administrative
Corporate
Impairment charges
Depreciation and amortization
Transaction and other costs, net
Total operating expenses
___________________
* Not meaningful.
Years Ended December 31,
Variance
Percent
Change
Variance
Percent
Change
2023
2022
2021
2023 vs 2022
2022 vs 2021
$
3,342 $
1,049
570
434
2,012
306
95
1,261
(13)
3,526 $
935
529
411
2,068
286
108
1,205
14
3,129 $
707
438
373
1,782
309
102
1,126
144
$
9,056 $
9,082 $
8,110 $
(184)
114
41
23
(56)
20
(13)
56
(27)
(26)
(5.2)% $
12.2 %
7.8 %
5.6 %
(2.7)%
7.0 %
(12.0)%
4.6 %
*
(0.3)% $
397
228
91
38
286
(23)
6
79
(130)
972
12.7 %
32.2 %
20.8 %
10.2 %
16.0 %
(7.4)%
5.9 %
7.0 %
(90.3)%
12.0 %
Casino expenses consist primarily of salaries and wages associated with our gaming operations, gaming taxes and marketing and promotions attributable to
our Caesars Digital segment. Food and beverage expenses consist principally of salaries and wages and costs of goods sold associated with our food and
beverage operations. Hotel expenses consist principally of salaries and wages, supplies and costs of services associated with our hotel operations. Other
expenses consist principally of salaries and wages and costs of goods sold associated with our retail, entertainment and other operations.
Casino expenses decreased for the year ended December 31, 2023 as compared to the same prior year period due to a reduction in advertising costs from
the promotion of our Caesars Sportsbook app and Caesars Digital’s expansion into new jurisdictions, particularly in the first quarter of 2022. Food and
beverage and hotel expenses have increased in connection with increased revenues; however, we continue to focus on labor efficiencies to manage rising
labor costs and strategically manage our marketing and advertising spend to reduce our casino expenses. Similarly, we continue to manage recent increases
in food costs by focusing on efficiencies within food and beverage venues and menu options.
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42
General and administrative expenses include items such as information technology, facility maintenance, utilities, property and liability insurance, expenses
for administrative departments such as accounting, compliance, purchasing, human resources, legal, internal audit, and property taxes. General and
administrative expenses also include other marketing expenses indirectly related to our gaming and non-gaming operations.
Corporate expenses include unallocated expenses such as payroll, inclusive of the annual bonus, stock-based compensation, professional fees, and other
various expenses not directly related to the Company’s operations.
Transaction and other costs, net for the year ended December 31, 2023 primarily includes non-cash changes in equity method investments and a gain of
$29 million associated with proceeds received from the sale of a potential insurance recovery. Offsetting these costs are non-cash losses on the write down
and disposal of assets and pre-opening costs in connection with new temporary facility openings. Transaction and other costs, net for the year ended
December 31, 2022 primarily represents professional services for integration activities and various contract exit or termination costs, offset by a
$38 million gain in the first quarter of 2022 resulting from insurance proceeds received in excess of the respective carrying value of damaged assets
associated with our Lake Charles property.
Other Expense
Other expense was as follows:
(Dollars in millions)
Interest expense, net
Loss on extinguishment of debt
Other income (loss)
Benefit for income taxes
___________________
* Not meaningful.
Years Ended December 31,
Variance
Percent
Change
Variance
Percent
Change
2023
2022
2021
2023 vs 2022
2022 vs 2021
$
(2,342) $
(200)
10
888
(2,265) $
(85)
46
41
(2,295) $
(236)
(198)
283
(77)
(115)
(36)
847
(3.4)% $
(135.3)%
(78.3)%
*
30
151
244
(242)
1.3 %
64.0 %
*
(85.5)%
For the year ended December 31, 2023, interest expense, net increased year over year due to annual escalators in our financing obligations related to our
VICI Leases, including escalators based on the Consumer Price Index (“CPI”) that take effect in November of each year. In addition, although we have
reduced our outstanding debt, rising interest rates have negatively impacted our borrowing rates and resulted in interest expense related to debt service to be
flat compared to the prior year.
For the years ended December 31, 2023 and 2022, loss on extinguishment of debt was primarily related to the prepayments of the Caesars Resort
Collection (“CRC”) Term Loan and the CRC Incremental Term Loan. In addition, on July 17, 2023, we repaid the Baltimore Term Loan.
Other income decreased for the year ended December 31, 2023, as compared to prior year, mainly due to a change in the fair value of foreign exchange
forward contracts and a gain related to the resolution of a disputed claims liability, offset by the change in fair value of investments, all of which were
recorded in the prior year.
The income tax benefit was $888 million for 2023 and $41 million for 2022. The reported income tax benefit in 2023 differed from the statutory income
tax benefit primarily due to the partial release of federal and state valuation allowances. During the second quarter of 2023, we reversed the valuation
allowance related to certain deferred tax assets and recorded a one-time income tax benefit of $940 million, as we determined it was more likely than not
that a portion of our federal and state deferred tax assets would be realized. Refer to Item 8. - Note 17 for the effective income tax rate reconciliation.
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43
Segment comparison for the years ended December 31, 2023, 2022 and 2021
Las Vegas Segment
(Dollars in millions)
Revenues:
Casino
Food and beverage
Hotel
Other
Net revenues
Table game drop
Table game hold %
Slot handle
Hotel occupancy
Adjusted EBITDA
Adjusted EBITDA margin
Net income attributable to Caesars
Years Ended December 31,
Variance
Percent
Change
Variance
Percent
Change
2023
2022
2021
2023 vs 2022
2022 vs 2021
$
$
$
$
$
$
1,212
1,152
1,447
659
4,470
3,428
22.2 %
11,057
96.8 %
2,016
45.1 %
1,042
$
$
$
$
$
$
1,247
1,063
1,341
636
4,287
3,464
22.0 %
10,718
92.2 %
1,964
45.8 %
1,021
$
$
$
$
$
$
1,226
702
968
513
3,409
3,088
20.2 %
10,309
82.1 %
1,568
46.0 %
641
$
$
$
$
$
$
(35)
89
106
23
183
(36)
339
52
21
21
361
373
123
878
376
409
(2.8)% $
8.4 %
7.9 %
3.6 %
4.3 % $
(1.0)% $
0.2 pts
3.2 % $
4.6 pts
2.6 % $
396
(0.7) pts
1.7 %
51.4 %
38.5 %
24.0 %
25.8 %
12.2 %
1.8 pts
4.0 %
10.1 pts
25.3 %
(0.2) pts
2.1 % $
380
59.3 %
The Las Vegas segment’s net revenues, net income and Adjusted EBITDA increased year over year primarily due to higher hotel, food and beverage and
entertainment revenues. The increase in food and beverage revenues was mainly driven by higher restaurant covers and improved product mix associated
with the additions of new casual and premier dining venues. Other revenue increased primarily due to entertainment revenues attributable to an increase in
both the quality and number of headliner performances in the current year compared to prior year. In addition, during the first quarter of 2022, the
resurgence of the Omicron variant of COVID-19 had a significant negative impact on visitation, group and conventions, and scheduled concert events. As a
result, the Las Vegas segment experienced increased visitation during 2023 compared to the prior year which has driven higher hotel occupancy, improved
room rates, higher food and beverage revenues and additional entertainment revenues.
The increases in net revenues, net income and Adjusted EBITDA were partially offset by growth in overall union and non-union wages and headcount.
Additionally, our Las Vegas segment experienced challenges in the middle of 2023, related to construction disruption and roadwork on the Las Vegas Strip.
As a result, the Las Vegas segment’s Adjusted EBITDA margin decreased slightly as compared to the prior year.
Slot win percentage in the Las Vegas segment during the year ended December 31, 2023 was within our typical range.
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44
Regional Segment
(Dollars in millions)
Revenues:
Casino
Food and beverage
Hotel
Other
Net revenues
Table game drop
Table game hold %
Slot handle
Adjusted EBITDA
Adjusted EBITDA margin
Net income attributable to Caesars
Years Ended December 31,
Variance
Percent
Change
Variance
Percent
Change
2023
2022
2021
2023 vs 2022
2022 vs 2021
$
$
$
$
$
$
4,272
576
643
287
5,778
4,188
21.7 %
43,211
1,962
34.0 %
377
$
$
$
$
$
$
4,291
533
616
264
5,704
4,270
22.0 %
42,853
1,985
34.8 %
463
$
$
$
$
$
$
4,305
438
583
211
5,537
4,163
21.0 %
42,873
1,979
35.7 %
637
$
$
$
$
$
$
(19)
43
27
23
74
(82)
358
(23)
(0.4)% $
8.1 %
4.4 %
8.7 %
1.3 % $
(14)
95
33
53
167
(1.9)% $
107
(0.3) pts
0.8 % $
(20)
(0.3)%
21.7 %
5.7 %
25.1 %
3.0 %
2.6 %
1 pts
— %
(1.2)% $
(0.8) pts
6
0.3 %
(0.9) pts
(86)
(18.6)% $
(174)
(27.3)%
The Regional segment’s net revenues increased for the year ended December 31, 2023 compared to the same prior year period, primarily related to
incremental net revenues generated from the reopening of Horseshoe Lake Charles in the fourth quarter of 2022 and the opening of our temporary gaming
facilities at Caesars Virginia on May 15, 2023 and Harrah’s Columbus Nebraska on June 12, 2023. These increases were partially offset by competition
associated with new casino resorts opening in some of our regional markets, construction disruption from renovation projects at certain of our properties
and inclement weather across the country, particularly in northern Nevada, which restricted travel in the first quarter of 2023. In addition, wage and
headcount increases resulted in higher labor costs during the current year. Increased interest expense associated with our VICI Leases and additional
depreciation expense related to our new gaming facilities led to a decline in net income as compared to the same prior year period. As a result, Adjusted
EBITDA decreased as compared to the prior year.
Slot win percentage in the Regional segment during the year ended December 31, 2023 was within our typical range.
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45
Caesars Digital Segment
(Dollars in millions)
Revenues:
Casino
Other
(a)
Net revenues
Sports betting handle
Sports betting hold %
(b)
iGaming handle
iGaming hold %
Adjusted EBITDA
Adjusted EBITDA margin
Net loss attributable to Caesars
Years Ended December 31,
Variance
Percent
Change
Variance
Percent
Change
2023
2022
2021
2023 vs 2022
2022 vs 2021
$
$
$
$
$
$
886
87
973
12,089
6.3 %
10,622
3.1 %
38
3.9 %
(91)
$
$
$
$
$
$
462
86
548
12,801
5.4 %
8,073
3.2 %
(666)
(121.5)%
(790)
$
$
$
$
$
$
296
41
337
6,046
4.3 %
5,621
3.3 %
(476)
(141.2)%
(580)
$
$
$
$
$
$
424
1
425
(712)
2,549
704
91.8 % $
1.2 %
77.6 % $
(5.6)% $
0.9 pts
31.6 % $
(0.1) pts
* $
*
166
45
211
6,755
2,452
(190)
56.1 %
109.8 %
62.6 %
111.7 %
1.1 pts
43.6 %
(0.1) pts
(39.9)%
19.7 pts
699
88.5 % $
(210)
(36.2)%
___________________
* Not meaningful.
(a)
Includes total promotional and complimentary incentives related to sports betting, iGaming, and poker of $253 million, $542 million and $187 million for the year ended December 31,
2023, 2022 and 2021, respectively. Promotional and complimentary incentives for poker were $14 million, $21 million and $18 million for the year ended December 31, 2023, 2022 and
2021, respectively.
(b)
Caesars Digital generated an additional $1.1 billion, $1.2 billion and $706 million of sports betting handle for the year ended December 31, 2023, 2022 and 2021, respectively, which is not
included in this table, for select wholly-owned and third-party operations for which Caesars Digital provides services and we receive all, or a share of, the net profits. Hold related to these
operations was 10.4%, 11.0% and 9.7% for the year ended December 31, 2023, 2022 and 2021, respectively. Sports betting handle includes $45 million, $50 million and $40 million for the
year ended December 31, 2023, 2022 and 2021, respectively, related to horse racing and pari-mutuel wagers.
Caesars Digital reflects the operations for retail and mobile sports betting, iGaming, poker, and horse racing, which includes our Caesars Sportsbook,
Caesars Racebook and iGaming mobile apps.
Caesars Digital’s net revenues, net loss, Adjusted EBITDA, and Adjusted EBITDA margin improved for the year ended December 31, 2023, as compared
to prior year, primarily due to higher sports betting hold combined with lower year over year promotional and marketing expenses for launches in new
states and jurisdictions in 2023. The increase in iGaming handle was slightly offset by decreased hold during the period. During the third quarter of 2023,
we completed the migration of sports betting operations in Nevada to the Liberty platform and launched our new Caesars Palace Online Casino application
in states and territories where we operate iGaming.
We experienced negative net revenue in the first quarter of 2022 as a result of increased promotional offerings for new state launches in New York and
Louisiana. We have refined our promotional intensity during the launch period in new jurisdictions based, in part, on prior experience and do not expect
such investments to continue at elevated levels subsequent to initial launch periods.
As sports betting and online casinos expand through increased state or jurisdictional legalization, new product launches, and customer adoption, variations
in hold percentages and increases in promotional and marketing expenses in highly competitive markets during promotional periods may negatively impact
Caesars Digital’s net revenues, net income, Adjusted EBITDA and Adjusted EBITDA margin in comparison to current or prior periods.
Sports betting and iGaming hold percentages for the year ended December 31, 2023 were within our typical range.
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46
Managed and Branded Segment
(Dollars in millions)
Revenues:
Other
Net revenues
Adjusted EBITDA
Adjusted EBITDA margin
Net income (loss) attributable to Caesars
___________________
* Not meaningful.
Years Ended December 31,
Variance
Percent
Change
Variance
Percent
Change
2023
2022
2021
2023 vs 2022
2022 vs 2021
$
$
$
$
307
307
76
24.8 %
101
$
$
$
$
282
282
84
29.8 %
(301)
$
$
$
$
278
278
87
31.3 %
68
$
$
$
$
25
25
(8)
8.9 % $
8.9 % $
(9.5)% $
(5) pts
4
4
(3)
1.4 %
1.4 %
(3.4)%
(1.5) pts
402
* $
(369)
*
We manage several properties and license rights to the use of our brands. These revenue agreements typically include reimbursement of certain costs that
we incur directly. Such costs are primarily related to payroll costs incurred on behalf of the properties under management. The revenue related to these
reimbursable management costs has a direct impact on our evaluation of Adjusted EBITDA margin which, when excluded, reflects margins typically
realized from such agreements. The table below presents the amount included in net revenues and total operating expenses related to these reimbursable
costs. In September 2023, we recorded $25 million of additional other revenue related to the termination of the Caesars Dubai management agreement,
which has been excluded from Adjusted EBITDA.
(Dollars in millions)
Reimbursable management revenue
Reimbursable management cost
Corporate & Other
(Dollars in millions)
Revenues:
Casino
Other
Net revenues
Adjusted EBITDA
___________________
* Not meaningful.
$
$
$
$
Years Ended December 31,
Variance
Percent
Change
Variance
Percent
Change
2023
2022
2021
2023 vs 2022
2022 vs 2021
206 $
206
198 $
198
191 $
191
8
8
4.0 % $
4.0 %
7
7
3.7 %
3.7 %
Years Ended December 31,
Variance
Percent
Change
Variance
Percent
Change
2023
2022
2021
2023 vs 2022
2022 vs 2021
(3) $
3
— $
(3) $
3
— $
— $
9
9 $
—
—
—
— % $
— %
* $
(154) $
(124) $
(168) $
(30)
(24.2)% $
(3)
(6)
(9)
44
*
(66.7)%
(100.0)%
26.2 %
Supplemental Unaudited Presentation of Consolidated Adjusted Earnings before Interest, Taxes, Depreciation and Amortization (“Adjusted
EBITDA”) for the Years Ended December 31, 2023, 2022 and 2021
Adjusted EBITDA (described below), a non-GAAP financial measure, has been presented as a supplemental disclosure because it is a widely used measure
of performance and basis for valuation of companies in our industry and we believe that this non-GAAP supplemental information will be helpful in
understanding our ongoing operating results. Management has historically used Adjusted EBITDA when evaluating operating performance because we
believe that the inclusion or exclusion of certain recurring and non-recurring items is necessary to provide a full understanding of our core operating results
and as a means to evaluate period-to-period results. Adjusted EBITDA represents net income (loss) before interest income or interest expense net of
interest capitalized, (benefit) provision for income taxes, depreciation and amortization, stock-based compensation expense, (gain) loss on extinguishment
of debt, impairment charges, other (income) loss, net income (loss) attributable to noncontrolling interests, transaction costs associated with our
acquisitions, developments, and divestitures, and non-cash changes in equity method investments. Adjusted EBITDA also excludes the expense associated
with certain of our leases as these transactions were accounted for as financing obligations and the associated expense is included in interest expense.
Adjusted EBITDA is not
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47
a measure of performance or liquidity calculated in accordance with GAAP. Adjusted EBITDA is unaudited and should not be considered an alternative to,
or more meaningful than, net income (loss) as an indicator of our operating performance. Uses of cash flows that are not reflected in Adjusted EBITDA
include capital expenditures, interest payments, income taxes, debt principal repayments, and payments under our leases with affiliates of VICI Properties
Inc. and GLPI, which can be significant. As a result, Adjusted EBITDA should not be considered as a measure of our liquidity. Other companies that
provide EBITDA information may calculate Adjusted EBITDA differently than we do. The definition of Adjusted EBITDA may not be the same as the
definitions used in any of our debt agreements.
The following table summarizes our Adjusted EBITDA for the years ended December 31, 2023, 2022 and 2021 in addition to reconciling net income (loss)
to Adjusted EBITDA in accordance with GAAP (unaudited):
(In millions)
(a)
Net income (loss) attributable to Caesars
Net income (loss) attributable to noncontrolling interests
Discontinued operations, net of income taxes
Benefit for income taxes
Other (income) loss
Loss on extinguishment of debt
Interest expense, net
Impairment charges
Depreciation and amortization
(b)
Transaction costs and other
Stock-based compensation expense
Adjusted EBITDA
Pre-consolidation, pre-acquisition, and pre-disposition EBITDA, net
(c)
Total Adjusted EBITDA
Years Ended December 31,
2022
2021
2023
786 $
42
—
(888)
(10)
200
2,342
95
1,261
6
104
3,938
(15)
3,923 $
(899) $
(11)
386
(41)
(46)
85
2,265
108
1,205
90
101
3,243
(20)
3,223 $
(1,019)
3
30
(283)
198
236
2,295
102
1,126
220
82
2,990
(23)
2,967
$
$
____________________
(a)
Other (income) loss primarily includes the net changes in fair value of (i) investments held by the Company, (ii) foreign exchange forward contracts, (iii) a disputed claims liability, and (iv)
the derivative liability related to the 5% convertible notes, which were fully converted during the year ended December 31, 2021, and the change in the foreign exchange rate associated
with restricted cash held in GBP associated with our acquisition of William Hill.
(b)
(c)
Transaction costs and other primarily includes (i) net proceeds received in exchange for participation rights in a potential insurance recovery, (ii) proceeds received for the termination of
the Caesars Dubai management agreement, (iii) insurance proceeds received in excess of the respective carrying value of damaged assets associated with the Lake Charles property, (iv)
costs related to non-cash losses on the write down and disposal of assets, professional services for transaction and integration costs, various contract exit or termination costs, and pre-
opening costs in connection with new temporary facility openings, and (v) non-cash changes in equity method investments.
Results of operations for Horseshoe Baltimore prior to its consolidation on August 26, 2021 and William Hill prior to its acquisition on April 22, 2021 are added to Adjusted EBITDA. The
results of operations of divested properties prior to their respective divestiture dates are subtracted from Adjusted EBITDA. See Item 7 - Overview above. Such figures are based on
unaudited internal financial statements and have not been reviewed by the Company’s auditors for the periods presented. The additional financial information is included to enable the
comparison of current results with results of prior periods.
Liquidity and Capital Resources
We are a holding company and our only significant assets are ownership interests in our subsidiaries. Our ability to fund our obligations depends on
existing cash on hand, cash flows from our subsidiaries and our ability to raise capital. Our primary sources of liquidity and capital resources are existing
cash on hand, cash flows from operations, availability of borrowings under our revolving credit facility, proceeds from the issuance of debt and equity
securities and proceeds from completed asset sales. Our cash requirements may fluctuate significantly depending on our decisions with respect to business
acquisitions or divestitures and strategic capital and marketing investments.
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48
As of December 31, 2023, our cash on hand and revolving borrowing capacity were as follows:
(In millions)
Cash and cash equivalents
Revolver capacity
Revolver capacity committed to letters of credit
Revolver capacity committed as regulatory requirement
(a)
Total
December 31, 2023
1,005
2,210
(70)
(46)
3,099
$
$
___________________
(a)
Revolver capacity includes $2.25 billion under our CEI Revolving Credit Facility, maturing in January 2028, less $40 million reserved for specific purposes.
During the year ended December 31, 2023, our operating activities generated operating cash inflows of $1.8 billion, as compared to operating cash inflows
of $1.0 billion during the year ended December 31, 2022 due to the results of operations described above.
On February 6, 2023, we entered into an Incremental Assumption Agreement No. 2 pursuant to which we incurred a new senior secured term loan facility
in an aggregate principal amount of $2.5 billion (the “CEI Term Loan B” and, together with the CEI Term Loan A, the “CEI Term Loans”) as a new term
loan under the CEI Credit Agreement. The CEI Term Loan B requires scheduled quarterly principal payments in amounts equal to 0.25% of the original
aggregate principal amount of the CEI Term Loan B, with the balance payable at maturity. Borrowings under the CEI Term Loan B bear interest, paid
monthly, at a rate equal to, at our option, either (a) a forward-looking term rate based on the Adjusted Term SOFR, subject to a floor of 0.50% or (b) a base
rate (the “TLB Base Rate”) determined by reference to the highest of (i) the “Prime Rate” in the United States, (ii) the federal funds rate plus 0.50% per
annum and (iii) the one-month Adjusted Term SOFR plus 1.00% per annum, in each case, plus an applicable margin. Such applicable margin is 3.25% per
annum in the case of any Adjusted Term SOFR loan and 2.25% per annum in the case of any TLB Base Rate loan, subject to one 0.25% step-down based
on our net total leverage ratio. The CEI Term Loan B was issued at a price of 99.0% of the principal amount and will mature in February 2030.
On February 6, 2023, concurrently with the issuance of the CEI Term Loan B, we issued $2.0 billion in aggregate principal amount of 7.00% senior secured
notes (the “CEI Senior Secured Notes due 2030”) pursuant to an indenture by and among the Company, the subsidiary guarantors party thereto from time to
time, U.S. Bank Trust Company, National Association, as trustee, and U.S. Bank National Association, as collateral agent. The CEI Senior Secured Notes
due 2030 rank equally with all existing and future first-priority lien obligations of the Company and the subsidiary guarantors. The CEI Senior Secured
Notes due 2030 will mature in February 2030, with interest paid semi-annually on February 15 and August 15 of each year, commencing August 15, 2023.
The net proceeds from the CEI Term Loan B, along with the net proceeds from the issuance of the CEI Senior Secured Notes due 2030 described above,
were used to repay the outstanding principal balance, including accrued and unpaid interest, of both the CRC Term Loan and the CRC Incremental Term
Loan. Upon the termination of the CRC Term Loan and the CRC Incremental Term Loan, we recorded a loss on extinguishment of debt of $197 million.
On May 1, 2023, we elected to prepay the outstanding $400 million Convention Center Mortgage Loan utilizing cash on hand.
On July 10, 2023, we completed the acquisition of the remaining 24.2% equity ownership in Horseshoe Baltimore, utilizing cash on hand, for a total of
$66 million. On July 17, 2023, we permanently repaid the outstanding principal balance of the Baltimore Term Loan. In connection with the repayment, we
recognized a $3 million loss on the early extinguishment of debt.
On February 6, 2024, we entered into an Incremental Assumption Agreement No. 3 pursuant to which we incurred a new senior secured incremental term
loan in an aggregate principal amount of $2.9 billion (the “CEI Term Loan B-1”) under the CEI Credit Agreement. The CEI Term Loan B-1 requires
quarterly principal payments in amounts equal to 0.25% of the original aggregate principal amount of the CEI Term Loan B-1, with the balance payable at
maturity. Borrowings under the CEI Term Loan B-1 bear interest at a rate equal to, at our option, either (a) a forward-looking term rate based on the Term
SOFR, subject to a floor of 0.50% or (b) a base rate (the “TLB-1 Base Rate”) determined by reference to the highest of (i) the “Prime Rate” in the United
States, (ii) the federal funds rate plus 0.50% per annum and (iii) the one-month Term SOFR plus 1.00% per annum, in each case, plus an applicable margin.
Such applicable margin is 2.75% per annum in the case of any Term SOFR loan and 1.75% per annum in the case of any TLB-1 Base Rate loan. The CEI
Term Loan B-1 was issued at a price of 99.75% of the principal amount and will mature on February 6, 2031.
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49
Additionally, on February 6, 2024, we issued $1.5 billion in aggregate principal amount of 6.50% senior secured notes due 2032 (the “CEI Senior Secured
Notes due 2032”) pursuant to an indenture by and among the Company, the subsidiary guarantors party thereto, U.S. Bank Trust Company, National
Association, as trustee, and U.S. Bank National Association, as collateral agent. The CEI Senior Secured Notes due 2032 rank equally with all existing and
future first-priority lien obligations of the Company and the subsidiary guarantors. The CEI Senior Secured Notes due 2032 will mature on February 15,
2032, with interest paid semi-annually on February 15 and August 15 of each year, commencing August 15, 2024.
The net proceeds from the issuance of the CEI Senior Secured Notes due 2032 and the net proceeds from the CEI Term Loan B-1, together with borrowings
under the CEI Revolving Credit Facility, were used to tender, redeem, repurchase, defease, and/or satisfy and discharge any and all of the principal
amounts, including accrued and unpaid interest, related expenses and fees of both the 5.75% Senior Secured Notes due 2025 (the “CRC Senior Secured
Notes”) and the 6.25% Senior Secured Notes due 2025 (the “CEI Senior Secured Notes due 2025”). As a result of these transactions, we estimate that we
will incur approximately $50 million of loss on early extinguishment of debt.
We expect that our primary capital requirements going forward will relate to the expansion and maintenance of our properties, taxes, servicing our
outstanding indebtedness, and rent payments under our GLPI Master Lease, the VICI Leases and other leases. We make capital expenditures and perform
continuing refurbishment and maintenance at our properties to maintain our quality standards. Our capital expenditure requirements for 2024 include
expansion projects, hotel renovations and continued investment into new markets with our Caesars Sportsbook and iGaming applications in our Caesars
Digital segment. In addition, we may, from time to time, seek to repurchase or prepay our outstanding indebtedness. Any such purchases or prepayments
may be funded by existing cash balances or the incurrence of debt. The amount and timing of any repurchase will be based on business and market
conditions, capital availability, compliance with debt covenants and other considerations.
We have agreements with certain professional sports leagues and teams, sporting event facilities and media companies for tickets, suites, and advertising,
marketing, promotional and sponsorship opportunities including communication with partner customer databases. Additionally, a selection of such
partnerships provide us with exclusivity to access the aforementioned rights within the casino and/or sports betting category. As of December 31, 2023 and
2022, obligations related to these agreements were $605 million and $898 million, respectively, with contracts extending through 2040. These obligations
include leasing of event suites that are generally considered short term leases for which we do not record a right of use asset or lease liability. We recognize
expenses in the period services are received in accordance with the various agreements. In addition, assets or liabilities may be recorded related to the
timing of payments as required by the respective agreement.
We continue to expand into new markets with projects such as our partnership with the Eastern Band of Cherokee Indians to build and develop Caesars
Virginia which is estimated to open a permanent facility in late 2024. The permanent development has a budget of $650 million and is expected to include a
premier destination resort casino along with a 320-room hotel and world-class casino floor including 1,300 slot machines, 85 live table games, a WSOP
Poker Room, a Caesars Sportsbook, a live entertainment theater and 40,000 square feet of meeting and convention space. Additionally, we are developing
Harrah’s Columbus Nebraska which is a casino development expected to feature a new one-mile horse racing surface, a 40,000-square-foot-casino and
sportsbook with more than 400 slot machines and 20 table games, as well as a restaurant and retail space, with an official opening in the second quarter of
2024. In the second quarter of 2023, temporary gaming facilities for Caesars Virginia and Harrah’s Columbus Nebraska opened while the permanent
facilities are being constructed.
In 2020, we funded $400 million into escrow for a three year capital expenditure plan in the state of New Jersey. The capital plan included significant room
renovations at both Caesars Atlantic City and Harrah’s Atlantic City, as well as the addition of new restaurants with celebrity partners. During the year
ended December 31, 2023, we met our commitment and exhausted the remaining funds in the escrow account.
As a condition of the extension of the casino operating contract and ground lease for Harrah’s New Orleans, we are also required to make a capital
investment of $325 million on or around Harrah’s New Orleans by July 15, 2024. The capital investment involves the rebranding of the property to Caesars
New Orleans which includes a renovation and full interior and exterior redesign, an updated casino floor, new culinary experiences and a new 340-room
hotel tower. The project has a current capital plan of approximately $430 million and, as of December 31, 2023, total capital expenditures have been
$289 million since the project began.
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Cash used for capital expenditures totaled $1.3 billion, $952 million and $520 million for the years ended December 31, 2023, 2022 and 2021, respectively,
related to our growth, renovation, maintenance, and other capital projects. The following table summarizes our estimates for 2024 capital expenditures:
(In millions)
Growth and renovation projects
Caesars Digital
Maintenance projects
Total estimated capital expenditures from unrestricted cash
Caesars Virginia
(a)
Total
$
$
Low
High
325 $
95
300
720
300
375
115
400
890
350
1,020 $
1,240
___________________
(a)
We expect the joint venture to enter into a new credit facility, of approximately $375 million to $425 million, to fund future Caesars Virginia capital expenditures alongside ongoing cash
flows from the temporary casino’s operations.
A significant portion of our liquidity needs are for debt service and payments associated with our leases. Our estimated debt service (including principal
and interest) is approximately $915 million for 2024. We also lease certain real property assets from third parties, including VICI and GLPI. The VICI
Leases are subject to annual escalations, that take effect in November of each year, based on the CPI. We estimate our lease payments to VICI and GLPI to
be approximately $1.3 billion for 2024.
We have periodically divested assets to raise capital or, in previous cases, to comply with conditions, terms, obligations or restrictions imposed by antitrust,
gaming and other regulatory entities. If an agreed upon selling price for future divestitures does not exceed the carrying value of the assets, we may be
required to record additional impairment charges in future periods which may be material.
We expect that our current liquidity, including availability of borrowings under our committed credit facility and cash flows from operations will be
sufficient to fund our operations, capital requirements and service our outstanding indebtedness for the next twelve months.
Debt and Master Lease Covenant Compliance
The Senior Credit Facilities, the CEI Term Loan B, and the indentures governing the CRC Senior Secured Notes, the CEI Senior Secured Notes due 2025,
the CEI Senior Secured Notes due 2030, the CEI Senior Notes due 2027, and the CEI Senior Notes due 2029 contain covenants which are standard and
customary for these types of agreements. These include negative covenants, which, subject to certain exceptions and baskets, limit our ability to (among
other items) incur additional indebtedness, make investments, make restricted payments, including dividends, grant liens, sell assets and make acquisitions.
Following the Third Amendment, the Amended CEI Revolving Credit Facility and the CEI Term Loan A include a maximum net total leverage ratio
financial covenant of 7.25:1 until December 31, 2024 and 6.50:1 from and after December 31, 2024. In addition, the Amended CEI Revolving Credit
Facility and the CEI Term Loan A include a minimum fixed charge coverage ratio financial covenant of 1.75:1 until December 31, 2024 and 2.0:1 from and
after December 31, 2024. From and after the repayment of the CEI Term Loan A, the financial covenants applicable to the Amended CEI Revolving Credit
Facility will be tested solely to the extent that certain testing conditions are satisfied. Failure to comply with such covenants could result in an acceleration
of the maturity of indebtedness outstanding under the relevant debt document. As of December 31, 2023, we were not subject to any debt covenants with
respect to the new CEI Term Loan B-1 or the CEI Senior Secured Notes due 2032.
The GLPI Leases and VICI Leases contain certain covenants requiring minimum capital expenditures based on a percentage of net revenues along with
maintaining certain financial ratios.
As of December 31, 2023, we were in compliance with all of the applicable financial covenants described above.
Share Repurchase Program
In November 2018, the Board authorized a $150 million common stock repurchase program (the “Share Repurchase Program”) pursuant to which we may,
from time to time, repurchase shares of common stock on the open market (either with or without a 10b5-1 plan) or through privately negotiated
transactions. The Share Repurchase Program has no time limit and may be suspended or discontinued at any time without notice. There is no minimum
number of shares of common stock that we are required to repurchase under the Share Repurchase Program.
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As of December 31, 2023, we have acquired 223,823 shares of common stock at an aggregate value of $9 million and an average of $40.80 per share. No
shares were repurchased during the years ended December 31, 2023 or 2022.
Debt Obligations and Leases
CEI Term Loans and CEI Revolving Credit Facility
CEI is party to a credit agreement, dated as of July 20, 2020, with JPMorgan Chase Bank, N.A., as administrative agent, U.S. Bank National Association,
as collateral agent, and certain banks and other financial institutions and lenders party thereto (the “CEI Credit Agreement”), which, as amended, provides
for the CEI Revolving Credit Facility in an aggregate principal amount of $2.25 billion (the “CEI Revolving Credit Facility”). The CEI Revolving Credit
Facility contains reserves of $40 million which are available only for certain permitted uses.
On October 5, 2022, Caesars entered into a third amendment to the CEI Credit Agreement (the “Third Amendment”) pursuant to which we (a) incurred a
senior secured term loan in an aggregate principal amount of $750 million (the “CEI Term Loan A”) as a new term loan under the credit agreement, (b)
amended and extended the CEI Revolving Credit Facility under the CEI Credit Agreement (the CEI Revolving Credit Facility, as so amended, the
“Amended CEI Revolving Credit Facility” and, together with the CEI Term Loan A, the “Senior Credit Facilities”), (c) increased the aggregate principal
amount of the CEI Revolving Credit Facility to $2.25 billion, and (d) made certain other amendments to the CEI Credit Agreement. Both the Amended CEI
Revolving Credit Facility and the new CEI Term Loan A mature on January 31, 2028, subject to a springing maturity in the event certain other long-term
debt of Caesars is not extended or repaid. The Amended CEI Revolving Credit Facility includes a letter of credit sub-facility of $388 million. The CEI
Term Loan A requires scheduled quarterly payments in amounts equal to 1.25% of the original aggregate principal amount of the CEI Term Loan A, with
the balance payable at maturity. We may make voluntary prepayments of the CEI Term Loan A at any time prior to maturity at par.
Borrowings under the Senior Credit Facilities bear interest, paid monthly, at a rate equal to, at our option, either (a) a forward-looking term rate based on
Secured Overnight Financing Rate (“Term SOFR”) for the applicable interest period plus an adjustment of 0.10% per annum (“Adjusted Term SOFR”),
subject to a floor of 0% or (b) a base rate (the “Base Rate”) determined by reference to the highest of (i) the rate of interest per annum last quoted by The
Wall Street Journal as the “Prime Rate” in the United States, (ii) the federal funds rate plus 0.50% per annum and (iii) the one-month Adjusted Term SOFR
plus 1.00% per annum, in each case, plus an applicable margin. Such applicable margin is 2.25% per annum in the case of any Adjusted Term SOFR loan
and 1.25% per annum in the case of any Base Rate loan, subject to three 0.25% step-downs based on our net total leverage ratio. In addition, on a quarterly
basis, we are required to pay each lender under the Amended CEI Revolving Credit Facility a commitment fee in respect of any unused commitments under
the Amended CEI Revolving Credit Facility in the amount of 0.35% per annum of the principal amount of the unused commitments of such lender, subject
to three 0.05% step-downs based on our net total leverage ratio.
On February 6, 2023, Caesars entered into an Incremental Assumption Agreement No. 2 pursuant to which we incurred a new senior secured term loan
facility in an aggregate principal amount of $2.5 billion (the “CEI Term Loan B” and, together with the CEI Term Loan A, the “CEI Term Loans”) as a new
term loan under the CEI Credit Agreement. The CEI Term Loan B requires scheduled quarterly principal payments in amounts equal to 0.25% of the
original aggregate principal amount of the CEI Term Loan B, with the balance payable at maturity. Borrowings under the CEI Term Loan B bear interest,
paid monthly, at a rate equal to, at the our option, either (a) a forward-looking term rate based on the Adjusted Term SOFR, subject to a floor of 0.50% or
(b) a base rate (the “TLB Base Rate”) determined by reference to the highest of (i) the “Prime Rate” in the United States, (ii) the federal funds rate plus
0.50% per annum and (iii) the one-month Adjusted Term SOFR plus 1.00% per annum, in each case, plus an applicable margin. Such applicable margin is
3.25% per annum in the case of any Adjusted Term SOFR loan and 2.25% per annum in the case of any TLB Base Rate loan, subject to one 0.25% step-
down based on our net total leverage ratio. The CEI Term Loan B was issued at a price of 99.0% of the principal amount and will mature in February 2030.
The net proceeds from the CEI Term Loan B, along with the net proceeds from the issuance of the CEI Senior Secured Notes due 2030 described below,
were used to repay the outstanding principal balance, including accrued and unpaid interest, of both the CRC Term Loan and the CRC Incremental Term
Loan.
During the year ended December 31, 2023, we utilized and fully repaid the CEI Revolving Credit Facility. Such activity is presented in the financing
section in the Statements of Cash Flows. As of December 31, 2023, we had $2.1 billion of available borrowing capacity under the CEI Revolving Credit
Facility, after consideration of $70 million in outstanding letters of credit, $46 million committed for regulatory purposes and the reserves described above.
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Subsequent Amendment to the CEI Credit Agreement and issuance of New Senior Secured Notes
On February 6, 2024, we entered into an Incremental Assumption Agreement No. 3 pursuant to which we incurred a new senior secured incremental term
loan in an aggregate principal amount of $2.9 billion (the “CEI Term Loan B-1”) under the CEI Credit Agreement. The CEI Term Loan B-1 requires
quarterly principal payments in amounts equal to 0.25% of the original aggregate principal amount of the CEI Term Loan B-1, with the balance payable at
maturity. Borrowings under the CEI Term Loan B-1 bear interest at a rate equal to, at our option, either (a) a forward-looking term rate based on the Term
SOFR, subject to a floor of 0.50% or (b) a base rate (the “TLB-1 Base Rate”) determined by reference to the highest of (i) the “Prime Rate” in the United
States, (ii) the federal funds rate plus 0.50% per annum and (iii) the one-month Term SOFR plus 1.00% per annum, in each case, plus an applicable margin.
Such applicable margin is 2.75% per annum in the case of any Term SOFR loan and 1.75% per annum in the case of any TLB-1 Base Rate loan. The CEI
Term Loan B-1 was issued at a price of 99.75% of the principal amount and will mature on February 6, 2031.
Additionally, on February 6, 2024, we issued $1.5 billion in aggregate principal amount of 6.50% of senior secured notes due 2032 (the “CEI Senior
Secured Notes due 2032”) pursuant to an indenture by and among the Company, the subsidiary guarantors party thereto, U.S. Bank Trust Company,
National Association, as trustee, and U.S. Bank National Association, as collateral agent. The CEI Senior Secured Notes due 2032 rank equally with all
existing and future first-priority lien obligations of the Company and the subsidiary guarantors. The CEI Senior Secured Notes due 2032 will mature on
February 15, 2032, with interest paid semi-annually on February 15 and August 15 of each year, commencing August 15, 2024.
The net proceeds from the issuance of the CEI Senior Secured Notes due 2032 and the net proceeds from the CEI Term Loan B-1, together with borrowings
under the CEI Revolving Credit Facility, were used to tender, redeem, repurchase, defease, and/or satisfy and discharge any and all of the principal
amounts, including accrued and unpaid interest, related expenses and fees of both the 5.75% Senior Secured Notes due 2025 (the “CRC Senior Secured
Notes”) and the 6.25% Senior Secured Notes due 2025 (the “CEI Senior Secured Notes due 2025”). As a result of these transactions, we estimate that it
will incur approximately $50 million of loss on early extinguishment of debt.
CRC Senior Secured Notes due 2025
On July 6, 2020, Colt Merger Sub, Inc. (the “Escrow Issuer”) issued $1.0 billion in aggregate principal amount of the CRC Senior Secured Notes pursuant
to an indenture, dated July 6, 2020, by and among the Escrow Issuer, U.S. Bank National Association, as trustee and Credit Suisse AG, Cayman Islands
Branch, as collateral agent. The CRC Senior Secured Notes ranked equally with all existing and future first priority lien obligations of CRC, CRC Finco,
Inc. and the subsidiary guarantors. The CRC Senior Secured Notes were set to mature on July 1, 2025 with interest payable semi-annually in cash in arrears
on January 1 and July 1 of each year.
On February 16, 2024, we completed the tender and/or redemption of the CRC Senior Secured Notes with proceeds from a new CEI Term Loan B-1, new
CEI Senior Secured Notes due 2032, and borrowings under the CEI Revolving Credit Facility, as needed. See “Subsequent Amendment to the CEI Credit
Agreement and issuance of New Senior Secured Notes” above.
CEI Senior Secured Notes due 2025
On July 6, 2020, the Escrow Issuer issued $3.4 billion in aggregate principal amount of the CEI Senior Secured Notes due 2025 pursuant to an indenture,
dated July 6, 2020, by and among the Escrow Issuer, U.S. Bank National Association, as trustee, and U.S. Bank National Association, as collateral agent.
The CEI Senior Secured Notes due 2025 ranked equally with all existing and future first-priority lien obligations of the Company and the subsidiary
guarantors. The CEI Senior Secured Notes due 2025 were set to mature on July 1, 2025 with interest payable semi-annually in cash in arrears on January 1
and July 1 of each year. On April 5, 2023, we purchased $1 million in principal amount of the CEI Senior Secured Notes due 2025.
On February 7, 2024, we completed the tender, redemption, and/or satisfaction and discharge of the CEI Senior Secured Notes due 2025 with proceeds
from a new CEI Term Loan B-1, new CEI Senior Secured Notes due 2032, and borrowings under the CEI Revolving Credit Facility, as needed. See
“Subsequent Amendment to the CEI Credit Agreement and issuance of New Senior Secured Notes” above.
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CEI Senior Secured Notes due 2030
On February 6, 2023, concurrently with the issuance of the CEI Term Loan B, we issued $2.0 billion in aggregate principal amount of 7.00% senior secured
notes (the “CEI Senior Secured Notes due 2030”) pursuant to an indenture by and among the Company, the subsidiary guarantors party thereto from time to
time, U.S. Bank Trust Company, National Association, as trustee, and U.S. Bank National Association, as collateral agent. The CEI Senior Secured Notes
due 2030 rank equally with all existing and future first-priority lien obligations of the Company and the subsidiary guarantors. The CEI Senior Secured
Notes due 2030 will mature in February 2030, with interest paid semi-annually on February 15 and August 15 of each year, commencing August 15, 2023.
Baltimore Term Loan and Baltimore Revolving Credit Facility
On July 17, 2023, following the acquisition of the remaining 24.2% equity interest in Horseshoe Baltimore, we permanently repaid the outstanding
principal balance of Horseshoe Baltimore’s senior secured term loan facility (the “Baltimore Term Loan”). In connection with the repayment, we
recognized a $3 million loss on the early extinguishment of debt. The Baltimore Term Loan was subject to a variable rate of interest calculated as London
Interbank Offered Rate (“LIBOR”) plus 4.00% until May 1, 2023, when the Baltimore Term Loan’s benchmark interest rate was amended from LIBOR to
the Adjusted Term SOFR plus an applicable adjustment. In addition, Horseshoe Baltimore’s senior secured revolving credit facility (the “Baltimore
Revolving Credit Facility”) matured on July 7, 2023. The Baltimore Revolving Credit Facility had borrowing capacity of up to $10 million, subject to a
variable rate of interest calculated as Term SOFR plus 4.00%.
Convention Center Mortgage Loan
On September 18, 2020, we entered into a loan agreement with VICI, to borrow a 5-year, $400 million Forum Convention Center mortgage loan (the
“Mortgage Loan”). The Mortgage Loan bears interest at a rate of, initially, 7.7% per annum, which was set to escalate annually on the anniversary of the
closing date up to a maximum interest rate of 8.3% per annum. On May 1, 2023, we elected to prepay the outstanding $400 million Mortgage Loan
utilizing cash on hand. In connection with the repayment, we extended VICI’s call right relating to the CAESARS FORUM convention center from
December 31, 2026 to December 31, 2028.
CRC Term Loan and CRC Incremental Term Loan
Caesars Resort Collection (“CRC”) was party to a credit agreement, dated as of December 22, 2017 (as amended, the “CRC Credit Agreement”), which
provided for, among other things, an initial $4.7 billion seven-year senior secured term loan (the “CRC Term Loan”), and an incremental $1.8 billion five-
year senior secured term loan (the “CRC Incremental Term Loan”).
The CRC Term Loan and the CRC Incremental Term Loan were subject to the terms described below prior to repayment. We repaid the $3.4 billion
outstanding principal amount of the CRC Term Loan and the $1.0 billion outstanding principal amount of the CRC Incremental Term Loan on February 6,
2023, with proceeds from a new CEI Term Loan B and new CEI Senior Secured Notes due 2030, both of which are described above. Upon the termination
of the CRC Term Loan and the CRC Incremental Term Loan, we recorded a loss on extinguishment of debt of $197 million.
Borrowings under the CRC Credit Agreement were subject to interest at a rate equal to either (a) LIBOR adjusted for certain additional costs, subject to a
floor of 0% or (b) a base rate determined by reference to the highest of (i) the federal funds rate plus 0.50%, (ii) the prime rate as determined by Credit
Suisse AG, Cayman Islands Branch, as administrative agent under the CRC Credit Agreement and (iii) the one-month adjusted LIBOR rate plus 1.00%, in
each case plus an applicable margin. Such applicable margin was (a) with respect to the CRC Term Loan, 2.75% per annum in the case of any LIBOR loan
or 1.75% per annum in the case of any base rate loan and (b) with respect to the CRC Incremental Term Loan, 3.50% per annum in the case of any LIBOR
loan or 2.50% in the case of any base rate loan.
CEI Senior Notes due 2027
On July 6, 2020, the Escrow Issuer issued $1.8 billion in aggregate principal amount of 8.125% Senior Notes due 2027 pursuant to an indenture, dated July
6, 2020 (the “CEI Senior Notes due 2027”), by and between the Escrow Issuer and U.S. Bank National Association, as trustee. The CEI Senior Notes due
2027 rank equally with all existing and future senior unsecured indebtedness of the Company and the subsidiary guarantors. The CEI Senior Notes due
2027 will mature on July 1, 2027 with interest payable semi-annually in cash in arrears on January 1 and July 1 of each year.
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CEI Senior Notes due 2029
On September 24, 2021, we issued $1.2 billion in aggregate principal amount of 4.625% Senior Notes due 2029 (the “CEI Senior Notes due 2029”)
pursuant to an indenture dated as of September 24, 2021 between us and U.S. Bank National Association, as trustee. The CEI Senior Notes due 2029 rank
equally with all existing and future senior unsecured indebtedness of the Company and the subsidiary guarantors. The CEI Senior Notes due 2029 will
mature on October 15, 2029 with interest payable on April 15 and October 15 of each year.
VICI Leases
CEI leases certain real property assets from VICI under the following agreements: (i) for a portfolio of properties located throughout the United States (the
“Regional Lease”), (ii) for Caesars Palace Las Vegas and Harrah’s Las Vegas (the “Las Vegas Lease”), and (iii) for Harrah’s Joliet (the “Joliet Lease”),
collectively, VICI Leases. The lease agreements, inclusive of all amendments, include (i) a 15-year initial term with four five-year renewal options, (ii)
initial annual fixed rent payments of $1.1 billion, subject to annual escalation provisions based on the CPI and a 2% floor which commenced in lease year
two of the initial terms and (iii) a variable element based on net revenues of the underlying leased properties, commencing in lease year eight of the initial
term.
The Regional Lease includes a Put-Call Right Agreement whereby we may require VICI to purchase and lease back (as lessor) or whereby VICI may
require us to sell to VICI and lease back (as lessee) the real estate components of the gaming and racetrack facilities of Harrah’s Hoosier Park Racing &
Casino and Horseshoe Indianapolis (the “Centaur properties”). Election to exercise the option by either party must be made during the election period
beginning January 1, 2022 and ending December 31, 2024. Upon either party exercising their option, the Centaur properties would be sold at a price and
leased back to CEI in accordance to the terms and conditions of the Put-Call Right Agreement.
Our VICI Leases are accounted for as a financing obligation and totaled $11.4 billion as of December 31, 2023. See Note 10 to our Financial Statements for
additional information about our VICI Leases and related matters.
GLPI Leases
The GLPI Master Lease, encompassing a portfolio of properties within the United States, provides for the lease of land, buildings, structures and other
improvements on the land, easements and similar appurtenances to the land and improvements relating to the operation of the leased properties. The GLPI
Master Lease, inclusive of all amendments, provides for (i) an initial term of 20 years (through September 2038), with four five-year renewals at the our
option, (ii) annual land and building base rent of $24 million and $63 million, respectively, (iii) escalating provisions of building base rent equal to
101.25% of the rent for the preceding year for lease years five and six, 101.75% for lease years seven and eight and 102% for each lease year thereafter and
(iv) relief from the operating, capital expenditure and financial covenants in the event of involuntary closures. The GLPI Master Lease does not provide us
with an option to purchase the leased property or the ability to terminate its obligations under the GLPI Master Lease prior to its expiration without GLPI’s
consent.
On May 5, 2022, we consummated the sale of the equity interests of Baton Rouge. On November 13, 2023, a third amendment to the GLPI Master Lease
was entered into as a result of the sale and removal of Baton Rouge from the properties included under the GLPI Master Lease.
The Lumière Lease was entered into by us and GLPI, whereby we sold the real estate underlying Horseshoe St. Louis, formerly known as Lumière, to
GLPI and leased back the property under a long-term financing obligation. The Lumière Lease, inclusive of all amendments, provides for (i) an initial term
commencing on September 29, 2020 and ending on October 31, 2033, (ii) four five-year renewal options, (iii) annual rent payments of $23 million, (iv)
escalation provisions commencing in lease year two equal to 101.25% of the rent for the preceding year for lease years two through five, 101.75% for lease
years six and seven and 102% for each lease year thereafter, (v) maintaining a minimum of 1.20:1 adjusted revenue to rent ratio and (vi) certain relief under
the financial covenant in the event of involuntary closures.
The GLPI Leases are accounted for as financing obligations and totaled $1.3 billion as of December 31, 2023. See Note 10 to our Financial Statements for
additional information about our GLPI Leases and related matters.
Other Liquidity Matters
We are faced with certain contingencies, from time to time, involving litigation, claims, assessments, environmental remediation or compliance. These
commitments and contingencies are discussed in greater detail in “Part I, Item 3. Legal Proceedings” and Note 11 to our Financial Statements, both of
which are included elsewhere in this Annual Report on Form 10-K. See “Part I, Item 1A. Risk Factors—Risks Related to Our Business” which is included
elsewhere in this Annual Report on Form 10-K.
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Critical Accounting Policies and Estimates
We prepare our financial statements in conformity with GAAP. In preparing our financial statements, we have made our best estimates and judgments of
the amounts and disclosures included in the financial statements, giving regard to materiality. When more than one accounting principle, or method of its
application, is generally accepted, we select the principle or method that we consider to be the most appropriate under specific circumstances. Application
of these accounting principles requires us to make estimates about the future resolution of existing uncertainties. Certain of our accounting policies,
including those in connection with income taxes, goodwill and indefinite lived intangible assets, long-lived assets, allowance for doubtful accounts related
to certain gaming receivables, self-insurance reserves, and litigation, claims and assessments require that we apply significant judgment in defining the
appropriate assumptions for calculating financial estimates.
We consider accounting estimates to be critical accounting policies when:
•
•
the estimates involve matters that are highly uncertain at the time the accounting estimate is made; and
different estimates or changes to estimates could have a material impact on the reported financial position, changes in financial position, or results
of operations.
By their nature, these judgments and estimates are subject to an inherent degree of uncertainty. Our judgments and estimates are based on our historical
experience, terms of existing contracts, observance of trends in the industry, information gathered from customer behavior, and information available from
other outside sources, as appropriate. Due to the inherent uncertainty involving judgments and estimates, actual results may differ from those estimates.
Our most critical accounting estimates and assumptions are in the following areas:
Income Taxes
We and our subsidiaries file income tax returns with federal, state and foreign jurisdictions. Our income tax returns are subject to examination by the
Internal Revenue Service (“IRS”) and other tax authorities. Positions taken in tax returns are sometimes subject to uncertainty in the tax laws and may not
ultimately be accepted by the IRS or other tax authorities. See Note 17 in the accompanying consolidated financial statements for a discussion of the status
and impact of examinations by tax authorities.
We record income taxes under the asset and liability method, whereby deferred tax assets and liabilities are recognized based on the expected future tax
consequences of temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and
as attributable to operating loss and tax credit carryforwards. We reduce the carrying amounts of deferred tax assets by a valuation allowance if, based on
the available evidence, it is more likely than not that such assets will not be realized. Management assesses the available positive and negative evidence to
estimate if sufficient future taxable income will be generated to use existing deferred tax assets. During the second quarter of 2023, we evaluated our
forecasted adjusted taxable income and objectively verifiable evidence and placed substantial weight on our 2022 and 2023 quarterly earnings, adjusted for
non-recurring items, including the interest expense disallowed under current tax law. Accordingly, we determined it was more likely than not that a portion
of the federal and state deferred tax assets will be realized and, as a result, during the second quarter of 2023, we reversed the valuation allowance related to
these deferred tax assets and recorded an income tax benefit of $940 million. We are still carrying a valuation allowance on certain federal and state
deferred tax assets that are not more likely than not to be realized in the future. We have assessed the changes to the valuation allowance, including
realization of the disallowed interest expense deferred tax asset, using the integrated approach.
As of December 31, 2023, the Company had federal and state net operating loss carryforwards of $872 million and $9.0 billion, respectively, and federal
general business tax credit and research tax credit carryforwards of $145 million, which will expire on various dates as follows:
Year of Expiration
(In millions)
2024-2028
2029-2033
2034-2043
Do not expire
Net Operating Losses
Federal
States
Tax Credits
Federal
$
$
— $
238
168
466
872 $
604 $
1,590
4,560
2,279
9,033 $
8
39
98
—
145
Under the applicable accounting standards, we may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax
position will be sustained on examination by the taxing authorities based on the technical merits of the position. The tax benefits recognized in the financial
statements from such a position should be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate
settlement. The accounting standards also
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provide guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and disclosure requirements for
uncertain tax positions.
Goodwill and Other Indefinite-lived Intangible Assets
Assessing goodwill and indefinite-lived intangible assets for impairment is a process that requires significant judgment and involves detailed qualitative
and quantitative business-specific analysis and many individual assumptions which fluctuate between assessments.
We determine the estimated fair value of each reporting unit based on a combination of EBITDA, valuation multiples, and estimated future cash flows
discounted at rates commensurate with the capital structure and cost of capital of comparable market participants, giving appropriate consideration to the
prevailing borrowing rates within the casino industry in general. We also evaluate the aggregate fair value of all of our reporting units and other non-
operating assets in comparison to our aggregate debt and equity market capitalization at the test date. EBITDA multiples and discounted cash flows are
common measures used to value businesses in our industry.
We determine the fair value of our indefinite-lived intangible assets using either the relief from royalty method or the excess earnings method under the
income approach or replacement cost market approach. The determination of fair value of our reporting units and indefinite-lived intangible assets requires
management to make significant assumptions and estimates around the forecasts as well as the selection of discount rates and valuation multiples. Changes
in these estimates could have a significant impact on the fair value of our reporting units, intangible assets and result in potential impairment.
Forecasts and the determination of appropriate discount rates and valuation multiples used to determine the fair value of our reporting units and indefinite-
lived intangible assets involves significant assumptions and estimates. Assumptions include those used to assess effects of changes in the competitive
environment, capital projects and new developments which may not be realized at the projected rate.
We completed our annual impairment tests as of October 1, 2023. The estimated fair values of certain of our indefinite lived intangible assets and reporting
units decreased primarily due to a decrease in projected future cash flows at certain regional properties due to increased competition. Accordingly, we
identified one reporting unit with which the estimated fair value of the associated gaming rights was less than the carrying value and recorded an
impairment of $81 million. In addition, we identified one reporting unit where the estimated fair value of the respective reporting unit was below the
carrying value and recorded a total impairment of $14 million to goodwill. These reporting units are within the Regional segment.
As of October 1, 2023, three reporting units in the Regional segment with goodwill totaling $1.1 billion had fair values that did not significantly exceed
their respective carrying values. In addition, we identified a trademark totaling $114 million in the Las Vegas segment and a gaming right totaling
$91 million in the Regional segment that do not significantly exceed their respective carrying values. The reporting units and indefinite lived intangible
assets with carrying values that do not significantly exceed their estimated fair values are primarily assets acquired in the Merger when our discount rate
was approximately 9.5%. The discount rate used in our annual impairment testing as of October 1, 2023 was approximately 10.5%. To the extent gaming
volumes deteriorate in the near future, discount rates increase significantly, or we do not meet our projected performance, we may recognize further
impairments, and such impairments could be material. The discount rate represents the most sensitive input in our estimates and an increase of 1% to the
discount rate would result in impairments of approximately $40 million on the assets that do not significantly exceed their carrying values. In addition,
$1.0 billion of goodwill within our Regional segment is associated with reporting units with zero or negative carrying values. See Note 7 for additional
information.
Long-Lived Assets
We have significant capital invested in our long-lived assets, and judgments are made in determining the estimated useful lives of assets, salvage values to
be assigned to assets, and if or when an asset has been impaired. The accuracy of these estimates affects the amount of depreciation and amortization
expense recognized in our financial results and whether we have a gain or loss on the disposal of an asset. We assign lives to our assets based on our
standard policy, which is established by management as representative of the useful life of each category of asset. We review the carrying value of our long-
lived assets whenever events and circumstances indicate that the carrying value of an asset may not be recoverable from the estimated future cash flows
expected to result from its use and eventual disposition. The factors considered by management in performing this assessment include current operating
results, trends and prospects, planned construction and renovation projects, as well as the effect of obsolescence, demand, competition, and other economic,
legal, and regulatory factors. In estimating expected future cash flows for determining whether an asset is impaired, assets are grouped at the lowest level of
identifiable cash flows, which, for most of our assets, is the individual property. See Note 6 for additional information.
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57
Allowance for Doubtful Accounts - Gaming
We reserve an estimated amount for gaming receivables that may not be collected to reduce the Company’s receivables to their net carrying amount.
Methodologies for estimating the allowance for doubtful accounts range from specific reserves to various percentages applied to aged receivables.
Historical collection rates and reasonable forecasts are considered, as are customer relationships, in determining specific reserves to reflect current expected
credit loss. As with many estimates, management must make judgments about potential actions by third parties in establishing and evaluating our reserves
for allowance for doubtful accounts. As of December 31, 2023, a 5% increase or decrease to the allowance determined based on a percentage of aged
receivables would change the reserve by approximately $15 million.
Self-Insurance Reserves
We are self-insured for various levels of general liability, employee medical insurance coverage and workers’ compensation coverage. Insurance claims and
reserves include accruals of estimated settlements for known claims, as well as accruals of estimates for claims incurred but not yet reported. We utilize
independent consultants to assist management in its determination of estimated insurance liabilities. While the total cost of claims incurred depends on
future developments, in managements’ opinion, recorded reserves are adequate to cover future claims payments. Self-insurance reserves for employee
medical claims, workers’ compensations and general liability claims are included within Accrued other liabilities on the Balance Sheets.
The assumptions utilized by our actuaries are subject to significant uncertainty and if outcomes differ from these assumptions or events develop or progress
in a negative manner, the Company could experience a material adverse effect and additional liabilities may be recorded in the future.
Litigation, Claims and Assessments
We utilize estimates for litigation, claims and assessments. These estimates are based on our knowledge and experience regarding current and past events,
as well as assumptions about future events. If our assessment of such a matter should change, we may have to change the estimates, which may have an
adverse effect on our financial position, results of operations or cash flows. Actual results could differ from these estimates.
Recently Issued Accounting Pronouncements
For information with respect to recent accounting pronouncements and the impact of these pronouncements on our Financial Statements, see Note 2,
Summary of Significant Accounting Policies – Recently Issued Accounting Pronouncements, in the Notes.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Market risk is the risk of loss arising from adverse changes in market rates and prices, such as interest rates, foreign currency exchange rates and
commodity prices. We are exposed to changes in interest rates primarily from variable rate long-term debt arrangements. We manage our interest rate risk
by monitoring interest rates, including future projected rates, and adjust our mix of fixed and variable rate borrowings.
Interest Rate Risk
As of December 31, 2023, the face value of our long-term debt was $12.4 billion, including variable-rate long-term borrowings of $3.2 billion. No amounts
were outstanding under our revolving credit facility.
The table below provides information as of December 31, 2023 about our fixed rate and variable rate financial instruments that are sensitive to changes in
interest rates, including the cash flows associated with amortization and average interest rates. Principal amounts are used to calculate the payments to be
exchanged under the related agreements and average variable rates are based on implied forward rates in the yield curve as of December 31, 2023 and
should not be considered a predictor of actual future interest rates.
Table of Contents
58
(Dollars in millions)
Liabilities
Long-term debt
Fixed rate
Average interest rate
Variable rate
Average interest rate
2024
2025
(a)
Expected Maturity Date
2026
2027
2028
Thereafter
Total
Fair Value
$
$
$
$
2
4.3 %
63
6.9 %
4,390
6.1 %
63
5.7 %
$
$
$
$
2
4.3 %
63
5.4 %
1,613
8.1 %
63
5.5 %
$
$
$
$
2
4.3 %
585
4.9 %
3,237
6.1 %
2,356
6.7 %
$
$
9,246
6.5 %
3,193
6.5 %
$
$
9,230
3,186
____________________
(a)
Maturities of $4.4 billion in 2025 of fixed rate were repaid with the net proceeds of the $2.9 billion CEI Term Loan B-1 and the $1.5 billion CEI Senior Secured Notes due 2032. Following
these transactions, the balance of fixed rate debt decreased by $2.9 billion and the balance of variable rate debt increased by $3.0 billion.
As of December 31, 2023, borrowings outstanding under our CEI credit agreement were variable-rate borrowings. Assuming a 100 basis-point increase in
Term SOFR, our annual interest cost would change by approximately $32 million based on gross amounts outstanding at December 31, 2023.
We do not purchase or hold any derivative financial instruments for trading purposes.
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59
Item 8. Financial Statements and Supplementary Data
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS OF
CAESARS ENTERTAINMENT, INC.
Report of Independent Registered Public Accounting Firm
Consolidated Balance Sheets
Consolidated Statements of Operations
Consolidated Statements of Comprehensive Income (Loss)
Consolidated Statements of Stockholders’ Equity
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
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60
Page
61
64
65
66
67
68
70
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the stockholders and the Board of Directors of Caesars Entertainment, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Caesars Entertainment, Inc. and subsidiaries (the “Company”) as of December 31, 2023
and 2022, the related consolidated statements of operations, comprehensive income (loss), stockholders’ equity, and cash flows for each of the three years
in the period ended December 31, 2023, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the “financial
statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023
and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with
accounting principles generally accepted in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company's
internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued
by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 20, 2024, expressed an unqualified opinion on
the Company’s internal control over financial reporting.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial
statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the
Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the
PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing
procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to
those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits
also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the
financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or
required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2)
involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion
on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical
audit matters or on the accounts or disclosures to which they relate.
Income Taxes – Valuation Allowance – Refer to Note 17 to the Financial Statements
Critical Audit Matter Description
The Company records income taxes under the asset and liability method, whereby deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The carrying amounts
of deferred tax assets are reduced by a valuation allowance if, based on the available evidence, it is more likely than not that such assets will not be
realized. The Company assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use existing
deferred tax assets. During the second quarter of 2023, the Company determined it was more likely than not that a portion of the federal and state deferred
tax assets will be realized in the future. As a result, the Company reversed the valuation allowance related to these deferred tax assets and recorded a net
income tax benefit of $940 million.
We identified that management’s determination that a portion of the deferred tax assets will be realized as a critical audit matter because of the significant
management judgements in assessing the available positive and negative evidence that sufficient taxable income will be generated. This required a higher
degree of auditor judgement and an increased extent of effort, including the need to involve our income tax specialists, when performing procedures to
evaluate the reasonableness of managements estimates of future taxable income.
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61
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to managements determination that in the current year it is more likely than not that sufficient future taxable income will be
generated included the following, among others;
• We tested the effectiveness of managements controls over:
◦
◦
Judgements and estimates related to the realization of deferred tax assets.
The determination of whether it is more likely than not that sufficient income will be generated in the future to realize the deferred tax
assets.
• With the assistance of our tax specialists, we performed the following:
◦
◦
◦
◦
Evaluated the reasonableness of methods, assumptions, and judgements used by management to determine whether a reversal of their
valuation allowance was appropriate.
Evaluated management’s assessment and weighting of the positive and negative evidence used to conclude if a valuation allowance was
necessary.
Evaluated the realizability of deferred tax assets, including the application of tax laws and the projections of future income.
Evaluated whether the estimates of future taxable income were consistent with evidence obtained in other areas of the audit.
Goodwill and Indefinite-lived Intangible Assets – Refer to Note 7 to the Financial Statements
Critical Audit Matter Description
The Company reviews goodwill and indefinite-lived intangible assets for impairment at least annually and between annual test dates in certain
circumstances. The Company performs its impairment test by comparing the fair value of each reporting unit to the carrying amount. The Company
determines the established fair value of each reporting unit based on a combination of earnings before interest, taxes, depreciation, and amortization
(“EBITDA”), valuation multiples, and estimated future cash flows discounted at rates commensurate with the capital structure and cost of capital of
comparable market participants, considering the prevailing borrowing rates within the casino industry in general, and expected sales proceeds. The
Company further evaluates the aggregate fair value of all reporting units and other non-operating assets in comparison to its aggregate debt and equity
market capitalization at the test date.
Indefinite-lived intangible assets consist primarily of trademarks, Caesars Rewards, and gaming rights. The Company uses the Excess Earnings Method
and Cost Approach to determine the estimated fair value of gaming rights and uses the relief from royalty method to determine the estimated fair value of
trademarks and Caesars Rewards.
The Company performed its annual impairment assessment as of October 1, 2023. The Company’s goodwill balance was $10,990 million as of December
31, 2023 of which we identified: (1) $1.3 billion and $105 million was related to two reporting units in the Las Vegas segment and one reporting unit in the
Regional segment, respectively, had estimated fair values that did not significantly exceed their carrying values and (2) $1.2 billion related to one Reporting
Unit in the Caesars Digital segment which had an increased level of sensitivity with management forecasts and selected discount rate and valuation
multiples.
The Company’s indefinite-lived intangibles balance was $3,577 million as of December 31, 2023, of which trademarks totaling $254 million and
$523 million in the Las Vegas and Corporate segments, respectively, had estimated fair values that did not significantly exceed their carrying values.
The determination of the Company’s reporting units and indefinite-lived intangible assets fair value requires management to make significant assumptions
and estimates around forecasts and the selection of discount rates and valuation multiples. Therefore, our audit procedures to evaluate the reasonableness of
management’s forecasts required a higher degree of auditor judgment, increased level of audit effort, and use of more experienced audit professionals, as
well as the involvement of valuation specialists.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to management’s forecasts and the selection of discount rates and valuation multiples used by management to determine the
fair value of the Company’s reporting units and indefinite-lived intangible assets included the following, among others:
• We tested the effectiveness of the Company’s internal controls over valuation inputs including management’s forecasts and the selection of
discount rates and valuation multiples.
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62
• We evaluated management’s ability to accurately forecast by comparing management’s historical projections to actual performance.
• We evaluated the reasonableness of the assumptions and estimates included in management’s forecasts by:
◦
◦
◦
Comparing forecasts to information included in the Company’s communications to the Board of Directors, projected information in
industry reports, and analyst reports for the Company and peer companies.
Conducting inquiries with property management.
Considering the impact of changes in the competitive, regulatory, and economic environment on management’s projections.
◦ Assessing the reasonableness of strategic plans incorporated by management into the projections.
◦
Evaluating management’s estimate and the impact of any related expansion of gaming activities by analyzing historical information.
• With the assistance of our valuation specialists, we evaluated the discount rates selected by management by:
◦
Assessing the impact of the uncertainty in the forecasts on the discount rates, including testing the underlying market-based source
information used in the selection of the discount rates and the mathematical accuracy of the discount rate calculations.
◦ Developing a range of independent estimates and comparing those to discount rates selected by management.
/s/ DELOITTE & TOUCHE LLP
Las Vegas, Nevada
February 20, 2024
We have served as the Company’s auditor since 2020.
Table of Contents
63
CAESARS ENTERTAINMENT, INC.
CONSOLIDATED BALANCE SHEETS
ASSETS
(Dollars in millions, except par value)
CURRENT ASSETS:
Cash and cash equivalents
Restricted cash
Accounts receivable, net
Inventories
Prepayments and other current assets
Total current assets
Investments in and advances to unconsolidated affiliates
Property and equipment, net
Goodwill
Intangible assets other than goodwill
Deferred tax asset
Other long-term assets, net
Total assets
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable
Accrued interest
Accrued other liabilities
Current portion of long-term debt
Total current liabilities
Long-term financing obligation
Long-term debt
Deferred tax liability
Other long-term liabilities
Total liabilities
Commitments and contingencies (Note 11)
STOCKHOLDERS' EQUITY:
Preferred stock, $0.00001 par value, 150,000,000 shares authorized, no shares issued and outstanding
Common stock, $0.00001 par value, 500,000,000 shares authorized, 215,800,650 and 214,671,754 issued and outstanding,
net of treasury shares
Additional paid-in capital
Accumulated deficit
Treasury stock at cost, 363,016 and 363,016 shares held
Accumulated other comprehensive income
Caesars stockholders' equity
Noncontrolling interests
Total stockholders’ equity
Total liabilities and stockholders’ equity
December 31,
2023
2022
$
$
$
$
1,005 $
122
608
46
264
2,045
157
14,756
10,990
4,523
47
848
33,366 $
408 $
369
1,848
65
2,690
12,759
12,224
102
871
28,646
—
—
7,001
(2,523)
(23)
97
4,552
168
4,720
33,366 $
1,038
131
611
59
263
2,102
94
14,598
11,004
4,714
—
1,015
33,527
314
318
1,928
108
2,668
12,610
12,659
987
852
29,776
—
—
6,953
(3,309)
(23)
92
3,713
38
3,751
33,527
The accompanying notes are an integral part of these consolidated financial statements.
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64
CAESARS ENTERTAINMENT, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share data)
NET REVENUES:
Casino
Food and beverage
Hotel
Other
Net revenues
OPERATING EXPENSES:
Casino
Food and beverage
Hotel
Other
General and administrative
Corporate
Impairment charges
Depreciation and amortization
Transaction and other costs, net
Total operating expenses
Operating income
OTHER EXPENSE:
Interest expense, net
Loss on extinguishment of debt
Other income (loss)
Total other expense
Loss from continuing operations before income taxes
Benefit for income taxes
Income (loss) from continuing operations, net of income taxes
Discontinued operations, net of income taxes
Net income (loss)
Net (income) loss attributable to noncontrolling interests
Net income (loss) attributable to Caesars
Net income (loss) per share - basic and diluted:
Basic income (loss) per share from continuing operations
Basic loss per share from discontinued operations
Basic income (loss) per share
Diluted income (loss) per share from continuing operations
Diluted loss per share from discontinued operations
Diluted income (loss) per share
Weighted average basic shares outstanding
Weighted average diluted shares outstanding
Years Ended December 31,
2023
2022
2021
6,367 $
1,728
2,090
1,343
11,528
5,997 $
1,596
1,957
1,271
10,821
3,342
1,049
570
434
2,012
306
95
1,261
(13)
9,056
2,472
(2,342)
(200)
10
(2,532)
(60)
888
828
—
828
(42)
786 $
3.65 $
—
3.65 $
3.64 $
—
3.64 $
215
216
3,526
935
529
411
2,068
286
108
1,205
14
9,082
1,739
(2,265)
(85)
46
(2,304)
(565)
41
(524)
(386)
(910)
11
(899) $
(2.39) $
(1.80)
(4.19) $
(2.39) $
(1.80)
(4.19) $
214
214
5,827
1,140
1,551
1,052
9,570
3,129
707
438
373
1,782
309
102
1,126
144
8,110
1,460
(2,295)
(236)
(198)
(2,729)
(1,269)
283
(986)
(30)
(1,016)
(3)
(1,019)
(4.69)
(0.14)
(4.83)
(4.69)
(0.14)
(4.83)
211
211
$
$
$
$
$
$
The accompanying notes are an integral part of these consolidated financial statements.
Table of Contents
65
CAESARS ENTERTAINMENT, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In millions)
Net income (loss)
Foreign currency translation adjustments
Change in fair market value of interest rate swaps, net of tax
Other
Other comprehensive income, net of tax
Comprehensive income (loss)
Amounts attributable to noncontrolling interests:
Net (income) loss attributable to noncontrolling interests
Foreign currency translation adjustments
Comprehensive (income) loss attributable to noncontrolling interests
Comprehensive income (loss) attributable to Caesars
2023
Years Ended December 31,
2022
2021
828 $
1
—
4
5
833
(42)
—
(42)
791 $
(910) $
34
21
—
55
(855)
11
1
12
(843) $
(1,016)
(45)
47
(1)
1
(1,015)
(3)
1
(2)
(1,017)
$
$
The accompanying notes are an integral part of these consolidated financial statements.
Table of Contents
66
CAESARS ENTERTAINMENT, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
Caesars Stockholders' Equity
Preferred Stock
Common Stock
Treasury
Stock
(In millions)
Shares Amount Shares Amount
Additional
Paid-in
Capital
Accumulated
Deficit
Accumulated
Other
Comprehensive
Income
Amount
Noncontrolling
Interests
Total
Stockholders'
Equity
Balance, January 1, 2021
Stock-based compensation
Issuance of common stock,
net
Net income (loss)
Other comprehensive
income (loss), net of tax
Shares withheld related to
net share settlement of
stock awards
Transactions with
noncontrolling interests
Balance, December 31, 2021
Stock-based compensation
Net loss
Other comprehensive
income (loss), net of tax
Shares withheld related to
net share settlement of
stock awards
Transactions with
noncontrolling interests
Balance, December 31, 2022
Stock-based compensation
Net income
Other comprehensive
income, net of tax
Shares withheld related to
net share settlement of
stock awards
Transactions with
noncontrolling interests
Balance, December 31, 2023
Table of Contents
— $ —
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
208 $ — $
1
5
—
—
—
—
214
1
—
—
—
—
215
1
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
6,382 $
83
(1,391) $
—
34 $
—
(9) $
—
18 $
—
456
—
—
(44)
—
6,877
102
—
—
(26)
—
6,953
104
—
—
(27)
—
(1,019)
—
—
—
(2,410)
—
(899)
—
—
—
(3,309)
—
786
—
—
—
—
2
—
—
36
—
—
56
—
—
92
—
—
5
—
(14)
—
—
—
—
(23)
—
—
—
—
—
(23)
—
—
—
—
—
3
(1)
—
41
61
—
(11)
(1)
—
(11)
38
—
42
—
—
—
—
— $ —
—
216 $ — $
—
(29)
7,001 $
—
(2,523) $
—
97 $
—
(23) $
88
168 $
The accompanying notes are an integral part of these consolidated financial statements.
67
5,034
83
442
(1,016)
1
(44)
41
4,541
102
(910)
55
(26)
(11)
3,751
104
828
5
(27)
59
4,720
CAESARS ENTERTAINMENT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
2023
Years Ended December 31,
2022
2021
$
828 $
(910) $
(1,016)
Discontinued operations, net of income taxes
Depreciation and amortization
Amortization of deferred financing costs and discounts
Provision for doubtful accounts
Loss on extinguishment of debt
Non-cash lease amortization
(Gain) loss on investments
Stock-based compensation expense
Loss on sale of businesses and disposal of property and equipment
Impairment charges
Deferred income taxes
(Gain) loss on derivatives
Foreign currency transaction gain
Other non-cash adjustments to net (income) loss
Change in operating assets and liabilities:
Accounts receivable
Prepaid expenses and other assets
Income taxes (receivable) payable
Accounts payable, accrued expenses and other liabilities
Other
Net cash provided by operating activities
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment
Acquisition of William Hill, net of cash acquired
Purchase of additional interest in Horseshoe Baltimore, net of cash consolidated
Acquisition of gaming rights and trademarks
Proceeds from sale of businesses, property and equipment, net of cash sold
Proceeds from the sale of investments
Proceeds from insurance related to property damage
Investments in unconsolidated affiliates
Other
Net cash used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term debt and revolving credit facilities
Repayments of long-term debt and revolving credit facilities
Financing obligation payments
Debt issuance and extinguishment costs
Proceeds from issuance of common stock
Cash paid to settle convertible notes
Taxes paid related to net share settlement of equity awards
Payments to acquire ownership interest in subsidiary
Contributions from noncontrolling interest owners
Distributions to noncontrolling interest
Net cash used in financing activities
Table of Contents
68
—
1,261
200
41
200
51
(5)
104
22
95
(888)
—
—
(40)
(82)
39
(27)
10
—
1,809
(1,264)
—
—
(30)
1
4
—
(3)
36
(1,256)
5,460
(6,106)
(8)
(79)
—
—
(27)
(66)
116
(3)
(713)
386
1,205
297
25
85
54
54
101
5
108
(41)
(73)
—
(57)
(143)
(15)
(7)
(82)
1
993
(952)
—
—
(11)
39
126
36
—
(6)
(768)
1,500
(2,738)
(3)
(12)
1
—
(27)
—
—
(3)
(1,282)
30
1,126
347
26
236
39
107
82
11
102
(283)
127
(21)
(8)
(135)
(67)
13
482
1
1,199
(520)
(1,581)
(5)
(312)
726
239
44
(39)
—
(1,448)
1,308
(1,977)
(5)
(56)
3
(367)
(45)
—
—
(2)
(1,141)
(In millions)
CASH FLOWS FROM DISCONTINUED OPERATIONS:
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
Net cash from discontinued operations
Change in cash, cash equivalents, and restricted cash classified as assets held for sale
Effect of foreign currency exchange rates on cash
Decrease in cash, cash equivalents and restricted cash
Cash, cash equivalents and restricted cash, beginning of period
Cash, cash equivalents and restricted cash, end of period
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH TO
AMOUNTS REPORTED WITHIN THE CONSOLIDATED BALANCE SHEETS:
Cash and cash equivalents
Restricted cash
Restricted and escrow cash included in other noncurrent assets
Cash and cash equivalents and restricted cash in discontinued operations
Total cash, cash equivalents and restricted cash
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash interest paid for debt
Cash interest paid for rent related to financing obligations
Income taxes paid, net
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Payables for capital expenditures
Convertible notes settled with shares
Land contributed to joint venture
2023
Years Ended December 31,
2022
2021
—
—
—
—
—
—
(160)
1,303
1,143 $
1,005 $
122
16
—
1,143 $
846 $
1,286
26
169
—
—
(18)
386
—
368
—
(29)
(718)
2,021
1,303 $
1,038 $
131
134
—
1,303 $
805 $
1,205
22
145
—
—
(27)
(1,475)
591
(911)
10
32
(2,259)
4,280
2,021
1,070
319
323
309
2,021
831
1,092
9
100
440
61
$
$
$
$
The accompanying notes are an integral part of these consolidated financial statements.
Table of Contents
69
CAESARS ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The accompanying consolidated financial statements include the accounts of Caesars Entertainment, Inc., a Delaware corporation, and its consolidated
subsidiaries which may be referred to as the “Company,” “CEI,” “Caesars,” “we,” “our,” “us,” or the “Registrant” within these financial statements.
We also refer to (i) our Consolidated Financial Statements as our “Financial Statements,” (ii) our Consolidated Statements of Operations and
Consolidated Statements of Comprehensive Income (Loss) as our “Statements of Operations,” (iii) our Consolidated Balance Sheets as our “Balance
Sheets,” and (iv) our Consolidated Statements of Cash Flows as our “Statements of Cash Flows,” which are prepared in accordance with accounting
principles generally accepted in the United States (“GAAP”). References to numbered “Notes” refer to Notes to our Consolidated Financial Statements
included herein.
Note 1. Organization and Basis of Presentation
Organization
The Company is a geographically diversified gaming and hospitality company that was founded in 1973 by the Carano family with the opening of the
Eldorado Hotel Casino in Reno, Nevada. Beginning in 2005, the Company grew through a series of acquisitions, including the acquisition of MTR Gaming
Group, Inc. in 2014, Isle of Capri Casinos, Inc. in 2017, Tropicana Entertainment, Inc. in 2018, Caesars Entertainment Corporation in 2020, and William
Hill PLC (the “William Hill Acquisition”) on April 22, 2021. The Company’s ticker symbol on the NASDAQ Stock Market is “CZR”.
The Company owns, leases, brands or manages an aggregate of 52 domestic properties in 18 states with approximately 51,300 slot machines, video lottery
terminals and e-tables, approximately 2,700 table games and approximately 44,700 hotel rooms as of December 31, 2023. The Company operates and
conducts sports wagering across 31 jurisdictions in North America, 25 of which offer online sports betting, and operates iGaming in five jurisdictions in
North America. In addition, the Company has other properties in North America that are authorized to use the brands and marks of Caesars Entertainment,
Inc., as well as other non-gaming properties. The Company’s primary source of revenue is generated by its casino properties’ gaming operations, which
includes retail and online sports betting and online gaming, and the Company utilizes its hotels, restaurants, bars, entertainment, racing, retail shops and
other services to attract customers to its properties.
The Company’s operations for retail and online sports betting, iGaming, and online poker are included under the Caesars Digital segment. The Company
has made significant investments into the interactive business in recent years with, among other investments, the William Hill Acquisition, strategic
expansion into new markets as legalization permits, and marketing campaigns with distinguished actors, former athletes and media personalities promoting
the Caesars Sportsbook app. The Company expects to continue to expand its operations in the Caesars Digital segment as new jurisdictions legalize retail
and online gaming and sports betting.
The Company has divested certain properties and other assets, including non-core properties and divestitures required by regulatory agencies. See Note 4
for a discussion of properties recently sold and Note 19 for segment information.
Basis of Presentation
Our Financial Statements are prepared in accordance with accounting principles generally accepted in the United States, which requires management to
make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses and the disclosure of contingent assets and
liabilities. Management believes the accounting estimates are appropriate and reasonably determined. Actual amounts could materially differ from those
estimates.
The presentation of financial information herein for the periods after the Company’s acquisitions or before divestitures of various properties is not fully
comparable to the periods prior to their respective purchase or after the sale dates. See Note 3 for further discussion of the acquisitions and related
transactions and Note 4 for properties recently divested.
Our Financial Statements include the accounts of Caesars Entertainment, Inc. and its subsidiaries after elimination of all intercompany accounts and
transactions. See Note 2 for policy on consolidation of subsidiaries.
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70
CAESARS ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Note 2. Summary of Significant Accounting Policies
Additional significant accounting policy disclosures are provided within the applicable Notes to the Financial Statements.
Consolidation of Subsidiaries and Variable Interest Entities
We consolidate all subsidiaries in which we have a controlling financial interest and variable interest entities (“VIEs”) for which we or one of our
consolidated subsidiaries is the primary beneficiary. Control generally equates to ownership percentage, whereby (i) affiliates that are more than 50%
owned are consolidated; (ii) investments in affiliates of 50% or less but greater than 20% are generally accounted for using the equity method where we
have determined that we have significant influence over the entities; and (iii) investments in affiliates of 20% or less are generally accounted for as
investments in equity securities.
We consider ourselves the primary beneficiary of a VIE when we have both the power to direct the activities that most significantly affect the results of the
VIE and the right to receive benefits or the obligation to absorb losses of the entity that could be potentially significant to the VIE. We review investments
for VIE consideration if a reconsideration event occurs to determine if the investment qualifies, or continues to qualify, as a VIE. If we determine an
investment qualifies, or no longer qualifies, as a VIE, there may be a material effect to our Financial Statements.
Cash and Cash Equivalents
Cash equivalents include investments in money market funds that can be redeemed immediately at the current net asset value per share. A money market
fund is a mutual fund whose investments are primarily in short-term debt securities designed to maximize current income with liquidity and capital
preservation, usually maintaining per share net asset value at a constant amount, such as one dollar. The carrying amounts approximate the fair value
because of the short maturity of those instruments (Level 1). Cash and cash equivalents also include cash maintained for gaming operations.
Restricted Cash
Restricted cash includes cash equivalents held in certificates of deposit accounts or money market type funds, that are not subject to remeasurement on a
recurring basis, which are restricted under certain operating agreements or restricted for future capital expenditures in the normal course of business.
Advertising
Advertising costs are expensed in the period the advertising initially takes place. Advertising costs were $259 million, $571 million and $518 million for
the years ended December 31, 2023, 2022 and 2021, respectively, and are included within operating expenses. During the years ended December 31, 2022
and 2021, the Company launched significant television, radio and internet marketing campaigns promoting the Caesars Sportsbook. Advertising costs
related to the Caesars Digital segment are primarily recorded in Casino expense.
Interest Expense, Net
(In millions)
Interest expense
Capitalized interest
Interest income
Total interest expense, net
Recently Issued Accounting Pronouncements
Pronouncements to Be Implemented in Future Periods
2023
Years Ended December 31,
2022
2021
$
$
2,394 $
(40)
(12)
2,342 $
2,303 $
(26)
(12)
2,265 $
2,320
(9)
(16)
2,295
In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, “Income Taxes:
Improvements to Income Tax Disclosures,” which requires disaggregated information about an entity’s effective tax rate reconciliation as well as
information on income taxes paid. These updates apply to all entities subject to income taxes and will be effective for annual periods beginning after
December 15, 2024. Early adoption is permitted. Updates will be applied on a prospective basis with the option to apply the standard retrospectively. We do
not expect the amendments in this update to have a material impact on our Financial Statements.
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71
CAESARS ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
In November 2023, the FASB issued ASU 2023-07, “Segment Reporting: Improvements to Reportable Segment Disclosures,” which requires public entities
to disclose information about their reportable segments’ significant expenses on an interim and annual basis. This guidance is effective for years beginning
after December 15, 2023, and interim period within years beginning after December 15, 2024. Early adoption is permitted. Amendments in this update
should be applied retrospectively to all prior periods presented in the financial statements. We do not expect the amendments in this update to have a
material impact on our Financial Statements.
In October 2023, the FASB issued ASU 2023-06, “Disclosure Improvements: Codification Amendments In Response to the SEC’s Disclosure Update and
Simplification Initiative,” to clarify or improve disclosure and presentation requirements on a variety of topics and align the requirements in the FASB
accounting standard codification with the Securities and Exchange Commission regulations. This guidance is effective for the Company no later than June
30, 2027. We do not expect the amendments in this update to have a material impact on our Financial Statements.
Note 3. Acquisitions, Purchase Price Accounting and Pro forma Information
Acquisition of William Hill
On April 22, 2021, we completed the acquisition of William Hill PLC for cash consideration of approximately £2.9 billion, or approximately $3.9 billion,
based on the GBP to USD exchange rate on the closing date.
We acquired William Hill PLC and its U.S. subsidiary, William Hill U.S. Holdco (“William Hill US” and together with William Hill PLC, “William Hill”)
to better position the Company to address the extensive usage of digital platforms, continued legalization in additional states and jurisdictions, and growing
bettor demand, which are driving the market for online sports betting platforms in the U.S. In addition, we continue to leverage the World Series of Poker
(“WSOP”) brand and license the WSOP trademarks for a variety of products and services across these digital platforms. At the time that the William Hill
Acquisition was consummated, the Company’s intent was to divest William Hill International.
On September 8, 2021, the Company entered into an agreement to sell William Hill International to 888 Holdings Plc for approximately £2.2 billion. On
April 7, 2022, the Company amended the agreement to sell William Hill International to 888 Holdings Plc for a revised enterprise value of approximately
£2.0 billion. During the year ended December 31, 2022, the Company recorded impairments to assets held for sale of $503 million within discontinued
operations based on the revised and final sales price. On July 1, 2022, the Company completed the sale of William Hill International to 888 Holdings Plc.
Prior to the acquisition, the Company accounted for its investment in William Hill PLC as an investment in equity securities and William Hill US as an
equity method investment. Accordingly, the acquisition was accounted for as a business combination achieved in stages, or a “step acquisition.”
As mentioned above, the total purchase consideration for William Hill was approximately $3.9 billion. The purchase consideration in the acquisition was
determined with reference to its acquisition date fair value.
(In millions)
Cash for outstanding William Hill common stock
Fair value of William Hill equity awards
Settlement of preexisting relationships (net of receivable/payable)
Settlement of preexisting relationships (net of previously held equity investment and off-market settlement)
(a)
Total purchase consideration
Consideration
3,909
30
7
(34)
3,912
$
$
____________________
(a)
William Hill common stock of approximately 1.0 billion shares as of the acquisition date was paid at £2.72 per share, or approximately $3.77 per share using the GBP to USD exchange
rate on the acquisition date.
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72
CAESARS ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Final Purchase Price Allocation
The fair values are based on management’s analysis, including work performed by third-party valuation specialists, and were finalized over the one-year
measurement period. The following table summarizes the allocation of the purchase consideration to the identifiable assets acquired and liabilities assumed
of William Hill, with the excess recorded as goodwill as of December 31, 2022:
(In millions)
Other current assets
Assets held for sale
Property and equipment, net
Goodwill
Intangible assets
Other noncurrent assets
(a)
Total assets
Other current liabilities
Liabilities related to assets held for sale
Deferred income taxes
Other noncurrent liabilities
(b)
Total liabilities
Noncontrolling interests
Net assets acquired
Fair Value
164
4,337
55
1,154
565
317
6,592
242
2,142
251
35
2,670
10
3,912
$
$
$
$
____________________
(a)
Intangible assets consist of gaming rights valued at $80 million, trademarks valued at $27 million, developed technology valued at $110 million, reacquired rights valued at $280 million
and user relationships valued at $68 million.
(b)
Includes the fair value of debt of $1.1 billion related to William Hill International at the acquisition date.
The fair values of the assets acquired and liabilities assumed were determined using the market, income, and cost approaches, or a combination. Valuation
methodologies under both a market and income approach used for the identifiable net assets acquired in the William Hill Acquisition make use of Level 3
inputs, such as expected cash flows and projected financial results. The market approach indicates value for a subject asset based on available market
pricing for comparable assets.
Trade receivables and payables and other current and noncurrent assets and liabilities were valued at the existing carrying values as they represented the
estimated fair value of those items at the William Hill acquisition date.
Assets and liabilities held for sale substantially represented William Hill International which was valued using a combination of approaches including a
market approach based on valuation multiples and EBITDA, the relief from royalty method and the replacement cost method. In addition to the approaches
described, our estimates were updated to reflect the sale price of William Hill International in the sale to 888 Holdings Plc, described above.
The acquired net assets of William Hill included certain investments in common stock. Investments with a publicly available share price were valued using
the share price on the acquisition date. Investments without publicly available share data were valued at their carrying value, which approximated fair
value.
Other personal property assets such as furniture, equipment, computer hardware, and fixtures were valued using a cost approach which determined that the
carrying values represented fair value of those items at the William Hill acquisition date.
Trademarks and developed technology were valued using the relief from royalty method, which presumes that without ownership of such trademarks or
technology, the Company would have to make a series of payments to the assets’ owner in return for the right to use their brand or technology. By virtue of
their ownership of the respective intangible assets, the Company avoids any such payments and records the related intangible value. The estimated useful
lives of the trademarks and developed technology were approximately 15 years and six years, respectively, from the acquisition date.
Online user relationships are valued using a cost approach based on the estimated marketing and promotional cost to acquire the new active user base if the
user relationships were not already in place and needed to be replaced. We estimated the useful life of the user relationships to be approximately three years
from the acquisition date.
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73
CAESARS ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Operating agreements with non-Caesars entities allowed William Hill to operate retail and online sportsbooks as well as online gaming within certain
states. These agreements were valued using the excess earnings method, estimating the projected profits of the business attributable to the rights afforded
through the agreements, adjusted for returns of other assets that contribute to the generation of this profit, such as working capital, fixed assets and other
intangible assets. We estimated the useful life of these operating agreements to be approximately 20 years from the acquisition date and have included them
within amortizing gaming rights.
The reacquired rights intangible asset represents the estimated fair value of the Company’s share of William Hill’s forecasted profits arising from the prior
contractual arrangement with the Company to operate retail and online sportsbooks and online gaming. This fair value estimate was determined using the
excess earnings method, an income-based approach that reflects the present value of the future profit William Hill expected to earn over the remaining term
of the contract, adjusted for returns of other assets that contribute to the generation of this profit, such as working capital, fixed assets and other intangible
assets. The forecasted profit used within the valuation was adjusted for the settlement of the preexisting relationship in order to avoid double counting of
the settlement. Reacquired rights are amortizable over the remaining contractual period of the contract in which the rights were granted and estimated to be
approximately 24 years from the acquisition date.
Goodwill is the result of expected synergies from the operations of the combined company and future customer relationships including the brand names and
strategic partner relationships of Caesars and the technology and assembled workforce of William Hill. The goodwill acquired will not generate
amortization deductions for income tax purposes.
The fair value of long-term debt assumed was calculated based on market quotes.
The Company recognized acquisition-related transaction costs of $21 million and $68 million for the years ended December 31, 2022 and 2021,
respectively, excluding additional transaction costs associated with sale of William Hill International. These costs were associated with legal, professional
services, and certain severance and retention costs and were primarily recorded in Transaction and other costs, net in our Statements of Operations.
For the period of April 22, 2021 through December 31, 2021, the operations of William Hill generated net revenues of $183 million, excluding
discontinued operations (see Note 4), and a net loss of $415 million.
Unaudited Pro Forma Financial Information
The following unaudited pro forma financial information is presented to illustrate the estimated effects of the William Hill Acquisition as if it had occurred
on January 1, 2020. The pro forma amounts include the historical operating results of the Company and William Hill prior to the acquisition, with
adjustments directly attributable to the acquisition. The pro forma results include adjustments and consequential tax effects to reflect incremental
amortization expense to be incurred based on preliminary fair values of the identifiable intangible assets acquired, eliminate gains and losses related to
certain investments and adjustments to the timing of acquisition related costs and expenses incurred during the year ended December 31, 2021. The
unaudited pro forma financial information is not necessarily indicative of the financial position or results that would have occurred had the William Hill
Acquisition been consummated as of the dates indicated, nor is it indicative of any future results. In addition, the unaudited pro forma financial information
does not reflect the expected realization of any synergies or cost savings associated with the acquisition.
(In millions)
Net revenues
Net loss
Net loss attributable to Caesars
Consolidation of Horseshoe Baltimore
Year Ended December
31, 2021
$
9,696
(893)
(896)
On July 10, 2023, the Company completed the acquisition of the remaining 24.2% equity ownership in Horseshoe Baltimore, utilizing cash on hand, for a
total of $66 million.
On August 26, 2021 (the “Consolidation Date”), the Company increased its ownership interest in Horseshoe Baltimore, a property which it also managed,
to approximately 75.8% for cash consideration of $55 million. Our previously held investment was remeasured as of the date of the change in ownership
and the Company recognized a gain of $40 million during the year ended December 31, 2021. Subsequent to the change in ownership, the Company was
determined to have a controlling financial interest and began to consolidate the operations of Horseshoe Baltimore.
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74
CAESARS ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Prior to the purchase, the Company held an interest in Horseshoe Baltimore of approximately 44.3% which was accounted for as an equity method
investment.
(In millions)
Cash for additional ownership interest
Preexisting relationships (net of receivable/payable)
Preexisting relationships (net of previously held equity investment)
Total purchase consideration
Final Purchase Price Allocation
Consideration
55
18
81
154
$
$
The fair values are based on management’s analysis, including work performed by a third-party valuation specialist, and were finalized over the one-year
measurement period. The following table summarizes the allocation of the purchase consideration to the identifiable assets and liabilities of Horseshoe
Baltimore, with excess recorded as goodwill as of December 31, 2022:
(In millions)
Current assets
Property and equipment, net
Goodwill
Intangible assets
Other noncurrent assets
(a)
Total assets
Current liabilities
Long-term debt
Other long-term liabilities
Total liabilities
Noncontrolling interests
Net assets acquired
Fair Value
60
317
63
53
183
676
26
272
182
480
42
154
$
$
$
$
____________________
(a)
Intangible assets consist of gaming rights valued at $43 million and customer relationships valued at $10 million.
The fair values of the assets acquired and liabilities assumed were determined using the market, income, and cost approaches, or a combination. Valuation
methodologies under both a market and income approach used for the identifiable net assets of Horseshoe Baltimore on the Consolidation Date make use of
Level 3 inputs, such as expected cash flows and projected financial results. The market approach indicates value for a subject asset based on available
market pricing for comparable assets.
Trade receivables and payables and other current and noncurrent assets and liabilities were valued at the existing carrying values as they represented the
estimated fair value of those items on the Consolidation Date.
Other personal property assets such as furniture, equipment, computer hardware, and fixtures were valued at the existing carrying values as they closely
represented the estimated fair value of those items on the Consolidation Date.
The fair value of the buildings and improvements were estimated via the income approach. The remaining estimated useful life of the buildings and
improvements on the Consolidation Date is 40 years.
The right of use asset and operating lease liability related to a ground lease for the site on which Horseshoe Baltimore is located was recorded at fair value
and will be amortized over the estimated remaining useful life due to changes in the underlying fair value and estimated remaining useful life of the
building and improvements. Renewal options are considered to be reasonably certain. The income approach was used to determine fair value, based on the
estimated present value of the future lease payments over the lease term, including renewal options, using an incremental borrowing rate of approximately
7.6%.
Customer relationships are valued using an income approach, comparing the prospective cash flows with and without the customer relationships in place to
estimate the fair value of the customer relationships, with the fair value assumed to be equal to the discounted cash flows of the business that would be lost
if the customer relationships were not in place and needed to be replaced. We estimate the useful life of these customer relationships to be approximately
seven years from the Consolidation Date.
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75
CAESARS ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
The fair value of the gaming rights was determined using the excess earnings method, which is an income approach methodology that estimates the
projected cash flows of the business attributable to the gaming license intangible asset, which is net of charges for the use of other identifiable assets of the
business including working capital, fixed assets and other intangible assets. The acquired gaming rights are considered to have an indefinite life.
The goodwill acquired will generate amortization deductions for income tax purposes.
The fair value of long-term debt has been calculated based on market quotes.
For the period of August 26, 2021 through December 31, 2021, the operations of Horseshoe Baltimore generated net revenues of $72 million, and a net
income of $4 million.
Unaudited Pro Forma Financial Information
The following unaudited pro forma financial information is presented to illustrate the estimated effects of the Horseshoe Baltimore consolidation as if it had
occurred on January 1, 2020. The pro forma amounts include the historical operating results of the Company and Horseshoe Baltimore prior to the
consolidation. The pro forma results include adjustments and consequential tax effects to reflect incremental amortization expense to be incurred based on
preliminary fair values of the identifiable intangible assets acquired and the adjustments to eliminate certain revenues and expenses which are considered
intercompany activities. The unaudited pro forma financial information is not necessarily indicative of the financial results that would have occurred had
the consolidation of Horseshoe Baltimore occurred as of the dates indicated, nor is it indicative of any future results. In addition, the unaudited pro forma
financial information does not reflect the expected realization of any synergies or cost savings associated with the consolidation.
(In millions)
Net revenues
Net loss
Net loss attributable to Caesars
Note 4. Divestitures and Discontinued Operations
Year Ended December
31, 2021
$
9,693
(1,049)
(1,056)
The Company periodically divests assets to raise capital or, in previous cases, to comply with conditions, terms, obligations or restrictions imposed by
antitrust, gaming and other regulatory entities. The carrying value of the net assets held for sale are compared to the expected selling price and any
expected losses are recorded immediately. Gains or losses associated with the disposal of assets held for sale are recorded within other operating costs,
unless the assets represent a discontinued operation.
Rio, Baton Rouge, Evansville and MontBleu Divestitures
On October 2, 2023, the Company’s lease term related to certain assets of Rio All-Suite Hotel & Casino (“Rio”) ended and all operations were assumed by
the lessor. Rio was reported within the Las Vegas segment.
On May 5, 2022, the Company consummated the sale of the equity interests of Belle of Baton Rouge Casino & Hotel (“Baton Rouge”) to CQ Holding
Company, Inc., resulting in a loss of $3 million.
On June 3, 2021, the Company consummated the sale of the real property and equity interests of Tropicana Evansville (“Evansville”) to Gaming and
Leisure Properties, Inc. (“GLPI”) and Bally’s Corporation, respectively, for $480 million, resulting in a gain of $12 million.
On April 6, 2021, the Company consummated the sale of the equity interests of MontBleu Casino Resort & Spa (“MontBleu”) to Bally’s Corporation for
$15 million, resulting in a gain of less than $1 million. The Company received the payment in full on April 5, 2022.
Prior to their respective closing dates, Baton Rouge, Evansville and MontBleu did not meet the requirements for presentation as discontinued operations.
All properties were previously reported in the Regional segment.
Table of Contents
76
CAESARS ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
The following information presents the net revenues and net income (loss) of recent divestitures:
(In millions)
Net revenues
Net income
(In millions)
Net revenues
Net income (loss)
(In millions)
Net revenues
Net income (loss)
Discontinued operations
Year Ended December
31, 2023
Rio
$
Year Ended December 31, 2022
Rio
Baton Rouge
$
199 $
18
Year Ended December 31, 2021
Rio
Baton Rouge
Evansville
MontBleu
$
205 $
22
17 $
(2)
58 $
26
145
15
6
(1)
11
4
On July 20, 2020, the closing date of the merger between Eldorado Hotel Casino and Caesars Entertainment Corporation (the “Merger”), Harrah’s
Louisiana Downs, Caesars Southern Indiana and Caesars UK Group, met held for sale criteria. The operations of these properties, until their respective date
of divestiture, have been presented within discontinued operations. In addition, at the time that the William Hill Acquisition was consummated, the
Company’s intent was to divest William Hill International. Accordingly, the assets and liabilities of these reporting units were classified as held for sale
with operations presented within discontinued operations.
On November 1, 2021, the Company consummated the sale of the equity interests of Harrah’s Louisiana Downs to Rubico Acquisition Corp. for
$22 million and proceeds were split between the Company and VICI Properties L.P., a Delaware limited partnership (“VICI”). The annual base rent
payments under the Regional Master Lease between Caesars and VICI remained unchanged.
On September 3, 2021, the Company consummated the sale of the equity interests of Caesars Southern Indiana to the Eastern Band of Cherokee Indians
(“EBCI”) for $250 million, resulting in a gain of $12 million. In connection with this transaction, the Company’s annual base rent payments to VICI under
the Regional Master Lease were reduced by $33 million. Additionally, the Company and EBCI entered into a 10-year brand license agreement, for the
continued use of the Caesars brand and Caesars Rewards loyalty program at Caesars Southern Indiana. The agreement contains cancellation rights in
exchange for a termination fee at the buyer’s discretion following the fifth anniversary of the agreement.
On July 16, 2021, the Company completed the sale of Caesars UK Group, in which the buyer assumed all liabilities associated with the Caesars UK Group,
and recorded an impairment of $14 million within discontinued operations.
The following information presents the net revenues and net income (loss) for the Company’s properties that are part of discontinued operations for the
year ended December 31, 2022 and 2021:
(In millions)
Net revenues
Net loss
(In millions)
Net revenues
Net income (loss)
Table of Contents
Year Ended December
31, 2022
William Hill
International
$
820
(448)
Harrah’s Louisiana
Downs
Caesars UK Group
Caesars Southern
Indiana
William Hill
International
Year Ended December 31, 2021
$
48 $
10
77
30 $
(30)
155 $
27
1,221
(18)
CAESARS ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Note 5. Investments in and Advances to Unconsolidated Affiliates
The Company has investments in unconsolidated affiliates accounted for under the equity method which are recorded in Investment in and advances to
unconsolidated affiliates on the Balance Sheets. Certain significant investments as of December 31, 2023 and 2022 are discussed below.
Pompano Joint Venture
In April 2018, the Company entered into a joint venture with Cordish Companies (“Cordish”) to plan and develop a mixed-use entertainment and
hospitality destination expected to be located on unused land adjacent to the casino and racetrack at the Company’s Pompano property. As the managing
member, Cordish will operate the business and manage the development, construction, financing, marketing, leasing, maintenance and day-to-day operation
of the various phases of the project. Additionally, Cordish will be responsible for the development of the master plan for the project with the Company’s
input and will submit it for the Company’s review and approval. While the Company holds a 50% variable interest in the joint venture, it is not the primary
beneficiary; as such the investment in the joint venture is accounted for using the equity method. The Company participates evenly with Cordish in the
profits and losses of the joint venture, which are included in Transaction and other costs on the Statements of Operations.
As of December 31, 2023, the Company has contributed a total of $7 million in cash contributions since inception of the joint venture, which includes
capital calls totaling $3 million each in October 2023 and June 2021 that the Company elected to participate in. Additionally, the Company has contributed
approximately 209 acres of land with a total fair value of approximately $69 million, which includes a contribution of 186 acres of land, with a fair value of
$61 million, on February 12, 2021. The Company has no further obligation to contribute additional real estate or cash. During the year ended December 31,
2023, the Company recorded $64 million of income related to the investment, primarily due to the joint venture’s gain on the sale of a land parcel. As of
December 31, 2023 and 2022, the Company’s investment in the joint venture was $147 million and $80 million, respectively.
NeoGames
The acquired net assets of William Hill included an investment in NeoGames S.A. (“NeoGames”), a global leader of iLottery solutions and services to
national and state-regulated lotteries, and other investments. On September 16, 2021, the Company sold a portion of its shares of NeoGames common stock
for $136 million which decreased its ownership interest from 24.5% to approximately 8.4%. Additionally, on March 14, 2022 the Company sold its
remaining 2 million shares at fair value for $26 million. During the years ended December 31, 2022 and 2021, the Company recorded losses related to the
investment in NeoGames of $34 million and $54 million, respectively, which is included within Other income (loss) in the Statements of Operations.
Note 6. Property and Equipment
Property and equipment are stated at cost, except for assets acquired in our business combinations which were adjusted for fair value under Accounting
Standards Codification (“ASC”) 805. Internal use software costs are capitalized during the application development stage. Costs of major improvements
are capitalized, while costs of normal repairs and maintenance are charged to expense as incurred. Depreciation is computed using the straight-line method
over the estimated useful life of the asset as noted in the table below, or the term of the lease, whichever is less. Gains or losses on the disposal of property
and equipment are included in operating income. Useful lives of each asset class are generally as follows:
Buildings and improvements
Land improvements
Furniture, fixtures and equipment
Riverboats
3 to 40 years
12 to 40 years
3 to 15 years
30 years
A portion of our property and equipment is subject to various operating leases for which we are the lessor. Leased property includes our hotel rooms,
convention space and retail space through various short-term and long-term operating leases. See Note 10 for further discussion of our leases.
Table of Contents
78
CAESARS ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
The Company evaluates its property and equipment and other long-lived assets for impairment whenever indicators of impairment exist. The Company
compares the estimated future cash flows of the asset, on an undiscounted basis, to the carrying value of the asset. If the undiscounted cash flows exceed
the carrying value, no impairment is indicated. If the undiscounted cash flows do not exceed the carrying value, then an impairment charge may be
recorded for any difference between fair value and the carrying value. All recognized impairment losses are recorded as operating expenses, unless the
assets represent a discontinued operation. See Note 4 for further discussion of impairment on assets previously held for sale.
Property and Equipment, Net
(In millions)
Land
Buildings, riverboats, and leasehold and land improvements
Furniture, fixtures, and equipment
Construction in progress
Total property and equipment
Less: accumulated depreciation
Total property and equipment, net
Depreciation Expense
(In millions)
Depreciation expense
December 31,
2023
2022
$
$
2,088 $
13,543
2,409
762
18,802
(4,046)
14,756 $
2,092
13,094
2,054
351
17,591
(2,993)
14,598
2023
Years Ended December 31,
2022
2021
$
1,117 $
1,018 $
987
Depreciation is calculated using the straight-line method over the shorter of the estimated useful life of the asset or the related lease.
Note 7. Goodwill and Intangible Assets, net
The purchase price of an acquisition is allocated to the underlying assets acquired and liabilities assumed based upon their estimated fair values at the date
of acquisition. The Company determines the estimated fair values after review and consideration of relevant information including discounted cash flows,
quoted market prices, and estimates made by management. To the extent the purchase price exceeds the fair value of the net identifiable tangible and
intangible assets acquired and liabilities assumed, such excess is recorded as goodwill.
Goodwill and indefinite-lived intangible assets must be reviewed for impairment at least annually and between annual test dates in certain circumstances.
The Company performs its annual impairment tests as of October 1 of each fiscal year. The Company performs this assessment more frequently if
impairment indicators exist. We utilized a combined income approach using a discounted cash flow method and a guideline public company method to
determine the fair value of our goodwill. The Company performed the annual goodwill impairment test by comparing the fair value of each reporting unit
with its carrying amount. The Company determines the estimated fair value of each reporting unit based on a combination of earnings before interest, taxes,
depreciation and amortization (“EBITDA”), valuation multiples, and estimated future cash flows discounted at rates commensurate with the capital
structure and cost of capital of comparable market participants, giving appropriate consideration to the prevailing borrowing rates within the casino
industry in general, and expected sales proceeds. The Company also evaluates the aggregate fair value of all of its reporting units and other non-operating
assets in comparison to its aggregate debt and equity market capitalization at the test date. EBITDA multiples and discounted cash flows are common
measures used to value businesses in the industry.
Indefinite-lived intangible assets consist primarily of trademarks, Caesars Rewards and expenditures associated with obtaining racing and gaming licenses.
Indefinite-lived intangible assets are not subject to amortization but are subject to an annual impairment test. If the carrying amount of an indefinite-lived
intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to that excess amount.
Trademarks and Caesars Rewards were valued using the relief from royalty method, which presumes that without ownership of such trademarks or loyalty
program, the Company would have to make a stream of payments to a brand or franchise owner in return for the right to use their name or program. By
virtue of this asset, the Company avoids any such payments and records the related intangible value of the Company’s ownership of the brand name or
program.
Table of Contents
79
CAESARS ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Gaming rights represent intangible assets acquired from the purchase of a gaming entity located in a gaming jurisdiction where competition is limited, such
as when only a limited number of gaming operators are allowed to operate in the jurisdiction. These gaming license rights are not subject to amortization as
the Company has determined that they have indefinite useful lives. For gaming jurisdictions with high barriers of renewal of the gaming rights, such as
material costs of renewal, the gaming rights are deemed to have a finite useful life and are amortized over the expected useful life. We used the Excess
Earnings Method and a Cost Approach for estimating fair value for these gaming rights.
Finite-lived intangible assets consist of trade names, customer relationships, reacquired rights, and technology acquired in business combinations.
Amortization is recorded using the straight-line method over the estimated useful life of the asset. The Company evaluates for impairment whenever
indicators of impairment exist. When indicators are noted, the Company then compares estimated future cash flows, undiscounted, to the carrying value of
the asset. If the undiscounted cash flows exceed the carrying value, no impairment is recorded. Impairment charges are presented on the statements of
operations.
As a result of the finalized and approved capital and operating plans and the completion of the annual impairment testing for the year ended December 31,
2023, the Company recognized impairment charges in our Regional segment. These impairments were primarily due to a decrease in projected future cash
flows at certain regional properties due increased competition. The Company identified one reporting unit with an estimated fair value of the associated
gaming rights below the carrying value and recorded an impairment of $81 million. In addition, the Company identified one reporting unit with an
estimated fair value below its carrying value and we recorded an impairment of $14 million to goodwill.
During the year ended December 31, 2022, the Company recognized impairment charges in our Regional segment related to goodwill and gaming rights
totaling $78 million and $30 million, respectively, due to an increase in the related discount rates, which represents the higher required cost of capital as a
result of the macroeconomic environment and projected outlook.
In December 2021, the Company approved a capital plan which included the planned rebranding of certain of our properties. The Company utilized an
income approach to determine the fair value of the trademarks subject to rebranding based on their expected future cash flows, which resulted in an
impairment charge of $102 million during the year ended December 31, 2021. The adjusted carrying values of these trademarks were amortized over their
respective useful lives.
Changes in Carrying Value of Goodwill by Segment
(In millions)
Gross Goodwill:
Balance as of January 1, 2022
Other
Balance as of December 31, 2022
(a)
Accumulated Impairment:
Balance as of January 1, 2022
Impairment
Balance as of December 31, 2022
Net carrying value, as of December 31, 2022
Gross Goodwill:
Balance as of January 1, 2023
Other
Balance as of December 31, 2023
Accumulated Impairment:
Balance as of January 1, 2023
Impairment
Balance as of December 31, 2023
Net carrying value, as of December 31, 2023
(b)
Las Vegas
Regional
Caesars Digital
Managed and
Branded
CEI Total
$
$
$
$
6,889 $
—
6,889
—
—
—
6,889 $
6,889 $
—
6,889
—
—
—
6,889 $
3,093 $
—
3,093
(104)
(78)
(182)
2,911 $
3,093 $
—
3,093
(182)
(14)
(196)
2,897 $
1,198 $
6
1,204
—
—
—
1,204 $
1,204 $
—
1,204
—
—
—
1,204 $
— $
—
—
—
—
—
— $
— $
—
—
—
—
—
— $
11,180
6
11,186
(104)
(78)
(182)
11,004
11,186
—
11,186
(182)
(14)
(196)
10,990
____________________
(a)
See Note 3 for further detail. Purchase price allocation finalized in 2022.
(b)
$1.0 billion of goodwill within our Regional segment is associated with reporting units with zero or negative carrying value.
Table of Contents
80
CAESARS ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Changes in Carrying Amount of Intangible Assets Other than Goodwill
(In millions)
Balance as of January 1
Impairment
Amortization expense
Acquisition of gaming rights and trademarks
Other
Balance as of December 31
Amortizing
Non-Amortizing
Total
2023
2022
2023
2022
2023
2022
$
$
1,060 $
—
(144)
30
—
946 $
1,209 $
—
(187)
10
28
1,060 $
3,654 $
(81)
—
4
—
3,577 $
3,711 $
(30)
—
1
(28)
3,654 $
4,714 $
(81)
(144)
34
—
4,523 $
4,920
(30)
(187)
11
—
4,714
Gross Carrying Amount and Accumulated Amortization of Intangible Assets Other Than Goodwill
December 31, 2023
Gross Carrying
Amount
Accumulated
Amortization
Net Carrying
Amount
Gross Carrying
Amount
December 31, 2022
Accumulated
Amortization
Net Carrying
Amount
(Dollars in millions)
Amortizing intangible assets
Customer relationships
Gaming rights and other
Trademarks
Reacquired rights
Technology
Useful Life
3 - 7 years
10 - 34 years
15 years
24 years
6 years
Non-amortizing intangible assets
Trademarks
Gaming rights
Caesars Rewards
$
$
587 $
242
313
250
110
1,502 $
(360) $
(28)
(91)
(28)
(49)
(556)
587 $
212
313
250
110
1,472 $
227 $
214
222
222
61
946 $
1,998
1,056
523
3,577
4,523
(276) $
(16)
(73)
(17)
(30)
(412)
$
311
196
240
233
80
1,060
1,998
1,133
523
3,654
4,714
Total amortizing and non-amortizing intangible assets, net
$
Amortization expense with respect to intangible assets for the years ended December 31, 2023, 2022 and 2021 totaled $144 million, $187 million and $139
million, respectively, which is included in Depreciation and amortization in the Statements of Operations.
Estimated Five-Year Amortization
(In millions)
2024
2025
Years Ended December 31,
2026
2027
2028
Estimated annual amortization expense
$
130 $
122 $
122 $
80 $
43
Note 8. Fair Value Measurements
Marketable Securities
Marketable securities consist primarily of trading securities held by the Company’s captive insurance subsidiary and deferred compensation plans. The
estimated fair values of the Company’s marketable securities are determined on an individual asset basis based upon quoted prices of identical assets
available in active markets (Level 1), quoted prices of identical assets in inactive markets, or quoted prices for similar assets in active and inactive markets
(Level 2), and represent the amounts the Company would expect to receive if the Company sold these marketable securities. As of December 31, 2023 and
2022, the Company held $2 million in Level 1 securities and as of December 31, 2022 held an additional $2 million in Level 2 securities.
The Company held common shares of Flutter Entertainment PLC, which is a publicly traded company with a readily determinable share price. On July 7,
2021, the Company sold the remaining shares for $9 million and recorded a loss of $1 million on the sale date. Gains and losses have been included in
Other income (loss) in the Statements of Operations.
Derivative Instruments
The Company does not purchase or hold any derivative financial instruments for trading purposes.
Table of Contents
81
CAESARS ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Forward contracts
The Company entered into several foreign exchange forward contracts with third parties to hedge the risk of fluctuations in the foreign exchange rates
between USD and GBP. During the years ended December 31, 2022 and 2021, the Company recorded a gain of $73 million and $23 million, respectively,
related to forward contracts, which was recorded in the Other income (loss) in the Statements of Operations. All forward contracts were settled as of July 1,
2022.
Interest Rate Swap Derivatives
The Company assumed Caesars Entertainment Corporation’s interest rate swaps to manage the mix of assumed debt between fixed and variable rate
instruments. During the year ended December 31, 2022, the Company was party to four interest rate swap agreements to fix the interest rate on $1.3 billion
of variable rate debt related to the CRC Credit Agreement. The interest rate swaps were designated as cash flow hedging instruments. The difference to be
paid or received under the terms of the interest rate swap agreements was accrued as interest rates changed and recognized as an adjustment to interest
expense at settlement. The term of the interest rate swaps ended on December 31, 2022.
Valuation Methodology
The estimated fair values of our interest rate swap derivative instruments were derived from market prices obtained from dealer quotes for similar, but not
identical, assets or liabilities. Such quotes represented the estimated amounts we would receive or pay to terminate the contracts. The interest rate swap
derivative instruments were included in either Other long-term assets, net or Other long-term liabilities on our Balance Sheets. Our derivatives were
recorded at their fair values, adjusted for the credit rating of the counterparty if the derivative was an asset, or adjusted for the credit rating of the Company
if the derivative was a liability. None of our derivative instruments were offset and all were classified as Level 2.
Financial Statement Effect
The effect of interest rate swaps designated as hedging instruments on the Balance Sheets for amounts transferred into Accumulated other comprehensive
income (loss) (“AOCI”) before tax was a gain of $28 million during the year ended December 31, 2022. AOCI reclassified to Interest expense on the
Statements of Operations was $12 million for year ended December 31, 2022. Net settlement of these interest rate swaps resulted in the reclassification of
deferred gains and losses within AOCI to be reclassified to the income statement as a component of interest expense as settlement occurred.
Accumulated Other Comprehensive Income
The changes in AOCI by component, net of tax, for the periods through December 31, 2023 and 2022 are shown below.
(In millions)
Balances as of December 31, 2021
Other comprehensive income before reclassifications
Amounts reclassified from accumulated other comprehensive income
Total other comprehensive income, net of tax
Balances as of December 31, 2022
Other comprehensive income before reclassifications
Total other comprehensive income, net of tax
Balances as of December 31, 2023
Table of Contents
Unrealized Net
Gains on Derivative
Instruments
Foreign Currency
Translation
Adjustments
Other
Total
73 $
9
12
21
94 $
—
—
94 $
$
$
$
82
(36) $
35
—
35
(1) $
1
1
— $
(1) $
—
—
—
(1) $
4
4
3 $
36
44
12
56
92
5
5
97
CAESARS ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Note 9. Accrued Other Liabilities
Accrued other liabilities consisted of the following:
(In millions)
Contract and contract related liabilities (See Note 13)
Accrued payroll and other related liabilities
Accrued taxes
Self-insurance claims and reserves (See Note 11)
Disputed claims liability
Operating lease liability (See Note 10)
Accrued marketing
Other accruals
Total accrued other liabilities
Disputed Claims Liability
December 31,
2023
2022
749 $
283
202
200
26
23
23
342
747
283
195
203
26
50
20
404
1,848 $
1,928
$
$
The disputed claims liability represents certain remaining unsecured claims related to Caesars Entertainment Corporation’s bankruptcy assumed from the
Merger for which we have estimated the fair value of the remaining liability.
Note 10. Leases
The Company has operating and finance leases for various real estate and equipment. Certain of the Company’s lease agreements include rental payments
based on a percentage of sales over specified contractual amounts, rental payments adjusted periodically for inflation and rental payments based on usage.
The Company’s leases include options to extend the lease term one month to 74 years. The Company’s lease agreements do not contain any material
restrictive covenants, other than those described below.
Lessee Arrangements
Operating Leases
The Company leases real estate and equipment used in operations from third parties. As of December 31, 2023, the remaining term of the Company’s
operating leases ranged from 1 to 68 years with various extension options available, if the Company elects to exercise them. However, the Company’s
remaining terms only include extension options that we have determined are reasonably certain as of December 31, 2023. In addition to minimum rental
commitments, certain of the Company’s operating leases provide for contingent rentals based on a percentage of revenues in excess of specified amounts.
The Company does not include costs associated with non-lease components in the lease costs disclosed in the table below. During the years ended
December 31, 2023 and 2022, the Company obtained $41 million and $43 million, respectively, of right-of-use (“ROU”) assets in exchange for new lease
liabilities. During the years ended December 31, 2023 and 2022, the Company disposed of $7 million and $12 million, respectively, of ROU assets and
lease liabilities.
Leases recorded on the balance sheet consist of the following:
(In millions)
Assets:
Classification on the Balance Sheet
2023
2022
December 31,
Operating lease ROU assets
(a)
Other long-term assets, net
$
622 $
Liabilities:
Current operating lease liabilities
Non-current operating lease liabilities
(a)
(a)
Accrued other liabilities
Other long-term liabilities
23
728
639
50
710
___________________
(a)
As noted above, the Company has elected the short-term lease measurement and recognition exemption and do not establish ROU assets or liabilities for operating leases with terms of 12
months or less.
Table of Contents
83
CAESARS ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Lease Terms and Discount Rate
Weighted Average Remaining Lease Term (in years)
Weighted Average Discount Rate
Components of Lease Expense
(In millions)
Operating lease expense
Short-term and variable lease expense
Total operating lease costs
Supplemental cash flow information related to leases is as follows:
Cash payments included in the measurement of lease liabilities
(In millions)
Operating cash flows for operating leases
Maturities of Lease Liabilities
(In millions)
2024
2025
2026
2027
2028
Thereafter
Total future minimum lease payments
Less: present value factor
Total lease liability
Finance Leases
December 31,
2023
2022
32.1
8.1 %
2023
Years Ended December 31,
2022
2021
96 $
159
255 $
132 $
138
270 $
32.2
8.3 %
128
104
232
2023
Years Ended December 31,
2022
2021
116 $
110 $
96
$
$
$
Operating Leases
81
77
76
76
74
1,919
2,303
(1,552)
751
$
$
The Company has finance leases for certain equipment and real estate. As of December 31, 2023, the Company’s finance leases had remaining lease terms
of up to approximately 35 years, some of which include options to extend the lease terms in one month increments. The Company’s finance lease ROU
assets and liabilities were $69 million and $77 million as of December 31, 2023, respectively, and $73 million and $78 million as of December 31, 2022,
respectively.
Financing Obligations
VICI Leases & Golf Course Use Agreement
The fair value of the real estate assets and the related failed sale-leaseback financing obligations were estimated based on the present value of the estimated
future lease payments over the lease term of 15 years, plus renewal options, using an imputed discount rate of approximately 11.01%.
CEI leases certain real property assets from VICI under the following agreements: (i) for a portfolio of properties located throughout the United States (the
“Regional Lease”), (ii) for Caesars Palace Las Vegas and Harrah’s Las Vegas (the “Las Vegas Lease”), and (iii) for Harrah’s Joliet (the “Joliet Lease”),
(collectively, “VICI Leases”). The lease agreements, inclusive of all amendments, include (i) a 15-year initial term with four five-year renewal options, (ii)
initial annual fixed rent payments of $1.1 billion, subject to annual escalation provisions based on the Consumer Price Index (“CPI”) and a 2% floor which
commenced in lease year two of the initial terms and (iii) a variable element based on net revenues of the underlying leased properties, commencing in
lease year eight of the initial term.
Table of Contents
84
CAESARS ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
The Regional Lease includes a Put-Call Right Agreement whereby the Company may require VICI to purchase and lease back (as lessor) or whereby VICI
may require the Company to sell to VICI and lease back (as lessee) the real estate components of the gaming and racetrack facilities of Harrah’s Hoosier
Park Racing & Casino and Horseshoe Indianapolis (the “Centaur properties”). Election to exercise the option by either party must be made during the
election period beginning January 1, 2022 and ending December 31, 2024. Upon either party exercising their option, the Centaur properties would be sold
at a price and leased back to CEI in accordance to the terms and conditions of the Put-Call Right Agreement.
The Golf Course Use Agreement between the Company and VICI has a 35-year term (inclusive of all renewal periods), whereby the Company agrees to
pay initial annual membership and use fees totaling $14 million, subject to annual escalation provisions similar to those described above in the Regional
Lease, as well as certain per-round fees set forth in the agreement.
GLPI Leases
The fair value of the real estate assets and the related failed sale-leaseback financing obligations were estimated based on the present value of the estimated
future lease payments over the lease term of 35 years, including renewal options, using an imputed discount rate of approximately 9.75%. The value of the
failed sale-leaseback financing obligations is dependent upon assumptions regarding the amount of the lease payments and the estimated discount rate of
the lease payments required by a market participant.
CEI leases certain real property assets from GLPI under the Master Lease (as amended, the “GLPI Master Lease”). The GLPI Master Lease, encompassing
a portfolio of properties within the United States, provides for the lease of land, buildings, structures and other improvements on the land, easements and
similar appurtenances to the land and improvements relating to the operation of the leased properties. The GLPI Master Lease, inclusive of all amendments,
provides for (i) an initial term of 20 years (through September 2038), with four five-year renewals at the Company’s option, (ii) annual land and building
base rent of $24 million and $63 million, respectively, (iii) escalating provisions of building base rent equal to 101.25% of the rent for the preceding year
for lease years five and six, 101.75% for lease years seven and eight and 102% for each lease year thereafter and (iv) relief from the operating, capital
expenditure and financial covenants in the event of involuntary closures. The GLPI Master Lease does not provide the Company with an option to purchase
the leased property or the ability to terminate its obligations under the GLPI Master Lease prior to its expiration without GLPI’s consent.
On May 5, 2022, the Company consummated the sale of the equity interests of Baton Rouge. On November 13, 2023, a third amended and restated master
lease was entered into as a result of the removal of Baton Rouge from the properties included under the GLPI Master Lease.
The Lumière Lease was entered into by the Company and GLPI, whereby the Company sold the real estate underlying Horseshoe St. Louis, formerly
known as Lumière, to GLPI and leased back the property under a long-term financing obligation. The Lumière Lease, inclusive of all amendments,
provides for (i) an initial term commencing on September 29, 2020 and ending on October 31, 2033, (ii) four five-year renewal options, (iii) annual rent
payments of $23 million, (iv) escalation provisions commencing in lease year two equal to 101.25% of the rent for the preceding year for lease years two
through five, 101.75% for lease years six and seven and 102% for each lease year thereafter, (v) maintaining a minimum of 1.20:1 adjusted revenue to rent
ratio and (vi) certain relief under the financial covenant in the event of involuntary closures.
The Company continues to reflect the real estate assets related to the failed sale-lease back transactions on the Balance Sheets in Property and equipment,
net as if the Company was the legal owner, and continues to recognize depreciation expense over their estimated useful lives.
The future minimum payments related to the GLPI Leases, including the Lumière Lease, and VICI Leases financing obligation, as amended, at
December 31, 2023 were as follows:
(In millions)
2024
2025
2026
2027
2028
Thereafter
Total future payments
Less: Amounts representing interest
Plus: Residual values
Financing obligation
Table of Contents
GLPI Leases
VICI Leases
112 $
113
115
117
119
4,368
4,944
(3,926)
240
1,258 $
1,205
1,221
1,239
1,260
1,292
43,937
50,154
(39,614)
893
11,433
$
$
85
CAESARS ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Cash payments made relating to the Company’s long-term financing obligations during the years ended December 31, 2023, 2022 and 2021 were as
follows:
(In millions)
Cash paid for principal
Cash paid for interest
2023
$
(a)
GLPI Leases
December 31,
2022
2021
2023
(a)
VICI Leases
December 31,
2022
1 $
111
— $
110
— $
109
1 $
1,175
1 $
1,095
2021
1
983
____________________
(a)
For the initial periods of the VICI and GLPI Leases, cash payments are less than the interest expense recognized, which causes the failed-sale leaseback obligation to increase during the
initial years of the lease term.
Lease Covenants
The GLPI Leases and VICI Leases contain certain covenants requiring minimum capital expenditures based on a percentage of net revenues along with
maintaining certain financial ratios. The Company was in compliance with all applicable covenants as of December 31, 2023.
Lessor Arrangements
Lodging Arrangements
Lodging arrangements are considered short-term and generally consist of lease and nonlease components. The lease component is the predominant
component of the arrangement and consists of the fees charged for lodging. The nonlease components primarily consist of resort fees and other
miscellaneous items. As the timing and pattern of transfer of both the lease and nonlease components are over the course of the lease term, we have elected
to combine the revenue generated from lease and nonlease components into a single lease component based on the predominant component in the
arrangement. During the years ended December 31, 2023, 2022 and 2021, we recognized $2.1 billion, $2.0 billion and $1.6 billion, respectively, in lease
revenue related to lodging arrangements, which is included in Hotel revenues in the Statements of Operations.
Conventions
Convention arrangements are considered short-term and generally consist of lease and nonlease components. The lease component is the predominant
component of the arrangement and consists of fees charged for the use of meeting space. The nonlease components primarily consist of food and beverage
and audio/visual services. Revenue from conventions is included in Food and beverage revenue in the Statement of Operations, and during the years ended
December 31, 2023, 2022 and 2021, lease revenue related to conventions was $40 million, $34 million and $7 million, respectively.
Real Estate Operating Leases
We enter into long-term real estate leasing arrangements with third-party lessees at our properties. As of December 31, 2023, the remaining terms of these
operating leases ranged from 1 to 82 years, some of which include options to extend the lease term for up to five years. In addition to minimum rental
commitments, certain of our operating leases provide for contingent payments including contingent rentals based on a percentage of revenues in excess of
specified amounts and reimbursements for common area maintenance and utilities charges. As the timing and pattern of transfer of both the lease and
nonlease components are over the course of the lease term, we have elected to combine the revenue generated from lease and nonlease components into a
single lease component based on the predominant component in the arrangement. In addition, to maintain the value of our leased assets, certain leases
include specific maintenance requirements of the lessees or maintenance is performed by the Company on behalf of the lessees. During the years ended
December 31, 2023, 2022 and 2021, we recognized $166 million, $168 million and $149 million, respectively, of real estate lease revenue, which is
included in Other revenue in the Statement of Operations. Real estate lease revenue includes $68 million, $64 million and $45 million of variable rental
income for the years ended December 31, 2023, 2022 and 2021, respectively.
Table of Contents
86
CAESARS ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Maturities of Lease Receivables
(In millions)
2024
2025
2026
2027
2028
Thereafter
Total
Note 11. Litigation, Commitments and Contingencies
Litigation
General
Operating Leases
70
64
62
56
50
689
991
$
$
We are a party to various legal proceedings, which have arisen in the normal course of our business. Such proceedings can be costly, time consuming and
unpredictable and, therefore, no assurance can be given that the final outcome of such proceedings will not materially impact our consolidated financial
condition or results of operations. Estimated losses are accrued for these proceedings when the loss is probable and can be estimated. While we maintain
insurance coverage that we believe is adequate to mitigate the risks of such proceedings, no assurance can be given that the amount or scope of existing
insurance coverage will be sufficient to cover losses arising from such matters. The current liability for the estimated losses associated with these
proceedings is not material to our consolidated financial condition and those estimated losses are not expected to have a material impact on our results of
operations.
Cybersecurity Incident
On September 14, 2023, we announced that an unauthorized actor had gained access to our information technology network as a result of a social
engineering attack on an outsourced IT support vendor used by the Company, and acquired a copy of, among other data, our loyalty program database
(“Data Incident”).
As a result of the Data Incident, numerous putative class action lawsuits have been filed against us purporting to represent various classes of persons whose
personal information was affected by the Data Incident. These putative class actions assert a variety of common law and statutory claims based on
allegations that we failed to use reasonable security procedures and practices to safeguard customers’ personal information, and seek monetary and
statutory damages, injunctive relief and other related relief. In addition to those putative class action lawsuits, individual claims have been filed or
threatened against us as well.
In addition, we have received inquiries from numerous state regulators related to the Data Incident. We have responded or are in the process of responding
to these inquiries and are cooperating fully with regulators.
While we intend to vigorously defend ourselves in the above-described proceedings, we believe it is reasonably possible that we may incur losses
associated therewith. It is not possible at this time to estimate the amount of loss or range of loss, if any, that might result from adverse judgments,
settlements, or other resolution given the stage of these proceedings, the absence of specific allegations regarding the alleged damages, the uncertainty as to
the certification of a class or classes and the size of any certified class, if applicable, and/or the lack of resolution of significant factual and legal issues.
Moreover, additional lawsuits and claims related to the Data Incident may be asserted and governmental agencies may open additional inquiries or
investigations into the Data Incident. We have received, and continue to pursue, reimbursements from insurance carriers for costs incurred as a result of the
Data Incident.
We have incurred, and may continue to incur, certain expenses related to the Data Incident, including expenses to respond to, remediate and investigate this
matter. The full scope of the costs and related impacts of this incident, including the extent to which these costs will be offset by our cybersecurity
insurance or potential indemnification claims against third parties, has not been determined. We are unable to predict the full impact of this incident and its
impact on guest behavior in the future, including whether a change in our guests’ behavior could negatively impact our financial condition and results of
operations on an ongoing basis. Based on our assessment, the incident has not had a material impact, and we do not believe the incident has materially
affected or will materially affect us, including our operations, business strategy, results of operations, or financial condition.
Table of Contents
87
CAESARS ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Contractual Commitments
Capital Commitments
Harrah’s New Orleans
In April 2020, the Company and the State of Louisiana, by and through the Louisiana Gaming Control Board, entered into an Amended and Restated
Casino Operating Contract. Additionally, the Company, New Orleans Building Corporation and the City entered into a Second Amended and Restated
Lease Agreement. Based on these amendments related to Harrah’s New Orleans, the Company is required to make a capital investment of $325 million on
or around Harrah’s New Orleans by July 15, 2024. The capital investment will involve the rebranding of the property to Caesars New Orleans which
includes a renovation and full interior and exterior redesign, updated casino floor, new culinary experiences and a new 340 room hotel tower. The project
has a current capital plan of approximately $430 million, and as of December 31, 2023, total capital expenditures have been $289 million since the project
began.
Atlantic City
As required by the New Jersey Gaming Control Board, in 2020, the Company funded $400 million in escrow to provide funds for a three year capital
expenditure plan in the state of New Jersey. The capital plan included significant room renovations at both Caesars Atlantic City and Harrah’s Atlantic City,
as well as the addition of new restaurants with celebrity partners. During the year ended December 31, 2023, the Company met its commitment and
exhausted the remaining funds in the escrow account.
Sports Sponsorship/Partnership Obligations
The Company has agreements with certain professional sports leagues and teams, sporting event facilities and media companies for tickets, suites, and
advertising, marketing, promotional and sponsorship opportunities including communication with partner customer databases. Additionally, a selection of
such partnerships provide Caesars with exclusivity to access the aforementioned rights within the casino and/or sports betting category. As of December 31,
2023 and 2022, obligations related to these agreements were $605 million and $898 million, respectively, with contracts extending through 2040. These
obligations include leasing of event suites that are generally considered short term leases for which we do not record a right of use asset or lease liability.
The Company recognizes expenses in the period services are received in accordance with the various agreements. In addition, assets or liabilities may be
recorded related to the timing of payments as required by the respective agreement.
Self-Insurance
The Company is self-insured for workers compensation and other risk insurance, as well as health insurance and general liability. The Company’s total
estimated self-insurance liability was $200 million and $203 million as of December 31, 2023 and 2022, respectively, which is included in Accrued other
liabilities in our Balance Sheets.
The assumptions utilized by our actuaries are subject to significant uncertainty and if outcomes differ from these assumptions or events develop or progress
in a negative manner, the Company could experience a material adverse effect and additional liabilities may be recorded in the future.
Contingencies
Weather Disruption - Lake Charles
On August 27, 2020, Hurricane Laura made landfall on Lake Charles as a Category 4 storm severely damaging the Isle of Capri Casino Lake Charles
(“Lake Charles”). During the year ended December 31, 2022, the Company reached a final settlement agreement with the insurance carriers for a total
amount of $128 million, before our insurance deductible of $25 million. The Company has received a total of $103 million related to damaged fixed assets,
remediation costs and business interruption.
The Company recorded gains of $38 million and $21 million during the years ended December 31, 2022 and 2021, respectively, which are included in
Transaction and other costs, net in our Statements of Operations, as proceeds received for the cost to replace damaged property were in excess of respective
carrying value of the assets. The construction of our new land-based casino, Horseshoe Lake Charles, was completed and reopened in December 2022.
Table of Contents
88
CAESARS ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Note 12. Long-Term Debt
(Dollars in millions)
Secured Debt
Final
Maturity
Rates
Face Value
Book Value
Book Value
December 31, 2023
December 31, 2022
(a)
CEI Revolving Credit Facility
CEI Term Loan A
CEI Term Loan B
CRC Senior Secured Notes
CEI Senior Secured Notes due 2025
CEI Senior Secured Notes due 2030
Baltimore Revolving Credit Facility
Baltimore Term Loan
Convention Center Mortgage Loan
CRC Incremental Term Loan
CRC Term Loan
(a)
Unsecured Debt
CEI Senior Notes due 2027
CEI Senior Notes due 2029
Special Improvement District Bonds
Long-term notes and other payables
2028
2028
2030
2025
2025
2030
N/A
N/A
N/A
N/A
N/A
2027
2029
2037
variable
variable
variable
5.75%
6.25%
7.00%
N/A
N/A
N/A
N/A
N/A
8.125%
4.625%
4.30%
Total debt
Current portion of long-term debt
Deferred finance charges associated with the CEI Revolving Credit Facility
Long-term debt
Unamortized discounts and deferred finance charges
Fair value
$
$
$
— $
712
2,481
989
3,399
2,000
—
—
—
—
—
1,611
1,200
45
2
12,439
(65)
—
12,374 $
$
12,416
— $
710
2,432
983
3,374
1,978
—
—
—
—
—
1,593
1,188
45
2
12,305
(65)
(16)
12,224 $
150 $
—
747
—
979
3,360
—
—
262
400
972
3,243
1,589
1,186
47
2
12,787
(108)
(20)
12,659
318
____________________
(a)
Refer to “Subsequent Amendment to the CEI Credit Agreement and issuance of New Senior Secured Notes” for a discussion of the repayment of these notes.
Annual Estimated Debt Service Requirements
(In millions)
Annual maturities of long-term debt
Estimated interest payments
Total debt service obligation
(b)
2024
Years Ended December 31,
2026
(a)
2025
2027
2028
Thereafter
Total
$
$
65 $
850
915 $
4,453 $
800
5,253 $
65 $
520
585 $
1,676 $
510
2,186 $
587 $
360
947 $
5,593 $
450
6,043 $
12,439
3,490
15,929
____________________
(a)
Maturities of $4.4 billion in 2025 were repaid with the net proceeds of the $2.9 billion CEI Term Loan B-1 and the $1.5 billion CEI Senior Secured Notes, due 2032. See “Subsequent
Amendment to the CEI Credit Agreement and issuance of New Senior Secured Notes” below.
(b)
Debt principal payments are estimated amounts based on contractual maturity and scheduled repayment dates. Interest payments are estimated based on the forward-looking SOFR curve,
where applicable. Actual payments may differ from these estimates.
Current Portion of Long-Term Debt
The current portion of long-term debt as of December 31, 2023 includes the principal payments on the term loans, other unsecured borrowings, and special
improvement district bonds that are contractually due within 12 months. The Company may, from time to time, seek to repurchase or prepay its outstanding
indebtedness. Any such purchases or repayments may be funded by existing cash balances or the incurrence of debt. The amount and timing of any
repurchase will be based on business and market conditions, capital availability, compliance with debt covenants and other considerations.
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89
CAESARS ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Debt Discounts or Premiums and Deferred Finance Charges
Debt discounts or premiums and deferred finance charges incurred in connection with the issuance of debt are amortized to interest expense based on the
related debt agreements primarily using the effective interest method. Unamortized discounts are written off and included in our gain or loss calculations to
the extent we extinguish debt prior to the original maturity or scheduled payment dates.
Net amortization of the debt issuance costs and the discount and/or premium associated with the Company’s indebtedness totaled $48 million, $139 million
and $177 million for the years ended December 31, 2023, 2022 and 2021, respectively. Amortization of debt issuance costs is computed using the effective
interest method and is included in interest expense.
Fair Value
The fair value of debt has been calculated primarily based on the borrowing rates available as of December 31, 2023 and based on market quotes of our
publicly traded debt. We classify the fair value of debt within Level 1 and Level 2 in the fair value hierarchy.
Terms of Outstanding Debt
CEI Term Loans and CEI Revolving Credit Facility
CEI is party to a credit agreement, dated as of July 20, 2020, with JPMorgan Chase Bank, N.A., as administrative agent, U.S. Bank National Association,
as collateral agent, and certain banks and other financial institutions and lenders party thereto (the “CEI Credit Agreement”), which, as amended, provides
for the CEI Revolving Credit Facility in an aggregate principal amount of $2.25 billion (the “CEI Revolving Credit Facility”). The CEI Revolving Credit
Facility contains reserves of $40 million which are available only for certain permitted uses.
On October 5, 2022, Caesars entered into a third amendment to the CEI Credit Agreement (the “Third Amendment”) pursuant to which the Company (a)
incurred a senior secured term loan in an aggregate principal amount of $750 million (the “CEI Term Loan A”) as a new term loan under the credit
agreement, (b) amended and extended the CEI Revolving Credit Facility under the CEI Credit Agreement (the CEI Revolving Credit Facility, as so
amended, the “Amended CEI Revolving Credit Facility” and, together with the CEI Term Loan A, the “Senior Credit Facilities”), (c) increased the
aggregate principal amount of the CEI Revolving Credit Facility to $2.25 billion, and (d) made certain other amendments to the CEI Credit Agreement.
Both the Amended CEI Revolving Credit Facility and the new CEI Term Loan A mature on January 31, 2028, subject to a springing maturity in the event
certain other long-term debt of Caesars is not extended or repaid. The Amended CEI Revolving Credit Facility includes a letter of credit sub-facility of
$388 million. The CEI Term Loan A requires scheduled quarterly payments in amounts equal to 1.25% of the original aggregate principal amount of the
CEI Term Loan A, with the balance payable at maturity. The Company may make voluntary prepayments of the CEI Term Loan A at any time prior to
maturity at par.
Borrowings under the Senior Credit Facilities bear interest paid monthly, at a rate equal to, at the Company’s option, either (a) a forward-looking term rate
based on Secured Overnight Financing Rate (“Term SOFR”) for the applicable interest period plus an adjustment of 0.10% per annum (“Adjusted Term
SOFR”), subject to a floor of 0% or (b) a base rate (the “Base Rate”) determined by reference to the highest of (i) the rate of interest per annum last quoted
by The Wall Street Journal as the Prime Rate in the United States, (ii) the federal funds rate plus 0.50% per annum and (iii) the one-month Adjusted Term
SOFR plus 1.00% per annum, in each case, plus an applicable margin. Such applicable margin is 2.25% per annum in the case of any Adjusted Term SOFR
loan and 1.25% per annum in the case of any Base Rate loan, subject to three 0.25% step-downs based on the Company’s net total leverage ratio. In
addition, on a quarterly basis, the Company is required to pay each lender under the Amended CEI Revolving Credit Facility a commitment fee in respect
of any unused commitments under the Amended CEI Revolving Credit Facility in the amount of 0.35% per annum of the principal amount of the unused
commitments of such lender, subject to three 0.05% step-downs based on the Company’s net total leverage ratio.
Table of Contents
90
CAESARS ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
On February 6, 2023, Caesars entered into an Incremental Assumption Agreement No. 2 pursuant to which the Company incurred a new senior secured
term loan facility in an aggregate principal amount of $2.5 billion (the “CEI Term Loan B” and, together with the CEI Term Loan A, the “CEI Term
Loans”) as a new term loan under the CEI Credit Agreement. The CEI Term Loan B requires scheduled quarterly principal payments in amounts equal to
0.25% of the original aggregate principal amount of the CEI Term Loan B, with the balance payable at maturity. Borrowings under the CEI Term Loan B
bear interest, paid monthly, at a rate equal to, at the Company’s option, either (a) a forward-looking term rate based on the Adjusted Term SOFR, subject to
a floor of 0.50% or (b) a base rate (the “TLB Base Rate”) determined by reference to the highest of (i) the “Prime Rate” in the United States, (ii) the federal
funds rate plus 0.50% per annum and (iii) the one-month Adjusted Term SOFR plus 1.00% per annum, in each case, plus an applicable margin. Such
applicable margin is 3.25% per annum in the case of any Adjusted Term SOFR loan and 2.25% per annum in the case of any TLB Base Rate loan, subject
to one 0.25% step-down based on the Company’s net total leverage ratio. The CEI Term Loan B was issued at a price of 99.0% of the principal amount and
will mature in February 2030.
The net proceeds from the CEI Term Loan B, along with the net proceeds from the issuance of the CEI Senior Secured Notes due 2030 described below,
were used to repay the outstanding principal balance, including accrued and unpaid interest, of both the CRC Term Loan and the CRC Incremental Term
Loan.
During the year ended December 31, 2023, the Company utilized and fully repaid the CEI Revolving Credit Facility. Such activity is presented in the
financing section in the Statements of Cash Flows. As of December 31, 2023, the Company had $2.1 billion of available borrowing capacity under the CEI
Revolving Credit Facility, after consideration of $70 million in outstanding letters of credit, $46 million committed for regulatory purposes and the reserves
described above.
Subsequent Amendment to the CEI Credit Agreement and issuance of New Senior Secured Notes
On February 6, 2024, the Company entered into an Incremental Assumption Agreement No. 3 pursuant to which the Company incurred a new senior
secured incremental term loan in an aggregate principal amount of $2.9 billion (the “CEI Term Loan B-1”) under the CEI Credit Agreement. The CEI Term
Loan B-1 requires quarterly principal payments in amounts equal to 0.25% of the original aggregate principal amount of the CEI Term Loan B-1, with the
balance payable at maturity. Borrowings under the CEI Term Loan B-1 bear interest at a rate equal to, at the Company’s option, either (a) a forward-looking
term rate based on the Term SOFR, subject to a floor of 0.50% or (b) a base rate (the “TLB-1 Base Rate”) determined by reference to the highest of (i) the
“Prime Rate” in the United States, (ii) the federal funds rate plus 0.50% per annum and (iii) the one-month Term SOFR plus 1.00% per annum, in each
case, plus an applicable margin. Such applicable margin is 2.75% per annum in the case of any Term SOFR loan and 1.75% per annum in the case of any
TLB-1 Base Rate loan. The CEI Term Loan B-1 was issued at a price of 99.75% of the principal amount and will mature on February 6, 2031.
Additionally, on February 6, 2024, the Company issued $1.5 billion in aggregate principal amount of 6.50% senior secured notes due 2032 (the “CEI
Senior Secured Notes due 2032”) pursuant to an indenture by and among the Company, the subsidiary guarantors party thereto, U.S. Bank Trust Company,
National Association, as trustee, and U.S. Bank National Association, as collateral agent. The CEI Senior Secured Notes due 2032 rank equally with all
existing and future first-priority lien obligations of the Company and the subsidiary guarantors. The CEI Senior Secured Notes due 2032 will mature on
February 15, 2032, with interest paid semi-annually on February 15 and August 15 of each year, commencing August 15, 2024.
The net proceeds from the issuance of the CEI Senior Secured Notes due 2032 and the net proceeds from the CEI Term Loan B-1, together with borrowings
under the CEI Revolving Credit Facility, were used to tender, redeem, repurchase, defease, and/or satisfy and discharge any and all of the principal
amounts, including accrued and unpaid interest, related expenses and fees of both the 5.75% Senior Secured Notes due 2025 (the “CRC Senior Secured
Notes”) and the 6.25% Senior Secured Notes due 2025 (the “CEI Senior Secured Notes due 2025”). As a result of these transactions, the Company
estimates that it will incur approximately $50 million of loss on early extinguishment of debt.
CRC Senior Secured Notes due 2025
On July 6, 2020, Colt Merger Sub, Inc. (the “Escrow Issuer”) issued $1.0 billion in aggregate principal amount of the CRC Senior Secured Notes pursuant
to an indenture, dated July 6, 2020, by and among the Escrow Issuer, U.S. Bank National Association, as trustee and Credit Suisse AG, Cayman Islands
Branch, as collateral agent. The CRC Senior Secured Notes ranked equally with all existing and future first priority lien obligations of CRC, CRC Finco,
Inc. and the subsidiary guarantors. The CRC Senior Secured Notes were set to mature on July 1, 2025, with interest payable semi-annually in cash in
arrears on January 1 and July 1 of each year.
On February 16, 2024, the Company completed the tender and/or redemption of the CRC Senior Secured Notes with proceeds from a new CEI Term Loan
B-1, new CEI Senior Secured Notes due 2032 and borrowings under the CEI Revolving Credit
Table of Contents
91
CAESARS ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Facility, as needed. See “Subsequent Amendment to the CEI Credit Agreement and issuance of New Senior Secured Notes” above.
CEI Senior Secured Notes due 2025
On July 6, 2020, the Escrow Issuer issued $3.4 billion in aggregate principal amount of the CEI Senior Secured Notes due 2025 pursuant to an indenture
dated July 6, 2020, by and among the Escrow Issuer, U.S. Bank National Association, as trustee, and U.S. Bank National Association, as collateral agent.
The CEI Senior Secured Notes due 2025 ranked equally with all existing and future first-priority lien obligations of the Company and the subsidiary
guarantors. The CEI Senior Secured Notes due 2025 were set to mature on July 1, 2025, with interest payable semi-annually in cash in arrears on January 1
and July 1 of each year. On April 5, 2023, the Company purchased $1 million in principal amount of the CEI Senior Secured Notes due 2025.
On February 7, 2024, the Company completed the tender, redemption, and/or satisfaction and discharge of all of the CEI Senior Secured Notes due 2025
with proceeds from a new CEI Term Loan B-1, new CEI Senior Secured Notes due 2032 and borrowings under the CEI Revolving Credit Facility, as
needed. See “Subsequent Amendment to the CEI Credit Agreement and issuance of New Senior Secured Notes” above.
CEI Senior Secured Notes due 2030
On February 6, 2023, concurrently with the issuance of the CEI Term Loan B, the Company issued $2.0 billion in aggregate principal amount of 7.00%
senior secured notes (the “CEI Senior Secured Notes due 2030”) pursuant to an indenture by and among the Company, the subsidiary guarantors party
thereto from time to time, U.S. Bank Trust Company, National Association, as trustee, and U.S. Bank National Association, as collateral agent. The CEI
Senior Secured Notes due 2030 rank equally with all existing and future first-priority lien obligations of the Company and the subsidiary guarantors. The
CEI Senior Secured Notes due 2030 will mature in February 2030, with interest paid semi-annually on February 15 and August 15 of each year,
commencing August 15, 2023.
Baltimore Term Loan and Baltimore Revolving Credit Facility
On July 17, 2023, following the acquisition of the remaining 24.2% equity interest in Horseshoe Baltimore, the Company permanently repaid the
outstanding principal balance of Horseshoe Baltimore’s senior secured term loan facility (the “Baltimore Term Loan”). In connection with the repayment,
the Company recognized a $3 million loss on the early extinguishment of debt. The Baltimore Term Loan was subject to a variable rate of interest
calculated as London Interbank Offered Rate (“LIBOR”) plus 4.00% until May 1, 2023, when the Baltimore Term Loan’s benchmark interest rate was
amended from LIBOR to the Adjusted Term SOFR plus an applicable adjustment. In addition, Horseshoe Baltimore’s senior secured revolving credit
facility (the “Baltimore Revolving Credit Facility”) matured on July 7, 2023. The Baltimore Revolving Credit Facility had borrowing capacity of up to
$10 million, subject to a variable rate of interest calculated as Term SOFR plus 4.00%.
Convention Center Mortgage Loan
On September 18, 2020, the Company entered into a loan agreement with VICI, to borrow a 5-year, $400 million Forum Convention Center mortgage loan
(the “Mortgage Loan”). The Mortgage Loan bears interest at a rate of, initially, 7.7% per annum, which was set to escalate annually on the anniversary of
the closing date up to a maximum interest rate of 8.3% per annum. On May 1, 2023, the Company elected to prepay the outstanding $400 million Mortgage
Loan utilizing cash on hand. In connection with the repayment, the Company extended VICI’s call right relating to the CAESARS FORUM convention
center from December 31, 2026 to December 31, 2028.
CRC Term Loan and CRC Incremental Term Loan
Caesars Resort Collection (“CRC”) was party to a credit agreement, dated as of December 22, 2017 (as amended, the “CRC Credit Agreement”), which
provided for, among other things, an initial $4.7 billion seven-year senior secured term loan (the “CRC Term Loan”), and an incremental $1.8 billion five-
year senior secured term loan (the “CRC Incremental Term Loan”).
The CRC Term Loan and the CRC Incremental Term Loan were subject to the terms described below prior to repayment. The Company repaid the
$3.4 billion outstanding principal amount of the CRC Term Loan and the $1.0 billion outstanding principal amount of the CRC Incremental Term Loan on
February 6, 2023, with proceeds from a new CEI Term Loan B and new CEI Senior Secured Notes due 2030, both of which are described above. Upon the
termination of the CRC Term Loan and the CRC Incremental Term Loan, the Company recorded a loss on extinguishment of debt of $197 million.
Borrowings under the CRC Credit Agreement were subject to interest at a rate equal to either (a) LIBOR adjusted for certain additional costs, subject to a
floor of 0% or (b) a base rate determined by reference to the highest of (i) the federal funds rate plus 0.50%, (ii) the prime rate as determined by Credit
Suisse AG, Cayman Islands Branch, as administrative agent under the
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92
CAESARS ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
CRC Credit Agreement and (iii) the one-month adjusted LIBOR rate plus 1.00%, in each case plus an applicable margin. Such applicable margin was (a)
with respect to the CRC Term Loan, 2.75% per annum in the case of any LIBOR loan or 1.75% per annum in the case of any base rate loan and (b) with
respect to the CRC Incremental Term Loan, 3.50% per annum in the case of any LIBOR loan or 2.50% in the case of any base rate loan.
CEI Senior Notes due 2027
On July 6, 2020, the Escrow Issuer issued $1.8 billion in aggregate principal amount of 8.125% Senior Notes due 2027 pursuant to an indenture, dated July
6, 2020 (the “CEI Senior Notes due 2027”), by and between the Escrow Issuer and U.S. Bank National Association, as trustee. The CEI Senior Notes due
2027 rank equally with all existing and future senior unsecured indebtedness of the Company and the subsidiary guarantors. The CEI Senior Notes due
2027 will mature on July 1, 2027 with interest payable semi-annually in cash in arrears on January 1 and July 1 of each year.
CEI Senior Notes due 2029
On September 24, 2021, the Company issued $1.2 billion in aggregate principal amount of 4.625% Senior Notes due 2029 (the “CEI Senior Notes due
2029”) pursuant to an indenture dated as of September 24, 2021 between the Company and U.S. Bank National Association, as trustee. The CEI Senior
Notes due 2029 rank equally with all existing and future senior unsecured indebtedness of the Company and the subsidiary guarantors. The CEI Senior
Notes due 2029 will mature on October 15, 2029 with interest payable on April 15 and October 15 of each year.
Summary of Debt and Revolving Credit Facility Cash Flows from Financing Activities in 2023
(In millions)
Proceeds
Repayments
(a)
CEI Revolving Credit Facility
CEI Term Loan A
CEI Term Loan B
CEI Senior Secured Notes due 2025
CEI Senior Secured Notes due 2030
Baltimore Term Loan
Mortgage Loan
CRC Incremental Term Loan
CRC Term Loan
Special Improvement District Bonds
Total
$
$
960 $
—
2,500
—
2,000
—
—
—
—
—
5,460 $
960
38
19
1
—
267
400
1,004
3,415
2
6,106
____________________
(a)
Includes contractually scheduled repayments as well as voluntary accelerated repayments.
Debt Covenant Compliance
The Senior Credit Facilities, the CEI Term Loan B and the indentures governing the CRC Senior Secured Notes, the CEI Senior Secured Notes due 2025,
the CEI Senior Secured Notes due 2030, the CEI Senior Notes due 2027, and the CEI Senior Notes due 2029 contain covenants which are standard and
customary for these types of agreements. These include negative covenants, which, subject to certain exceptions and baskets, limit the Company’s and its
subsidiaries’ ability to (among other items) incur additional indebtedness, make investments, make restricted payments, including dividends, grant liens,
sell assets and make acquisitions.
Following the Third Amendment, the Amended CEI Revolving Credit Facility and the CEI Term Loan A include a maximum net total leverage ratio
financial covenant of 7.25:1 until December 31, 2024 and 6.50:1 from and after December 31, 2024. In addition, the Amended CEI Revolving Credit
Facility and the CEI Term Loan A include a minimum fixed charge coverage ratio financial covenant of 1.75:1 until December 31, 2024 and 2.0:1 from and
after December 31, 2024. From and after the repayment of the CEI Term Loan A, the financial covenants applicable to the Amended CEI Revolving Credit
Facility will be tested solely to the extent that certain testing conditions are satisfied. Failure to comply with such covenants could result in an acceleration
of the maturity of indebtedness outstanding under the relevant debt document. As of December 31, 2023, we were not subject to any debt covenants with
respect to the new CEI Term Loan B-1 or the CEI Senior Secured Notes due 2032.
As of December 31, 2023, the Company was in compliance with all of the applicable financial covenants described above.
Table of Contents
93
CAESARS ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Guarantees
The Senior Credit Facilities, the CEI Term Loan B, the CEI Senior Secured Notes due 2025 and the CEI Senior Secured Notes due 2030 are guaranteed on
a senior secured basis by each existing and future material wholly-owned domestic subsidiary of the Company (subject to certain exceptions including
CRC and its subsidiaries) and are secured by substantially all of the existing and future property and assets of the Company and its subsidiary guarantors
(subject to certain exceptions). The CEI Senior Notes due 2027 and the CEI Senior Notes due 2029 are guaranteed on a senior unsecured basis by such
subsidiaries.
Prior to the repayments on February 6, 2024, the CRC Senior Secured Notes were guaranteed on a senior secured basis by each existing and future material
wholly-owned domestic subsidiary of CRC (subject to certain exceptions) and were secured by substantially all of the existing and future property and
assets of CRC and its subsidiary guarantors (subject to certain exceptions). The CRC Senior Secured Notes were also guaranteed on a senior unsecured
basis by the Company. As of December 31, 2023, there were no guarantees with respect to the CEI Term Loan B-1 or the CEI Senior Secured Notes due
2032.
Note 13. Revenue Recognition
Accounting Policies
Casino Revenues
Our casino revenues consist of gaming wagers, pari-mutuel commissions, sports betting and iGaming wagers. The Company recognizes as casino revenue
the net win from these gaming activities, which is the difference between gaming wins and losses, not the total amount wagered. Progressive jackpots are
accrued and charged to revenue at the time the obligation to pay the jackpot is established. Gaming revenues are recognized net of free bets, free play,
matched deposits, and other similar incentives to its customers. During significant promotional periods, such as entering new jurisdictions with our Caesars
Sportsbook or Caesars Racebook apps, such activity could result in negative net gaming revenue. Such periods are not expected to be long in duration as
our level of investment during these promotional periods is within our discretion. Pari-mutuel commissions consist of commissions earned from
thoroughbred and harness racing and importing of simulcast signals from other racetracks and are recognized at the time wagers are made. Such
commissions are a designated portion of the wagering handle as determined by state racing commissions and are shown net of the taxes assessed by state
and local agencies, as well as purses and other contractual amounts paid to horsemen associations. The Company recognizes revenues from fees earned
through the exporting of simulcast signals to other racetracks at the time wagers are made, which are recorded on a gross basis. Such fees are based upon a
predetermined percentage of handle as contracted with the other racetracks.
Non-gaming Revenues
Hotel, food and beverage, and other operating revenues are recognized as services are performed and is the net amount collected from the customer for
such goods and services. Hotel, food and beverage services have been determined to be separate, stand-alone performance obligations and are recorded as
revenue as the good or service is transferred to the customer over the customer’s stay at the hotel or when the delivery is made for the food and beverage.
Advance deposits for future hotel occupancy, convention space or food and beverage services contracts are recorded as deferred income until revenue
recognition criteria has been met. The Company also provides goods and services that may include multiple performance obligations, such as for packages,
for which revenues are allocated on a pro rata basis based on each service’s standalone selling price (“SSP”).
Sales and other taxes collected from customers on behalf of governmental authorities are accounted for on a net basis and are not included in net revenues
or operating expenses.
The Company’s Statement of Operations presents net revenue disaggregated by type or nature of the good or service. A summary of net revenues
disaggregated by type of revenue and reportable segment is presented below. Refer to Note 19 for additional information on the Company’s reportable
segments.
(In millions)
Casino
Food and beverage
Hotel
Other
Net revenues
Table of Contents
Las Vegas
Regional
Year Ended December 31, 2023
Managed and
Branded
Caesars Digital
Corporate and
Other
Total
$
$
1,212 $
1,152
1,447
659
4,470 $
4,272 $
576
643
287
5,778 $
94
886 $
—
—
87
973 $
— $
—
—
307
307 $
(3) $
—
—
3
— $
6,367
1,728
2,090
1,343
11,528
CAESARS ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(In millions)
Casino
Food and beverage
Hotel
Other
Net revenues
(In millions)
Casino
Food and beverage
Hotel
Other
Net revenues
Las Vegas
Regional
1,247 $
1,063
1,341
636
4,287 $
4,291 $
533
616
264
5,704 $
Year Ended December 31, 2022
Managed and
Branded
Caesars Digital
Corporate and
Other
Total
462 $
—
—
86
548 $
— $
—
—
282
282 $
(3) $
—
—
3
— $
5,997
1,596
1,957
1,271
10,821
Las Vegas
Regional
1,226 $
702
968
513
3,409 $
4,305 $
438
583
211
5,537 $
Year Ended December 31, 2021
Managed and
Branded
Caesars Digital
Corporate and
Other
Total
296 $
—
—
41
337 $
— $
—
—
278
278 $
— $
—
—
9
9 $
5,827
1,140
1,551
1,052
9,570
$
$
$
$
Accounts Receivable and Credit Risk
We issue credit to approved casino customers following investigations of creditworthiness. Business or economic conditions or other significant events
could affect the collectability of these receivables. Accounts receivable are non-interest bearing and are initially recorded at cost.
Marker play represents a meaningful portion of our overall table games volume. We maintain strict controls over the issuance of markers and aggressively
pursue collection from those customers who fail to pay their marker balances timely. These collection efforts include the mailing of statements and
delinquency notices and the use of personal contacts, outside collection agencies and civil litigation. Markers are generally legally enforceable instruments
in the United States. Markers are not legally enforceable instruments in some foreign countries, but the United States assets of foreign customers may be
reached to satisfy judgments entered in the United States. We consider the likelihood and difficulty of enforceability, among other factors, when we issue
credit to customers who are not residents of the United States.
Trade receivables, including casino and hotel receivables, are typically non-interest bearing. Accounts are written off when management deems the account
to be uncollectible. Recoveries of accounts previously written off are recorded when received. Management believes that as of December 31, 2023 and
2022, no significant concentrations of credit risk related to receivables existed.
Reserve for Uncollectible Accounts Receivable
An estimated allowance for doubtful accounts is maintained to reduce the Company’s receivables to their carrying amount, which approximates fair value.
The allowance is estimated based on specific review of customer accounts, historical collection experience, customer relationships and reasonable forecasts
which consider current economic and business conditions to reflect current expected credit loss. As with many estimates, management must make
judgments about potential actions by third parties in establishing and evaluating our reserves for bad debts.
Accounts Receivable, Net
(In millions)
Casino
Food and beverage and hotel
Other
Accounts receivable, net
Table of Contents
December 31,
2023
2022
$
$
274 $
118
216
608 $
259
144
208
611
95
CAESARS ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Allowance for Doubtful Accounts
(In millions)
Balance as of January 1, 2021
Provision for doubtful accounts
Write-offs less recoveries
Balance as of December 31, 2021
Provision for doubtful accounts
Write-offs less recoveries
Balance as of December 31, 2022
Provision for doubtful accounts
Write-offs less recoveries
Balance as of December 31, 2023
Contracts
Other
(a)
Total
$
$
120 $
16
(26)
110
13
(22)
101
29
(49)
81 $
18 $
10
(8)
20
12
(15)
17
12
(17)
12 $
138
26
(34)
130
25
(37)
118
41
(66)
93
____________________
(a)
“Other” includes allowance associated with lease receivables under ASC 842. See Note 10 for further details.
Contract and Contract Related Liabilities
The Company records contract or contract-related liabilities related to differences between the timing of cash receipts from the customer and the
recognition of revenue. The Company generally has three types of liabilities related to contracts with customers: (1) outstanding chip liability, which
represents the amounts owed in exchange for gaming chips held by customers,(2) Caesars Rewards player loyalty program obligations, which represent the
deferred allocation of revenue relating to reward credits granted to Caesars Rewards members based on certain types of customer spend, including online
and retail gaming, hotel, dining, retail shopping, and player loyalty program incentives earned, and (3) customer deposits and other deferred revenue, which
primarily represents funds deposited by customers related to gaming play and advance payments received for goods and services yet to be provided (such
as advance ticket sales, deposits on rooms and convention space, unpaid wagers, iGaming deposits, or future sports bets). These liabilities are generally
expected to be recognized as revenue within one year of being purchased, earned, or deposited and are recorded within accrued other liabilities on the
Company’s Balance Sheets. Liabilities expected to be recognized as revenue beyond one year of being purchased, earned, or deposited are recorded within
other long-term liabilities on the Company’s Balance Sheets.
Outstanding Chip Liability
The Company recognizes the impact on gaming revenues on an annual basis to reflect an estimate of the change in the value of outstanding chips that are
not expected to be redeemed. This estimate is determined by measuring the difference between the total value of chips placed in service less the value of
chips under our control. This measurement is performed on an annual basis utilizing a methodology in which a consistent formula is applied to estimate the
percentage of chips not in our custody that are not expected to be redeemed. In addition to the formula, certain judgments are made with regard to various
denominations and souvenir chips. The outstanding chip liability is included in accrued other liabilities on the Balance Sheets.
Caesars Rewards Loyalty Program
Caesars Rewards grants Reward Credits to Caesars Rewards Members based on various types of customer spend, including online and retail gaming, hotel,
dining, and retail shopping at Caesars-affiliated properties. Members may redeem Reward Credits for complimentary or discounted goods and services
such as rooms, food and beverages, merchandise, free play, entertainment, and travel accommodations. Members are able to accumulate Reward Credits
over time that they may redeem at their discretion under the terms of the program. A member’s Reward Credit balance is forfeited if the member does not
earn at least one Reward Credit during a continuous six-month period.
Because of the significance of the Caesars Rewards program and the ability for customers to accumulate Reward Credits based on their past play, we have
determined that Reward Credits granted in conjunction with other earning activity represent a performance obligation. As a result, for transactions in which
Reward Credits are earned, we allocate a portion of the transaction price to the Reward Credits that are earned based upon the relative SSP of the goods and
services involved. When the activity underlying the “earning” of the Reward Credits has a wide range of selling prices and is highly variable, such as in the
case of gaming activities, we use the residual approach in this allocation by computing the value of the Reward Credits as described below and allocating
the residual amount to the gaming activity. This allocation results in a significant portion of the transaction price being deferred and is recognized as
revenue when the Reward Credits are redeemed in accordance with the specific recognition policy of the activity for which the credits are redeemed.
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96
CAESARS ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Our Caesars Rewards loyalty program includes various tiers that offer different benefits, and members are able to earn credits towards tier status, which
generally enables them to receive discounts similar to those provided as complimentaries described below. We have determined that any such discounts
received as a result of tier status do not represent material rights, and therefore, we do not account for them as distinct performance obligations.
We have determined the SSP of a Reward Credit by computing the redemption value of credits expected to be redeemed. Because Reward Credits are not
otherwise independently sold, we analyzed all Reward Credit redemption activity over the preceding calendar year and determined the redemption value
based on the fair market value of the goods and services for which the Reward Credits were redeemed. We have applied the practical expedient under the
portfolio approach to our Reward Credit transactions because of the similarity of gaming and other transactions and the homogeneity of Reward Credits.
As part of determining the SSP for Reward Credits, we also determined that there is generally an amount of Reward Credits that is not redeemed, which is
considered “breakage.” We recognize the expected breakage proportionally with the pattern of revenue recognized related to the redemption of Reward
Credits. We periodically reassess our customer behaviors and revise our expectations as deemed necessary on a prospective basis.
The following table summarizes the activity related to contract and contract-related liabilities:
(In millions)
Balance at January 1
Balance at December 31
Increase (decrease)
Outstanding Chip Liability
2023
2022
Caesars Rewards
Customer Deposits and Other
Deferred Revenue
2023
2022
2023
2022
$
$
45 $
42
(3) $
48 $
45
(3) $
87 $
86
(1) $
91 $
87
(4) $
693 $
693
— $
560
693
133
Customer deposits and other deferred revenues increased in 2022 primarily due to our expansion in the Caesars Digital segment with the legalization of
retail and online sports betting in new states.
Complimentaries
The Company offers discretionary coupons and other discretionary complimentaries to customers outside of the loyalty program such as matching deposits,
free bets and free play. Such complimentaries are provided in conjunction with other revenue‑earning activities and are generally provided to encourage
additional customer spending on those activities. Accordingly, the Company allocates a portion of the transaction price received from such customers to the
complimentary goods and services. The Company performs this allocation based on the SSP of the underlying goods and services, which is determined
based upon the weighted-average cash sales prices received for similar services at similar points during the year. The retail value of complimentary food,
beverage, hotel rooms and other services provided to customers is recognized as a reduction of revenues for the department which issued the
complimentary and revenue for the department redeemed. Complimentaries provided by third parties at the discretion and under the control of the
Company are recorded as an expense when incurred.
The Company’s revenues included complimentaries and loyalty point redemptions totaling $1.4 billion, $1.2 billion and $1.0 billion for the years ended
December 31, 2023, 2022 and 2021, respectively.
Note 14. Earnings per Share
Basic earnings per share (“EPS”) is computed by dividing net income (loss) by the weighted average shares outstanding during the reporting period.
Diluted EPS is computed similarly to basic EPS except that the weighted average shares outstanding are increased to include additional shares from the
assumed exercise of stock options and the assumed vesting of restricted share units, if dilutive. The number of additional shares is calculated by assuming
that outstanding stock options were exercised, that outstanding restricted share units were released and that the proceeds from such activities were used to
acquire shares of common stock at the average market price during the reporting period.
For a period in which the Company generated a net loss from continuing operations, the weighted average shares outstanding - basic was used in
calculating diluted loss per share because using diluted shares would have been anti-dilutive to loss per share.
Table of Contents
97
CAESARS ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
The following table illustrates the reconciliation of the numerators and denominators of the basic and diluted net income (loss) per share computations
during the years ended December 31, 2023, 2022 and 2021:
(In millions, except per share amounts)
Net income (loss) from continuing operations attributable to Caesars, net of income taxes
Discontinued operations, net of income taxes
Net income (loss) attributable to Caesars
Shares outstanding:
Weighted average shares outstanding – basic
Effect of dilutive securities:
Stock-based compensation awards
Weighted average shares outstanding – diluted
Basic income (loss) per share from continuing operations
Basic loss per share from discontinued operations
Net income (loss) per common share attributable to common stockholders – basic:
Diluted income (loss) per share from continuing operations
Diluted loss per share from discontinued operations
Net income (loss) per common share attributable to common stockholders – diluted:
Weighted-Average Number of Anti-Dilutive Shares Excluded from Calculation of EPS
(In millions)
Stock-based compensation awards
Total anti-dilutive common stock
Note 15. Stock-Based Compensation and Stockholders’ Equity
Stock-Based Awards
Years Ended December 31,
2022
2021
2023
786 $
—
786 $
215
1
216
3.65 $
—
3.65 $
3.64 $
—
3.64 $
(513) $
(386)
(899) $
214
—
214
(2.39) $
(1.80)
(4.19) $
(2.39) $
(1.80)
(4.19) $
(989)
(30)
(1,019)
211
—
211
(4.69)
(0.14)
(4.83)
(4.69)
(0.14)
(4.83)
$
$
$
$
$
$
Years Ended December 31,
2022
2021
2023
1
1
3
3
3
3
The Company maintains long-term incentive plans which allow for granting stock-based compensation awards for directors, employees, officers, and
consultants or advisers who render services to the Company or its subsidiaries, based on Company Common Stock, including stock options, restricted
stock, restricted stock units (“RSUs”), performance stock units (“PSUs”), market-based performance stock units (“MSUs”), stock appreciation rights, and
other stock-based awards or dividend equivalents. Forfeitures are recognized in the period in which they occur.
Performance Incentive Plans
The Board of Directors (“Board”) adopted, and the Company’s stockholders approved, the 2015 Equity Incentive Plan, as amended and restated in 2019
(the “2015 Plan”), which allows for shares to be granted as part of the Company’s long-term incentive plan. As of December 31, 2023, the Company had 4
million shares available for grant under the 2015 Plan.
Equity awards granted to employees and executive officers generally vest within one to three years from the grant date either ratably on each anniversary,
or entirely at the end of the service period. Awards may also contain performance conditions in addition to time based vesting conditions. Performance
awards relate to the achievement of defined levels of performance and will vest and become payable at the end of the vesting period. Performance awards
may contain targeted performance levels, which may ultimately vest within a range of 0% to 200% of the target award, based on defined operating metrics
or market performance as compared to a peer group. RSUs granted to non-employee directors generally vest immediately and are issued on the vesting
date, or may be deferred.
Total stock-based compensation expense in the accompanying Statements of Operations was $104 million, $101 million and $82 million during the years
ended December 31, 2023, 2022 and 2021, respectively. These amounts are included in Corporate expenses and, in the case of certain property positions,
General and administrative expenses in the Company’s Statements of Operations.
Table of Contents
98
CAESARS ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Restricted Stock Unit Activity
During the year ended December 31, 2023, the Company granted RSUs to employees of the Company with an aggregate fair value of $78 million. Each
RSU represents the right to receive payment in respect of one share of the Company’s Common Stock.
A summary of the RSUs activity for the year ended December 31, 2023 is presented in the following table:
Unvested outstanding as of December 31, 2022
(b)
Granted
Vested
Forfeited
Unvested outstanding as of December 31, 2023
Units
Weighted Average Grant
Date Fair Value
(a)
1,863,481 $
1,487,539
(1,318,519)
(110,082)
1,922,419
66.87
52.13
60.87
57.43
60.11
____________________
(a)
Represents the weighted-average grant date fair value of RSUs, which is the share price of our common stock on the grant date.
(b)
Included are 34,167 RSUs granted to non-employee members of the Board during the year ended December 31, 2023.
Performance Stock Unit Activity
During the year ended December 31, 2023, the Company granted PSUs to employees of the Company with an aggregate fair value of $9 million as of
December 31, 2023. On the vesting date, recipients will receive between 0% and 200% of the target number of PSUs granted, in the form of Company
Common Stock, based on the achievement of specified performance conditions. The fair value of the PSUs is based on the market price of our common
stock when a mutual understanding of the key terms and conditions of the awards between the Company and recipient is achieved. The awards are
remeasured each period until such an understanding is reached.
A summary of the PSUs activity for the year ended December 31, 2023 is presented in the following table:
Unvested outstanding as of December 31, 2022
Granted
Performance Adjustment
Vested
Forfeited
Unvested outstanding as of December 31, 2023
Units
Weighted Average Grant
Date Fair Value
(a)
383,157 $
192,836
440
(243,093)
(5,110)
328,230
51.73
46.88
57.83
49.81
46.88
____________________
(a)
This represents the weighted-average grant date fair value for PSUs where the grant date has been achieved or the price of our common stock as of the balance sheet date for PSUs where a
grant date has not been achieved.
Market-Based Stock Unit Activity
During the year ended December 31, 2023, the Company granted MSUs to employees of the Company with an aggregate fair value of $31 million. On the
vesting date, recipients will receive between 0% and 200% of the granted MSUs in the form of Company Common Stock based on the achievement of
specified market and service conditions. Based on the terms and conditions of the awards, the grant date fair value of the MSUs was determined using a
Monte Carlo simulation model. Key assumptions for the Monte Carlo simulation model are the risk-free interest rate, expected volatility, expected
dividends and correlation coefficient. The effect of market conditions is considered in determining the grant date fair value, which is not subsequently
revised based on actual performance.
Table of Contents
99
CAESARS ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
A summary of the MSUs activity for the year ended December 31, 2023 is presented in the following table:
Unvested outstanding as of December 31, 2022
Granted
Performance Adjustment
Vested
Forfeited
Unvested outstanding as of December 31, 2023
____________________
(a)
Represents the grant date fair value determined using a Monte Carlo simulation model.
Stock Option Activity
Outstanding as of December 31, 2022
Exercised
Outstanding as of December 31, 2023
Vested and expected to vest as of December 31, 2023
Exercisable as of December 31, 2023
Stock Option Exercises
(Dollars in millions)
Option Exercises:
Number of options exercised
Cash received for options exercised
Aggregate intrinsic value of options exercised
Unrecognized Compensation Cost
Units
Weighted- Average Fair
Value
(a)
741,803 $
379,855
(100,612)
(139,536)
(9,491)
872,019
83.24
80.53
74.62
93.28
85.11
Shares
Weighted Average
Exercise Price
Weighted Average
Remaining
Contractual Term
(years)
Aggregate Intrinsic
Value
(in millions)
88 $
(88)
—
—
—
30.63
30.63
—
—
—
0.14 $
0
0
0
—
—
—
—
2023
Years Ended December 31,
2022
2021
$
$
88
— $
— $
43,384
1 $
2 $
114,884
3
9
As of December 31, 2023, the Company had $98 million of unrecognized compensation expense, which is expected to be recognized over a weighted-
average period of 1.7 years.
Common Stock
On June 17, 2021, following receipt of required shareholder approvals, the Company amended its Certificate of Incorporation to increase the number of
authorized shares of common stock from 300 million to 500 million.
Preferred Stock
On June 17, 2021, following receipt of required shareholder approvals, the Company amended its Certificate of Incorporation to authorize the issuance of
up to 150 million shares of preferred stock.
Share Repurchase Program
In November 2018, the Board authorized a $150 million common stock repurchase program (the “Share Repurchase Program”) pursuant to which the
Company may, from time to time, repurchase shares of common stock on the open market (either with or without a 10b5-1 plan) or through privately
negotiated transactions. The Share Repurchase Program has no time limit and may be suspended or discontinued at any time without notice. There is no
minimum number of shares of common stock that the Company is required to repurchase under the Share Repurchase Program.
As of December 31, 2023, the Company has acquired 223,823 shares of common stock at an aggregate value of $9 million and an average of $40.80 per
share. No shares were repurchased during the years ended December 31, 2023 or 2022.
Table of Contents
100
CAESARS ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Note 16. Employee Benefit Plans
401(k) Plans
The Company offers a 401(k) plan to substantially all employees who are not covered by collective bargaining agreements, who meet certain eligibility
requirements, namely terms of service. Under the 401(k) plan, the Company matches contributions equal to 50% of the first 6% as outlined per plan
documents.
The Company’s matching contribution expense totaled $29 million, $29 million and $27 million for the years ended December 31, 2023, 2022 and 2021,
respectively.
Defined-Benefit Plans
Scioto Downs sponsors a noncontributory defined-benefit plan covering all full-time employees meeting certain age and service requirements. On May 31,
2001, the plan was amended to freeze eligibility, accrual of years of service and benefits. As of December 31, 2023, the fair value of the plan assets and
benefit obligation was $1 million. The plan assets are comprised primarily of money market and mutual funds whose values are determined based on
quoted market prices and are classified in Level 1 of the fair value hierarchy. We did not make cash contributions to the Scioto Downs pension plan during
2023, 2022 and 2021.
In addition, the Company also sponsors a defined-benefit plan for certain Tropicana Atlantic City employees under a Variable Annuity Pension Plan. As of
December 31, 2023, the fair value of the plan assets was $25 million and benefit obligations totaled $20 million. Contributions to the plan were $2 million
for the years ended December 31, 2023 and 2022 and $1 million for the year ended December 31, 2021.
Deferred Compensation Plans
CEI assumed two active deferred compensation plans, the Caesars Entertainment Corporation Executive Supplemental Savings Plan III (“ESSP III”) and
the Caesars Entertainment Corporation Outside Director Deferred Compensation Plan. These plans are unfunded, non-qualified deferred compensation
plans. Payment obligations pursuant to the plans are unsecured general obligations of the Company and affiliates of the Company employing participants in
the ESSP III. The liability as of December 31, 2023 and 2022 was $5 million and $2 million, respectively, which was recorded in Other long-term liabilities
in the Balance Sheets.
As of December 31, 2023, certain current and former employees of Caesars, and our subsidiaries and affiliates, have balances under: (i) the Harrah’s
Entertainment, Inc. Executive Supplemental Savings Plan, (ii) the Harrah’s Entertainment, Inc. Executive Supplemental Savings Plan II, (iii) the Park Place
Entertainment Corporation Executive Deferred Compensation Plan, (iv) the Harrah’s Entertainment, Inc. Deferred Compensation Plan, and (v) the Harrah’s
Entertainment, Inc. Executive Deferred Compensation Plan (collectively, the “existing deferred compensation plans”). These plans are deferred
compensation plans that allowed certain employees an opportunity to save for retirement and other purposes. Each of the plans is now frozen and is no
longer accepting contributions. However, participants may still earn returns on existing plan balances based upon their selected investment alternatives,
which are reflected in their deferral accounts. The total liability recorded in Other long-term liabilities in the Balance Sheets for these plans was $31 million
and $33 million as of December 31, 2023 and 2022, respectively.
Trust Assets
CEI is a party to a trust agreement (the “Trust Agreement”) and an escrow agreement with respect to all five of the existing deferred compensation plans
(the “Escrow Agreement”), each structured as a so-called “rabbi trust” arrangement, which holds assets that may be used to satisfy obligations under the
existing deferred compensation plans above. Amounts held pursuant to the Trust Agreement and the Escrow Agreement were $67 million and $60 million,
as of December 31, 2023 and 2022, respectively, and have been reflected within Other long-term assets, net in the Balance Sheets.
Table of Contents
101
CAESARS ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Multi-employer Pension Plans
The Company contributes to a number of multi-employer defined benefit pension plans under the terms of collective bargaining agreements that cover
union-represented employees. The risks of participating in these multi-employer plans are different from a single-employer plan in the following respects:
i. Assets contributed to the multi-employer plan by one employer may be used to provide benefits to employees of other participating employers.
ii.
iii.
If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating
employers.
If the Company chooses to stop participating in some of its multi-employer plans, the Company may be required to pay those plans an amount
based on the underfunding of the plan, referred to as a “withdrawal liability.”
Multi-employer Pension Plan Participation
Pension Protection
(a)
Act Zone Status
Contributions
(In millions)
Pension Fund
Southern Nevada Culinary and
Bartenders Pension Plan
(d)
Legacy Plan of the UNITE HERE
Retirement Fund
(d)(e)
Central Pension Fund of the IUOE &
Participating Employers
EIN/Pension Plan
Number
88-6016617/001
82-0994119/001
36-6052390/001
Western Conference of Teamsters
91-6145047/001
2023
Green
Red
Green
Green
Pension Plan
Painters IUPAT
Other Funds
Total Contributions
52-6073909/001
Yellow
FIP/RP
(b)
Status
No
2023
2022
$
26 $
24 $
2021
18
Surcharge
Imposed
No
Yes
No
No
No
10
7
7
1
9
7
6
1
9
6
5
1
No
N/A
N/A
No
4
55 $
3
50 $
2
41
$
Expiration Date of
Collective
Bargaining
(c)
Agreement
September 30, 2028
Various up to
May 31, 2026
March 31, 2024
March 31, 2024
Various up to
June 30, 2026
____________________
(a)
Represents the Pension Protection Act zone status for applicable plan year beginning January 1, except where noted otherwise. The zone status is based on information that the Company
received from the plan administrator and is certified by the plan’s actuary. Among other factors, plans in the red zone are generally less than 65% funded, plans in the yellow zone are
between 65% and less than 80% funded, and plans in the green zone are at least 80% funded. All plans detailed in the table above utilized extended amortization provisions to calculate
zone status.
(b)
(c)
(d)
(e)
Indicates plans for which a financial improvement plan (“FIP”) or a rehabilitation plan (“RP”) is either pending or has been implemented.
The terms of the current agreement continue indefinitely until either party provides appropriate notice of intent to terminate the contract.
The Company provided more than 5% of the total contributions for the plan year ended December 31, 2022 and as of the date the financial statements were issued, Forms 5500 were not
available for the 2023 plan year.
The HEREIU Pension Fund consists of two separate plans, the Legacy Plan of the HEREIU Pension Fund and the Adjustable Plan of the HEREIU Pension Fund. CEI makes a single
contribution to the HEREIU Pension Fund, the Trustees of which allocate such contribution between the Legacy Plan and the Adjustable Plan. The contribution amount reflected to the
Legacy Plan is the aggregate contribution made to the HEREIU Pension Fund before such allocation between the Legacy Plan and the Adjustable Plan of the HEREIU Pension Fund.
Note 17. Income Taxes
The components of the Company’s provision for income taxes for the years ended December 31, 2023, 2022 and 2021 are presented below.
Components of Income (Loss) Before Income Taxes
(In millions)
United States
Outside of the U.S.
Table of Contents
$
$
102
2023
Years Ended December 31,
2022
2021
(90) $
30
(60) $
(590) $
25
(565) $
(1,272)
3
(1,269)
CAESARS ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Income Tax Provision (Benefit) from Continuing Operations
(In millions)
United States
Current
2023
Years Ended December 31,
2022
2021
Federal
State & Local
Deferred
Federal
State & Local
Outside of the U.S.
Current
Deferred
$
$
— $
23
(754)
(166)
9
—
(888) $
— $
7
(57)
2
7
—
(41) $
The following is an allocation of the total income tax provision (benefit) for the years ended December 31, 2023, 2022 and 2021:
(In millions)
Income tax provision (benefit) applicable to:
Income from continuing operations
Discontinued operations
Additional paid-in capital
Other comprehensive income
2023
Years Ended December 31,
2022
2021
$
(888) $
—
(12)
1
(41) $
(50)
—
(30)
(1)
(2)
(219)
(106)
2
43
(283)
(283)
19
—
3
The following is a reconciliation of the statutory federal income tax of 21% to the Company’s reported income tax provision (benefit) for the years ended
December 31, 2023, 2022 and 2021:
(In millions)
Federal statutory income tax provision (benefit)
State and local income tax provision (benefit)
Nondeductible compensation and benefits
Goodwill impairment
Nondeductible convertible notes costs
Decrease in uncertain tax positions
Change in tax rates from change in tax law before valuation allowance
Foreign taxes
Deferred tax adjustment related to William Hill acquisition
Minority interests
Valuation allowance
Tax credits
Deferred tax recognition on life insurance
Other
Reported income tax provision (benefit)
Table of Contents
$
$
103
2023
Years Ended December 31,
2022
2021
(13) $
(13)
16
3
—
—
25
3
—
(9)
(889)
(14)
—
3
(888) $
(118) $
1
13
3
—
(1)
86
6
30
3
(55)
(10)
—
1
(41) $
(267)
(54)
3
—
42
(6)
15
3
—
—
(34)
(5)
17
3
(283)
CAESARS ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components of the Company’s net deferred taxes at December 31, 2023 and 2022 are
as follows:
(In millions)
Deferred tax assets:
Loss carryforwards
Excess business interest expense
Credit carryforwards
Financing obligation
Long-term lease obligation
Other
Deferred tax liabilities:
Identified intangibles
Fixed assets
Right-of-use assets
Other
Valuation allowance
Net deferred tax liabilities
As of December 31,
2023
2022
$
$
569 $
399
141
2,644
208
233
4,194
(759)
(2,295)
(174)
(101)
(3,329)
(920)
(55) $
779
288
126
2,534
160
272
4,159
(803)
(2,243)
(128)
(163)
(3,337)
(1,809)
(987)
Management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use existing deferred
tax assets. During the second quarter of 2023, the Company evaluated its forecasted adjusted taxable income and objectively verifiable evidence and placed
substantial weight on its 2022 and 2023 quarterly earnings, adjusted for non-recurring items, including the interest expense disallowed under current tax
law. Accordingly, the Company determined it was more likely than not that a portion of the federal and state deferred tax assets will be realized and, as a
result, during the second quarter of 2023, the Company reversed the valuation allowance related to these deferred tax assets and recorded an income tax
benefit of $940 million. The Company is still carrying a valuation allowance on certain federal and state deferred tax assets that are not more likely than not
to be realized in the future. The Company has assessed the changes to the valuation allowance, including realization of the disallowed interest expense
deferred tax asset, using the integrated approach.
As of December 31, 2023, the Company had federal and state net operating loss carryforwards of $872 million and $9.0 billion, respectively, and federal
general business tax credit and research tax credit carryforwards of $145 million, which will expire on various dates as follows:
Year of Expiration
(In millions)
2024-2028
2029-2033
2034-2043
Do not expire
Net Operating Losses
Federal
States
Tax Credits
Federal
$
$
— $
238
168
466
872 $
604 $
1,590
4,560
2,279
9,033 $
8
39
98
—
145
In general, Section 382 of the Internal Revenue Code provides an annual limitation with respect to the ability of a corporation to utilize its net operating
loss carryovers, as well as certain built-in losses, against future taxable income in the event of a change in ownership. It is unlikely that the limitation will
adversely affect the Company’s ability to utilize its net operating loss carryovers against its future taxable income.
Table of Contents
104
CAESARS ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
Reconciliation of Unrecognized Tax Benefits
(In millions)
Balance as of beginning of year
Acquisition of William Hill
Sale of William Hill International
Additions based on tax positions related to the current year
Additions for tax positions of prior years
Reductions for tax positions for prior years
Expiration of statutes
Balance as of end of year
2023
Years Ended December 31,
2022
2021
$
$
128 $
—
—
—
1
(5)
—
124 $
157 $
—
(24)
3
1
(8)
(1)
128 $
137
32
—
4
5
(8)
(13)
157
We classify reserves for tax uncertainties within Other long-term liabilities in our Balance Sheets, separate from any related income tax payable, deferred
tax asset, or deferred tax liability. Reserve amounts relate to any potential income tax liabilities resulting from uncertain tax positions as well as potential
interest or penalties associated with those liabilities.
We accrue interest and penalties related to unrecognized tax benefits in income tax expense. During 2023, we decreased our unrecognized tax benefits by
$4 million, primarily due to the noncash settlement of a state audit. During 2022, we decreased our unrecognized tax benefits by $29 million, primarily due
to the sale of William Hill International. During 2021, we increased our unrecognized tax benefits by $20 million, primarily due to the William Hill
Acquisition. There was no accrual for the payment of interest and penalties as of December 31, 2023 and December 31, 2022. Included in the balances of
unrecognized tax benefits as of December 31, 2023 and December 31, 2022 was $112 million and $115 million, respectively, of unrecognized tax benefits
that, if recognized, would impact the effective tax rate.
In 2021, the Organization for Economic Co-operation and Development (the “OECD”) established an Inclusive Framework on Base Erosion and Profit
Shifting and agreed on a two-pillar solution (“Pillar Two”) to global taxation, focusing on global profit allocation and a 15% global minimum effective tax
rate. The OECD issued Pillar Two model rules and continues to release guidance on these rules. While the US has not yet adopted the Pillar Two rules,
various other countries around the world are enacting legislation. We will continue to analyze the law to determine potential impacts. We currently do not
expect the Framework to have a material impact on our effective tax rate or our financial statements.
The Company, including its subsidiaries, files tax returns with federal, state and foreign jurisdictions. The Company does not have tax sharing agreements
with the other members within the consolidated group. With few exceptions, the Company is no longer subject to US federal or state and local tax
assessments by tax authorities for years before 2020. We believe that it is reasonably possible that the unrecognized tax benefits liability will not materially
change within the next 12 months. Audit outcomes and the timing of audit settlements are subject to significant uncertainty. Although we believe that
adequate provision has been made for such issues, there is the possibility that the ultimate resolution of such issues could have an adverse effect on our
earnings. Conversely, if these issues are resolved favorably in the future, the related provision would be reduced, thus having a favorable impact on
earnings.
Note 18. Related Party Transactions
C. S. & Y. Associates
The Company owns the entire parcel on which Eldorado Resort Casino Reno is located, except for approximately 30,000 square feet which is leased from
C. S. & Y. Associates (“CSY”) (the “CSY Lease”). CSY is a general partnership in which a trust has an approximate 27% interest. The Company’s
Executive Chairman of the Board, Gary L. Carano, and his siblings are direct or indirect beneficiaries of the trust. The CSY Lease expires on June 30,
2057. Annual rent pursuant to the CSY Lease is currently $0.6 million, paid monthly. Annual rent is subject to periodic rent escalations of 1 to 2 percent
through the term of the lease. Commensurate with its interest, the trust receives directly from the Company approximately 27% of the rent paid by the
Company. As of December 31, 2023 and 2022 there were no amounts due to or from CSY.
CVA Holdco, LLC
In May 2023, the Company entered into a joint venture, CVA Holdco, LLC, with EBCI and an additional minority partner, to construct, own and operate a
gaming facility in Danville, Virginia (“Caesars Virginia”). Caesars Virginia opened in a temporary facility on May 15, 2023 which will be replaced by a
permanent facility that is currently under construction and is estimated to open in late 2024. As the managing member, the Company will operate the
business and manage the development, construction, financing, marketing, leasing, maintenance and day-to-day operation of the various phases of the
project. While the Company holds a 49.5% variable interest in the joint venture, it is the primary beneficiary; as such, the joint venture’s operations are
included in the Financial Statements, with a minority interest recorded reflecting the operations attributed to the other partners.
Table of Contents
105
CAESARS ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
The Company participates ratably, based on ownership percentage, with the partners in the profits and losses of the joint venture. As of December 31, 2023,
the Company has received $116 million in contributions for the project and EBCI and the other minority partners are obligated to contribute additional cash
totaling $8 million to the joint venture.
Note 19. Segment Information
The executive decision maker of the Company reviews operating results, assesses performance and makes decisions on a “significant market” basis.
Management views each of the Company’s casinos as an operating segment. Operating segments are aggregated based on their similar economic
characteristics, types of customers, types of services and products provided, and their management and reporting structure. The Company’s principal
operating activities occur in four reportable segments. The reportable segments are based on the similar characteristics of the operating segments with the
way management assesses these results and allocates resources, which is a consolidated view that adjusts for the effect of certain transactions between these
reportable segments within Caesars: (1) Las Vegas, (2) Regional, (3) Caesars Digital, and (4) Managed and Branded, in addition to Corporate and Other.
See table below for a summary of these segments. Also, see Note 4, Note 6 and Note 7 for a discussion of the impairment of intangibles and long-lived
assets related to certain segments.
The following table sets forth certain information regarding our properties (listed by segment in which each property is reported) as of December 31, 2023:
Regional
Managed and Branded
Las Vegas
Caesars Palace Las Vegas
The Cromwell
Flamingo Las Vegas
Harrah’s Las Vegas
Horseshoe Las Vegas
The LINQ Hotel & Casino
Paris Las Vegas
Planet Hollywood Resort & Casino
Caesars Digital
Caesars Atlantic City
Caesars Virginia
(a)
Circus Circus Reno
Eldorado Gaming Scioto Downs
Harveys Lake Tahoe
Horseshoe Baltimore
Horseshoe Black Hawk
Horseshoe Bossier City
Eldorado Resort Casino Reno
Horseshoe Council Bluffs
Grand Victoria Casino
Harrah’s Atlantic City
Harrah’s Columbus Nebraska
(b)
Harrah’s Council Bluffs
Harrah’s Gulf Coast
Managed
Harrah’s Ak-Chin
Harrah’s Cherokee
Harrah’s Cherokee Valley River
Harrah’s Resort Southern California
Caesars Windsor
Branded
Caesars Southern Indiana
Harrah’s Northern California
Caesars Digital
Harrah’s Hoosier Park Racing & Casino
Harrah’s Joliet
Harrah’s Lake Tahoe
Harrah’s Laughlin
Harrah’s Metropolis
Harrah’s New Orleans
Harrah’s North Kansas City
Harrah’s Philadelphia
Harrah’s Pompano Beach
Horseshoe Hammond
Horseshoe Indianapolis
Horseshoe Lake Charles
Horseshoe St. Louis
Horseshoe Tunica
Isle Casino Bettendorf
Isle of Capri Casino Boonville
Isle of Capri Casino Lula
Isle Casino Waterloo
Lady Luck Casino - Black Hawk
Silver Legacy Resort Casino
Trop Casino Greenville
Tropicana Atlantic City
Tropicana Laughlin Hotel & Casino
___________________
(a)
Temporary gaming facility opened on May 15, 2023. The construction of the permanent facility of Caesars Virginia is expected to be completed in late 2024.
(b)
Temporary gaming facility opened on June 12, 2023. The construction of the permanent facility of Harrah’s Columbus Nebraska is expected to be completed in the second quarter of 2024.
Certain of our properties operate off-track betting locations, including Harrah’s Hoosier Park Racing & Casino, which operates Winner’s Circle
Indianapolis and Winner’s Circle New Haven; and Horseshoe Indianapolis, which operates Winner’s Circle Clarksville. The LINQ Promenade is an open-
air dining, entertainment, and retail promenade located on the east side of the Las Vegas Strip next to The LINQ Hotel & Casino (the “LINQ”) that features
the High Roller, a 550-foot observation wheel, and the Fly LINQ Zipline attraction. We also own the CAESARS FORUM conference center, which is a
550,000 square feet conference center with 300,000 square feet of flexible meeting space, two of the largest pillarless ballrooms in the world and direct
access to the LINQ. Caesars will also open its first non-gaming hotel experience in the first half of 2024 with the opening of Caesars Republic Scottsdale
featuring more than 250 hotel rooms, approximately 20,000 square feet of event space and hotel amenities including, pools, bars, lounges, and celebrity
partnered restaurants.
Table of Contents
106
CAESARS ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
“Corporate and Other” includes certain unallocated corporate overhead costs and other adjustments, including eliminations of transactions among
segments, to reconcile to the Company’s consolidated results.
The following table sets forth, for the periods indicated, certain operating data for the Company’s four reportable segments, in addition to Corporate and
Other.
(In millions)
Las Vegas:
Net revenues
Adjusted EBITDA
Regional:
Net revenues
Adjusted EBITDA
Caesars Digital:
Net revenues
Adjusted EBITDA
Managed and Branded:
Net revenues
Adjusted EBITDA
Corporate and Other:
Net revenues
Adjusted EBITDA
2023
Years Ended December 31,
2022
2021
$
4,470 $
2,016
4,287 $
1,964
5,778
1,962
973
38
307
76
—
(154)
5,704
1,985
548
(666)
282
84
—
(124)
3,409
1,568
5,537
1,979
337
(476)
278
87
9
(168)
Reconciliation of Net Income (Loss) Attributable to Caesars to Adjusted EBITDA by Segment
Adjusted EBITDA is presented as a measure of the Company’s performance. Adjusted EBITDA is defined as revenues less certain operating expenses and
is comprised of net income (loss) before (i) interest income and interest expense, net of interest capitalized, (ii) income tax (benefit) provision, (iii)
depreciation and amortization, and (iv) certain items that we do not consider indicative of our ongoing operating performance at an operating property
level.
In evaluating Adjusted EBITDA you should be aware that, in the future, we may incur expenses that are the same or similar to some of the adjustments in
this presentation. The presentation of Adjusted EBITDA should not be construed as an inference that future results will be unaffected by unusual or
unexpected items.
Adjusted EBITDA is a financial measure commonly used in our industry and should not be construed as an alternative to net income (loss) as an indicator
of operating performance or as an alternative to cash flow provided by operating activities as a measure of liquidity (as determined in accordance with
GAAP). Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies within the industry. Adjusted EBITDA is
included because management uses Adjusted EBITDA to measure performance and allocate resources, and believes that Adjusted EBITDA provides
investors with additional information consistent with that used by management.
Table of Contents
107
CAESARS ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(In millions)
(a)
Net income (loss) attributable to Caesars
Net income (loss) attributable to noncontrolling interests
Net loss from discontinued operations
Benefit for income taxes
Other (income) loss
Loss on extinguishment of debt
Interest expense, net
Depreciation and amortization
Impairment charges
Transaction costs and other
Stock-based compensation expense
(b)
Adjusted EBITDA
Adjusted EBITDA by Segment:
Las Vegas
Regional
Caesars Digital
Managed and Branded
Corporate and Other
2023
Years Ended December 31,
2022
2021
$
786 $
(899) $
(1,019)
42
—
(888)
(10)
200
2,342
1,261
95
6
104
3,938 $
2,016 $
1,962
38
76
(154)
(11)
386
(41)
(46)
85
2,265
1,205
108
90
101
3,243 $
1,964 $
1,985
(666)
84
(124)
3
30
(283)
198
236
2,295
1,126
102
220
82
2,990
1,568
1,979
(476)
87
(168)
$
$
____________________
(a)
Other (income) loss primarily includes the net changes in fair value of (i) investments held by the Company (ii) foreign exchange forward contracts (iii) a disputed claims liability, and (iv)
the derivative liability related to the 5% convertible notes, which were fully converted during the year ended December 31, 2021, and the change in the foreign exchange rate associated
with restricted cash held in GBP associated with our acquisition of William Hill.
(b)
Transaction costs and other primarily includes (i) net proceeds received in exchange for participation rights in a potential insurance recovery, (ii) proceeds received for the termination of
the Caesars Dubai management agreement, (iii) insurance proceeds received in excess of the respective carrying value of damaged assets associated with the Lake Charles property, (iv)
costs related to non-cash losses on the write down and disposal of assets, professional services for transaction and integration costs, various contract exit or termination costs, and pre-
opening costs in connection with new temporary facility openings and (v) non-cash changes in equity method investments.
Capital Expenditures, Net - By Segment
(In millions)
Las Vegas
Regional
Caesars Digital
Corporate and Other
Total
(a)
____________________
(a)
Includes capital expenditures associated with our discontinued operations, where applicable.
2023
Years Ended December 31,
2022
2021
$
$
257 $
839
100
68
1,264 $
165 $
597
106
84
952 $
Total Assets - By Segment
(In millions)
Las Vegas
Regional
Caesars Digital
Managed and Branded
(a)
Corporate and Other
Total
____________________
(a)
Includes eliminations of transactions among segments, to reconcile to the Company’s consolidated results.
Table of Contents
108
December 31,
2023
2022
$
$
24,230 $
15,291
1,095
224
(7,474)
33,366 $
85
327
67
39
518
23,547
14,908
1,200
140
(6,268)
33,527
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We have established and maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports
that we file under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized, evaluated and reported
within the time periods specified in the rules and forms of the SEC, and that such information is accumulated and communicated to management, including
our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed
and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily is required to apply its
judgment in evaluating the cost-benefit relationship of possible controls and procedures.
Management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and
procedures (as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Exchange Act) as of December 31, 2023. Based on these evaluations, our
Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures required by Rules 13a-15(e) and 15d-15(e) were
effective as of December 31, 2023, at a reasonable assurance level.
Management’s Annual Report on Internal Control over Financial Reporting
Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-
15(f) or 15d-15(f) promulgated under the Exchange Act. This system is designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of consolidated financial statements for external purposes in accordance with US GAAP.
Management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated and assessed the effectiveness of our internal
control over financial reporting as of the end of the period covered by this Form 10-K Annual Report based upon the framework set forth in the Internal
Control-Integrated Framework issued in 2013 by the Committee of Sponsoring Organization of the Treadway Commission. Based on their evaluation and
assessment, they concluded that, as of December 31, 2023, our internal control over financial reporting was effective based on those criteria.
Deloitte & Touche LLP, an independent registered public accounting firm, has issued an attestation report on our internal control over financial reporting as
of December 31, 2023, which report follows below.
Changes in Internal Control Over Financial Reporting
As of December 31, 2023, there were no significant changes in our internal control over financial reporting that have materially affected, or are reasonably
likely to materially affect, our internal control over financial reporting.
Table of Contents
109
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the stockholders and the Board of Directors of Caesars Entertainment, Inc.
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of Caesars Entertainment, Inc., and subsidiaries (the “Company”) as of December 31, 2023,
based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway
Commission (“COSO”). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of
December 31, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated
financial statements as of and for the year ended December 31, 2023, of the Company and our report dated February 20, 2024, expressed an unqualified
opinion on those financial statements.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of
internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our
responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm
registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the
applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an
understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating
effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We
believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control
over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are
being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial
statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.
/s/ DELOITTE & TOUCHE LLP
Las Vegas, Nevada
February 20, 2024
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110
Item 9B. Other Information
Rule 10b5-1 Trading Plans
For the three months ended December 31, 2023, none of our directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted, modified or
terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as defined in Item 408 of Regulation S-K.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
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111
Item 10. Directors, Executive Officers and Corporate Governance
PART III
The information required by this Item is hereby incorporated by reference to our definitive Proxy Statement for our Annual Meeting of Stockholders (our
“Proxy Statement”) to be filed with the Securities and Exchange Commission no later than April 29, 2024, pursuant to Regulation 14A under the Securities
Act.
We have adopted a code of ethics and business conduct applicable to all directors and employees, including the Chief Executive Officer, Chief Financial
Officer and Principal Accounting Officer. The code of business conduct and ethics is posted on our website, http://www.caesars.com/corporate (accessible
through the “Governance” caption of the Investors page) and a printed copy will be delivered on request by writing to the Corporate Secretary at Caesars
Entertainment, Inc., c/o Corporate Secretary, 100 West Liberty Street, 12th Floor, Reno, NV 89501. We intend to satisfy the disclosure requirement
regarding certain amendments to, or waivers from, provisions of its code of business conduct and ethics by posting such information on our website.
Item 11. Executive Compensation
The information required by this Item is hereby incorporated by reference to our Proxy Statement, to be filed with the Securities and Exchange
Commission no later than April 29, 2024, pursuant to Regulation 14A under the Securities Act.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information required by this Item is hereby incorporated by reference to our Proxy Statement, to be filed with the Securities and Exchange
Commission no later than April 29, 2024, pursuant to Regulation 14A under the Securities Act.
Item 13. Certain Relationships and Related Transactions, and Director Independence
The information required by this Item is hereby incorporated by reference to our Proxy Statement, to be filed with the Securities and Exchange
Commission no later than April 29, 2024, pursuant to Regulation 14A under the Securities Act.
Item 14. Principal Accounting Fees and Services
The information about aggregate fees billed to us by our principal accountant, Deloitte & Touche LLP (PCAOB ID No. 34) is incorporated herein by
reference to our Proxy Statement, to be filed with the Securities and Exchange Commission no later than April 29, 2024, pursuant to Regulation 14A under
the Securities Act.
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112
Item 15. Exhibits and Financial Statement Schedules
PART IV
(a)(i) Financial Statements
Included in Part II (Item 8) of this Annual Report on Form 10-K:
Report of Independent Registered Public Accounting Firm
Consolidated Balance Sheets as of December 31, 2023 and 2022
Consolidated Statements of Operations for the Years Ended December 31, 2023, 2022 and 2021
Consolidated Statements of Comprehensive Income (Loss) for the Years Ended December 31, 2023, 2022 and 2021
Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2023, 2022 and 2021
Consolidated Statements of Cash Flows for the Years Ended December 31, 2023, 2022 and 2021
Notes to Consolidated Financial Statements
(a)(ii) Financial Statement Schedule
Schedule I—Condensed Financial Information of Registrant Parent Company Only as of December 31, 2023 and 2022 and for the Years Ended December 31,
2023, 2022 and 2021
We have omitted schedules other than the ones listed above because they are not required or are not applicable, or the required information is shown in the
financial statements or notes to the financial statements.
(a)(iii) Exhibits
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113
Exhibit
Number
2.1
2.2
3.1
Description of Exhibit
Method of Filing
Agreement and Plan of Merger, dated as of June 24, 2019, by and among Caesars Entertainment Corporation, Eldorado
Resorts, Inc. and Colt Merger Sub, Inc.
Previously filed on Form 8-K filed
on June 25, 2019.
Amendment No. 1 to Agreement and Plan of Merger, dated as of August 15, 2019, by and among Caesars
Entertainment Corporation, Eldorado Resorts, Inc. and Colt Merger Sub, Inc.
Previously filed on Form 8-K filed
on August 16, 2019.
Amended and Restated Certificate of Incorporation of Caesars Entertainment, Inc.
Previously filed on Form 8-K filed
on June 16, 2023.
Previously filed on Form 8-K filed
on August 1, 2022.
Filed herewith.
3.2
Amended and Restated Bylaws of Caesars Entertainment, Inc.
4.1
Description of Capital Stock
4.2††
4.3††
4.4††
4.5††
4.6
4.7
4.8
4.9
4.10†††
4.11†††
4.12†††
4.13
4.14
4.15
Indenture (6.25% CEI Senior Secured Notes due 2025) dated as of July 6, 2020, by and between Colt Merger Sub, Inc.
and U.S. Bank National Association, as trustee and collateral agent.
Previously filed on Form 8-K filed
on July 7, 2020.
First Supplemental Indenture, dated as of July 20, 2020, to Indenture (6.25% CEI Senior Secured Notes due 2025),
dated as of July 6, 2020, by and among Colt Merger Sub, Inc., Eldorado Resorts, Inc., the subsidiary guarantors party
thereto and U.S. Bank National Association, as trustee and collateral agent.
Previously filed on Form 8-K filed
on July 21, 2020.
Second Supplemental Indenture, dated as of June 4, 2021, to Indenture (6.25% CEI Senior Secured Notes due 2025),
dated as of July 6, 2020, by and among Caesars Entertainment, Inc., the subsidiary guarantors party thereto and U.S.
Bank National Association, as trustee and collateral agent.
Previously filed on Form 10-K filed
on February 22, 2023.
Third Supplemental Indenture, dated as of November 3, 2023, to Indenture (6.250% CEI Senior Secured Notes due
2025), dated as of July 6, 2020, by and among Caesars Entertainment, Inc., the subsidiary guarantors party thereto and
U.S. Bank Trust Company, National Association, as trustee, and U.S. Bank National Association, as collateral agent.
Previously filed on Form 8-K filed
on February 7, 2024.
Indenture (8.125% CEI Senior Notes due 2027) dated as of July 6, 2020, by and between Colt Merger Sub, Inc. and
U.S. Bank National Association, as trustee.
Previously filed on Form 8-K filed
on July 7, 2020.
First Supplemental Indenture, dated as of July 20, 2020, to Indenture (8.125% CEI Senior Notes due 2027), dated as of
July 6, 2020, by and among Colt Merger Sub, Inc., Eldorado Resorts, Inc., the subsidiary guarantors party thereto and
U.S. Bank National Association, as trustee.
Previously filed on Form 8-K filed
on July 21, 2020.
Second Supplemental Indenture, dated as of June 4, 2021, to Indenture (8.125% CEI Senior Notes due 2027), dated as
of July 6, 2020, by and among Caesars Entertainment, Inc., the subsidiary guarantors party thereto and U.S. Bank
National Association, as trustee.
Previously filed on Form 10-K filed
on February 22, 2023.
Third Supplemental Indenture, dated as of November 3, 2023, to Indenture (8.125% CEI Senior Notes due 2027), dated
as of July 6, 2020, by and among Caesars Entertainment, Inc., the subsidiary guarantors party thereto and U.S. Bank
National Association, as trustee.
Filed herewith.
Indenture (5.75% CRC Secured Notes due 2025) dated as of July 6, 2020, by and between Colt Merger Sub, Inc., U.S.
Bank National Association, as trustee, and Credit Suisse AG, Cayman Islands Branch, as collateral agent.
Previously filed on Form 8-K filed
on July 7, 2020.
First Supplemental Indenture, dated as of July 20, 2020, to Indenture (5.75% CRC Secured Notes due 2025), dated as
of July 6, 2020, by and among Colt Merger Sub, Inc., CRC Finco, Inc., Caesars Resort Collection, LLC, the subsidiary
guarantors party thereto, U.S. Bank National Association, as trustee, and Credit Suisse AG, Cayman Islands Branch, as
collateral agent.
Previously filed on Form 8-K filed
on July 21, 2020.
Second Supplemental Indenture, dated as of August 6, 2021, to Indenture (5.75% CRC Secured Notes due 2025), dated
as of July 6, 2020, by and among Caesars Entertainment, Inc., CRC Finco, Inc., Caesars Resort Collection, LLC and
U.S. Bank National Association, as trustee and collateral agent.
Previously filed on Form 8-K filed
on August 10, 2021.
Indenture (4.625% CEI Senior Notes due 2029), dated as of September 24, 2021, by and between Caesars
Entertainment, Inc., the guarantors party thereto and U.S. Bank National Association, as trustee.
Previously filed on Form 8-K filed
on September 27, 2021.
First Supplemental Indenture, dated as of October 4, 2022, to Indenture (4.625% CEI Senior Notes due 2029), by and
among Caesars Entertainment, Inc., the guarantors party thereto and U.S. Bank National Association, as trustee.
Previously filed on Form 8-K filed
on October 5, 2022.
Second Supplemental Indenture, dated as of November 3, 2023, to Indenture (4.625% CEI Senior Notes due 2029), by
and among Caesars Entertainment, Inc., the guarantors party thereto and U.S. Bank National Association, as trustee.
Filed herewith.
Table of Contents
114
Exhibit
Number
4.16
4.17
4.18
4.19
10.1
10.2
10.3
10.4
10.5
10.6
10.7**
10.8**
10.9
10.10
10.11
10.12
10.13
Indenture (7.00% Senior Secured Notes due 2030), dated as of February 6, 2023, by and among Caesars Entertainment,
Inc., the subsidiary guarantors party thereto, U.S. Bank Trust Company, National Association, as trustee, and U.S. Bank
National Association, as collateral agent.
Description of Exhibit
Method of Filing
Previously filed on Form 8-K filed
on February 6, 2023.
First Supplemental Indenture (7.00% CEI Senior Secured Notes due 2030), dated as of March 24, 2023, to Indenture,
dated as of February 6, 2023, by and among Caesars Entertainment, Inc., the subsidiary guarantors party thereto, U.S.
Bank Trust Company, National Association, as Trustee, and U.S. Bank National Association, as Collateral Agent.
Previously filed on Form 10-Q filed
on May 3, 2023.
Second Supplemental Indenture (7.00% CEI Senior Secured Notes due 2030), dated as of November 3, 2023, to
Indenture, dated as of February 6, 2023, by and among Caesars Entertainment, Inc., the subsidiary guarantors party
thereto, U.S. Bank Trust Company, National Association, as Trustee, and U.S. Bank National Association, as Collateral
Agent.
Filed herewith.
Indenture (6.50% CEI Senior Secured Notes due 2032), dated as of February 6, 2024, by and among Caesars
Entertainment, Inc., the subsidiary guarantors party thereto, U.S. Bank Trust Company, National Association, as
Trustee, and U.S. Bank National Association, as Collateral Agent.
Previously filed on Form 8-K filed
on February 7, 2024.
Second Amendment to Lease (CPLV) (which includes a conformed copy of the Las Vegas Lease through the Second
Amendment), dated as of July 20, 2020, by and among CPLV Property Owner LLC, Claudine Propco LLC, Propco
TRS LLC, Desert Palace LLC, CEOC, LLC and Harrah’s Las Vegas, LLC
Previously filed on Form 8-K filed
on July 21, 2020.
Third Amendment to Lease, dated as of September 30, 2020, by and among CPLV Property Owner LLC, Claudine
Propco LLC, Propco TRS LLC, Desert Palace LLC, CEOC, LLC and Harrah’s Las Vegas, LLC.
Previously filed on Form 10-Q filed
on November 9, 2020.
Fourth Amendment to Lease, dated as of November 18, 2020, by and among CPLV Property Owner LLC, Claudine
Propco LLC, Propco TRS LLC, Desert Palace LLC, CEOC, LLC and Harrah’s Las Vegas, LLC.
Previously filed on Form 10-K on
March 1, 2021.
Fifth Amendment to Lease, dated as of September 3, 2021, by and among CPLV Property Owner LLC, Claudine
Propco LLC, Propco TRS LLC, Desert Palace LLC, CEOC, LLC and Harrah’s Las Vegas, LLC.
Previously filed on Form 10-Q on
November 5, 2021.
Sixth Amendment to Lease, dated as of November 1, 2021, by and among CPLV Property Owner LLC, Claudine
Propco LLC, Propco TRS LLC, Desert Palace LLC, CEOC, LLC and Harrah’s Las Vegas, LLC.
Previously filed on Form 10-K filed
on February 24, 2022.
Guaranty, dated as of July 20, 2020, by and among Eldorado Resorts, Inc., CPLV Property Owner LLC and Claudine
Propco LLC.
Previously filed on Form 8-K filed
on July 21, 2020.
Fifth Amendment to Lease (Non-CPLV) (which includes a conformed copy of the Regional Lease through the Fifth
Amendment), dated as of July 20, 2020, by and among the entities listed on Schedule A attached thereto, Harrah’s
Atlantic City LLC, New Laughlin Owner LLC, Harrah’s New Orleans LLC, the entities listed on Schedule B attached
thereto, Harrah’s Atlantic City Operating Company, LLC, Harrah’s Laughlin, LLC, Jazz Casino Company, L.L.C. and
Propco TRS LLC.
Previously filed on Form 8-K filed
on July 21, 2020.
Sixth Amendment to Lease, dated as of September 30, 2020, by and among the entities listed on Schedules A and B
thereto and Propco TRS LLC.
Previously filed on Form 10-Q filed
on November 9, 2020.
Seventh Amendment to Lease, dated as of November 18, 2020, by and among the entities listed on Schedules A and B
thereto and Propco TRS LLC.
Previously filed on Form 10-K on
March 1, 2021.
Eighth Amendment to Lease, dated as of September 3, 2021, by and among the entities listed on Schedule A and B
thereto and Propco TRS LLC.
Previously filed on Form 10-Q on
November 5, 2021.
Ninth Amendment to Lease, dated as of November 1, 2021, by and among the entities listed on Schedules A and B
thereto and Propco TRS LLC.
Previously filed on Form 10-K filed
on February 24, 2022.
Tenth Amendment to Lease (Regional), dated as of December 30, 2021, by and among the entities listed on Schedules
A and B thereto and Propco TRS LLC.
Previously filed on Form 10-K filed
on February 24, 2022.
Eleventh Amendment to Lease, dated as of August 25, 2022, by and among the entities listed on Schedules A and B
thereto and Propco TRS LLC.
Previously filed on Form 10-Q filed
on November 2, 2022.
Table of Contents
115
Exhibit
Number
10.14
10.15
10.16**
10.17**
10.18
10.19
10.20
10.21
10.22*
10.23
10.24
10.25*
10.26*
10.27*
10.28
10.29
10.30
10.31
10.32
10.33
10.34*
Description of Exhibit
Method of Filing
Twelfth Amendment to Lease, dated as of April 7, 2023, by and among the entities listed on Schedules A and B thereto
and Propco TRS LLC.
Previously filed on Form 10-Q filed
on May 3, 2023.
Guaranty of Lease, dated as of July 20, 2020, by and among Eldorado Resorts, Inc. and the entities listed on Schedule
A thereto (Regional).
Previously filed on Form 8-K filed
on July 21, 2020.
Second Amendment to Lease (Joliet) (which includes a conformed copy of the Joliet Lease through the Second
Amendment), dated as of July 20, 2020, by and among Harrah’s Joliet Landco LLC, Des Plaines Development Limited
Partnership, CEOC, LLC and Propco TRS LLC.
Previously filed on Form 8-K filed
on July 21, 2020.
Third Amendment to Lease, dated as of September 30, 2020, by and among Harrah’s Joliet Landco LLC, Des Plaines
Development Limited Partnership, CEOC, LLC and Propco TRS LLC.
Previously filed on Form 10-Q filed
on November 9, 2020.
Fourth Amendment to Lease, dated as of November 18, 2020, by and among Harrah’s Joliet Landco LLC, Des Plaines
Development Limited Partnership, CEOC, LLC and Propco TRS LLC.
Previously filed on Form10-K on
March 1, 2021.
Fifth Amendment to Lease, dated as of September 3, 2021, by and among Harrah’s Joliet Landco LLC, Des Plaines
Development Limited Partnership, CEOC, LLC and Propco TRS LLC.
Previously filed on Form 10-Q on
November 5, 2021
Sixth Amendment to Lease, dated as of November 1, 2021, by and among Harrah’s Joliet Landco LLC, Des Plaines
Development Limited Partnership, CEOC, LLC and Propco TRS LLC.
Previously filed on Form 10-K filed
on February 24, 2022.
Guaranty, dated as of July 20, 2020, by and between Eldorado Resorts, Inc. and Harrah’s Joliet Landco LLC.
Previously filed on Form 8-K filed
on July 21, 2020.
Right of First Refusal Agreement, dated as of July 20, 2020, by and between Eldorado Resorts, Inc. and VICI
Properties L.P. (Las Vegas Strip).
Previously filed on Form 8-K filed
on July 21, 2020.
Right of First Refusal Agreement, dated as of July 20, 2020, by and between Eldorado Resorts, Inc. and VICI
Properties L.P. (Horseshoe Baltimore).
Previously filed on Form 8-K filed
on July 21, 2020.
Second Amendment to Golf Course Use Agreement, dated as of July 20, 2020, by and among Rio Secco LLC, Cascata
LLC, Chariot Run LLC, Grand Bear LLC, Caesars Enterprise Services, LLC, CEOC, LLC and, solely for purposes of
Section 2.1(c) thereof, Caesars License Company, LLC.
Previously filed on Form 8-K filed
on July 21, 2020.
Amended and Restated Put-Call Right Agreement, dated as of July 20, 2020, by and among Claudine Propco, LLC and
Eastside Convention Center, LLC.
Previously filed on Form 8-K filed
on July 21, 2020.
Second Amended and Restated Put-Call Right Agreement entered into as of September 18, 2020 by and among
Claudine Propco LLC and Caesars Convention Center Owner, LLC.
Previously filed on Form 8-K filed
on September 18, 2020.
Put-Call Right Agreement entered into as of July 20, 2020 by and between Centaur Propco LLC and Caesars Resort
Collection, LLC.
Previously filed on Form 8-K filed
on July 21, 2020.
First Amendment to Third Amended and Restated Omnibus License and Enterprise Services Agreement, dated as of
July 20, 2020, by and among Caesars Enterprise Services, LLC, CEOC, LLC, Caesars Resort Collection, LLC, Caesars
License Company, LLC and Caesars World LLC (including as Exhibit A thereto a conformed copy of the Third
Amended and Restated Omnibus License and Enterprise Services Agreement, dated as of December 26, 2018, as
amended).
Previously filed on Form 8-K filed
by Caesars Holdings, Inc. on July
21, 2020.
Credit Agreement, dated as of July 20, 2020, by and among Eldorado Resorts, Inc., the lenders party thereto from time
to time, JPMorgan Chase Bank, N.A., as administrative agent, and U.S. Bank National Association, as collateral agent.
Previously filed on Form 8-K filed
on July 21, 2020.
Incremental Assumption Agreement No. 1, dated as of July 20, 2020, by and among Eldorado Resorts, Inc., the
subsidiary guarantors party thereto, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent.
Previously filed on Form 8-K filed
on July 21, 2020.
First Amendment to Credit Agreement, dated as of November 10, 2021, by and between Caesars Entertainment, Inc.
and JPMorgan Chase Bank, N.A., as administrative agent.
Previously filed on Form 8-K filed
on November 10, 2021.
Second Amendment to Credit Agreement, dated as of January 26, 2022, by and between Caesars Entertainment, Inc.
and JPMorgan Chase Bank, N.A., as administrative agent.
Previously filed on Form 8-K filed
on January 27, 2022.
Third Amendment to Credit Agreement, dated as of October 5, 2022, by and among Caesars Entertainment, Inc., the
subsidiary guarantors party thereto, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent.
Previously filed on Form 8-K filed
on October 5, 2022.
Incremental Assumption Agreement No. 2, dated as of February 6, 2023, by and among Caesars Entertainment, Inc.,
the subsidiary guarantors party thereto, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative
agent.
Previously filed on Form 8-K filed
on February 6, 2023.
Table of Contents
116
Exhibit
Number
10.35*
10.36
10.37
10.38
Description of Exhibit
Incremental Assumption Agreement No. 3, dated as of February 6, 2024, by and among Caesars Entertainment, Inc.,
the subsidiary guarantors party thereto, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative
agent.
Caesars Entertainment Corporation Amended and Restated Escrow Agreement, dated as of December 12, 2016,
between Caesars Entertainment Corporation and Wells Fargo Bank, N.A.
Amended and Restated Casino Operating Contract, dated April 1, 2020, by and between Jazz Casino Company, L.L.C.
and the State of Louisiana, by and through the Louisiana Gaming Control Board.
Method of Filing
Previously filed on Form 8-K filed
on February 7, 2024.
Previously filed on Form 8-K filed
by Caesars Holdings, Inc. on
October 13, 2017.
Previously filed on Form 8-K filed
by Caesars Holdings, Inc. on April
6, 2020.
First Amendment to the Amended and Restated Casino Operating Contract, made and entered into as of April 9, 2020,
and made effective as of April 1, 2020, by and between Jazz Casino Company, L.L.C. and the State of Louisiana, by
and through the Louisiana Gaming Control Board.
Previously filed on Form 8-K/A
filed by Caesars Holdings, Inc. on
April 14, 2020.
10.39†
Caesars Entertainment Corporation Executive Supplemental Savings Plan III.
10.40†
Caesars Entertainment Corporation Outside Director Deferred Compensation Plan.
10.41†
Eldorado Resorts, Inc. Amended and Restated 2015 Equity Incentive Plan
10.42†
Form of Director Indemnification Agreement.
Previously filed on Form S-8 filed
by Caesars Holdings, Inc. on
December 13, 2018.
Previously filed on Form S-8 filed
by Caesars Holdings, Inc. on
December 13, 2018.
Previously filed on Form S-8 POS
filed on June 29, 2019.
Previously filed on Form 10-Q filed
on November 9, 2020.
10.43†
10.44†
10.45†
10.46†
10.47†
10.48†
10.49†
10.50†
10.51†
10.52†
10.53†
10.54†
Form of Director Non-Deferred Restricted Stock Unit Award Agreement pursuant to the Eldorado Resorts, Inc. 2015
Equity Incentive
Previously filed on Form 10-K filed
on February 28, 2020.
Form of Restricted Stock Unit Award Agreement pursuant to the Amended & Restated 2015 Equity Incentive Plan.
Previously filed on Form 10-K on
March 1, 2021.
Form of Restricted Stock Unit Award Agreement Performance-Based (TSR) pursuant to the Amended & Restated 2015
Equity Incentive Plan.
Previously filed on Form 10-K on
March 1, 2021.
Form of Restricted Stock Unit Time-Based Award Agreement pursuant to the Eldorado Resorts, Inc. 2015 Equity
Incentive Plan.
Previously filed on Form 10-K filed
on February 28, 2020.
Form of Director Restricted Stock Unit Award Agreement pursuant to the Eldorado Resorts, Inc. 2015 Equity Incentive
Plan.
Form of Performance Stock Unit Award Agreement pursuant to the Eldorado Resorts, Inc. 2015 Equity Incentive Plan.
Previously filed on Registration
Statement Form S-1 filed by
Eldorado Resorts, Inc. June 14,
2015.
Previously filed on Form 10-K filed
on March 1, 2019.
Amended and Restated Executive Employment Agreement, dated as of January 26, 2024, by and between Caesars
Enterprise Services, LLC and Bret Yunker.
Amended and Restated Executive Employment Agreement, dated as of January 26, 2024, by and between Caesars
Enterprise Services, LLC and Stephanie Lepori.
Amended and Restated Executive Employment Agreement, dated as of January 26, 2024, by and between Caesars
Enterprise Services, LLC and Thomas Reeg.
Filed herewith.
Filed herewith.
Filed herewith.
Restricted Stock Unit Award Agreement by and between Caesars Entertainment, Inc. and Thomas R. Reeg dated
February 25, 2022.
Previously filed on Form 8-K filed
on March 1, 2022.
Amended and Restated Executive Employment Agreement, dated as of January 26, 2024, by and between Caesars
Enterprise Services, LLC and Anthony Carano.
Amended and Restated Executive Employment Agreement, dated as of January 26, 2024, by and between Caesars
Enterprise Services, LLC and Edmund L. Quatmann, Jr.
Filed herewith.
Filed herewith.
Table of Contents
117
Exhibit
Number
10.55
10.56
14.1
21.1
23.1
31.1
31.2
32.1
32.2
97.1
99.1
101.1
101.2
101.3
101.4
101.5
101.6
104
Description of Exhibit
Amended and Restated Omnibus Amendment to Leases, dated as of October 27, 2020, by and among the entities listed
on Schedule A attached thereto CPLV Property Owner LLC, Claudine Propco LLC, Harrah’s Joliet Landco LLC,
CEOC, LLC, the entities listed on Schedule B attached thereto, Desert Palace LLC, Harrah’s Las Vegas, LLC, Des
Plaines Development Limited Partnership and Propco TRS LLC.
Third Amended and Restated Master Lease, dated as of November 13, 2023, by and among Tropicana Entertainment,
Inc., IOC Black Hawk County, Inc., Isle of Capri Bettendorf, L.C. and GLP Capital L.P.
Code of Ethics and Business Conduct
Subsidiaries of the Registrant
Consent of Deloitte & Touche LLP
Certification of Thomas R. Reeg pursuant to Rule 13a-14a and Rule 15d-14(a)
Certification of Bret Yunker pursuant to Rule 13a-14a and Rule 15d-14(a)
Certification of Thomas R. Reeg in accordance with 18 U.S.C. Section 1350
Certification of Bret Yunker in accordance with 18 U.S.C. Section 1350
Policy Relating to Recovery of Erroneously Awarded Compensation
Gaming and Regulatory Overview
Inline XBRL Instance Document
Inline XBRL Taxonomy Extension Schema Document
Inline XBRL Taxonomy Extension Calculation Linkbase Document
Inline XBRL Taxonomy Extension Definition Linkbase Document
Inline XBRL Taxonomy Extension Label Linkbase Document
Inline XBRL Taxonomy Extension Presentation Linkbase Document
Cover Page Interactive Data File (embedded within the Inline XBRL document)
Method of Filing
Previously filed on Form 10-Q filed
on November 9, 2020.
Filed herewith.
Filed herewith.
Filed herewith.
Filed herewith.
Filed herewith.
Filed herewith.
Filed herewith.
Filed herewith.
Filed herewith.
Filed herewith.
Filed herewith.
Filed herewith.
Filed herewith.
Filed herewith.
Filed herewith.
Filed herewith.
Filed herewith.
______________________
†
††
Denotes a management contract or compensatory plan or arrangement.
On February 7, 2024, the CEI Senior Secured Notes due 2025 and the related amendments/incremental assumption agreements and the guarantees agreement
were terminated.
†††
*
**
On February 16, 2024, the CRC Secured Notes due 2025 and the related amendments/incremental assumption agreements and the guarantees agreement were
terminated.
Certain schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K.
Portions of this exhibit have been omitted pursuant to Item 601(b)(10)(iv) of Regulation S-K because such information is (i) not material and (ii) could be
competitively harmful if publicly disclosed.
Annexes, schedules and/or exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K.
Item 16. Form 10-K Summary
None.
Table of Contents
118
CONDENSED FINANCIAL INFORMATION OF REGISTRANT PARENT COMPANY ONLY
CAESARS ENTERTAINMENT, INC.
CONDENSED BALANCE SHEETS
Schedule I
(In millions)
ASSETS
Current assets
Investment in and advances to unconsolidated affiliates
Investment in subsidiaries
Property and equipment, net
Long-term intercompany notes
Other long-term assets, net
Total assets
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Long-term debt
Other long-term liabilities
Total liabilities
Total stockholders’ equity
Total liabilities and stockholders’ equity
See accompanying Notes to Condensed Financial Information.
Table of Contents
119
As of December 31,
2023
2022
$
$
$
$
135 $
—
11,523
2
4,401
25
16,086 $
306 $
11,199
29
11,534
4,552
16,086 $
188
3
10,465
4
—
146
10,806
236
6,826
31
7,093
3,713
10,806
CONDENSED FINANCIAL INFORMATION OF REGISTRANT PARENT COMPANY ONLY
CAESARS ENTERTAINMENT, INC.
CONDENSED STATEMENTS OF OPERATIONS
Schedule I
(In millions)
Net revenues
Expenses:
Corporate expense
Depreciation and amortization
Transaction and other costs, net
Total operating expenses
Operating income (loss)
Other expense:
Interest expense
Income (loss) on interests in subsidiaries
Loss on extinguishment of debt
Other income (loss)
Income (loss) from operations before income taxes
Benefit for income taxes
Net income (loss)
2023
Years Ended December 31,
2022
2021
$
— $
— $
4
2
2
(26)
(22)
22
(507)
1,268
—
3
786
—
786 $
4
4
11
19
(19)
(428)
(492)
—
40
(899)
—
(899) $
43
6
60
109
(105)
(395)
(437)
(14)
(72)
(1,023)
4
(1,019)
$
See accompanying Notes to Condensed Financial Information.
Table of Contents
120
CONDENSED FINANCIAL INFORMATION OF REGISTRANT PARENT COMPANY ONLY
CAESARS ENTERTAINMENT, INC.
CONDENSED STATEMENTS OF CASH FLOWS
Schedule I
(In millions)
Cash flows used in operating activities
Cash flows from investing activities
Issuance of long-term intercompany notes
Collections from long-term intercompany notes
Purchase of property and equipment, net
William Hill Acquisition
Proceeds from sale of businesses, property and equipment, net of cash sold
Proceeds from the sale of investments
Cash flows provided by (used in) investing activities
Cash flows from financing activities
Proceeds from long-term debt and revolving credit facilities
Debt issuance and extinguishment costs
Repayments of long-term debt and revolving credit facilities
Net proceeds (repayments) with related parties
Cash paid to settle convertible notes
Taxes paid related to net share settlement of equity awards
Proceeds from issuance of common stock
Cash flows provided by financing activities
Decrease in cash, cash equivalents, and restricted cash
Cash, cash equivalents, and restricted cash, beginning of period
Cash, cash equivalents, and restricted cash, end of period
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH TO
AMOUNTS REPORTED WITHIN THE CONDENSED BALANCE SHEETS
Cash and cash equivalents in current assets
Restricted and escrow cash included in other long-term assets, net
Total cash, cash equivalents and restricted cash
2023
Years Ended December 31,
2022
2021
$
(296) $
(329) $
(4,420)
19
—
—
—
—
(4,401)
5,460
(79)
(1,017)
189
—
(27)
—
4,526
(171)
316
145 $
134 $
11
145 $
$
$
$
—
—
—
—
15
84
99
750
(12)
(89)
(592)
—
(27)
1
31
(199)
515
316 $
185 $
131
316 $
(448)
—
—
(1)
(3,938)
—
89
(3,850)
1,200
(17)
(100)
705
(367)
(45)
3
1,379
(2,919)
3,434
515
199
316
515
See accompanying Notes to Condensed Financial Information.
Table of Contents
121
CONDENSED FINANCIAL INFORMATION OF REGISTRANT PARENT COMPANY ONLY
CAESARS ENTERTAINMENT, INC.
NOTES TO CONDENSED FINANCIAL INFORMATION
Schedule I
1. Background and basis of presentation
These condensed parent company financial statements have been prepared in accordance with Rule 12-04, Schedule 1 of Regulation S-X, as the restricted
net assets of Caesars Entertainment, Inc. and its subsidiaries exceed 25% of the consolidated net assets of Caesars Entertainment, Inc. and its subsidiaries
(the “Company”). This information should be read in conjunction with the Company’s consolidated financial statements included elsewhere in this filing.
2. Restricted net assets of subsidiaries
Certain of the Company’s subsidiaries have restrictions on their ability to pay dividends or make intercompany loans and advances pursuant to financing
arrangements and regulatory restrictions. The amount of restricted net assets the Company’s consolidated subsidiaries held as of December 31, 2023 was
approximately $4.5 billion. Such restrictions are on net assets of Caesars Entertainment, Inc. and its subsidiaries. The amount of restricted net assets in the
Company’s unconsolidated subsidiaries was not material to the financial statements.
3. Commitments, contingencies, and long-term obligations
For a discussion of the Company’s commitments, contingencies, and long-term obligations under its credit facilities, see Note 11 and Note 12 of the
Company’s consolidated financial statements.
Table of Contents
122
Pursuant to the requirements of Sections 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
SIGNATURES
Dated: February 20, 2024
CAESARS ENTERTAINMENT, INC.
By:
/s/ Thomas R. Reeg
Thomas R. Reeg
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant
and in the capacities and on the dates indicated.
Signature
Title
Date
/s/ Thomas R. Reeg
Thomas R. Reeg
/s/ Bret Yunker
Bret Yunker
/s/ Stephanie D. Lepori
Stephanie D. Lepori
/s/ Gary L. Carano
Gary L. Carano
/s/ Bonnie Biumi
Bonnie Biumi
/s/ Jan Jones Blackhurst
Jan Jones Blackhurst
/s/ Frank J. Fahrenkopf Jr.
Frank J. Fahrenkopf Jr.
/s/ Don Kornstein
Don Kornstein
/s/ Courtney Mather
Courtney Mather
/s/ Michael E. Pegram
Michael E. Pegram
/s/ David P. Tomick
David P. Tomick
Chief Executive Officer (Principal Executive Officer) and
Director
February 20, 2024
Chief Financial Officer (Principal Financial Officer)
February 20, 2024
Chief Administrative and Accounting Officer (Principal
Accounting Officer)
February 20, 2024
Executive Chairman of the Board
February 20, 2024
Director
Director
Director
Director
Director
Director
Director
February 20, 2024
February 20, 2024
February 20, 2024
February 20, 2024
February 20, 2024
February 20, 2024
February 20, 2024
Table of Contents
123
Exhibit 4.1
DESCRIPTION OF CAPITAL STOCK
We have one class of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended: our common stock, par value $0.00001
per share. The following is a general description of the terms and provisions of our capital stock and related provisions of our certificate of incorporation
and our bylaws, each of which is incorporated by reference as an exhibit to the Annual Report on Form 10-K of which this Exhibit 4.1 is a part. The
following description is only a summary of the material provisions of our capital stock, certificate of incorporation and bylaws and does not purport to be
complete and is subject and qualified in its entirety by reference to the applicable provisions of the Delaware General Corporation Law, or the DGCL, our
certificate of incorporation and our bylaws. We encourage you to read our certificate of incorporation, our bylaws and the applicable provisions of the
DGCL for additional information.
General
Our authorized capital stock consists of 500,000,000 shares of common stock, par value $0.00001 per share.
Common Stock
Dividend rights
We will be permitted to pay dividends if, as and when declared by our board of directors, subject to compliance with limitations imposed by the DGCL.
The holders of our common stock are entitled to receive and share equally in these dividends as they may be declared by our board of directors out of funds
legally available for such purpose. We do not currently expect to pay dividends on our common stock.
Voting rights
Our common stock votes as a single class on all matters on which stockholders are entitled to vote, and each share of our common stock is entitled to cast
one vote in person or by proxy on such matters. Holders of our common stock do not have the right to cumulate votes in the election of directors. Directors
are elected by a plurality of the shares actually voting on the matter at each annual meeting or special meeting called for the purpose of electing such
directors at which a quorum is present.
Liquidation rights
Upon our liquidation, dissolution or winding-up, whether voluntary or involuntary, the holders of our common stock will be entitled to receive, after
payment or provision for payment of all our debts and liabilities, all of our assets available for distribution.
Preemptive rights
Holders of our common stock are not entitled to any preemptive rights to subscribe for additional shares of our common stock, nor are they liable to further
capital calls or to assessments by us. Therefore, if we issue additional shares without the opportunity for existing stockholders to purchase more shares, a
stockholder’s ownership interest in our Company may be subject to dilution.
Other Rights or Preferences
Our common stock has no sinking fund, redemption provisions, or conversion or exchange rights, other than redemption provisions related to compliance
with gaming laws.
Preferred Stock
We are authorized to issue up to 150,000,000 shares of preferred stock, none of which is outstanding. Our board of directors is authorized without further
action by holders of our common stock, subject to limitations prescribed by Delaware law and our certificate of incorporation, to issue preferred stock and
to determine the terms and conditions
4812-2185-9293
of the preferred stock, including whether the shares of preferred stock will be issued in one or more series, the number of shares to be included in each
series and the powers, designations, preferences and rights of the shares. Our board of directors is authorized to designate any qualifications, limitations or
restrictions on the shares without any further vote or action by our stockholders. The issuance of preferred stock may have the effect of delaying, deferring
or preventing a change in control of our company that some stockholders believe to be in their best interests or in which holders of our common stock
might receive a premium over the market price and may adversely affect the voting and other rights of the holders of our common stock, which could have
an adverse impact on the market price of our common stock. We have no current plan to issue any shares of preferred stock.
Transfer agent and registrar
The transfer agent and registrar for our common stock is Continental Stock Transfer & Trust Company.
Limitation of liability and indemnification matters
We have entered into indemnification agreements with certain of our executive officers and each of our directors pursuant to which we have agreed to
indemnify such executive officers and directors against liability incurred by them by reason of their services as an executive officer or director to the fullest
extent allowable under applicable law. We also provide liability insurance for each officer and director for losses arising from claims or charges made
against them while acting in their capacities as our officer or director.
To the extent that indemnification for liabilities arising under the Securities Act may be permitted to our executive officers and directors pursuant to the
foregoing, we have been informed that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is
therefore unenforceable.
National market listing
Our common stock is listed on the NASDAQ Stock Market under the symbol “CZR.”
39337.00400
4812-2185-9293
Exhibit 4.9
THIRD SUPPLEMENTAL INDENTURE
THIS THIRD SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”), dated as of November 3, 2023, among
AMERICAN WAGERING, INC., AWI GAMING, INC., AWI MANUFACTURING, INC., BRANDYWINE BOOKMAKING
LLC, BW SUB CO., CAESARS CONVENTION CENTER OWNER, LLC, CAESARS INTERACTIVE ENTERTAINMENT
NEW JERSEY, LLC, COMPUTERIZED BOOKMAKING SYSTEMS, INC., DIGITAL HOLDCO LLC, WH NV III, LLC,
WHUS TECHCO, INC., WILLIAM HILL DFSB, INC., WILLIAM HILL NEVADA I, WILLIAM HILL NEVADA II, WILLIAM
HILL NEW JERSEY, INC. and WILLIAM HILL U.S. HOLDCO, INC. (each, a “New Guarantor”), CAESARS
ENTERTAINMENT, INC., a Delaware corporation (the “Issuer”), the other Subsidiary Guarantors (as defined in the Indenture
referred to herein), and U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, as trustee (as successor-in-interest to U.S.
Bank National Association, and in such capacity, the “Trustee”).
W I T N E S S E T H :
WHEREAS, the Colt Merger Sub, Inc. (predecessor to the Issuer) (the “Escrow Issuer”) has heretofore executed and
delivered to the Trustee an indenture, dated as of July 6, 2020, providing for the issuance of 8.125% Senior Notes due 2027 (the
“Notes”), initially in the aggregate principal amount of $1,800,000,000, as supplemented by that certain supplemental indenture,
dated as of July 20, 2020, by and among the Escrow Issuer, the Issuer (f/k/a Eldorado Resorts, Inc.), the Subsidiary Guarantors
party thereto, and the Trustee, pursuant to which the Issuer assumed the Escrow Issuer’s obligations under the Notes and the
Indenture, and the Subsidiary Guarantors became party thereto, and that certain supplemental indenture dated as of June 4, 2021,
by and among the Issuer, the Subsidiary Guarantors party thereto, and the Trustee (as further amended, supplemented or otherwise
modified, the “Indenture”);
WHEREAS, Section 4.11 of the Indenture provides that under certain circumstances the Issuer is required to cause each
New Guarantor to execute and deliver to the Trustee a supplemental indenture pursuant to which each New Guarantor shall
unconditionally guarantee all the Issuer’s Obligations under the Notes and the Indenture pursuant to a Note Guarantee on the terms
and conditions set forth herein; and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee, the Issuer and the Subsidiary Guarantors, if any, are
authorized to execute and deliver this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which
is hereby acknowledged, each New Guarantor, the Issuer, the Subsidiary Guarantors and the Trustee mutually covenant and agree
for the equal and ratable benefit of the holders of the Notes as follows:
1.
Defined Terms. As used in this Supplemental Indenture, terms defined in the Indenture or in the preamble or recital
hereto are used herein as therein defined, except that the term “holders” in this Supplemental Indenture shall refer to the term
“holders” as defined in the Indenture and the Trustee acting on behalf of and for the benefit of such holders. The words “herein,”
“hereof” and “hereby” and other words of similar import used in this Supplemental Indenture refer to this Supplemental Indenture
as a whole and not to any particular section hereof.
2.
Agreement to Guarantee. Each New Guarantor hereby agrees, jointly and severally with all existing guarantors (if
any), to unconditionally guarantee the Issuer’s Obligations under the Notes and the Indenture on the terms and subject to the
conditions set forth in Article XII of the Indenture and to be bound by all other applicable provisions of the Indenture and the
Notes and to perform all of the obligations and agreements of a guarantor under the Indenture. From and after the date hereof, all
references in the Indenture to the “Subsidiary Guarantors” shall include the New Guarantors.
3.
Notices. All notices or other communications to each New Guarantor shall be given at the following address:
Caesars Entertainment, Inc., 100 West Liberty Street, 12 Floor, Reno, Nevada 89501, Facsimile: (775) 337-9218 Attn: Chief
Financial Officer.
4.
Execution and Delivery. Each New Guarantor agrees that its Note Guarantee shall remain in full force and effect
th
notwithstanding the absence of the endorsement of any notation of such Note Guarantee.
5.
Ratification of Indenture; Supplemental Indentures Part of Indenture. Except as expressly amended hereby, the
Indenture is in all respects ratified and confirmed and all the terms, conditions and provisions thereof shall remain in full force and
effect. This Supplemental Indenture shall form a part of the Indenture for all purposes, and every holder of Notes heretofore or
hereafter authenticated and delivered shall be bound hereby.
6.
Governing Law. This Supplemental Indenture shall be governed by, and construed in accordance with, the laws
of the State of New York.
7.
No Recourse Against Others. No director, officer, employee, manager, incorporator or holder of any Equity Interests
in any New Guarantor or any direct or indirect parent corporation, as such, shall have any liability for any obligations of any New
Guarantor under the Notes or the Indenture or this Supplemental Indenture or for any claim based on, in respect of, or by reason of,
such obligations or their creation. Each holder of Notes by accepting a Note waives and releases all such liability. The waiver and
release are part of the consideration for issuance of the Notes.
8.
Trustee Makes No Representation. The Trustee makes no representation as to the validity or sufficiency of this
Supplemental Indenture.
9.
Counterparts. The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be
an original, but all of them together represent the same agreement.
10.
Effect of Headings. The Section headings herein are for convenience only and shall not effect the construction
thereof.
[Signature Pages Follow]
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed as of the date first
above written.
CAESARS ENTERTAINMENT, INC.,
as Issuer
By: /s/ Edmund L. Quatmann, Jr.
Name: Edmund L. Quatmann, Jr.
Title: Secretary
[Signature Page to Third Supplemental Indenture – CEI 8.125% Senior Notes due 2027]
AZTAR RIVERBOAT HOLDING COMPANY, LLC
BLACK HAWK HOLDINGS, L.L.C.
CAESARS DUBAI, LLC
CAESARS GROWTH PARTNERS, LLC
CAESARS HOLDINGS, INC.
CAESARS HOSPITALITY, LLC
CAESARS INTERNATIONAL HOSPITALITY, LLC
CAESARS PARLAY HOLDING, LLC
CCR NEWCO, LLC
CCSC/BLACKHAWK, INC.
CIE GROWTH, LLC
CIRCUS AND ELDORADO JOINT VENTURE, LLC
CRS ANNEX, LLC
EASTSIDE CONVENTION CENTER, LLC
ELDO FIT, LLC
ELDORADO HOLDCO LLC
ELDORADO LIMITED LIABILITY COMPANY
ELDORADO SHREVEPORT #1, LLC
ELDORADO SHREVEPORT #2, LLC
ELGIN HOLDINGS I LLC
ELGIN HOLDINGS II LLC
ELGIN RIVERBOAT RESORT–RIVERBOAT CASINO
GB INVESTOR, LLC
By: /s/ Bret Yunker
Name: Bret Yunker
Title: Chief Financial Officer
[Signature Page to Third Supplemental Indenture – CEI 8.125% Senior Notes due 2027]
IC HOLDINGS COLORADO, INC.
IOC - BLACK HAWK DISTRIBUTION COMPANY, LLC
IOC - BOONVILLE, INC.
IOC - LULA, INC.
IOC BLACK HAWK COUNTY, INC.
IOC HOLDINGS, L.L.C.
IOC-VICKSBURG, INC.
IOC-VICKSBURG, L.L.C.
ISLE OF CAPRI BETTENDORF, L.C.
ISLE OF CAPRI BLACK HAWK, L.L.C.
ISLE OF CAPRI CASINOS LLC
LIGHTHOUSE POINT, LLC
MTR GAMING GROUP, INC.
NEW JAZZ ENTERPRISES, L.L.C.
NEW TROPICANA HOLDINGS, INC.
NEW TROPICANA OPCO, INC.
OLD PID, INC.
POMPANO PARK HOLDINGS, L.L.C.
PPI DEVELOPMENT HOLDINGS LLC
PPI DEVELOPMENT LLC
PPI, INC.
ROMULUS RISK AND INSURANCE COMPANY, INC.
SCIOTO DOWNS, INC.
ST. CHARLES GAMING COMPANY, L.L.C.
TEI (ES), LLC
TEI (ST. LOUIS RE), LLC
TEI (STLH), LLC
TROPICANA ENTERTAINMENT INC.
TROPICANA LAUGHLIN, LLC
TROPICANA ST. LOUIS LLC
VEGAS DEVELOPMENT LAND OWNER LLC
By: /s/ Bret Yunker
Name: Bret Yunker
Title: Chief Financial Officer
TROPICANA ATLANTIC CITY CORP.
CAESARS INTERACTIVE ENTERTAINMENT NEW JERSEY, LLC
By: /s/ Edmund L. Quatmann, Jr.
Name: Edmund L. Quatmann, Jr.
Title: Secretary
[Signature Page to Third Supplemental Indenture – CEI 8.125% Senior Notes due 2027]
AMERICAN WAGERING, INC.
AWI GAMING, INC.
AWI MANUFACTURING, INC.
BRANDYWINE BOOKMAKING LLC
BW SUB CO.
CAESARS CONVENTION CENTER OWNER, LLC
COMPUTERIZED BOOKMAKING SYSTEMS, INC.
DIGITAL HOLDCO LLC
WH NV III, LLC
WHUS TECHCO, INC.
WILLIAM HILL DFSB, INC.
WILLIAM HILL NEVADA I
WILLIAM HILL NEVADA II
WILLIAM HILL NEW JERSEY, INC.
WILLIAM HILL U.S. HOLDCO, INC.
By: /s/ Bret Yunker
Name: Bret Yunker
Title: Chief Financial Officer
[Signature Page to Third Supplemental Indenture – CEI 8.125% Senior Notes due 2027]
U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION,
as Trustee
Name: Laurel Casasanta Title: Vice President
By: /s/ Laurel Casasanta
[Signature Page to Third Supplemental Indenture – CEI 8.125% Senior Notes due 2027]
Exhibit 4.15
SECOND SUPPLEMENTAL INDENTURE
THIS SECOND SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”), dated as of November 3, 2023, among
AMERICAN WAGERING, INC., AWI GAMING, INC., AWI MANUFACTURING, INC., BRANDYWINE BOOKMAKING
LLC, BW SUB CO., CAESARS CONVENTION CENTER OWNER, LLC, CAESARS INTERACTIVE ENTERTAINMENT
NEW JERSEY, LLC, COMPUTERIZED BOOKMAKING SYSTEMS, INC., DIGITAL HOLDCO LLC, WH NV III, LLC,
WHUS TECHCO, INC., WILLIAM HILL DFSB, INC., WILLIAM HILL NEVADA I, WILLIAM HILL NEVADA II, WILLIAM
HILL NEW JERSEY, INC. and WILLIAM HILL U.S. HOLDCO, INC. (each, a “New Guarantor”), CAESARS
ENTERTAINMENT, INC., a Delaware corporation (the “Issuer”), the other Subsidiary Guarantors (as defined in the Indenture
referred to herein), and U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, as trustee (as successor-in-interest to U.S.
Bank National Association, and in such capacity, the “Trustee”).
W I T N E S S E T H :
WHEREAS, the Issuer has heretofore executed and delivered to the Trustee an indenture, dated as of September 24, 2021,
providing for the issuance of 4.625% Senior Notes due 2029 (the “Notes”), initially in the aggregate principal amount of
$1,200,000,000, as supplemented by that certain supplemental indenture, dated as of October 4, 2022, by and among the Issuer, the
Subsidiary Guarantors party thereto, and the Trustee (as further amended, supplemented or otherwise modified, the “Indenture”);
WHEREAS, Section 4.11 of the Indenture provides that under certain circumstances the Issuer is required to cause each
New Guarantor to execute and deliver to the Trustee a supplemental indenture pursuant to which each New Guarantor shall
unconditionally guarantee all the Issuer’s Obligations under the Notes and the Indenture pursuant to a Note Guarantee on the terms
and conditions set forth herein; and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee, the Issuer and the Subsidiary Guarantors, if any, are
authorized to execute and deliver this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which
is hereby acknowledged, each New Guarantor, the Issuer, the Subsidiary Guarantors and the Trustee mutually covenant and agree
for the equal and ratable benefit of the holders of the Notes as follows:
1.
Defined Terms. As used in this Supplemental Indenture, terms defined in the Indenture or in the preamble or recital
hereto are used herein as therein defined, except that the term “holders” in this Supplemental Indenture shall refer to the term
“holders” as defined in the Indenture and the Trustee acting on behalf of and for the benefit of such holders. The words “herein,”
“hereof” and “hereby” and other words of similar import used in this Supplemental Indenture refer to this Supplemental Indenture
as a whole and not to any particular section hereof.
2.
Agreement to Guarantee. Each New Guarantor hereby agrees, jointly and severally with all existing guarantors (if
any), to unconditionally guarantee the Issuer’s Obligations under the Notes and the Indenture on the terms and subject to the
conditions set forth in Article XII of the Indenture and to be bound by all other applicable provisions of the Indenture and the
Notes and to perform all of the obligations and agreements of a guarantor under the Indenture. From and after the date hereof, all
references in the Indenture to the “Guarantors” and the “Subsidiary Guarantors” shall include the New Guarantors.
3.
Notices. All notices or other communications to each New Guarantor shall be given at the following address:
Caesars Entertainment, Inc., 100 West Liberty Street, 12 Floor, Reno, Nevada 89501, Facsimile: (775) 337-9218 Attn: Chief
Financial Officer.
4.
Execution and Delivery. Each New Guarantor agrees that its Note Guarantee shall remain in full force and effect
th
notwithstanding the absence of the endorsement of any notation of such Note Guarantee.
5.
Ratification of Indenture; Supplemental Indentures Part of Indenture. Except as expressly amended hereby, the
Indenture is in all respects ratified and confirmed and all the terms, conditions and
provisions thereof shall remain in full force and effect. This Supplemental Indenture shall form a part of the Indenture for all
purposes, and every holder of Notes heretofore or hereafter authenticated and delivered shall be bound hereby.
6.
Governing Law. This Supplemental Indenture shall be governed by, and construed in accordance with, the laws
of the State of New York.
7.
No Recourse Against Others. No director, officer, employee, manager, incorporator or holder of any Equity Interests
in any New Guarantor or any direct or indirect parent corporation, as such, shall have any liability for any obligations of any New
Guarantor under the Notes or the Indenture or this Supplemental Indenture or for any claim based on, in respect of, or by reason of,
such obligations or their creation. Each holder of Notes by accepting a Note waives and releases all such liability. The waiver and
release are part of the consideration for issuance of the Notes.
8.
Trustee Makes No Representation. The Trustee makes no representation as to the validity or sufficiency of this
Supplemental Indenture.
9.
Counterparts. The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be
an original, but all of them together represent the same agreement.
10.
Effect of Headings. The Section headings herein are for convenience only and shall not effect the construction
thereof.
[Signature Pages Follow]
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed as of the date first
above written.
CAESARS ENTERTAINMENT, INC.,
as Issuer
By: /s/ Edmund L. Quatmann, Jr.
Name: Edmund L. Quatmann, Jr.
Title: Executive Vice President, Chief Legal Officer and
Secretary
[Signature Page to Second Supplemental Indenture – CEI 4.625% Senior Notes due 2029]
AZTAR RIVERBOAT HOLDING COMPANY, LLC
BLACK HAWK HOLDINGS, L.L.C.
CAESARS DUBAI, LLC
CAESARS GROWTH PARTNERS, LLC
CAESARS HOLDINGS, INC.
CAESARS HOSPITALITY, LLC
CAESARS INTERNATIONAL HOSPITALITY, LLC
CAESARS PARLAY HOLDING, LLC
CCR NEWCO, LLC
CCSC/BLACKHAWK, INC.
CIE GROWTH, LLC
CIRCUS AND ELDORADO JOINT VENTURE, LLC
CRS ANNEX, LLC
EASTSIDE CONVENTION CENTER, LLC
ELDO FIT, LLC
ELDORADO HOLDCO LLC
ELDORADO LIMITED LIABILITY COMPANY
ELDORADO SHREVEPORT #1, LLC
ELDORADO SHREVEPORT #2, LLC
ELGIN HOLDINGS I LLC
ELGIN HOLDINGS II LLC
ELGIN RIVERBOAT RESORT–RIVERBOAT CASINO
GB INVESTOR, LLC
By: /s/ Bret Yunker
Name: Bret Yunker
Title: Chief Financial Officer
[Signature Page to Second Supplemental Indenture – CEI 4.625% Senior Notes due 2029]
IC HOLDINGS COLORADO, INC.
IOC - BLACK HAWK DISTRIBUTION COMPANY, LLC
IOC - BOONVILLE, INC.
IOC - LULA, INC.
IOC BLACK HAWK COUNTY, INC.
IOC HOLDINGS, L.L.C.
IOC-VICKSBURG, INC.
IOC-VICKSBURG, L.L.C.
ISLE OF CAPRI BETTENDORF, L.C.
ISLE OF CAPRI BLACK HAWK, L.L.C.
ISLE OF CAPRI CASINOS LLC
LIGHTHOUSE POINT, LLC
MTR GAMING GROUP, INC.
NEW JAZZ ENTERPRISES, L.L.C.
NEW TROPICANA HOLDINGS, INC.
NEW TROPICANA OPCO, INC.
OLD PID, INC.
POMPANO PARK HOLDINGS, L.L.C.
PPI DEVELOPMENT HOLDINGS LLC
PPI DEVELOPMENT LLC
PPI, INC.
ROMULUS RISK AND INSURANCE COMPANY, INC.
SCIOTO DOWNS, INC.
ST. CHARLES GAMING COMPANY, L.L.C.
TEI (ES), LLC
TEI (ST. LOUIS RE), LLC
TEI (STLH), LLC
TROPICANA ENTERTAINMENT INC.
TROPICANA LAUGHLIN, LLC
TROPICANA ST. LOUIS LLC
VEGAS DEVELOPMENT LAND OWNER LLC
By: /s/ Bret Yunker
Name: Bret Yunker
Title: Chief Financial Officer
TROPICANA ATLANTIC CITY CORP.
CAESARS INTERACTIVE ENTERTAINMENT NEW JERSEY, LLC
By: /s/ Edmund L. Quatmann, Jr.
Name: Edmund L. Quatmann, Jr.
Title: Secretary
[Signature Page to Second Supplemental Indenture – CEI 4.625% Senior Notes due 2029]
AMERICAN WAGERING, INC.
AWI GAMING, INC.
AWI MANUFACTURING, INC.
BRANDYWINE BOOKMAKING LLC
BW SUB CO.
CAESARS CONVENTION CENTER OWNER, LLC
COMPUTERIZED BOOKMAKING SYSTEMS, INC.
DIGITAL HOLDCO LLC
WH NV III, LLC
WHUS TECHCO, INC.
WILLIAM HILL DFSB, INC.
WILLIAM HILL NEVADA I
WILLIAM HILL NEVADA II
WILLIAM HILL NEW JERSEY, INC.
WILLIAM HILL U.S. HOLDCO, INC.
By: /s/ Bret Yunker
Name: Bret Yunker
Title: Chief Financial Officer
[Signature Page to Second Supplemental Indenture – CEI 4.625% Senior Notes due 2029]
U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION,
as Trustee
Name: Laurel Casasanta Title: Vice President
By: /s/ Laurel Casasanta
[Signature Page to Second Supplemental Indenture – CEI 4.625% Senior Notes due 2029]
Exhibit 4.18
SECOND SUPPLEMENTAL INDENTURE
THIS SECOND SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”), dated as of November 3, 2023, among
AMERICAN WAGERING, INC., AWI GAMING, INC., AWI MANUFACTURING, INC., BRANDYWINE BOOKMAKING LLC, BW
SUB CO., CAESARS CONVENTION CENTER OWNER, LLC, CAESARS INTERACTIVE ENTERTAINMENT NEW JERSEY, LLC,
COMPUTERIZED BOOKMAKING SYSTEMS, INC., DIGITAL HOLDCO LLC, WH NV III, LLC, WHUS TECHCO, INC.,
WILLIAM HILL DFSB, INC., WILLIAM HILL NEVADA I, WILLIAM HILL NEVADA II, WILLIAM HILL NEW JERSEY, INC. and
WILLIAM HILL U.S. HOLDCO, INC. (each, a “New Guarantor”), CAESARS ENTERTAINMENT, INC., a Delaware corporation (the
“Issuer”), the other Subsidiary Guarantors (as defined in the Indenture referred to herein), U.S. BANK TRUST COMPANY, NATIONAL
ASSOCIATION, as trustee (in such capacity, the “Trustee”), and U.S. BANK NATIONAL ASSOCIATION, as collateral agent (in such
capacity, the “Collateral Agent”).
W I T N E S S E T H :
WHEREAS, the Issuer has heretofore executed and delivered to the Trustee and the Collateral Agent an indenture, dated as of
February 6, 2023, providing for the issuance of 7.000% Senior Secured Notes due 2030 (the “Notes”), initially in the aggregate principal
amount of $2,000,000,000, as supplemented by that certain supplemental indenture, dated as of March 24, 2023, by and among the Issuer,
the Subsidiary Guarantors party thereto, the Trustee and the Collateral Agent (as further amended, supplemented or otherwise modified,
the “Indenture”);
WHEREAS, Section 4.11 of the Indenture provides that under certain circumstances the Issuer is required to cause each New
Guarantor to execute and deliver to the Trustee a supplemental indenture pursuant to which each New Guarantor shall unconditionally
guarantee all the Issuer’s Obligations under the Notes and the Indenture pursuant to a Note Guarantee on the terms and conditions set forth
herein; and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee, the Collateral Agent, the Issuer and the Subsidiary Guarantors,
if any, are authorized to execute and deliver this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is
hereby acknowledged, each New Guarantor, the Issuer, the Subsidiary Guarantors, the Trustee, and the Collateral Agent mutually covenant
and agree for the equal and ratable benefit of the holders of the Notes as follows:
1.
Defined Terms. As used in this Supplemental Indenture, terms defined in the Indenture or in the preamble or recital hereto
are used herein as therein defined, except that the term “holders” in this Supplemental Indenture shall refer to the term “holders” as
defined in the Indenture and the Trustee acting on behalf of and for the benefit of such holders. The words “herein,” “hereof” and “hereby”
and other words of similar import used in this Supplemental Indenture refer to this Supplemental Indenture as a whole and not to any
particular section hereof.
2.
Agreement to Guarantee. Each New Guarantor hereby agrees, jointly and severally with all existing guarantors (if any), to
unconditionally guarantee the Issuer’s Obligations under the Notes and the Indenture on the terms and subject to the conditions set forth in
Article XIII of the Indenture and to be bound by all other applicable provisions of the Indenture and the Notes and to perform all of the
obligations and agreements of a guarantor under the Indenture. From and after the date hereof, all references in the Indenture to the
“Guarantors” and the “Subsidiary Guarantors” shall include the New Guarantors.
3.
Notices. All notices or other communications to each New Guarantor shall be given at the following address: Caesars
Entertainment, Inc., 100 West Liberty Street, 12 Floor, Reno, Nevada 89501, Facsimile: (775) 337-9218 Attn: Chief Financial Officer.
th
4.
Execution and Delivery. Each New Guarantor agrees that its Note Guarantee shall remain in full force and effect
notwithstanding the absence of the endorsement of any notation of such Note Guarantee.
5.
Ratification of Indenture; Supplemental Indentures Part of Indenture. Except as expressly amended hereby, the Indenture is
in all respects ratified and confirmed and all the terms, conditions and provisions thereof shall remain in full force and effect. This
Supplemental Indenture shall form a part of the Indenture for all purposes, and every holder of Notes heretofore or hereafter authenticated
and delivered shall be bound hereby.
6.
of New York.
Governing Law. This Supplemental Indenture shall be governed by, and construed in accordance with, the laws of the State
7.
No Recourse Against Others. No director, officer, employee, manager, incorporator or holder of any Equity Interests in any
New Guarantor or any direct or indirect parent corporation, as such, shall have any liability for any obligations of any New Guarantor
under the Notes or the Indenture or this Supplemental Indenture or for any claim based on, in respect of, or by reason of, such obligations
or their creation. Each holder of Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes.
sufficiency of this Supplemental Indenture.
Trustee Makes No Representation. The Trustee and the Collateral Agent make no representation as to the validity or
original, but all of them together represent the same agreement.
Counterparts. The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an
8.
9.
10.
Effect of Headings. The Section headings herein are for convenience only and shall not effect the construction thereof.
[Signature Pages Follow]
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed as of the date first above written.
CAESARS ENTERTAINMENT, INC.,
as Issuer
By: /s/ Edmund L. Quatmann, Jr.
Name: Edmund L. Quatmann, Jr.
Title: Executive Vice President, Chief Legal Officer and
Secretary
[Signature Page to Second Supplemental Indenture – CEI 7.00% Senior Secured Notes due 2030]
AZTAR RIVERBOAT HOLDING COMPANY, LLC
BLACK HAWK HOLDINGS, L.L.C.
CAESARS DUBAI, LLC
CAESARS GROWTH PARTNERS, LLC
CAESARS HOLDINGS, INC.
CAESARS HOSPITALITY, LLC
CAESARS INTERNATIONAL HOSPITALITY, LLC
CAESARS PARLAY HOLDING, LLC
CCR NEWCO, LLC
CCSC/BLACKHAWK, INC.
CIE GROWTH, LLC
CIRCUS AND ELDORADO JOINT VENTURE, LLC
CRS ANNEX, LLC
EASTSIDE CONVENTION CENTER, LLC
ELDO FIT, LLC
ELDORADO HOLDCO LLC
ELDORADO LIMITED LIABILITY COMPANY
ELDORADO SHREVEPORT #1, LLC
ELDORADO SHREVEPORT #2, LLC
ELGIN HOLDINGS I LLC
ELGIN HOLDINGS II LLC
ELGIN RIVERBOAT RESORT–RIVERBOAT CASINO
GB INVESTOR, LLC
By: /s/ Bret Yunker
Name: Bret Yunker
Title: Chief Financial Officer
[Signature Page to Second Supplemental Indenture – CEI 7.00% Senior Secured Notes due 2030]
IC HOLDINGS COLORADO, INC.
IOC - BLACK HAWK DISTRIBUTION COMPANY, LLC
IOC - BOONVILLE, INC.
IOC - LULA, INC.
IOC BLACK HAWK COUNTY, INC.
IOC HOLDINGS, L.L.C.
IOC-VICKSBURG, INC.
IOC-VICKSBURG, L.L.C.
ISLE OF CAPRI BETTENDORF, L.C.
ISLE OF CAPRI BLACK HAWK, L.L.C.
ISLE OF CAPRI CASINOS LLC
LIGHTHOUSE POINT, LLC
MTR GAMING GROUP, INC.
NEW JAZZ ENTERPRISES, L.L.C.
NEW TROPICANA HOLDINGS, INC.
NEW TROPICANA OPCO, INC.
OLD PID, INC.
POMPANO PARK HOLDINGS, L.L.C.
PPI DEVELOPMENT HOLDINGS LLC
PPI DEVELOPMENT LLC
PPI, INC.
ROMULUS RISK AND INSURANCE COMPANY, INC.
SCIOTO DOWNS, INC.
ST. CHARLES GAMING COMPANY, L.L.C.
TEI (ES), LLC
TEI (ST. LOUIS RE), LLC
TEI (STLH), LLC
TROPICANA ENTERTAINMENT INC.
TROPICANA LAUGHLIN, LLC
TROPICANA ST. LOUIS LLC
VEGAS DEVELOPMENT LAND OWNER LLC
By: /s/ Bret Yunker
Name: Bret Yunker
Title: Chief Financial Officer
TROPICANA ATLANTIC CITY CORP.
CAESARS INTERACTIVE ENTERTAINMENT NEW JERSEY, LLC
By: /s/ Edmund L. Quatmann, Jr.
Name: Edmund L. Quatmann, Jr.
Title: Secretary
[Signature Page to Second Supplemental Indenture – CEI 7.00% Senior Secured Notes due 2030]
AMERICAN WAGERING, INC.
AWI GAMING, INC.
AWI MANUFACTURING, INC.
BRANDYWINE BOOKMAKING LLC
BW SUB CO.
CAESARS CONVENTION CENTER OWNER, LLC
COMPUTERIZED BOOKMAKING SYSTEMS, INC.
DIGITAL HOLDCO LLC
WH NV III, LLC
WHUS TECHCO, INC.
WILLIAM HILL DFSB, INC.
WILLIAM HILL NEVADA I
WILLIAM HILL NEVADA II
WILLIAM HILL NEW JERSEY, INC.
WILLIAM HILL U.S. HOLDCO, INC.
By: /s/ Bret Yunker
Name: Bret Yunker
Title: Chief Financial Officer
[Signature Page to Second Supplemental Indenture – CEI 7.00% Senior Secured Notes due 2030]
U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION,
as Trustee
Name: Laurel Casasanta
By: /s/ Laurel Casasanta
Title: Vice President
U.S. BANK NATIONAL ASSOCIATION,
as Collateral Agent
Name: Laurel Casasanta
By: /s/ Laurel Casasanta
Title: Vice President
[Signature Page to Second Supplemental Indenture – CEI 7.00% Senior Secured Notes due 2030]
Exhibit 10.49
EXECUTION VERSION
FIRST AMENDMENT
TO THE
AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT
This First Amendment to the Amended and Restated Executive Employment Agreement (the “Amendment”) is entered
into as of January 26, 2024 (the “Effective Date”), by and between Caesars Enterprise Services, LLC, a Delaware limited liability
company (the “Company”), and Bret Yunker (the “Executive”).
RECITALS
WHEREAS, the Executive and the Company desire to amend the Amended and Restated Executive Employment
Agreement, by and between Executive and the Company, dated as of August 10, 2022 (the “2022 Agreement”), as provided for
herein;
WHEREAS, capitalized terms used but not otherwise defined herein shall have the meanings assigned to such terms in
the 2022 Agreement; and
NOW, THEREFORE, in consideration and exchange for the foregoing, the parties hereto hereby amend the 2022
Agreement as follows, effective as of the date first written above:
1. The first sentence of Article 2 of the 2022 Agreement is hereby amended and restated in its entirety as follows:
The Term of Employment shall begin on the Effective Date, and shall extend until January 1, 2027 (the “Term”),
with automatic one (1) year renewals (each a “Renewal Term”) upon the expiration of the Term or the current
Renewal Term, as applicable, unless either Party notifies the other at least three (3) months before the scheduled
expiration date of the Term or Renewal Term, as applicable, that this Agreement is not to renew; provided that in
the event of a Change in Control the Term or then current Renewal Term shall automatically be extended an
additional two (2) years from the date of consummation of such Change in Control (and such two (2) year
extension period shall be a “Renewal Term” for purposes of this Agreement.
2. The first sentence of Article 4 of the 2022 Agreement is hereby amended and restated in its entirety as follows:
Effective as of January 1, 2024, the Executive shall be paid an annualized Base Salary, payable in accordance with
the regular payroll practices of the Company, of not less than one million two hundred thousand dollars
($1,200,000).
3. Article 9 of the 2022 Agreement is hereby amended and restated in its entirety as follows:
(a)
Pursuant to the Prior Agreement, the Executive received a one-time special signing bonus in an amount
equal to one million five hundred thousand dollars ($1,500,000) (the “Signing Bonus”). If Executive’s
employment with the Company terminates due to Executive’s resignation without Good Reason or by the
Company for Cause, prior to January 1, 2025, the Executive agrees to repay a pro rata portion of the Signing
Bonus to the Company, which shall be calculated based on the number of full calendar months remaining from the
Date of Termination until January 1, 2025, divided by thirty-six (36) months (without reduction for any federal,
state or local income and employment tax liability paid by the Executive).
(b)
Subject to the approval of the Compensation Committee, the Executive will be granted a one-time sign-on
award of 57,754 restricted stock units (“RSUs”). The RSUs will vest in equal one-third (1/3) installments on each
of the first three (3) anniversaries of January 1, 2024 (i.e., January 1, 2025, January 1, 2026, and January 1, 2027),
subject to the Executive’s continued service on each applicable vesting date. The sign-on RSU award will be
subject to the terms, conditions and restrictions specified in the Parent’s Amended & Restated 2015 Equity
Incentive Plan (as the same may be amended from time to time) and award agreement.
4. Article 31 of the 2022 Agreement is hereby amended and restated in its entirety as follows:
Notwithstanding any other provisions in this Agreement to the contrary, any incentive-based compensation, or any
other compensation paid to the Executive pursuant to this Agreement or any other agreement or arrangement with
the Parent, or any of its Subsidiaries or affiliates (including the Company), is subject to the Parent’s Policy for
Recovery of Erroneously Awarded Compensation, effective as of December 1, 2023 (the “Clawback Policy”), and
any amendments thereto (or any other policy adopted by the Parent or any of its Subsidiaries or affiliates
(including the Company) pursuant to any such law, government regulation or stock exchange listing requirement).
Executive acknowledges and agrees that Executive has no right to indemnification, insurance payments or other
reimbursement by or from the Parent or any of its Subsidiaries or affiliates (including the Company) for any
compensation that is subject to recoupment and/or forfeiture under the Clawback Policy.
5. Except as expressly amended by this Amendment, all of the terms of the 2022 Agreement shall remain in full force and effect.
2
6. This Amendment may be executed in any number of counterparts, each of which shall be considered an original instrument,
but all such counterparts shall together constitute one and the same agreement.
[Signature Page Follows]
3
IN WITNESS WHEREOF, the parties hereto have executed this Amendment on the date and year first above written.
Caesars Enterprise Services, LLC
By:
Name:
Title:
/s/ Thomas R. Reeg
Thomas R. Reeg
Chief Executive Officer
Executive
/s/ Bret Yunker
Name: Bret Yunker
4
Exhibit 10.50
EXECUTION VERSION
FIRST AMENDMENT
TO THE
AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT
This First Amendment to the Amended and Restated Executive Employment Agreement (the “Amendment”) is entered
into as of January 26, 2024 (the “Effective Date”), by and between Caesars Enterprise Services, LLC, a Delaware limited liability
company (the “Company”), and Stephanie Lepori (the “Executive”).
RECITALS
WHEREAS, the Executive and the Company desire to amend the Amended and Restated Executive Employment
Agreement, by and between Executive and the Company, dated as of August 10, 2022 (the “2022 Agreement”), as provided for
herein;
WHEREAS, capitalized terms used but not otherwise defined herein shall have the meanings assigned to such terms in
the 2022 Agreement; and
NOW, THEREFORE, in consideration and exchange for the foregoing, the parties hereto hereby amend the 2022
Agreement as follows, effective as of the date first written above:
1. The first sentence of Article 2 of the 2022 Agreement is hereby amended and restated in its entirety as follows:
The Term of Employment shall begin on the Effective Date, and shall extend until January 1, 2027 (the “Term”),
with automatic one (1) year renewals (each a “Renewal Term”) upon the expiration of the Term or the current
Renewal Term, as applicable, unless either Party notifies the other at least three (3) months before the scheduled
expiration date of the Term or Renewal Term, as applicable, that this Agreement is not to renew; provided that in
the event of a Change in Control the Term or then current Renewal Term shall automatically be extended an
additional two (2) years from the date of consummation of such Change in Control (and such two (2) year
extension period shall be a “Renewal Term” for purposes of this Agreement.
2. The first sentence of Article 4 of the 2022 Agreement is hereby amended and restated in its entirety as follows:
Effective as of January 1, 2024, the Executive shall be paid an annualized Base Salary, payable in accordance with
the regular payroll practices of the Company, of not less than seven hundred twenty-five thousand dollars
($725,000).
3. Article 6 of the 2022 Agreement is hereby amended and restated in its entirety as follows:
The Executive shall be eligible to participate in the Parent’s long-term incentive plan on terms commensurate with
her position and duties, as determined by the Compensation Committee in its discretion. Program design,
including but not limited to performance measures and weighting shall be determined by the Compensation
Committee in its discretion. Effective as of January 1, 2024, the Executive’s target annual long-term incentive
award opportunity will be equal to two hundred fifty percent (250%) of the Executive’s Base Salary.
4. Article 9 of the 2022 Agreement is hereby amended and restated in its entirety as follows:
(a)
Pursuant to the Prior Agreement, the Executive received a one-time special signing bonus in an amount
equal to one million dollars ($1,000,000) (the “Signing Bonus”). If Executive’s employment with the Company
terminates due to Executive’s resignation without Good Reason or by the Company for Cause, prior to January 1,
2025, the Executive agrees to repay a pro rata portion of the Signing Bonus to the Company, which shall be
calculated based on the number of full calendar months remaining from the Date of Termination until January 1,
2025, divided by thirty-six (36) months (without reduction for any federal, state or local income and employment
tax liability paid by the Executive).
(b)
Subject to the approval of the Compensation Committee, the Executive will be granted a one-time sign-on
award of 14,750 restricted stock units (“RSUs”). The RSUs will vest in equal one-third (1/3) installments on each
of the first three (3) anniversaries of January 1, 2024 (i.e., January 1, 2025, January 1, 2026, and January 1, 2027),
subject to the Executive’s continued service on each applicable vesting date. The sign-on RSU award will be
subject to the terms, conditions and restrictions specified in the Parent’s Amended & Restated 2015 Equity
Incentive Plan (as the same may be amended from time to time) and award agreement.
5. Article 31 of the 2022 Agreement is hereby amended and restated in its entirety as follows:
Notwithstanding any other provisions in this Agreement to the contrary, any incentive-based compensation, or any
other compensation paid to the Executive pursuant to this Agreement or any other agreement or arrangement with
the Parent, or any of its Subsidiaries or affiliates (including the Company), is subject to the Parent’s Policy for
Recovery of Erroneously Awarded Compensation, effective as of December 1, 2023 (the “Clawback Policy”), and
any amendments thereto (or any other policy adopted by the Parent or any of its Subsidiaries or affiliates
(including the Company) pursuant to any such law, government regulation or stock exchange listing requirement).
Executive acknowledges and agrees that Executive has no right to indemnification, insurance payments or other
2
reimbursement by or from the Parent or any of its Subsidiaries or affiliates (including the Company) for any
compensation that is subject to recoupment and/or forfeiture under the Clawback Policy.
6. Except as expressly amended by this Amendment, all of the terms of the 2022 Agreement shall remain in full force and effect.
7. This Amendment may be executed in any number of counterparts, each of which shall be considered an original instrument,
but all such counterparts shall together constitute one and the same agreement.
[Signature Page Follows]
3
IN WITNESS WHEREOF, the parties hereto have executed this Amendment on the date and year first above written.
Caesars Enterprise Services, LLC
By:
Name:
Title:
/s/ Thomas R. Reeg
Thomas R. Reeg
Chief Executive Officer
Executive
/s/ Stephanie D. Lepori
Name: Stephanie D. Lepori
4
Exhibit 10.51
EXECUTION VERSION
FIRST AMENDMENT
TO THE
AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT
This First Amendment to the Amended and Restated Executive Employment Agreement (the “Amendment”) is entered
into as of January 26, 2024 (the “Effective Date”), by and between Caesars Enterprise Services, LLC, a Delaware limited liability
company (the “Company”), and Thomas R. Reeg (the “Executive”).
RECITALS
WHEREAS, the Executive and the Company desire to amend the Amended and Restated Executive Employment
Agreement, by and between Executive and the Company, dated as of August 10, 2022 (the “2022 Agreement”), as provided for
herein;
WHEREAS, capitalized terms used but not otherwise defined herein shall have the meanings assigned to such terms in
the 2022 Agreement; and
NOW, THEREFORE, in consideration and exchange for the foregoing, the parties hereto hereby amend the 2022
Agreement as follows, effective as of the date first written above:
1. The first sentence of Article 2 of the 2022 Agreement is hereby amended and restated in its entirety as follows:
The Term of Employment shall begin on the Effective Date, and shall extend until January 1, 2027 (the “Term”),
with automatic one (1) year renewals (each a “Renewal Term”) upon the expiration of the Term or the current
Renewal Term, as applicable, unless either Party notifies the other at least three (3) months before the scheduled
expiration date of the Term or Renewal Term, as applicable, that this Agreement is not to renew; provided that in
the event of a Change in Control the Term or then current Renewal Term shall automatically be extended an
additional two (2) years from the date of consummation of such Change in Control (and such two (2) year
extension period shall be a “Renewal Term” for purposes of this Agreement.
2. Article 6 of the 2022 Agreement is hereby amended and restated in its entirety as follows:
The Executive shall be eligible to participate in the Parent’s long-term incentive plan on terms commensurate with
his position and duties, as determined by the Compensation Committee in its discretion. Program design, including
but not limited to performance measures and weighting shall be determined by the Compensation Committee in its
discretion. Effective as of January 1, 2024, the
Executive’s target annual long-term incentive award opportunity will be equal to four hundred seventy-five
(475%) of the Executive’s Base Salary.
3. Article 9 of the 2022 Agreement is hereby amended and restated in its entirety as follows:
(a)
Pursuant to the Prior Agreement, the Executive received a one-time special signing bonus in an amount
equal to five million dollars ($5,000,000) (the “Signing Bonus”). If Executive’s employment with the Company
terminates due to Executive’s resignation without Good Reason or by the Company for Cause, prior to January 1,
2025, the Executive agrees to repay a pro rata portion of the Signing Bonus to the Company, which shall be
calculated based on the number of full calendar months remaining from the Date of Termination until January 1,
2025, divided by thirty-six (36) months (without reduction for any federal, state or local income and employment
tax liability paid by the Executive).
(b)
Subject to the approval of the Compensation Committee, the Executive will be granted a one-time sign-on
award of 70,126 restricted stock units (“RSUs”). The RSUs will vest in equal one-third (1/3) installments on each
of the first three (3) anniversaries of January 1, 2024 (i.e., January 1, 2025, January 1, 2026, and January 1, 2027),
subject to the Executive’s continued service on each applicable vesting date. The sign-on RSU award will be
subject to the terms, conditions and restrictions specified in the Parent’s Amended & Restated 2015 Equity
Incentive Plan (as the same may be amended from time to time) and award agreement.
4. Article 31 of the 2022 Agreement is hereby amended and restated in its entirety as follows:
Notwithstanding any other provisions in this Agreement to the contrary, any incentive-based compensation, or any
other compensation paid to the Executive pursuant to this Agreement or any other agreement or arrangement with
the Parent, or any of its Subsidiaries or affiliates (including the Company), is subject to the Parent’s Policy for
Recovery of Erroneously Awarded Compensation, effective as of December 1, 2023 (the “Clawback Policy”), and
any amendments thereto (or any other policy adopted by the Parent or any of its Subsidiaries or affiliates
(including the Company) pursuant to any such law, government regulation or stock exchange listing requirement).
Executive acknowledges and agrees that Executive has no right to indemnification, insurance payments or other
reimbursement by or from the Parent or any of its Subsidiaries or affiliates (including the Company) for any
compensation that is subject to recoupment and/or forfeiture under the Clawback Policy.
5. Except as expressly amended by this Amendment, all of the terms of the 2022 Agreement shall remain in full force and effect.
2
6. This Amendment may be executed in any number of counterparts, each of which shall be considered an original instrument,
but all such counterparts shall together constitute one and the same agreement.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties hereto have executed this Amendment on the date and year first above written.
Caesars Enterprise Services, LLC
/s/ Edmund L. Quatmann, Jr.
By:
Name: Edmund L. Quatmann, Jr.
Title:
Chief Legal Officer
Executive
/s/ Thomas R. Reeg
Name: Thomas R. Reeg
3
Exhibit 10.53
EXECUTION VERSION
FIRST AMENDMENT
TO THE
AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT
This First Amendment to the Amended and Restated Executive Employment Agreement (the “Amendment”) is entered
into as of January 26, 2024 (the “Effective Date”), by and between Caesars Enterprise Services, LLC, a Delaware limited liability
company (the “Company”), and Anthony Carano (the “Executive”).
RECITALS
WHEREAS, the Executive and the Company desire to amend the Amended and Restated Executive Employment
Agreement, by and between Executive and the Company, dated as of August 10, 2022 (the “2022 Agreement”), as provided for
herein;
WHEREAS, capitalized terms used but not otherwise defined herein shall have the meanings assigned to such terms in
the 2022 Agreement; and
NOW, THEREFORE, in consideration and exchange for the foregoing, the parties hereto hereby amend the 2022
Agreement as follows, effective as of the date first written above:
1. The first sentence of Article 2 of the 2022 Agreement is hereby amended and restated in its entirety as follows:
The Term of Employment shall begin on the Effective Date, and shall extend until January 1, 2027 (the “Term”),
with automatic one (1) year renewals (each a “Renewal Term”) upon the expiration of the Term or the current
Renewal Term, as applicable, unless either Party notifies the other at least three (3) months before the scheduled
expiration date of the Term or Renewal Term, as applicable, that this Agreement is not to renew; provided that in
the event of a Change in Control the Term or then current Renewal Term shall automatically be extended an
additional two (2) years from the date of consummation of such Change in Control (and such two (2) year
extension period shall be a “Renewal Term” for purposes of this Agreement.
2. Article 6 of the 2022 Agreement is hereby amended and restated in its entirety as follows:
The Executive shall be eligible to participate in the Parent’s long-term incentive plan on terms commensurate with
his position and duties, as determined by the Compensation Committee in its discretion. Program design, including
but not limited to performance measures and weighting shall be determined by the Compensation Committee in its
discretion. Effective as of January 1, 2024, the
Executive’s target annual long-term incentive award opportunity will be equal to three hundred twenty-five
(325%) of the Executive’s Base Salary.
3. Article 9 of the 2022 Agreement is hereby amended and restated in its entirety as follows:
(a)
Pursuant to the Prior Agreement, the Executive received a one-time special signing bonus in an amount
equal to one million five hundred thousand dollars ($1,500,000) (the “Signing Bonus”). If Executive’s
employment with the Company terminates due to Executive’s resignation without Good Reason or by the
Company for Cause, prior to January 1, 2025, the Executive agrees to repay a pro rata portion of the Signing
Bonus to the Company, which shall be calculated based on the number of full calendar months remaining from the
Date of Termination until January 1, 2025, divided by thirty-six (36) months (without reduction for any federal,
state or local income and employment tax liability paid by the Executive).
(b)
Subject to the approval of the Compensation Committee, the Executive will be granted a one-time sign-on
award of 82,509 restricted stock units (“RSUs”). The RSUs will vest in equal one-third (1/3) installments on each
of the first three (3) anniversaries of January 1, 2024 (i.e., January 1, 2025, January 1, 2026, and January 1, 2027),
subject to the Executive’s continued service on each applicable vesting date. The sign-on RSU award will be
subject to the terms, conditions and restrictions specified in the Parent’s Amended & Restated 2015 Equity
Incentive Plan (as the same may be amended from time to time) and award agreement.
4. Article 31 of the 2022 Agreement is hereby amended and restated in its entirety as follows:
Notwithstanding any other provisions in this Agreement to the contrary, any incentive-based compensation, or any
other compensation paid to the Executive pursuant to this Agreement or any other agreement or arrangement with
the Parent, or any of its Subsidiaries or affiliates (including the Company), is subject to the Parent’s Policy for
Recovery of Erroneously Awarded Compensation, effective as of December 1, 2023 (the “Clawback Policy”), and
any amendments thereto (or any other policy adopted by the Parent or any of its Subsidiaries or affiliates
(including the Company) pursuant to any such law, government regulation or stock exchange listing requirement).
Executive acknowledges and agrees that Executive has no right to indemnification, insurance payments or other
reimbursement by or from the Parent or any of its Subsidiaries or affiliates (including the Company) for any
compensation that is subject to recoupment and/or forfeiture under the Clawback Policy.
2
5. Except as expressly amended by this Amendment, all of the terms of the 2022 Agreement shall remain in full force and effect.
6. This Amendment may be executed in any number of counterparts, each of which shall be considered an original instrument,
but all such counterparts shall together constitute one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment on the date and year first above written.
[Signature Page Follows]
Caesars Enterprise Services, LLC
By:
Name:
Title:
/s/ Thomas R. Reeg
Thomas R. Reeg
Chief Executive Officer
Executive
/s/ Anthony Carano
Name: Anthony Carano
3
Exhibit 10.54
EXECUTION VERSION
FIRST AMENDMENT
TO THE
AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT
This First Amendment to the Amended and Restated Executive Employment Agreement (the “Amendment”) is entered
into as of January 26, 2024 (the “Effective Date”), by and between Caesars Enterprise Services, LLC, a Delaware limited liability
company (the “Company”), and Edmund Quatmann (the “Executive”).
RECITALS
WHEREAS, the Executive and the Company desire to amend the Amended and Restated Executive Employment
Agreement, by and between Executive and the Company, dated as of August 10, 2022 (the “2022 Agreement”), as provided for
herein;
WHEREAS, capitalized terms used but not otherwise defined herein shall have the meanings assigned to such terms in
the 2022 Agreement; and
NOW, THEREFORE, in consideration and exchange for the foregoing, the parties hereto hereby amend the 2022
Agreement as follows, effective as of the date first written above:
1. The first sentence of Article 2 of the 2022 Agreement is hereby amended and restated in its entirety as follows:
The Term of Employment shall begin on the Effective Date, and shall extend until January 1, 2027 (the “Term”),
with automatic one (1) year renewals (each a “Renewal Term”) upon the expiration of the Term or the current
Renewal Term, as applicable, unless either Party notifies the other at least three (3) months before the scheduled
expiration date of the Term or Renewal Term, as applicable, that this Agreement is not to renew; provided that in
the event of a Change in Control the Term or then current Renewal Term shall automatically be extended an
additional two (2) years from the date of consummation of such Change in Control (and such two (2) year
extension period shall be a “Renewal Term” for purposes of this Agreement.
2. The first sentence of Article 4 of the 2022 Agreement is hereby amended and restated in its entirety as follows:
Effective as of January 1, 2024, the Executive shall be paid an annualized Base Salary, payable in accordance with
the regular payroll practices of the Company, of not less than eight hundred thousand dollars ($800,000).
3. Article 6 of the 2022 Agreement is hereby amended and restated in its entirety as follows:
The Executive shall be eligible to participate in the Parent’s long-term incentive plan on terms commensurate with
his position and duties, as determined by the Compensation Committee in its discretion. Program design, including
but not limited to performance measures and weighting shall be determined by the Compensation Committee in its
discretion. Effective as of January 1, 2024, the Executive’s target annual long-term incentive award opportunity
will be equal to two hundred fifty percent (250%) of the Executive’s Base Salary.
4. Article 9 of the 2022 Agreement is hereby amended and restated in its entirety as follows:
(a)
Pursuant to the Prior Agreement, the Executive received a one-time special signing bonus in an amount
equal to one million dollars ($1,000,000) (the “Signing Bonus”). If Executive’s employment with the Company
terminates due to Executive’s resignation without Good Reason or by the Company for Cause, prior to January 1,
2025, the Executive agrees to repay a pro rata portion of the Signing Bonus to the Company, which shall be
calculated based on the number of full calendar months remaining from the Date of Termination until January 1,
2025, divided by thirty-six (36) months (without reduction for any federal, state or local income and employment
tax liability paid by the Executive).
(b)
Subject to the approval of the Compensation Committee, the Executive will be granted a one-time sign-on
award of 49,505 restricted stock units (“RSUs”). The RSUs will vest in equal one-third (1/3) installments on each
of the first three (3) anniversaries of January 1, 2024 (i.e., January 1, 2025, January 1, 2026, and January 1, 2027),
subject to the Executive’s continued service on each applicable vesting date. The sign-on RSU award will be
subject to the terms, conditions and restrictions specified in the Parent’s Amended & Restated 2015 Equity
Incentive Plan (as the same may be amended from time to time) and award agreement.
5. Article 31 of the 2022 Agreement is hereby amended and restated in its entirety as follows:
Notwithstanding any other provisions in this Agreement to the contrary, any incentive-based compensation, or any
other compensation paid to the Executive pursuant to this Agreement or any other agreement or arrangement with
the Parent, or any of its Subsidiaries or affiliates (including the Company), is subject to the Parent’s Policy for
Recovery of Erroneously Awarded Compensation, effective as of December 1, 2023 (the “Clawback Policy”), and
any amendments thereto (or any other policy adopted by the Parent or any of its Subsidiaries or affiliates
(including the Company) pursuant to any such law, government regulation or stock exchange listing requirement).
Executive acknowledges and agrees that Executive has no right to indemnification, insurance payments or other
2
reimbursement by or from the Parent or any of its Subsidiaries or affiliates (including the Company) for any
compensation that is subject to recoupment and/or forfeiture under the Clawback Policy.
6. Except as expressly amended by this Amendment, all of the terms of the 2022 Agreement shall remain in full force and effect.
7. This Amendment may be executed in any number of counterparts, each of which shall be considered an original instrument,
but all such counterparts shall together constitute one and the same agreement.
[Signature Page Follows]
3
IN WITNESS WHEREOF, the parties hereto have executed this Amendment on the date and year first above written.
Caesars Enterprise Services, LLC
By:
Name:
Title:
/s/ Thomas R. Reeg
Thomas R. Reeg
Chief Executive Officer
Executive
/s/ Edmund L. Quatmann, Jr.
Name: Edmund L. Quatmann, Jr.
4
Exhibit 10.56
THIRD AMENDED AND
RESTATED MASTER LEASE
|US-DOCS\126208570.12||
TABLE OF CONTENTS
TO
THIRD AMENDED AND
RESTATED MASTER LEASE
1.1 Leased Property.
1.2 Single, Indivisible Lease.
1.3 Term.
1.4 Renewal Terms.
1.1 Definitions.
1.1 Rent.
1.2 Late Payment of Rent.
1.3 Method of Payment of Rent.
1.4 Net Lease.
1.1 Impositions.
1.2 Utilities.
1.3 Impound Account.
1.1 No Termination, Abatement, etc.
1.1 Ownership of the Leased Property.
1.2 Tenant’s Property.
1.3 Guarantors; Tenant’s Property.
1.1 Condition of the Leased Property.
1.2 Use of the Leased Property.
1.3 Competing Business.
ARTICLE I
ARTICLE II
ARTICLE III
ARTICLE IV
ARTICLE V
ARTICLE VI
ARTICLE VII
ARTICLE VIII
1.1 Representations and Warranties.
1.2 Compliance with Legal and Insurance Requirements, etc.
1.3 Zoning and Uses.
1.4 Compliance with Ground Lease.
ARTICLE IX
1.1 Maintenance and Repair.
1.2 Encroachments, Restrictions, Mineral Leases, etc.
1.1 Construction of Capital Improvements to the Leased Property.
1.2 Construction Requirements for All Capital Improvements.
ARTICLE X
|US-DOCS\126208570.12||
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29
29
30
30
32
32
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33
33
34
34
35
36
36
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ARTICLE XI
ARTICLE XII
ARTICLE XIII
1.3 Landlord’s Right of First Offer to Fund.
1.1 Liens.
1.1 Permitted Contests.
1.1 General Insurance Requirements.
1.2 Maximum Foreseeable Loss.
1.3 Additional Insurance.
1.4 Waiver of Subrogation.
1.5 Policy Requirements.
1.6 Increase in Limits.
1.7 Blanket Policy.
1.8 No Separate Insurance.
ARTICLE XIV
1.1 Property Insurance Proceeds.
1.2 Tenant’s Obligations Following Casualty.
1.3 No Abatement of Rent.
1.4 Waiver.
1.5 Insurance Proceeds Paid to Facility Mortgagee.
1.6 Termination of Master Lease; Abatement of Rent.
ARTICLE XV
1.1 Condemnation.
1.2 Award Distribution.
1.3 Temporary Taking.
1.4 Condemnation Awards Paid to Facility Mortgagee.
1.5 Termination of Master Lease; Abatement of Rent.
ARTICLE XVI
1.1 Events of Default.
1.2 Certain Remedies.
1.3 Damages.
1.4 Receiver.
1.5 Waiver.
1.6 Application of Funds.
1.1 Permitted Leasehold Mortgagees.
1.2 Landlord’s Right to Cure Tenant’s Default.
1.3 Landlord’s Right to Cure Debt Agreement.
ARTICLE XVII
1.1 Sale of the Leased Property.
1.1 Holding Over.
ARTICLE XVIII
ARTICLE XIX
ARTICLE XX
|US-DOCS\126208570.12||
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1.1 Risk of Loss.
1.1 General Indemnification.
ARTICLE XXI
ARTICLE XXII
1.1 Subletting and Assignment.
1.2 Permitted Assignments.
1.3 Permitted Sublease Agreements.
1.4 Required Assignment and Subletting Provisions.
1.5 Costs.
1.6 No Release of Tenant’s Obligations; Exception.
1.7 Replacement Property Transaction.
1.1 Officer’s Certificates and Financial Statements.
1.2 Confidentiality; Public Offering Information.
1.3 Financial Covenants.
1.4 Landlord Obligations.
ARTICLE XXIII
1.1 Landlord’s Right to Inspect.
1.1 No Waiver.
1.1 Remedies Cumulative.
1.1 Acceptance of Surrender.
1.1 No Merger.
1.1 Conveyance by Landlord.
1.1 Quiet Enjoyment.
ARTICLE XXIV
ARTICLE XXV
ARTICLE XXVI
ARTICLE XXVII
ARTICLE XXVIII
ARTICLE XXIX
ARTICLE XXX
ARTICLE XXXI
1.1 Landlord’s Financing.
1.2 Attornment.
1.3 Compliance with Facility Mortgage Documents.
ARTICLE XXXII
1.1 Hazardous Substances.
1.2 Notices.
1.3 Remediation.
1.4 Indemnity by Tenant.
1.5 Environmental Inspections.
1.6 Indemnity by Landlord
1.7 Survival
ARTICLE XXXIII
|US-DOCS\126208570.12||
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1.1 Memorandum of Lease
1.2 Tenant Financing.
1.1 Expert Valuation Process.
1.1 Notices.
ARTICLE XXXIV
ARTICLE XXXV
ARTICLE XXXVI
1.1 Transfer of Tenant’s Property and Operational Control of the Facilities.
1.2 Determination of Successor Tenant and Gaming Assets FMV.
1.3 Operation Transfer.
1.1 Attorneys’ Fees.
1.1 Brokers.
1.1 Anti-Terrorism Representations.
1.1 GLP REIT Protection.
ARTICLE XXXVII
ARTICLE XXXVIII
ARTICLE XXXIX
ARTICLE XL
ARTICLE XLI
1.1 Survival.
1.2 Severability.
1.3 Non-Recourse; Consequential Damages.
1.4 Successors and Assigns.
1.5 Governing Law.
1.6 Waiver of Trial by Jury.
1.7 Amendment and Restatement; Entire Agreement.
1.8 Headings.
1.9 Counterparts.
1.10 Interpretation.
1.11 Time of Essence.
1.12 Further Assurances.
1.13 Gaming Regulations.
1.14 Certain Provisions of Nevada Law.
1.15 Certain Provisions of New Jersey Law
EXHIBIT A – LIST OF FACILITIES
EXHIBIT B – LEGAL DESCRIPTIONS
EXHIBIT C – GAMING LICENSES
EXHIBIT D – FORM OF SECOND AMENDED AND RESTATED GUARANTY OF MASTER LEASE
EXHIBIT E – FORM OF NONDISTURBANCE AND ATTORNMENT AGREEMENT
EXHIBIT F – FORM OF SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT
|US-DOCS\126208570.12||
iv
SCHEDULE A – DISCLOSURE ITEMS
SCHEDULE B – PROPERTY AGREEMENTS
SCHEDULE C – PROPERTY VALUES
SCHEDULE D – 2019 FACILITY ADJUSTED REVENUE
SCHEDULE 1.1 – EXCLUSIONS FROM LEASED PROPERTY
SCHEDULE 6.3 – GUARANTORS UNDER THE MASTER LEASE
|US-DOCS\126208570.12||
v
THIRD AMENDED AND RESTATED MASTER LEASE
This THIRD AMENDED AND RESTATED MASTER LEASE (the “Master Lease”) is entered into as of [ ]
(the “Effective Date”), by and among GLP CAPITAL, L.P., a Pennsylvania limited partnership (together with its permitted
successors and assigns, “Landlord”), TROPICANA ENTERTAINMENT INC., a Delaware corporation (together with its
permitted successors and assigns, “TEI”), IOC BLACK HAWK COUNTY, INC., an Iowa corporation (together with its
permitted successors and assigns, “Waterloo Operator”), and ISLE OF CAPRI BETTENDORF, L.C., an Iowa limited liability
company (together with its permitted successors and assigns, “Bettendorf Operator” and, collectively with TEI and Waterloo
Operator, “Tenant”).
RECITALS
A.
On October 1, 2018, Landlord, Tropicana AC Sub Corp., as co-landlord, Tenant and Tropicana Atlantic
City Corp., as co-tenant, entered into that certain Master Lease, as amended by that certain Partial Termination of and First
Amendment to Master Lease, dated as of June 6, 2019 and as modified by that certain Waiver to Master Lease, dated as of March
31, 2020 (as so amended and modified, the “Original Master Lease”) pursuant to which Landlord leased the Leased Property to
Tenant.
Amended and Restated Master Lease, dated as of June 15, 2020 (the “First A&R Master Lease”).
B.
Landlord and Tenant amended and restated the Original Master Lease in its entirety pursuant to that certain
C.
Landlord and Tenant amended and restated the First A&R Master Lease in its entirely pursuant to that
certain Second Amended and Restated Master Lease (the “Second A&R Master Lease”), dated as of December 18, 2020 (the
“Second A&R Effective Date”), pursuant to which Landlord and Tenant replaced the facility commonly known as Tropicana
Evansville in Evansville, Indiana, together with all Leased Property (as defined in First A&R Master Lease) with respect thereto,
under this Master Lease with the facilities commonly known as Isle Casino Hotel in Bettendorf, Iowa, together with all Leased
Property with respect thereto (the “Bettendorf Facility”), and Isle Casino Hotel in Waterloo, Iowa, together with all Leased
Property with respect thereto (the “Waterloo Facility” and, together with the Bettendorf Facility, the “Iowa Facilities”).
D.
Landlord and Tenant hereby wish to amend and restate the Second A&R Master Lease in its entirety
pursuant to the terms hereof to reflect, among other items, the removal of the facility commonly known as Belle of Baton Rouge
located in Baton Rouge, Louisiana, together with all Leased Property (as defined in the Second A&R Master Lease) with respect
thereto, from this Master Lease.
Exhibit A (each a “Facility,” and collectively, the “Facilities”).
E.
A list of the five (5) facilities covered by this Master Lease as of the Effective Date is attached hereto as
F.
Capitalized terms used in this Master Lease and not otherwise defined herein are defined in Article II
hereof.
acknowledged, the parties agree as follows:
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby
|US-DOCS\126208570.12||
ARTICLE I
1.1
Leased Property. Upon and subject to the terms and conditions hereinafter set forth, Landlord leases to
Tenant and Tenant leases from Landlord all of Landlord’s rights and interest in and to the following with respect to each of the
Facilities (collectively, the “Leased Property”):
(a)
the real property or properties described in Exhibit B attached hereto (collectively, the “Land”);
(b)
all buildings, structures, barges, riverboats, Fixtures (as hereinafter defined) and other improvements of
every kind now or hereafter located on the Land or connected thereto including, but not limited to, alleyways and connecting
tunnels, sidewalks, utility pipes, conduits and lines (on-site and off-site to the extent Landlord has obtained any interest in the
same), parking areas and roadways appurtenant to such buildings and structures of each such Facility (collectively, the “Leased
Improvements”);
(c)
all easements, rights and appurtenances relating to the Land and the Leased Improvements; and
(d)
all equipment, machinery, fixtures, and other items of property, including all components thereof, that (i)
are now or hereafter located in, on or used in connection with and permanently affixed to or otherwise incorporated into the
Leased Improvements and (ii) qualify as Long-Lived Assets, together with all replacements, modifications, alterations and
additions thereto (collectively, the “Fixtures”).
Notwithstanding anything contained herein to the contrary, (a) Bettendorf Operator shall not acquire a leasehold interest
through this Master Lease in any Facility or Leased Property, as applicable, leased to Tenant pursuant to this Master Lease other
than the Bettendorf Facility and all Leased Property with respect thereto and (b) Waterloo Operator shall not acquire a leasehold
interest through this Master Lease in any Facility or Leased Property, as applicable, leased to Tenant pursuant to this Master
Lease other than the Waterloo Facility and all Leased Property with respect thereto. Notwithstanding anything contained herein to
the contrary, (a) Bettendorf Operator holds the sole Gaming License for and shall be the sole operator of the Bettendorf Facility
and TEI shall not operate the Bettendorf Facility unless and until it obtains the requisite Gaming License and complies with
appropriate Gaming Regulations, and (b) Waterloo Operator holds the sole Gaming License for and shall be the sole operator of
the Waterloo Facility and TEI shall not operate the Bettendorf Facility unless and until it obtains the requisite Gaming License
and complies with appropriate Gaming Regulations.
The Leased Property is leased subject to all covenants, conditions, restrictions, easements and other matters affecting the
Leased Property as of the Commencement Date and such subsequent covenants, conditions, restrictions, easements and other
matters as may be agreed to by Landlord or Tenant in accordance with the terms of this Master Lease, whether or not of record,
including any matters which would be disclosed by an inspection or accurate survey of the Leased Property. Notwithstanding the
foregoing, Leased Property shall exclude those items referenced on Schedule 1.1.
1.2
Single, Indivisible Lease. Notwithstanding anything contained herein to the contrary, this Master Lease
constitutes one indivisible lease of the Leased Property and not separate leases governed by similar terms. The Leased Property
constitutes one economic unit, and the Rent and all other provisions have been negotiated and agreed to based on a demise of all
of the Leased Property to Tenant as a single, composite, inseparable transaction and would have been substantially different had
separate leases or a divisible lease been intended. Except as
|US-DOCS\126208570.12||
2
expressly provided in this Master Lease for specific, isolated purposes (and then only to the extent expressly otherwise stated), all
provisions of this Master Lease apply equally and uniformly to all of the Leased Property as one unit. An Event of Default with
respect to any portion of the Leased Property is an Event of Default as to all of the Leased Property. The parties intend that the
provisions of this Master Lease shall at all times be construed, interpreted and applied so as to carry out their mutual objective to
create an indivisible lease of all of the Leased Property and, in particular but without limitation, that, for purposes of any
assumption, rejection or assignment of this Master Lease under 11 U.S.C. Section 365, or any successor or replacement thereof or
any analogous state law, this is one indivisible and non-severable lease and executory contract dealing with one legal and
economic unit and that this Master Lease must be assumed, rejected or assigned as a whole with respect to all (and only as to all)
of the Leased Property. The parties may amend this Master Lease from time to time to include one or more additional Facilities
as part of the Leased Property and such future addition to the Leased Property shall not in any way change the indivisible and
nonseverable nature of this Master Lease and all of the foregoing provisions shall continue to apply in full force.
1.3
Term. The “Term” of this Master Lease is the Initial Term plus all Renewal Terms, to the extent exercised.
The initial term of this Master Lease (the “Initial Term”) commenced on October 1, 2018 (the “Commencement Date”) and
shall end on the day immediately preceding the twentieth (20 ) anniversary of the Commencement Date, subject to renewal as set
forth in Section 1.4 below.
th
1.4
Renewal Terms. The term of this Master Lease may be extended for four (4) separate “Renewal Terms” of
five (5) years each if: (a) at least twelve (12), but not more than eighteen (18) months prior to the end of the then current Term,
Tenant delivers to Landlord a Notice that it desires to exercise its right to extend this Master Lease for one (1) Renewal Term (a
“Renewal Notice”); and (b) no Event of Default shall have occurred and be continuing on the date Landlord receives the
Renewal Notice (the “Exercise Date”) or on the last day of the then current Term. During any such Renewal Term, except as
otherwise specifically provided for herein, all of the terms and conditions of this Master Lease shall remain in full force and
effect.
Tenant may exercise such options to renew with respect to all (and no fewer than all) of the Facilities which are subject to this
Master Lease as of the Exercise Date.
ARTICLE II
1.1
Definitions. For all purposes of this Master Lease, except as otherwise expressly provided or unless the
context otherwise requires, (i) the terms defined in this Article II have the meanings assigned to them in this Article and include
the plural as well as the singular; (ii) all accounting terms not otherwise defined herein have the meanings assigned to them in
accordance with GAAP; (iii) all references in this Master Lease to designated “Articles,” “Sections” and other subdivisions are to
the designated Articles, Sections and other subdivisions of this Master Lease; (iv) the word “including” shall have the same
meaning as the phrase “including, without limitation,” and other similar phrases; (v) the words “herein,” “hereof” and
“hereunder” and other words of similar import refer to this Master Lease as a whole and not to any particular Article, Section or
other subdivision; (vi) all Exhibits, Schedules and other attachments annexed to the body of this Master Lease are hereby deemed
to be incorporated into and made an integral part of this Master Lease; (vii) the word “or” is not exclusive; and (viii) for the
calculation of any financial ratios or tests referenced in this Master Lease (including the Adjusted Revenue to Rent Ratio and the
Indebtedness to EBITDA Ratio), this Master Lease, regardless of its treatment under GAAP, shall be deemed to be an operating
lease and the Rent payable hereunder shall be treated as an operating expense and shall not constitute Indebtedness or interest
expense.
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3
AAA: As defined in Section 34.1(b).
Accounts: All accounts, including deposit accounts and any Facility Mortgage Reserve Account (to the extent
actually funded by Tenant), all rents, profits, income, revenues or rights to payment or reimbursement derived from the use of any
space within the Leased Property and/or from goods sold or leased or services rendered from the Leased Property (including,
without limitation, from goods sold or leased or services rendered from the Leased Property by any subtenant) and all accounts
receivable, in each case whether or not evidenced by a contract, document, instrument or chattel paper and whether or not earned
by performance, including without limitation, the right to payment of management fees and all proceeds of the foregoing.
Additional Charges: All Impositions and all other amounts, liabilities and obligations which Tenant assumes or
agrees to pay under this Master Lease and, in the event of any failure on the part of Tenant to pay any of those items, except
where such failure is due to the acts or omissions of Landlord, every fine, penalty, interest and cost which may be added for non-
payment or late payment of such items.
Adjusted Revenue: For any Test Period, Net Revenue (i) minus expenses other than Specified Expenses and (ii)
plus Specified Proceeds, if any; provided, however, that for purposes of calculating Adjusted Revenue, Net Revenue shall not
include Gaming Revenues, Retail Sales or Promotional Allowances of any subtenants of Tenant or any deemed payments under
subleases of this Master Lease, licenses or other access rights from Tenant to its operating subsidiaries. Adjusted Revenue for the
Leased Property shall be calculated on a pro forma basis to give effect to any increase or decrease in Rent as a result of the
addition or removal of Leased Property to this Master Lease since the beginning of any Test Period of Tenant as if each such
increase or decrease had been effected on the first day of such Test Period. For purposes of calculating the Adjusted Revenue to
Rent Ratio, (a) subject to clause (b) below, if any Facility is closed to the public for more than fifteen (15) days as a result of an
Unavoidable Delay during any fiscal quarter of any Test Period, then (i) the Adjusted Revenue attributable to such Facility in
respect of such fiscal quarter shall be excluded from the calculation of Adjusted Revenue for such Test Period and (ii) the
Adjusted Revenue attributable to such Facility during any fiscal quarters of such Test Period during which such Facility is not
closed to the public for more than fifteen (15) days shall be annualized as follows for purposes of calculating Adjusted Revenue
for such Test Period: (A) if such Facility is not closed to the public for more than fifteen (15) days in any of the remaining three
(3) fiscal quarters of such Test Period, then the aggregate Adjusted Revenue attributable to such Facility for such quarters shall be
multiplied by 4/3, (B) if such Facility is not closed to the public for more than fifteen (15) days in only two (2) fiscal quarters of
such Test Period, then the aggregate Adjusted Revenue attributable to such Facility for such quarters shall be multiplied by 2 and
(C) if such Facility is not closed to the public for more than fifteen (15) days in only one (1) fiscal quarter of such Test Period,
then the Adjusted Revenue attributable to such Facility for such quarter shall be multiplied by 4 and (b) notwithstanding clause
(a) above, for purposes of calculating the Adjusted Revenue from and after any Covenant Resumption Date, (i) the Adjusted
Revenue for the Test Period ending on the last day of the fiscal quarter in which the Covenant Resumption Date occurs (the
“Initial Test Period”) shall be deemed to be the Adjusted Revenue for the last fiscal quarter of the Initial Test Period, in each case,
multiplied by 4, (ii) the Adjusted Revenue for the first Test Period ending after the Initial Test Period (the “Second Test Period”)
shall be deemed to be the Adjusted Revenue for the last two fiscal quarters of the Second Test Period, in each case, multiplied by
2 and (iii) the Adjusted Revenue for the second Test Period ending after the Initial Test Period (the “Third Test Period”) shall be
deemed to be the Adjusted Revenue for the last three fiscal quarters of the Third Test Period, in each case, multiplied by 4/3.
|US-DOCS\126208570.12||
4
of Tenant for all of the Facilities that are included in this Master Lease.
Adjusted Revenue Pool: As of any date of determination, the aggregate amount of the Facility Adjusted Revenue
Adjusted Revenue to Rent Ratio: As at any date of determination, the ratio for any period of Adjusted Revenue to
Rent. For purposes of calculating the Adjusted Revenue to Rent Ratio, Adjusted Revenue shall be calculated on a pro forma basis
(and shall be calculated to give effect to (x) pro forma adjustments reasonably contemplated by Tenant and (y) such other pro
forma adjustments consistent with Regulation S-X under the Securities Act) to give effect to any material acquisitions and
material asset sales consummated by the Tenant or any Guarantor during any Test Period of Tenant as if each such material
acquisition had been effected on the first day of such Test Period and as if each such material asset sale had been consummated
on the day prior to the first day of such Test Period. In addition, (i) Adjusted Revenue and Rent shall be calculated on a pro forma
basis to give effect to any increase or decrease in Rent as a result of the addition or removal of Leased Property to this Master
Lease during any Test Period as if such increase or decrease had been effected on the first day of such Test Period and (ii) in the
event Rent is to be increased in connection with the addition or inclusion of a Long-Lived Asset that is projected to increase
Adjusted Revenue, such Rent increase shall not be taken into account in calculating the Adjusted Revenue to Rent Ratio until the
first fiscal quarter following the completion of the installation or construction of such Long-Lived Assets.
Affiliate: When used with respect to any corporation, limited liability company, or partnership, the term “Affiliate”
shall mean any person which, directly or indirectly, controls or is controlled by or is under common control with such
corporation, limited liability company or partnership. For the purposes of this definition, “control” (including the correlative
meanings of the terms “controlled by” and “under common control with”), as used with respect to any Person, shall mean the
possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such person,
through the ownership of voting securities, partnership interests or other equity interests.
Appointing Authority: As defined in Section 34.1(b).
Award: All compensation, sums or anything of value awarded, paid or received on a total or partial Taking.
Bettendorf Facility: As defined in Recital C.
Bettendorf Operator: As defined in the preamble.
Building Base Rent:
(A) During the period from the Commencement Date until (and including) the last day of the first Lease Year
(i.e., September 30, 2019), an annual amount equal to Sixty Million Nine Hundred Eighteen Thousand Five Hundred Twenty-
Five Dollars ($60,918,525).
(B) During the period from the first day of the second Lease Year until (but excluding) the Second A&R
Effective Date, an annual amount equal to Sixty-Two Million One Hundred Thirty-Six Thousand Eight Hundred Ninety-Six
Dollars ($62,136,896).
(C) During the period from the Second A&R Effective Date until the end of the Initial Term, an annual amount
equal to Sixty-Two Million Five Hundred Thirteen Thousand Nine Hundred Fifty-Six and 13/100 Dollars ($62,513,956.13);
provided, however, that commencing with the fifth (5 ) Lease Year (i.e., the Lease Year commencing on October 1, 2022) and
continuing each Lease Year thereafter during the Initial Term, the Building Base Rent
th
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5
shall increase to an annual amount equal to the sum of (i) the Building Base Rent for the immediately preceding Lease Year, and
(ii) the Escalation.
(D) The Building Base Rent for the first year of each Renewal Term shall be an annual amount equal to the sum
of (i) the Building Base Rent for the immediately preceding Lease Year, and (ii) the Escalation. Commencing with the second
(2nd) Lease Year of any Renewal Term and continuing each Lease Year thereafter during such Renewal Term, the Building Base
Rent shall increase to an annual amount equal to the sum of (i) the Building Base Rent for the immediately preceding Lease Year,
and (ii) the Escalation.
(E) As applicable during the Term, Building Base Rent shall be increased pursuant to Section 10.3(c) in respect
of Capital Improvements funded by Landlord (which increases shall, in each case, be subject to the Escalations provided in the
foregoing clauses (C) and (D)).
Building Base Rent shall be subject to further adjustment as and to the extent provided in Section 14.6.
Business Day: Each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which national
banks in the City of New York, New York or Las Vegas, Nevada are authorized, or obligated, by law or executive order, to close.
Capital Improvements: With respect to any Facility, any improvements or alterations or modifications of the
Leased Improvements, including without limitation capital improvements and structural alterations, modifications or
improvements, or one or more additional structures annexed to any portion of any of the Leased Improvements of such Facility,
or the expansion of existing improvements, which are constructed on any parcel or portion of the Land of such Facility, during
the Term, including construction of a new wing or new story, all of which shall constitute a portion of the Leased Improvements
and Leased Property hereunder in accordance with Section 10.3. Notwithstanding the foregoing, for purposes of Article X only,
“Capital Improvements” shall not include any improvements or alterations or modifications of the Leased Improvements or any
expansion of the existing improvements if such (i) commenced prior to the Term in accordance with the terms of the Merger
Agreement, and (ii) costs less than Fifteen Million Dollars ($15,000,000) on an individual project basis and less than Fifty
Million Dollars ($50,000,000) in the aggregate with respect to all of the Facilities, it being agreed, for the avoidance of doubt,
such improvements or alterations or modifications of the Leased Improvements or any expansion of the existing improvements
shall be deemed part of the Leased Property and the Facilities for all purposes hereunder.
thereof.
Cash: Cash and cash equivalents and all instruments evidencing the same or any right thereto and all proceeds
Casualty Event: Any loss of title or any loss of or damage to or destruction of, or any condemnation or other
taking (including by any governmental authority) of, any asset for which Tenant or any of its Subsidiaries (directly or through
Tenant’s Parent) receives cash insurance proceeds or proceeds of a condemnation award or other similar compensation (excluding
proceeds of business interruption insurance). “Casualty Event” shall include, but not be limited to, any taking of all or any part of
any real property of Tenant or any of its Subsidiaries or any part thereof, in or by condemnation or other eminent domain
proceedings pursuant to any applicable law, or by reason of the temporary requisition of the use or occupancy of all or any part of
any real property of Tenant or any of its Subsidiaries or any part thereof by any governmental authority, civil or military.
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6
Change in Control: (i) Any Person or “group” (within the meaning of Rules 13d-3 and 13d-5 under the Securities
Exchange Act of 1934, as amended from time to time, and any successor statute), (a) shall have acquired direct or indirect
beneficial ownership or control of fifty percent (50%) or more on a fully diluted basis of the direct or indirect voting power in
the Equity Interests of Tenant’s Parent entitled to vote in an election of directors of Tenant’s Parent, or (b) shall have caused the
election of a majority of the members of the board of directors or equivalent body of Tenant’s Parent, which such members have
not been nominated by a majority of the members of the board of directors or equivalent body of Tenant’s Parent as such were
constituted immediately prior to such election, (ii) except as permitted or required hereunder, the direct or indirect sale by
Tenant or Tenant’s Parent of all or substantially all of Tenant’s assets, whether held directly or through Subsidiaries, relating to
the Facilities in one transaction or in a series of related transactions (excluding sales to Tenant or its Subsidiaries), (iii) (a)
Tenant ceasing to be a wholly-owned Subsidiary (directly or indirectly) of Tenant’s Parent or (b) Tenant’s Parent ceasing to
control one hundred percent (100%) of the voting power in the Equity Interests of Tenant or (iv) Tenant’s Parent consolidates
with, or merges with or into, any Person, or any Person consolidates with, or merges with or into, Tenant’s Parent, in any such
event pursuant to a transaction in which any of the outstanding Equity Interests of Tenant’s Parent ordinarily entitled to vote in
an election of directors of Tenant’s Parent or such other Person is converted into or exchanged for cash, securities or other
property, other than any such transaction where the Equity Interests of Tenant’s Parent ordinarily entitled to vote in an election
of directors of Tenant’s Parent outstanding immediately prior to such transaction constitute or are converted into or exchanged
into or exchanged for a majority (determined by voting power in an election of directors) of the outstanding Equity Interests
ordinarily entitled to vote in an election of directors of such surviving or transferee Person (immediately after giving effect to
such transaction).
thereunder, each as amended from time to time.
Code: The Internal Revenue Code of 1986 and, to the extent applicable, the Treasury Regulations promulgated
Commencement Date: As defined in Section 1.3.
Commission: As defined in Section 41.15(a).
Competing Facility: A Gaming Facility within the Restricted Area acquired or operated by Tenant or any Affiliate
of Tenant; provided, however, that a “Competing Facility” shall not include any Gaming Facility which Tenant or any Affiliate of
Tenant owns or operates as of the Effective Date or is under contract to acquire as of the Effective Date.
Condemnation: The exercise of any governmental power, whether by legal proceedings or otherwise, by a
Condemnor or a voluntary sale or transfer by Landlord to any Condemnor, either under threat of condemnation or while legal
proceedings for condemnation are pending.
Condemnor: Any public or quasi-public authority, or private corporation or individual, having the power of
Condemnation.
Confidential Information: Any and all financial, technical, proprietary, confidential, and other information,
including data, reports, interpretations, forecasts, analyses, compilations, studies, summaries, extracts, records, know-how,
statements (written or oral) or other documents of any kind, that contain information concerning the business and affairs of a
party or its affiliates, divisions and subsidiaries, which such party or its Related Persons provide to the other party or its Related
Persons, whether furnished before or after the Commencement Date, and regardless of the manner in which it was furnished, and
any material prepared by a party or its Related Persons, in whatever form maintained, containing, reflecting or based upon,
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7
in whole or in part, any such information; provided, however, that “Confidential Information” shall not include information
which: (i) was or becomes generally available to the public other than as a result of a disclosure by the other party or its Related
Persons in breach of this Master Lease; (ii) was or becomes available to the other party or its Related Persons on a non-
confidential basis prior to its disclosure hereunder as evidenced by the written records of the other party or its Related Persons,
provided that the source of the information is not bound by a confidentiality agreement or otherwise prohibited from transmitting
such information by a contractual, legal or fiduciary duty; or (iii) was independently developed by the other party without the use
of any Confidential Information, as evidenced by the written records of the other party.
Consolidated Interest Expense: For any period, interest expense of Tenant and its Subsidiaries that are Guarantors
for such period as determined on a consolidated basis for Tenant and its Subsidiaries that are Guarantors in accordance with
GAAP.
Covenant Resumption Date: The first day following the end of a Covenant Suspension Period.
Covenant Suspension Period: If on the last day of any Test Period more than 75% of the Facilities under this
Master Lease are closed to the public, and have been closed for a period of more than fifteen (15) days, in each case due to an
Unavoidable Delay, then the period commencing on (and including) the last day of any such Test Period and continuing until (but
excluding) the last day of the second full consecutive fiscal quarter throughout which at least 25% of the Facilities under this
Master Lease have remained open to the public. Notwithstanding the foregoing, Tenant may, in its sole discretion, elect that any
Covenant Suspension Period end on any date prior to the date that such Covenant Suspension Period would otherwise end absent
such election.
CPI: The United States Department of Labor, Bureau of Labor Statistics Revised Consumer Price Index for All
Urban Consumers (1982-84=100), U.S. City Average, All Items, or, if that index is not available at the time in question, the index
designated by such Department as the successor to such index, and if there is no index so designated, an index for an area in the
United States that most closely corresponds to the entire United States, published by such Department, or if none, by any other
instrumentality of the United States.
published for the beginning of the first Lease Year. If the product is less than one, the CPI Increase shall be equal to one.
CPI Increase: The product of (i) the CPI published for the beginning of each Lease Year, divided by (ii) the CPI
CPR Institute: As defined in Section 34.1(b).
Date of Taking: The date the Condemnor has the right to possession of the property being condemned.
Debt Agreement: If designated by Tenant to Landlord in writing to be included in the definition of “Debt
Agreement,” one or more (A) debt facilities or commercial paper facilities, providing for revolving credit loans, term loans,
receivables financing (including through the sale of receivables to lenders or to special purpose entities formed to borrow from
lenders against such receivables) or letters of credit, (B) debt securities, indentures or other forms of debt financing (including
convertible or exchangeable debt instruments or bank guarantees or bankers’ acceptances), or (C) instruments or agreements
evidencing any other indebtedness, in each case, with the same or different borrowers or issuers and, in each case, (i) entered into
from time to time by Tenant and/or its Affiliates (including Tenant’s Parent), (ii) as amended, supplemented, modified, extended,
restructured, renewed, refinanced, restated, replaced or
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8
refunded in whole or in part from time to time, (iii) which may be secured by assets of Tenant and its Subsidiaries, including, but
not limited to, their Cash, Accounts, Tenant’s Property, real property and leasehold estates in real property (including this Master
Lease), and (iv) which shall provide Landlord, in accordance with Section 17.3 hereof, the right to receive copies of notices of
Specified Debt Agreement Defaults thereunder and opportunity to cure any breaches or defaults by Tenant thereunder within the
cure period, if any, that exists under such Debt Agreement. For the avoidance of doubt, each of the following is a Debt
Agreement: (a) that certain Credit Agreement, dated as of July 20, 2020 (as amended, restated, amended and restated, replaced,
refinanced, supplemented or otherwise modified from time to time, the “Credit Agreement”), among Tenant’s Parent, the lenders
from time to time party thereto, JPMorgan Chase Bank, N.A., as administrative agent, and U.S. Bank National Association, as
collateral agent (in such capacity, together with its successors and assigns, the “Collateral Agent”) and (b) that certain Indenture,
dated as of July 6, 2020 (as amended, amended and restated, replaced, refinanced, supplemented or otherwise modified from time
to time, the “Secured Indenture”), among Tenant’s Parent (as successor to Colt Merger Sub, Inc.), U.S. Bank National
Association, as trustee, the Collateral Agent and the other parties from time to time party thereto governing Tenant’s Parent’s
6.250% Senior Secured Notes due 2025.
Dollars and $: The lawful money of the United States.
Discretionary Transferee: A transferee that meets all of the following requirements set forth in clauses (a) through
(d) below: (a) such transferee has (1) at least five (5) years of experience (directly or through one or more of its Subsidiaries)
operating or managing one or more casinos with revenues in the immediately preceding fiscal year of at least Seven Hundred
Fifty Million Dollars ($750,000,000) in the aggregate (or retains a manager with such qualifications, which manager shall not be
replaced other than in accordance with Article XXII hereof) that is not in the business, and that does not have an Affiliate in the
business, of leasing properties to gaming operators, or (2) in the case of a Permitted Leasehold Mortgagee Foreclosing Party only,
agreement(s) in place in a form reasonably satisfactory to Landlord to retain for a period of eighteen (18) months (or more) after
the effective time of the transfer at least (i) eighty percent (80%) of Tenant and its Subsidiaries’ personnel employed at the
Facilities who have employment contracts as of the date of the relevant agreement to transfer and (ii) seventy percent (70%) of
Tenant’s and Tenant’s Parent’s ten (in the aggregate between both Tenant and Tenant’s Parent) most highly compensated
corporate employees as of the date of the relevant agreement to transfer based on total compensation determined in accordance
with Item 402 of Regulation S-K of the Securities and Exchange Act of 1934, as amended; (b) such transferee (directly or
through one or more of its Subsidiaries) is licensed or certified by each gaming authority with jurisdiction over any portion of the
Leased Property as of the date of any proposed assignment or transfer to such entity (or will be so licensed upon its assumption of
the Master Lease); (c) such transferee is Solvent, and, other than in the case of a Permitted Leasehold Mortgagee Foreclosing
Party, if such transferee has a Parent Company, the Parent Company of such transferee is Solvent, and (d) (i) other than in the
case of a Permitted Leasehold Mortgagee Foreclosing Party, (x) the Parent Company of such transferee or, if such transferee does
not have a Parent Company, such transferee, has sufficient assets so that, after giving effect to its assumption of Tenant’s
obligations hereunder or the applicable assignment (including pursuant to a Change in Control under Section 22.2(iii)(b) or
Section 22.2(iii)(c)), its Indebtedness to EBITDA Ratio on a consolidated basis in accordance with GAAP is less than 7:1 on a
pro forma basis based on projected earnings and after giving effect to the proposed transaction or (y) an entity that has an
investment grade credit rating from a nationally recognized rating agency with respect to such entity’s long term, unsecured debt
has provided a Guaranty, or (ii) in the case of a Permitted Leasehold Mortgagee Foreclosing Party, (x) Tenant has an
Indebtedness to EBITDA Ratio of less than 8:1 on a pro forma basis based on projected earnings and after giving effect to the
proposed transaction or (y) an entity that has an investment
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9
grade credit rating from a nationally recognized rating agency with respect to such entity’s long term, unsecured debt has
provided a Guaranty.
Division: As defined in Section 41.15(a).
EBITDA: For any Test Period, the consolidated net income or loss of the Parent Company of a Discretionary
Transferee (or, in the case of (x) a Permitted Leasehold Mortgagee Foreclosing Party, such Permitted Leasehold Mortgagee
Foreclosing Party or (y) a Discretionary Transferee that does not have a Parent Company, such Discretionary Transferee) on a
consolidated basis for such period, determined in accordance with GAAP, adjusted by excluding (1) income tax expense, (2)
consolidated interest expense (net of interest income), (3) depreciation and amortization expense, (4) any income, gains or losses
attributable to the early extinguishment or conversion of indebtedness or cancellation of indebtedness, (5) gains or losses on
discontinued operations and asset sales, disposals or abandonments, (6) impairment charges or asset write-offs including, without
limitation, those related to goodwill or intangible assets, long-lived assets, and investments in debt and equity securities, in each
case, in accordance with GAAP, (7) any non-cash items of expense (other than to the extent such non-cash items of expense
require or result in an accrual or reserve for future cash expenses), (8) extraordinary gains or losses and (9) unusual or non-
recurring gains or items of income or loss.
Effective Date: As defined in the preamble.
Property, or any portion thereof or interest therein.
Encumbrance: Any mortgage, deed of trust, lien, encumbrance or other matter affecting title to any of the Leased
End of Term Gaming Asset Transfer Notice: As defined in Section 36.1.
Environmental Costs: As defined in Section 32.4.
Environmental Laws: Any and all applicable federal, state, municipal and local laws, statutes, ordinances, rules,
regulations, guidances, policies, orders, codes, decrees or judgments, whether statutory or common law, as amended from time to
time, now or hereafter in effect, pertaining to the environment, public health and safety and industrial hygiene, including the use,
generation, manufacture, production, storage, release, discharge, disposal, handling, treatment, removal, decontamination,
cleanup, transportation or regulation of any Hazardous Substance, including, without limitation, the New Jersey Industrial Site
Recovery Act, the Clean Air Act, the Clean Water Act, the Toxic Substances Control Act, the Comprehensive Environmental
Response Compensation and Liability Act, the Resource Conservation and Recovery Act, the Federal Insecticide, Fungicide,
Rodenticide Act, the Safe Drinking Water Act and the Occupational Safety and Health Act.
Equity Interests: With respect to any Person, any and all shares, interests, participations or other equivalents,
including membership interests (however designated, whether voting or non-voting), of equity of such Person, including, if such
Person is a partnership, partnership interests (whether general or limited) and any other interest or participation that confers on a
Person the right to receive a share of the profits and losses of, or distributions of assets of, such partnership.
Equity Rights: With respect to any Person, any then outstanding subscriptions, options, warrants, commitments,
preemptive rights or agreements of any kind (including any stockholders’ or voting trust agreements) for the issuance, sale,
registration or voting of any additional Equity Interests of any class, or partnership or other ownership interests of any type in,
such Person; provided, however, that a debt instrument convertible into or exchangeable or exercisable for any Equity Interests
shall not be deemed an Equity Right.
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10
Escalated Building Base Rent: (a) For the fifth Lease Year and the sixth Lease Year, an amount equal to 101.25%
of the Building Base Rent as of the end of the immediately preceding Lease Year, (b) for the seventh Lease Year and the eighth
Lease Year, an amount equal to 101.75% of the Building Base Rent as of the end of the immediately preceding Lease Year, and
(c) for the ninth Lease Year and for each Lease Year thereafter, an amount equal to 102% of the Building Base Rent as of the end
of the immediately preceding Lease Year.
Escalation: For any Lease Year (commencing with the fifth Lease Year), an amount equal to the excess of (a) the
Escalated Building Base Rent for such Lease Year over (b) the Building Base Rent for the immediately preceding Lease Year.
The parties hereby acknowledge and agree that, notwithstanding anything to the contrary set forth in the Original Master Lease,
no Escalation has been based upon, or affected by, Adjusted Revenue.
Event of Default: As defined in Section 16.1.
Exercise Date: As defined in Section 1.4.
agreement of Landlord and Tenant or otherwise in accordance with Article XXXIV hereof.
Expert: An independent third party professional, with expertise in respect of a matter at issue, appointed by the
Facilit(y)(ies): As defined in Recital D.
Facility Adjusted Revenue: With respect to each Facility under this Master Lease as of any date of determination,
the greater of (i) the Adjusted Revenue of Tenant for the most recently ended Test Period, as generated by such Facility
individually, and (ii) the amount set forth on Schedule D annexed hereto for such Facility.
Facility Mortgage: As defined in Section 13.1.
Facility Mortgage Documents: With respect to each Facility Mortgage and Facility Mortgagee, the applicable
Facility Mortgage, loan agreement, debt agreement, credit agreement or indenture, lease, note, collateral assignment instruments,
guarantees, indemnity agreements and other documents or instruments evidencing, securing or otherwise relating to the loan
made, credit extended, or lease or other financing vehicle entered into pursuant thereto.
Facility Mortgage Reserve Account: As defined in Section 31.3(b).
Facility Mortgagee: As defined in Section 13.1.
Financial Statements: (i) For a Fiscal Year, consolidated statements of Tenant’s Parent and its consolidated
subsidiaries (as defined by GAAP) of income, stockholders’ equity and comprehensive income and cash flows for such period
and for the period from the beginning of the Fiscal Year to the end of such period and the related consolidated balance sheet as at
the end of such period, together with the notes thereto, all in reasonable detail and setting forth in comparative form the
corresponding figures for the corresponding period in the preceding Fiscal Year and prepared in accordance with GAAP and
audited by a “big four” or other nationally recognized accounting firm, and (ii) for a fiscal quarter, consolidated statements of
Tenant’s Parent’s income, stockholders’ equity and comprehensive income and cash flows for such period and for the period from
the beginning of the Fiscal Year to the end of such period and the related consolidated balance sheet as at the end of such period,
together with the notes thereto, all in reasonable detail and setting forth in comparative form the corresponding figures for the
corresponding period in the preceding Fiscal Year and prepared in accordance with GAAP.
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First A&R Master Lease: As defined in Recital B.
Fiscal Year: The annual period commencing January 1 and terminating December 31 of each year.
Fixtures: As defined in Section 1.1(d).
Foreclosure Assignment: As defined in Section 22.2(iii)(d).
Foreclosure COC: As defined in Section 22.2(iii)(d).
Foreclosure Purchaser: As defined in Section 31.1.
GAAP: Generally accepted accounting principles consistently applied in the preparation of financial statements, as
in effect from time to time (except with respect to any financial ratio defined or described herein or the components thereof, for
which purposes GAAP shall refer to such principles as in effect as of the Commencement Date).
Gaming Assets FMV: As defined in Section 36.1.
Gaming Facility: A facility at which there are operations of slot machines, table games or pari-mutuel wagering.
Gaming License: Any license, permit, approval, finding of suitability or other authorization issued by a state
regulatory agency to operate, carry on or conduct any gambling game, gaming device, slot machine, race book or sports pool on
the Leased Property, or required by any Gaming Regulation, including each of the licenses, permits or other authorizations set
forth on Exhibit C, as amended from time to time, and those related to any Facilities that are added to this Master Lease after the
Commencement Date.
Gaming Regulation(s): Any and all laws, statutes, ordinances, rules, regulations, policies, orders, codes, decrees or
judgments, and Gaming License conditions or restrictions, as amended from time to time, now or hereafter in effect or
promulgated, pertaining to the operation, control, maintenance or Capital Improvement of a Gaming Facility or the conduct of a
person or entity holding a Gaming License, including, without limitation, any requirements imposed by a regulatory agency,
commission, board or other governmental body pursuant to the jurisdiction and authority granted to it under applicable law.
Gaming Revenues: As defined in the definition of Net Revenue.
GLP: Gaming and Leisure Properties, Inc.
Greenfield Project: As defined in Section 7.3(a).
with all Leased Property with respect thereto.
Greenville Facility: The Facility commonly known as Tropicana Greenville located in Greenville, MS, together
Ground Leased Property: The real property leased pursuant to a Ground Lease.
Ground Lease: Collectively, those certain leases with respect to real property that is a portion of the Leased
Property, pursuant to which Landlord is a tenant and which leases have either been approved by Tenant or are in existence as of
(a) with respect to any Facility other than the Iowa Facilities, the Commencement Date and (b) with respect to any Iowa Facility,
the Second A&R Effective Date, each of which leases is listed on Schedule A hereto.
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12
Ground Lessor: As defined in Section 8.4(a).
Guarantor: Any entity that guaranties the payment or collection of all or any portion of the amounts payable by
Tenant, or the performance by Tenant of all or any of its obligations, under this Master Lease, including any replacement
guarantor consented to by Landlord in connection with the assignment of the Master Lease or a sublease of Leased Property
pursuant to Article XXII.
Guaranty: That certain Second Amended and Restated Guaranty of Master Lease dated as of [ ], a form of which
is attached as Exhibit D hereto, as the same may be amended, supplemented or replaced from time to time, by and between
Tenant’s Parent, Landlord and certain Subsidiaries of Tenant from time to time party thereto, and any other guaranty in form and
substance reasonably satisfactory to the Landlord executed by a Guarantor in favor of Landlord (as the same may be amended,
supplemented or replaced from time to time) pursuant to which such Guarantor agrees to guaranty all of the obligations of Tenant
hereunder.
Handling: As defined in Section 32.4.
Hazardous Substances: Collectively, any petroleum, petroleum product or by product, polychlorinated biphenyls,
asbestos, lead-based paint, mold or any other contaminant, pollutant or hazardous or toxic substance, material or waste regulated
or listed pursuant to any Environmental Law.
Immaterial Subsidiary Guarantor: Any Subsidiary of Tenant having assets with an aggregate fair market value of
less than twenty-five million Dollars ($25.0 million) as of the most recent date on which Financial Statements have been
delivered to Landlord pursuant to Section 23.1(b); provided, however, that in no event shall the aggregate fair market value of the
assets of all Immaterial Subsidiary Guarantors exceed fifty million Dollars ($50.0 million) as of the most recent date on which
Financial Statements have been delivered to Landlord pursuant to Section 23.1(b).
Impartial Appraiser: As defined in Section 13.2.
Impositions: Collectively, all taxes, including capital stock, franchise, margin and other state taxes of Landlord, ad
valorem, sales, use, gross receipts, transaction privilege, rent or similar taxes; assessments including assessments for public
improvements or benefits, whether or not commenced or completed prior to the Commencement Date and whether or not to be
completed within the Term; ground rents (pursuant to the Ground Leases); all obligations of Landlord and its Affiliates under the
documents listed on Schedule B hereto; water, sewer and other utility levies and charges; excise tax levies; fees including license,
permit, inspection, authorization and similar fees; and all other governmental charges, in each case whether general or special,
ordinary or extraordinary, or foreseen or unforeseen, of every character in respect of the Leased Property and/or the Rent and
Additional Charges and all interest and penalties thereon attributable to any failure in payment by Tenant (other than failures
arising from the acts or omissions of Landlord) which at any time prior to, during or in respect of the Term hereof may be
assessed or imposed on or in respect of or be a lien upon (i) Landlord or Landlord’s interest in the Leased Property, (ii) the
Leased Property or any part thereof or any rent therefrom or any estate, right, title or interest therein, or (iii) any occupancy,
operation, use or possession of, or sales from or activity conducted on or in connection with the Leased Property or the leasing or
use of the Leased Property or any part thereof; provided, however, that Impositions shall not include and nothing contained in
this Master Lease shall be construed to require Tenant to pay (a) any tax based on net or overall gross income (whether
denominated as a franchise or capital stock or other tax) imposed on Landlord or any other Person, (b) any transfer, or net
revenue tax of Landlord or any other Person except Tenant and its successors, (c) any tax
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13
imposed with respect to the sale, exchange or other disposition by Landlord of any Leased Property or the proceeds thereof, or
(d) any principal, interest or other amounts due on, or any mortgage recording taxes or other amounts relating to the incurrence
of, any indebtedness on or secured by the Leased Property owed to a Facility Mortgagee for which Landlord or its Subsidiaries is
the obligor; provided, further, Impositions shall include any tax, assessment, tax levy or charge set forth in clause (a) or (b) that is
levied, assessed or imposed in lieu of, or as a substitute for, any Imposition.
Indebtedness: Of any Person, without duplication, (a) all indebtedness of such Person for borrowed money,
whether or not evidenced by bonds, debentures, notes or similar instruments, (b) all obligations of such Person as lessee under
capital leases which have been or should be recorded as liabilities on a balance sheet of such Person in accordance with GAAP,
(c) all obligations of such Person to pay the deferred purchase price of property or services (excluding trade accounts payable in
the ordinary course of business), (d) all indebtedness secured by a lien on the property of such Person, whether or not such
indebtedness shall have been assumed by such Person, (e) all obligations, contingent or otherwise, with respect to the face
amount of all letters of credit (whether or not drawn) and banker’s acceptances issued for the account of such Person, (f) all
obligations under any agreement with respect to any swap, forward, future or derivative transaction or option or similar
arrangement involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt instruments or
securities or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar
transaction or combination of transactions, (g) all guarantees by such Person of any of the foregoing and (h) all indebtedness of
the nature described in the foregoing clauses (a)-(g) of any partnership of which such Person is a general partner.
Indebtedness to EBITDA Ratio: As at any date of determination, the ratio of (a) Indebtedness of the applicable
(x) Discretionary Transferee or Parent Company of the Discretionary Transferee or (y) in the case of a Permitted Leasehold
Mortgagee Foreclosing Party, the Permitted Leasehold Mortgagee Foreclosing Party (such Discretionary Transferee, Parent
Company or Permitted Leasehold Mortgagee Foreclosing Party, as applicable the “Relevant Party”) on a consolidated basis, as
of such date (excluding Indebtedness of the type referenced in clauses (e) or (f) of the definition of Indebtedness or
Indebtedness referred to in clauses (d) or (g) of the definition of Indebtedness to the extent relating to Indebtedness of the type
referenced in clauses (e) or (f) of the definition of Indebtedness), to (b) EBITDA for the Test Period most recently ended prior
to such date for which financial statements are available. For purposes of calculating the Indebtedness to EBITDA Ratio,
EBITDA shall be calculated on a pro forma basis (and shall be calculated, except for pro forma adjustments reasonably
contemplated by the potential transferee which may be included in such calculations, otherwise in accordance with Regulation
S-X under the Securities Act) to give effect to any material acquisitions and material asset sales consummated by the Relevant
Party and its Subsidiaries since the beginning of any Test Period of the Relevant Party as if each such material acquisition had
been effected on the first day of such Test Period and as if each such material asset sale had been consummated on the day prior
to the first day of such period. In addition, for the avoidance of doubt, (i) if the Relevant Party or any Subsidiary of the Relevant
Party has incurred any Indebtedness or repaid, repurchased, acquired, defeased or otherwise discharged any Indebtedness since
the end of the most recent Test Period for which financial statements are available, Indebtedness shall be calculated (for
purposes of this definition) after giving effect on a pro forma basis to such incurrence, repayment, repurchase, acquisition,
defeasance or discharge and the applications of any proceeds thereof as if it had occurred prior to the first day of such Test
Period and (ii) the Indebtedness to EBITDA Ratio shall give pro forma effect to the transactions whereby the applicable
Discretionary Transferee becomes party to the Master Lease or the Change in Control transactions permitted under Section
22.2(iii) and shall include the Indebtedness and EBITDA of Tenant and its Subsidiaries for the relevant period.
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14
Initial Term: As defined in Section 1.3.
Insurance Requirements: The terms of any insurance policy required by this Master Lease and all requirements of
the issuer of any such policy and of any insurance board, association, organization or company necessary for the maintenance of
any such policy.
Investment Fund: A bona fide private equity fund or bona fide investment vehicle arranged by and managed by or
controlled by, or under common control with, a private equity fund (excluding any private equity fund investment vehicle the
primary assets of which are Tenant and its Subsidiaries and/or this Master Lease and assets related thereto) that is engaged in
making, purchasing, funding or otherwise or investing in a diversified portfolio of businesses and companies and is organized
primarily for the purpose of making equity investments in companies.
Iowa Facilities: As defined in Recital C.
Land: As defined in Section 1.1(a).
Land Base Rent: (a) During the period from the Commencement Date until (and including) the last day of the
second Lease Year, an annual amount equal to Thirteen Million Three Hundred Sixty Thousand Thirty-Seven Dollars
($13,360,037), (b) during the period from the first day of the third Lease Year (i.e., the Lease Year commencing on October 1,
2020) until (but excluding) the Second A&R Effective Date, an annual amount equal to Twenty-Three Million Five Hundred
Eighty-Five Thousand Four Hundred Sixty-Two Dollars ($23,585,462), and (c) from and after the Second A&R Effective Date,
an annual amount equal to Twenty-Three Million Seven Hundred Twenty-Eight Thousand Five Hundred Eighty-Three and
69/100 Dollars ($23,728,583.69). Land Base Rent shall be subject to further adjustment as and to the extent provided in Section
14.6.
Landlord: As defined in the preamble.
Landlord Representatives: As defined in Section 23.4.
Landlord Tax Returns: As defined in Section 4.1(b).
Lease Year: The first Lease Year for each Facility shall be the period commencing on the Commencement Date
and ending on the day immediately preceding the first (1 ) anniversary of the Commencement Date, and each subsequent Lease
Year for each Facility shall be each period of twelve (12) full calendar months after the last day of the prior Lease Year.
st
Leased Improvements: As defined in Section 1.1(b).
Leased Property: As defined in Section 1.1.
Leased Property Rent Adjustment Event: As defined in Section 14.6.
Leasehold Estate: As defined in Section 17.1(a).
Legal Requirements: All federal, state, county, municipal and other governmental statutes, laws, rules, policies,
guidance, codes, orders, regulations, ordinances, permits, licenses, covenants, conditions, restrictions, judgments, decrees and
injunctions (including common law, Gaming Regulations and Environmental Laws) affecting either the Leased Property, Tenant’s
Property and all Capital Improvements or the construction, use or alteration thereof, whether now or hereafter enacted and in
force, including, without limitation, any which may (i) require
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15
repairs, modifications or alterations in or to the Leased Property and Tenant’s Property, (ii) in any way adversely affect the use
and enjoyment thereof, or (iii) regulate the transport, handling, use, storage or disposal or require the cleanup or other treatment
of any Hazardous Substance.
Liquor Authority: As defined in Section 41.13(a).
Liquor Laws: As defined in Section 41.13(a).
Long-Lived Assets: (i) With respect to property owned by Tenant’s Parent as of the Commencement Date, all
property capitalized in accordance with GAAP with an expected life of not less than fifteen (15) years as initially reflected on the
books and records of Tenant’s Parent at or about the time of acquisition thereof or (ii) with respect to those assets purchased,
replaced or otherwise maintained by Tenant after the Commencement Date, such asset capitalized in accordance with GAAP with
an expected life of not less than fifteen (15) years as of or about the time of the acquisition thereof, as classified by Tenant in
accordance with GAAP.
Master Lease: As defined in the preamble.
Material Indebtedness: At any time, Indebtedness of any one or more of the Tenant (and its Subsidiaries) and any
Guarantor in an aggregate principal amount exceeding ten percent (10%) of Adjusted Revenue of Tenant and the Guarantors that
are Subsidiaries of Tenant on a consolidated basis over the most recent Test Period for which financial statements are available.
As of the Commencement Date, until financial statements are available for the initial Test Period, such amount shall be Seventeen
Million Six Hundred Forty Three Thousand Dollars ($17,643,000).
Maximum Foreseeable Loss: As defined in Section 13.2.
Merger Agreement: That certain Agreement and Plan of Merger dated as of April 15, 2018 by and among Tenant’s
Parent, Delta Merger Sub, Inc., Landlord and TEI.
Net Revenue: With respect to any Facility, the sum of, without duplication, (i) the amount received by Tenant (and
its Subsidiaries and its subtenants) from patrons at such Facility for gaming, less refunds and free promotional play provided to
the customers and invitees of Tenant (and its Subsidiaries and subtenants) pursuant to a rewards, marketing, and/or frequent users
program, and less amounts returned to patrons through winnings at such Facility (the amounts in this clause (i), “Gaming
Revenues”); and (ii) the gross receipts of Tenant (and its Subsidiaries and subtenants) for all goods and merchandise sold, the
charges for all services performed, or any other revenues generated by Tenant (and its Subsidiaries and subtenants) in, at, or from
such Facility for cash, credit, or otherwise (without reserve or deduction for uncollected amounts), but excluding any Gaming
Revenues (the amounts in this clause (ii), “Retail Sales”); less (iii) the retail value of accommodations, food and beverage, and
other services furnished without charge to guests of Tenant (and its Subsidiaries and subtenants) at such Facility (the amounts in
this clause (iii), “Promotional Allowance”). For the avoidance of doubt, gaming taxes and casino operating expenses (such as
salaries, income taxes, employment taxes, supplies, equipment, cost of goods and inventory, rent, office overhead, marketing and
advertising and other general administrative costs) will not be deducted in arriving at Net Revenue. Net Revenue will be
calculated on an accrual basis for these purposes, as required under GAAP. For the absence of doubt, if Gaming Revenues, Retail
Sales or Promotional Allowances of a Subsidiary or subtenant, as applicable, are taken into account for purposes of calculating
Net Revenue, any rent received by Tenant from such Subsidiary or subtenant, as applicable, pursuant to any sublease with such
Subsidiary or subtenant, as applicable, shall not also be taken into account for purposes of calculating Net Revenues.
Notwithstanding the foregoing, with respect to any Specified Sublease, Net Revenue shall not include Gaming
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16
Revenues or Retail Sales from the subtenants under such subleases and shall include the rent received by Tenant or its
subsidiaries thereunder. “Net Revenue” with respect to the Leased Property means the aggregate amount of Net Revenue for all
of the Facilities.
New Lease: As defined in Section 17.1(f).
New Jersey Act: As defined in Section 41.15(a).
New Jersey Facility(ies): As defined in Section 41.15(a).
New Jersey Fair Market Value: As defined in Section 41.15(e).
New Jersey Purchase Notice: As defined in Section 41.15(d).
Notice: A notice given in accordance with Article XXXV.
Notice of Termination: As defined in Section 17.1(f).
NRS: As defined in Section 41.14.
OFAC: As defined in Section 39.1.
Officer’s Certificate: A certificate of Tenant or Landlord, as the case may be, signed by an officer of such party
authorized to so sign by resolution of its board of directors or by its sole member or by the terms of its by-laws or operating
agreement, as applicable.
Original Master Lease: As defined in Recital A.
than the maximum rate then permitted under applicable law.
Overdue Rate: On any date, a rate equal to five (5) percentage points above the Prime Rate, but in no event greater
Parent Company: With respect to any Discretionary Transferee, any Person (other than an Investment Fund) (x) as
to which such Discretionary Transferee is a Subsidiary; and (y) which is not a Subsidiary of any other Person (other than an
Investment Fund).
Payment Date: Any due date for the payment of the installments of Rent or any other sums payable under this
Master Lease.
Percentage Rent: (a) During the period from the Commencement Date until (and including) the last day of the
second Lease Year, an annual amount equal to Thirteen Million Three Hundred Sixty Thousand Thirty-Seven Dollars
($13,360,037) and (b) from and after the first day of the third Lease Year, Zero Dollars ($0.00).
22.3(ii) without Landlord’s consent.
Permitted Facility Sublease: A sublease for all or substantially all of any Facility that is permitted under Section
of the Adjusted Revenue Pool.
Permitted Facility Sublease Cap Amount: As of any date of determination, an amount equal to ten percent (10%)
Permitted Leasehold Mortgage: A document creating or evidencing an encumbrance on Tenant’s leasehold interest
(or a subtenant’s subleasehold interest) in the Leased Property, granted to or for the benefit of a Permitted Leasehold Mortgagee
as security for the obligations under a Debt Agreement.
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17
Permitted Leasehold Mortgagee: The lender or agent or trustee or similar representative on behalf of one or more
lenders or noteholders or other investors under a Debt Agreement, in each case as and to the extent such Person has the power to
act on behalf of all lenders under such Debt Agreement pursuant to the terms thereof; provided such lender, agent or trustee or
similar representative (but not necessarily the lenders, noteholders or other investors which it represents) is a banking or other
financial institution in the business of generally acting as a lender, agent or trustee or similar representative (in each case, on
behalf of a group of lenders) under debt agreements or instruments similar to the Debt Agreement. For the avoidance of doubt,
the Collateral Agent is a Permitted Leasehold Mortgagee.
Permitted Leasehold Mortgagee Designee: An entity designated by a Permitted Leasehold Mortgagee and acting
for the benefit of the Permitted Leasehold Mortgagee, or the lenders, noteholders or investors represented by the Permitted
Leasehold Mortgagee.
Permitted Leasehold Mortgagee Foreclosing Party: A Permitted Leasehold Mortgagee that forecloses on this
Master Lease and assumes this Master Lease or a Subsidiary of a Permitted Leasehold Mortgagee that assumes this Master Lease
in connection with a foreclosure on this Master Lease by a Permitted Leasehold Mortgagee.
Person or person: Any individual, corporation, limited liability company, partnership, joint venture, association,
joint stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other
form of entity.
Pre-Existing Environmental Conditions: As defined in Section 32.6.
Pre-Opening Expense: With respect to any fiscal period, the amount of expenses (including Consolidated Interest
Expense) incurred with respect to capital projects which are appropriately classified as “pre-opening expenses” on the applicable
financial statements of Tenant’s Parent and its Subsidiaries for such period.
Primary Intended Use: Gaming and/or pari-mutuel use consistent, with respect to each Facility, with its current use
(as specified on Exhibit A attached hereto as it may be amended from time to time), or with prevailing gaming industry use at any
time, together with all ancillary uses consistent with gaming use and operations, including hotels, restaurants, bars, etc.
Prime Rate: On any date, a rate equal to the annual rate on such date publicly announced by JPMorgan Chase
Bank, N.A. (provided that if JPMorgan Chase Bank, N.A. ceases to publish such rate, the Prime Rate shall be determined
according to the Prime Rate of another nationally known money center bank reasonably selected by Landlord), to be its prime
rate for ninety (90)-day unsecured loans to its corporate borrowers of the highest credit standing, but in no event greater than the
maximum rate then permitted under applicable law.
Proceeding: As defined in Section 23.1(b)(v).
Prohibited Persons: As defined in Section 39.1.
Promotional Allowance: As defined in the definition of Net Revenue.
Property Value: With respect to the Replaced Property and the Replacement Properties, the “Property Value” set
forth on Schedule C attached hereto.
between Landlord and TEI as amended.
Purchase and Sale Agreement: That certain Purchase and Sale Agreement dated as of April 15, 2018, by and
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18
Qualified Successor Tenant: As defined in Section 36.2.
Regulatory Approval Supporting Information: Information regarding Landlord (and, without limitation, its officers
and Affiliates), Tenant (and, without limitation, its officers and Affiliates), or a Replaced Property Transferee (and, without
limitation, its officers and Affiliates), as applicable, in each case, that is reasonably requested by Tenant from Landlord or by
Landlord from Tenant, as the case may be, in connection with obtaining any Required Governmental Approvals.
Related Persons: With respect to a party, such party’s Affiliates and Subsidiaries and the directors, officers,
employees, agents, advisors and controlling persons of such party and its Affiliates and Subsidiaries.
Remediation and Remediate: As defined in Section 32.3.
Renewal Notice: As defined in Section 1.4.
Renewal Term: A period for which the Term is renewed in accordance with Section 1.4.
Rent: The sum of (a) the Building Base Rent, (b) the Land Base Rent and (c) the Percentage Rent.
Rent Reduction Amount: As defined in Section 41.15(f).
Replaced Property: The Greenville Facility, if designated by Tenant to be replaced by one or more Replacement
Properties in connection with a Replacement Property Transaction.
Replaced Property Transferee: The transferee(s) of Landlord’s interest in the Replaced Property as designated by
Tenant (in its sole discretion), which may or may not be Tenant or an Affiliate of Tenant; provided that, subject to the foregoing,
immediately after giving effect to a Replacement Property Transaction, the Tenant’s and Landlord’s interest in the Replaced
Property shall be owned by the same entity or by affiliated entities unless otherwise approved by Landlord; provided, further, that
the Replaced Property Transferee shall not be a “real estate investment trust” (within the meaning of Section 856(a) of the Code),
the primary business of which is leasing real properties to gaming operators.
Replacement Exchange Agreement: A replacement exchange agreement for the exchange of the Replaced
Property for the Replacement Property in connection with a Replacement Property Transaction, which shall (except as otherwise
expressly set forth in this Master Lease) contain customary terms and conditions for transfers of property in the jurisdiction(s) in
which the Replaced Property and the Replacement Property are located, as applicable, including, but not limited to, the following
terms: (i) Tenant shall provide customary representations and warranties with respect to the condition (financial and physical) of
the Replacement Property, which shall survive the closing for a period of twelve (12) months and which shall include customary
post-closing indemnification obligations, (ii) Tenant shall deliver the Replacement Property to Landlord free and clear of all liens
other than liens that are (x) approved by Landlord in accordance with a customary title and survey objection procedure or
(y) would have been permitted under this Master Lease if such Replacement Property were a “Facility” under this Master Lease
when such liens were incurred; provided, that in no event shall any monetary liens (other than liens for real estate taxes or other
Impositions not yet due and payable which shall be Tenant’s obligations under the Replacement Property Lease Amendment) be
deemed a permitted encumbrance under such Replacement Exchange
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Agreement, (iii) Landlord shall provide only the following limited representations and warranties to the Replaced Property
Transferee with respect to the Replaced Property: (a) due authority and execution, (b) no conflict with organizational documents
of Landlord or any other agreement or judgment to which Landlord is a party, (c) Patriot Act and OFAC, (d) bankruptcy, and
(e) Landlord has not entered into any contract, easement or other agreement, which will be binding on the Replaced Property
Transferee after the closing of the Replacement Property Transaction, except for those contracts, easements or other agreements
that are disclosed in any title report or in this Master Lease (it being understood that any property related representations and
warranties requested by the Replaced Property Transferee and any post-closing indemnification obligations related thereto shall
be provided solely by Tenant), and (iv) subject to the satisfaction of all closing conditions in favor of Landlord, Landlord shall
convey its fee interest to the Replaced Property Transferee free and clear of: (a) all monetary liens and encumbrances voluntarily
created or entered into by Landlord and (b) except to the extent that Tenant’s consent is not required under this Master Lease, all
other liens and encumbrances voluntarily created or entered into by Landlord without Tenant’s prior written consent.
Replacement Property: One or more of Tenant’s or its Affiliates’ properties generally referred to as (a) Eldorado -
Scioto Downs in Columbus, Ohio, (b) The Row in Reno, Nevada (consisting of Eldorado, Silver Legacy and Circus Circus),
(c) Isle Casino Racing at Pompano Park in Pompano Beach, Florida, (d) Isle and Lady Luck Casino Hotels in Black Hawk,
Colorado or (e) Isle of Capri Casino and Hotel in Boonville, Missouri, which: (x) is or are (as applicable) designated by Tenant
(in its sole discretion) as a Replacement Property and (y) has or have (as applicable) a Property Value, individually or
collectively, of at least equal to the Property Value of the Replaced Property, in each case; provided that, no effects or events
materially and adversely affecting the value of such property have occurred since the Effective Date, and Landlord has been
provided reasonable access to and an opportunity to conduct an inspection to confirm the foregoing.
Replacement Property Lease Amendment: An amendment to this Master Lease as is reasonably necessary and
appropriate to effectuate fully the provisions and intent of Section 22.7, including to evidence and effectuate (a) the removal of
the Replaced Property from this Master Lease (including, without limitation, the removal of (i) the Replaced Property from the
list of Facilities on Exhibit A, (ii) the legal description with respect to the Replaced Property from Exhibit B, (iii) the Gaming
License with respect to the Replaced Property from the list of Gaming Licenses on Exhibit C and (iv) the disclosure items with
respect to the Replaced Property from Schedule A), (b) the addition of the Replacement Property to this Master Lease (including,
without limitation, the addition of (i) the Replacement Property to the list of Facilities on Exhibit A, (ii) the legal description with
respect to the Replacement Property to Exhibit B and (iii) the Gaming License with respect to the Replacement Property to the
list of Gaming Licenses on Exhibit C) and (c) if applicable, the adjustment of Building Base Rent and Land Base Rent under this
Master Lease in accordance with Section 22.7(e), together with such other documents (including, without limitation, the
recordation of amended memorandum(s) of lease) as are reasonably necessary and appropriate to effectuate fully the provisions
and intent of Section 22.7.
Replacement Property Right: Tenant’s right to require Landlord to consummate a Replacement Property
Transaction, subject to and in accordance with the terms and conditions of Section 22.7 of Master Lease (it being understood that
if more than one Replacement Property is identified by Tenant to replace the Replaced Property, then the acquisition of such
Replacement Properties shall occur in a single transaction with the Replaced Property).
Replacement Property Transaction: (a) The sale by Tenant or an Affiliate of Tenant to Landlord of a Replacement
Property and the simultaneous leaseback to Tenant of such Replacement Property pursuant to Section 22.7 of this Master Lease
and (b) the transfer by Landlord to the Replaced Property Transferee of all of Landlord’s interest in the Replaced
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Property (including Landlord’s fee interest therein), in each case, free and clear of all liens for borrowed money; provided that, in
the event that the Replaced Property Transferee is not Tenant or any of its Affiliates, then Tenant shall simultaneously transfer to
the Replaced Property Transferee all of Tenant’s Property and its operations (in each case, excluding Tenant’s intellectual
property, any of which Tenant may, in its sole discretion, elect to transfer) with respect to the Replaced Property.
Replacement Property Transaction Notice: As defined in Section 22.7(a).
trustee or a Person acting in a similar capacity or as representative for such lenders or holders.
Representative: With respect to the lenders or holders under a Debt Agreement, a Person designated as agent or
Required Governmental Approvals: All Gaming Licenses and other necessary approvals from all gaming
authorities and other governmental authorities required under applicable law (including applicable Gaming Regulations) for (as
applicable) the exercise of the Replacement Property Right and the consummation of the transactions contemplated thereby.
Facility covered under this Master Lease at such time.
Restricted Area: The geographical area that at any time during the Term is within a sixty (60) mile radius of any
Restricted Information: As defined in Section 23.1(c).
Restricted Payment: Dividends (in cash, property or obligations) on, or other payments or distributions on account
of, or the setting apart of money for a sinking or other analogous fund for, or the purchase, redemption, retirement, repurchase or
other acquisition of, any Equity Interests or Equity Rights (other than outstanding securities convertible into Equity Interests) of
Tenant, but excluding dividends, payments or distributions paid through the issuance of additional shares of Equity Interests and
any redemption, retirement or exchange of any Equity Interest through, or with the proceeds of, the issuance of Equity Interests
of Tenant.
Retail Sales: As defined in the definition of Net Revenue.
SEC: The United States Securities and Exchange Commission.
Second A&R Effective Date: As defined in Recital C.
Second A&R Master Lease: As defined in Recital C.
promulgated thereunder.
Securities Act: The Securities Act of 1933, as amended, or any successor statute, and the rules and regulations
Severance Lease: A separate lease with respect to a New Jersey Facility, created when Landlord transfers a
specific Facility (Facilities), which lease shall provide that the rent payable under the Severance Lease at the time of
commencement of such Severance Lease shall be equal to the amount of the Rent Reduction Amount for the applicable Leased
Property to be subject to such Severance Lease.
Solvent: With respect to any Person on a particular date, that on such date (a) the fair value of the property of such
Person, on a going-concern basis, is greater than the total amount of liabilities (including contingent liabilities) of such Person,
(b) the present fair salable value of the assets of such Person, on a going-concern basis, is not less than the amount that will be
required to pay the probable liability of such Person on its debts (including contingent liabilities) as they become absolute and
matured, (c) such Person has not incurred, and does not
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21
intend to, and does not believe that it will, incur, debts or liabilities beyond such Person’s ability to pay such debts and liabilities
as they mature, (d) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction,
for which such Person’s property would constitute an unreasonably small capital and (e) such Person is “solvent” within the
meaning given that term and similar terms under applicable laws relating to fraudulent transfers and conveyances. For purposes
of this definition, the amount of any contingent liability shall be computed as the amount that, in light of all the facts and
circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured
liability (irrespective of whether such contingent liabilities meet the criteria for accrual under Accounting Standards Codification
No. 450).
Specified Debt Agreement Default: Any event or occurrence under a Debt Agreement or Material Indebtedness
that enables or permits the lenders or holders (or Representatives of such lenders or holders) to accelerate the maturity of the
Indebtedness outstanding under a Debt Agreement or Material Indebtedness.
Specified Expenses: For any Test Period, (i) Rent incurred for the same Test Period, and (ii) the (1) income tax
expense, (2) consolidated interest expense, (3) depreciation and amortization expense, (4) any nonrecurring, unusual, or
extraordinary items of income, cost or expense, including but not limited to, (a) any gains or losses attributable to the early
extinguishment or conversion of indebtedness, (b) gains or losses on discontinued operations and asset sales, disposals or
abandonments, and (c) impairment charges or asset write-offs including, without limitation, those related to goodwill or
intangible assets, long-lived assets, and investments in debt and equity securities, in each case, pursuant to GAAP, (5) any non-
cash items of expense (other than to the extent such non-cash items of expense require an accrual or reserve for future cash
expenses (provided that if such accrual or reserve is for contingent items, the outcome of which is subject to uncertainty, such
non-cash items of expense may, at the election of the Tenant, be added to net income and deducted when and to the extent
actually paid in cash)), (6) any Pre-Opening Expenses, (7) transaction costs for the spin-off of Tenant’s Parent, the entry into this
Master Lease, the negotiation and consummation of the financing transactions in connection therewith and the other transactions
contemplated in connection with the foregoing consummated on or before the Commencement Date, (8) non-cash valuation
adjustments, (9) any expenses related to the repurchase of stock options, and (10) expenses related to the grant of stock options,
restricted stock, or other equivalent or similar instruments; in the case of each of (1) through (10), of Tenant and the Subsidiaries
of Tenant that are Guarantors on a consolidated basis for such period.
Specified Proceeds: For any Test Period, to the extent not otherwise included in Net Revenue, the amount of
insurance proceeds (calculated net of any applicable deductible and the reasonable out-of-pocket costs and expenses actually
incurred by Tenant, if any, to collect such proceeds) received during such period by Tenant or the Guarantors in respect of any
Casualty Event; provided, however, that for purposes of this definition, (i) with respect to any Facility subject to such Casualty
Event which had been in operation for at least one complete fiscal quarter the amount of insurance proceeds plus the Net
Revenue (excluding such insurance proceeds), if any, attributable to the Facility subject to such Casualty Event for such period
shall not exceed an amount equal to the Net Revenue attributable to such Facility for the Test Period ended immediately prior to
the date of such Casualty Event (calculated on a pro forma annualized basis to the extent such Facility was not operational for the
full previous Test Period) and (ii) with respect to any Facility subject to such Casualty Event which had not been in operation for
at least one complete fiscal quarter, the amount of insurance proceeds plus the Net Revenue attributable to such Facility for such
period shall not exceed the Net Revenue reasonably projected by Tenant to be derived from such Facility for such period.
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Specified Sublease: (a) With respect to any Facility other than the Iowa Facilities, any lease in effect on the
Commencement Date constituting part of the Leased Property with respect to which Tenant is a sublessor, substantially as in
effect on the Commencement Date and (b) with respect to any Iowa Facility, any lease in effect on the Second A&R Effective
Date constituting part of the Leased Property with respect to which Tenant is a sublessor, substantially as in effect on the Second
A&R Effective Date, in each case, a list of which is attached on Schedule A hereto.
State: With respect to each Facility, the state or commonwealth in which such Facility is located.
Subsidiary: As to any Person, (i) any corporation more than fifty percent (50%) of whose stock of any class or
classes having by the terms thereof ordinary voting power to elect a majority of the directors of such corporation (irrespective of
whether or not at the time stock of any class or classes of such corporation shall have or might have voting power by reason of
the happening of any contingency) is at the time of determination owned by such Person and/or one or more Subsidiaries of such
Person, and (ii) any partnership, limited liability company, association, joint venture or other entity in which such person and/or
one or more Subsidiaries of such person has more than a fifty percent (50%) equity interest at the time of determination. Unless
otherwise qualified, all references to a “Subsidiary” or to “Subsidiaries” in this Master Lease shall refer to a Subsidiary or
Subsidiaries of Tenant.
Successor Tenant: As defined in Section 36.1.
Successor Tenant Rent: As defined in Section 36.2.
Taking: As defined in Section 15.1(a).
TEI: As defined in the preamble.
Tenant: As defined in the preamble.
Tenant Capital Improvement: A Capital Improvement funded by Tenant, as compared to Landlord.
Tenant COC: As defined in Section 22.2(iii).
Tenant Parent COC: As defined in Section 22.2(iii).
Tenant Representatives: As defined in Section 23.4.
Tenant’s Parent: Caesars Entertainment, Inc., and any permitted successor thereto.
Tenant’s Property: With respect to each Facility, all assets (other than the Leased Property and property owned by
a third party) primarily related to or used in connection with the operation of the business conducted on or about the Leased
Property, together with all replacements, modifications, additions, alterations and substitutes therefor.
Term: As defined in Section 1.3.
Termination Notice: As defined in Section 17.1(d).
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23
ended consecutive fiscal quarters of such Person.
Test Period: With respect to any Person, for any date of determination, the period of the four (4) most recently
Unavoidable Delay: Any of the following events: epidemics, pandemics, strikes, lock-outs, inability to procure
materials, power failure, acts of God, governmental restrictions, enemy action, civil commotion, fire, unavoidable casualty,
condemnation or other causes beyond the reasonable control of the party responsible for performing an obligation hereunder;
provided that lack of funds shall not be deemed a cause beyond the reasonable control of a party.
Unsuitable for Its Primary Intended Use: A state or condition of any Facility such that by reason of damage or
destruction, or a partial taking by Condemnation, such Facility cannot, following restoration thereof (to the extent commercially
practical), be operated on a commercially practicable basis for its Primary Intended Use, taking into account, among other
relevant factors, the amount of square footage and the estimated revenue affected by such damage or destruction.
Waterloo Facility: As defined in Recital C.
Waterloo Operator: As defined in the preamble.
ARTICLE III
1.1
Rent. During the Term, Tenant will pay to Landlord the Rent and Additional Charges in lawful money of
the United States of America and legal tender for the payment of public and private debts, in the manner provided in Section 3.3.
The Rent during any Lease Year is payable in advance in consecutive monthly installments on the fifth (5 ) Business Day of each
calendar month during that Lease Year. Unless otherwise agreed by the parties, Rent and Additional Charges shall be prorated as
to any partial months at the beginning and end of the Term. The parties will agree on an allocation of the Rent on a declining
basis for federal income tax purposes within the 115/85 safe harbor of Section 467 of the Code, assuming a projected schedule of
Rent for this purpose.
th
1.2
Late Payment of Rent. Tenant hereby acknowledges that late payment by Tenant to Landlord of Rent will
cause Landlord to incur costs not contemplated hereunder, the exact amount of which is presently anticipated to be extremely
difficult to ascertain. Accordingly, if any installment of Rent other than Additional Charges payable to a Person other than
Landlord shall not be paid within five (5) days after its due date, Tenant will pay Landlord on demand a late charge equal to the
lesser of (a) five percent (5%) of the amount of such installment or (b) the maximum amount permitted by law; provided,
however, that in no event shall any late charge be assessed on the full amount of Rent due pursuant to Section 16.3. The parties
agree that this late charge represents a fair and reasonable estimate of the costs that Landlord will incur by reason of late payment
by Tenant. The parties further agree that such late charge is Rent and not interest and such assessment does not constitute a lender
or borrower/creditor relationship between Landlord and Tenant. Thereafter, if any installment of Rent other than Additional
Charges payable to a Person other than Landlord shall not be paid within ten (10) days after its due date, the amount unpaid,
including any late charges previously accrued, shall bear interest at the Overdue Rate from the due date of such installment to the
date of payment thereof, and Tenant shall pay such interest to Landlord on demand. The payment of such late charge or such
interest shall not constitute waiver of, nor excuse or cure, any default under this Master Lease, nor prevent Landlord from
exercising any other rights and remedies available to Landlord.
electronic funds transfer debit transactions through wire transfer of
1.3 Method of Payment of Rent. Rent and Additional Charges to be paid to Landlord shall be paid by
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24
immediately available funds and shall be initiated by Tenant for settlement on or before the Payment Date; provided, however, if
the Payment Date is not a Business Day, then settlement shall be made on the next succeeding day which is a Business Day.
Landlord shall provide Tenant with appropriate wire transfer information in a Notice from Landlord to Tenant. If Landlord directs
Tenant to pay any Rent to any party other than Landlord, Tenant shall send to Landlord simultaneously with such payment, a
copy of the transmittal letter or invoice and a check whereby such payment is made or such other evidence of payment as
Landlord may reasonably require.
1.4
Net Lease. Landlord and Tenant acknowledge and agree that (i) this Master Lease is and is intended to be
what is commonly referred to as a “net, net, net” or “triple net” lease, and (ii) the Rent shall be paid absolutely net to Landlord, so
that this Master Lease shall yield to Landlord the full amount or benefit of the installments of Rent and Additional Charges
throughout the Term with respect to each Facility, all as more fully set forth in Article IV and subject to any other provisions of
this Master Lease which expressly provide for adjustment or abatement of Rent or other charges. If Landlord commences any
proceedings for non-payment of Rent, Tenant will not interpose any counterclaim or cross complaint or similar pleading of any
nature or description in such proceedings unless Tenant would lose or waive such claim by the failure to assert it. This shall not,
however, be construed as a waiver of Tenant’s right to assert such claims in a separate action brought by Tenant. The covenants to
pay Rent and other amounts hereunder are independent covenants, and Tenant shall have no right to hold back, offset or fail to
pay any such amounts for default by Landlord or for any other reason whatsoever, except as provided in Section 3.1.
ARTICLE IV
1.1
Impositions. (a)Subject to Article XII relating to permitted contests, Tenant shall pay, or cause to be paid,
all Impositions before any fine, penalty, interest or cost may be added for non-payment. Tenant shall make such payments
directly to the taxing authorities where feasible, and promptly furnish to Landlord copies of official receipts or other satisfactory
proof evidencing such payments. Tenant’s obligation to pay Impositions shall be absolutely fixed upon the date such Impositions
become a lien upon the Leased Property or any part thereof subject to Article XII. If any Imposition may, at the option of the
taxpayer, lawfully be paid in installments, whether or not interest shall accrue on the unpaid balance of such Imposition, Tenant
may pay the same, and any accrued interest on the unpaid balance of such Imposition, in installments as the same respectively
become due and before any fine, penalty, premium, further interest or cost may be added thereto. For the avoidance of doubt,
Tenant shall be responsible for the payment of all Impositions that are due and payable as of the Commencement Date (regardless
as to whether such Impositions are attributable to a period preceding the Commencement Date).
(a)
Landlord or GLP shall prepare and file all tax returns and reports as may be required by Legal
Requirements with respect to Landlord’s net income, gross receipts, franchise taxes and taxes on its capital stock and any other
returns required to be filed by or in the name of Landlord (the “Landlord Tax Returns”), and Tenant or Tenant’s Parent shall
prepare and file all other tax returns and reports as may be required by Legal Requirements with respect to or relating to the
Leased Property (including all Capital Improvements), and Tenant’s Property.
(b)
Any refund due from any taxing authority in respect of any Imposition paid by or on behalf of Tenant or
Tenant’s Affiliates, including prior to the merger effected pursuant to the Merger Agreement, shall be paid over to or retained by
Tenant.
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(c)
Landlord and Tenant shall, upon request of the other, provide such data as is maintained by the party to
whom the request is made with respect to the Leased Property as may be necessary to prepare any required returns and reports. If
any property covered by this Master Lease is classified as personal property for tax purposes, Tenant shall file all personal
property tax returns in such jurisdictions where it must legally so file. Landlord, to the extent it possesses the same, and Tenant,
to the extent it possesses the same, shall provide the other party, upon request, with cost and depreciation records necessary for
filing returns for any property so classified as personal property. Where Landlord is legally required to file personal property tax
returns, Tenant shall be provided with copies of assessment notices indicating a value in excess of the reported value in sufficient
time for Tenant to file a protest.
(d)
Billings for reimbursement by Tenant to Landlord of personal property or real property taxes and any taxes
due under the Landlord Tax Returns, if and to the extent Tenant is responsible for such taxes under the terms of this Section 4.1,
shall be accompanied by copies of a bill therefor and payments thereof which identify the personal property or real property or
other tax obligations of Landlord with respect to which such payments are made.
(e)
Impositions imposed or assessed in respect of the tax-fiscal period during which the Term terminates shall
be adjusted and prorated between Landlord and Tenant, whether or not such Imposition is imposed or assessed before or after
such termination, and Tenant’s obligation to pay its prorated share thereof in respect of a tax-fiscal period during the Term shall
survive such termination. Landlord will not voluntarily enter into agreements that will result in additional Impositions without
Tenant’s consent, which shall not be unreasonably withheld (it being understood that it shall not be reasonable to withhold
consent to customary additional Impositions that other property owners of properties similar to the Leased Property customarily
consent to in the ordinary course of business); provided Tenant is given reasonable opportunity to participate in the process
leading to such agreement.
1.2
Utilities. Tenant shall pay or cause to be paid all charges for electricity, power, gas, oil, water and other
utilities used in the Leased Property (including all Capital Improvements). Tenant shall also pay or reimburse Landlord for all
costs and expenses of any kind whatsoever which at any time with respect to the Term hereof with respect to any Facility may be
imposed against Landlord by reason of any of the covenants, conditions and/or restrictions affecting the Leased Property or any
portion thereof, or with respect to easements, licenses or other rights over, across or with respect to any adjacent or other property
which benefits the Leased Property or any Capital Improvement, including any and all costs and expenses associated with any
utility, drainage and parking easements. Landlord will not enter into agreements that will encumber the Leased Property without
Tenant’s consent, which shall not be unreasonably withheld (it being understood that it shall not be reasonable to withhold
consent to encumbrances that do not adversely affect the use or future development of the Facility as a Gaming Facility or
increase Additional Charges payable under this Master Lease); provided Tenant is given reasonable opportunity to participate in
the process leading to such agreement. Tenant will not enter into agreements that will encumber the Leased Property after the
expiration of the Term without Landlord’s consent, which shall not be unreasonably withheld (it being understood that it shall not
be reasonable to withhold consent to encumbrances that do not adversely affect the value of the Leased Property or the Facility);
provided Landlord is given reasonable opportunity to participate in the process leading to such agreement.
1.3
Impound Account. At Landlord’s option following the occurrence and during the continuation of an
Event of Default or a default by Tenant of Section 23.3(b) hereof (to be exercised by thirty (30) days’ prior written notice to
Tenant); and provided Tenant is not already being required to impound such payments in accordance with the requirements of
Section 31.3(b) below, Tenant shall be required to deposit, at the time of any payment of Rent, an amount equal to one-twelfth of
the sum of (i) Tenant’s estimated annual real and personal
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26
property taxes required pursuant to Section 4.1 hereof (as reasonably determined by Landlord), and (ii) Tenant’s estimated annual
maintenance expenses and insurance premium costs pursuant to Articles IX and XIII hereof (as reasonably determined by
Landlord). Such amounts shall be applied to the payment of the obligations in respect of which said amounts were deposited in
such order of priority as Landlord shall reasonably determine, on or before the respective dates on which the same or any of them
would become delinquent. Such amount shall be deposited in an interest-bearing segregated account with a banking institution
and the reasonable cost of such bank for administering such impound account shall be paid by Tenant. Nothing in this Section 4.3
shall be deemed to affect any right or remedy of Landlord hereunder.
ARTICLE V
1.1
No Termination, Abatement, etc. Except as otherwise specifically provided in this Master Lease, Tenant
shall remain bound by this Master Lease in accordance with its terms and shall not seek or be entitled to any abatement,
deduction, deferment or reduction of Rent, or set-off against the Rent. Except as may be otherwise specifically provided in this
Master Lease, the respective obligations of Landlord and Tenant shall not be affected by reason of (i) any damage to or
destruction of the Leased Property or any portion thereof from whatever cause or any Condemnation of the Leased Property, any
Capital Improvement or any portion thereof; (ii) other than as a result of Landlord’s willful misconduct or gross negligence, the
lawful or unlawful prohibition of, or restriction upon, Tenant’s use of the Leased Property, any Capital Improvement or any
portion thereof, the interference with such use by any Person or by reason of eviction by paramount title; (iii) any claim that
Tenant has or might have against Landlord by reason of any default or breach of any warranty by Landlord hereunder or under
any other agreement between Landlord and Tenant or to which Landlord and Tenant are parties; (iv) any bankruptcy, insolvency,
reorganization, consolidation, readjustment, liquidation, dissolution, winding up or other proceedings affecting Landlord or any
assignee or transferee of Landlord; or (v) for any other cause, whether similar or dissimilar to any of the foregoing, other than a
discharge of Tenant from any such obligations as a matter of law. Tenant hereby specifically waives all rights arising from any
occurrence whatsoever which may now or hereafter be conferred upon it by law (a) to modify, surrender or terminate this Master
Lease or quit or surrender the Leased Property or any portion thereof, or (b) which may entitle Tenant to any abatement,
reduction, suspension or deferment of the Rent or other sums payable by Tenant hereunder except in each case as may be
otherwise specifically provided in this Master Lease. Notwithstanding the foregoing, nothing in this Article V shall preclude
Tenant from bringing a separate action against Landlord for any matter described in the foregoing clauses (ii), (iii) or (v) and
Tenant is not waiving other rights and remedies not expressly waived herein. The obligations of Landlord and Tenant hereunder
shall be separate and independent covenants and agreements and the Rent and all other sums payable by Tenant hereunder shall
continue to be payable in all events unless the obligations to pay the same shall be terminated pursuant to the express provisions
of this Master Lease or by termination of this Master Lease as to all or any portion of the Leased Property other than by reason of
an Event of Default. Tenant’s agreement that, except as may be otherwise specifically provided in this Master Lease, any eviction
by paramount title as described in item (ii) above shall not affect Tenant’s obligations under this Master Lease, shall not in any
way discharge or diminish any obligation of any insurer under any policy of title or other insurance and, to the extent the
recovery thereof is not necessary to compensate Landlord for any damages incurred by any such eviction, Tenant shall be entitled
to a credit for any sums recovered by Landlord under any such policy of title or other insurance up to the maximum amount paid
by Tenant to Landlord under this Section 5.1, and Landlord, upon request by Tenant, shall assign Landlord’s rights under such
policies to Tenant; provided that such assignment does not adversely affect Landlord’s rights under any such policy and provided
further, that Tenant shall indemnify, defend, protect and save Landlord harmless from and against any liability, cost or expense of
any kind that may be imposed upon Landlord in
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connection with any such assignment except to the extent such liability, cost or expense arises from the gross negligence or
willful misconduct of Landlord.
ARTICLE VI
1.1
Ownership of the Leased Property. (a)Landlord and Tenant acknowledge and agree that they have
executed and delivered this Master Lease with the understanding that (i) the Leased Property is the property of Landlord, (ii)
Tenant has only the right to the possession and use of the Leased Property upon the terms and conditions of this Master Lease,
(iii) this Master Lease is a “true lease,” is not a financing lease, capital lease, mortgage, equitable mortgage, deed of trust, trust
agreement, security agreement or other financing or trust arrangement, and the economic realities of this Master Lease are those
of a true lease, (iv) the business relationship created by this Master Lease and any related documents is and at all times shall
remain that of landlord and tenant, (v) this Master Lease has been entered into by each party in reliance upon the mutual
covenants, conditions and agreements contained herein, and (vi) none of the agreements contained herein is intended, nor shall
the same be deemed or construed, to create a partnership between Landlord and Tenant, to make them joint venturers, to make
Tenant an agent, legal representative, partner, subsidiary or employee of Landlord, or to make Landlord in any way responsible
for the debts, obligations or losses of Tenant.
(a)
Each of the parties hereto covenants and agrees, subject to Section 6.1(c), not to (i) file any income tax
return or other associated documents; (ii) file any other document with or submit any document to any governmental body or
authority; (iii) enter into any written contractual arrangement with any Person; or (iv) release any financial statements of Tenant,
in each case that takes a position other than that this Master Lease is a “true lease” with Landlord as owner of the Leased
Property and Tenant as the tenant of the Leased Property, including (x) treating Landlord as the owner of such Leased Property
eligible to claim depreciation deductions under Sections 167 or 168 of the Code with respect to such Leased Property, (y) Tenant
reporting its Rent payments as rent expense under Section 162 of the Code, and (z) Landlord reporting the Rent payments as
rental income under Section 61 of the Code, in each case except as otherwise required by a change in law or a “determination”
within the meaning of Section 1313(a) of the Code (or similar provision of state or local law).
(b)
If Tenant should reasonably conclude that GAAP or the SEC require treatment different from that set forth
in Section 6.1(b) for applicable non-tax purposes, then (x) Tenant shall promptly give prior Notice to Landlord, accompanied by a
written statement that references the applicable pronouncement that controls such treatment and contains a brief description
and/or analysis that sets forth in reasonable detail the basis upon which Tenant reached such conclusion, and (y) notwithstanding
Section 6.1(b), Tenant may comply with such requirements.
(c)
The Rent is the fair market rent for the use of the Leased Property and was agreed to by Landlord and
Tenant on that basis, and the execution and delivery of, and the performance by Tenant of its obligations under, this Master Lease
does not constitute a transfer of all or any part of the Leased Property.
(d)
Tenant waives any claim or defense based upon the characterization of this Master Lease as anything other
than a true lease and as a master lease of all of the Leased Property. Tenant stipulates and agrees (1) not to challenge the validity,
enforceability or
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28
characterization of the lease of the Leased Property as a true lease and/or as a single, unseverable instrument pertaining to the
lease of all, but not less than all, of the Leased Property, and (2) not to assert or take or omit to take any action inconsistent with
the agreements and understandings set forth in Section 3.4 or this Section 6.1, in each case except as otherwise required by a
change in law or a “determination” within the meaning of Section 1313(a) of the Code (or similar provision of state or local law).
1.2
Tenant’s Property. Tenant shall, during the entire Term, own (or lease) and maintain (or cause its
Subsidiaries to own (or lease) and maintain) on the Leased Property adequate and sufficient Tenant’s Property, and shall maintain
(or cause its Subsidiaries to maintain) all of such Tenant’s Property in good order, condition and repair, in all cases as shall be
necessary and appropriate in order to operate the Facilities for the Primary Intended Use in compliance with all applicable
licensure and certification requirements and in compliance with all applicable Legal Requirements, Insurance Requirements and
Gaming Regulations. If any of Tenant’s Property requires replacement in order to comply with the foregoing, Tenant shall replace
(or cause a Subsidiary to replace) it with similar property of the same or better quality at Tenant’s (or such Subsidiary’s) sole cost
and expense. Subject to the foregoing, Tenant and its Subsidiaries may sell, transfer, convey or otherwise dispose of Tenant’s
Property (other than Gaming Licenses and subject to Section 6.3) in their discretion in the ordinary course of its business and
Landlord shall have no rights to such Tenant’s Property. Tenant shall, upon Landlord’s request, from time to time but not more
frequently than one time per Lease Year, provide Landlord with a list of the material Tenant’s Property located at each of the
Facilities. In the case of any such Tenant’s Property that is leased (rather than owned) by Tenant (or its Subsidiaries), Tenant shall
use commercially reasonable efforts to ensure that the lease agreements pursuant to which Tenant (or its Subsidiaries) leases such
Tenant’s Property are assignable to third parties in connection with any transfer by Tenant (or its Subsidiaries) to a replacement
lessee or operator at the end of the Term. Tenant shall remove all of Tenant’s Property from the Leased Property at the end of the
Term, except to the extent Tenant has transferred ownership of such Tenant’s Property to a Successor Tenant or Landlord. Any
Tenant’s Property left on the Leased Property at the end of the Term whose ownership was not transferred to a Successor Tenant
shall be deemed abandoned by Tenant and shall become the property of Landlord.
1.3
Guarantors; Tenant’s Property. Each of Tenant’s Parent and each of Tenant’s Subsidiaries set forth on
Schedule 6.3 shall be a Guarantor under this Master Lease and shall execute and deliver to the Landlord the Guaranty attached
hereto as Exhibit D. In addition, if any material Gaming License or other license or other material asset necessary to operate any
portion of the Leased Property is owned by a Subsidiary, Tenant shall within two (2) Business Days after the date such Subsidiary
acquires such Gaming License, other license or other material asset, (a) notify the Landlord thereof and (b) cause such Subsidiary
(if it is not already a Guarantor) to become a Guarantor by executing the Guaranty in form and substance reasonably satisfactory
to Landlord.
ARTICLE VII
1.1
Condition of the Leased Property. Tenant acknowledges receipt and delivery of possession of the Leased
Property and confirms that Tenant has examined and otherwise has knowledge of the condition of the Leased Property prior to
the execution and delivery of this Master Lease and has found the same (except as included in the disclosures on Schedule A) to
be in good order and repair and, to the best of Tenant’s knowledge, free from Hazardous Substances not in compliance with Legal
Requirements and satisfactory for its purposes hereunder. Regardless, however, of any examination or inspection made by Tenant
and
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29
whether or not any patent or latent defect or condition was revealed or discovered thereby, Tenant is leasing the Leased Property
“as is” in its present condition. Subject to Section 32.6, Tenant waives any claim or action against Landlord in respect of the
condition of the Leased Property including any defects or adverse conditions not discovered or otherwise known by Tenant as of
the Commencement Date. LANDLORD MAKES NO WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, IN
RESPECT OF THE LEASED PROPERTY OR ANY PART THEREOF, EITHER AS TO ITS FITNESS FOR USE, DESIGN OR
CONDITION FOR ANY PARTICULAR USE OR PURPOSE OR OTHERWISE, OR AS TO THE NATURE OR QUALITY OF
THE MATERIAL OR WORKMANSHIP THEREIN, OR THE EXISTENCE OF ANY HAZARDOUS SUBSTANCE ON THE
LEASED PROPERTY OR ANY PART THEREOF, IT BEING AGREED THAT ALL SUCH RISKS, LATENT OR PATENT,
ARE TO BE BORNE SOLELY BY TENANT INCLUDING ALL RESPONSIBILITY AND LIABILITY FOR ANY
REMEDIATION AND COMPLIANCE WITH ALL ENVIRONMENTAL LAWS, EXCEPT AS SET FORTH IN SECTION 32.6
HEREOF.
1.2
Use of the Leased Property. (a)Tenant shall use or cause to be used the Leased Property and the
improvements thereon of each Facility for its Primary Intended Use. Tenant shall not use the Leased Property or any portion
thereof or any Capital Improvement thereto for any other use without the prior written consent of Landlord, which consent
Landlord may withhold in its sole discretion. Landlord acknowledges that operation of each Facility for its Primary Intended Use
generally requires a Gaming License under applicable Gaming Regulations and that without such a license neither Landlord nor
GLP may operate, control or participate in the conduct of the gaming and/or racing operations at the Facilities.
(a)
Tenant shall not commit or suffer to be committed any waste on the Leased Property (including any Capital
Improvement thereto) or cause or permit any nuisance thereon or to, except as required by law, take or suffer any action or
condition that will diminish the ability of the Leased Property to be used as a Gaming Facility after the expiration or earlier
termination of the Term.
Tenant shall neither suffer nor permit the Leased Property or any portion thereof to be used in such a
manner as (i) might reasonably tend to impair Landlord’s title thereto or to any portion thereof or (ii) may make possible a claim
of adverse use or possession, or an implied dedication of the Leased Property or any portion thereof.
(b)
(c)
Tenant shall continuously operate each Facility for the Primary Intended Use (except as a result of casualty,
condemnation or Unavoidable Delay that affects such Facility). Tenant in its discretion shall be permitted to cease operations at a
Facility or Facilities if such cessation would not reasonably be expected to have a material adverse effect on Tenant, the
Facilities, or on the Leased Property, taken as a whole, provided that no Event of Default has occurred and is continuing
immediately prior to or immediately after the date that operations are ceased or as a result of such cessation.
1.3
Competing Business.
(a)
Tenant’s Obligations for Greenfields. Tenant agrees that during the Term, neither Tenant nor any of its
Affiliates shall (i) build or otherwise participate in the development of a new Gaming Facility (including a facility that has been
shut down for a period of more than twelve (12) months) located within a Restricted Area of a Facility (a “Greenfield Project”)
or (ii) acquire or operate any Competing Facility, unless Tenant shall first offer Landlord the opportunity to include the
Greenfield Project or the Competing Facility, as the case may be, as a Leased Property under this Master Lease on terms to be
negotiated by the parties (which terms
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with respect to Landlord funding the development of any such Greenfield Project shall include the terms set forth in Section 10.3
hereof regarding Capital Improvements). Within thirty (30) days of Landlord’s receipt of notice from Tenant providing the
opportunity to fund and include as Leased Property under this Master Lease a Greenfield Project or a Competing Facility, as the
case may be, on terms to be negotiated by the parties, Landlord shall notify Tenant as to whether it intends to participate in such
Greenfield Project or acquire such Competing Facility, as applicable, and, if Landlord indicates such intent, the parties shall
negotiate in good faith the terms and conditions upon which this would be effected, including the terms of any amendment to this
Master Lease and any development, funding or purchase agreement, which Landlord might require. Should Landlord notify
Tenant that it does not intend to pursue such Greenfield Project or Competing Facility (or should Landlord decline to notify
Tenant of its affirmative response within such thirty (30) day period), or if the parties despite good faith efforts on both sides fail
to reach agreement on the terms under which such opportunity would be jointly pursued under this Master Lease and such new
Greenfield Project or Competing Facility, would become a portion of the Leased Property hereunder, in any event, within forty-
five (45) days after Landlord’s notice to Tenant of Landlord’s intent to participate in such Greenfield Project or Competing
Facility, then Tenant shall have no further obligation to Landlord with respect to, and may pursue, such Greenfield Project or
Competing Facility, as applicable. Notwithstanding anything to the contrary in this Section 7.3(a), Tenant and its Affiliates shall
not be restricted under this Section 7.3(a) from expanding any Facility under this Master Lease (subject to Tenant’s compliance
with the terms of Section 10.3 and the other provisions of Article X).
(b)
Landlord’s Obligations for Greenfields. Landlord agrees that during the Term, neither Landlord nor any of
its Affiliates shall, without the prior written consent of the Tenant (which consent may be withheld in Tenant’s sole discretion),
build or otherwise participate in the development of a Greenfield Project within the Restricted Area. Notwithstanding anything to
the contrary in this Section 7.3(b), (i) Landlord and its Affiliates shall not be restricted under this Section 7.3(b) from acquiring,
financing or providing refinancing for any facility that is in operation or has been in operation at any time during the twelve
month period prior to the time in question, and (ii) subject to the provisions of Section 7.3(d) hereof, Landlord and its Affiliates
shall not be restricted under this Section 7.3(b) from expanding any Competing Facility existing at the time in question.
(c)
Tenant’s Rights Regarding Facility Expansions. Tenant shall be permitted to construct Capital
Improvements in accordance with the terms of Article X hereof.
(d)
Landlord’s Rights Regarding Facility Expansions. Landlord shall be permitted to finance expansions of
any Competing Facility within the Restricted Area that is already in existence at any time in question.
Landlord’s Rights to Acquire or Finance Existing Facilities. Landlord shall not be restricted under this
Section 7.3 from acquiring or providing any kind of financing or refinancing to any Competing Facility within the Restricted
Area that is already in existence at any time in question.
(e)
No Restrictions Outside of Restricted Area. Each of Landlord and Tenant shall not be restricted from
participating in opportunities, including, without limitation, developing, building, purchasing or operating Gaming Facilities,
outside the Restricted Area at any time.
(f)
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ARTICLE VIII
1.1
Representations and Warranties. Each party represents and warrants to the other that: (i) this Master
Lease and all other documents executed or to be executed by it in connection herewith have been duly authorized and shall be
binding upon it; (ii) it is duly organized, validly existing and in good standing under the laws of the state of its formation and is
duly authorized and qualified to perform this Master Lease within the State(s) where any portion of the Leased Property is
located; and (iii) neither this Master Lease nor any other document executed or to be executed in connection herewith violates the
terms of any other agreement of such party.
1.2
Compliance with Legal and Insurance Requirements, etc. Subject to Article XII regarding permitted
contests, Tenant, at its expense, shall promptly (a) comply in all material respects with all Legal Requirements and Insurance
Requirements regarding the use, operation, maintenance, repair and restoration of the Leased Property (including all Capital
Improvements thereto) and Tenant’s Property whether or not compliance therewith may require structural changes in any of the
Leased Improvements or interfere with the use and enjoyment of the Leased Property, and (b) procure, maintain and comply in all
material respects with all Gaming Regulations and Gaming Licenses, and other authorizations required for the use of the Leased
Property (including all Capital Improvements) and Tenant’s Property for the applicable Primary Intended Use and any other use
of the Leased Property (including Capital Improvements then being made) and Tenant’s Property, and for the proper erection,
installation, operation and maintenance of the Leased Property and Tenant’s Property. In an emergency or in the event of a breach
by Tenant of its obligations under this Section 8.2 which is not cured within any applicable cure period, Landlord may, but shall
not be obligated to, enter upon the Leased Property and take such reasonable actions and incur such reasonable costs and
expenses to effect such compliance as it deems advisable to protect its interest in the Leased Property, and Tenant shall reimburse
Landlord for all such reasonable costs and expenses incurred by Landlord in connection with such actions. Tenant covenants and
agrees that the Leased Property and Tenant’s Property shall not be used for any unlawful purpose. In the event that a regulatory
agency, commission, board or other governmental body notifies Tenant that it is in jeopardy of losing a Gaming License material
to the continued operation of a Facility, and, assuming no Event of Default has occurred and is continuing, Tenant shall be given
reasonable time to address the regulatory issue, after which period (but in all events prior to an actual revocation of such Gaming
License) Tenant shall be required to sell (i) if permitted by applicable law, the Gaming License, and to the extent such sale is not
permitted by applicable law Tenant shall use reasonable best efforts to transfer the applicable Gaming License or to cause the
issuance of a new or replacement Gaming License, pursuant to the procedures permitted by applicable state law, and (ii) Tenant’s
Property related to such Facility to a successor operator of such Facility determined by Landlord choosing one and Tenant
choosing three (for a total of four) potential operators and Landlord indicating the reasonable, market terms under which it would
agree to lease such Facility to such potential operators, which in Landlord’s reasonable discretion may contain reasonable
variations in terms to the extent required to account for credit quality differences among the potential operators (e.g., Landlord
may require different letter of credit terms and amounts, but may not set different rent terms). Tenant will then be entitled to
auction off Tenant’s Property relating to such Facility and Landlord will thereafter be entitled to lease the Facility to the potential
successor that is the successful bidder. In the event of a new lease from Landlord to the successor, the Leased Property relating to
such Facility shall be severed from the Leased Property hereunder and thereafter Rent shall be reduced based on the formula set
forth in Section 14.6 hereof. Landlord shall comply with any Gaming Regulations or other regulatory requirements required of it
as owner of the Facilities taking into account its Primary Intended Use (except to the extent Tenant fulfills or is required to fulfill
any such requirements hereunder). In the event that a regulatory agency, commission, board or other governmental body notifies
Landlord that it is in jeopardy of failing to comply with any such Gaming
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Regulation or other regulatory requirements material to the continued operation of a Facility for its Primary Intended Use,
Landlord shall be given reasonable time to address the regulatory issue, after which period (but in all events prior to an actual
cessation of the use of the Facility for its Primary Intended Use as a result of the failure by Landlord to comply with such
regulatory requirements) Landlord shall be required to sell the Leased Property relating to such Facility to the highest bidder (and
Tenant shall be entitled to be one of the bidders) who would agree to lease such Facility to Tenant on terms substantially the same
as the terms hereof (including rent calculated in the manner provided pursuant to Section 14.6 hereof, an identical amount of
which, after the effective time of such sale, shall be credited against Rent hereunder); provided that if Tenant is the bidder it shall
not be required to agree to lease the Facility, but if it is the winning bidder shall be entitled to a credit against the Rent hereunder
calculated in the manner provided pursuant to Section 14.6. In the event during the period in which Landlord conducts such
auction such regulatory agency notifies Landlord and Tenant that Tenant may not pay any portion of the Rent to Landlord, Tenant
shall be entitled to fund such amount into an escrow account, to be released to Landlord or the party legally entitled thereto at or
upon resolution of such regulatory issues and otherwise on terms reasonably satisfactory to the parties. Notwithstanding anything
in the foregoing to the contrary, no transfer of Tenant’s Property used in the conduct of gaming (including the purported or
attempted transfer of a Gaming License) or the operation of a Gaming Facility for its Primary Intended Use shall be effected or
permitted without receipt of all necessary approvals and/or Gaming Licenses in accordance with applicable Gaming Regulations.
1.3
Zoning and Uses. Without the prior written consent of Landlord, which shall not be unreasonably
withheld unless the action for which consent is sought could adversely affect the Primary Intended Use of a Facility (in which
event Landlord may withhold its consent in its sole and absolute discretion), Tenant shall not (i) initiate or support any limiting
change in the permitted uses of the Leased Property (or to the extent applicable, limiting zoning reclassification of the Leased
Property); (ii) seek any variance under existing land use restrictions, laws, rules or regulations (or, to the extent applicable,
zoning ordinances) applicable to the Leased Property or use or permit the use of the Leased Property; (iii) impose or permit or
suffer the imposition of any restrictive covenants, easements or encumbrances (other than Permitted Leasehold Mortgages) upon
the Leased Property in any manner that adversely affects in any material respect the value or utility of the Leased Property; (iv)
execute or file any subdivision plat affecting the Leased Property, or institute, or permit the institution of, proceedings to alter any
tax lot comprising the Leased Property; or (v) permit or suffer the Leased Property to be used by the public or any Person in such
manner as might make possible a claim of adverse usage or possession or of any implied dedication or easement (provided that
the proscription in this clause (v) is not intended to and shall not restrict Tenant in any way from complying with any obligation it
may have under applicable Legal Requirements, including, without limitation, Gaming Regulations, to afford to the public access
to the Leased Property).
1.4
Compliance with Ground Lease.
(a)
This Master Lease, to the extent affecting and solely with respect to the Ground Leased Property, is and
shall be subject and subordinate to all of the terms and conditions of the Ground Lease. Tenant hereby acknowledges that Tenant
has reviewed and agreed to all of the terms and conditions of the Ground Lease. Tenant hereby agrees that Tenant shall not do, or
fail to do, anything that would cause any violation of the Ground Lease. Without limiting the foregoing, (i) Tenant shall pay
Landlord on demand as an Additional Charge hereunder all rent required to be paid by, and other monetary obligations of,
Landlord as tenant under the Ground Lease (and, at Landlord’s option, Tenant shall make such payments directly to the Ground
Lessor); provided, however, such Additional Charges payable by Tenant shall exclude any additional costs under the Ground
Lease which are caused solely by Landlord after the Commencement Date without consent or fault of or omission by Tenant, (ii)
to the extent
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Landlord is required to obtain the written consent of the lessor under the Ground Lease (the “Ground Lessor”) to alterations of
or the subleasing of all or any portion of the Ground Leased Property pursuant to the Ground Lease, Tenant shall likewise obtain
Ground Lessor’s written consent to alterations of or the subleasing of all or any portion of the Ground Leased Property (and
Landlord will use commercially reasonable efforts to submit such requests to Ground Lessor and cooperate, at no cost or expense
to Landlord, with the reasonable requests of Tenant and Ground Lessor to facilitate such requests), and (iii) Tenant shall carry and
maintain general liability, automobile liability, property and casualty, worker’s compensation and employer’s liability insurance
in amounts and with policy provisions, coverages and certificates as required of Landlord as tenant under the Ground Lease.
(b)
In the event of cancellation or termination of the Ground Lease for any reason whatsoever whether
voluntary or involuntary (by operation of law or otherwise) prior to the expiration date of this Master Lease, including extensions
and renewals granted thereunder, then, at Ground Lessor’s option, Tenant shall make full and complete attornment to Ground
Lessor with respect to the obligations of Landlord to Ground Lessor in connection with the Ground Leased Property for the
balance of the term of the Ground Lease (notwithstanding that this Master Lease shall have expired with respect to the Ground
Leased Property as a result of the cancellation or termination of the Ground Lease). Tenant’s attornment shall be evidenced by a
written agreement which shall provide that the Tenant is in direct privity of contract with Ground Lessor (i.e., that all obligations
previously owed to Landlord under this Master Lease with respect to the Ground Lease or the Ground Leased Property shall be
obligations owed to Ground Lessor for the balance of the term of this Master Lease, notwithstanding that this Master Lease shall
have expired with respect to the Ground Leased Property as a result of the cancellation or termination of the Ground Lease) and
which shall otherwise be in form and substance reasonably satisfactory to Ground Lessor. Tenant shall execute and deliver such
written attornment within thirty (30) days after request by Ground Lessor. Unless and until such time as an attornment agreement
is executed by Tenant pursuant to this Section 8.4(b), nothing contained in this Master Lease shall create, or be construed as
creating, any privity of contract or privity of estate between Ground Lessor and Tenant.
Ground Lease.
(c)
Nothing contained in this Master Lease amends, or shall be construed to amend, any provision of the
ARTICLE IX
1.1 Maintenance and Repair. (a)Tenant, at its expense and without the prior consent of Landlord, shall
maintain the Leased Property and Tenant’s Property, and every portion thereof, and all private roadways, sidewalks and curbs
appurtenant to the Leased Property, and which are under Tenant’s control in good order and repair whether or not the need for
such repairs occurs as a result of Tenant’s use, any prior use, the elements or the age of the Leased Property and Tenant’s
Property, and, with reasonable promptness, make all reasonably necessary and appropriate repairs thereto of every kind and
nature, including those necessary to ensure continuing compliance with all Legal Requirements, whether interior or exterior,
structural or non-structural, ordinary or extraordinary, foreseen or unforeseen or arising by reason of a condition existing prior to
the Commencement Date. All repairs shall be at least equivalent in quality to the original work. Tenant will not take or omit to
take any action the taking or omission of which would reasonably be expected to materially impair the value or the usefulness of
the Leased Property or any part thereof or any Capital Improvement thereto for its Primary Intended Use.
(a)
Landlord shall not under any circumstances be required to (i) build or rebuild any improvements on the
Leased Property; (ii) make any repairs, replacements,
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alterations, restorations or renewals of any nature to the Leased Property, whether ordinary or extraordinary, structural or non-
structural, foreseen or unforeseen, or to make any expenditure whatsoever with respect thereto; or (iii) maintain the Leased
Property in any way. Tenant hereby waives, to the extent permitted by law, the right to make repairs at the expense of Landlord
pursuant to any law in effect at the time of the execution of this Master Lease or hereafter enacted.
(b)
Nothing contained in this Master Lease and no action or inaction by Landlord shall be construed as (i)
constituting the consent or request of Landlord, expressed or implied, to any contractor, subcontractor, laborer, materialman or
vendor to or for the performance of any labor or services or the furnishing of any materials or other property for the construction,
alteration, addition, repair or demolition of or to the Leased Property or any part thereof or any Capital Improvement thereto; or
(ii) giving Tenant any right, power or permission to contract for or permit the performance of any labor or services or the
furnishing of any materials or other property in such fashion as would permit the making of any claim against Landlord in respect
thereof or to make any agreement that may create, or in any way be the basis for, any right, title, interest, lien, claim or other
encumbrance upon the estate of Landlord in the Leased Property, or any portion thereof or upon the estate of Landlord in any
Capital Improvement thereto.
(c)
Tenant shall, upon the expiration or earlier termination of the Term, vacate and surrender the Leased
Property (including all Capital Improvements, subject to the provisions of Article X), in each case with respect to such Facility, to
Landlord in the condition in which such Leased Property was originally received from Landlord and Capital Improvements were
originally introduced to such Facility, except as repaired, rebuilt, restored, altered or added to as permitted or required by the
provisions of this Master Lease (including Section 14.2 and 15.1) and except for ordinary wear and tear.
(d) Without limiting Tenant’s obligations to maintain the Leased Property and Tenant’s Property under this
Master Lease, within thirty (30) days after the end of each calendar year (commencing with the calendar year ending December
31, 2018), Tenant shall provide Landlord with evidence satisfactory to Landlord in the reasonable exercise of Landlord’s
discretion that Tenant has in such calendar year spent, with respect to the Leased Property and Tenant’s Property, an aggregate
amount equal to at least 1% of its actual Net Revenue from the Facilities for such calendar year on installation or restoration and
repair or other improvement of items, which installations, restorations and repairs and other improvements are capitalized in
accordance with GAAP with an expected life of not less than three (3) years; provided that, in the event an Unavoidable Delay
occurs during the time during which Tenant is required to make the foregoing expenditures and such Unavoidable Delay actually
prevents or delays Tenant’s performance of such installations, restorations, repairs or other improvements, then the relevant
period in which Tenant was obligated to perform such installations, restorations, repairs or other improvements shall be extended,
on a day-for-day basis, for the same amount of time that such Unavoidable Delay actually delayed Tenant’s ability to perform
such installations, restorations, repairs or other improvements; provided, further, that with respect to the installations,
restorations, repairs or other improvements required to be made during the calendar year ending December 31, 2020, Tenant shall
be required to make such installations, restorations, repairs or other improvements no later than June 30, 2021. If Tenant fails to
make at least the above amount of capital expenditures and fails within sixty (60) days after receipt of a written demand from
Landlord to either (i) cure such deficiency or (ii) obtain Landlord’s written approval, in its reasonable discretion, of a repair and
maintenance program satisfactory to cure such deficiency, then the same shall be deemed an Event of Default hereunder.
1.2
Encroachments, Restrictions, Mineral Leases, etc. If any of the Leased Improvements shall, at any time,
encroach upon any property, street or right-of-way, or shall
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violate any restrictive covenant or other agreement affecting the Leased Property, or any part thereof or any Capital Improvement
thereto, or shall impair the rights of others under any easement or right-of-way to which the Leased Property is subject, or the use
of the Leased Property or any Capital Improvement thereto is impaired, limited or interfered with by reason of the exercise of the
right of surface entry or any other provision of a lease or reservation of any oil, gas, water or other minerals, then promptly upon
the request of Landlord or any Person affected by any such encroachment, violation or impairment, each of Tenant and Landlord,
subject to their right to contest the existence of any such encroachment, violation or impairment, shall protect, indemnify, save
harmless and defend the other party hereto from and against fifty percent (50%) of all losses, liabilities, obligations, claims,
damages, penalties, causes of action, costs and expenses (including reasonable attorneys’, consultants’ and experts’ fees and
expenses) based on or arising by reason of any such encroachment, violation or impairment. In the event of an adverse final
determination with respect to any such encroachment, violation or impairment, either (a) each of Tenant and Landlord shall be
entitled to obtain valid and effective waivers or settlements of all claims, liabilities and damages resulting from each such
encroachment, violation or impairment, whether the same shall affect Landlord or Tenant or (b) Tenant at the shared cost and
expense of Tenant and Landlord on a 50-50 basis shall make such changes in the Leased Improvements, and take such other
actions, as Tenant in the good faith exercise of its judgment deems reasonably practicable, to remove such encroachment or to
end such violation or impairment, including, if necessary, the alteration of any of the Leased Improvements, and in any event take
all such actions as may be necessary in order to be able to continue the operation of the Leased Improvements for the Primary
Intended Use substantially in the manner and to the extent the Leased Improvements were operated prior to the assertion of such
encroachment, violation or impairment. Tenant’s (and Landlord’s) obligations under this Section 9.2 shall be in addition to and
shall in no way discharge or diminish any obligation of any insurer under any policy of title or other insurance and, to the extent
the recovery thereof is not necessary to compensate Landlord and Tenant for any damages incurred by any such encroachment,
violation or impairment, Tenant shall be entitled to fifty percent (50%) of any sums recovered by Landlord under any such policy
of title or other insurance up to the maximum amount paid by Tenant under this Section 9.2 and Landlord, upon request by
Tenant, shall assign Landlord’s rights under such policies to Tenant; provided such assignment does not adversely affect
Landlord’s rights under any such policy. Landlord agrees to use reasonable efforts to seek recovery under any policy of title or
other insurance under which Landlord is an insured party for all losses, liabilities, obligations, claims, damages, penalties, causes
of action, costs and expenses (including reasonable attorneys’, consultants’ and experts’ fees and expenses) based on or arising
by reason of any such encroachment, violation or impairment as set forth in this Section 9.2; provided, however, that in no event
shall Landlord be obligated to institute any litigation, arbitration or other legal proceedings in connection therewith unless
Landlord is reasonably satisfied that Tenant has the financial resources needed to fund such litigation and Tenant and Landlord
have agreed upon the terms and conditions on which such funding will be made available by Tenant, including, but not limited to,
the mutual approval of a litigation budget.
ARTICLE X
1.1
Construction of Capital Improvements to the Leased Property. Tenant shall, with respect to any
Facility, have the right to make a Capital Improvement, including, without limitation, any Capital Improvement required by
Section 8.2 or 9.1(a), without the consent of Landlord if the Capital Improvement (i) is of equal or better quality than the existing
Leased Improvements it is improving, altering or modifying, (ii) does not consist of adding new structures or enlarging existing
structures, and (iii) does not have an adverse effect on the structure of any existing Leased Improvements. Tenant shall provide
Landlord copies of the plans and specifications in respect of all Capital Improvements, which plans and specifications shall be
prepared in a high-grade professional manner and shall adequately demonstrate
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compliance with clauses (i)-(iii) of the preceding sentence with respect to projects that do not require Landlord’s written consent
and shall be in such form as Landlord may reasonably require for any other projects. All other Capital Improvements shall be
subject to Landlord’s review and approval, which approval shall not be unreasonably withheld. For any Capital Improvement
which does not require the approval of Landlord, Tenant shall, prior to commencing construction of such Capital Improvement,
provide to Landlord a written description of such Capital Improvement and on an ongoing basis supply Landlord with related
documentation and information as Landlord may reasonably request (including plans and specifications of any such Capital
Improvements). If Tenant desires to make a Capital Improvement for which Landlord’s approval is required, Tenant shall submit
to Landlord in reasonable detail a general description of the proposal, the projected cost of construction and such plans and
specifications, permits, licenses, contracts and other information concerning the proposal as Landlord may reasonably request.
Such description shall indicate the use or uses to which such Capital Improvement will be put and the impact, if any, on current
and forecasted gross revenues and operating income attributable thereto. It shall be reasonable for Landlord to condition its
approval of any Capital Improvement upon any or all of the following terms and conditions:
which approval shall not be unreasonably withheld;
(a)
Such construction shall be effected pursuant to detailed plans and specifications approved by Landlord,
Tenant and approved by Landlord, which approval shall not be unreasonably withheld;
(b)
Such construction shall be conducted under the supervision of a licensed architect or engineer selected by
(c)
Landlord’s receipt, from the general contractor and, if reasonably requested by Landlord, a major
subcontractor(s) of a performance and payment bond (or, if Tenant elects in lieu of performance and payment bond covering any
major subcontractor, Sub-guard insurance, which policy shall be in form reasonably satisfactory to Landlord and which shall
include a financial interest endorsement naming Landlord as a beneficiary) for the full value of such construction, which such
bond shall name Landlord as an additional obligee and otherwise be in form and substance and issued by a Person reasonably
satisfactory to Landlord;
(d)
In the case of a Tenant Capital Improvement, such construction shall not be undertaken unless Tenant
demonstrates to the reasonable satisfaction of Landlord the financial ability to complete the construction without adversely
affecting its cash flow position or financial viability; and
of United States federal income taxes.
(e)
No Capital Improvement will result in the Leased Property becoming a “limited use” property for purposes
approval is required, for all Capital Improvements:
1.2
Construction Requirements for All Capital Improvements. Whether or not Landlord’s review and
(a)
Such construction shall not be commenced until Tenant shall have procured and paid for all municipal and
other governmental permits and authorizations required to be obtained prior to such commencement, including those permits and
authorizations required pursuant to any Gaming Regulations, and Landlord shall join in the application for such permits or
authorizations whenever such action is necessary; provided, however, that (i) any such joinder shall be at no cost or expense to
Landlord; and (ii) any plans required to be filed in connection with any such application which require the approval of Landlord
as hereinabove provided shall have been so approved by Landlord;
such architect or engineer believes that the design of such
(b)
(i) Such construction shall not, and Tenant’s licensed architect or engineer shall certify to Landlord that
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construction (as illustrated through the applicable corresponding construction documents) shall not, impair the structural strength
of any component of the applicable Facility or overburden the electrical, water, plumbing, HVAC or other building systems of
any such component in a manner that would violate applicable building codes or prudent industry practices, and (ii) Tenant’s
general contractor shall certify to Landlord that such construction is in compliance with such design and corresponding
construction documents;
(c)
Tenant’s licensed architect or engineer shall certify to Landlord that such architect or engineer believes that
the detailed plans and specifications conform to, and comply with, in all material respects all applicable building, subdivision and
zoning codes, laws, ordinances and regulations imposed by all governmental authorities having jurisdiction over the Leased
Property of the applicable Facility;
(d)
During and following completion of such construction, the parking and other amenities which are located
in the applicable Facility or on the Land of such Facility shall remain adequate for the operation of such Facility for its Primary
Intended Use and in no event shall such parking be less than that which is required by law (including any variances with respect
thereto); provided, however, with Landlord’s prior consent and at no additional expense to Landlord, (i) to the extent additional
parking is not already a part of a Capital Improvement, Tenant may construct additional parking on the Land; or (ii) Tenant may
acquire or lease off-site parking to serve such Facility as long as such parking shall be reasonably proximate to, and dedicated to,
or otherwise made available to serve, such Facility;
All work done in connection with such construction shall be done promptly and using materials and
resulting in work that is at least as good product and condition as the remaining areas of the applicable Facility and in conformity
with all Legal Requirements, including, without limitation, any applicable minority or women owned business requirements; and
(e)
Promptly following the completion of such construction, Tenant shall deliver to Landlord “as built”
drawings of such addition, certified as accurate by the licensed architect or engineer selected by Tenant to supervise such work,
and copies of any new or revised certificates of occupancy.
(f)
1.3
Landlord’s Right of First Offer to Fund. Tenant shall request that Landlord fund or finance the
construction and acquisition of any Capital Improvement that includes Long-Lived Assets (along with reasonably related fees and
expenses, such as title fees, costs of permits, legal fees and other similar transaction related costs) if the cost of such Capital
Improvements constituting Long-Lived Assets is expected to be in excess of $2 million (subject to the CPI Increase), and Tenant
shall provide to Landlord any information about such Capital Improvements which Landlord may reasonably request (including
any specifics regarding the terms upon which Tenant will be seeking financing for such Capital Improvements). Landlord may,
but shall be under no obligation to, provide the funds necessary to meet the request. Within ten (10) Business Days of receipt of a
request to fund a proposed Capital Improvement pursuant to this Section 10.3, Landlord shall notify Tenant as to whether it will
fund all or a portion of such proposed Capital Improvement and, if so, the terms and conditions upon which it would do so
(including the terms with respect to any increases in Rent hereunder due to such Capital Improvements). If Landlord agrees to
fund such proposed Capital Improvement, Tenant shall have ten (10) Business Days to accept or reject Landlord’s funding
proposal. If Landlord declines to fund a proposed Capital Improvement (or declines to provide Tenant written notice within such
ten (10) Business Day period of the terms of its proposal to fund such Capital Improvements), Tenant shall be permitted to secure
outside financing or utilize then existing available financing for such Capital Improvement for a six-month period, after which
six-month period (if Tenant has not secured outside financing or determined to utilize then existing
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available financing) Tenant shall again be required to first seek funding from Landlord. If Landlord agrees to fund all or a portion
of a proposed Capital Improvement and Tenant rejects the terms thereof, Tenant shall be permitted to either use then existing
available financing or seek outside financing for such Capital Improvement for a six-month period. If Tenant constructs a Capital
Improvement with its then existing available financing or outside financing obtained in accordance with this Section 10.3, (i)
except as may otherwise be expressly provided in this Master Lease to the contrary, (A) during the Term, such Capital
Improvements shall be deemed part of the Leased Property and the Facilities solely for the purpose of calculating Net Revenues
hereunder and shall for all other purposes be Tenant’s Property and (B) following expiration or termination of the Term, shall be
either, at the option of Landlord, purchased by Landlord for fair market value or, if not purchased by Landlord, Tenant shall be
entitled to either remove such Tenant Capital Improvements, provided that the Leased Property is restored in a manner reasonably
satisfactory to Landlord, or receive fair value for such Tenant Capital Improvements in accordance with Article XXXVI. If
Landlord agrees to fund a proposed Capital Improvement and Tenant accepts the terms thereof, such Capital Improvements shall
be deemed part of the Leased Property and the Facilities for all purposes and Tenant shall provide Landlord with the following
prior to any advance of funds:
(a)
any information, certificates, licenses, permits or documents reasonably requested by Landlord which are
necessary and obtainable to confirm that Tenant will be able to use the Capital Improvement upon completion thereof in
accordance with the Primary Intended Use, including all required federal, state or local government licenses and approvals;
information, setting forth in reasonable detail the projected or actual costs related to such Capital Improvements;
(b)
an Officer’s Certificate and, if requested, a certificate from Tenant’s architect providing appropriate backup
(c)
an amendment to this Master Lease (and any development or funding agreement agreed to in accordance
with this Section 10.3), in a form reasonably agreed to by Landlord and Tenant, which may include, among other things, an
increase in the Rent in amounts as agreed upon by the parties hereto pursuant to the agreed funding proposal terms described
above and other provisions as may be necessary or appropriate;
a deed conveying title to Landlord to any land acquired for the purpose of constructing the Capital
Improvement free and clear of any liens or encumbrances except those approved by Landlord, and accompanied by an ALTA
survey thereof satisfactory to Landlord;
(d)
(e)
for each advance, endorsements to any outstanding policy of title insurance covering the Leased Property
or commitments therefor reasonably satisfactory in form and substance to Landlord (i) updating the same without any additional
exception except those that do not materially affect the value of such land and do not interfere with the use of the Leased Property
or as may be approved by Landlord, which approval shall not be unreasonably withheld, and (ii) increasing the coverage thereof
by an amount equal to the cost of the Capital Improvement, except to the extent covered by the owner’s policy of title insurance
referred to in paragraph (f) below;
(f)
if appropriate, an owner’s policy of title insurance insuring the fair market value of fee simple title to any
land and improvements conveyed to Landlord free and clear of all liens and encumbrances except those that do not materially
affect the value of such land and do not interfere with the use of the Leased Property or are approved by Landlord, which
approval shall not be unreasonably withheld, provided that if the requirement in this paragraph (f) is not satisfied (or waived by
Landlord), Tenant shall be entitled to seek third party financing or use available financing in lieu of seeking such advance from
Landlord;
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(g)
if requested by Landlord, an appraisal by a member of the Appraisal Institute of the Leased Property
indicating that the fair market value of the Leased Property upon completion of the Capital Improvement will exceed the fair
market value of the Leased Property immediately prior thereto by an amount not less than ninety-five percent (95%) of the cost
of the Capital Improvement, provided that if the requirement in this paragraph (g) is not satisfied (or waived by Landlord), Tenant
shall be entitled to seek third party financing or use available financing in lieu of seeking such advance from Landlord; and
resolutions, ratifications, lien releases and waivers and other instruments and information reasonably required by Landlord.
(h)
such other billing statements, invoices, certificates, endorsements, opinions, site assessments, surveys,
ARTICLE XI
1.1
Liens. Subject to the provisions of Article XII relating to permitted contests, Tenant will not directly or
indirectly create or allow to remain and will promptly discharge at its expense any lien, encumbrance, attachment, title retention
agreement or claim upon the Leased Property or any Capital Improvement thereto or upon the Gaming Licenses (including
indirectly through a pledge of shares in the direct or indirect entity owning an interest in the Gaming Licenses) or any attachment,
levy, claim or encumbrance in respect of the Rent, excluding, however, (i) this Master Lease; (ii) the matters that existed as of the
Commencement Date with respect to such Facility and disclosed on Schedule A; (iii) restrictions, liens and other encumbrances
which are consented to in writing by Landlord (such consent not to be unreasonably withheld); (iv) liens for Impositions which
Tenant is not required to pay hereunder; (v) subleases permitted by Article XXII; (vi) liens for Impositions not yet delinquent or
being contested in accordance with Article XII, provided that Tenant has provided appropriate reserves as required under GAAP
and any foreclosure or similar remedies with respect to such Impositions have not been instituted and no notice as to the
institution or commencement thereof has been issued except to the extent such institution or commencement is stayed no later
than the earlier of (x) ten (10) Business Days after such notice is issued or (y) five (5) Business Days prior to the institution or
commencement thereof; (vii) liens of mechanics, laborers, materialmen, suppliers or vendors for sums either disputed or not yet
due, provided that (1) the payment of such sums shall not be postponed under any related contract for more than sixty (60) days
after the completion of the action giving rise to such lien unless being contested in accordance with Article XII and such reserve
or other appropriate provisions as shall be required by law or GAAP shall have been made therefor and no foreclosure or similar
remedies with respect to such liens has been instituted and no notice as to the institution or commencement thereof have been
issued except to the extent such institution or commencement is stayed no later than the earlier of (x) ten (10) Business Days after
such notice is issued or (y) five (5) Business Days prior to the institution or commencement thereof; or (2) any such liens are in
the process of being contested as permitted by Article XII; (viii) any liens created by Landlord; (ix) liens related to equipment
leases or equipment financing for Tenant’s Property which are used or useful in Tenant’s business on the Leased Property,
provided that the payment of any sums due under such equipment leases or equipment financing shall either (1) be paid as and
when due in accordance with the terms thereof, or (2) be in the process of being contested as permitted by Article XII and
provided that a lien holder’s removal of any such Tenant’s Property from the Leased Property shall be made in accordance with
the requirements set forth in this Section 11.1; (x) liens granted as security for the obligations of Tenant and its Affiliates under a
Debt Agreement; provided, however, in no event shall the foregoing be deemed or construed to permit Tenant to encumber its
leasehold interest (or a subtenant to encumber its subleasehold interest) in the Leased Property or its direct or indirect interest (or
the interest of any of its Subsidiaries) in the Gaming Licenses (other than, in each case, to a Permitted Leasehold Mortgagee, for
which no consent shall be required), without the prior written consent of Landlord, which consent may be granted or
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withheld in Landlord’s sole discretion; and provided, further, that Tenant shall be required to provide Landlord with fully
executed copies of any and all Permitted Leasehold Mortgages and related principal Debt Agreements; (xi) easements, rights-of-
way, restrictions (including zoning restrictions), covenants, encroachments, protrusions and other similar charges or
encumbrances, and minor title deficiencies on or with respect to any Leased Property, in each case whether now or hereafter in
existence, not individually or in the aggregate materially interfering with the conduct of the business on the Leased Property,
taken as a whole; and (xii) liens granted as security for the obligations of Landlord and its Affiliates under any Facility Mortgage.
For the avoidance of doubt, the parties acknowledge and agree that Tenant has not granted any liens in favor of Landlord as
security for its obligations hereunder (except to the extent contemplated in the final paragraph of this Section 11.1) and nothing
contained herein shall be deemed or construed to prohibit the issuance of a lien on the Equity Interests in Tenant (it being agreed
that any foreclosure by a lien holder on such interests in Tenant shall be subject to the restriction on Change in Control set forth
in Article XXII) or to prohibit Tenant from pledging its Accounts and other Tenant’s Property and other property of Tenant,
including fixtures and equipment installed by Tenant at the Facilities, as collateral in connection with financings from equipment
lenders (or to Permitted Leasehold Mortgagees); provided that Tenant shall in no event pledge to any Person that is not granted a
Permitted Leasehold Mortgage hereunder any of the Gaming Licenses or other of Tenant’s Property to the extent that such
Tenant’s Property cannot be removed from the Leased Property without damaging or impairing the Leased Property (other than in
a de minimis manner). For the further avoidance of doubt, by way of example, Tenant shall not grant to any lender (other than a
Permitted Leasehold Mortgagee) a lien on, and any and all lien holders (including a Permitted Leasehold Mortgagee) shall not
have the right to remove, carpeting, internal wiring, elevators, or escalators at the Leased Property, but lien holders may have the
right to remove (and Tenant shall have the right to grant a lien on) manual or electronic gaming machines and other gaming
equipment (including, without limitation, electronic equipment used to monitor and/or operate gaming machines and other
gaming equipment) and electronic or other equipment used to operate player affinity systems, even if the removal thereof from
the Leased Property could result in damage; provided any such damage is repaired by the lien holder or Tenant in accordance
with the terms of this Master Lease.
Landlord and Tenant intend that this Master Lease be an indivisible true lease that affords the parties hereto the
rights and remedies of landlord and tenant hereunder and does not represent a financing arrangement. This Master Lease is not an
attempt by Landlord or Tenant to evade the operation of any aspect of the law applicable to any of the Leased Property. Except as
otherwise required by a change in tax law or any change in accounting rules or regulations or a “determination” within the
meaning of Section 1313(a) of the Code (or similar provision of state or local law), Landlord and Tenant hereby acknowledge and
agree that this Master Lease shall be treated as an operating lease for all purposes and not as a synthetic lease, financing lease or
loan and that Landlord shall be entitled to all the benefits of ownership of the Leased Property, including depreciation for all
federal, state and local tax purposes.
If, notwithstanding (a) the form and substance of this Master Lease and (b) the intent of the parties, and the
language contained herein providing that this Master Lease shall at all times be construed, interpreted and applied to create an
indivisible lease of all of the Leased Property, any court of competent jurisdiction finds that this Master Lease is a financing
arrangement, this Master Lease shall be considered a secured financing agreement and Landlord’s title to the Leased Property
shall constitute a perfected first priority lien in Landlord’s favor on the Leased Property to secure the payment and performance
of all the obligations of Tenant hereunder (and to that end, Tenant hereby grants, assigns and transfers to the Landlord a security
interest in all right, title or interest in or to any and all of the Leased Property, as security for the prompt and complete payment
and performance when due of Tenant’s obligations hereunder). Tenant authorizes Landlord, at the expense of Tenant, to make any
filings or take other actions as Landlord reasonably determines are necessary or advisable in order to effect
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fully this Master Lease or to more fully perfect or renew the rights of the Landlord, and to subordinate to the Landlord the lien of
any Permitted Leasehold Mortgagee, with respect to the Leased Property (it being understood that nothing herein shall affect the
rights of a Permitted Leasehold Mortgagee under Article XVII hereof). At any time and from time to time upon the request of the
Landlord, and at the expense of the Tenant, Tenant shall promptly execute, acknowledge and deliver such further documents and
do such other acts as the Landlord may reasonably request in order to effect fully this Master Lease or to more fully perfect or
renew the rights of the Landlord with respect to the Leased Property. Upon the exercise by the Landlord of any power, right,
privilege or remedy pursuant to this Master Lease which requires any consent, approval, recording, qualification or authorization
of any governmental authority, Tenant will execute and deliver, or will cause the execution and delivery of, all applications,
certifications, instruments and other documents and papers that Landlord may be required to obtain from Tenant for such consent,
approval, recording, qualification or authorization.
ARTICLE XII
1.1
Permitted Contests. Tenant, upon prior written notice to Landlord, on its own or in Landlord’s name, at
Tenant’s expense, may contest, by appropriate legal proceedings conducted in good faith and with due diligence, the amount,
validity or application, in whole or in part, of any licensure or certification decision (including pursuant to any Gaming
Regulation), Imposition, Legal Requirement, Insurance Requirement, lien, attachment, levy, encumbrance, charge or claim;
provided, however, that (i) in the case of an unpaid Imposition, lien, attachment, levy, encumbrance, charge or claim, the
commencement and continuation of such proceedings shall suspend the collection thereof from Landlord and from the Leased
Property or any Capital Improvement thereto; (ii) neither the Leased Property or any Capital Improvement thereto, the Rent
therefrom nor any part or interest in either thereof would be in any danger of being sold, forfeited, attached or lost pending the
outcome of such proceedings; (iii) in the case of a Legal Requirement, neither Landlord nor Tenant would be in any danger of
civil or criminal liability for failure to comply therewith pending the outcome of such proceedings; (iv) if any such contest shall
involve a sum of money or potential loss in excess of Five Hundred Thousand Dollars ($500,000), upon request of Landlord,
Tenant shall deliver to Landlord an opinion of counsel reasonably acceptable to Landlord to the effect set forth in clauses (i), (ii)
and (iii) above, to the extent applicable (it being agreed that the matters set forth in clause (i) can be addressed by Tenant paying
the contested amount prior to any such contest); (v) in the case of a Legal Requirement, Imposition, lien, encumbrance or charge,
Tenant shall give such reasonable security as may be required by Landlord to prevent any sale or forfeiture of the Leased
Property or any Capital Improvement thereto or the Rent by reason of such non-payment or noncompliance; (vi) in the case of an
Insurance Requirement, the coverage required by Article XIII shall be maintained; (vii) Tenant shall keep Landlord reasonably
informed as to the status of the proceedings; and (viii) if such contest be finally resolved against Landlord or Tenant, Tenant shall
promptly pay the amount required to be paid, together with all interest and penalties accrued thereon, or comply with the
applicable Legal Requirement or Insurance Requirement. Landlord, at Tenant’s expense, shall execute and deliver to Tenant such
authorizations and other documents as may reasonably be required in any such contest, and, if reasonably requested by Tenant or
if Landlord so desires, Landlord shall join as a party therein. The provisions of this Article XII shall not be construed to permit
Tenant to contest the payment of Rent or any other amount (other than Impositions or Additional Charges which Tenant may
from time to time be required to impound with Landlord) payable by Tenant to Landlord hereunder. Tenant shall indemnify,
defend, protect and save Landlord harmless from and against any liability, cost or expense of any kind that may be imposed upon
Landlord in connection with any such contest and any loss resulting therefrom, except in any instance where Landlord opted to
join and joined as a party in the proceeding despite Tenant’s having sent written notice to Landlord of Tenant’s preference that
Landlord not join in such proceeding.
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ARTICLE XIII
1.1
General Insurance Requirements. During the Term, Tenant shall at all times keep the Leased Property,
and all property located in or on the Leased Property, including Capital Improvements, the Fixtures and Tenant’s Property,
insured with the kinds and amounts of insurance described below. Each element of insurance described in this Article XIII shall
be maintained with respect to the Leased Property of each Facility and Tenant’s Property and operations thereon. Such insurance
shall be written by companies permitted to conduct business in the applicable State. All third party liability type policies must
name Landlord as an “additional insured.” All property policies shall name Landlord as “loss payee” for its interests in each
Facility. All business interruption policies shall name Landlord as “loss payee” with respect to Rent only. Property losses shall be
payable to Landlord and/or Tenant as provided in Article XIV. In addition, the policies, as appropriate, shall name as an
“additional insured” and/or “loss payee” each Permitted Leasehold Mortgagee and as an “additional insured” or “loss payee” the
holder of any mortgage, deed of trust or other security agreement (“Facility Mortgagee”) securing any indebtedness or any other
Encumbrance placed on the Leased Property in accordance with the provisions of Article XXXI (“Facility Mortgage”) by way
of a standard form of mortgagee’s loss payable endorsement. Except as otherwise set forth herein, any property insurance loss
adjustment settlement shall require the written consent of Landlord, Tenant, and each Facility Mortgagee (to the extent required
under the applicable Facility Mortgage Documents) unless the amount of the loss net of the applicable deductible is less than Five
Million Dollars ($5,000,000) in which event no consent shall be required. Evidence of insurance shall be deposited with Landlord
and, if requested, with any Facility Mortgagee(s). The insurance policies required to be carried by Tenant hereunder shall insure
against all the following risks with respect to each Facility:
(a)
Loss or damage by fire, vandalism, collapse and malicious mischief, extended coverage perils commonly
known as “All Risk,” and all physical loss perils normally included in such All Risk insurance, including, but not limited to,
sprinkler leakage and windstorm, in an amount not less than the insurable value on a Maximum Foreseeable Loss (as defined
below in Section 13.2) basis and including a building ordinance coverage endorsement; provided, that Tenant shall have the right
(i) to limit maximum insurance coverage for loss or damage by earthquake (including earth movement) to a minimum amount of
Two Hundred Million Dollars ($200,000,000) or as may be reasonably requested by Landlord and commercially available, and
(ii) to limit maximum insurance coverage for loss or damage by windstorm (including but not limited to named windstorms) to a
minimum amount of Two Hundred Million Dollars ($200,000,000) or as may be reasonably requested by Landlord and
commercially available; provided, further, that in the event the premium cost of any or all of earthquake, flood, windstorm
(including named windstorm) or terrorism coverages are available only for a premium that is more than 2.5 times the average
premium paid by Tenant (or prior operator of Facilities) over the preceding three years for the insurance policy contemplated by
this Section 13.1(a), then Tenant shall be entitled and required to purchase the maximum insurance coverage it deems most
efficient and prudent to purchase and Tenant shall not be required to spend additional funds to purchase additional coverages
insuring against such risks; and provided, further, that some property coverages might be sub-limited in an amount less than the
Maximum Foreseeable Loss as long as the sub-limits are commercially reasonable and prudent as deemed by Tenant;
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Loss or damage by explosion of steam boilers, pressure vessels or similar apparatus, now or hereafter
installed in each Facility, in such limits with respect to any one accident as may be reasonably requested by Landlord from time
to time;
(b)
(c)
Flood (when any of the improvements comprising the Leased Property of a Facility is located in whole or
in part within a designated 100-year flood plain area) in an amount not less than the greater of (i) probable maximum loss of a
250 year event, and (ii) One Hundred Million Dollars ($100,000,000), and such other hazards and in such amounts as may be
customary for comparable properties in the area;
(d)
Loss of rental value in an amount not less than twelve (12) months’ Rent payable hereunder or business
interruption in an amount not less than twelve (12) months of income and normal operating expenses including 90-days ordinary
payroll and Rent payable hereunder with an extended period of indemnity coverage of at least ninety (90) days necessitated by
the occurrence of any of the hazards described in Sections 13.1(a), 13.1(b) or 13.1(c), provided that Tenant may self-insure
specific Facilities for the insurance contemplated under this Section 13.1(d), provided that (i) such Facilities that Tenant chooses
to self-insure are not expected to generate more than ten percent (10%) of Net Revenues anticipated to be generated from all the
Facilities and (ii) Tenant deposits in any impound account created under Section 4.3 hereof an amount equal to the product of (1)
the sum of (A) the insurance premiums paid by Tenant for such period under this Section 13.1(d) to insurance companies and (B)
the amount deposited by Tenant in an impound account pursuant to this provision, and (2) the percentage of Net Revenues that
are anticipated to be generated by the Facilities that are being self-insured by Tenant under this provision;
(e)
Claims for personal injury or property damage under a policy of comprehensive general public liability
insurance with amounts not less than One Hundred Million Dollars ($100,000,000) each occurrence and One Hundred Million
Dollars ($100,000,000) in the annual aggregate, provided that such requirements may be satisfied through the purchase of a
primary general liability policy and excess liability policies;
(f)
During such time as Tenant is constructing any improvements, Tenant, at its sole cost and expense, shall
carry, or cause to be carried (i) workers’ compensation insurance and employers’ liability insurance covering all persons
employed in connection with the improvements in statutory limits, (ii) a completed operations endorsement to the commercial
general liability insurance policy referred to above, (iii) builder’s risk insurance, completed value form (or its equivalent),
covering all physical loss, in an amount and subject to policy conditions satisfactory to Landlord, and (iv) such other insurance,
in such amounts, as Landlord deems reasonably necessary to protect Landlord’s interest in the Leased Property from any act or
omission of Tenant’s contractors or subcontractors.
1.2 Maximum Foreseeable Loss. The term “Maximum Foreseeable Loss” shall mean the largest monetary
loss within one area that may be expected to result from a single fire with protection impaired, the control of the fire mainly
dependent on physical barriers or separations and a delayed manual firefighting by public and/or private fire brigades. If
Landlord reasonably believes that the Maximum Foreseeable Loss has increased at any time during the Term, it shall have the
right (unless Tenant and Landlord agree otherwise) to have such Maximum Foreseeable Loss redetermined by an impartial
national insurance company reasonably acceptable to both parties (the “Impartial Appraiser”), or, if the parties cannot agree on
an Impartial Appraiser, then by an Expert appointed in accordance with Section 34.1 hereof. The determination of the Impartial
Appraiser (or the Expert, as the case may be) shall be final and binding on the parties hereto, and Tenant shall forthwith adjust the
amount of the insurance carried pursuant to this Article XIII to the amount so determined by the Impartial Appraiser (or the
Expert, as the case may be), subject to the approval of the Facility Mortgagee, as applicable.
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Each party shall pay one-half (1/2) of the fee, if any, of the Impartial Appraiser. If Landlord pays the Impartial Appraiser, fifty
percent (50%) of such costs shall be Additional Charges hereunder and if Tenant pays such Impartial Appraiser, fifty percent
(50%) of such costs shall be a credit against the next Rent payment hereunder. If Tenant has undertaken any structural alterations
or additions to the Leased Property having a cost or value in excess of Twenty Five Million Dollars ($25,000,000), Landlord may
at Tenant’s expense have the Maximum Foreseeable Loss redetermined at any time after such improvements are made, regardless
of when the Maximum Foreseeable Loss was last determined.
1.3
Additional Insurance. In addition to the insurance described above, Tenant shall maintain such additional
insurance upon notice from Landlord as may be reasonably required from time to time by any Facility Mortgagee and shall
further at all times maintain adequate workers’ compensation coverage and any other coverage required by Legal Requirements
for all Persons employed by Tenant on the Leased Property in accordance with Legal Requirements.
1.4 Waiver of Subrogation. All insurance policies carried by either party covering the Leased Property or
Tenant’s Property, including, without limitation, contents, fire and liability insurance, shall expressly waive any right of
subrogation on the part of the insurer against the other party. Each party, respectively, shall pay any additional costs or charges for
obtaining such waiver.
1.5
Policy Requirements. All of the policies of insurance referred to in this Article XIII shall be written in
form reasonably satisfactory to Landlord and any Facility Mortgagee and issued by insurance companies with a minimum
policyholder rating of “A-” and a financial rating of “VII” in the most recent version of Best’s Key Rating Guide, or a minimum
rating of “BBB” from Standard & Poor’s or equivalent. If Tenant obtains and maintains the general liability insurance described
in Section 13.1(e) above on a “claims made” basis, Tenant shall provide continuous liability coverage for claims arising during
the Term. In the event such “claims made” basis policy is canceled or not renewed for any reason whatsoever (or converted to an
“occurrence” basis policy), Tenant shall either obtain (a) “tail” insurance coverage converting the policies to “occurrence” basis
policies providing coverage for a period of at least three (3) years beyond the expiration of the Term, or (b) an extended reporting
period of at least three (3) years beyond the expiration of the Term. Tenant shall pay all of the premiums therefor, and deliver
certificates thereof to Landlord prior to their effective date (and with respect to any renewal policy, prior to the expiration of the
existing policy), and in the event of the failure of Tenant either to effect such insurance in the names herein called for or to pay
the premiums therefor, or to deliver such certificates thereof to Landlord, at the times required, Landlord shall be entitled, but
shall have no obligation, to effect such insurance and pay the premiums therefor, in which event the cost thereof, together with
interest thereon at the Overdue Rate, shall be repayable to Landlord upon demand therefor. Tenant shall obtain, to the extent
available on commercially reasonable terms, the agreement of each insurer, by endorsement on the policy or policies issued by it,
or by independent instrument furnished to Landlord, that it will give to Landlord thirty (30) days’ (or ten (10) days’ in the case of
non-payment of premium) written notice before the policy or policies in question shall be altered, allowed to expire or cancelled.
Notwithstanding any provision of this Article XIII to the contrary, Landlord acknowledges and agrees that the coverage required
to be maintained by Tenant may be provided under one or more policies with various deductibles or self-insurance retentions by
Tenant or its Affiliates, subject to Landlord’s approval not to be unreasonably withheld. Upon written request by Landlord,
Tenant shall provide Landlord copies of the property insurance policies when issued by the insurers providing such coverage.
1.6
Increase in Limits. If, from time to time after the Commencement Date, Landlord determines in the
exercise of its reasonable business judgment that the limits of the
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personal injury or property damage-public liability insurance then carried pursuant to Section 13.1(e) hereof are insufficient,
Landlord may give Tenant Notice of acceptable limits for the insurance to be carried; provided that in no event will Tenant be
required to carry insurance in an amount which exceeds the product of (i) the amounts set forth in Section 13.1(e) hereof and (ii)
the CPI Increase; and subject to the foregoing limitation, within ninety (90) days after the receipt of such Notice, the insurance
shall thereafter be carried with limits as prescribed by Landlord until further increase pursuant to the provisions of this Section
13.6.
1.7
Blanket Policy. Notwithstanding anything to the contrary contained in this Article XIII, Tenant’s
obligations to carry the insurance provided for herein may be brought within the coverage of a so-called blanket policy or policies
of insurance carried and maintained by Tenant; provided that the requirements of this Article XIII (including satisfaction of the
Facility Mortgagee’s requirements and the approval of the Facility Mortgagee) are otherwise satisfied, and provided further that
Tenant maintains specific allocations acceptable to Landlord.
1.8
No Separate Insurance. Tenant shall not, on Tenant’s own initiative or pursuant to the request or
requirement of any third party, (i) take out separate insurance concurrent in form or contributing in the event of loss with that
required in this Article XIII to be furnished by, or which may reasonably be required to be furnished by, Tenant or (ii) increase
the amounts of any then existing insurance by securing an additional policy or additional policies, unless all parties having an
insurable interest in the subject matter of the insurance, including in all cases Landlord and all Facility Mortgagees, are included
therein as additional insureds and the loss is payable under such insurance in the same manner as losses are payable under this
Master Lease. Notwithstanding the foregoing, nothing herein shall prohibit Tenant from insuring against risks not required to be
insured hereby, and as to such insurance, Landlord and any Facility Mortgagee need not be included therein as additional
insureds, nor must the loss thereunder be payable in the same manner as losses are payable hereunder except to the extent
required to avoid a default under the Facility Mortgage.
ARTICLE XIV
1.1
Property Insurance Proceeds. All proceeds (except business interruption not allocated to rent expenses)
payable by reason of any property loss or damage to the Leased Property, or any portion thereof, under any property policy of
insurance required to be carried hereunder shall be paid to Facility Mortgagee or to an escrow account held by a third party
depositary reasonably acceptable to Landlord and Tenant (pursuant to an escrow agreement acceptable to the parties and intended
to implement the terms hereof) and made available to Tenant upon request for the reasonable out-of-pocket costs of preservation,
stabilization, emergency restoration, business interruption, reconstruction and repair, as the case may be, of any damage to or
destruction of the Leased Property, or any portion thereof; provided, however, that the portion of such proceeds that are
attributable to Tenant’s obligation to pay Rent shall be applied against Rents due by Tenant hereunder; and provided, further, that
if the total amount of proceeds payable net of the applicable deductibles is One Million Dollars ($1,000,000) or less, and if no
Event of Default has occurred and is continuing, the proceeds shall be paid directly to Tenant and, subject to the limitations set
forth in this Article XIV used for the repair of any damage to the Leased Property, it being understood and agreed that Tenant
shall have no obligation to rebuild any Tenant Capital Improvement, provided that the Leased Property is rebuilt in a manner
substantially similar to the condition in which it existed prior to the related casualty or otherwise in a manner reasonably
satisfactory to Landlord. Any excess proceeds of insurance remaining after the completion of the restoration or reconstruction of
the Leased Property to substantially the same condition as existed immediately before the damage or destruction and with
materials and workmanship of like kind and quality and to Landlord’s reasonable satisfaction shall be provided to Landlord
within fifteen (15) days after such
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restoration or reconstruction has been completed. All salvage resulting from any risk covered by insurance for damage or loss to
the Leased Property shall belong to Landlord. Tenant shall have the right to prosecute and settle insurance claims, provided that
Tenant shall consult with and involve Landlord in the process of adjusting any insurance claims under this Article XIV and any
final settlement with the insurance company shall be subject to Landlord’s consent, such consent not to be unreasonably withheld.
1.2
Tenant’s Obligations Following Casualty. (a)If a Facility and/or any Tenant Capital Improvements to a
Facility are damaged, whether or not from a risk covered by insurance carried by Tenant, except as otherwise provided herein, (i)
Tenant shall restore such Leased Property (excluding any Tenant Capital Improvement, it being understood and agreed that
Tenant shall not be required to repair any Tenant Capital Improvement, provided that the Leased Property is rebuilt in a manner
reasonably satisfactory to Landlord), to substantially the same condition as existed immediately before such damage and (ii) such
damage shall not terminate this Master Lease.
(a)
If Tenant restores the affected Leased Property and the cost of the repair or restoration exceeds the amount
of proceeds received from the insurance required to be carried hereunder, Tenant shall provide Landlord with evidence
reasonably acceptable to Landlord that Tenant has available to it any excess amounts needed to restore such Facility. Such excess
amounts necessary to restore such Facility shall be paid by Tenant.
If Tenant has not restored the affected Leased Property and gaming operations have not recommenced by
the date that is the third anniversary of the date of any casualty, all remaining insurance proceeds shall be paid to and retained by
Landlord free and clear of any claim by or through Tenant.
(b)
(c)
In the event neither Landlord nor Tenant is required or elects to repair and restore the Leased Property, all
insurance proceeds, other than proceeds reasonably attributed to any Tenant Capital Improvements (and, subject to no Event of
Default having occurred and being continuing, any business interruption proceeds in excess of Tenant’s Rent obligations
hereunder), which proceeds shall be and remain the property of Tenant, shall be paid to and retained by Landlord free and clear of
any claim by or through Tenant except as otherwise specifically provided below in this Article XIV.
1.3
No Abatement of Rent. This Master Lease shall remain in full force and effect and Tenant’s obligation to
pay the Rent and all other charges required by this Master Lease shall remain unabated during the period required for adjusting
insurance, satisfying Legal Requirements, repair and restoration.
1.4 Waiver. Tenant waives any statutory rights of termination which may arise by reason of any damage or
destruction of the Leased Property but such waiver shall not affect any contractual rights granted to Tenant under this Article
XIV.
1.5
Insurance Proceeds Paid to Facility Mortgagee. Notwithstanding anything herein to the contrary, in the
event that Landlord obtains any Facility Mortgage, the terms of such Facility Mortgage shall provide that any insurance proceeds
(excluding business interruption proceeds, which shall continue to be payable to Landlord in payment of Rent) may be held by
such Facility Mortgagee and shall be applied to the restoration of the Leased Property and/or disbursed to Tenant to permit
Tenant to restore the Leased Property, in the manner required by Section 14.2 and other applicable provisions of this Master
Lease and may not be applied by such Facility Mortgagee to the indebtedness secured by the Facility Mortgage, provided that
Tenant satisfies each of the following conditions to the reasonable satisfaction of Landlord and such Facility Mortgagee: (a) at the
time of the related casualty, there shall exist no
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47
Event of Default; (b) the Leased Property affected by such casualty shall be capable of being restored to the condition required by
Section 14.2; (c) Tenant shall demonstrate to Landlord’s and such Facility Mortgagee’s reasonable satisfaction Tenant’s ability to
pay the Rent coming due during such repair or restoration period (after taking into account proceeds from business interruption
insurance carried by Tenant); (d) Tenant shall have provided to Landlord and such Facility Mortgagee all of the following: (i) an
architect’s contract with an architect reasonably acceptable to Landlord and such Facility Mortgagee; (ii) complete plans and
specifications for the restoration of the affected portions of the Leased Property, which plans and specifications shall cause the
Leased Property to be restored or reconstructed to the condition required under Section 14.2; provided, however, Tenant agrees to
incorporate Landlord’s reasonable comments to such plans and specifications; (iii) fixed-price or guaranteed maximum cost
construction contracts with contractors reasonably acceptable to Landlord and such Facility Mortgagee for completion of the
restoration work in accordance with the aforementioned plans and specifications; (iv) such additional funds (if any) as are
necessary from time to time, in Landlord’s and such Facility Mortgagee’s reasonable opinion, to complete the restoration
pursuant to the plans and specifications and in the condition required under Section 14.2; and (v) copies of all permits, licenses
and approvals necessary to complete the restoration in accordance with the plans and specifications and all Legal Requirements;
(e) Tenant shall, promptly following the related casualty, diligently pursue all items required pursuant to clause (d) above and,
after obtaining and providing the same to Landlord and any Facility Mortgagee, shall promptly commence and diligently pursue
such work to completion; (f) Tenant shall complete (and shall provide to Landlord and any Facility Mortgagee such
documentation evidencing the same) the restoration on or before the earliest to occur of (i) three (3) years after the date of the
related casualty, and (ii) the expiration of the Term (provided, however, in the event that such restoration or reconstruction cannot
be reasonably completed prior to the expiration of the Term, the deadline imposed under this subclause (iii) shall include any
properly exercised Renewal Term); (g) the Property and the use thereof after the restoration will be in compliance with all
applicable Legal Requirements; (h) Tenant shall promptly deliver to Landlord and any Facility Mortgagee all certificates of
occupancy, lien waivers and such other documentation reasonably requested by Landlord or any Facility Mortgagee in connection
with the restoration and reconstruction of the Leased Property; and (i) Tenant agrees to comply with any commercially reasonable
draw or other disbursement requirements imposed by any such Facility Mortgagee.
1.6
Termination of Master Lease; Abatement of Rent. In the event this Master Lease is terminated as to an
affected Leased Property pursuant to Section 8.2 (in respect of Tenant being in jeopardy of losing a Gaming License or Landlord
being in jeopardy of failing to comply with a regulatory requirement material to the continued operation of a Facility), Section
15.5 (as provided therein) or Section 41.15 (in the event Tenant elects to purchase a New Jersey Facility or require Landlord to
sell such New Jersey Facility to a third party) (such termination or cessation, a “Leased Property Rent Adjustment Event”),
then:
(i) the Building Base Rent due hereunder from and after the effective date of any such Leased Property Rent Adjustment
Event shall be reduced by an amount determined by multiplying (A) a fraction, (x) the numerator of which shall be the
fair market value of the affected Leased Property immediately prior to the effective date of such Leased Property Rent
Adjustment Event and (y) the denominator of which shall be the fair market value of all of the Leased Property then
subject to the terms of this Master Lease, including the affected Leased Property, immediately prior to the effective
date of such Leased Property Rent Adjustment Event (in each case as determined in good faith by the parties (or, if the
parties cannot agree, by an Expert pursuant to Section 34.1 of this Master Lease)), by (B) the Building Base Rent
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48
payable under this Master Lease immediately prior to the effective date of such Leased Property Rent Adjustment
Event;
(ii) the Land Base Rent due hereunder from and after the effective date of any such Leased Property Rent Adjustment
Event shall be reduced by an amount determined by multiplying (A) a fraction, (x) the numerator of which shall be the
fair market value of such affected Leased Property immediately prior to the effective date of such Leased Property
Rent Adjustment Event and (y) the denominator of which shall be the fair market value of all of the Leased Property
then subject to the terms of this Master Lease, including the affected Leased Property, immediately prior to the
effective date of such Leased Property Rent Adjustment Event (in each case as determined in good faith by the parties
(or, if the parties cannot agree, by an Expert pursuant to Section 34.1 of this Master Lease)), by (B) the Land Base
Rent payable under this Master Lease immediately prior to the effective date of such Leased Property Rent
Adjustment Event; and
(iii)Landlord shall retain any claim which Landlord may have against Tenant for failure to insure such Leased Property as
required by Article XIII.
1.1
Condemnation.
ARTICLE XV
(a)
Total Taking. If the Leased Property of a Facility is totally and permanently taken by Condemnation (a
“Taking”), this Master Lease shall terminate with respect to such Facility as of the day before the Date of Taking for such
Facility.
(b)
Partial Taking. If a portion of the Leased Property of, and any Tenant Capital Improvements to, a Facility
are taken by Condemnation, this Master Lease shall remain in effect if the affected Facility is not thereby rendered Unsuitable for
Its Primary Intended Use, but if such Facility is thereby rendered Unsuitable for Its Primary Intended Use, this Master Lease shall
terminate with respect to such Facility as of the day before the Date of Taking for such Facility.
(c)
Restoration. If there is a partial Taking of the Leased Property of, and any Tenant Capital Improvements to,
a Facility and this Master Lease remains in full force and effect with respect to such Facility, Landlord shall make available to
Tenant the portion of the Award applicable to restoration of the Leased Property (excluding any Tenant Capital Improvements, it
being understood and agreed that Tenant shall not be required to repair or restore any Tenant Capital Improvements, provided that
the Leased Property is restored in a manner reasonably satisfactory to Landlord and, whether or not Tenant elects to restore such
Tenant Capital Improvements, the portion of such Award attributable thereto shall also be paid to Tenant), and Tenant shall
accomplish all necessary restoration whether or not the amount provided by the Condemnor for restoration is sufficient and the
Rent shall be reduced by such amount as may be agreed upon by Landlord and Tenant or, if they are unable to reach such an
agreement within a period of thirty (30) days after the occurrence of the Taking, then the Rent for such Facility shall be
proportionately reduced, based on the proportion of the Facility that was subject to the partial Taking and pursuant to the formula
set forth in Section 14.6 hereof. Tenant shall restore such Leased Property (as nearly as possible under the circumstances) to a
complete architectural unit
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49
of the same general character and condition as such Leased Property existing immediately prior to such Taking.
1.2
Award Distribution. Except as set forth below and except to the extent of restoration proceeds to be made
available to Tenant as provided in Section 15.1(c) hereof, the entire Award shall belong to and be paid to Landlord. Tenant shall,
however, be entitled to pursue its own claim with respect to the Taking for Tenant’s lost profits value and moving expenses and,
the portion of the Award, if any, allocated to any Tenant Capital Improvements (subject to Tenant’s restoring the Leased Property
not subject to a Taking in a manner reasonably satisfactory to Landlord) and Tenant’s Property shall be and remain the property
of Tenant free of any claim thereto by Landlord.
1.3
Temporary Taking. The taking of the Leased Property, or any part thereof, shall constitute a taking by
Condemnation only when the use and occupancy by the taking authority has continued for longer than 180 consecutive days.
During any shorter period, which shall be a temporary taking, all the provisions of this Master Lease shall remain in full force
and effect and the Award allocable to the Term shall be paid to Tenant.
1.4
Condemnation Awards Paid to Facility Mortgagee. Notwithstanding anything herein to the contrary, in
the event that any Facility Mortgagee is entitled to any Condemnation Award, or any portion thereof, under the terms of any
Facility Mortgage or related financing agreement, such award shall be applied, held and/or disbursed in accordance with the
terms of the Facility Mortgage or related financing agreement. In the event that the Facility Mortgagee elects to apply the
Condemnation Award to the indebtedness secured by the Facility Mortgage in the case of a Taking as to which the restoration
provisions apply (or the related financing agreement requires such application), Landlord shall either (i) within ninety (90) days
of the notice from the Facility Mortgagee make available to Tenant for restoration of such Leased Property funds (either through
refinance or otherwise) equal to the amount applied by the Facility Mortgagee or applicable to restoration of the Leased Property
and shall pay to Tenant any amount of the Award allocated to Tenant Capital Improvements, or (ii) sell to Tenant the portion of
the Leased Property consisting of the Facility that is not subject to the Taking in exchange for a payment equal to the greater of
(1) the difference between (a) the value of such Facility immediately prior to such Taking, based on the average fair market value
of similar real estate in the areas surrounding such Facility, and (b) the amount of the Condemnation Award retained by the
Facility Mortgagee, and (2) the value of the remaining portion of such Facility after such Taking, based on the average fair
market value of similar real estate in the areas surrounding such Facility.
1.5
Termination of Master Lease; Abatement of Rent. In the event this Master Lease is terminated with
respect to the affected portion of the Leased Property as a result of a Taking (or pursuant to Section 15.4 hereof as a result of a
Facility Mortgagee electing to apply a Condemnation Award to the indebtedness secured by the Facility Mortgage), the Rent due
hereunder from and after the effective date of such termination shall be reduced by an amount determined in the same manner as
set forth in Section 14.6 hereof.
ARTICLE XVI
1.1
(a)
Events of Default. Any one or more of the following shall constitute an “Event of Default”:
(i) Tenant shall fail to pay any installment of Rent within four (4) Business Days of when due and such
failure is not cured by Tenant within three (3) Business Days after notice from Landlord of Tenant’s failure
to
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50
pay such installment of Rent when due (and such notice of failure from Landlord may be given any time
after such installment is four (4) Business Days late);
(i)
Tenant shall fail on any two separate occasions in the same Fiscal Year to pay any installment of Rent
within four (4) Business Days of when due;
(ii)
Reserved; or
(iii)
Tenant shall fail to pay any Additional Charge within five (5) Business Days after notice from Landlord of
Tenant’s failure to make such payment of such Additional Charge when due (and such notice of failure
from Landlord may be given any time after such payment is more than one (1) Business Day late);
(b)
a default shall occur under any Guaranty, where the default is not cured within any applicable grace period
set forth therein or, if no cure periods are provided, within fifteen (15) days after notice from Landlord (or in the case of a breach
of Paragraph 8 of the Guaranty, the cure periods provided herein with respect to such action or omission);
(c)
(i)
(ii)
Tenant or any Guarantor shall:
admit in writing in a legal proceeding its inability to pay its debts generally as they become due;
file a petition in bankruptcy or a petition to take advantage of any insolvency act;
(iii) make an assignment for the benefit of its creditors;
(iv)
consent to the appointment of a receiver of itself or of the whole or any substantial part of its property; or
(v)
file a petition or answer seeking reorganization or arrangement under the United States bankruptcy laws or
any other applicable law or statute of the United States of America or any state thereof pertaining to debtor
relief or insolvency;
(d)
Tenant or any Guarantor (other than an Immaterial Subsidiary Guarantor) shall be adjudicated as bankrupt
or a court of competent jurisdiction shall enter an order or decree appointing, without the consent of Tenant or any Guarantor
(other than an Immaterial Subsidiary Guarantor), a receiver of Tenant or any Guarantor (other than an Immaterial Subsidiary
Guarantor) or of the whole or substantially all of the Tenant’s or any Guarantor’s (other than an Immaterial Subsidiary
Guarantor’s) property, or approving a petition filed against Tenant or any Guarantor (other than an Immaterial Subsidiary
Guarantor) seeking reorganization or arrangement of Tenant or any Guarantor (other than an Immaterial Subsidiary Guarantor)
under the United States bankruptcy laws or any other applicable law or statute of the United States of America or any state
thereof, and such judgment, order or decree shall not be vacated or set aside or stayed within sixty (60) days from the date of the
entry thereof;
(e)
Tenant or any Guarantor (other than an Immaterial Subsidiary Guarantor) shall be liquidated or dissolved
(except that any Guarantor may be liquidated or dissolved into another Guarantor or the Tenant or so long as its assets are
distributed following such liquidation or dissolution to another Guarantor or Tenant);
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51
(f)
the estate or interest of Tenant in the Leased Property or any part thereof shall be levied upon or attached in
any proceeding relating to more than $1,000,000 and the same shall not be vacated, discharged (or bonded) or stayed pending
appeal (or bonded or otherwise similarly secured payment) within the later of ninety (90) days after commencement thereof or
thirty (30) days after receipt by Tenant of notice thereof from Landlord; provided, however, that such notice shall be in lieu of
and not in addition to any notice required under applicable law and the foregoing shall not apply to the lien of real estate Taxes on
the Leased Property to the extent that such Taxes are not delinquent or are being contested in accordance with the provisions of
Section 12.1 of this Master Lease;
Tenant voluntarily ceases operations for its Primary Intended Use at a Facility (except as a result of
Unavoidable Delay, material damage, destruction or Condemnation that affects such Facility) and such event would reasonably
be expected to have a material adverse effect on Tenant, the Facilities, or on the Leased Property, in each case, taken as a whole;
(g)
proves to be untrue when made in any material respect which materially and adversely affects Landlord;
(h)
any of the representations or warranties made by Tenant hereunder or by any Guarantor in a Guaranty
(i)
any applicable license or other agreements material to a Facility’s operation for its Primary Intended Use
are at any time terminated or revoked or suspended for more than thirty (30) days (and causes cessation of gaming activity at a
Facility) and such termination, revocation or suspension is not stayed pending appeal and would reasonably be expected to have a
material adverse effect on Tenant, the Facilities, or on the Leased Property, taken as a whole;
(j)
except to a permitted assignee pursuant to Section 22.2 or a permitted subtenant or Subsidiary that joins as
a Guarantor to the Guaranty pursuant to Section 22.3, or with respect to the granting of a permitted pledge hereunder to a
Permitted Leasehold Mortgagee, the sale or transfer, without Landlord’s consent, of all or any portion of any Gaming License or
similar certificate or license relating to the Leased Property;
(k)
Tenant or any Guarantor, by its acts or omissions, causes the occurrence of a default under any provision
(to the extent Tenant has knowledge of such provision and Tenant’s or such Guarantor’s obligations with respect thereto) of any
Facility Mortgage, related documents or obligations thereunder by which Tenant is bound in accordance with Section 31.1 or has
agreed under the terms of this Master Lease to be bound, which default is not cured within the applicable time period, if the effect
of such default is to cause, or to permit the holder or holders of that Facility Mortgage or Indebtedness secured by that Facility
Mortgage (or a trustee or agent on behalf of such holder or holders), to cause, that Facility Mortgage (or the Indebtedness secured
thereby) to become or be declared due and payable (or redeemable) prior to its stated maturity (excluding in any case any default
related to the financial performance of Tenant or any Guarantor);
two consecutive fiscal quarters or (y) a breach of Sections 23.3(b) or (c) hereof;
(l)
(x) a breach by Tenant of Section 23.3(a) hereof for two consecutive Test Periods ending on the last day of
(m)
if Tenant shall fail to observe or perform any other term, covenant or condition of this Master Lease and
such failure is not cured by Tenant within thirty (30) days after written notice thereof from Landlord, unless such failure cannot
with due diligence be cured within a period of thirty (30) days, in which case such failure shall not be deemed to be an Event of
Default if Tenant proceeds promptly and with due diligence to cure the failure and diligently
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52
completes the curing thereof within one hundred twenty (120) days after such notice from Landlord; provided, however, that such
notice shall be in lieu of and not in addition to any notice required under applicable law;
(n)
if Tenant or any Guarantor shall fail to pay, bond, escrow or otherwise similarly secure payment of one or
more final judgments aggregating in excess of the product of (i) $100 million and (ii) the CPI Increase (and only to the extent not
covered by insurance), which judgments are not discharged or effectively waived or stayed for a period of 45 consecutive days;
and
(o)
an assignment of Tenant’s interest in this Master Lease (including pursuant to a Change in Control) shall
have occurred without the consent of Landlord to the extent such consent is required under Article XXII or Tenant is otherwise in
default of the provisions set forth in Section 22.1 below.
No Event of Default (other than a failure to make payment of money) shall be deemed to exist under this Section
16.1 during any time the curing thereof is prevented by an Unavoidable Delay, provided that upon the cessation of the
Unavoidable Delay, Tenant remedies the default without further delay.
1.2
Certain Remedies. If an Event of Default shall have occurred and be continuing, Landlord may (a)
terminate this Master Lease by giving Tenant no less than ten (10) days’ notice of such termination and the Term shall terminate
and all rights of Tenant under this Master Lease shall cease, (b) seek damages as provided in Section 16.3 hereof, and/or (c)
exercise any other right or remedy at law or in equity available to Landlord as a result of any Event of Default. Tenant shall pay
as Additional Charges all costs and expenses incurred by or on behalf of Landlord, including reasonable attorneys’ fees and
expenses, as a result of any Event of Default hereunder. If an Event of Default shall have occurred and be continuing, whether or
not this Master Lease has been terminated pursuant to the first sentence of this Section 16.2, Tenant shall, to the extent permitted
by law (including applicable Gaming Regulations), if required by Landlord to do so, immediately surrender to Landlord
possession of all or any portion of the Leased Property (including any Tenant Capital Improvements of the Facilities) as to which
Landlord has so demanded and quit the same and Landlord may, to the extent permitted by law (including applicable Gaming
Regulations), enter upon and repossess such Leased Property and any Capital Improvement thereto by reasonable force, summary
proceedings, ejectment or otherwise, and, to the extent permitted by law (including applicable Gaming Regulations), may remove
Tenant and all other Persons and any of Tenant’s Property from such Leased Property (including any such Tenant Capital
Improvement thereto).
1.3
Damages. None of (i) the termination of this Master Lease, (ii) the repossession of the Leased Property
(including any Capital Improvements to any Facility), (iii) the failure of Landlord to relet the Leased Property or any portion
thereof, (iv) the reletting of all or any portion of the Leased Property, or (v) the inability of Landlord to collect or receive any
rentals due upon any such reletting, shall relieve Tenant of its liabilities and obligations hereunder, all of which shall survive any
such termination, repossession or reletting. Landlord and Tenant agree that Landlord shall have no obligation to mitigate
Landlord’s damages under this Master Lease. If any such termination of this Master Lease occurs (whether or not Landlord
terminates Tenant’s right to possession of the Leased Property), Tenant shall forthwith pay to Landlord all Rent due and payable
under this Master Lease to and including the date of such termination. Thereafter:
the occurrence of an Event of Default, either:
Tenant shall forthwith pay to Landlord, at Landlord’s option, as and for liquidated and agreed current damages for
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53
(A)
the sum of:
(i)
(ii)
(iii)
(iv)
the worth at the time of award of the unpaid Rent which had been earned at the time of termination to the
extent not previously paid by Tenant under this Section 16.3;
the worth at the time of award of the amount by which the unpaid Rent which would have been earned
after termination until the time of award exceeds the amount of such rental loss that Tenant proves was in
fact avoided or could have been reasonably avoided;
the worth at the time of award of the amount by which the unpaid Rent for the balance of the Term after
the time of award exceeds the amount of such rental loss that Tenant proves was in fact avoided or could
be reasonably avoided; plus
any other amount necessary to compensate Landlord for all the detriment proximately caused by Tenant’s
failure to perform its obligations under this Master Lease or which in the ordinary course of things would
be likely to result therefrom; provided, however, no compensation shall be due for consequential damages
or diminution in value of the Land or the buildings resulting from the Event of Default; provided, further,
that Tenant shall be responsible for consequential damages resulting solely from Tenant’s holding over and
remaining in all or any portion of the Leased Property following the expiration or earlier termination of
this Master Lease (or any partial termination thereof with respect to a particular Facility) and first accruing
after the date that is six (6) months following such termination.
As used in clauses (i) and (ii) above, the “worth at the time of award” shall be computed by allowing interest at the
Overdue Rate. As used in clause (iii) above, the “worth at the time of award” shall be computed by discounting
such amount at the discount rate of the Federal Reserve Bank of New York at the time of award plus one percent
(1%) and reducing such amount by the portion of the unpaid Rent that Tenant proves could be reasonably avoided.
or
(B) if Landlord chooses not to terminate Tenant’s right to possession of the Leased Property (whether or not
Landlord terminates the Master Lease), each installment of said Rent and other sums payable by Tenant to Landlord under this
Master Lease as the same becomes due and payable, together with interest at the Overdue Rate from the date when due until paid,
and Landlord may enforce, by action or otherwise, any other term or covenant of this Master Lease (and Landlord may at any
time thereafter terminate Tenant’s right to possession of the Leased Property and seek damages under subparagraph (A) hereof, to
the extent not already paid for by Tenant under this subparagraph (B)).
1.4
Receiver. Upon the occurrence and continuance of an Event of Default, and upon commencement of
proceedings to enforce the rights of Landlord hereunder, but subject to any limitations of applicable law, Landlord shall be
entitled, as a matter of right, to the appointment of a receiver or receivers acceptable to Landlord of the Leased Property and of
the revenues, earnings, income, products and profits thereof, pending the outcome of such proceedings, with such powers as the
court making such appointment shall confer.
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54
1.5 Waiver. If Landlord initiates judicial proceedings or if this Master Lease is terminated by Landlord
pursuant to this Article XVI, Tenant waives, to the extent permitted by applicable law, (i) any right of redemption, re-entry or
repossession; and (ii) the benefit of any laws now or hereafter in force exempting property from liability for rent or for debt.
1.6
Application of Funds. Any payments received by Landlord under any of the provisions of this Master
Lease during the existence or continuance of any Event of Default which are made to Landlord rather than Tenant due to the
existence of an Event of Default shall be applied to Tenant’s obligations in the order which Landlord may reasonably determine
or as may be prescribed by the laws of the State.
1.1
Permitted Leasehold Mortgagees.
ARTICLE XVII
(a)
On one or more occasions without Landlord’s prior consent Tenant may mortgage or otherwise encumber
Tenant’s estate in and to the Leased Property (the “Leasehold Estate”) to one or more Permitted Leasehold Mortgagees under
one or more Permitted Leasehold Mortgages and pledge its right, title and interest under this Master Lease and/or Equity Interests
in Tenant or its direct or indirect equity owners as security for such Permitted Leasehold Mortgages or any Debt Agreement
secured thereby; provided that, except as provided in Section 17.1(b)(i)(3), no Person shall be considered a Permitted Leasehold
Mortgagee unless (1) such Person delivers to Landlord a written agreement (in form and substance reasonably satisfactory to
Landlord) providing (i) that (unless this Master Lease has been terminated as to a particular Facility) such Permitted Leasehold
Mortgagee and any lenders for whom it acts as representative, agent or trustee, will not use or dispose of any Gaming License for
use at a location other than at the Facility to which such Gaming License relates as of the date such Person becomes a Permitted
Leasehold Mortgagee (or, in the case of any Facility added to the Master Lease after such date, as of the date that such Facility is
added to the Master Lease), and (ii) an express acknowledgement that, in the event of the exercise by the Permitted Leasehold
Mortgagee of its rights under the Permitted Leasehold Mortgage, the Permitted Leasehold Mortgagee shall be required to (except
for a transfer that meets the requirements of Section 22.2(iii)) secure the approval of Landlord for the replacement of Tenant with
respect to the affected portion of the Leased Property and contain the Permitted Leasehold Mortgagee’s acknowledgment that
such approval may be granted or withheld by Landlord in accordance with the provisions of Article XXII of this Master Lease,
and (2) the underlying Permitted Leasehold Mortgage includes an express acknowledgement that any exercise of remedies
thereunder that would affect the Leasehold Estate shall be subject to the terms of the Master Lease.
(b)
Notice to Landlord.
(i)
(1) If Tenant shall, on one or more occasions, mortgage Tenant’s Leasehold Estate and if the
holder of such Permitted Leasehold Mortgage shall provide Landlord with written notice of such Permitted
Leasehold Mortgage together with a true copy of such Permitted Leasehold Mortgage and the name and address of
the Permitted Leasehold Mortgagee, Landlord and Tenant agree that, following receipt of such written notice by
Landlord, the provisions of this Section 17.1 shall apply in respect to each such Permitted Leasehold Mortgage.
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(1)
In the event of any assignment of a Permitted Leasehold Mortgage or in the event of a
change of address of a Permitted Leasehold Mortgagee or of an assignee of such Mortgage, written notice of the
new name and address shall be provided to Landlord.
(2)
Landlord hereby acknowledges and agrees that the Collateral Agent has satisfied all
conditions precedent set forth in this Section 17.1 to be, and for all purposes under this Master Lease is, a
Permitted Leasehold Mortgagee.
(ii)
Landlord shall promptly upon receipt of a communication purporting to constitute the notice
provided for by subsection (b)(i) above acknowledge by an executed and notarized instrument receipt of such
communication as constituting the notice provided for by subsection (b)(i) above and confirming the status of the
Permitted Leasehold Mortgagee as such or, in the alternative, notify the Tenant and the Permitted Leasehold
Mortgagee of the rejection of such communication as not conforming with the provisions of this Section 17.1 and
specify the specific basis of such rejection.
(iii)
After Landlord has received the notice provided for by subsection (b)(i) above, the Tenant, upon
being requested to do so by Landlord, shall with reasonable promptness provide Landlord with copies of the note
or other obligation secured by such Permitted Leasehold Mortgage and of any other documents pertinent to the
Permitted Leasehold Mortgage as specified by the Landlord. If requested to do so by Landlord, Tenant shall
thereafter also provide the Landlord from time to time with a copy of each amendment or other modification or
supplement to such instruments. All recorded documents shall be accompanied by the appropriate recording stamp
or other certification of the custodian of the relevant recording office as to their authenticity as true and correct
copies of official records and all nonrecorded documents shall be accompanied by a certification by Tenant that
such documents are true and correct copies of the originals. From time to time upon being requested to do so by
Landlord, Tenant shall also notify Landlord of the date and place of recording and other pertinent recording data
with respect to such instruments as have been recorded.
(c)
Default Notice. Landlord, upon providing Tenant any notice of: (i) default under this Master Lease or (ii) a
termination of this Master Lease, shall at the same time provide a copy of such notice to every Permitted Leasehold Mortgagee
for which notice has been properly provided to Landlord pursuant to Section 17.1(b) hereof. No such notice by Landlord to
Tenant shall be deemed to have been duly given unless and until a copy thereof has been sent, in the manner prescribed in Section
35.1 of this Master Lease, to every Permitted Leasehold Mortgagee for which notice has been properly provided to Landlord
pursuant to Section 17.1(b) hereof. From and after such notice has been sent to a Permitted Leasehold Mortgagee, such Permitted
Leasehold Mortgagee shall have the same period, with respect to its remedying any default or acts or omissions which are the
subject matter of such notice or causing the same to be remedied, as is given Tenant after the giving of such notice to Tenant, plus
in each instance, the additional periods of time specified in subsections (d) and (e) of this Section 17.1 to remedy, commence
remedying or cause to be remedied the defaults or acts or omissions which are the subject matter of such notice specified in any
such notice. Landlord shall accept such performance by or at the instigation of such Permitted Leasehold Mortgagee as if the
same had been done by Tenant. Tenant authorizes each Permitted Leasehold Mortgagee (to the extent such action is authorized
under the applicable Debt Agreement) to take any such action at such
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Permitted Leasehold Mortgagee’s option and does hereby authorize entry upon the premises by the Permitted Leasehold
Mortgagee for such purpose.
(d)
Notice to Permitted Leasehold Mortgagee. Anything contained in this Master Lease to the contrary
notwithstanding, if any default shall occur which entitles Landlord to terminate this Master Lease, Landlord shall have no right to
terminate this Master Lease on account of such default unless, following the expiration of the period of time given Tenant to cure
such default or the act or omission which gave rise to such default, Landlord shall notify every Permitted Leasehold Mortgagee
for which notice has been properly provided to Landlord pursuant to Section 17.1(b) hereof of Landlord’s intent to so terminate at
least thirty (30) days in advance of the proposed effective date of such termination if such default is capable of being cured by the
payment of money, and at least ninety (90) days in advance of the proposed effective date of such termination if such default is
not capable of being cured by the payment of money (“Termination Notice”). The provisions of subsection (e) below of this
Section 17.1 shall apply if, during such thirty (30) or ninety (90) days (as the case may be) Termination Notice period, any
Permitted Leasehold Mortgagee shall:
(i) notify Landlord of such Permitted Leasehold Mortgagee’s desire to nullify such Termination Notice; and
(ii) pay or cause to be paid all Rent, Additional Charges, and other payments (i) then due and in arrears as specified in
the Termination Notice to such Permitted Leasehold Mortgagee and (ii) which may become due during such thirty
(30) or ninety (90) day (as the case may be) period (as the same may become due); and
(iii)comply or in good faith, with reasonable diligence and continuity, commence to comply with all nonmonetary
requirements of this Master Lease then in default and reasonably susceptible of being complied with by such
Permitted Leasehold Mortgagee, provided, however, that such Permitted Leasehold Mortgagee shall not be
required during such ninety (90) day period to cure or commence to cure any default consisting of Tenant’s failure
to satisfy and discharge any lien, charge or encumbrance against the Tenant’s interest in this Master Lease or the
Leased Property, or any of Tenant’s other assets junior in priority to the lien of the mortgage or other security
documents held by such Permitted Leasehold Mortgagee; and
(iv)during such thirty (30) or ninety (90) day period, the Permitted Leasehold Mortgagee shall respond, with
reasonable diligence, to requests for information from Landlord as to the Permitted Leasehold Mortgagee’s (and
related lenders’) intent to pay such Rent and other charges and comply with this Master Lease.
(e)
Procedure on Default.
(i)
If Landlord shall elect to terminate this Master Lease by reason of any Event of Default of Tenant that has
occurred and is continuing, and a Permitted Leasehold Mortgagee shall have proceeded in the manner provided for
by subsection (d) of this Section 17.1, the specified date for the termination of this Master Lease as fixed by
Landlord in its Termination Notice shall be extended for a period of six (6) months; provided that such Permitted
Leasehold Mortgagee shall, during such six-month period (and during the period of any continuance referred to in
subsection (e)(ii) below):
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(1) pay or cause to be paid the Rent, Additional Charges and other monetary obligations of Tenant
under this Master Lease as the same become due, and continue its good faith efforts to perform or cause to be
performed all of Tenant’s other obligations under this Master Lease, excepting (A) obligations of Tenant to
satisfy or otherwise discharge any lien, charge or encumbrance against Tenant’s interest in this Master Lease or
the Leased Property or any of Tenant’s other assets junior in priority to the lien of the mortgage or other
security documents held by such Permitted Leasehold Mortgagee and (B) past nonmonetary obligations then in
default and not reasonably susceptible of being cured by such Permitted Leasehold Mortgagee; and
(2) if not enjoined or stayed pursuant to a bankruptcy or insolvency proceeding or other judicial order,
diligently continue to pursue acquiring or selling Tenant’s interest in this Master Lease and the Leased
Property by foreclosure of the Permitted Leasehold Mortgage or other appropriate means and diligently
prosecute the same to completion.
(ii)
If at the end of such six (6) month period such Permitted Leasehold Mortgagee is complying with subsection (e)(i)
above, this Master Lease shall not then terminate, and the time for completion by such Permitted Leasehold
Mortgagee of its proceedings shall continue (provided that for the time of such continuance, such Permitted
Leasehold Mortgagee is in compliance with subsection (e)(i) above) (x) so long as such Permitted Leasehold
Mortgagee is enjoined or stayed pursuant to a bankruptcy or insolvency proceeding or other judicial order and if
so enjoined or stayed, thereafter for so long as such Permitted Leasehold Mortgagee proceeds to complete steps to
acquire or sell Tenant’s interest in this Master Lease by foreclosure of the Permitted Leasehold Mortgage or by
other appropriate means with reasonable diligence and continuity but not to exceed twelve (12) months after the
Permitted Leasehold Mortgagee is no longer so enjoined or stayed from prosecuting the same and in no event
longer than twenty-four (24) months from the date of Landlord’s initial notification to Permitted Leasehold
Mortgagee pursuant to Section 17.1(d) hereof, and (y) if such Permitted Leasehold Mortgagee is not so enjoined
or stayed, thereafter for so long as such Permitted Leasehold Mortgagee proceeds to complete steps to acquire or
sell Tenant’s interests in this Master Lease by foreclosure of the Permitted Leasehold Mortgage or by other
appropriate means with reasonable diligence and continuity but not to exceed twelve (12) months from the date of
Landlord’s initial notification to Permitted Leasehold Mortgagee pursuant to Section 17.1(d) hereof. Nothing in
this subsection (e) of this Section 17.1, however, shall be construed to extend this Master Lease beyond the
original term thereof as extended by any options to extend the term of this Master Lease properly exercised by
Tenant or a Permitted Leasehold Mortgagee in accordance with Section 1.4, nor to require a Permitted Leasehold
Mortgagee to continue such foreclosure proceeding after the default has been cured. If the default shall be cured
pursuant to the terms and within the time periods allowed in subsections (d) and (e) of this Section 17.1 and the
Permitted Leasehold Mortgagee shall discontinue such foreclosure proceedings, this Master Lease shall continue
in full force and effect as if Tenant had not defaulted under this Master Lease.
(iii)
If a Permitted Leasehold Mortgagee is complying with subsection (e)(i) of this Section 17.1, upon the acquisition
of Tenant’s Leasehold Estate herein by a Discretionary Transferee this Master Lease shall continue in full force
and effect as if Tenant had not defaulted under this Master Lease, provided that such
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(iv)
(v)
(vi)
Discretionary Transferee cures all outstanding defaults that can be cured through the payment of money and all
other defaults that are reasonably susceptible of being cured.
For the purposes of this Section 17.1, the making of a Permitted Leasehold Mortgage shall not be deemed to
constitute an assignment or transfer of this Master Lease nor of the Leasehold Estate hereby created, nor shall any
Permitted Leasehold Mortgagee, as such, be deemed to be an assignee or transferee of this Master Lease or of the
Leasehold Estate hereby created so as to require such Permitted Leasehold Mortgagee, as such, to assume the
performance of any of the terms, covenants or conditions on the part of the Tenant to be performed hereunder; but
the purchaser at any sale of this Master Lease (including a Permitted Leasehold Mortgagee if it is the purchaser at
foreclosure) and of the Leasehold Estate hereby created in any proceedings for the foreclosure of any Permitted
Leasehold Mortgage, or the assignee or transferee of this Master Lease and of the Leasehold Estate hereby created
under any instrument of assignment or transfer in lieu of the foreclosure of any Permitted Leasehold Mortgage,
shall be subject to Article XXII hereof (including the requirement that such purchaser assume the performance of
the terms, covenants or conditions on the part of the Tenant to be performed hereunder and meet the qualifications
of Discretionary Transferee or be reasonably consented to by Landlord in accordance with Section 22.2(i) hereof).
Any Permitted Leasehold Mortgagee or other acquirer of the Leasehold Estate of Tenant pursuant to foreclosure,
assignment in lieu of foreclosure or other proceedings in accordance with the requirements of Section 22.2(iii) of
this Master Lease may, upon acquiring Tenant’s Leasehold Estate, without further consent of Landlord, sell and
assign the Leasehold Estate in accordance with the requirements of Section 22.2(iii) of this Master Lease and enter
into Permitted Leasehold Mortgages in the same manner as the original Tenant, subject to the terms hereof.
Notwithstanding any other provisions of this Master Lease, any sale of this Master Lease and of the Leasehold
Estate hereby created in any proceedings for the foreclosure of any Permitted Leasehold Mortgage, or the
assignment or transfer of this Master Lease and of the Leasehold Estate hereby created in lieu of the foreclosure of
any Permitted Leasehold Mortgage, shall be deemed to be a permitted sale, transfer or assignment of this Master
Lease and of the Leasehold Estate hereby created to the extent that the successor tenant under this Master Lease is
a Discretionary Transferee and the transfer otherwise complies with the requirements of Section 22.2(iii) of this
Master Lease or the transferee is reasonably consented to by Landlord in accordance with Section 22.2(i) hereof.
(f)
New Lease. In the event of the termination of this Master Lease other than due to a default as to which the
Permitted Leasehold Mortgagee had the opportunity (without legal impediment) to, but did not, cure the default as set forth in
Sections 17.1(d) and 17.1(e) above, including pursuant to the disaffirmance or rejection of this Master Lease by Tenant in a
bankruptcy, Landlord shall provide each Permitted Leasehold Mortgagee with written notice that this Master Lease has been
terminated (“Notice of Termination”), together with a statement of all sums which would at that time be due under this Master
Lease but for such termination, and of all other defaults, if any, then known to Landlord. Landlord agrees to enter into a new lease
(“New Lease”) of the Leased Property with such Permitted Leasehold Mortgagee or its
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Permitted Leasehold Mortgagee Designee (in each case if a Discretionary Transferee) or any other transferee permitted to be
assigned this Master Lease without consent of the Landlord pursuant to Section 22.2(iii)(d), for the remainder of the term of this
Master Lease, effective as of the date of termination, at the rent and additional rent, and upon the terms, covenants and conditions
(including all options to renew but excluding requirements which have already been fulfilled) of this Master Lease, provided:
Such Permitted Leasehold Mortgagee or its Permitted Leasehold Mortgagee Designee shall make a
binding, written, irrevocable commitment to Landlord for such New Lease within thirty (30) days after the date such Permitted
Leasehold Mortgagee receives Landlord’s Notice of Termination of this Master Lease given pursuant to this Section 17.1(f);
(i)
(ii)
Such Permitted Leasehold Mortgagee or its Permitted Leasehold Mortgagee Designee shall pay or cause to
be paid to Landlord at the time of the execution and delivery of such New Lease, any and all sums which would at the time of
execution and delivery thereof be due pursuant to this Master Lease but for such termination and, in addition thereto, all
reasonable expenses, including reasonable attorney’s fees, which Landlord shall have incurred by reason of such termination and
the execution and delivery of the New Lease and which have not otherwise been received by Landlord from Tenant or other party
in interest under Tenant; and
(iii)
Such Permitted Leasehold Mortgagee or its Permitted Leasehold Mortgagee Designee shall agree to
remedy any of Tenant’s defaults of which said Permitted Leasehold Mortgagee was notified by Landlord’s Notice of Termination
(or in any subsequent notice) and which can be cured through the payment of money or are reasonably susceptible of being cured
by Permitted Leasehold Mortgagee or its Permitted Leasehold Mortgagee Designee.
(g)
New Lease Priorities. If more than one Permitted Leasehold Mortgagee shall request a New Lease pursuant
to subsection (f)(i) of this Section 17.1, Landlord shall enter into such New Lease with the Permitted Leasehold Mortgagee
whose mortgage is senior in lien, or with its Permitted Leasehold Mortgagee Designee acting for the benefit of such Permitted
Leasehold Mortgagee prior in lien foreclosing on Tenant’s interest in this Master Lease. Landlord, without liability to Tenant or
any Permitted Leasehold Mortgagee with an adverse claim, may rely upon a title insurance policy issued by a reputable title
insurance company as the basis for determining the appropriate Permitted Leasehold Mortgagee who is entitled to such New
Lease.
(h)
Permitted Leasehold Mortgagee Need Not Cure Specified Defaults. Nothing herein contained shall require
any Permitted Leasehold Mortgagee as a condition to its exercise of the right hereunder to cure any default of Tenant not
reasonably susceptible of being cured by such Permitted Leasehold Mortgagee or its Permitted Leasehold Mortgagee Designee
(including but not limited to the default referred to in Section 16.1(c), (d), (e), (f) (if the levy or attachment is in favor of such
Permitted Leasehold Mortgagee (provided such levy is extinguished upon foreclosure or similar proceeding or in a transfer in lieu
of any such foreclosure) or is junior to the lien of such Permitted Leasehold Mortgagee and would be extinguished by the
foreclosure of the Permitted Leasehold Mortgage that is held by such Permitted Leasehold Mortgagee) or (n) (if the judgment is
in favor of a Permitted Leasehold Mortgagee other than a Permitted Leasehold Mortgagee holding a Permitted Leasehold
Mortgage that is senior to the lien of such Permitted Leasehold Mortgagee) and any other sections of this Master Lease which
may impose conditions of default not susceptible to being cured by a Permitted Leasehold Mortgagee or a subsequent owner of
the Leasehold Estate through foreclosure hereof), in order to comply with the provisions of Sections 17.1(d) and 17.1(e), or as a
condition of entering into the New Lease provided for by Section 17.1(f).
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(i)
Casualty Loss. A standard mortgagee clause naming each Permitted Leasehold Mortgagee for which notice
has been properly provided to Landlord pursuant to Section 17.1(b) hereof may be added to any and all insurance policies
required to be carried by Tenant hereunder on condition that the insurance proceeds are to be applied in the manner specified in
this Master Lease and the Permitted Leasehold Mortgage shall so provide; except that the Permitted Leasehold Mortgage may
provide a manner for the disposition of such proceeds, if any, otherwise payable directly to the Tenant (but not such proceeds, if
any, payable jointly to the Landlord and the Tenant or to the Landlord, to the Facility Mortgagee or to a third-party escrowee)
pursuant to the provisions of this Master Lease.
(j)
Arbitration; Legal Proceedings. Landlord shall give prompt notice to each Permitted Leasehold Mortgagee
(for which notice has been properly provided to Landlord pursuant to Section 17.1(b) hereof) of any arbitration or legal
proceedings between Landlord and Tenant involving obligations under this Master Lease.
(k)
No Merger. The fee title to the Leased Property and the Leasehold Estate of Tenant therein created by this
Master Lease shall not merge but shall remain separate and distinct, notwithstanding the acquisition of said fee title and said
Leasehold Estate by Landlord or by Tenant or by a third party, by purchase or otherwise.
(l) Notices. Notices from Landlord to the Permitted Leasehold Mortgagee for which notice has been properly
provided to Landlord pursuant to Section 17.1(b) hereof shall be provided in the method provided in Section 35.1 hereof to the
address or fax number furnished Landlord pursuant to subsection (b) of this Section 17.1, and those from the Permitted
Leasehold Mortgagee to Landlord shall be mailed to the address designated pursuant to the provisions of Section 35.1 hereof.
Such notices, demands and requests shall be given in the manner described in this Section 17.1 and in Section 35.1 and shall in
all respects be governed by the provisions of those sections.
(m) Limitation of Liability. Notwithstanding any other provision hereof to the contrary, (i) Landlord agrees that
any Permitted Leasehold Mortgagee’s liability to Landlord in its capacity as Permitted Leasehold Mortgagee hereunder
howsoever arising shall be limited to and enforceable only against such Permitted Leasehold Mortgagee’s interest in the
Leasehold Estate and such Permitted Leasehold Mortgagee’s interest in such other collateral granted to such Permitted
Leasehold Mortgagee to secure the obligations under its Debt Agreement to the extent such other collateral is acquired by such
Permitted Leasehold Mortgagee by foreclosure or in lieu of foreclosure; provided, however, if necessary to satisfy the
Landlord’s claim the Permitted Leasehold Mortgagee shall use diligent efforts to foreclose or acquire by a deed in lieu of such
foreclosure such other collateral granted to such Permitted Leasehold Mortgagee, and (ii) each Permitted Leasehold Mortgagee
agrees that Landlord’s liability to such Permitted Leasehold Mortgagee hereunder howsoever arising shall be limited to and
enforceable only against Landlord’s interest in the Leased Property, and no recourse against Landlord shall be had against any
other assets of Landlord whatsoever.
(n) Sale Procedure. If an Event of Default shall have occurred and be continuing, the Permitted Leasehold
Mortgagee for which notice has been properly provided to Landlord pursuant to Section 17.1(b) hereof with the most senior lien
on the Leasehold Estate shall have the right to make all determinations and agreements on behalf of Tenant under Article
XXXVI (including, without limitation, requesting that the sale process described in Article XXXVI be commenced, the
determination and agreement of the Gaming Assets FMV, the Successor Tenant Rent, and the potential Successor Tenants that
should be included in the process, and negotiation with such Successor Tenants), in each case, in accordance with and subject to
the terms and provisions of Article XXXVI, including without limitation the requirement that Successor Tenant meet the
qualifications of Discretionary Transferee.
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(o) Third Party Beneficiary. Each Permitted Leasehold Mortgagee (for so long as such Permitted Leasehold
Mortgagee holds a Permitted Leasehold Mortgage) is an intended third-party beneficiary of this Article XVII entitled to enforce
the same as if a party to this Master Lease.
1.2
Landlord’s Right to Cure Tenant’s Default. If Tenant shall fail to make any payment or to perform any
act required to be made or performed hereunder when due or within any cure period provided for herein, Landlord, without
waiving or releasing any obligation or default, may, but shall be under no obligation to, upon prior written notice to Tenant
specifying the default to be cured and that it is curing such default under this Section 17.2 make such payment or perform such
act for the account and at the expense of Tenant, and may, to the extent permitted by law, enter upon the Leased Property for such
purpose and take all such action thereon as, in Landlord’s opinion, may be necessary or appropriate therefor. No such entry shall
be deemed an eviction of Tenant. All sums so paid by Landlord and all costs and expenses, including reasonable attorneys’ fees
and expenses, so incurred, together with interest thereon at the Overdue Rate from the date on which such sums or expenses are
paid or incurred by Landlord, shall be paid by Tenant to Landlord on demand as an Additional Charge.
1.3
Landlord’s Right to Cure Debt Agreement. Tenant agrees to use commercially reasonable efforts to
include in any agreement related to Material Indebtedness and any Debt Agreement (or the principal or controlling agreement
relating to such Material Indebtedness or series of related Debt Agreements) obtained by or entered into by Tenant after the
Commencement Date a provision requiring the lender or lenders thereunder (or the Representatives of such lenders) to provide a
copy to Landlord of any notices issued by such lender or lenders thereunder or the Representative of such lenders to Tenant of a
Specified Debt Agreement Default. In addition, Tenant agrees to use commercially reasonable efforts to include in any such
agreement related to Material Indebtedness and any Debt Agreement (or the principal or controlling agreement relating to such
Material Indebtedness or series of related Debt Agreements) a provision with the effect that should Tenant shall fail to make any
payment or to perform any act required to be made or performed under an agreement related to Material Indebtedness or under
the Debt Agreement when due or within any cure period provided for therein (if any), Landlord may, subject to applicable
Gaming Regulations and the terms hereof, upon prior written notice to Tenant specifying the default and that it is curing such
default under this Section 17.3, cure any such default by making such payment to the applicable lenders or Representative or
otherwise performing such acts within the cure period thereunder (if any) for the account of Tenant, to the extent such default is
susceptible to cure by Landlord; provided that Landlord’s right to cure such default shall not be any greater than the rights of the
obligors under such Material Indebtedness or Debt Agreement to cure such default. Landlord and Tenant agree that all sums so
paid by Landlord and all costs and expenses, including reasonable attorneys’ fees and expenses, so incurred, together with
interest thereon at the Overdue Rate from the date on which such sums or expenses are paid or incurred by Landlord, shall be for
the account of Tenant and paid by Tenant to Landlord on demand.
ARTICLE XVIII
1.1
Sale of the Leased Property. Landlord shall not voluntarily sell all or portions of the Leased Property
(including via entering into a merger transaction) during the Term without the prior written consent of Tenant, which consent may
not be unreasonably withheld. Notwithstanding the foregoing, Tenant’s consent shall not be required for (A) any transfer to a
Facility Mortgagee contemplated under Article XXXI hereof which may include, without limitation, a transfer by foreclosure
brought by the Facility Mortgagee or a transfer by deed in lieu of foreclosure (and the first subsequent sale by such Facility
Mortgagee to the extent the Facility Mortgagee has been diligently attempting to expedite such first subsequent sale from
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the time it initiated foreclosure proceedings taking into account the interest of such Facility Mortgagee to maximize the proceeds
of such sale), (B) a sale by Landlord of all of the Leased Property to a single buyer or group of buyers, other than to an operator,
or an Affiliate of such an operator, of Gaming Facilities (provided that Landlord shall be permitted to sell all of the Leased
Property to a real estate investment trust even if such real estate investment trust is an Affiliate of such an operator), (C) a merger
transaction or sale by Landlord or GLP involving all of the Facilities, other than with an operator, or an Affiliate of an operator,
of Gaming Facilities (provided that Landlord or GLP shall be permitted to merge with or sell all of the Leased Property to a real
estate investment trust even if such real estate investment trust is an Affiliate of an operator), (D) a sale/leaseback transaction by
Landlord with respect to any or all of the Leased Properties for financing purposes, (E) any sale of all or a portion of the Leased
Property or the Facilities that does not change the identity of the Landlord hereunder, including without limitation a participating
interest in Landlord’s interest under this Master Lease or a sale of Landlord’s reversionary interest in the Leased Property, or (F) a
sale or transfer to an Affiliate of GLP or a joint venture entity in which GLP or its Affiliate is the managing member or partner.
Any sale by Landlord of all or any portion of the Leased Property pursuant to this Section 18.1 shall be subject in each instance
to all of the rights of Tenant under this Master Lease and, to the extent necessary, any purchaser or successor Landlord and/or
other controlling persons must be approved by all applicable gaming regulatory agencies to ensure that there is no material
impact on the validity of any of the Gaming Licenses or the ability of Tenant to continue to use the Facilities for gaming activities
in substantially the same manner as immediately prior to Landlord’s sale.
ARTICLE XIX
1.1
Holding Over. If Tenant shall for any reason remain in possession of the Leased Property of a Facility
after the expiration or earlier termination of the Term without the consent, or other than at the request, of Landlord, such
possession shall be as a month-to-month tenant during which time Tenant shall pay as Rent each month the monthly Rent
applicable to the prior Lease Year for such Facility multiplied by (A) 150% for the first three months of such holdover and (B)
200% for any succeeding months of such holdover, together with all Additional Charges and all other sums payable by Tenant
pursuant to this Master Lease. During such period of month-to-month tenancy, Tenant shall be obligated to perform and observe
all of the terms, covenants and conditions of this Master Lease, but shall have no rights hereunder other than the right, to the
extent given by law to month-to-month tenancies, to continue its occupancy and use of the Leased Property of, and/or any Tenant
Capital Improvements to, such Facility. Nothing contained herein shall constitute the consent, express or implied, of Landlord to
the holding over of Tenant after the expiration or earlier termination of this Master Lease.
ARTICLE XX
1.1
Risk of Loss. The risk of loss or of decrease in the enjoyment and beneficial use of the Leased Property as
a consequence of the damage or destruction thereof by fire, the elements, casualties, thefts, riots, wars or otherwise, or in
consequence of foreclosures, attachments, levies or executions (other than by Landlord and Persons claiming from, through or
under Landlord) is assumed by Tenant, and except as otherwise provided herein no such event shall entitle Tenant to any
abatement of Rent.
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ARTICLE XXI
1.1
General Indemnification. In addition to the other indemnities contained herein, and notwithstanding the
existence of any insurance carried by or for the benefit of Landlord or Tenant, and without regard to the policy limits of any such
insurance, Tenant shall protect, indemnify, save harmless and defend Landlord from and against all liabilities, obligations, claims,
damages, penalties, causes of action, costs and expenses, including reasonable attorneys’, consultants’ and experts’ fees and
expenses, imposed upon or incurred by or asserted against Landlord by reason of: (i) except to the extent caused solely as a result
of Landlord’s gross negligence or willful misconduct, any accident, injury to or death of Persons or loss of or damage to property
occurring on or about the Leased Property or adjoining sidewalks under the control of Tenant; (ii) any use, misuse, non-use,
condition, maintenance or repair by Tenant of the Leased Property; (iii) any failure on the part of Tenant to perform or comply
with any of the terms of this Master Lease (notwithstanding anything to the contrary set forth in Section 1.2(a) of the Purchase
and Sale Agreement); (iv) the non-performance of any of the terms and provisions of any and all existing and future subleases of
the Leased Property to be performed by any party thereunder; (v) any claim for malpractice, negligence or misconduct committed
by any Person on or working from the Leased Property; and (vi) the violation by Tenant of any Legal Requirement
(notwithstanding anything to the contrary set forth in Section 1.2(d) of the Purchase and Sale Agreement). Any amounts which
become payable by Tenant under this Article XXI shall be paid within ten (10) days after liability therefor is determined by a
final non appealable judgment or settlement or other agreement of the parties, and if not timely paid shall bear interest at the
Overdue Rate from the date of such determination to the date of payment. Tenant, at its sole cost and expense, shall contest, resist
and defend any such claim, action or proceeding asserted or instituted against Landlord. For purposes of this Article XXI, any
acts or omissions of Tenant, or by employees, agents, assignees, contractors, subcontractors or others acting for or on behalf of
Tenant (whether or not they are negligent, intentional, willful or unlawful), shall be strictly attributable to Tenant.
ARTICLE XXII
1.1
Subletting and Assignment. Tenant shall not, without Landlord’s prior written consent, which, except as
specifically set forth herein, may be withheld in Landlord’s sole and absolute discretion, voluntarily or by operation of law assign
(which term includes any transfer, sale, encumbering, pledge or other transfer or hypothecation) this Master Lease, sublet all or
any part of the Leased Property of any Facility or engage the services of any Person (other than an Affiliate of Tenant that
becomes or is also a Guarantor) for the management or operation of any Facility (provided that the foregoing shall not restrict a
transferee of Tenant from retaining a manager necessary for such transferee’s satisfying the requirement set forth in clause (a)(1)
of the definition of “Discretionary Transferee”). Tenant acknowledges that Landlord is relying upon the expertise of Tenant in the
operation of the Facilities and that Landlord entered into this Master Lease with the expectation that Tenant would remain in and
operate such Facilities during the entire Term and for that reason, except as set forth herein, Landlord retains sole and absolute
discretion in approving or disapproving any assignment or sublease. Any Change in Control shall constitute an assignment of
Tenant’s interest in this Master Lease within the meaning of this Article XXII and the provisions requiring consent contained
herein shall apply.
1.2
(i)
Permitted Assignments. Notwithstanding the foregoing, and subject to Section 40.1, Tenant may:
with Landlord’s prior written consent, which consent shall not be unreasonably withheld, allow to occur or
undergo a Change in Control (including without
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limitation a transfer or assignment of this Master Lease to any third party in conjunction with a sale by Tenant of all or
substantially all of Tenant’s assets relating to the Facilities);
(ii)
without Landlord’s prior written consent, assign this Master Lease or sublease the Leased Property to
Tenant’s Parent, a wholly-owned Subsidiary of Tenant’s Parent or a wholly-owned Subsidiary of Tenant if all of the following are
first satisfied: (w) such Affiliate becomes a party to the Guaranty as a Guarantor and in the case of an assignment of this Master
Lease, becomes party to and bound by this Master Lease; (x) Tenant remains fully liable hereunder; (y) the use of the Leased
Property continues to comply with the requirements of this Master Lease; and (z) Landlord in its reasonable discretion shall have
approved the form and content of all documents for such assignment or sublease and received an executed counterpart thereof;
and
(iii)
without Landlord’s prior written consent:
(a) undergo a Change in Control of the type referred to in clause (i)(a) of the definition of Change in
Control (such Change in Control, a “Tenant Parent COC”) if a Person acquiring such beneficial ownership or
control is (1) a Discretionary Transferee and (2) the Parent Company of such Discretionary Transferee, if any, has
become a Guarantor and provided a Guaranty on terms substantially similar to the Guaranty or otherwise
reasonably satisfactory to Landlord or, if such Discretionary Transferee does not have a Parent Company, such
Discretionary Transferee has become a Guarantor and provided a Guaranty on terms substantially similar to the
Guaranty or otherwise reasonably satisfactory to Landlord;
(b) undergo a Change in Control whereby a Person acquires beneficial ownership and control of 100% of
the Equity Interests in Tenant in connection with a Change in Control that does not constitute a Tenant Parent
COC or a Foreclosure COC (such Change in Control, a “Tenant COC”) if (1) such Person is a Discretionary
Transferee, (2) the Parent Company of such Discretionary Transferee, if any, has become a Guarantor and
provided a Guaranty on terms substantially similar to the Guaranty or otherwise reasonably satisfactory to
Landlord or, if such Discretionary Transferee does not have a Parent Company, such Discretionary Transferee has
become a Guarantor and provided a Guaranty on terms reasonably satisfactory to Landlord, and (3) the Adjusted
Revenue to Rent Ratio with respect to all of the Facilities (determined at the proposed effective time of the Change
in Control) for the then most recently preceding four (4) fiscal quarters for which financial statements are
available is at least 1.4:1;
(c) assign this Master Lease to any Person in an assignment that does not constitute a Foreclosure
Assignment if (1) such Person is a Discretionary Transferee, (2) such Discretionary Transferee agrees in writing to
assume the obligations of the Tenant under this Master Lease without amendment or modification other than as
provided below, (3) the Parent Company of such Discretionary Transferee, if any, has become a Guarantor and
provided a Guaranty on terms substantially similar to the Guaranty or otherwise reasonably satisfactory to
Landlord or, if such Discretionary Transferee does not have a Parent Company, such Discretionary Transferee has
become a Guarantor and provided a Guaranty on terms substantially similar to the Guaranty or otherwise
reasonably satisfactory to Landlord, and (4) the Adjusted Revenue to Rent Ratio with respect to all of the
Facilities (determined at the proposed effective time of the assignment) for the then most recently preceding four
(4) fiscal quarters for which financial statements are available is at least 1.4:1; or
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(d) (i) assign this Master Lease by way of foreclosure of the Leasehold Estate, an assignment-in-lieu of
foreclosure to any Person or an assignment (by sale or through a plan of reorganization) pursuant to any applicable
bankruptcy or insolvency law to any Person, (any such assignment, a “Foreclosure Assignment”) or (ii) undergo
a Change in Control whereby a Person acquires beneficial ownership and control of 100% of the Equity Interests
in Tenant as a result of the purchase at a foreclosure on a permitted pledge of, or an assignment (by sale or through
a plan of reorganization) pursuant to any applicable bankruptcy or insolvency law to any Person of, the Equity
Interests in Tenant or an assignment in lieu of such foreclosure (a “Foreclosure COC”) or (iii) effect the first
subsequent sale or assignment of the Leasehold Estate or Change in Control after a Foreclosure Assignment or a
Foreclosure COC whereby a Person so acquires the Leasehold Estate or beneficial ownership and control of 100%
of the Equity Interests in Tenant or the Person who acquired the Leasehold Estate in connection with the
Foreclosure Assignment, in each case, effected by a Permitted Leasehold Mortgagee or a Permitted Leasehold
Mortgagee Foreclosing Party, to the extent such Permitted Leasehold Mortgagee or Permitted Leasehold
Mortgagee Designee has been diligently attempting to expedite such first subsequent sale from the time it has
initiated foreclosure proceedings taking into account the interest of such Permitted Leasehold Mortgagee or
Permitted Leasehold Mortgagee Designee in maximizing the proceeds of such disposition if (1) such Person is a
Discretionary Transferee, (2) in the case of any Foreclosure Assignment, if such Discretionary Transferee is not a
Permitted Leasehold Mortgagee Designee such Discretionary Transferee agrees in writing to assume the
obligations of the Tenant under this Master Lease without amendment or modification other than as provided
below (which written assumption, in the case of a Permitted Leasehold Mortgagee Foreclosing Party, may be
made by a Subsidiary of a Permitted Leasehold Mortgagee or a Permitted Leasehold Mortgagee Designee) and (3)
if such Discretionary Transferee is not a Permitted Leasehold Mortgagee Foreclosing Party, the Parent Company
of such Discretionary Transferee, if any, has become a Guarantor and provided a Guaranty on terms substantially
similar to the Guaranty or otherwise reasonably satisfactory to Landlord or, if such Discretionary Transferee does
not have a Parent Company, such Discretionary Transferee has become a Guarantor and provided a Guaranty on
terms substantially similar to the Guaranty or otherwise reasonably satisfactory to Landlord;
provided that no such Change in Control or assignment referred to in this Section 22.2(iii) shall be permitted without
Landlord’s prior written consent unless, and in which case such consent shall not be unreasonably withheld, (A) the use of
the Leased Property at the time of such Change in Control or assignment and immediately after giving effect thereto is
permitted by Section 7.2 hereof, and (B) Landlord in its reasonable discretion shall have approved the form and content of
all documents for such assignment and assumption and received an executed counterpart thereof (provided no such
approval shall be required in the case of a Tenant Parent COC or a Tenant COC, so long as (A) Tenant remains obligated
under the Master Lease and the Guaranty remains in effect except with respect to any release of Tenant’s Parent permitted
thereunder, (B) the requirements for a Guaranty from the Parent Company or Discretionary Transferee under clause (a) or
(b) above are met, and (C) any modifications to this Master Lease required pursuant to the next succeeding paragraph are
made); and
(iv)
without Landlord’s prior written consent, pledge or mortgage its Leasehold Estate to a Permitted Leasehold
Mortgagee and permit a pledge of the equity interests in Tenant to be pledged to a Permitted Leasehold Mortgagee.
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Upon the effectiveness of any Change in Control or assignment permitted pursuant to this Section 22.2, such Discretionary
Transferee (and, if applicable, its Parent Company) and Landlord shall make such amendments and other modifications to this
Master Lease as are reasonably requested by either party to give effect to such Change in Control or assignment and such
technical amendments as may be necessary or appropriate in the reasonable opinion of such requesting party in connection with
such Change in Control or assignment including, without limitation, changes to the definition of Change in Control to substitute
the Parent Company (or, if the Discretionary Transferee does not have a Parent Company, the Discretionary Transferee) for
Tenant’s Parent therein and in the provisions of this Master Lease regarding delivery of financial statements and other reporting
requirements with respect to Tenant’s Parent. After giving effect to any such Change in Control or assignment, unless the context
otherwise requires, references to Tenant and Tenant’s Parent hereunder shall be deemed to refer to the Discretionary Transferee or
its Parent Company, as applicable.
1.3
Permitted Sublease Agreements. Notwithstanding the provisions of Section 22.1, but subject to
compliance with the provisions of this Section 22.3 and of Section 40.1, (a) provided that no Event of Default shall have occurred
and be continuing, Tenant shall be permitted to sublease gaming operations to a wholly-owned Subsidiary that becomes a
Guarantor by executing the Guaranty in form and substance reasonably satisfactory to Landlord, (b) the Specified Subleases shall
be permitted without any further consent from Landlord, and (c) provided that no Event of Default shall have occurred and be
continuing, Tenant may enter into any sublease agreement (including any management agreement or similar agreements with
sports betting and/or online gaming operators) with respect to all or any portion (including any portion used for gaming purposes)
of any Facility without the prior written consent of Landlord, provided, further that, (i) all sublease agreements under this Section
22.3 are made in furtherance of the Primary Intended Use, except with respect to the Specified Subleases; and (ii) any sublease
with respect to all or substantially all of any Facility shall be subject to the prior written consent of Landlord (in its sole
discretion) unless, subject to the further requirements set forth in the final paragraph of this Section 22.3, as of the date on which
Tenant intends to enter into any Permitted Facility Sublease, the Facility Adjusted Revenue of Tenant generated by such Facility
when taken together with the Facility Adjusted Revenue of Tenant for all other Facilities subject to a Permitted Facility Sublease
at the time of entry into such sublease, in the aggregate, does not exceed the Permitted Facility Sublease Cap Amount. After an
Event of Default has occurred and while it is continuing, Landlord may collect rents from any subtenant and apply the net amount
collected to the Rent, but no such collection shall be deemed (i) a waiver by Landlord of any of the provisions of this Master
Lease, (ii) the acceptance by Landlord of such subtenant as a tenant or (iii) a release of Tenant from the future performance of its
obligations hereunder. If reasonably requested by Tenant in connection with a sublease permitted under clause (c) above,
Landlord and such sublessee shall enter into a subordination, non-disturbance and attornment agreement with respect to such
sublease in a form reasonably satisfactory to Landlord (and if a Facility Mortgage is then in effect, Landlord shall use reasonable
efforts to cause the Facility Mortgagee to enter into such subordination, non-disturbance and attornment agreement).
Tenant shall give Landlord at least thirty (30) days’ prior written notice before entering into any Permitted Facility
Sublease, which notice shall be accompanied by the proposed form of such Permitted Facility Sublease. In addition, Tenant shall
furnish Landlord reasonably promptly with such materials as Landlord may reasonably request in order to determine that the
requirements of this Section 22.3 with respect to such Permitted Facility Sublease are satisfied. Reasonably promptly following
entry into any such Permitted Facility Sublease, Tenant shall provide Landlord with a copy of the executed Permitted Facility
Sublease, and Tenant shall furnish Landlord with copies of any amendments of, or supplements to, any Permitted Facility
Sublease with reasonable promptness after the execution thereof.
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1.4
Required Assignment and Subletting Provisions. Any assignment and/or sublease (excluding a
Specified Sublease until such Specified Sublease is amended or modified, in which case such amendment or modification shall
incorporate the requirements of Section 22.4) must provide that:
(i)
in the case of a sublease, it shall be subject and subordinate to all of the terms and conditions of this Master
Lease;
other provision of this Master Lease;
(ii)
the use of the applicable Facility (or portion thereof) shall not conflict with any Legal Requirement or any
(iii)
except as otherwise provided herein, no subtenant or assignee shall be permitted to further sublet all or any
part of the applicable Leased Property or assign this Master Lease or its sublease except insofar as the same would be permitted if
it were a sublease by Tenant under this Master Lease (it being understood that any subtenant under Section 22.3(a) may pledge
and mortgage its subleasehold estate (or allow the pledge of its equity interests) to a Permitted Leasehold Mortgagee);
(iv)
in the case of a sublease, in the event of cancellation or termination of this Master Lease for any reason
whatsoever or of the surrender of this Master Lease (whether voluntary, involuntary or by operation of law) prior to the
expiration date of such sublease, including extensions and renewals granted thereunder, then, subject to Article XXXVI, at
Landlord’s option, the subtenant shall make full and complete attornment to Landlord for the balance of the term of the sublease,
which attornment shall be evidenced by an agreement in form and substance satisfactory to Landlord and which the subtenant
shall execute and deliver within five (5) days after request by Landlord and the subtenant shall waive the provisions of any law
now or hereafter in effect which may give the subtenant any right of election to terminate the sublease or to surrender possession
in the event any proceeding is brought by Landlord to terminate this Master Lease; and
(v)
in the event the subtenant receives a written notice from Landlord stating that this Master Lease has been
cancelled, surrendered or terminated, then, subject to Article XXXVI, the subtenant shall thereafter be obligated to pay all rentals
accruing under said sublease directly to Landlord (or as Landlord shall so direct); all rentals received from the subtenant by
Landlord shall be credited against the amounts owing by Tenant under this Master Lease.
1.5
Costs. Tenant shall reimburse Landlord for Landlord’s reasonable costs and expenses incurred after the
Commencement Date in conjunction with the processing and documentation of any assignment, subletting or management
arrangement, including reasonable attorneys’, architects’, engineers’ or other consultants’ fees whether or not such sublease,
assignment or management agreement is actually consummated.
1.6
No Release of Tenant’s Obligations; Exception. No assignment (other than a permitted transfer pursuant
to Section 22.2(i) or Section 22.2(iii)(c) or Section 22.2(iii)(d)(1) or Section 22.2(iii)(d)(3), in connection with a sale or
assignment of the Leasehold Estate), subletting or management agreement shall relieve Tenant of its obligation to pay the Rent
and to perform all of the other obligations to be performed by Tenant hereunder. The liability of Tenant and any immediate and
remote successor in interest of Tenant (by assignment or otherwise), and the due performance of the obligations of this Master
Lease on Tenant’s part to be performed or observed, shall not in any way be discharged, released or impaired by any (i)
stipulation which extends the time within which an obligation under this Master Lease is to be performed, (ii) waiver of the
performance of an obligation required under this Master Lease that is not entered into for the benefit of Tenant or such successor,
or (iii) failure to enforce any of the obligations set forth in this Master Lease, provided that Tenant shall not be responsible for
any
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additional obligations or liability arising as the result of any modification or amendment of this Master Lease by Landlord and
any assignee of Tenant that is not an Affiliate of Tenant.
1.7
Replacement Property Transaction.
(a)
Notwithstanding anything contained herein to the contrary (including, but not limited to, Section 22.1) and
subject to no Event of Default having occurred and being continuing at such time of delivering any Replacement Property
Transaction Notice, Tenant shall have the right, at any time, and from time to time, prior to the first (1 ) anniversary of the
Effective Date, to exercise the Replacement Property Right in accordance with the terms, conditions and procedures set forth in
this Section 22.7.
st
(b)
In order to exercise the Replacement Property Right, Tenant shall deliver to Landlord a written notice (the
“Replacement Property Transaction Notice”) of Tenant’s election to exercise the Replacement Property Right, which (as a
condition to the effectiveness of such Replacement Property Transaction Notice) shall set forth all material information with
respect to the proposed Replacement Property Transaction, including, without limitation, (i) the proposed Replacement Property
and the Replaced Property, (ii) the proposed Replaced Property Transferee, (iii) the proposed closing date of the Replacement
Property Transaction, which date shall be not less than sixty (60) days after the date of such Replacement Property Transaction
Notice, and (iv) the proposed Replacement Exchange Agreement and Replacement Property Lease Amendment. Promptly upon
Landlord’s reasonable request therefor, Tenant shall provide to Landlord additional information reasonably related to the
proposed Replacement Property Transaction, to the extent such information is reasonably available to Tenant.
(c) Within fifteen (15) days after Landlord’s receipt of a Replacement Property Transaction Notice, Landlord
shall (i) provide its commercially reasonable comments or revisions (unless such comments or revisions are necessary to cause
the Replacement Exchange Agreement and/or Replacement Property Lease Amendment to satisfy the requirements of this Master
Lease, in which case such comments may be made regardless as to whether such comments are otherwise “commercially
reasonable”) to the proposed Replacement Exchange Agreement and/or the Replacement Property Lease Amendment, which
shall be attached as an exhibit to the Replacement Exchange Agreement, (ii) advise Tenant as to whether the proposed
Replacement Property meets the requirements under this Section 22.7 and the definition of “Replacement Property”, and if the
Replacement Property does not meet such requirements the reasons therefor, and (iii) advise Tenant as to whether an Event of
Default has occurred and is continuing thereby prohibiting Tenant from exercising its Replacement Property Right (in which case
Landlord shall have no obligation to proceed with a Replacement Property Transaction until Tenant cures such Event of Default
to Landlord’s reasonable satisfaction). Subject to no Event of Default having occurred and being continuing, Landlord and Tenant
shall thereafter negotiate in good faith to reconcile any applicable issues(s) and use commercially reasonable efforts to enter into
the Replacement Exchange Agreement as soon as reasonably practicable thereafter.
(d)
In the event the Property Value of the Replacement Property is greater than the Property Value of the
Replaced Property (it being understood that in no event shall the Landlord be obligated to engage in a Replacement Property
Transaction if the Property Value of the Replacement Property (in the aggregate) is less than the Property Value of the Replaced
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Property), then upon the consummation of the closing under the Replacement Exchange Agreement and entry into the
Replacement Property Lease Amendment (i) Landlord shall pay to Tenant in cash an amount equal to such excess and (ii)
Building Base Rent and Land Base Rent under this Master Lease shall increase by an annual amount equal to one-eleventh of
such excess, with such increase being split between Building Base Rent and Land Base Rent in the same proportion as Building
Base Rent and Land Base Rent bear to one another at the time the Replacement Property Lease Amendment is executed. In the
event that the Property Value of the Replacement Property is equal to the Property Value of the Replaced Property, then there
shall be no payment from Landlord to Tenant on account thereof and there shall be no adjustment to the amount of Rent due from
Tenant under this Master Lease.
(e)
The consummation of the closing under the Replacement Exchange Agreement shall be subject to
obtaining all Required Governmental Approvals by Tenant, Landlord and/or the Replaced Property Transferee (and each of their
respective applicable Affiliates) in accordance with applicable law (including applicable Gaming Regulations). Each of Landlord
and Tenant shall, and shall cause its Affiliates to, (a) file or cause to be filed, as promptly as practicable, and in any event no later
than ten (10) days, following the date on which Landlord and Tenant execute such Replacement Exchange Agreement, all
applications and supporting documentation necessary to obtain all Required Governmental Approvals for the Replacement
Property Transaction, (b) use commercially reasonable efforts in order to obtain such Required Governmental Approvals as
promptly as practicable, and (c) use commercially reasonable efforts in order to assist the other party in its efforts to obtain such
Required Governmental Approvals as promptly as practicable. Landlord, at no cost or expense to Landlord, agrees to reasonably
cooperate with Tenant and use commercially reasonable efforts to provide Regulatory Approval Supporting Information that is
reasonably requested by Tenant in connection with the Replacement Property Transaction, in Tenant’s efforts to obtain any
Required Governmental Approvals.
(f)
Upon the consummation of the closing under the Replacement Exchange Agreement, Landlord and Tenant
shall execute the Replacement Property Lease Amendment, and upon the execution of the Replacement Property Lease
Amendment, this Master Lease shall terminate with respect to the Replaced Property, the Replaced Property shall cease to
constitute Leased Property hereunder, neither Tenant nor Landlord shall have any further liabilities or obligations under this
Master Lease, from and after the consummation of the closing under the Replacement Exchange Agreement, in respect of the
Replaced Property, and the Guaranty shall automatically, and without further action by any party, cease to apply with respect to
any Obligations (as defined in the Guaranty) with respect to the Replaced Property to the extent arising from and after the
consummation of the closing under the Replacement Exchange Agreement and the execution of the Replacement Property Lease
Amendment (provided that any such Obligations arising prior to such closing date shall not be terminated, limited or affected by
or upon the closing under the Replacement Exchange Agreement).
(g)
Upon the consummation of the closing under the Replacement Exchange Agreement and the entry into the
Replacement Property Lease Amendment, this Master Lease shall apply to the Replacement Property, the Replacement Property
shall constitute Leased Property and a Facility hereunder, each of Tenant’s and Landlord’s obligations under this Master Lease in
respect of the Leased Property and the Facilities shall apply to the Replacement
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Property, and the Guaranty shall automatically, and without further action by any party, apply with respect to any Obligations (as
defined in the Guaranty) with respect to the Replacement Property to the extent arising from and after the consummation of the
closing under the Replacement Exchange Agreement.
(h)
Each of Tenant and Landlord (at no cost or expense to Landlord) shall furnish to the other party Regulatory
Approval Supporting Information and reasonable assistance as such party may reasonably request in connection with obtaining
the Required Governmental Approvals. Subject to Section 23.2 and applicable laws relating to the exchange of information,
outside counsel for Landlord and Tenant shall have the right to review in advance, and to the extent practicable each party shall
consult with the other in connection with, all of the information relating to Landlord or Tenant, as the case may be, and any of
their respective subsidiaries, that appears in any filing made with, or written materials submitted to, any Person and/or any
governmental authority in connection with the Replacement Property Transaction; provided, that the foregoing shall not apply to
applications made with respect to Gaming Licenses and other gaming approvals required under applicable Gaming Regulations
that include personal identifying information or other similarly sensitive information (as reasonably determined by such party in
good faith). In exercising the foregoing rights, each of Landlord and Tenant shall act reasonably and as promptly as practicable.
Subject to applicable law and the instructions of any governmental authority, Landlord and Tenant shall keep the other party
reasonably apprised of the status of matters relating to the completion of the Replacement Property Transaction, including
promptly furnishing the other party with copies of notices or other written substantive communications received from any
governmental authority and/or other Person with respect to the Replacement Property Transaction and, to the extent practicable
under the circumstances, shall provide the other party with the opportunity to participate in any meeting with any governmental
authority in respect of any substantive filing, investigation or other inquiry in connection with the Replacement Property
Transaction.
(i)
If Tenant exercises the Replacement Property Right, Tenant and Landlord shall use commercially
reasonable efforts to effectuate the Replacement Property Transaction and minimize all costs, fees (including consent fees), taxes
and expenses incurred by Tenant and Landlord in consummating the Replacement Property Transaction. All reasonable,
documented out-of-pocket costs and expenses relating to an exercise of the Replacement Property Right and/or otherwise in
connection with any transfer or proposed transfer pursuant to this Section 22.7 (including reasonable, documented attorneys’ fees
and other reasonable, documented out-of-pocket costs incurred by Landlord for outside counsel, if any) shall be borne by Tenant
and not Landlord.
1.1
Officer’s Certificates and Financial Statements.
ARTICLE XXIII
(a)
Officer’s Certificate. Each of Landlord and Tenant shall, at any time and from time to time upon receipt of
not less than ten (10) Business Days’ prior written request from the other party hereto, furnish an Officer’s Certificate certifying
(i) that this Master Lease is unmodified and in full force and effect, or that this Master Lease is in full force and effect as
modified and setting forth the modifications; (ii) the Rent and Additional Charges payable
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hereunder and the dates to which the Rent and Additional Charges payable have been paid; (iii) that the address for notices to be
sent to the party furnishing such Officer’s Certificate is as set forth in this Master Lease (or, if such address for notices has
changed, the correct address for notices to such party); (iv) whether or not, to its actual knowledge, such party or the other party
hereto is in default in the performance of any covenant, agreement or condition contained in this Master Lease (together with
back-up calculation and information reasonably necessary to support such determination) and, if so, specifying each such default
of which such party may have knowledge; (v) that Tenant is in possession of the Leased Property (other than portions that are
subleased or assigned to third parties in accordance with this Master Lease); and (vi) responses to such other questions or
statements of fact as such other party, any ground or underlying landlord, any purchaser or any current or prospective Facility
Mortgagee or Permitted Leasehold Mortgagee shall reasonably request. Landlord’s or Tenant’s failure to deliver such statement
within such time shall constitute an acknowledgement by such failing party that, to such party’s knowledge, (x) this Master Lease
is unmodified and in full force and effect except as may be represented to the contrary by the other party; (y) the other party is not
in default in the performance of any covenant, agreement or condition contained in this Master Lease; and (z) the other matters
set forth in such request, if any, are true and correct. Any such certificate furnished pursuant to this Article XXIII may be relied
upon by the receiving party and any current or prospective Facility Mortgagee, Permitted Leasehold Mortgagee, ground or
underlying landlord or purchaser of the Leased Property. Each Guarantor or Tenant, as the case may be, shall deliver a written
notice to Landlord within two (2) Business Days of obtaining knowledge of the occurrence of a default hereunder. Such notice
shall include a detailed description of the default and the actions such Guarantor or Tenant has taken or shall take, if any, to
remedy such default.
(b)
Statements. Tenant shall furnish the following statements to Landlord:
(i)
Within sixty-five (65) days after the end of Tenant’s Parent’s Fiscal Years (commencing with the Fiscal
Year ending December 31, 2018) or concurrently with the filing by Tenant’s Parent of its annual report on Form 10-K
with the SEC, whichever is earlier: (x) Tenant’s Parent’s Financial Statements; (y) a certificate, executed by the chief
financial officer or treasurer of the Tenant’s Parent (a) certifying that, to such person’s knowledge after due inquiry, no
default has occurred under this Master Lease or, if such person has knowledge after due inquiry that a default has
occurred, specifying the nature and extent thereof and any corrective action taken or proposed to be taken with respect
thereto and (b) setting forth the calculation of the financial covenants set forth in Section 23.3 hereof in reasonable detail
as of such Fiscal Year (commencing with the Fiscal Year ending December 31, 2018); and (z) a report with respect to
Tenant’s Parent’s Financial Statements from Tenant’s Parent’s accountants, which report shall be unqualified as to going
concern and scope of audit of Tenant’s Parent and its Subsidiaries (excluding any qualification as to going concern
relating to any debt maturities in the twelve month period following the date of such audit or any projected financial
performance or covenant default in any Material Indebtedness or this Master Lease in such twelve month period) and
shall provide in substance that (a) such consolidated financial statements present fairly the consolidated financial position
of Tenant’s Parent and its Subsidiaries as at the dates indicated and the results of their operations and cash flow for the
periods indicated in conformity with GAAP and (b) that the examination by Tenant’s Parent’s accountants in connection
with such Financial Statements has been made in accordance with generally accepted auditing standards;
(ii) Within forty-five (45) days after the end of each of the first three (3) fiscal quarters of the Tenant’s Parent’s
Fiscal Year (commencing with the fiscal quarter ending June 30, 2018) or concurrently with the filing by Tenant’s Parent
of its quarterly report on Form 10-Q with the SEC, whichever is earlier, a copy of Tenant’s Parent’s Financial Statements
for such period, together with a certificate, executed by the chief financial
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officer or treasurer of Tenant’s Parent (i) certifying that no default has occurred or, if such a default has occurred,
specifying the nature and extent thereof and any corrective action taken or proposed to be taken with respect thereto, (ii)
setting forth the calculation of the financial covenants set forth in Section 23.3 hereof in reasonable detail as of such
quarter, to the extent one complete Test Period has been completed which has commenced following the Commencement
Date and (iii) certifying that such Financial Statements fairly present, in all material respects, the financial position and
results of operations of Tenant’s Parent and its Subsidiaries on a consolidated basis in accordance with GAAP (subject to
normal year-end audit adjustments and the absence of footnotes);
(iii)
Promptly following Landlord’s request from time to time, (a) five-year forecasts of Tenant’s income
statement and balance sheet covering such quarterly and annual periods as may be reasonably requested by Landlord, and
in a format consistent with Tenant’s Parent’s quarterly and annual financial statements filed with the SEC, and such
additional financial information and projections as may be reasonably requested by Landlord in connection with
syndications, private placements, or public offerings of GLP’s or Landlord’s debt securities or loans or equity or hybrid
securities and (b) such additional information and unaudited quarterly financial information concerning the Leased
Property and Tenant as Landlord or GLP may require for its ongoing filings with the SEC under both the Securities Act
and the Securities Exchange Act of 1934, as amended, including, but not limited to 10-Q Quarterly Reports, 10-K Annual
Reports and registration statements to be filed by Landlord or GLP during the Term of this Master Lease, the Internal
Revenue Service (including in respect of GLP’s qualification as a “real estate investment trust” (within the meaning of
Section 856(a) of the Code)) and any other federal, state or local regulatory agency with jurisdiction over GLP or its
Subsidiaries subject to Section 23.1(c) below;
(iv) Within thirty-five (35) days after the end of each calendar month, a copy of Tenant’s income statement for
such month and Tenant’s balance sheet as of the end of such month (which may be subject to quarterly and year-end
adjustments and the absence of footnotes); provided, however, that with respect to each calendar quarter, Tenant shall
provide such financial reports for the final month thereof as soon as is reasonably practicable following the closing of the
books for such month and in sufficient time so that Landlord or its Affiliate is able to include the operational results for
the entire quarter in its current Form 10-Q or Form 10-K (or supplemental report filed in connection therewith);
(v)
Prompt Notice to Landlord of any action, proposal or investigation by any agency or entity, or complaint to
such agency or entity, (any of which is called a “Proceeding”), known to Tenant, the result of which Proceeding would
reasonably be expected to be to revoke or suspend or terminate or modify in a way adverse to Tenant, or fail to renew or
fully continue in effect, any license or certificate or operating authority pursuant to which Tenant carries on any part of the
Primary Intended Use of all or any portion of the Leased Property;
(vi)
As soon as it is prepared and in no event later than sixty (60) days after the end of each Fiscal Year, a
capital and operating budget for each Facility for the Fiscal Year in which it is delivered; and
(vii)
Tenant further agrees to provide the financial and operational reports to be delivered to Landlord under this
Master Lease in such electronic format(s) as may reasonably be required by Landlord from time to time in order to (i)
facilitate Landlord’s internal financial and reporting database and (ii) permit Landlord to calculate any rent, fee or other
payments due under Ground Leases. Tenant also agrees that Landlord shall
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have audit rights with respect to such information to the extent required to confirm Tenant’s compliance with the Master
Lease terms (including, without limitation, calculation of Net Revenues).
(c)
Notwithstanding the foregoing provisions of Section 23.1, Tenant shall not be obligated (1) to provide
information that is subject to the quality assurance immunity or is subject to attorney-client privilege or the attorney work product
doctrine or (2) to provide information or assistance that could give Landlord or its Affiliates a “competitive” advantage with
respect to markets in which GLP, Landlord or any of Landlord’s Affiliates and Tenant, Tenant’s Parent or any of Tenant’s
Affiliates might be competing at any time (“Restricted Information”) it being understood that Restricted Information shall not
include revenue and expense information relevant to Landlord’s calculation and verification of (i) the Escalation amount
hereunder and (ii) Tenant’s compliance with Section 23.3(a) hereof, provided that the foregoing information shall be provided on
a portfolio wide (as opposed to Facility by Facility) basis, except where required by Landlord to be able to make submissions to,
or otherwise to comply with requirements of, gaming and other regulatory authorities, in which case such additional information
(including Facility by Facility performance information) will be provided by Tenant to Landlord to the extent so required
(provided that Landlord shall in such instance first execute a nondisclosure agreement in a form reasonably satisfactory to Tenant
with respect to such information). Landlord shall retain audit rights with respect to Restricted Information to the extent required
to confirm Tenant’s compliance with the Master Lease terms (and GLP’s compliance with SEC, Internal Revenue Service and
other legal and regulatory requirements) and provided that appropriate measures are in place to ensure that only Landlord’s
auditors and attorneys (and not Landlord or GLP or any of Landlord’s other Affiliates) are provided access to such information.
In addition, Landlord shall not disclose any Restricted Information to any Person or any employee, officer or director of any
Person (other than GLP or a Subsidiary of Landlord) that directly or indirectly owns or operates any gaming business or is a
competitor of Tenant, Tenant’s Parent or any Affiliate of Tenant.
1.2
Confidentiality; Public Offering Information.
(a)
The parties recognize and acknowledge that they may receive certain Confidential Information of the other
party. Each party agrees that neither such party nor any of its representatives acting on its behalf shall, during or within five (5)
years after the term of the termination or expiration of this Master Lease, directly or indirectly use any Confidential Information
of the other party or disclose Confidential Information of the other party to any person for any reason or purpose whatsoever,
except as reasonably required in order to comply with the obligations and otherwise as permitted under the provisions of this
Master Lease. Notwithstanding the foregoing, in the event that a party or any of its representatives is requested or becomes
legally compelled (pursuant to any legal, governmental, administrative or regulatory order, authority or process) to disclose any
Confidential Information of the other party, it will, to the extent reasonably practicable and not prohibited by law, provide the
party to whom such Confidential Information belongs prompt written notice of the existence, terms or circumstances of such
event so that the party to whom such Confidential Information belongs may seek a protective order or other appropriate remedy
or waive compliance with the provisions of this Section 23.2(a). In the event that such protective order or other remedy is not
obtained or the party to whom such Confidential Information belongs waives compliance with this Section 23.2(a), the party
compelled to disclose such Confidential information will furnish only that portion of the Confidential Information or take only
such action as, based upon the advice of your legal counsel, is legally required and will use commercially reasonable efforts to
obtain reliable assurance that confidential treatment will be accorded any Confidential Information so
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furnished. The party compelled to disclose the Confidential Information shall cooperate with any action reasonably requested by
the party to whom such Confidential Information belongs to obtain a protective order or other reliable assurance that confidential
treatment will be accorded to the Confidential Information.
(b)
Notwithstanding anything to the contrary in Section 23.2(a), Tenant specifically agrees that Landlord may
include financial information and such information concerning the operation of the Facilities (1) which is approved by Tenant in
its sole discretion, (2) which is publicly available, (3) the Adjusted Revenue to Rent Ratio, or (4) the inclusion of which is
approved by Tenant in writing, which approval may not be unreasonably withheld, in offering memoranda or prospectuses or
confidential information memoranda, or similar publications or marketing materials, rating agency presentations, investor
presentations or disclosure documents in connection with syndications, private placements or public offerings of GLP’s or
Landlord’s securities or loans or securities or loans of any direct or indirect parent entity of Landlord, and any other reporting
requirements under applicable federal and state laws, including those of any successor to Landlord, provided that, with respect to
matters permitted to be disclosed solely under this clause (4), the recipients thereof shall be obligated to maintain the
confidentiality thereof pursuant to Section 23.2(a) or pursuant to confidentiality provisions substantially similar thereto and to
comply with all federal, state and other securities laws applicable with respect to such information. Unless otherwise agreed by
Tenant, neither Landlord nor GLP shall revise or change the wording of information previously publicly disclosed by Tenant and
furnished to Landlord or GLP or any direct or indirect parent entity of Landlord pursuant to Section 23.1 or this Section 23.2 and
Landlord’s Form 10-Q or Form 10-K (or supplemental report filed in connection therewith) shall not disclose the operational
results of the Facilities prior to Tenant’s Parent’s, Tenant’s or its Affiliate’s public disclosure thereof so long as Tenant’s Parent,
Tenant or such Affiliate reports such information in a timely manner consistent with historical practices and SEC disclosure
requirements. Tenant agrees to provide such other reasonable information and, if necessary, participation in road shows and other
presentations at Landlord’s or GLP’s sole cost and expense, with respect to Tenant and its Leased Property to facilitate a public or
private debt or equity offering or syndication by Landlord or GLP or any direct or indirect parent entity of Landlord or GLP or to
satisfy GLP’s or Landlord’s SEC disclosure requirements or the disclosure requirements of any direct or indirect parent entity of
Landlord or GLP. In this regard, Landlord shall provide to Tenant a copy of any information prepared by Landlord to be
published, and Tenant shall have a reasonable period of time (not to exceed three (3) Business Days) after receipt of such
information to notify Landlord of any corrections.
1.3
Financial Covenants. (a)Tenant on a consolidated basis with respect to all of the Facilities shall maintain
an Adjusted Revenue to Rent Ratio determined on the last day of any fiscal quarter on a cumulative basis for the preceding Test
Period (commencing with the Test Period ending on June 30, 2021, but excluding any fiscal quarter the last day of which occurs
during a Covenant Suspension Period) of at least 1.2:1.
(a)
In the event that Tenant does not satisfy at any time the Adjusted Revenue to Rent Ratio set forth in
Section 23.3(a), Tenant’s Parent shall not be permitted to make any Restricted Payment until Tenant is in compliance with such
ratio in a subsequent period.
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(b)
Tenant’s Parent shall not make any Restricted Payment during any Covenant Suspension Period.
1.4
Landlord Obligations. Landlord acknowledges and agrees that certain of the information contained in the
Financial Statements may be non-public financial or operational information with respect to Tenant, Tenant’s Parent and/or the
Leased Property. Landlord further agrees (i) to maintain the confidentiality of such non-public information; provided, however,
that notwithstanding the foregoing and notwithstanding anything to the contrary in Section 23.2(a) hereof or otherwise herein,
Landlord shall have the right to share such information with GLP and their respective officers, employees, directors, Facility
Mortgagee, agents and lenders party to material debt instruments entered into by GLP or Landlord, actual or prospective
arrangers, underwriters, investors or lenders with respect to Indebtedness or Equity Interests that may be issued by GLP or
Landlord, rating agencies, accountants, attorneys and other consultants (the “Landlord Representatives”), provided that each
such Landlord Representative is advised of the confidential nature of such information and agrees, to the extent such information
is not publicly available, to maintain the confidentiality thereof pursuant to Section 23.2(a) or pursuant to confidentiality
provisions substantially similar thereto and to comply with all federal, state and other securities laws applicable with respect to
such information and (ii) that neither it nor any Landlord Representative shall be permitted to engage in any transactions with
respect to the stock or other equity or debt securities or syndicated loans of Tenant or Tenant’s Parent based on any such non-
public information provided by or on behalf of Landlord or GLP (provided that this provision shall not govern the provision of
information by Tenant or Tenant’s Parent). In addition to the foregoing, Landlord agrees that, upon request of Tenant, it shall
from time to time provide such information as may be reasonably requested by Tenant with respect to Landlord’s capital structure
and/or any financing secured by this Master Lease or the Leased Property in connection with Tenant’s review of the treatment of
this Master Lease under GAAP. In connection therewith, Tenant agrees to maintain the confidentiality of any such non-public
information; provided, however, Tenant shall have the right to share such information with Tenant’s Parent and their respective
officers, employees, directors, Permitted Leasehold Mortgagees, agents and lenders party to material debt instruments entered
into by Tenant or Tenant’s Parent, actual or prospective arrangers, underwriters, investors or lenders with respect to Indebtedness
or Equity Interests that may be issued by Tenant or Tenant’s Parent, rating agencies, accountants, attorneys and other consultants
(the “Tenant Representatives”) so long as such Tenant Representative is advised of the confidential nature of such information
and agrees, to the extent such information is not publicly available, (i) to maintain the confidentiality thereof pursuant to Section
23.2(a) or pursuant to confidentiality provisions substantially similar thereto and to comply with all federal, state and other
securities laws applicable with respect to such information and (ii) not to engage in any transactions with respect to the stock or
other equity or debt securities or syndicated loans of GLP or Landlord based on any such non-public information provided by or
on behalf of Tenant or Tenant’s Parent (provided that this provision shall not govern the provision of information by Landlord or
GLP).
1.1
Landlord’s Right to Inspect. Upon reasonable advance notice to Tenant and subject to the rights of hotel
guests and subtenants under subleases, Tenant shall permit Landlord and its authorized representatives to inspect the Leased
Property during usual business hours. Landlord shall take care to minimize disturbance of the operations on the Leased Property,
except in the case of emergency.
ARTICLE XXIV
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ARTICLE XXV
1.1
No Waiver. No delay, omission or failure by Landlord or Tenant to insist upon the strict performance of
any term hereof or to exercise any right, power or remedy hereunder and no acceptance of full or partial payment of Rent by
Landlord during the continuance of any default or Event of Default, shall impair any such right or constitute a waiver of any such
breach or of any such term. No waiver of any breach shall affect or alter this Master Lease, which shall continue in full force and
effect with respect to any other then existing or subsequent breach.
ARTICLE XXVI
1.1
Remedies Cumulative. To the extent permitted by law, each legal, equitable or contractual right, power
and remedy of Landlord now or hereafter provided either in this Master Lease or by statute or otherwise shall be cumulative and
concurrent and shall be in addition to every other right, power and remedy and the exercise or beginning of the exercise by
Landlord of any one or more of such rights, powers and remedies shall not preclude the simultaneous or subsequent exercise by
Landlord of any or all of such other rights, powers and remedies.
1.1
Acceptance of Surrender. No surrender to Landlord of this Master Lease or of any Leased Property or
any part thereof, or of any interest therein, shall be valid or effective unless agreed to and accepted in writing by Landlord, and no
act by Landlord or any representative or agent of Landlord, other than such a written acceptance by Landlord, shall constitute an
acceptance of any such surrender.
ARTICLE XXVII
No Merger. There shall be no merger of this Master Lease or of the leasehold estate created hereby by
reason of the fact that the same Person may acquire, own or hold, directly or indirectly, (i) this Master Lease or the leasehold
estate created hereby or any interest in this Master Lease or such leasehold estate and (ii) the fee estate in the Leased Property.
1.1
ARTICLE XXVIII
ARTICLE XXIX
1.1
Conveyance by Landlord. If Landlord or any successor owner of the Leased Property shall convey the
Leased Property in accordance with Section 18.1 and the other terms of this Master Lease other than as security for a debt, and
the grantee or transferee expressly assumes all obligations of Landlord arising after the date of the conveyance, Landlord or such
successor owner, as the case may be, shall thereupon be released from all future liabilities and obligations of the Landlord under
this Master Lease arising or accruing from and after the date of such conveyance or other transfer and all such future liabilities
and obligations shall thereupon be binding upon the new owner.
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ARTICLE XXX
1.1
Quiet Enjoyment. So long as Tenant shall pay the Rent as the same becomes due and shall fully comply
with all of the terms of this Master Lease and fully perform its obligations hereunder, Tenant shall peaceably and quietly have,
hold and enjoy the Leased Property for the Term, free of any claim or other action by Landlord or anyone claiming by, through or
under Landlord, but subject to all liens and encumbrances of record as of the Commencement Date or thereafter provided for in
this Master Lease or consented to by Tenant. No failure by Landlord to comply with the foregoing covenant shall give Tenant any
right to cancel or terminate this Master Lease or abate, reduce or make a deduction from or offset against the Rent or any other
sum payable under this Master Lease, or to fail to perform any other obligation of Tenant hereunder. Notwithstanding the
foregoing, Tenant shall have the right, by separate and independent action to pursue any claim it may have against Landlord as a
result of a breach by Landlord of the covenant of quiet enjoyment contained in this Article XXX or any other covenant of
Landlord set forth in this Master Lease.
ARTICLE XXXI
1.1
Landlord’s Financing. Without the consent of Tenant, Landlord may from time to time, directly or
indirectly, create or otherwise cause to exist any Facility Mortgage upon the Leased Property or any portion thereof or interest
therein; provided, however, if Tenant has not consented to any such Facility Mortgage entered into by Landlord after the
Commencement Date, Tenant’s obligations with respect thereto shall be subject to the limitations set forth in Section 31.3. This
Master Lease is and at all times shall be subject and subordinate to any such Facility Mortgage which may now or hereafter affect
the Leased Property or any portion thereof or interest therein and to all renewals, modifications, consolidations, replacements,
restatements and extensions thereof or any parts or portions thereof; provided, however, that the subjection and subordination of
this Master Lease and Tenant’s leasehold interest hereunder to any Facility Mortgage shall be conditioned upon the execution by
the holder of each Facility Mortgage and delivery to Tenant of a nondisturbance and attornment agreement substantially in the
form attached hereto as Exhibit E and with respect to any Facility Mortgage on any vessel or barge, Landlord shall be required to
deliver such nondisturbance and attornment agreement to Tenant from each holder of a Facility Mortgage on such vessel or barge
prior to the recording or registration of such Facility Mortgage on such vessel or barge in a manner that would, or the
enforcement of remedies thereunder would, affect or disturb the rights of Tenant under this Master Lease or the provisions of
Article XVII which benefit any Permitted Leasehold Mortgagee, in the case of any Permitted Leasehold Mortgagee (provided
that upon the request of Landlord such nondisturbance and attornment agreement shall also incorporate subordination provisions
referenced above, as contemplated below, and be in substantially the form attached hereto as Exhibit F, and be executed by
Tenant as well as Landlord), which will bind such holder of such Facility Mortgage and its successors and assigns as well as any
person who acquires any portion of the Leased Property in a foreclosure or similar proceeding or in a transfer in lieu of any such
foreclosure or a successor owner of the Leased Property (each, a “Foreclosure Purchaser”) and which provides that so long as
there is not then outstanding and continuing an Event of Default under this Master Lease, the holder of such Facility Mortgage,
and any Foreclosure Purchaser shall disturb neither Tenant’s leasehold interest or possession of the Leased Property in
accordance with the terms hereof, nor any of its rights, privileges and options, and shall give effect to this Master Lease,
including the provisions of Article XVII which benefit any Permitted Leasehold Mortgagee (as if such Facility Mortgagee or
Foreclosure Purchaser were the landlord under this Master Lease (it being understood that if an Event of Default has occurred
and is continuing at such time such parties shall be subject to the terms and provisions hereof concerning the exercise of rights
and remedies upon such Event of Default including the provisions of Articles XVI and XXXVI)). In connection with the
foregoing and at
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the request of Landlord, Tenant shall promptly execute a subordination, nondisturbance and attornment agreement, in form and
substance substantially in the form of Exhibit F or otherwise reasonably satisfactory to Tenant, and the Facility Mortgagee or
prospective Facility Mortgagee, as the case may be, which will incorporate the terms set forth in the preceding sentence. Except
for the documents described in the preceding sentences, this provision shall be self-operative and no further instrument of
subordination shall be required to give it full force and effect. If, in connection with obtaining any Facility Mortgage for the
Leased Property or any portion thereof or interest therein, a Facility Mortgagee or prospective Facility Mortgagee shall request
(A) reasonable cooperation from Tenant, Tenant shall provide the same at no cost or expense to Tenant, it being understood and
agreed that Landlord shall be required to reimburse Tenant for all such costs and expenses so incurred by Tenant, including, but
not limited to, its reasonable attorneys’ fees, or (B) reasonable amendments or modifications to this Master Lease as a condition
thereto, Tenant hereby agrees to execute and deliver the same so long as any such amendments or modifications do not
(i) increase Tenant’s monetary obligations under this Master Lease, (ii) adversely increase Tenant’s non-monetary obligations
under this Master Lease in any material respect, or (iii) diminish Tenant’s rights under this Master Lease in any material respect.
1.2
Attornment. If Landlord’s interest in the Leased Property or any portion thereof or interest therein is sold,
conveyed or terminated upon the exercise of any remedy provided for in any Facility Mortgage Documents (or in lieu of such
exercise), or otherwise by operation of law: (a) at the request and option of the new owner or superior lessor, as the case may be,
Tenant shall attorn to and recognize the new owner or superior lessor as Tenant’s “landlord” under this Master Lease or enter into
a new lease substantially in the form of this Master Lease with the new owner or superior lessor, and Tenant shall take such
actions to confirm the foregoing within ten (10) days after request; and (b) the new owner or superior lessor shall not be (i) liable
for any act or omission of Landlord under this Master Lease occurring prior to such sale, conveyance or termination; (ii) subject
to any offset, abatement or reduction of rent because of any default of Landlord under this Master Lease occurring prior to such
sale, conveyance or termination; (iii) bound by any previous modification or amendment to this Master Lease or any previous
prepayment of more than one month’s rent, unless such modification, amendment or prepayment shall have been approved in
writing by such Facility Mortgagee (to the extent such approval was required at the time of such amendment or modification or
prepayment under the terms of the applicable Facility Mortgage Documents) or, in the case of such prepayment, such prepayment
of rent has actually been delivered to such new owner or superior lessor or in either case, such modification, amendment or
prepayment occurred before Landlord provided Tenant with notice of the Facility Mortgage and the identity and address of the
Facility Mortgagee; or (iv) liable for any security deposit or other collateral deposited or delivered to Landlord pursuant to this
Master Lease unless such security deposit or other collateral has actually been delivered to such new owner or superior lessor.
1.3
Compliance with Facility Mortgage Documents. (a)Tenant acknowledges that any Facility Mortgage
Documents executed by Landlord or any Affiliate of Landlord may impose certain obligations on the “borrower” or other
counterparty thereunder to comply with or cause the operator and/or lessee of a Facility to comply with all representations,
covenants and warranties contained therein relating to such Facility and the operator and/or lessee of such Facility, including,
covenants relating to (i) the maintenance and repair of such Facility; (ii) maintenance and submission of financial records and
accounts of the operation of such Facility and related financial and other information regarding the operator and/or lessee of such
Facility and such Facility itself; (iii) the procurement of insurance policies with respect to such Facility; and (iv) without limiting
the foregoing, compliance with all applicable Legal Requirements relating to such Facility and the operation of the business
thereof. For so long as any Facility Mortgages encumber the Leased Property or any portion thereof or interest therein, Tenant
covenants and agrees, at its sole cost and expense and for the express benefit of Landlord,
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to operate the applicable Facility(ies) in compliance with the terms and conditions of this Master Lease for the benefit of
Landlord so that Landlord is in compliance with such representations, warranties and covenants as the same apply to the Leased
Property and to timely perform all of the obligations of Tenant under this Master Lease relating thereto. To the extent that any
duties and obligations of Landlord under such Facility Mortgage are beyond Tenant’s obligations under this Master Lease or may
not properly be performed by Tenant, Tenant shall cooperate with and assist Landlord, at Landlord’s expense, in the performance
thereof (other than payment of any indebtedness evidenced or secured thereby); provided, however, notwithstanding the
foregoing, (A) this Section 31.3(a) shall not be deemed to, and shall not, impose on Tenant obligations which (i) increase
Tenant’s monetary obligations under this Master Lease, (ii) adversely increase Tenant’s non-monetary obligations under this
Master Lease in any material respect, or (iii) diminish Tenant’s rights or remedies under this Master Lease in any material respect
and (B) in the event of a conflict between the obligations, duties, rights and/or remedies of Tenant hereunder or under the Facility
Mortgage Documents, this Master Lease shall govern. For purposes of the foregoing, any proposed implementation of new
financial covenants shall be deemed to diminish Tenant’s rights under this Master Lease in a material respect (it being understood
that Landlord may agree to such financial covenants in any Facility Mortgage Documents and such financial covenants will not
impose obligations on Tenant). If any new Facility Mortgage Documents to be executed by Landlord or any Affiliate of Landlord
would impose on Tenant any obligations under this Section 31.3(a), Landlord shall provide copies of the same to Tenant for
informational purposes (but not for Tenant’s approval) prior to the execution and delivery thereof by Landlord or any Affiliate of
Landlord; provided, however, that neither Landlord nor its Affiliates shall enter into any new Facility Mortgage Documents
imposing obligations on Tenant with respect to impounds that are more restrictive than obligations imposed on Tenant pursuant to
this Master Lease.
(a) Without limiting or expanding Tenant’s obligations pursuant to Section 31.3(a), during the Term of this
Master Lease, Tenant acknowledges and agrees that, except as expressly provided elsewhere in this Master Lease, it shall
undertake at its own cost and expense the performance of any and all repairs, replacements, capital improvements, maintenance
items and all other requirements relating to the condition of a Facility that are required by any Facility Mortgage Documents or
by Facility Mortgagee, and Tenant shall be solely responsible and hereby covenants to fund and maintain any and all impound,
escrow or other reserve or similar accounts required under any Facility Mortgage Documents as security for or otherwise relating
to any operating expenses of a Facility, including any capital repair or replacement reserves and/or impounds or escrow accounts
for taxes or insurance premiums (each a “Facility Mortgage Reserve Account”); provided, however, this Section 31.3(b) shall
not (i) increase Tenant’s monetary obligations under this Master Lease, (ii) adversely increase Tenant’s non-monetary obligations
under this Master Lease in any material respect, (iii) diminish Tenant’s rights or remedies under this Master Lease in any material
respect, or (iv) impose obligations to fund such reserve or similar accounts in excess of amounts required under this Master Lease
in respect of reserve or similar accounts under the circumstances required under this Master Lease; and provided, further, that any
amounts which Tenant is required to fund into a Facility Mortgage Reserve Account with respect to satisfaction of any repair or
replacement reserve requirements imposed by a Facility Mortgagee or Facility Mortgage Documents shall be credited on a dollar
for dollar basis against the mandatory expenditure obligations of Tenant for such applicable Facility(ies) under Section 9.1(e)
and, if Landlord defaults under such Facility Mortgage and such amounts funded into a Facility Mortgage Reserve Account are
applied by the Facility Mortgagee for purposes other than their intended purposes for such operating expenses, such amounts
shall be credited on a dollar for dollar basis against Rents next coming due. During the Term of this Master Lease and provided
that no Event of Default shall have occurred and be continuing hereunder, Tenant shall, subject to the terms and conditions of
such Facility Mortgage Reserve Account and the requirements of the Facility Mortgagee(s) thereunder (and the related Facility
Mortgage Documents), have access to and the right to apply or use (including for
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reimbursement) to the same extent as Landlord all monies held in each such Facility Mortgage Reserve Account for the purposes
and subject to the limitations for which such Facility Mortgage Reserve Account is maintained, and Landlord agrees to
reasonably cooperate with Tenant in connection therewith. Landlord hereby acknowledges that funds deposited by Tenant in any
Facility Mortgage Reserve Account are the property of Tenant and Landlord is obligated to return the portion of such funds not
previously released to Tenant within fifteen (15) days following the earlier of (x) the expiration or earlier termination of this
Master Lease with respect to such applicable Facility, (y) the maturity or earlier prepayment of the applicable Facility Mortgage
and obligations secured thereby, or (z) an involuntary prepayment or deemed prepayment arising out of the acceleration of the
amounts due to a Facility Mortgagee or secured under a Facility Mortgage as a result of the exercise of remedies under the
applicable Facility Mortgage or Facility Mortgage Documents; provided, however, that the foregoing shall not be deemed or
construed to limit or prohibit Landlord’s right to bring any damage claim against Tenant for any breach of its obligations under
this Master Lease that may have resulted in the loss of any impound funds held by a Facility Mortgagee.
ARTICLE XXXII
1.1
Hazardous Substances. Tenant shall not allow any Hazardous Substance to be located in, on, under or
about the Leased Property or incorporated in any Facility; provided, however, that Hazardous Substances may be located,
brought, kept, stored, used or disposed of in, on or about the Leased Property in quantities and for purposes similar to those
located, brought, kept, used or disposed of in, on or about similar facilities used for purposes similar to the Primary Intended Use
or in connection with the construction of facilities similar to the applicable Facility or to the extent in existence at any Facility
and which are located, brought, kept, stored, used and disposed of in strict compliance with Legal Requirements. Tenant shall not
allow the Leased Property to be used as a waste disposal site or for the manufacturing, handling, storage, distribution or disposal
of any Hazardous Substance other than in the ordinary course of the business conducted at the Leased Property and in compliance
with applicable Legal Requirements.
1.2
Notices. Tenant shall provide to Landlord, within five (5) Business Days after Tenant’s receipt thereof, a
copy of any written notice, or notification from any governmental or quasi-governmental authority or other Person with respect to
(i) any violation of any Legal Requirement relating to the presence or release of Hazardous Substances located in, on, or under
the Leased Property; (ii) any material enforcement, cleanup, removal, or other governmental or regulatory action instituted,
completed or threatened with respect to the Leased Property; (iii) any claim made or threatened by any Person against Tenant
with respect to the Leased Property relating to damage, contribution, cost recovery, compensation, loss, or injury resulting from
or claimed to result from any Hazardous Substance; and (iv) any reports made to any federal state or local environmental agency
arising out of or in connection with any Hazardous Substances in, on, under or removed from the Leased Property, including any
complaints, notices or assertions of violations in connection therewith.
1.3
Remediation. If Tenant becomes aware of a violation of any Environmental Law relating to the presence
or release of any Hazardous Substance in, on or under the Leased Property, or if Tenant, Landlord or the Leased Property
becomes subject to any order of any federal, state or local governmental agency to repair, close, detoxify, decontaminate, clean,
perform corrective action or otherwise remediate (“Remediate”) the Leased Property, Tenant shall promptly notify Landlord of
such event and, at its sole cost and expense, cure such violation or effect such repair, closure, detoxification, decontamination,
cleanup, corrective action or other remediation (“Remediation”) to the extent required pursuant to Environmental Law; provided
that Remediation is required only to the extent as is required or necessary to attain
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compliance with minimum remedial standards applicable under Environmental Law, employing where applicable risk-based
remedial standards and institutional or engineering controls, where such standards or controls would not unreasonably interfere
with the operation and use of the Leased Property for purposes similar to the Primary Intended Use, provided, further, that
Landlord shall have the right to review and approve in accordance with Section 11.1 any encumbrances to be placed upon the
Leased Property in connection with any Remediation undertaken by Tenant.
1.4
Indemnity by Tenant. Tenant shall indemnify, defend, protect, save, hold harmless, and reimburse
Landlord for, from and against any and all costs, losses (including, losses of use), liabilities, damages, assessments, lawsuits,
deficiencies, demands, claims and expenses (collectively, “Environmental Costs”) (whether or not arising out of third-party
claims and regardless of whether liability without fault is imposed, or sought to be imposed, on Landlord) incurred in connection
with, arising out of, resulting from or incident to, directly or indirectly, before (except to the extent first discovered after the end
of the Term) or during (but not after) the Term or such portion thereof during which the Leased Property is leased to Tenant, (i)
the production, use, generation, storage, treatment, transporting, disposal, discharge, release or other handling or disposition of
any Hazardous Substances from, in, on, under or about the Leased Property (collectively, “Handling”), including the effects of
such Handling of any Hazardous Substances on any Person or property within or outside the boundaries of the Leased Property,
(ii) the presence of any Hazardous Substances present or located in, on, under or about the Leased Property and (iii) the violation
of any Environmental Law. “Environmental Costs” include costs of Remediation (including costs of response, removal,
containment and cleanup), investigation, design, engineering and construction, damages (including actual but excluding
consequential damages or loss of value) for personal injuries and for injury to, destruction of or loss of property or natural
resources, relocation or replacement costs, penalties, fines, charges or expenses, reasonable attorney’s fees, expert fees,
consultation fees, and court costs, and all amounts paid in investigating, defending or settling any of the foregoing.
Without limiting the scope or generality of the foregoing, Tenant expressly agrees that, in the event of a breach by
Tenant in its obligations under this Article XXXII that is not cured within any applicable notice and cure period, Tenant shall
reimburse Landlord for any and all reasonable costs and expenses incurred by Landlord in connection with, arising out of,
resulting from or incident to, directly or indirectly, before (with respect to any period of time in which Tenant or its Affiliate was
in possession and control of the applicable Leased Property) or during (but not after) the Term or such portion thereof during
which the Leased Property is leased to Tenant of the following:
under or about the Leased Property;
(a)
in investigating any and all matters relating to the Handling of any Hazardous Substances, in, on, from,
(b)
in bringing the Leased Property into compliance with all Legal Requirements; and
(c)
in Remediating any Hazardous Substances used, stored, generated, released or disposed of in, on, from,
under or about the Leased Property or off-site other than in the ordinary course of the business conducted at the Leased Property
and in compliance with applicable Legal Requirements.
If any claim is made by Landlord for reimbursement for Environmental Costs incurred by it hereunder, Tenant
agrees to pay such claim promptly, and in any event to pay such claim within sixty (60) calendar days after receipt by Tenant of
written notice thereof and any amount not so paid within such sixty (60) calendar day period shall bear interest at the Overdue
Rate from the date due to the date paid in full.
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1.5
Environmental Inspections. In the event Landlord has a reasonable basis to believe that Tenant is in
breach of its obligations under this Article XXXII, Landlord shall have the right, from time to time, during normal business
hours, subject to the rights of subtenants and hotel guests at the Leased Property and upon not less than five (5) days written
notice to Tenant, except in the case of an emergency in which event no notice shall be required, to conduct an inspection of the
Leased Property to determine the existence or presence of Hazardous Substances on or about the Leased Property. Landlord shall
have the right to enter and inspect the Leased Property, (upon not less than ten (10) days written notice to Tenant for invasive
testing except in the case of emergency when no advance notice shall be required; provided, that Landlord shall provide notice to
Tenant within a reasonable period thereafter) conduct any testing, sampling and analyses it deems necessary and shall have the
right to inspect Hazardous Substances brought into the Leased Property; provided that, except in the case of emergency or during
the occurrence and continuance of an Event of Default, Landlord shall use commercially reasonable efforts to cause any such
testing, sampling and analyses to be performed in such a manner so as to reasonably minimize any interference with the
operations and occupancy of the Leased Property and to reasonably minimize any disturbance to guests of Tenant. Landlord may,
in its discretion, retain such experts to conduct the inspection, perform the tests referred to herein, and to prepare a written report
in connection therewith. All reasonable costs and expenses incurred by Landlord under this Section 32.5 shall be paid on demand
as Additional Charges by Tenant to Landlord. Failure to conduct an environmental inspection or to detect unfavorable conditions
if such inspection is conducted shall in no fashion be intended as a release of any liability for environmental conditions
subsequently determined to be associated with or to have occurred during Tenant’s tenancy. To the extent Tenant may be liable
pursuant to this Article XXXII, Tenant shall remain liable for any environmental condition related to or having occurred during
its tenancy regardless of when such conditions are discovered and regardless of whether or not Landlord conducts an
environmental inspection at the termination of this Master Lease.
1.6
Indemnity by Landlord. Notwithstanding anything set forth in this Master Lease to the contrary,
Landlord shall be responsible for and shall indemnify, defend, protect, save, hold harmless, and reimburse Tenant for, from and
against any and all Environmental Costs (whether or not arising out of third-party claims and regardless of whether liability
without fault is imposed, or sought to be imposed, on Tenant) incurred in connection with, arising out of, resulting from or
incident to, before or during (but not after) the Term or such portion thereof, any Pre-Existing Environmental Conditions,
provided that such Environmental Costs to conduct any Remediation with respect to any Pre-Existing Conditions are not incurred
primarily as a result of or in connection to any alteration, renovation, remodeling or expansion activities performed by or on
behalf of Tenant in, on or about the Leased Property during the Term (other than any such alteration or renovation activities,
except to the extent such Remediation is required due to, or such Environmental Costs are incurred by Landlord or Tenant as a
result of, Tenant’s negligence or willful misconduct, (a) performed in compliance with Section 8.2 or Section 9.1(a) hereof, or (b)
required pursuant to any Applicable Law due to any safety risk or emergency), in which case Tenant shall be responsible for, and
shall indemnify, defend, protect, save, hold harmless and reimburse any indemnitees for, such Environmental Costs in accordance
with this Article XXXII. “Pre-Existing Environmental Conditions” means (i) any condition that exists at or on the Leased
Property on or prior to the Commencement Date with respect to contamination of soil, surface or ground waters, stream
sediments, and every other environmental media from Hazardous Substances, (ii) any Hazardous Substances present or located
in, on, under or about Leased Property on or prior to the Commencement Date or to the extent due to the gross negligence or
willful misconduct of
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Landlord thereafter and (iii) any Hazardous Substances that have migrated from the Leased Property on or prior to the
Commencement Date. Tenant shall use commercially reasonable efforts to minimize any interference with or disruption of any
Pre-Existing Environmental Conditions located within the Leased Property of which it is aware or becomes aware when
performing its obligations under this Master Lease (including, without limitation, Sections 8.2 and 9.1(a)).
If any claim is made by Tenant for reimbursement for Environmental Costs incurred by it hereunder, Landlord
agrees to pay such claim promptly, and in any event to pay such claim within sixty (60) calendar days after receipt by Landlord of
written notice thereof and any amount not so paid within such sixty (60) calendar day period shall bear interest at the Overdue
Rate from the date due to the date paid in full.
1.7
Survival. The obligations set forth in this Article XXXII shall survive the expiration or earlier termination
of this Master Lease.
ARTICLE XXXIII
1.1 Memorandum of Lease. Landlord and Tenant shall enter into one or more short form memoranda of this
Master Lease, in form suitable for recording in each county or other applicable location in which the Leased Property is located.
Tenant shall pay all costs and expenses of recording any such memorandum and shall fully cooperate with Landlord in removing
from record any such memorandum upon the expiration or earlier termination of the Term with respect to the applicable Facility.
1.2
Tenant Financing. If, in connection with granting any Permitted Leasehold Mortgage or entering into a
Debt Agreement, Tenant shall reasonably request (A) reasonable cooperation from Landlord, Landlord shall provide the same at
no cost or expense to Landlord, it being understood and agreed that Tenant shall be required to reimburse Landlord for all such
costs and expenses so incurred by Landlord, including, but not limited to, its reasonable out-of-pocket attorneys’ fees, or (B)
reasonable amendments or modifications to this Master Lease as a condition thereto, Landlord hereby agrees to execute and
deliver the same so long as any such amendments or modifications do not (i) increase Landlord’s monetary obligations under this
Master Lease, (ii) adversely increase Landlord’s non-monetary obligations under this Master Lease in any material respect, (iii)
diminish Landlord’s rights under this Master Lease in any material respect, (iv) adversely impact the value of the Leased Property
or (v) adversely impact Landlord’s (or any Affiliate of Landlord’s) tax treatment or position.
1.1
Expert Valuation Process.
ARTICLE XXXIV
(a)
In the event that the opinion of an “Expert” is required under this Master Lease and Landlord and Tenant
have not been able to reach agreement on such Person after at least ten (10) days of good faith negotiations, then either party shall
each have the right to seek appointment of the Expert by the “Appointing Authority,” as defined below, by writing to the
Appointing Authority, copying the other party, and asking it to serve as the Appointing Authority and appoint the Expert. The
Appointing Authority shall appoint an Expert who is independent of the parties and has at least ten (10) years of experience
valuing commercial real estate and/or in
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leasing or other matters, as applicable with respect to any of the matters to be determined by the Expert and in the geographic
area where the related Leased Property is located.
(b)
The “Appointing Authority” shall be (i) the Institute for Conflict Prevention and Resolution (also known
as, and shall be defined herein as, the “CPR Institute”), unless it is unable to serve, in which case the Appointing Authority shall
be (ii) the American Arbitration Association (“AAA”) under its Arbitrator Select Program for non-administered arbitrations or
whatever AAA process is in effect at the time for the appointment of arbitrators in cases not administered by the AAA, unless it
is unable to serve, in which case (iii) the parties shall have the right to apply to any court of competent jurisdiction to appoint an
Appointing Authority or an Expert in accordance with the court’s power to appoint arbitrators. The CPR Institute and the AAA
shall each be considered unable to serve if it no longer exists, or if it no longer provides neutral appointment services, or if it does
not confirm (in form or substance) that it will serve as the Appointing Authority within thirty (30) days after receiving a written
request from Landlord or Tenant to serve as the Appointing Authority, or if, despite agreeing to serve as the Appointing
Authority, it does not confirm its Expert appointment within sixty (60) after receiving such written request. The Appointing
Authority’s appointment of the Expert shall be final and binding upon the parties. The Appointing Authority shall have no power
or authority except to appoint the Expert, and no rules of the Appointing Authority shall be applied to the valuation or other
determination of the Expert other than the rules necessary for the appointment of the Expert.
from the Appointing Authority, the Expert will determine the matter in question, by proceeding as follows:
(c)
Once the Expert is finally selected, either by agreement of the parties or by confirmation to the parties
In the case of an Expert required for any other purpose, including without limitation under Section 13.2 and
Section 36.2(a) hereof, each of Landlord and Tenant shall have a period of ten (10) days to submit to the Expert its
position as to the Maximum Foreseeable Loss, as to the replacement cost of the Facilities as of the date of the
expiration of this Master Lease and as to the appropriate per annum yield for leases between owners and operators
of Gaming Facilities at the time in question (or as to any other matter to be resolved by an Expert hereunder), as
the case may be, and any materials each of Landlord and Tenant wishes the Expert to consider when determining
such Maximum Foreseeable Loss, replacement cost of the Facilities and the appropriate per annum yield for leases
between owners and operators of Gaming Facilities (or as to any other matter to be resolved by an Expert
hereunder), and the Expert will then make the relevant determination, by a “baseball arbitration” proceeding with
the Expert limited to awarding only one or the other of the two positions submitted (and not any position in
between or other compromise or ruling not consistent with one of the two positions submitted, except that in the
case of a determination in respect of a dispute under Section 36.2(a), the Expert in its discretion may choose the
position of one party with respect to the replacement cost of the Facilities as of the date of the expiration of this
Master Lease and the position of the other party with respect to the appropriate per annum yield for leases between
owners and operators of Gaming Facilities at the time in question), which shall then be binding on the parties
hereto. The Expert, in his or her sole discretion, shall consider any and all materials that he or she deems relevant,
except that there shall be no live hearings and the parties shall not be permitted to take discovery. The Expert may
submit written questions or information requests to the parties, and the parties may respond with written materials
within a time frame agreed by the parties or, absent agreement by the parties, set by the Expert.
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to the other party. The parties shall cooperate in good faith to facilitate the valuation or other determination by the Expert.
(d)
All communications between a party and either the Appointing Authority or the Expert shall also be copied
(e)
The costs of any Appointing Authority or Expert engaged with respect to any issue under Section 34.1(c)
of this Master Lease shall be borne by the party against whom the Expert rules on such issue. If Landlord pays such Expert or
Appointing Authority and is the prevailing party, such costs shall be Additional Charges hereunder and if Tenant pays such
Expert or Appointing Authority and is the prevailing party, such costs shall be a credit against the next Rent payment hereunder.
Notices. Any notice, request or other communication to be given by any party hereunder shall be in writing
and shall be sent by registered or certified mail, postage prepaid and return receipt requested, by hand delivery or express courier
service, by facsimile transmission or by an overnight express service to the following address:
1.1
ARTICLE XXXV
To Tenant:
With a copy to:
(that shall not
constitute notice)
To Landlord:
And with copy to
(which shall not
constitute notice):
th
Tropicana Entertainment Inc.
IOC Black Hawk County, Inc.
Isle of Capri Bettendorf, L.C.
c/o Caesars Entertainment, Inc.
100 West Liberty Street, 12 Floor
Reno, Nevada 89501
Attention: General Counsel
Facsimile No.: 281-683-7511
Latham & Watkins LLP
12670 High Bluff Drive
San Diego, CA 92130
Attention: Sony Ben-Moshe
Facsimile No.: (858) 523-5450
GLP Capital, L.P.
c/o Gaming and Leisure Properties, Inc.
845 Berkshire Blvd., Suite 200
Wyomissing, Pennsylvania 19610
Attention: Chief Executive Officer
Facsimile: (610) 401-2901
Goodwin Procter LLP
The New York Times Building
620 Eighth Avenue
New York, New York 10018
Attention: Yoel Kranz, Esq.
Facsimile: (617) 649-1471
or to such other address as either party may hereafter designate. Notice shall be deemed to have been given on the date of
delivery if such delivery is made on a Business Day, or if not, on the first Business Day after delivery. If delivery is refused,
Notice shall be deemed to have been given on the date delivery was first attempted. Notice sent by facsimile transmission shall be
deemed given upon confirmation that such Notice was received at the number specified above or in a Notice to the sender.
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ARTICLE XXXVI
1.1
Transfer of Tenant’s Property and Operational Control of the Facilities. Upon the written request (an
“End of Term Gaming Asset Transfer Notice”) of Landlord either immediately prior to or in connection with the expiration or
earlier termination of the Term, or of Tenant in connection with a termination of this Master Lease that occurs (i) either on the
last date of the Initial Term or the last date of any Renewal Term, or (ii) in the event Landlord exercises its right to terminate this
Master Lease or repossess the Leased Property in accordance with the terms of this Master Lease and, provided that, in each of
the foregoing clauses (i) or (ii), Tenant complies with the provisions of Section 36.3, Tenant shall transfer (or cause to be
transferred) upon the expiration of the Term, or as soon thereafter as Landlord shall request, the business operations conducted by
Tenant and its Subsidiaries at the Facilities (including, for the avoidance of doubt, all Tenant’s Property relating to each of the
Facilities other than tradenames and trademarks, but including all customer lists and all other Facility specific information and
assets) to a successor lessee or operator (or lessees or operators) of the Facilities (collectively, the “Successor Tenant”)
designated pursuant to Section 36.2 for consideration to be received by Tenant (or its Subsidiaries) from the Successor Tenant in
an amount equal to the fair market value of such business operations conducted at the Facilities and Tenant’s Property (including
any Tenant Capital Improvements not funded by Landlord in accordance with Section 10.3) (the “Gaming Assets FMV”) as
negotiated and agreed by Tenant and the Successor Tenant; provided, however, that in the event an End of Term Gaming Asset
Transfer Notice is delivered hereunder, then notwithstanding the expiration or earlier termination of the Term, until such time that
Tenant transfers the business operations conducted at the Facilities and Tenant’s Property to a Successor Tenant, Tenant shall (or
shall cause its Subsidiaries to) continue to (and Landlord shall permit Tenant to maintain possession of the Leased Property to the
extent necessary to) operate the Facilities in accordance with the applicable terms of this Master Lease and the course and manner
in which Tenant (or its Subsidiaries) has operated the Facilities prior to the end of the Term (including, but not limited to, the
payment of Rent hereunder). If Tenant and a potential Successor Tenant designated by Landlord cannot agree on the Gaming
Assets FMV within a reasonable time not to exceed thirty (30) days after receipt of an End of Term Gaming Asset Transfer
Notice hereunder, then such Gaming Assets FMV shall be determined, and Tenant’s transfer of Tenant’s Property to a Successor
Tenant in consideration for a payment in such amount shall be determined and transferred, in accordance with the provisions of
Section 36.2.
1.2
Determination of Successor Tenant and Gaming Assets FMV.
If not effected pursuant to Section 36.1, then the determination of the Gaming Assets FMV and the transfer of Tenant’s Property
to a Successor Tenant in consideration for the Gaming Assets FMV shall be effected by (i) first, determining in accordance with
Section 36.2(a) the rent that Landlord would be entitled to receive from Successor Tenant assuming a lease term of ten (10) years
(the “Successor Tenant Rent”) pursuant to a lease agreement containing substantially the same terms and conditions of this
Master Lease (other than, in the case of a new lease at the end of the final Renewal Term, the terms of this Article XXXVI, which
will not be included in such new lease), (ii) second, identifying and designating in accordance with the terms of Section 36.2(b), a
pool of qualified potential Successor Tenants (each, a “Qualified Successor Tenant”) prepared to lease the Facilities at the
Successor Tenant Rent and to bid for the business operations (which will include a one (1) year transition license for tradenames
and trademarks used at the Facilities) conducted at the Facilities and Tenant’s Property, and (iii) third, in accordance with the
terms of Section 36.2(c), determining the highest price a Qualified Successor Tenant would agree to pay for Tenant’s Property
and setting such highest price as the Gaming Assets FMV in exchange for which Tenant shall be required to transfer Tenant’s
Property and Landlord will enter into a lease with such Qualified Successor Tenant on substantially the same terms and
conditions of this Master Lease (other than, in the case of a new
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lease at the end of the final Renewal Term, the terms of this Article XXXVI, which will not be included in such new lease)
through the remaining term of this Master Lease (assuming that this Master Lease will not have terminated prior to its natural
expiration at the end of the final Renewal Term) or ten (10) years, whichever is greater for a rent calculated pursuant to Section
36.2(a) hereof. Notwithstanding anything in the contrary in this Article XXXVI, the transfer of Tenant’s Property will be
conditioned upon the Successor Tenant obtaining the Gaming Licenses or the approval of the applicable regulatory agencies of
the transfer of the Gaming Licenses and any other gaming assets to the Successor Tenant and/or the issuance of new gaming
licenses as required by applicable Gaming Regulations and the relevant regulatory agencies both with respect to operating and
suitability criteria, as the case may be.
(a)
Determining Successor Tenant Rent. Landlord and Tenant shall first attempt to agree on the amount of
Successor Tenant Rent that it will be assumed Landlord will be entitled to receive for a term of ten (10) years and pursuant to a
lease containing substantially the same terms and conditions of this Master Lease (other than, in the case of a new lease at the end
of the final Renewal Term, the terms of this Article XXXVI, which will not be included in such new lease). If Landlord and
Tenant cannot agree on the Successor Tenant Rent amount within a reasonable time not to exceed sixty (60) days after receipt of
an End of Term Gaming Asset Transfer Notice hereunder, then the Successor Tenant Rent shall be set as follows:
(i)
for the period preceding the day immediately preceding the fortieth (40 ) anniversary of the
Commencement Date occurs, then the annual Successor Tenant Rent shall be an amount equal to the annual Rent that
would have accrued under the terms of this Master Lease for such period (assuming the Master Lease will have not been
terminated prior to its natural expiration); and
th
(ii)
for the period following the day immediately preceding the fortieth (40 ) anniversary of the
Commencement Date occurs, then the Successor Tenant Rent shall be calculated in the same manner as Rent is calculated
under this Master Lease.
th
(b)
Designating Potential Successor Tenants. Landlord will select one and Tenant will select three additional
(for a total of up to four) potential Qualified Successor Tenants prepared to lease the Facilities for the Successor Tenant Rent,
each of whom must meet the criteria established for a Discretionary Transferee (and none of whom may be Tenant or an Affiliate
of Tenant (it being understood and agreed that there shall be no restriction on Landlord or any Affiliate of Landlord from being a
potential Qualified Successor Tenant), except in the case of termination of the Master Lease on the day immediately preceding
the fortieth (40 ) anniversary of the Commencement Date occurs). Landlord and Tenant must designate their proposed Qualified
Successor Tenants within ninety (90) days after receipt of an End of Term Gaming Asset Transfer Notice hereunder. In the event
that Landlord or Tenant fails to designate such party’s allotted number of potential Qualified Successor Tenants, the other party
may designate additional potential Qualified Successor Tenants such that the total number of potential Qualified Successor
Tenants does not exceed four; provided that, in the event the total number of potential Qualified Successor Tenants is less than
four, the transfer process will still proceed as set forth in Section 36.2(c) below.
th
(c)
Determining Gaming Assets FMV. Tenant will have a three (3) month period to negotiate an acceptable
sales price for Tenant’s Property with one of the Qualified Successor Tenants, which three (3) month period will commence
immediately upon the conclusion of the steps set forth above in Section 36.2(b). If Tenant does not reach an agreement prior to
the end of such three (3) month period, Landlord shall conduct an auction for Tenant’s Property among the four potential
successor lessees, and Tenant will be required to transfer Tenant’s Property to the highest bidder.
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1.3
Operation Transfer. Upon designation of a Successor Tenant (pursuant to either Section 36.1 or 36.2, as
the case may be), Tenant shall reasonably cooperate and take all actions reasonably necessary (including providing all reasonable
assistance to Successor Tenant) to effectuate the transfer of operational control of the Facilities to Successor Tenant in an orderly
manner so as to minimize to the maximum extent possible any disruption to the continued orderly operation of the Facilities for
its Primary Intended Use. Notwithstanding the expiration or earlier termination of the Term and anything to the contrary herein,
unless Landlord consents to the contrary, until such time that Tenant transfers Tenant’s Property and operational control of the
Facilities to a Successor Tenant in accordance with the provisions of this Article XXXVI, Tenant shall (or shall cause its
Subsidiaries to) continue to (and Landlord shall permit Tenant to maintain possession of the Leased Property to the extent
necessary to) operate the Facilities in accordance with the applicable terms of this Master Lease and the course and manner in
which Tenant (or its Subsidiaries) has operated the Facilities prior to the end of the Term (including, but not limited to, the
payment of Rent hereunder). Concurrently with the transfer of Tenant’s Property to Successor Tenant, Landlord and Successor
Tenant shall execute a new master lease in accordance with the terms as set forth in the final clause of the first sentence of
Section 36.2 hereof.
ARTICLE XXXVII
1.1
Attorneys’ Fees. If Landlord or Tenant brings an action or other proceeding against the other to enforce or
interpret any of the terms, covenants or conditions hereof or any instrument executed pursuant to this Master Lease, or by reason
of any breach or default hereunder or thereunder, the party prevailing in any such action or proceeding and any appeal thereupon
shall be paid all of its costs and reasonable outside attorneys’ fees incurred therein. In addition to the foregoing and other
provisions of this Master Lease that specifically require Tenant to reimburse, pay or indemnify against Landlord’s attorneys’ fees,
Tenant shall pay, as Additional Charges, all of Landlord’s reasonable outside attorneys’ fees incurred in connection with the
enforcement of this Master Lease (except to the extent provided above), including reasonable attorneys’ fees incurred in
connection with the review, negotiation or documentation of any subletting, assignment, or management arrangement or any
consent requested in connection therewith, and the collection of past due Rent.
ARTICLE XXXVIII
1.1
Brokers. Tenant warrants that it has not had any contact or dealings with any Person or real estate broker
which would give rise to the payment of any fee or brokerage commission in connection with this Master Lease, and Tenant shall
indemnify, protect, hold harmless and defend Landlord from and against any liability with respect to any fee or brokerage
commission arising out of any act or omission of Tenant. Landlord warrants that it has not had any contact or dealings with any
Person or real estate broker which would give rise to the payment of any fee or brokerage commission in connection with this
Master Lease, and Landlord shall indemnify, protect, hold harmless and defend Tenant from and against any liability with respect
to any fee or brokerage commission arising out of any act or omission of Landlord.
Anti-Terrorism Representations. Tenant hereby represents and warrants that neither Tenant, nor, to the
knowledge of Tenant, any persons or entities holding any legal or beneficial interest whatsoever in Tenant, are (i) the target of
any sanctions program that is established by Executive Order of the President or published by the Office of Foreign Assets
1.1
ARTICLE XXXIX
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89
Control, U.S. Department of the Treasury (“OFAC”); (ii) designated by the President or OFAC pursuant to the Trading with the
Enemy Act, 50 U.S.C. App. § 5, the International Emergency Economic Powers Act, 50 U.S.C. §§ 1701-06, the Patriot Act,
Public Law 107-56, Executive Order 13224 (September 23, 2001) or any Executive Order of the President issued pursuant to
such statutes; or (iii) named on the following list that is published by OFAC: “List of Specially Designated Nationals and
Blocked Persons” (collectively, “Prohibited Persons”). Tenant hereby represents and warrants to Landlord that no funds
tendered to Landlord by Tenant under the terms of this Master Lease are or will be directly or indirectly derived from activities
that may contravene U.S. federal, state or international laws and regulations, including anti-money laundering laws. If the
foregoing representations are untrue at any time during the Term and Landlord suffers actual damages as a result thereof, an
Event of Default will be deemed to have occurred, without the necessity of notice to Tenant.
Tenant will not during the Term of this Master Lease knowingly engage in any transactions or dealings, or
knowingly be otherwise associated with, any Prohibited Persons in connection with the use or occupancy of the Leased Property.
A breach of the representations contained in this Section 39.1 by Tenant as a result of which Landlord suffers actual damages
shall constitute a material breach of this Master Lease and shall entitle Landlord to any and all remedies available hereunder, or at
law or in equity.
ARTICLE XL
GLP REIT Protection. (a)The parties hereto intend that Rent and other amounts paid by Tenant hereunder
will qualify as “rents from real property” within the meaning of Section 856(d) of the Code, or any similar or successor provision
thereto and this Master Lease shall be interpreted consistent with this intent.
1.1
(a)
Anything contained in this Master Lease to the contrary notwithstanding, Tenant shall not without
Landlord’s advance written consent (which consent shall not be unreasonably withheld) (i) sublet, assign or enter into a
management arrangement for the Leased Property on any basis such that the rental or other amounts to be paid by the subtenant,
assignee or manager thereunder would be based, in whole or in part, on any formula such that any portion of any amount received
by Landlord would fail to qualify as “rents from real property” within the meaning of Section 856(d) of the Code, or any similar
or successor provision thereto; (ii) furnish or render any services to the subtenant, assignee or manager or manage or operate the
Leased Property so subleased, assigned or managed; (iii) sublet, assign or enter into a management arrangement for the Leased
Property to any Person (other than a “taxable REIT subsidiary” (within the meaning of Section 856(l) of the Code) of GLP) in
which Landlord or GLP owns an interest, directly or indirectly (by applying constructive ownership rules set forth in Section
856(d)(5) of the Code); or (iv) sublet, assign or enter into a management arrangement for the Leased Property in any other
manner which could cause any portion of the amounts received by Landlord pursuant to this Master Lease or any sublease to fail
to qualify as “rents from real property” within the meaning of Section 856(d) of the Code, or any similar or successor provision
thereto, or which could cause any other income of Landlord to fail to qualify as income described in Section 856(c)(2) of the
Code. The requirements of this Section 40.1(b) shall likewise apply to any further subleasing by any subtenant.
(b)
Anything contained in this Master Lease to the contrary notwithstanding, the parties acknowledge and
agree that Landlord, in its sole discretion, may assign this Master Lease or any interest herein to another Person (including
without limitation, a “taxable REIT subsidiary” (within the meaning of Section 856(l) of the Code)) in order to maintain
Landlord’s status as a “real estate investment trust” (within the meaning of Section 856(a) of the Code); provided, however,
Landlord shall be required to (i) comply with any applicable legal
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requirements related to such transfer and (ii) give Tenant notice of any such assignment; and provided, further, that any such
assignment shall be subject to all of the rights of Tenant hereunder.
(c)
Anything contained in this Master Lease to the contrary notwithstanding, upon request of Landlord, Tenant
shall cooperate with Landlord in good faith and at no cost or expense to Tenant, and provide such documentation and/or
information as may be in Tenant’s possession or under Tenant’s control and otherwise readily available to Tenant as shall be
reasonably requested by Landlord in connection with verification of GLP’s “real estate investment trust” (within the meaning of
Section 856(a) of the Code) compliance requirements. Anything contained in this Master Lease to the contrary notwithstanding,
Tenant shall take such reasonable action as may be requested by Landlord from time to time in order to ensure compliance with
the Internal Revenue Service requirement that Rent allocable for purposes of Section 856 of the Code to personal property, if any,
at the beginning and end of a calendar year does not exceed fifteen percent (15%) of the total Rent due hereunder as long as such
compliance does not (i) increase Tenant’s monetary obligations under this Master Lease or (ii) materially and adversely increase
Tenant’s nonmonetary obligations under this Master Lease or (iii) materially diminish Tenant’s rights under this Master Lease.
ARTICLE XLI
Survival. Anything contained in this Master Lease to the contrary notwithstanding, all claims against, and
liabilities and indemnities of Tenant or Landlord arising prior to the expiration or earlier termination of the Term shall survive
such expiration or termination.
1.1
Severability. If any term or provision of this Master Lease or any application thereof shall be held invalid
or unenforceable, the remainder of this Master Lease and any other application of such term or provision shall not be affected
thereby.
1.2
1.3
Non-Recourse; Consequential Damages. Tenant specifically agrees to look solely to the Leased Property
for recovery of any judgment from Landlord (and Landlord’s liability hereunder shall be limited solely to its interest in the
Leased Property, and no recourse under or in respect of this Master Lease shall be had against any other assets of Landlord
whatsoever). It is specifically agreed that (a) no constituent partner or shareholder in Landlord or officer or employee of Landlord
shall ever be personally liable for any such judgment or for the payment of any monetary obligation to Tenant and (b) no
shareholder that is an individual, officer or employee of Tenant shall ever be personally liable for any such judgment or for
payment of any monetary obligation to Landlord. The provision contained in the foregoing sentence is not intended to, and shall
not, limit any right that Tenant might otherwise have to obtain injunctive relief against Landlord, or any action not involving the
personal liability of Landlord. Furthermore, except as otherwise expressly provided herein, in no event shall either party ever be
liable to the other party for any indirect or consequential damages suffered by the claiming party from whatever cause.
and, subject to the provisions of Article XXII, upon Tenant and its successors and assigns.
1.4
Successors and Assigns. This Master Lease shall be binding upon Landlord and its successors and assigns
Governing Law. THIS MASTER LEASE WAS NEGOTIATED IN THE STATE OF NEW YORK,
WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND TO THE
UNDERLYING TRANSACTION EMBODIED HEREBY. ACCORDINGLY, IN ALL RESPECTS THIS MASTER LEASE
1.5
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(AND ANY AGREEMENT FORMED PURSUANT TO THE TERMS HEREOF) SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK
(WITHOUT REGARD TO PRINCIPLES OR CONFLICTS OF LAW) AND ANY APPLICABLE LAWS OF THE UNITED
STATES OF AMERICA, EXCEPT THAT ALL PROVISIONS HEREOF RELATING TO THE CREATION OF THE
LEASEHOLD ESTATE AND ALL REMEDIES SET FORTH IN ARTICLE XVI RELATING TO RECOVERY OF
POSSESSION OF THE LEASED PROPERTY OF ANY FACILITY (SUCH AS AN ACTION FOR UNLAWFUL DETAINER,
IN REM ACTION OR OTHER SIMILAR ACTION) SHALL BE CONSTRUED AND ENFORCED ACCORDING TO, AND
GOVERNED BY, THE LAWS OF THE STATE IN WHICH THE LEASED PROPERTY IS LOCATED.
1.6 Waiver of Trial by Jury. EACH OF LANDLORD AND TENANT ACKNOWLEDGES THAT IT HAS
HAD THE ADVICE OF COUNSEL OF ITS CHOICE WITH RESPECT TO ITS RIGHTS TO TRIAL BY JURY UNDER THE
CONSTITUTION OF THE UNITED STATES AND THE STATE. EACH OF LANDLORD AND TENANT HEREBY
EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION
(i) ARISING UNDER THIS MASTER LEASE (OR ANY AGREEMENT FORMED PURSUANT TO THE TERMS HEREOF)
OR (ii) IN ANY MANNER CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF LANDLORD
AND TENANT WITH RESPECT TO THIS MASTER LEASE (OR ANY AGREEMENT FORMED PURSUANT TO THE
TERMS HEREOF) OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN
CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER
NOW EXISTING OR HEREINAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR
OTHERWISE; EACH OF LANDLORD AND TENANT HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY A COURT TRIAL WITHOUT A JURY, AND
THAT EITHER PARTY MAY FILE A COPY OF THIS SECTION WITH ANY COURT AS CONCLUSIVE EVIDENCE OF
THE CONSENT OF EACH SUCH PARTY TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY.
1.7
Amendment and Restatement; Entire Agreement. This Master Lease hereby amends and restates the
Second A&R Master Lease in its entirety, and Landlord and Tenant hereby adopt this Master Lease in full substitution of the
Second A&R Master Lease. This Master Lease and the Exhibits and Schedules hereto constitute the entire and final agreement of
the parties with respect to the subject matter hereof, and may not be changed or modified except by an agreement in writing
signed by the parties and, with respect to the provisions set forth in Section 40.1, no such change or modification shall be
effective without the explicit reference to such section by number and paragraph. Landlord and Tenant hereby agree that all prior
or contemporaneous oral understandings, agreements or negotiations relative to the leasing of the Leased Property, including, but
not limited to, the Second A&R Master Lease, are merged into and revoked by this Master Lease.
1.8
Headings. All titles and headings to sections, subsections, paragraphs or other divisions of this Master
Lease are only for the convenience of the parties and shall not be construed to have any effect or meaning with respect to the
other contents of such sections, subsections, paragraphs or other divisions, such other content being controlling as to the
agreement among the parties hereto.
1.9
Counterparts. This Master Lease may be executed in any number of counterparts, each of which shall be
a valid and binding original, but all of which together shall constitute one and the same instrument. The words “execution,”
“execute,” “signed,” “signature,” and words of like import in or related to any document to be signed in connection
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with this Master Lease and the transactions contemplated hereby shall be deemed to include electronic signatures, which shall be
of the same legal effect, validity or enforceability as a manually executed signature to the extent and as provided for in any
applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic
Signatures and Records Act or any other similar state laws based on the Uniform Electronic Transactions Act.
Interpretation. Both Landlord and Tenant have been represented by counsel and this Master Lease and
every provision hereof has been freely and fairly negotiated. Consequently, all provisions of this Master Lease shall be
interpreted according to their fair meaning and shall not be strictly construed against any party.
1.10
1.11 Time of Essence. TIME IS OF THE ESSENCE OF THIS MASTER LEASE AND EACH PROVISION
HEREOF IN WHICH TIME OF PERFORMANCE IS ESTABLISHED.
1.12
Further Assurances. The parties agree to promptly sign all documents reasonably requested to give effect
to the provisions of this Master Lease. In addition, Landlord agrees to, at Tenant’s sole cost and expense, reasonably cooperate
with all applicable gaming authorities in connection with the administration of their regulatory jurisdiction over Tenant’s Parent,
Tenant and its Subsidiaries, including the provision of such documents and other information as may be requested by such
gaming authorities relating to Tenant or any of its Subsidiaries or to this Master Lease and which are within Landlord’s
reasonable control to obtain and provide.
1.13 Gaming Regulations. (a)Notwithstanding anything to the contrary in this Master Lease, this Master Lease
and any agreement formed pursuant to the terms hereof are subject to: (i) the Gaming Regulations; and (ii) the laws involving the
sale, distribution and possession of alcoholic beverages (the “Liquor Laws”). Without limiting the foregoing, each of Tenant,
Landlord, and each of Tenant’s or Landlord’s successors and assigns acknowledges that (i) it is subject to being called forward by
(a) the gaming authority or (b) any governmental authority enforcing the Liquor Laws (the “Liquor Authority”), in each of their
discretion, for licensing or a finding of suitability or to file or provide other information, and (ii) all rights, remedies and powers
under this Master Lease and any agreement formed pursuant to the terms hereof, including with respect to the entry into and
ownership and operation of the Gaming Facilities, and the possession or control of gaming equipment, alcoholic beverages or a
gaming or liquor license, may be exercised only to the extent that the exercise thereof does not violate any applicable provisions
of the Gaming Regulations and Liquor Laws and only to the extent that required approvals (including prior approvals) are
obtained from the requisite governmental authorities.
(a)
Notwithstanding anything to the contrary in this Master Lease or any agreement formed pursuant to the
terms hereof, each of Tenant, Landlord, and each of Tenant’s or Landlord’s successors and assigns agrees to cooperate with each
gaming authority and each Liquor Authority in connection with the administration of their regulatory jurisdiction over the parties
hereto, including, without limitation, the provision of such documents or other information as may be requested by any such
gaming authorities and/or Liquor Authorities relating to Tenant, Landlord, Tenant’s or Landlord’s successors and assigns or to
this Master Lease or any agreement formed pursuant to the terms hereof.
1.14 Certain Provisions of Nevada Law. Pursuant to the provisions of NRS 108.2403 Section 108.2405 of the
Nevada Revised Statutes (as amended or supplemented from time to time, “NRS”), to the extent the Leased Property is located in
Nevada, Landlord hereby waives the provisions of NRS 108.2403 and 108.2407, including, without limitation, any and all
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requirements under such sections to (i) establish a construction disbursement account, (ii) fund such construction disbursement
account in an amount equal to the total cost of the work of improvement, (iii) obtain the services of a construction control to
administer such construction disbursement account, (iv) provide notice of such construction disbursement account and (v) record
a surety bond for the prime contract that meets the requirements of NRS 108.2415. Notwithstanding the foregoing waiver,
however, Tenant shall, except as otherwise provided in this Master Lease, take all actions necessary under laws of the State of
Nevada to ensure that no liens encumbering Landlord’s interest in the Leased Property located in Nevada arise as a result of
Capital Improvements by Tenant. Tenant shall notify Land-lord of the name and address of Tenant’s prime contractor who will be
performing such Capital Improvements as soon as it is known. Tenant shall notify Landlord immediately upon the signing of any
contract with the prime contractor for such Capital Improvements or other construction, alteration or repair of any portion of such
Leased Property or any improvements to such Leased Property. Tenant may not enter such Leased Property to begin any
alteration or other work in such Leased Property until Tenant has delivered evidence satisfactory to Landlord that Tenant has
complied with the terms of this Section 41.14. Failure by Tenant to comply with the terms of this Section 41.14 shall permit
Landlord to declare an Event of Default. Further, Landlord shall have the right to post and maintain any notices of non-
responsibility.
1.15 Certain Provisions of New Jersey Law.
(a) This Master Lease and the parties hereto, in each case as it relates to the Facilities located in the State of New
Jersey (the “New Jersey Facility(ies)”) only, are subject to compliance with the requirements of the New Jersey Casino Control
Act, N.J.S.A. 5:12-1 et seq., (the “New Jersey Act”), and the regulations promulgated thereunder. In accordance with N.J.S.A.
5:12—82c, this Master Lease or any further amendments thereto relating to the New Jersey Facilities must be filed with the New
Jersey Casino Control Commission (the “Commission”) and the New Jersey Division of Gaming Enforcement (the “Division”)
and, to the extent that this Master Lease or any further amendment thereto relates to the New Jersey Facilities, the same shall only
be effective as to the New Jersey Facilities if approved by the Commission.
(b) The parties acknowledge and agree that the Master Lease and any transfer or assignments under the Master
Lease, in each case to the extent the same relate to the New Jersey Facilities, are subject to the applicable provisions of N.J.S.A.
5:12-82 et seq. To the extent required by N.J.S.A. 5:12-82c(10), with respect to the New Jersey Facilities only, each party to the
Master Lease is jointly and severally liable for all acts, omissions and violations of the New Jersey Act by any party, regardless of
actual knowledge of such act, omission o violation. Notwithstanding the foregoing, (i) if Tenant violates the New Jersey Act then
Tenant shall indemnify Landlord for any liability incurred by Landlord as a result of any such violation in a manner consistent
with Section 21.1 of this Master Lease and (ii) if Landlord violates the New Jersey Act then Landlord shall indemnify Tenant for
any liability incurred by Tenant as a result of any such violation.
(c) Pursuant to the provisions of N.J.S.A. 5:12-104b, this Master Lease, as it relates to the New Jersey Facilities
only, may be terminated by the Division or Commission without liability on the part of Tenant or Landlord, if the Division or
Commission disapproves of its terms, including the terms of compensation, or of the qualifications of Landlord or Tenant, their
respective owners, officers, directors or employees based on the standards contained in N.J.S.A. 5:12-86.
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(d) In accordance with the requirements of N.J.S.A. 5:12-82c(5), if at any time during the Term (so long as a
New Jersey Facility remains a Facility under this Master Lease), Landlord or any person associated with Landlord (other than
Tenant or any subtenant thereof), is found by the Commission or the Director of the Division, as applicable, to be unsuitable to be
associated with a casino enterprise in New Jersey, and is not removed from such association in a manner acceptable to the
Commission or the Director of the Division, as applicable, then upon written notice delivered by Tenant to Landlord (the “New
Jersey Purchase Notice”), following such final unstayed decision of the Commission or Director of the Division, as applicable,
which provides that a purchase of Landlord’s interest in a New Jersey Facility is required, Tenant may elect either (a) to require
Landlord to sell all (but not less than all) of Landlord’s interest in such New Jersey Facility (but no other Facility under the
Master Lease) to a third party pursuant to a Severance Lease provided, that the Commission or Director of the Division, as
applicable, does not object, or (b); to purchase all (but not less than all) of Landlord’s interest in an applicable New Jersey
Facility (but no other Facility under the Lease) for an amount equal to one hundred percent (100%) of the New Jersey Fair
Market Value (as finally determined in accordance with paragraph (e) of this Section 41.15 below), which amount shall be
payable in cash.
(e) The “New Jersey Fair Market Value” shall be an amount equal to the fair market value of an applicable
New Jersey Facility based on the amount that would be paid by a willing purchaser to a willing seller if neither were under any
compulsion to buy or sell. If the parties are unable to mutually agree upon the New Jersey Fair Market Value within thirty (30)
days after delivery of the New Jersey Purchase Notice, the New Jersey Fair Market Value will be determined by Experts
appointed in accordance with Section 34.1 in which case Landlord and Tenant shall each submit to the Experts their respective
determinations of the New Jersey Fair Market Value. The Experts may only select either the New Jersey Fair Market Value set
forth by Landlord or by Tenant and may not select any other amount or make any other determination (and the Experts shall be so
instructed). The Experts shall notify the parties in writing within thirty (30) days of the submission of the matter to the Experts of
their selection of either Tenant’s or Landlord’s determination of the New Jersey Fair Market Value as the conclusive
determination of the New Jersey Fair Market Value.
(f) In the event that Tenant has elected to purchase a New Jersey Facility, the closing of the purchase and a sale of such
New Jersey Facility shall occur not later than ninety (90) days after the determination of the New Jersey Fair Market Value, or
such other time as may be directed by the New Jersey Gaming Authorities. At such closing, Landlord shall deliver to Tenant all
fee and leasehold title to the applicable New Jersey Facility, free and clear of any liens, claims or other encumbrances other than
(A) any liens and encumbrances created to or in place as of the Commencement Date and (B) any liens and encumbrances caused
by Tenant or as permitted by the Master Lease. Landlord shall use all its commercially reasonable efforts to deliver title to the
applicable New Jersey Facility in the condition required in this Section 41.15(f). All closing costs and expenses, including any
applicable real property transfer taxes or fees, of conveying a New Jersey Facility to Tenant shall be allocated between Landlord
and Tenant in the manner as the same are customarily allocated between a seller and buyer of similar real property located in the
State of New Jersey. Upon such closing the Master Lease, as it relates to the applicable New Jersey Facility only, shall
automatically terminate and be of no further force and effect, and Rent due under this Master Lease from and after the date of
such closing shall be reduced by an amount determined in the same manner as set forth in Section 14.6 hereof (the “Rent
Reduction Amount”). Nothing in this Section 41.15 shall be deemed to supersede any provisions of the Master Lease which
expressly survives the termination of the Master Lease, and nothing contained in this Section 41.15 shall be deemed to release
either party from any obligation or liability relating to any Facility other than an applicable New Jersey Facility or any obligation
or liability relating to such applicable New Jersey Facility which shall
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have arisen under the Master Lease prior to the effective date of the sale to Tenant of the applicable New Jersey Facility.
(g) In the event that Tenant has elected to require Landlord to sell a New Jersey Facility to a third-party, in connection
with the closing of the purchase and sale of such New Jersey Facility from Landlord to such third-party, Tenant and such third-
party shall enter into a Severance Lease and the Master Lease shall be amended to reflect the removal of the applicable New
Jersey Facility from the Lease.
[SIGNATURES ON FOLLOWING PAGE]
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written above.
IN WITNESS WHEREOF, this Master Lease has been executed by Landlord and Tenant as of the date first
LANDLORD:
GLP CAPITAL, L.P.,
a Pennsylvania limited partnership
By: Gaming and Leisure Properties, Inc.,
its general partner
By: /s/ Brandon J. Moore
Name: Brandon J. Moore
Title: Chief Operating Officer,
General Counsel and Secretary
[Signature Page to Third Amended and Restated Master Lease]
TENANT:
TROPICANA ENTERTAINMENT INC.,
a Delaware corporation
By: /s/ Edmund L. Quatmann, Jr.
Name: Edmund L. Quatmann, Jr.
Title: Secretary
IOC BLACK HAWK COUNTY, INC.,
an Iowa corporation
By: /s/ Edmund L. Quatmann, Jr.
Name: Edmund L. Quatmann, Jr.
Title: Secretary
ISLE OF CAPRI BETTENDORF, L.C.,
an Iowa limited liability company
By: /s/ Edmund L. Quatmann, Jr.
Name: Edmund L. Quatmann, Jr.
Title: Secretary
[Signature Page to Third Amended and Restated Master Lease]
EXHIBIT A*
LIST OF FACILITIES
Names
Tropicana Atlantic City
Tropicana Laughlin
Tropicana Greenville
Isle Bettendorf
Isle Waterloo
Location
Atlantic City, NJ
Laughlin, NV
Greenville, MS
Bettendorf, IA
Waterloo, IA
Use
Land-based Gaming
Land-based Gaming
Land-based Gaming
Land-based Gaming
Land-based Gaming
*For avoidance of doubt and notwithstanding anything to the contrary contained in this Master Lease or any Exhibits or
Schedules hereto, Landlord’s lease to Tenant of the Leased Property under this Master Lease includes only so much of the Leased
Property as and to the extent the same has been assigned, transferred or conveyed to Landlord (a) as of the Commencement Date,
and (b) after the Commencement Date pursuant and subject to any amendment of this Master Lease executed by the parties in
accordance with the terms hereof.
ACTIVE/124660172.1
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A-1
EXHIBIT B
LEGAL DESCRIPTIONS
Tropicana Atlantic City
3004 Pacific Avenue, Lot 1 Block 29
Tract I: Lot : 1 Block: 29:
BEGINNING at a point of intersection of the southerly side of Pacific (60 feet wide) Avenue with the easterly side of Chelsea (60
feet wide) Avenue; thence
1. Along the southerly side of Pacific Avenue, North 62 degrees 32 minutes 00 seconds East, a distance of 125.00 feet to a point,
a corner to Lot 2, Block 29; thence
2. Along the lands of Lot, Block 29, South 27 degrees 28 minutes 00 seconds East, a distance of 125.00 feet to a point on the
westerly side of Morris (60 feet wide) Avenue; thence
3. Along the lands of Lot 2, Block 29, North 62 degrees 32 minutes 00 seconds East, a distance of 125.00 feet to a point on the
westerly side of Morris (60 feet wide) Avenue; thence
4. Along the westerly side of Morris Avenue, South 27 degrees 28 minutes 00 seconds East, a distance of 50.00 feet to a point, a
corner of Lot 4, Block 29; thence
5. Along the lands of Lot 4 and 6, Block 29, South 62 degrees 32 minutes 00 seconds West, a distance of 195.00 feet to a point, a
corner to Lot 5, Block 29; thence
6. Along the lands of Lot 5, Block 29, South 27 degrees 28 minutes 00 seconds East, a distance of 1.50 feet to a point, a corner of
Lot 5, Block 29; thence
7. Along the lands of Lot 6, Block 29, South 62 degrees 32 minutes 00 seconds West, a distance of 55.00 feet to a point on the
easterly side of Chelsea Avenue; thence
8. Along the easterly side of Chelsea Avenue, North 27 degrees 28 minutes 00 seconds West, a distance of 176.50 feet to the
point of BEGINNING.
106-115 South Morris Avenue, Lots 4 & 6, Block 29
Tract II Lots : 4 & 6 Block: 29:
BEGINNING at a point on the easterly side of Chelsea (60 feet wide) Avenue, a corner to Lot 1, Block 29, said point being
located South 27 degrees 28 minutes 00 seconds East, a distance of 176.50 feet from the point of intersection of the southerly side
of Pacific (60 feet wide) Avenue with the easterly side of Chelsea Avenue; thence
1. Along the lands of Lot 1, Block 29, North 62 degrees 32 minutes 00 seconds East, a distance of 55.00 feet to a point, a corner
to Lot 1, Block 29; thence
2. Along the lands of Lot 1, Block 29, North 27 degrees 28 minutes 00 seconds West, a distance of 1.50 feet to a point, a corner to
Lot 1, Block 29; thence
3. Along the lands of Lot 1, Block 29, North 62 degrees 32 minutes 00 seconds a distance of 195.00 feet to a point on the
westerly side of Morris (60 feet wide) Avenue; thence
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B-1
4. Along the westerly side of Morris Avenue, South 27 degrees 28 minutes 00 seconds East, a distance of 100.00 feet to a point, a
corner to Lot 5, Block 29; thence
5. Along the lands of Lot 5, Block 29, South 62 degrees 32 minutes 00 seconds West, a distance of 125.00 feet to a point, a corner
to Lot 5, Block 29; thence
6. Along the lands of Lot t, Block 29, South 27 degrees 28 minutes 00 seconds East, a distance of 50.00 feet to a point, a corner
to Lot 5, Block 29; thence
7. Along the lands of Lot 5, Block 29, South 62 degrees 32 minutes 00 seconds West, a distance of 125.00 feet to a point on the
easterly side of Chelsea Avenue; thence
8. Along the easterly side of Chelsea Avenue, North 27 degrees 28 minutes 00 seconds West, a distance of 148.50 feet to the
point of BEGINNING.
Air Rights Morris Avenue, Lot 4.01, Block 29
Tract III Lot(s): 4.01 Block: 29: (AIR RIGHTS OVER A PORTION OF MORRIS AVENUE)
Together with the Air Rights over a portion of Morris Avenue as set forth in Atlantic City Ordinance No. 102 of 1987 (
designated as “Prior Air Rights” in Atlantic City Ordinance No. 39 of 2017) , as more particularly described as follows:
ALL that certain lot, tract, or parcel of land and premises situate, lying, and being in the City of Atlantic City, County of Atlantic,
and State of New Jersey, bounded and described as follows:
BEGINNING at a point in the westerly line of Morris Avenue (60' wide), said point being distant 255.00' south of the southerly
line of Pacific Avenue (60' wide), and extending from said beginning point; thence
1. North 62° 32' 00" East, parallel with Pacific Avenue and crossing Morris Avenue, a distance of 60.00' to the easterly line of
Morris Avenue; thence
2. South 27° 28' 00' East, in and along the easterly line of Morris Avenue, a distance of 20.00'; thence
3. South 62° 32' 00" West, parallel with Pacific Avenue and crossing Morris Avenue , a distance of 60.00' to the westerly line of
Morris Avenue; thence
4. North 27° 28' 00" West, in and along the westerly line of Morris Avenue, a distance of 20.00' to the point and place of
BEGINNING.
It is further understood that the bottom of said easement shall be located at elevation 45.50, mean sea level datum and the top of
said easement shall be at elevation 60.50.
Tract VI (ADDITIONAL AIR RIGHTS OVER A PORTION OF MORRIS AVENUE)
Together with the Additional Air Rights over a portion of Morris Avenue as set forth in City of Atlantic City Ordinance No. 39 of
2017 as more particularly described as follows:
All that certain lot, tract, or parcel of land and premises situate, lying and being in the City of Atlantic City, County of Atlantic,
and State of New Jersey, bounded and described as follows:
Beginning at a point in the Easterly Right of Way Line of Morris Avenue (60.00 feet right of way width); said point being South
27°34'28" East along the said line, a distance of 255.00 feet
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B-1
from the Southeasterly Right of Way Line of Pacific Avenue (60.00 feet right of way width), and continuing thence:
1. South 27°34'28" East along the said line of Morris Avenue, a distance of 20.00 feet to a point; thence
2. South 62°25'32'West, a distance of 60.00 feet to a point in the Westerly Right of Way Line of Morris Avenue; thence
3. North 27°34'28" West along said line, a distance of 20.00 feet to the point; thence
4. North 62°25'32" East, a distance of 60.00 feet to the point and place of BEGINNING.
The Additional Air Rights are contained vertically with a starting elevation of 56.67 feet, extending 19.00 feet to an elevation of
75.67 feet. Elevations reference the North American Vertical Datum of 1988 (NAVD 88).
2821 Boardwalk, Lot 2 Block 30
Parcel 1:
Casino Parcel:
ALL THAT CERTAIN tract, parcel and lot of land lying and being situate in the City of Atlantic City, County of Atlantic, State
of New Jersey, Being more particularly described as follows:
BEGINNING at a point in the southerly side line of Pacific Avenue where the same is intersected by the easterly side line of
Brighton Avenue, and from said point of beginning; running THENCE
1. Along the southerly side line of Pacific Avenue North 62 degrees 32 minutes East, a distance of 179.00 feet to a point;
THENCE
2. Still along said side line South 27 degrees 28 minutes East, 10.00 feet to a point; THENCE
3. Still along said side line North 62 degrees 32 minutes East, a distance of 170.00 feet to a point in the westerly side line of Iowa
Avenue; THENCE
4. Along the westerly side line of Iowa Avenue South 27 degrees 28 minutes East, 497.85 feet to a point in the northerly side line
of Boardwalk; THENCE
5. Westwardly, in and along said northerly line of the Boardwalk, along an arc of a circle curving to the left having a radius of
4184.13, an arc length of 13.94 feet to a point of tangency; THENCE
6. Continuing along the northerly side line of Boardwalk, South 65 degrees 59 minutes 35 seconds West, a distance of 335.70 feet
to a point in the easterly side line of Brighton Avenue; THENCE
7. Along the easterly side line of Brighton Avenue North 27 degrees 28 minutes West, 486.72 feet to a point in the southerly side
line of Pacific Avenue, the point and place of BEGINNING.
TOGETHER WITH:
ALL that portion of the northeasterly half of Brighton Avenue (60 feet wide). now, vacated, situate, lying and being in the City of
Atlantic City, County of Atlantic and State of New Jersey, the entire vacated premises being bounded and described as follows:
BEGINNING at a point in the easterly line of Brighton Avenue (60 feet wide) being distant 200.00 feet South of the southerly
line of Pacific Avenue (60 feet wide); and extending THENCE
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1. South 27 degrees 28 minutes 00 seconds East, in and along the easterly line of Brighton Avenue, 286.72 feet to the inland or
interior line of Public Park; THENCE
2. South 65 degrees 59 minutes 35 seconds West, in and along the inland or interior line of Public Park, 60.11 feet to the westerly
line of Brighton Avenue; THENCE
3. North 27 degrees 28 minutes 00 seconds West, in and along the westerly line of Brighton Avenue, 283.10 feet; THENCE
4. North 62 degrees 32 minutes 00 seconds East, parallel with Pacific Avenue and crossing Brighton Avenue, 60.00 feet to the
point and place of BEGINNING.
TOGETHER WITH that portion of vacated Brighton Avenue South of Pacific Avenue pursuant to Ordinance No. 58 recorded
3/3/2008 recorded in Instrument #2008017845.
Air Rights Pacific Avenue, Lot 2.01 Block 30
Parcel 6A.14:
Former Block C-9 Lots 32 and 33 (together Lot 215):
Adamar of New Jersey, Inc., d/b/a Tropicana Casino Resort, a New Jersey Corporation by deed from 20 South Iowa Avenue,
LLC, a New Jersey Limited Liability Company dated September 16, 1999, recorded September 27, 1999 in the Office of the
Clerk/Register of Atlantic County, in Deed Book 6554, Page 75.
TRACT I (Lot 32):
ALL THAT CERTAIN tract, parcel and lot of land lying and being situate in the City of Atlantic City, County of Atlantic, State
of New Jersey, being more particularly described as follows:
BEGINNING in the westerly line of Iowa Avenue, 220 feet southwardly of Atlantic Avenue, and extending THENCE
1. Southwardly along Iowa Avenue, 60 feet; THENCE
2. Westwardly at right angles to Iowa Avenue and parallel with Atlantic Avenue, 60 feet; THENCE
3. Northwardly parallel with Iowa Avenue, 60 feet; THENCE
4. Eastwardly parallel with Atlantic Avenue, 60 feet to the westerly line of Iowa Avenue to the point and place of BEGINNING.
TRACT II (Lot 33):
ALL THAT CERTAIN tract, parcel and lot of land lying and being situate in the City of Atlantic City, County of Atlantic, State
of New Jersey, being more particularly described as follows:
BEGINNING in the westerly line of Iowa Avenue, 210 feet northwardly from Pacific Avenue, and extending THENCE
1. Westwardly parallel with Pacific Avenue, 60 feet; THENCE
2. Northwardly parallel with Iowa Avenue, 60 feet; THENCE
3. Eastwardly parallel with Pacific Avenue, 60 feet to the westerly line of Iowa Avenue, THENCE
4. Southwardly along same, 60 feet to the BEGINNING.
Air Rights Pacific Avenue, Lot 2 Block 177
Parcel 3A:
(Airspace / Walkway over Pacific Avenue and Brighton Avenue):
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ALL THAT CERTAIN Air Space as provided in that certain Ordinance No. 35 of 2001, dated June 6, 2001, and recorded April 5,
2005 in Book 11988 as Instrument #2005035755, and as provided in that certain Ordinance No. 4 of 1985 dated January 23,
1985. Subject to the terms and conditions contained therein, over the following described property;
ALL THAT CERTAIN tract, parcel and lot of land lying and being situate in the City of Atlantic City, County of Atlantic, State
of New Jersey, being more particularly described as follows:
BEGINNING at the intersection of the easterly line of Brighton Avenue (60 feet wide), with the northerly line of Pacific Avenue
(60 feet wide), and extending from said beginning point; THENCE
1. North 62 degrees, 32 minutes, 00 seconds East, in and along the northerly line of Pacific Avenue 35.30 feet to a point;
THENCE
2. South 27 degrees, 28 minutes, 00 seconds East, parallel with Brighton Avenue 60.00 feet to the southerly line of Pacific
Avenue; THENCE
3. South 62 degrees, 32 minutes, 00 seconds West, in and along same 35.50 feet to the easterly line of Brighton Avenue;
THENCE
4. South 27 degrees, 28 minutes, 00 seconds East, in and along same 200.00 feet to a point in the southerly terminus of Brighton
Avenue; THENCE
5. South 62 degrees, 32 minutes, 00 seconds West, in and along same parallel with Pacific Avenue 60.00 feet to the westerly line
of Brighton Avenue; THENCE
6. North 27 degrees, 28 minutes, 00 seconds West, in and along same 200.00 feet to the southerly line of Pacific Avenue;
THENCE
7. South 62 degrees, 32 minutes, 00 seconds West, in and along same 28.40 feet to a point; THENCE
8. North 27 degrees, 28 minutes, 00 seconds West, parallel with Brighton Avenue 60.00 feet to the northerly line of Pacific
Avenue; THENCE
9. North 62 degrees, 32 minutes, 00 seconds East in and along same 28.40 feet to the westerly line of Brighton Avenue; THENCE
10. North 27 degrees, 28 seconds, 00 seconds West, in and along same 250.00 feet to a point; THENCE
11. North 62 degrees, 32 minutes, 00 seconds East, parallel with Pacific Avenue 60.00 feet to the easterly line of Brighton
Avenue; THENCE
12. South 27 degrees 28 minutes, 00 seconds East in and along same 250.00 feet to the point and place of BEGINNING.
Air Rights Brighton Avenue, Lot 15, Block 175
Parcel 3B:
(Airspace / Walkway over Brighton Avenue):
ALL THAT CERTAIN Air Space as provided in that certain Ordinance No. 35 of 2001, dated June 6, 2001 recorded April 5,
2005 in Book 11988 as Instrument #2005035755, Subject to the terms and conditions contained therein, over the following
described property:
ALL THAT CERTAIN tract, parcel and lot of land lying and being situate in the City of Atlantic City, County of Atlantic, State
of New Jersey, being more particularly described as follows:
BEGINNING at a point in the easterly line of Brighton Avenue (60 feet wide), South 27 degrees, 28 minutes, 00 seconds East
231.00 feet from the southerly line of Atlantic Avenue (100 feet wide), and extending from said beginning point; THENCE
1. South 27 degrees, 28 minutes, 00 seconds East, in and along the easterly line of Brighton Avenue 17.00 feet to a point;
THENCE
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2. South 62 degrees, 32 minutes, 00 seconds West, parallel with Atlantic Avenue 60.00 feet to the westerly line of Brighton
Avenue; THENCE
3. North 27 degrees, 28 minutes, 00 seconds West, in and along same 17.00 feet to a point; THENCE
4. North 62 degrees, 32 minutes, 00 seconds East, parallel with Atlantic Avenue 60.00 feet to the point and place of
BEGINNING.
A portion of 2901 Pacific Avenue, Lot 1 (portion of) Block 177
Former Lot 8, Block C-8
ALL THAT CERTAIN lot, tract or parcel of land and premises situate, lying and being in the City of Atlantic City, County of
Atlantic, State of New Jersey, bounded and described as follows:
BEGINNING at a point in the easterly line of Morris Avenue 275 feet northwardly of Pacific Avenue; and extending THENCE
1. Eastwardly, parallel with Pacific Avenue, 125; THENCE
2. Northwardly, parallel with Morris Avenue, 50 feet; THENCE
3. Westwardly, parallel with Pacific Avenue, 125 feet to the easterly line of Morris Avenue; THENCE
4. Southwardly, along same, 50 feet to the place of BEGINNING.
Former Lot 9, Block C-8
ALLTHAT CERTAIN lot, tract or parcel of land and premises situate, lying and being in the City of Atlantic City, County of
Atlantic, State of New Jersey, bounded and described as follows:
BEGINNING at a point in the easterly line of Morris Avenue 225 feet northwardly from Pacific Avenue; and extending THENCE
1. Eastwardly, parallel with Pacific Avenue, 125 feet; THENCE
2. Northwardly, parallel with Morris Avenue, 50 feet; THENCE
3. Westwardly, parallel with Pacific Avenue, 125 feet to the easterly line of Morris Avenue; THENCE
4. Southwardly, along the same, 50 feet to the point and place of BEGINNING.
Former Lot 11, Block C-8
ALL THAT CERTAIN lot, tract or parcel of land and premises situate, lying and being in the City of Atlantic City, County of
Atlantic, State of New Jersey, bounded and described as follows:
BEGINNING in the easterly line of Morris Avenue 125 feet northwardly from the corner formed by the intersection of the
northerly line of Pacific Avenue and the easterly line of Morris Avenue; and extending THENCE
1. Eastwardly, parallel with Pacific Avenue, 125 feet; THENCE
2. Northwardly, parallel with Morris Avenue, 50 feet; THENCE
3. Westwardly, parallel with Pacific Avenue, 125 feet to the easterly line of Morris Avenue; THENCE
4. Southwardly, along the same 50 feet to the place of BEGINNING.
Former Lot 13, Block C-8
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B-5
ALL THAT CERTAIN lot, tract or parcel of land and premises situate, lying and being in the City of Atlantic City, County of
Atlantic, State of New Jersey, bounded and described as follows:
BEGINNING at a point in the westerly line of Brighton Avenue, 275 feet northwardly of Pacific Avenue; and extending
THENCE
1. Westwardly, parallel with Pacific Avenue, 125 feet; THENCE
2. Northwardly, parallel with Brighton Avenue, 50 feet; THENCE
3. Eastwardly, parallel with Pacific Avenue, 125 feet to the westerly line of Brighton Avenue; THENCE
4. Southwardly, along the same, 50 feet to the place of BEGINNING.
Former Lot 10, Block C-8
ALL THAT CERTAIN lot, tract or parcel of land and premises situate, lying and being in the City of Atlantic City, County of
Atlantic, State of New Jersey, bounded and described as follows:
BEGINNING in the easterly line of Morris Avenue 175 feet northwardly of Pacific Avenue; and extending THENCE
1. Eastwardly, parallel with Pacific Avenue 125; THENCE
2. Northwardly, parallel with Morris Avenue 50 feet; THENCE
3. Westwardly, parallel with Pacific Avenue 125 feet to the easterly line of Morris Avenue; THENCE
4. Southwardly, along the easterly line of Morris Avenue 50 feet to the place of BEGINNING.
Former Lot 23, Block C-8
ALL THAT CERTAIN lot, tract or parcel of land and premises situate, lying and being in the City of Atlantic City, County of
Atlantic, State of New Jersey, bounded and described as follows:
TRACT I:
BEGINNING in the westerly line of Brighton Avenue corner to 12 feet wide alley 125 feet South of the South line of Atlantic
Avenue and runs THENCE
1. Westwardly in the southerly line of said 12 feet wide alley, parallel with Atlantic Avenue, 125 feet; THENCE
2. Southwardly parallel with Brighton Avenue and 100 feet; THENCE
3. Eastwardly, and parallel with Atlantic Avenue, 125 feet to the westerly line of Brighton Avenue; THENCE
4. Northwardly, along the westerly line of Brighton Avenue, 100 feet to the place of BEGINNING.
TRACT II:
BEGINNING at a point in the easterly line of Morris Avenue 125 feet southwardly from Atlantic Avenue; and extending
THENCE
1. Eastwardly along the southerly line of a 12 feet wide alley and parallel with Atlantic Avenue 125 feet; THENCE
2. Southwardly parallel with Morris Avenue 50 feet; THENCE
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B-6
3. Westwardly parallel with Atlantic Avenue 125 feet to the easterly line of Morris Avenue; THENCE
4. Northwardly along same 50 feet to the place of BEGINNING.
Former Lot 7, Block C-8
ALL THAT CERTAIN lot, tract or parcel of land and premises situate, lying and being in the City of Atlantic City, County of
Atlantic, State of New Jersey, bounded and described as follows:
BEGINNING in the easterly line of Morris Avenue 175 feet southwardly from Atlantic Avenue; and extending THENCE
1. Eastwardly, parallel with Atlantic Avenue 125 feet; THENCE
2. Southwardly, parallel with Morris Avenue 50 feet; THENCE
3. Westwardly, parallel with Atlantic Avenue, 125 feet to the easterly line of Morris Avenue; THENCE
4. Northwardly, along same, 50 feet to the BEGINNING.
Former Lot 17, Block C-8
ALL THAT CERTAIN lot, tract or parcel of land and premises situate, lying and being in the City of Atlantic City, County of
Atlantic, State of New Jersey, bounded and described as follows:
BEGINNING at the northeasterly corner of Morris and Pacific Avenue; and extending THENCE
1. Eastwardly, along the northerly line of Pacific Avenue, 65 feet; THENCE
2. Northwardly, parallel with Morris Avenue, 125 feet; THENCE
3. Westwardly, parallel with Pacific Avenue, 65 feet to the easterly line of Morris Avenue; THENCE
4. Southwardly, along the easterly line of Morris Avenue, 125 feet to the place of BEGINNING.
Former Lot 16, Block C8
ALL THAT CERTAIN lot, tract or parcel of land and premises situate, lying and being in the City of Atlantic City, County of
Atlantic, State of New Jersey, bounded and described as follows:
BEGINNING in the westerly line of Brighton Avenue, 325 feet southwardly of the southerly line of Atlantic Avenue; and
extending THENCE
1. Westwardly, parallel with Atlantic Avenue, 125 feet; THENCE
2. Southwardly, parallel with Brighton Avenue, 50 feet; THENCE
3. Eastwardly, and parallel with Atlantic Avenue, 125 feet to the westerly line of Brighton Avenue; THENCE
4. Northwardly, along same, 50 feet to BEGINNING.
Former Lot 15, Block C-8
ALL THAT CERTAIN lot, tract or parcel of land and premises situate, lying and being in the City of Atlantic city, County of
Atlantic, State of New Jersey, bounded and described as follows:
BEGINNING at a point in the westerly line of Brighton Avenue, 125 feet northwardly from Pacific Avenue; and extending
THENCE
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B-7
1. Westwardly, parallel with Pacific Avenue, 125 feet; THENCE
2. Northwardly, parallel with Brighton Avenue, 50 feet; THENCE
3. Eastwardly, parallel with Pacific Avenue, 125 feet to the westerly line of Brighton Avenue; THENCE
4. Southwardly, along the same, 50 feet to the point and place of BEGINNING.
Together with the nonexclusive beneficial easement rights as set forth in Easement Agreement between B and B Limited
Partnership and Barbun Corporation, dated September 18, 1985 and recorded September 20, 1985 and recorded September 20,
1985 in Deed Book 4126, page 150 in and to the following described land:
ALL THAT CERTAIN tract, parcel and lot of land lying and being situate in the City of Atlantic City, County of Atlantic, State
of New Jersey, being more particularly described as follows:
BEGINNING at a point in the easterly line of Morris Avenue (60.00 feet wide) said point being distant 150.85 feet North of the
northerly line of Pacific Avenue (60.00 feet wide); and extending THENCE
1. North 62 degrees 32 minutes 00 seconds East, in and along the existing parking garage structure and parallel with Pacific
Avenue, a distance of 118.50 feet; THENCE
2. North 27 degrees 28 minutes 00 seconds West, in and along the existing parking garage structure, and parallel with Morris
Avenue, a distance of 131.70 feet; THENCE
3. North 62 degrees 32 minutes 00 seconds East, in and along the existing parking garage structure, and parallel with Pacific
Avenue, a distance of 28.00 feet; THENCE
4. North 27 degrees 28 minutes 00 seconds West, in and along the existing parking garage structure, and parallel with Morris
Avenue, a distance of 19.75 feet; THENCE
5. North 62 degrees 32 minutes 00 seconds East, in and along the existing parking garage structure, and parallel with Pacific
Avenue, a distance of 103.50 feet to the westerly line of Brighton Avenue; THENCE
6. North 27 degrees 28 minutes 00 seconds West, in and along the westerly line of Brighton Avenue, a distance of 122.70 feet to
the southerly line of a 12.00 foot wide alley; THENCE
7. South 62 degrees 32 minutes 00 seconds West, in and along the southerly line of said 12.00 foot wide alley, a distance of
250.00 feet to the easterly line of Morris Avenue; THENCE
8. South 27 degrees 28 minutes 00 seconds East, in and along the easterly line of Morris Avenue, a distance of 274.15 feet to the
point and place of BEGINNING.
EASEMENT interest as more particularly set forth in agreement of easements, covenants and restrictions for Transportation
Center and hotel by and between B and B Limited Partnership and Adamar of New Jersey, Inc., dated September 18, 1985 and
recorded September 20, 1985 in Deed Book 4126, Page 67, in and to the following described land:
ALL THAT CERTAIN lot, tract or parcel of real property and premises situate, lying between 119 feet 6 inches above mean sea
level datum and 400 feet, above mean sea Level Datum, and being in the City of Atlantic City, County of Atlantic, State of New
Jersey, being more particularly described as follows:
BEGINNING at the northwesterly corner of Pacific Avenue (60 feet wide) and Brighton Avenue (60.00 feet wide); and extending
THENCE
1. South 62 degrees 32 minutes 00 seconds west, in and along the northerly line of Pacific Avenue, a distance of 250.00 feet to
the easterly line of Morris Avenue; THENCE
2. North 27 degrees 28 minutes 00 seconds West, in and along the easterly line of Morris Avenue, a distance of 150.85 feet to the
existing parking garage structure; THENCE
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B-8
3. North 62 degrees 32 minutes 00 seconds East, in and along the existing parking garage structure, a distance of 118.50 feet;
THENCE
4. North 27 degrees 28 minutes 00 seconds West, in and along the existing Parking Garage Structure, a distance of 131.70 feet;
THENCE
5. North 62 degrees 32 minutes 00 seconds East, and along the existing parking structure, a distance of 28.00 feet; THENCE
6. North 27 degrees 28 minutes 00 seconds West, in and along the existing parking garage structure, a distance of 19.75 feet;
THENCE
7. North 62 degrees 32 minutes 00 seconds East, in and along the existing parking garage structure, a distance of 103.50 feet to
the westerly line of Brighton Avenue; THENCE
8. South 27 degrees 28 minutes 00 seconds East, in and along the westerly line of Brighton Avenue, a distance of 302.30 feet to
the point and place of BEGINNING.
A portion of 2801 Pacific Avenue, Lot 3 (portion of) Block 175
Former Block C-9 Lot 7
ALL THAT CERTAIN tract, parcel and lot of land lying and being situate in the City of Atlantic City, County of Atlantic, State
of New Jersey, being more particularly described as follows:
BEGINNING at a point in the easterly line of Brighton Avenue, 175 feet northwardly of Pacific Avenue; and extending THENCE
1. Eastwardly parallel with Pacific Avenue, 125 feet; THENCE
2. Northwardly parallel with Brighton Avenue, 50 feet; THENCE
3. Westwardly parallel with Pacific Avenue, 125 feet to the easterly line of Brighton Avenue; THENCE
4. Southwardly along the easterly line of Brighton Avenue, 50 feet to the place of BEGINNING.
BEING further described as follows:
ALL THAT CERTAIN tract, parcel and lot of land lying and being situate in the City of Atlantic City, County of Atlantic, State
of New Jersey, being more particularly described as follows:
BEGINNING at a point in the East line of Brighton Avenue (60 feet wide), said point being 175.00 feet North of the North line of
Pacific Avenue (60 feet wide) and extending; THENCE
1. North 27 degrees 28 minutes 00 seconds West, in and along the East line of Brighton Avenue, a distance of 50.00 feet to a
point; THENCE
2. North 62 degrees 32 minutes 00 seconds East, parallel with Pacific Avenue, a distance of 125.00 feet to a point; THENCE
3. South 27 degrees 28 minutes 00 seconds East, parallel with Brighton Avenue, a distance of 50.00 feet to a point; THENCE
4. South 62 degrees 32 minutes 00 seconds West, parallel with Pacific Avenue, a distance of 125.00 feet to the point and place of
BEGINNING.
Parcel 6C.1
Former Lot 13, Block C - 9:
BEGINNING at a point in the westerly line of Stenton Place distant 100 feet southwardly of the southerly line of Atlantic
Avenue; THENCE
1. Westwardly parallel with Atlantic Avenue, 54 feet; THENCE
2. Southwardly parallel with Stenton Place, 60 feet; THENCE
3. Eastwardly parallel with Atlantic Avenue, 54 to the westerly line of Stenton Place; THENCE
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B-9
4. Northwardly along said line of Stenton Place 60 feet to the place of BEGINNING.
Parcel 6C.2
Former Lot 14, Block C - 9:
BEGINNING at a point in the westerly line of Stenton Place, distant one hundred and sixty feet southwardly from the southerly
line of Atlantic Avenue, and runs THENCE
1. Southwardly, along and in the said westerly line of Stenton Place, sixty feet; THENCE
2. Westwardly, parallel with Atlantic Avenue, fifty-four feet; THENCE
3. Northwardly, parallel with Stenton Place, sixty feet; THENCE
4. Eastwardly, parallel with Atlantic Avenue fifty-four feet to the place of BEGINNING.
Parcel 6C.3
Former Lot 17, Block C - 9:
BEGINNING at a point in the westerly line of Stenton Place (50 feet wide), distant 150 feet North of the northerly line of Pacific
Avenue (60 feet wide), when measured in and along the aforesaid westerly line of Stenton Place, and extending from said
beginning point; THENCE
1. South 62 degrees 32 minutes 00 seconds West, parallel with Pacific Avenue, a distance of 54 feet to a point; THENCE
2. North 27 degrees 28 minutes 00 seconds West, parallel with Stenton Place, a distance of 60 feet to a point; THENCE
3. North 62 degrees 32 minutes 00 seconds East, parallel with Pacific Avenue, a distance of 54 feet to a point in the aforesaid
westerly line of Stenton Place; THENCE
4. South 27 degrees 28 minutes 00 seconds East, in and along the westerly line of Stenton Place, a distance of 60 feet to the point
and place of BEGINNING.
Parcel 6C.4
Former Lot 18, Block C - 9:
BEGINNING at a point in the westerly line of Stenton Place 400 feet southwardly of the southerly line of Atlantic Avenue;
THENCE
1. Southwardly along said westerly line of Stenton Place 60 feet; THENCE
2. Westwardly parallel with Atlantic Avenue, 54 feet; THENCE
3. Northwardly parallel with Stenton Place, 60 feet; THENCE
4. Eastwardly parallel with Atlantic Avenue, 54 feet to point and place of BEGINNING.
Parcel 6C.5
Former Lot 26, Block C - 9:
BEGINNING at a point in the easterly line of Stenton Place, distance 280 feet South from the southerly line of Atlantic Avenue;
1. Eastwardly parallel with Atlantic Avenue, 60 feet; THENCE
2. Southwardly parallel with Stenton Place, 60 feet; THENCE
3. Westwardly parallel with Atlantic Avenue, 60 feet to the easterly line of Stenton Place; THENCE
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B-10
4. Northwardly along said easterly line of Stenton Place, 60 feet to the place of BEGINNING.
FORMER bed of the vacated portion of Stenton Place being the southerly 450 feet of Stenton Place vacated by Ordinance No. 14
recorded 08/26/1998 in Vacation Book 19 Page 179:
BEGINNING at the intersection of the northerly line of Pacific Avenue (60 feet wide), with the easterly line of Stenton Place (50
feet wide), and extending from said beginning point; THENCE
1. South 62 degrees, 32 minutes 00 seconds West in and along the northerly line of Pacific Avenue, 50.00 feet to the westerly line
of Stenton Place; THENCE
2. North 27 degrees 28 minutes 00 seconds West in and along the westerly line of Stenton Place, 450.00 feet to a point being the
Southeast corner of Lot 41 in Block C-9, said point being 100.00 feet South of the South line of Atlantic Avenue (100 feet wide);
THENCE
3. North 62 degrees 32 minutes 00 seconds East, crossing Stenton Place, 50.00 feet to the easterly line of Stenton Place, said
point being the southwesterly corner of Lot 21 in Block C-9; THENCE
4. South 27 degrees 28 minutes 00 seconds East in and along the easterly line of Stenton Place, 450.00 feet to the point and place
of BEGINNING.
2901 Boardwalk, Lot 1 Block 30
Parcel 2:
Expansion Site Parcel:
ALL THAT CERTAIN tract, parcel and lot of land lying and being situate in the City of Atlantic City, County of Atlantic, State
of New Jersey, being more particularly described as follows:
BEGINNING at the southwesterly corner of Pacific Avenue (60.00 feet wide) and Brighton Avenue (60.00 feet wide); and
extending THENCE
1. South 27 degrees 28 minutes 00 seconds East, in and along the westerly line of Brighton Avenue, a distance of 483.10 feet to a
point in the inland line of Public Park; THENCE
2. South 65 degrees 59 minutes 35 seconds West, in and along said inland line, a distance of 250.46 feet to a point in the easterly
line of Morris Avenue (60.00 feet wide); THENCE
3. North 27 degrees 28 minutes 00 seconds West, in and along said easterly line, a distance of 467.98 feet to a point in the
southerly line of Pacific Avenue; THENCE
4. North 62 degrees 32 minutes 00 seconds East, in and along said southerly line, a distance of 250.00 feet to the point and place
of BEGINNING.
TOGETHER WITH:
ALL that portion of the southwesterly half of Brighton Avenue (60.00 feet wide) now vacated, situate, lying and being the City of
Atlantic City, County of Atlantic and State of New Jersey, the entire vacated portion being bounded and described as follows:
BEGINNING at a point in the easterly line of Brighton Avenue (60.00 feet wide) being distant 200.00 feet South of the southerly
line of Pacific Avenue (60.00 feet wide); and extending THENCE
1. South 27 degrees 28 minutes 00 seconds East, in and along the easterly line of Brighton Avenue, 286.72 feet to the inland or
interior line of Public Park; THENCE
2. South 65 degrees 59 minutes 35 seconds West, in and along the inland or interior line of Public Park, 60.11 feet to the westerly
line of Brighton Avenue; THENCE
3. North 27 degrees 28 minutes 00 seconds West, in and along the westerly line of Brighton Avenue, 283.10 feet; THENCE
4. North 62 degrees 32 minutes 00 seconds East, parallel with Pacific Avenue and crossing Brighton Avenue, 60.00 feet to the
point and place of BEGINNING.
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B-11
4800 Wellington Avenue, Lot 1 Block 303
Parcel 7 (Ventnor City Property)
REAL property in the City of Ventnor, County of Atlantic, State of New Jersey, described as follows:
ALL THAT CERTAIN lot, parcel or tract of land, situate and lying in the City of Ventnor, County of Atlantic and State of New
Jersey being more particularly described as follows:
BEGINNING at a point in the southerly line of West End Avenue where the same is intersected by the Municipal boundary line
between Ventnor City and Atlantic City; and extending THENCE
1. Southwardly in and along said Municipal boundary at right angles to West End Avenue and parallel with Jackson Avenue 570
feet to a point in the northerly line of a proposed extension of Fulton Avenue; THENCE
2. Westwardly in and along the northerly line of said proposed extension of Fulton Avenue and parallel with West end Avenue
74.40 feet to an angle point; THENCE
3. Continuing westwardly in the northerly line of said proposed extension of Fulton Avenue 226.57 feet; THENCE
4. Northwardly at right angles to West End Avenue and parallel with Jackson Avenue 549.05 feet to the southerly line of West
End Avenue; THENCE
5. Eastwardly in and along the southerly line of West End Avenue 300 feet to BEGINNING.
A portion of 2901 Pacific Avenue, Lot 1 (portion of) Block 177
Portion of Parcel 5:
(Portion of the Transportation Center)
Tract 1
BEGINNING at a point is the northerly line of Pacific Avenue 65 feet eastwardly of Morris Avenue; and extending THENCE
1. Northwardly parallel with Morris Avenue 125 feet; THENCE
2. Eastwardly parallel with Pacific Avenue 60 feet; THENCE
3. Southwardly parallel with Morris Avenue 125 feet to the northerly line of Pacific Avenue; THENCE
4. Westwardly along same 60 feet to the place of BEGINNING.
Tract 2
BEGINNING at a point in the northerly line of Pacific Avenue 65 feet westwardly of Brighton Avenue; and extending THENCE
1. Northwardly parallel with Brighton Avenue 125 feet, THENCE
2. Westwardly parallel with pacific avenue 60 feet; THENCE
3. Southwardly parallel with Brighton Avenue 125 feet to Pacific Avenue; THENCE
4. Eastwardly by same, 60 feet to BEGINNING.
Tract 3
BEGINNING at the northwesterly corner of Brighton and Pacific Avenues; and extending THENCE
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B-12
1. Westwardly along the northerly line of Pacific Avenue 65 feet, THENCE
2. Northwardly parallel with Brighton Avenue 125 feet; THENCE
3. Eastwardly parallel with Pacific Avenue 65 feet to westerly line of Brighton Avenue; THENCE
4. Southwardly in and along same 125 feet to BEGINNING.
ABOVE three tracts comprise former Lots 18, 21 and 22 in Block C-8
Tract 4
ALL THAT CERTAIN lot, tract or parcel of land and premises situate lying end being in the City of Atlantic City, County of
Atlantic and State of New Jersey, bounded and described as follows:
BEGINNING at a point in the westerly line of Brighton Avenue at the distance of 225 feet northwardly from the northerly line of
Pacific Avenue and extending THENCE
1. Westwardly parallel with Pacific Avenue 125 feet; THENCE
2. Northwardly parallel with Brighton Avenue 50 feet; THENCE
3. Eastwardly parallel with Pacific Avenue 125 feet to the westerly line of Brighton Avenue; THENCE
4. Southwardly along the westerly line of Brighton Avenue 50 feet to the place of BEGINNING.
BEING former Lot 14 in Block C-8
Together with the nonexclusive beneficial easement rights as set forth in agreement of easements, covenants and restrictions for
Transportation Center and Hotel, by and between B and B Limited Partnership and Adamar of New Jersey, Inc. dated September
18, 1985 and recorded September 20, 1985 in Deed Book 4126 Page 67, in and to the following described land:
ALL THAT CERTAIN lot, tract or parcel of real property and premises situate, lying between 119 feet 6 inches above mean sea
level datum and 400 feet above mean sea level datum, and being in the City of Atlantic city, County of Atlantic, State of New
Jersey, being more particularly described as follows:
BEGINNING at the northwesterly corner of Pacific Avenue (60.00 feet wide) and Brighton Avenue (60.00 feet wide) and
extending; THENCE
1. South 62 degrees 32 minutes 00 seconds West, in and along the northerly line of Pacific Avenue, a distance of 250.00 feet to
the easterly line of Morris Avenue; THENCE
2. North 27 degrees 28 minutes 00 seconds West, in and along the easterly line of Morris Avenue, a distance of 150.85 feet to the
existing parking garage structure; THENCE
3. North 62 degrees 32 minutes 00 seconds East, in and along the existing parking garage structure, a distance of 118.50 feet;
THENCE
4. North 27 degrees 28 minutes 00 seconds West, in and along the existing parking garage structure, a distance of 131.70 feet;
THENCE
5. North 62 degrees 32 minutes 00 seconds East, in and along the existing parking garage structure, a distance of 28.00 feet;
THENCE
6. North 27 degrees 28 minutes 00 seconds West, in and along the existing parking garage structure, a distance of 19.75 feet;
THENCE
7. North 62 degrees 32 minutes 00 seconds East, in and along the existing parking garage structure, a distance of 103.50 feet to
the westerly line of Brighton Avenue; THENCE
8. South 27 degrees 28 minutes 00 seconds East, in and along the westerly line of Brighton Avenue, a distance of 302.30 feet to
the point and place of BEGINNING.
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B-13
EXCEPTING from the foregoing property the fee and leasehold estate as evidenced by short form of Hotel Air Space parcel lease
sublease and sub-sublease agreement between Adamar of New Jersey, Inc. and Atlantic-Deauville, Inc., dated September 18,
1985 and recorded September 20, 1985 in Deed Book 4126 Page 59 in the Atlantic County Clerk’s Office, bounded and
described as follows:
ALL THAT CERTAIN lot, tract or parcel of real property and premises situate, lying between 119 feet 6 inches above mean sea
level datum and 400 feet above mean sea level datum, and being in the City of Atlantic City, County of Atlantic, State of New
Jersey, being more particularly described as follows:
BEGINNING at the northwesterly corner of Pacific Avenue (60.00 feet wide) and Brighton Avenue (60.00 feet wide); and
extending THENCE
1. South 62 degrees 32 minutes 00 seconds West, in and along the northerly line of Pacific Avenue, a distance of 250.00 feet to
the easterly line of Morris Avenue; THENCE
2. North 27 degrees 28 minutes 00 seconds West, in and along the easterly line of Morris Avenue, a distance of 150.85 feet to the
existing parking garage structure; THENCE
3. North 62 degrees 32 minutes 00 seconds East, in and along the existing parking garage structure, a distance of 118.50 feet;
THENCE
4. North 27 degrees 28 minutes 00 seconds West, in and along the existing parking garage structure, a distance of 131.70 feet;
THENCE
5. North 62 degrees 32 minutes 00 seconds East, in and along the existing parking garage structure, a distance of 28.00 feet;
THENCE
6. North 27 degrees 28 minutes 00 seconds West, in and along the existing parking garage structure, a distance of 19.75 feet;
THENCE
7. North 62 degrees 32 minutes 00 seconds East, in and along the existing parking garage structure, a distance of 103.50 feet to
the westerly line of Brighton Avenue; THENCE
8. South 27 degrees 28 minutes 00 seconds East, in and along the westerly line of Brighton Avenue, a distance of 302.30 feet to
the point and place of BEGINNING.
ALSO excepting from the foregoing an appurtenant undivided 5/7ths interest in the, fee and leasehold in all that certain lot, tract
of parcel of land and premises situate, lying and being in the City of Atlantic City, County of Atlantic, and State of New Jersey;
bounded and described as follows:
BEGINNING at the northwesterly corner of Pacific Avenue (60.00 feet wide) and Brighton Avenue (60.00 feet wide); and
extending THENCE
1. South 62 degrees 32 minutes 00 seconds West, in and along the northerly line of Pacific Avenue, a distance of 250.00 feet to
the easterly line of Morris Avenue; THENCE
2. North 27 degrees 28 minutes 00 seconds West, in and along the easterly line of Morris Avenue, a distance of 150.85 feet to the
existing parking garage structure; THENCE
3. North 62 degrees 32 minutes 00 seconds East, in and along the existing parking garage structure, a distance of 118.50 feet;
THENCE
4. North 27 degrees 28 minutes 00 seconds West, in and along the existing parking garage structure, a distance of 131.70 feet;
THENCE
5. North 62 degrees 32 minutes 00 seconds East, in and along the existing parking garage structure, a distance of 28.00 feet;
THENCE
6. North 27 degrees 28 minutes 00 seconds West, in and along the existing parking garage structure, a distance of 19.75 feet;
THENCE
7. North 62 degrees 32 minutes 00 seconds East, in and along the existing parking garage structure, a distance of 103.50 feet to
the westerly line of Brighton Avenue; THENCE
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B-14
8. South 27 degrees 28 minutes 00 seconds East, in and along the westerly line of Brighton Avenue, a distance of 302.30 feet to
the point and place of BEGINNING.
A portion of 2801 Pacific Avenue, Lot 3 (portion of) Block 175
Parcel 6B.1
Former Lots 27 & 34, Block C - 9:
Tract 1 (Lot 27):
BEGINNING at a point in the easterly line of Stenton Place, distant 340 feet Southwardly from the southerly line of Atlantic
Avenue and extending THENCE,
1. Eastwardly, parallel with Atlantic Avenue, 60 feet; THENCE
2. Southwardly, parallel with Stenton Place, 60 feet; THENCE
3. Westwardly, parallel with Atlantic Avenue, 60 feet to the said easterly line of Stenton Place; THENCE
4. Northwardly, along said easterly line of Stenton Place, 60 feet to the point and place of BEGINNING.
Tract 2 (Lot 34):
BEGINNING in the westerly line of Iowa Avenue, 150 feet northwardly of Pacific Avenue; and extending THENCE
1. Westwardly parallel with Pacific Avenue 60 feet; THENCE
2. Northwardly parallel with Iowa Avenue 60 feet; THENCE
3. Eastwardly parallel with Pacific Avenue, 60 feet to the westerly line of Iowa Avenue; THENCE
4. Southwardly along the same, 60 feet to the place of BEGINNING.
Parcel 6B.2
Former Lots 28, 29, 35 & 36 (now combined as lot 42) in Block C - 9:
Tract 1:
BEGINNING at a point in the easterly line of Stenton Place, 90 feet northwardly from the northerly line of Pacific Avenue; and
extending THENCE
1. Eastwardly, parallel with Pacific Avenue, 60 feet; THENCE
2. Northwardly, parallel with Stenton Place, 60 feet; THENCE
3. Westwardly, parallel with Pacific Avenue, 60 feet to the easterly line of Stenton Place, THENCE
4. Southwardly along the same, 60 feet to the point and place of BEGINNING.
Tract 2:
BEGINNING at the northeasterly corner of Pacific Avenue and Stenton Place, and extending THENCE
1. Northwardly along the easterly line of Stenton Place, 90 feet; THENCE
2. Eastwardly, parallel with Pacific Avenue, 60 feet; THENCE
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B-15
3. Southwardly, parallel with Stenton Place, 90 feet to the northerly line of Pacific Avenue; THENCE
4. Westwardly, along the same, 60 feet to the point and place of BEGINNING.
Tract 3:
BEGINNING at the northwesterly corner of Iowa Avenue and Pacific Avenue; and extending THENCE;
1. Westwardly, along the northerly line of Pacific Avenue, 60 feet;
2. Northwardly, parallel with Iowa Avenue, 90 feet; THENCE
3. Eastwardly, parallel with Pacific Avenue, 60 feet to the westerly line of Iowa Avenue; THENCE
4. Southwardly, along the same, 90 feet to the point and place of BEGINNING.
Tract 4:
BEGINNING in the westerly line of Iowa Avenue, 400 feet southwardly from the southerly line of Atlantic Avenue; and
extending THENCE
1. Westwardly parallel with Atlantic Avenue, 60 feet; THENCE
2. Southwardly, parallel with Iowa Avenue, 60 feet; THENCE
3. Eastwardly parallel with Atlantic Avenue 60 feet to the westerly line of Iowa Avenue; THENCE
4. Northwardly along the said westerly line of Iowa Avenue, 60 feet to the place of BEGINNING.
Tropicana Greenville
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE COUNTY OF WASHINGTON, STATE OF MISSISSIPPI, AND IS
DESCRIBED AS FOLLOWS:
PARCEL 1
(Leasehold – Lighthouse)
Commencing at Station 213 + 65.16 of the Bank Protection Work Base Line; thence South 42 degrees 06 minutes 10 seconds East 15.26 feet to an iron pipe
and the Point of Beginning of the tract herein described; thence South 33 degrees 06 minutes 34 seconds West 434.39 feet; thence South 44 degrees 27
minutes 49 seconds West 143.39 feet to an iron pipe; thence South 58 degrees 28 minutes 46 seconds West 26.29 feet to an iron pipe; thence North 42
degrees 06 minutes 10 seconds West 126.60 feet to an iron pipe on the high bank of Lake Ferguson; thence continuing North 42 degrees 06 minutes 10
seconds West 147 feet to the mean low water mark of Lake Ferguson; thence meandering said low water mark the following three calls: North 26 degrees
57 minutes 24 seconds East 630.66 feet; North 33 degrees 06 minutes 34 seconds East 60.00 feet; North 37 degrees 34 minutes East 187.63 feet; thence
South 42 degrees 06 minutes 10 seconds East 147 feet to an iron pipe on the high bank of Lake Ferguson; thence continuing South 42 degrees 06 minutes
10 seconds East 222.30 feet; thence South 33 degrees 06 minutes 34 seconds West 250.90 feet to the Point of Beginning, and being located in Section 4,
Township 18 North Range 8 West, Washington County, Mississippi.
PARCEL 3
(Fee Simple - Former Alpha Gulf Coast, Inc. Property)
Parcel 3.1 (Cunningham Property)
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B-16
The West 57.25 feet of the East 231 feet of the North 100 feet of Lot 2 and the East 1/2 of Lots 3 and 4 of the Second Addition to the City of Greenville,
Washington County, Mississippi.
Parcel 3.2 (Cunningham Property)
Beginning at the southwest corner of Lot 1 of the Second Addition to the City of Greenville, Washington County, Mississippi; thence along the West line of
Lots 1 through 9 of said addition, N 33°40'29" E 1188.76 feet to the South line of Nelson Street; thence S 56°19'31" E 129.60 feet along the South Right-
of-Way of Nelson Street to the East Right-of-Way of the Mississippi River Levee; thence S 33°40'29" W 119.5 feet along said levee right-of-way; thence
leaving said levee right-of-way line, S 33°40'29" W 80.5 feet; thence S 56°19'31" E 101.4 feet to the East Right-of-Way of said levee; thence S 33°40' 29"
W 824.76 feet along said levee right-of-way and the East line of the West half of a portion of Lots 2 and 9 and the East line of the West half of Lots 3
through 8; thence N 56°19'31" W 60.0 feet along said levee right-of-way; thence S 33°40'29" W 64.0 feet along said levee right-of way; thence N
56°19'31" W 46.5 feet along said right-of-way; thence S 33°40'29" W 100.0 feet along said levee right-of-way to the North right-of-Way line of Alexander
Street; thence N 56°19'31" W 124.5 feet to the point of beginning, containing 5.51 acres, more or less, in the Second Addition to the City of Greenville.
PARCEL 4
(Fee Simple – Former Casino Gaming International, Limited and Former Greenville Casino Partners, L.P. Property)
Parcel 4.1 (City Park Tract - Quitclaim Deed in Book 1814 at Page 514)
Commencing at a point on the West boundary of Poplar Street, Greenville, Washington County, Mississippi, said point being marked by an iron pipe
located two feet Southerly on said boundary from the Northeast corner of Lot Two, Block One, Huntington Addition to said city; thence Westerly 75 feet at
a right angle to Poplar Street along a fence marking the Northerly boundary line of that property conveyed by Deed recorded in Deed Book 180 at Page 326
of said county land records to the point of beginning; thence along the projection of the last said boundary line 25 feet to a point; thence Northerly parallel
with Poplar Street to a point located 100 feet Southerly from the South boundary of Central Avenue; thence Westerly parallel with Central Avenue 40 feet;
thence Northerly parallel with Poplar Street to a point on the South boundary of Central Avenue; thence Westerly along the South boundary of Central
Avenue to a concrete marker and iron pipe in the roadbed of Short Poplar Street, a way dedicated by more than forty years' public use at the date of this
instrument, said markers designating the Northwest corner of Lot 3, Block 11, Bachelor Bend Addition to said City; thence Southerly parallel with Poplar
Street along the roadbed of said Short Poplar Street to a concrete marker designating the Southwest corner of said Lot 3, Block 11, Bachelor Bend
Addition; thence along the North boundary of Lot 1, Block 1, Huntington Addition to a point marking the Northeast corner of that property conveyed at
Deed Book 180, Page 423, said County land records; thence Southerly along the Easterly boundary of the last said property 58 feet to the South boundary
of Lot 1, Block 1, Huntington Addition; thence along the last said lot boundary to a point located in a chain link fence lying Westerly 152.5 feet from the
Southeast corner of Lot 1, Block 1, Huntington Addition, said last described point being more fully described as the Northeast corner of that property
described at Deed Book 912, Page 576, said County land records; thence Southwesterly along said chain link fence to a point on the South boundary of the
North 31 feet of Lot 2, Block 1, Huntington Addition; thence along the last said boundary Easterly to a point at the Southwest corner of that property
described at Deed Book 180, Page 326; thence Northerly 29 feet along a line parallel with Poplar Street, said line being the West boundary of the property
in the last deed book references, to the point of beginning.
Parcel 4.2 (McCourt Tract - Warranty Deed in Book 1814 at Page 556 and Quitclaim Deed in Book 1814 at Page 554)
All of Lots 1 and 2 in Block 10 of the Bachelor Bend Addition to the City of Greenville, Mississippi, according to a plat thereof in Deed Book T, Page 169,
land records of Washington County, Mississippi and the South 15 feet of Lot 16, Reserve Addition to the City of Greenville.
Parcel 4.3. (Former Carol Brent Tract- Warranty Deed recorded in Book 1814 at Page 99)
Commencing at the southeast corner of Lot 20 of the Reserve Addition to the City of Greenville, Washington County, Mississippi, being also the point of
intersection of the southerly boundary line of said Lot 20, with the westerly boundary line of Poplar Street; thence Northerly, along the western boundary of
Poplar Street, 113.25 feet to the POINT OF BEGINNING of the parcel herein conveyed; continuing thence Northerly, along the said westerly boundary
line of Poplar Street, 43.25 feet; thence westerly, along the line perpendicular to the westerly boundary line of Poplar Street, 214.50 feet to the centerline of
Lot 18 of the said Reserve Addition; thence southerly, parallel with the westerly boundary of Poplar Street, along the centerline of Lot 18, 43.25 feet;
thence easterly, along a line perpendicular to the westerly boundary of Poplar Street, 214.50 feet to the POINT OF BEGINNING; BEING PARTS OF Lots
18, 19 and 20 of the Reserve Addition,
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B-17
LESS AND EXCEPT the following described parcels:
TRACT I. - Commencing at the southeast corner of Lot 20 of the Reserve Addition to the City of Greenville, being also the point of intersection of the
southerly boundary line of said Lot 20 with the westerly boundary line of Poplar Street; thence Northerly, along the westerly boundary of Poplar Street,
156.50 feet; thence westerly, along the line perpendicular to the westerly boundary of Poplar Street, 189.50 feet to the POINT OF BEGINNING of the
parcel hereby conveyed, thence continuing westerly, along said perpendicular line, 20.00 feet; thence southerly, along a line parallel with the North-South
centerline of Lot 18, 43.25 feet; thence easterly, along a line perpendicular to the westerly edge of Poplar Street, 20.00 feet; thence Northerly, on a line
parallel with the North-South centerline of Lot 18, 43.25 feet to the POINT OF BEGINNING, being a strip of land 20.00 feet wide and 43.25 feet long in
the East half of the South half of Lot 18, Reserve Addition to the City of Greenville, Washington County, Mississippi, and
Tract II -The west 5.00 feet of the East half of the North 43.25 feet of the South 156.50 feet of Lot 18, Reserve Addition to the City of Greenville,
Washington County, Mississippi, which land is currently held and owned by the Mississippi National Guard Armory in Greenville, in accordance with and
by virtue of three affidavits of adverse possession on file in Book 676 at Page 357, Book 676 at Page 363, Book 676 at Page 366, of the Chancery Clerk's
records in Washington County, Mississippi.
Parcel 4.4 (Former 241 Main Company Tracts- 4.4.1 through 4.4.5 below, LESS AND EXCEPT "Green Building" tract described below)
Parcel 4.4.1
The South 70 feet of Lots 19 and 20 and the East 49 1/2 feet of the South 70 feet of Lot 18 of the Reserve Addition to the City of Greenville, Washington
County, Mississippi.
Parcel 4.4.2
Commencing at the southeast corner of Lot 20 of the Reserve Addition to the said City of Greenville, being also the point of intersection of the southerly
boundary of said Lot 20 with the westerly boundary of Poplar Street; thence Northerly, along the westerly boundary of Poplar Street, 70 feet to the point of
beginning of the parcel hereby conveyed; continuing thence Northerly along the said westerly boundary of Poplar Street, 43.25 feet; thence westerly, along
a line perpendicular to the westerly boundary of Poplar Street, 214.50 feet to the center line of Lot 18 of said Reserve Addition; thence Southerly, parallel
with the westerly boundary of Poplar Street and along the center line of said Lot 18, 43.25 feet; thence easterly, along a line perpendicular to the westerly
boundary of Poplar Street, 214.50 feet to the point of beginning of the parcel hereby conveyed, being parts of Lots 18, 19 and 20 of the Reserve Addition to
the City of Greenville.
Parcel 4.4.3
Commencing at the Southeast corner of Lot 20 of the Reserve Addition to the City of Greenville, being also the point of intersection of the southerly
boundary line of said Lot 20 with the westerly boundary of Poplar Street; thence Northerly along the westerly boundary of Poplar Street 156.50 feet; thence
westerly along the line perpendicular to the westerly boundary of Poplar Street, 189.50 feet, to the point of beginning of the parcel hereby conveyed; thence
continuing westerly along said perpendicular line 20 feet; thence southerly along a line parallel to the North-South centerline of Lot 18, 43.25 feet; thence
easterly along a line perpendicular to the westerly edge of Poplar Street 20 feet; thence Northerly on a line parallel to the North-South centerline of Lot 18,
43.25 feet to the point of beginning, being a strip of land 20 feet wide and 43.25 feet long in the East half of the South half of Lot 18, Reserve Addition to
the City of Greenville, Mississippi.
Parcel 4.4.4
The West five feet of the East half of the North 43.25 feet of the South 156.50 feet of Lot 18, Reserve Addition to the City of Greenville, Washington
County, Mississippi, which land is currently held and owned by the Mississippi National Guard Armory in Greenville, in accordance with and by virtue of
three affidavits of adverse possession on file in Book 676, Page 357, Book 676, Page 363, and Book 676, Page 366 of the Chancery Clerk's records in
Washington County, Mississippi
Parcel 4.4.5
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B-18
The West 13.5 feet of the East half of the North 11.50 feet of the South 165 feet of Lot 18, Reserve Addition to the City of Greenville, the current legal
owner of which tract is currently unknown and which property is not assessed for taxes to anyone either by the City of Greenville or by Washington
County, Mississippi.
LESS AND EXCEPT, HOWEVER, FROM SAID PARCELS 4.4.1 THROUGH 4.4.5 INCLUSIVE, that certain property and structure located on the above
described tract known as the "Green Building", and being a parcel of approximately 43 feet by 54 feet which is located on the western side of the property
herein conveyed, whether herein described accurately or not, title to which is expressly reserved to grantors, together with reasonable access thereto via the
parking lot construction on the tract herein described.
Parcel 4.5 (Former Lane Henderson Tract- Deeds recorded in Book 1814 at Page 152 and Book 1814 at Page 517)
The North 76 feet of Lot 3, Block 10, Bachelor Bend Addition to the City of Greenville, Mississippi, according to a plat thereof in Deed Book T, Page 169
of the land records of Washington County, Mississippi.
Parcel 4.6 (Former C & G Property, Warranty Deed in Book 1855, Page 275)
Parcel 4.6.1
The North 210.50 feet of the West 77 feet of Lot 2, Block 11, Bachelor Bend Addition to the City of Greenville, Washington County, Mississippi.
Parcel 4.6.2
Parts of Lots 1 and 2 of Block 1 of the HUNTINGTON ADDITION to the City of Greenville, Washington County, Mississippi; 335 Rear South Poplar
Street, Lot Size 89 X 78 X 1R
Parcel 4.6.3
The West 34 feet of Lot 1 and the West 34 feet of the North 31 feet of Lot 2, Block 1 of the Huntington Addition to the City of Greenville, Washington
County, Mississippi; Lot Size 34 X 89.
Parcel 4.6.4
The East 46 feet of the West 87 feet of the North 140 feet of Lot 2, Block 9, Bachelor Bend Addition, City of Greenville, Washington County, Mississippi.
Parcel 4.6.5
South 70 feet of the West 1/2 of Lot 2, Block 11, Bachelor Bend Addition, City of Greenville, Washington County, Mississippi.
Parcel 4.6.6
East 19 feet of the West 41 feet of the North 140 feet of Lot 2, Block 9, Bachelor Bend Addition, City of Greenville, Washington County, Mississippi.
Parcel 4.7 (Quitclaim Deed in Book 201501 at Page 2194)
A strip of land located in Lots 1, 2 and 3 of Block 20 of the Huntington and Lavally
Addition and Lot 2 of Block 11 of the Bachelor Bend Addition all to the City of Greenville, Mississippi more particularly described as: commencing at the
Southwest corner of Lot 3 of Block 20 of the Huntington and Lavally Addition which is on the east right of way of Walnut Street where exists a capped
rebar; thence south 55 degrees 30 minutes East 154.00 feet to a capped #5 rebar and the Point of Beginning of the property herein described; thence from
the Point of Beginning North 34 degrees 30 minutes East 278.81 feet to a capped #5 rebar; thence South 55 degrees 26 minutes 30 seconds East 3.00 feet to
a point; thence South 34 degrees 30 minutes West 278.81 feet to a point; thence North 55 degrees 30 minutes West 3.00 feet to the Point of Beginning
containing 0.019 acres, more or less.
PARCEL 5
(Leasehold – Lighthouse from City of Greenville)
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B-19
Parcel 5.1
A portion of Lots 1, 2, 3, and 7 of Block 5 and the right-of-way of Locust Street and Washington Avenue of the Original Town Addition to the City of
Greenville, Washington County, Mississippi more particularly described below:
Commencing at Station 213 + 65.16 of the Bank Protection Work Base Line; thence South 42 degrees 06 minutes 10 seconds East 15.26 feet to an iron
pipe; thence South 33 degrees 06 minutes 34 seconds West 434.39 feet; thence South 44 degrees 27 minutes 49 seconds West 143.39 feet to an iron pipe;
thence South 58 degrees 28 minutes 46 seconds West 6.28 feet; thence South 45 degrees 39 minutes 52 seconds East 19.06 feet; thence South 47 degrees 25
minutes 52 seconds East 42.58 feet; thence South 20 degrees 57 minutes 40 seconds East 4.73 feet; thence South 54 degrees 06 minutes 59 seconds West
84.25 feet to the east right-of-way of Washington Avenue and the Point of Beginning of the tract herein described; thence continue South 54 degrees 06
minutes 59 seconds West 106.72 feet to the west right-of-way of Washington Avenue; thence North 56 degrees 19 minutes 50 seconds West 28.18 feet
along the west right-of-way of Washington Avenue to the south right-of-way of Locust Street; thence South 33 degrees 40 minutes 10 seconds West a
distance of 75.58 feet along the south right-of-way of Locust Street; thence South 54 degrees 06 minutes 59 seconds West 126.45 feet; thence North 35
degrees 53 minutes 01 seconds West 196.00 feet; thence North 54 degrees 06 minutes 59 seconds East 240.76 feet to the east right-of-way of Washington
Avenue; thence South 56 degrees 19 minutes 50 seconds East 209.18 feet along the east right-of-way of Washington Avenue to the Point of Beginning of
the tract herein described containing 53,285.5 square feet, more or less, and being located in Section 4, Township 18 North, Range 8 West, Washington
County, Mississippi.
Parcel 5.2
A portion of the right-of-way of Washington Avenue of the Original Town Addition to the City of Greenville, Washington County, Mississippi more
particularly described below:
Commencing at Station 213 + 65.16 of the Bank Protection Work Base Line; thence South 42 degrees 06 minutes 10 seconds East 15.26 feet to an iron
pipe; thence South 33 degrees 06 minutes 34 seconds West 434.39 feet; thence South 44 degrees 27 minutes 49 seconds West 143.39 feet to an iron pipe;
thence South 58 degrees 28 minutes 46 seconds West 6.28 feet; thence South 45 degrees 39 minutes 52 seconds East 19.06 feet; thence South 47 degrees 25
minutes 52 seconds East 42.58 feet; thence North 76 degrees 48 minutes 46 seconds East 26.51 feet; thence South 00 degrees 38 minutes 18 seconds West
12.39 feet to the point of curvature of a curve to the right; thence along said curve having a radius of 87.00 feet, an arch length of 62.08 feet, a chord
bearing of South 21 degrees 04 minutes 48 seconds West, and a chord length of 60.77 feet to the point of tangency; thence South 41 degrees 31 minutes 19
seconds West 31.62 feet to east right-of-way of Washington Avenue and the Point of Beginning of the tract herein described; thence continue South 41
degrees 31 minutes 19 seconds West 100.95 feet to the west right-of-way of Washington Avenue; thence North 56 degrees 19 minutes 50 seconds West
24.23 feet along the west right-of-way of Washington Avenue; thence North 41 degrees 31 minutes 19 seconds East 100.95 feet to the east right-of-way of
Washington Avenue; thence South 56 degrees 19 minutes 50 seconds East 24.23 feet along the east right-of-way of Washington Avenue to the Point of
Beginning of the tract herein described containing 2,422.7 square feet, more or less, and being located in Section 4, Township 18 North, Range 8 West,
Washington County, Mississippi.
Parcel 5.3
A portion of Lot 1 of Block 6, Lots 4 and 5 of Block 10 and the right-of-way of Locust Street of the Original Town Addition to the City of Greenville,
Washington County, Mississippi more particularly described below:
Commencing at Station 213 + 65.16 of the Bank Protection Work Base Line; thence South 42 degrees 06 minutes 10 seconds East 15.26 feet to an iron
pipe; thence South 33 degrees 06 minutes 34 seconds West 434.39 feet; thence South 44 degrees 27 minutes 49 seconds West 143.39 feet to an iron pipe;
thence South 58 degrees 28 minutes 46 seconds West 6.28 feet to the Point of Beginning of the tract herein described; thence South 45 degrees 39 minutes
52 seconds East 19.06 feet; thence South 47 degrees 25 minutes 52 seconds East 42.58 feet; thence North 76 degrees 48 minutes 46 seconds East 26.51
feet; thence South 00 degrees 38 minutes 18 seconds West 12.39 feet to the point of curvature of a curve to the right; thence along said curve having a
radius of 87.00 feet, an arch length of 62.08 feet, a chord bearing of South 21 degrees 04 minutes 48 seconds West, and a chord length of 60.77 feet to the
point of tangency; thence South 41 degrees 31 minutes 19 seconds West 31.62 feet to east right-of-way of Washington Avenue; thence North 56 degrees 19
minutes 50 seconds West 24.23 feet along the east right-of-way of Washington Avenue; thence North 41 degrees 31 minutes 19 seconds East 34.93 feet to
the point of curvature of a curve to the left; thence along said curve having a radius of 63.00 feet, an arch length of 44.95 feet, a chord bearing of North 21
degrees 04 minutes 48 seconds East, and a chord distance of 44.01 feet to the point of tangency; thence North 00 degrees 38 minutes 18 seconds East 1.66
feet; thence South 54 degrees 06 minutes 59 seconds West 84.25 feet to the
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B-20
east right-of-way of Washington Avenue; thence along the east right-of-way of Washington Avenue North 56 degrees 19 minutes 50 seconds West 209.18
feet; thence North 54 degrees 06 minutes 59 seconds East 112.73 feet; thence South 42 degrees 06 minutes 10 seconds East 3.33 feet to an iron rod; thence
South 42 degrees 06 minutes 10 seconds East 126.84 feet to an iron rod; thence North 58 degrees 28 minutes 46 seconds East 20.01 to the Point of
Beginning of the tract herein described containing 20,806.0 square feet, more or less, and being located in Section 4, Township 18 North, Range 8 West,
Washington County, Mississippi.
TOGETHER WITH:
(Sign Easement)
A portion of the Main Street right-of-way of the Original Town Addition to the City of Greenville, Washington County, Mississippi more particularly
described below:
Commencing at the southwest corner of Lot 1 of B1ock 8 of the Original Town Addition to the City of Greenville; thence North 55 degrees 30 minutes 00
seconds West 13.03 feet along the east right-of-way of Main Street to a point; thence south 34 degrees 14 minutes 27 seconds West 28.43 feet to the Point
of Beginning of the tract herein described; thence continue South 34 degrees 14 minutes 27 Seconds West 52.00 feet to a point; thence North 55 degrees 45
minutes 33 seconds West 10.0 feet to a point; thence North 34 degrees 14 minutes 27 seconds East 52.00 to a point; thence South 55 degrees 45 minutes 33
seconds East 10.00 feet to the Point of Beginning of the tract herein described containing 520.0 square feet, more or less and being located in Section 4,
Township 18 North, Range 8 West, Washington County, Mississippi,
TOGETHER WITH:
The rights and benefits of a permanent non-exclusive right of way and easement for ingress and egress as set forth in that certain Easement recorded
September 19, 2014 in Book 201401 at Page 5897.
Tropicana Laughlin
Parcel 1A: (APN: 264-13-301-003)
That portion of the South Half (S ½) of Section 13,Township 32 South, Range 66 East M.D.M., described as follows:
Lot Two (2) as shown by map thereof on file in File 53 of Parcel Maps, Page 53 in the Office of the County Recorder, Clark County, Nevada.
Excepting therefrom that portion lying within the boundaries of that certain parcel described in Quitclaim Deed to Clark County for roadway
and public improvements recorded August 20, 1992 in Book 920820 as Document No. 00522, Official Records.
Said parcel being also described as follows:
Commencing at the Northwest corner (NW) of the Southwest Quarter (SW ¼) of said Section 13;
Thence South 89°59’42” East, along the North line of the South Half (S ½) of said Section 13, a distance of 297.82 feet;
Thence South 01°35’03” West, a distance of 800.08 feet to the Point of Beginning;
Thence South 01°35’01” West, a distance of 799.78 feet;
Thence South 89°59’51” East, a distance of 1561.32 feet to a point on the Westerly right-of-way line of Casino Drive, said point being a
point on a curve concave Westerly, having a radius of 490.00 feet, a radial line to said point bears North 87°52’39” East;
Thence Northerly along said curve through a central angle of 03°05’07”, for an arc distance of 26.39 feet;
Thence North 05°12’28” West, a distance of 349.20 feet;
Thence North 06°38’24” West, a distance of 120.04 feet;
Thence North 05°12’28” West, a distance of 166.84 feet to the point of curvature concave Southwesterly, having a radius of 33.00 feet;
Thence Northwesterly along said curve through a central angle of 64°17’09”, for an arc distance of 37.03 feet to a point on a non-tangent
line;
Thence North 05°12’28” West, a distance of 87.95 feet to a point on a curve concave Northerly and having a radius of 25.00 feet, a radial line
of said point bears South 06°35’43” West;
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Thence Northeasterly along said curve through a central angle of 53°18’40”, for an arc distance of 23.26 feet to a point of tangency;
Thence North 05°12’28” West, a distance of 16.88 feet;
Thence departing said Westerly right-of-way line, North 89°59’51” West, a distance of 1467.06 feet to the Point of Beginning.
Legal description provided by:
Lyle E. Yenglin, Nevada PLS No. 17019
Martin & Martin
Civil Engineers
2101 South Jones Boulevard
Suite 120
Las Vegas, NV 89146
Parcel 1B:
An undivided 31.667% interest in and to that certain non-exclusive 30.00 foot access easement as described in that certain License
Agreement recorded February 15, 1985 in Book 1689 as Document No. 1648776, Official Records, affecting the following described
property:
That portion of Government Lot Four (4) in Section 13, Township 32 South, Range 66 East, M.D.M., situate within the County of Clark,
State of Nevada described as follows:
A strip of land thirty (30) feet in width lying Northerly of and contiguous to Line One (1) and Line Two (2) hereinafter described:
Commencing at the Northwest corner (NW) of said Government Lot Four (4);
Thence South 88°59’51” East, a distance of 377.85 feet to a point;
Thence South 10°49’28” West, a distance of 132.17 feet to the Southeast corner (SE) of Parcel Two (2) as shown on file in File 30 of Parcel
Maps, Page 48, Clark County, Nevada records, the True Point of Beginning; said True Point of Beginning hereinafter referred to as Point
“A”.
Line One (1):
Commencing at Point “A”;
Thence North 89°59’51” West along the Southerly line of said Parcel Two (2) and the Westerly prolongation thereof to a point on the
Easterly line of Rio Alta Vista Drive, as shown on File 39 of Surveys, Page 73, Clark County, Nevada records, the point of terminus of Line
One (1).
Line Two (2):
Commencing at Point “A”;
Thence South 89°59’51” East, a distance of 645.36 feet, more or less, to a point in the Westerly line of Colorado River, the point of terminus
of Line Two (2).
Such easement being subject to the provisions contained in the above License Agreement.
Parcel 1C:
Non-exclusive easements and other rights as set forth and established in that certain “Memorandum of Understanding” by and between the
Ramada Express Hotel and Casino and Tres Hombres, a Delaware limited liability company, recorded May 25, 2005 in Book 20050525 as
Document No. 02601, Official Records.
Parcel 2A: (APN: 264-13-301-007)
That portion of the South Half (S ½) of Section 13, Township 32 South, Range 66 East, M.D.M., described as follows:
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B-22
Lot Three (3) as shown by map thereof on file in File 98 of Parcel Maps, Page 17 in the Office of the County Recorder, Clark County,
Nevada.
Said parcel being also described as follows:
Commencing at the Northwest corner (NW) of the Southwest Quarter (SW ¼) of said Section 13;
Thence South 89°59’42” East, a distance of 297.82 feet;
Thence South 01°35’03” West, a distance of 800.08 feet;
Thence South 89°59’51” East, a distance of 654.14 feet to the Point of Beginning;
Thence from said True Point of Beginning and continuing Southeasterly along said line South 89°59’51” East, a distance of 650.04 feet;
Thence North 00°38’33” West, a distance of 269.65 feet;
Thence North 88°05’32” West, a distance of 30.03 feet;
Thence South 00°38’33” East, a distance of 70.64 feet;
Thence North 89°59’51” West, a distance of 620.04 feet;
Thence South 00°38’33” East, a distance of 200.01 feet to the Point of Beginning.
Legal description provided by:
Lyle E. Yenglin, Nevada PLS No. 17019
Martin & Martin
Civil Engineers
2101 South Jones Boulevard
Suite 120
Las Vegas, NV 89146
Parcel 2B:
Non-exclusive easements for pedestrian and vehicular ingress and egress, utilities and drainage as set forth and established in that certain
“Declaration of Reserved Easements for Access and Utilities” recorded May 26, 2000 in Book 20000526 as Document No. 00932, Official
Records.
Parcel 2C:
Non-exclusive easements for pedestrian and vehicular ingress and egress, utilities and drainage as set forth and established in that certain
“Easement Agreement” recorded May 26, 2000 in Book 20000526 as Document No. 00936, Official Records.
Parcel 3A: (APN: 264-13-401-003)
That portion of the Southwest Quarter (SW ¼) of Section 13, Township 32 South, Range 66 East, M.D.M., Clark County, Nevada, more
particularly described as follows:
Parcel Four (4) as shown by map thereof on file in File 98 of Parcel Maps, Page 17, in the Office of the County Recorder, Clark County,
Nevada.
Parcel 3B:
Non-exclusive easements for driveways, utilities and drainage, as disclosed by that certain Declaration of Easements recorded May 26, 2000
in Book 20000526 as Document No. 00932, of Official Records, Clark County, Nevada, subject to the terms, provisions and conditions set
forth in said instrument.
Parcel 3C:
Non-exclusive easements for driveways, utilities and drainage, as disclosed by that certain Easement Agreement recorded May 26, 2000 in
Book 20000526 as Document No. 00935, of Official Records, Clark County, Nevada, subject to the terms, provisions and conditions set forth
in said instrument.
Parcel 3D:
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B-23
Revocable license for egress and ingress for the sole purpose of launching private small boat craft, retrieving the same and incidental parking,
as disclosed by that certain License Agreement recorded February 15, 1983 in Book 1689 as Document No. 1648776, of Official Records,
Clark County, Nevada, subject to the terms, provision and conditions set forth in said instrument.
Isle Bettendorf
Part of Lot 3 of Steamboat Landing First Addition, being part of the North half of Section 33, and the South half of Section 28,
both in Township 78 North, Range 4 East of the 4th P.M., Scott County, Iowa, more particularly described as follows:
Beginning at the Northwest Corner of Lot 3 of Steamboat Landing First Addition;
Thence North 89 degrees 14' 00" East, 1523.79 feet, along the northerly line of said Lot 3, to a point of curvature;
Thence northeasterly 22.61' along the arc of a 5,779.60 foot radius curve, concave northerly, and along the northerly line of said
Lot 3 to a point, (chord N 88 degrees 57' 17" E, 22.61');
Thence South 00 degrees 16' 30" West, 813.87', to a point on the meander line of the Mississippi River;
Thence North 81 degrees 08' 20" West, 108.79', to a point on the meander line of the Mississippi River;
Thence North 66 degrees 43' 46" West, 151.33', to a point on the meander line of the Mississippi River;
Thence North 76 degrees 06' 50" West, 160.08', to a point on the meander line of the Mississippi River;
Thence North 88 degrees 14' 35" West, 303.80', to a point on the meander line of the Mississippi River;
Thence South 87 degrees 59' 03" West, 90.20', to a point on the meander line of the Mississippi River;
Thence North 87 degrees 48' 48" West, 590.01', to a point on the meander line of the Mississippi River;
Thence South 88 degrees 56' 08" West, 100.13', to a point on the meander line of the Mississippi River;
Thence North 87 degrees 19' 47" West, 60.12', to a point on the meander line of the Mississippi River, which point is also on a
line projected from the westerly line of Lot 3 of Steamboat Landing First Addition;
Thence North 00 degrees 16' 30" East, 648.51', along the westerly line of said Lot 3 and its projection, to the Point of Beginning.
ALSO DESCRIEBD AS:
LOT 1 OF STEAMBOAT LANDING 2ND ADDITION, BEING A PART OF LOT 3 OF STEAMBOAT LANDING FIRST
ADDITION, BEING PART OF THE NORTH HALF OF
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SECTION 33, AND THE SOUTH HALF OF SECTION 28, BOTH IN TOWNSHIP 78 NORTH, RANGE 4 EAST OF THE
4TH P.M., SCOTT COUNTY, IOWA, MORE PARTICULARLY DESCRIBED AS FOLLOWS:
BEGINNING AT THE NORTHWEST CORNER OF LOT 3 OF STEAMBOAT LANDING FIRST ADDITION;
THENCE NORTH 89 DEGREES 14' 00" EAST, 1523.79 FEET, ALONG THE NORTHERLY LINE OF SAID LOT 3, TO A
POINT OF CURVATURE; THENCE NORTHEASTERLY 22.61' ALONG THE ARC OF A 5,779.60 FOOT RADIUS CURVE,
CONCAVE NORTHERLY, AND ALONG THE NORTHERLY LINE OF SAID LOT 3 TO A POINT, (CHORD N 88
DEGREES 57' 17" E, 22.61'); THENCE SOUTH 00 DEGREES 16' 30" WEST, 813.87', TO A POINT ON THE MEANDER
LINE OF THE MISSISSIPPI RIVER; THENCE NORTH 81 DEGREES 08' 20" WEST, 108.52', TO A POINT ON THE
MEANDER LINE OF THE MISSISSIPPI RIVER; THENCE NORTH 66 DEGREES 43' 46" WEST, 151.33', TO A POINT ON
THE MEANDER LINE OF THE MISSISSIPPI RIVER; THENCE NORTH 76 DEGREES 06' 50" WEST, 160.08', TO A POINT
ON THE MEANDER LINE OF THE MISSISSIPPI RIVER; THENCE NORTH 88 DEGREES 14' 35" WEST, 303.80', TO A
POINT ON THE MEANDER LINE OF THE MISSISSIPPI RIVER; THENCE SOUTH 87 DEGREES 59' 03" WEST, 90.20',
TO A POINT ON THE MEANDER LINE OF THE MISSISSIPPI RIVER; THENCE NORTH 87 DEGREES 48' 48" WEST,
590.01', TO A POINT ON THE MEANDER LINE OF THE MISSISSIPPI RIVER; THENCE SOUTH 88 DEGREES 56' 08"
WEST, 100.13', TO A POINT ON THE MEANDER LINE OF THE MISSISSIPPI RIVER; THENCE NORTH 87 DEGREES 18'
09" WEST, 60.39', TO A POINT ON THE MEANDER LINE OF THE MISSISSIPPI RIVER, WHICH POINT IS ALSO ON A
LINE PROJECTED FROM THE WESTERLY LINE OF LOT 3 OF STEAMBOAT LANDING FIRST ADDITION; THENCE
NORTH 00 DEGREES 16' 30" EAST, 648.51', ALONG THE WESTERLY LINE OF SAID LOT 3 AND ITS PROJECTION,
TO THE POINT OF BEGINNING.
EASEMENT PARCEL:
A PARKING EASEMENT AREA, BEING A PART OF LOT 1 AND ALL OF LOT 2 OF STEAMBOAT LANDING FIRST
ADDITION, WITHIN THE NORTH HALF OF SECTION 33, AND THE SOUTH HALF OF SECTION 28, BOTH IN
TOWNSHIP 78 NORTH, RANGE 4 EAST OF THE 4 P.M., SCOTT COUNTY, IOWA, MORE PARTICULARLY
DESCRIBED AS FOLLOWS:
TH
BEGINNING AT THE SOUTHEAST CORNER OF SAID LOT 2 OF STEAMBOAT LANDING FIRST ADDITION; THENCE
SOUTH 83°03’16” WEST, ALONG THE SOUTH LINE OF LOT 2, 84.72 FEET; THENCE SOUTH 88°55’00” WEST,
ALONG THE SOUTH LINE OF LOT 2, 266.24 FEET TO A POINT OF CURVATURE; THENCE NORTHWESTERLY
ALONG SAID ARC, CONCAVE NORTHEASTERLY, HAVING A RADIUS OF 62.50 FEET, AN ARC LENGTH OF 97.83
FEET, TO A POINT ON THE WEST LINE OF LOT 2, CHORD OF THE LAST NAMED CURVE BEARS NORTH 46°35’25”
WEST, 88.14 FEET; THENCE NORTH 00°46’10” WEST, ALONG THE WEST LINE OF LOT 2, 177.31 FEET TO THE
NORTHWEST CORNER OF LOT 2; THENCE CONTINUING NORTH 00°46’10” WEST, 37.05 FEET TO THE SOUTH
LINE OF LOT 1; THENCE S89°12’40”W, ALONG THE SOUTH LINE OF LOT 1, 39.85 FEET; THENCE N00°46’10”W, A
DISTANCE OF 249.82 FEET TO THE NORTH LINE OF LOT 1; THENCE NORTH 89°14’00” EAST, ALONG THE NORTH
LINE OF LOT 1, 462.92 FEET TO THE NORTHEAST CORNER OF LOT 1; THENCE SOUTH 00°16’30” WEST, ALONG
THE EAST LINE OF LOT 1, 286.74 FEET, TO THE NORTHEAST CORNER OF LOT 2; THENCE, CONTINUING SOUTH
00°16’30” WEST, ALONG THE EAST LINE OF LOT 2,
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B-25
228.34 FEET, TO THE POINT OF BEGINNING. CONTAINING 22,254 SQUARE FEET OR 5.24 ACRES.
Isle Waterloo
A PARCEL OF LAND LOCATED IN A PART OF THE NORTHWEST QUARTER OF THE SOUTHEAST QUARTER, PART
OF THE SOUTHEAST QUARTER OF THE SOUTHWEST QUARTER AND PART OF THE NORTHEAST QUARTER OF
THE SOUTHWEST QUARTER ALL IN SECTION 12, TOWNSHIP 88 NORTH, RANGE 13 WEST OF THE 5th PRINCIPAL
MERIDIAN, BLACK HAWK COUNTY, IOWA, MORE PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT A LEAD PLUG FOUND MARKING THE SOUTHEAST CORNER OF THE SOUTHWEST QUARTER
OF SAID SECTION 12; THENCE N 00° 15' 10" W ALONG THE EAST LINE OF SAID SOUTHWEST QUARTER, A
DISTANCE OF 61.09 FEET TO AN IRON ROD SET IN THE NORTH RIGHT-OF-WAY LINE OF EAST SHAULIS ROAD
ALSO BEING THE POINT OF BEGINNING FOR THIS DESCRIPTION: THENCE ALONG SAID NORTH RIGHT-OF-WAY
LINE THE FOLLOWING SIX (6) CALLS: THENCE N 85° 22' 54" W A DISTANCE OF 291.89 FEET TO AN IRON ROD
SET; THENCE S 88° 55' 24" W A DISTANCE OF 100.00 FEET TO AN IRON ROD SET; THENCE S 72° 13' 57" W A
DISTANCE OF 104.40 FEET TO AN IRON ROD SET: THENCE S 86° 04' 09" W A DISTANCE OF 100.12 FEET TO AN
IRON ROD SET; THENCE S 88° 55' 54" W A DISTANCE OF 114.03 FEET TO AN IRON ROD SET; THENCE S 88° 55' 54"
W A DISTANCE OF 165.21 FEET TO AN IRON ROD SET; THENCE N 18° 28' 45" E DEPARTING FROM SAID RIGHT-
OF-WAY LINE, A DISTANCE OF 127.19 FEET TO AN IRON ROD SET; THENCE ALONG A CURVE TO THE RIGHT
WITH CHORD BEARING N 29° 54' 50" E A DISTANCE OF 410.48 FEET, A RADIUS OF 410.00 FEET AND ARC
DISTANCE OF 429.91 FEET TO AN IRON ROD SET; THENCE N 59° 57' 12" E A DISTANCE OF 328.48 FEET TO AN
IRON ROD SET; THENCE ALONG A CURVE TO THE LEFT WITH CHORD BEARING N 07° 40' 31" W A DISTANCE OF
660.26 FEET, A RADIUS OF 357.00 FEET AND ARC DISTANCE OF 842.76 FEET TO AN IRON ROD SET; THENCE S 88°
55' 54" W A DISTANCE OF 489.26 FEET TO AN IRON PIN FOUND MARKING THE NORTHEAST CORNER OF LOST
ISLAND REAL ESTATE PROPERTY AS RECORDED IN LD BOOK 573, PAGE 028 AND LD BOOK 572, PAGE 195 IN
THE BLACK HAWK COUNTY RECORDER'S OFFICE; THENCE CONTINUING S 88° 55' 54" W ALONG THE NORTH
LINE OF SAID LOST ISLAND REAL ESTATE PROPERTY, A DISTANCE OF 357.58 FEET TO AN IRON ROD SET;
THENCE N 00° 19' 08" W DEPARTING FROM SAID NORTH LINE, A DISTANCE OF 1310.92 FEET TO AN IRON ROD
SET IN THE NORTH LINE OF THE NORTHEAST QUARTER OF THE SOUTHWEST QUARTER OF SAID SECTION 12;
THENCE N 89° 05' 45" E ALONG SAID NORTH LINE, A DISTANCE OF 696.05 FEET TO AN IOWA DEPARTMENT OF
TRANSPORTATION ALUMINUM MONUMENT FOUND MARKING THE SOUTHWESTERLY RIGHT-OF-WAY LINE OF
PRIMARY ROAD U.S. ROUTE 218; THENCE ALONG SAID SOUTHWESTERLY RIGHT-OF-WAY LINE THE
FOLLOWING THREE (3) CALLS: THENCE S 41° 35' 50" E A DISTANCE OF 255.73 FEET TO AN IOWA DEPARTMENT
OF TRANSPORTATION ALUMINUM MONUMENT FOUND; THENCE S 43° 50' 20" E A DISTANCE OF 1033.85 FEET
TO AN IOWA DEPARTMENT OF TRANSPORTATION ALUMINUM MONUMENT FOUND; THENCE S 43° 43' 00" E A
DISTANCE OF 506.16 FEET TO AN IOWA DEPARTMENT OF TRANSPORTATION ALUMINUM MONUMENT FOUND
IN AN EXISTING FENCE LINE AND ON THE NORTH LINE OF THE SOUTHWEST QUARTER OF THE SOUTHEAST
QUARTER OF SAID SECTION 12; THENCE S 88° 46' 37" W ALONG SAID NORTH LINE, A DISTANCE OF 653.91 FEET
TO AN IRON ROD SET MARKING THE NORTHEAST CORNER OF THE SOUTHEAST
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QUARTER OF THE SOUTHWEST QUARTER OF SAID SECTION 12; THENCE S 00° 15' 10" E ALONG THE EAST LINE
OF SAID QUARTER SECTION, A DISTANCE OF 1263.53 FEET TO THE POINT OF BEGINNING.
Together with the easement set forth in Reciprocal Access and Private Road Agreement by and between IOC Black Hawk
County, Inc. an Iowa corporation and Lot Island Real Estate, LC, an Iowa limited liability company, recorded October 6, 2006 in
Document No. 2007008149 of the Black Hawk County Land Records.
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EXHIBIT C
GAMING LICENSES
Regulatory
Authority
Mississippi Gaming
Commission
New Jersey Casino
Control Commission
Type of License
Dates of
Issuance and
Expiration
Gaming License No. 0896
Gaming License Pursuant
to CCC Resolution 10-11-
10-21
10/28/16 -
10/27/19
11/10/20
New Jersey Division of
Gaming Enforcement
Internet Gaming Permit
No. NJIGP 14-005
10/21/17-
10/21/18
Nevada Gaming Control
Board
Gaming License 09430-
01
1/1/18 - 12/31/18
Iowa Racing and Gaming
Commission
Gambling Structure
4/1/20 - 3/31/21
Sports Wagering
8/15/19 - 3/31/21
Iowa Racing and Gaming
Commission
Gambling Structure
4/1/20 - 3/31/21
Sports Wagering
8/15/19 - 3/31/21
Licensed Entity
Facility
State
Lighthouse Point, LLC d/b/a Trop
Casino Greenville
Tropicana Atlantic City Corp. d/b/a
Tropicana Atlantic City Casino &
Hotel
Tropicana Atlantic City Corp. d/b/a
Tropicana Atlantic City Casino &
Hotel (3)
Tropicana Laughlin, LLC d/b/a
Tropicana Laughlin Hotel & Casino
(2)
Tropicana Greenville
Tropicana Atlantic City
Tropicana Atlantic City
Tropicana Laughlin
Isle of Capri Bettendorf, L.C.
Isle Bettendorf
IOC Black Hawk County, Inc.
Isle Waterloo
ACTIVE/124660172.1
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MS
NJ
NJ
NV
IA
IA
C-1
EXHIBIT D
FORM OF SECOND AMENDED AND RESTATED GUARANTY OF MASTER LEASE
This SECOND AMENDED AND RESTATED GUARANTY OF MASTER LEASE (this “Guaranty”), is
made and entered into as of [ ], by and among CAESARS ENTERTAINMENT, INC., a Delaware corporation,
LIGHTHOUSE POINT, LLC, a Mississippi limited liability company, TROPICANA LAUGHLIN, LLC, a Nevada limited
liability company (each, “Guarantor”, and collectively, the “Guarantors”), and GLP CAPITAL, L.P., a Pennsylvania limited
partnership (together with its permitted successors and assigns, the “Landlord”).
RECITALS
A.
On October 1, 2018, Landlord, Tropicana AC Sub Corp., as co-landlord, Tropicana Entertainment Inc. (“TEI”)
and Tropicana Atlantic City Corp., as co-tenant, entered into that certain Master Lease (the “Original Master Lease” and as
amended by that certain Partial Termination of and First Amendment to Master Lease, dated as of June 9, 2019, as modified by
that certain Waiver to Master Lease, dated as of March 31, 2020, as amended and restated by that certain Amended and Restated
Master Lease, dated as of June 15, 2020, and as amended and restated by that certain Second Amended and Restated Master
Lease, dated as of December 18, 2020 (the “Second A&R Master Lease”), the “Existing Master Lease”), pursuant to which
Landlord leased the Leased Property to TEI.
B.
In connection with the Second A&R Master Lease, Landlord, Tropicana AC Sub Corp., as co-landlord, the
Guarantors and Catfish Queen Partnership In Commendam, a Louisiana partnership in commendam (“Catfish”), entered into that
certain Amended and Restated Guaranty of Master Lease, dated as of December 18, 2020 (the “Existing Guaranty”).
C.
Pursuant to the terms and conditions of that certain letter agreement, dated as of May 5, 2022, Catfish was released
from its obligations under the Existing Guaranty on such date (other than with respect to amounts, obligations or liabilities of any
kind arising under the Existing Guaranty prior to such date).
D.
Landlord, TEI, IOC Black Hawk County, Inc. and Isle of Capri Bettendorf, L.C. (collectively, “Tenant”) have
entered into that certain Third Amended and Restated Master Lease dated of even date herewith (as may be amended, restated,
supplemented, waived or otherwise modified from time to time, the “Master Lease”), in order to amend the Existing Master
Lease to, among other things, remove the facility commonly known as Belle of Baton Rouge located in Baton Rouge, Louisiana,
together with all Leased Property (as defined in the Second A&R Master Lease) with respect thereto, from the Master Lease. All
capitalized terms used and not otherwise defined herein shall have the same meanings given such terms in the Master Lease.
E.
In furtherance of the foregoing, Landlord and the Guarantors desire to amend and restate the Existing Guaranty
pursuant to this Guaranty in order to reaffirm the obligations of the Guarantors hereunder with respect to the Master Lease.
F.
Each Guarantor is an affiliate of the Tenant, will derive substantial benefits from the Master Lease and
acknowledges and agrees that this Guaranty is given in accordance with the requirements of the Master Lease and that Landlord
would not have been willing to enter into the Master Lease unless such Guarantor was willing to execute and deliver this
Guaranty.
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1
AGREEMENTS
NOW, THEREFORE, in consideration of Landlord entering into the Master Lease with Tenant, and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each Guarantor agrees as follows:
1.
Guaranty. In consideration of the benefit derived or to be derived by it therefrom, as to the Master Lease, from and
after the Commencement Date thereof, each Guarantor hereby unconditionally and irrevocably guarantees, as a primary obligor
and not merely as a surety, (i) the payment when due of all Rent and all other sums payable by Tenant under the Master Lease,
and (ii) the faithful and prompt performance when due of each and every one of the terms, conditions and covenants to be kept
and performed by Tenant and its Affiliates under the Master Lease, including without limitation all indemnification obligations,
insurance obligations, and all obligations to operate, rebuild, restore or replace any facilities or improvements now or hereafter
located on the Leased Property covered by the Master Lease (collectively, the “Obligations”). In the event of the failure of
Tenant to pay any such Rent or other sums, or to render any other performance required of Tenant and its Affiliates under the
Master Lease, when due or within any applicable cure period, each Guarantor shall forthwith perform or cause to be performed
all provisions of the Master Lease to be performed by Tenant and its Affiliates thereunder, and pay all reasonable costs of
collection or enforcement and other damages that may result from the non-performance thereof to the full extent provided under
the Master Lease. As to the Obligations, each Guarantor’s liability under this Guaranty is without limit except as provided in
Section 12 hereof. Each Guarantor agrees that its guarantee provided herein constitutes a guarantee of payment when due and not
of collection.
2.
Survival of Obligations. The obligations of each Guarantor under this Guaranty shall survive and continue in full
force and effect notwithstanding:
(a)
any amendment, modification, or extension of the Master Lease pursuant to its terms;
(b)
any compromise, release, consent, extension, indulgence or other action or inaction in respect of any terms
of the Master Lease or any other guarantor;
(c)
at any time;
any substitution or release, in whole or in part, of any security for this Guaranty which Landlord may hold
(d)
any exercise or non-exercise by Landlord of any right, power or remedy under or in respect of the Master
Lease or any security held by Landlord with respect thereto, or any waiver of any such right, power or remedy;
(e)
any bankruptcy, insolvency, reorganization, arrangement, adjustment, composition, liquidation, or the like
of Tenant or any other guarantor;
(f)
any limitation of Tenant’s liability under the Master Lease or any limitation of Tenant’s liability thereunder
which may now or hereafter be imposed by any statute, regulation or rule of law, or any illegality, irregularity, invalidity
or unenforceability, in whole or in part, of the Master Lease or any term thereof;
(g)
subject to Section 13 hereof, any sale, lease, or transfer of all or any part of any interest in any Facility or
any or all of the assets of Tenant to any other person, firm or entity other than to Landlord;
|US-DOCS\126208570.12||
2
(h)
any act or omission by Landlord with respect to any of the security instruments or any failure to file, record
or otherwise perfect any of the same;
(i)
any extensions of time for performance under the Master Lease;
(j)
the release of Tenant from performance or observation of any of the agreements, covenants, terms or
conditions contained in the Master Lease by operation of law or otherwise;
(k)
the fact that Tenant may or may not be personally liable, in whole or in part, under the terms of the Master
Lease to pay any money judgment;
(l)
the failure to give Guarantor any notice of acceptance, default or otherwise;
(m)
any other guaranty now or hereafter executed by Guarantor or anyone else in connection with the Master
Lease;
(n)
any rights, powers or privileges Landlord may now or hereafter have against any other person, entity or
collateral; or
(o)
any other circumstances, whether or not Guarantor had notice or knowledge thereof.
3.
Primary Liability. The liability of Guarantor with respect to the Obligations shall be primary, direct and
immediate, and Landlord may proceed against Guarantor: (a) prior to or in lieu of proceeding against Tenant, its assets, any
security deposit, or any other guarantor; and (b) prior to or in lieu of pursuing any other rights or remedies available to Landlord.
All rights and remedies afforded to Landlord by reason of this Guaranty or by law are separate, independent and cumulative, and
the exercise of any rights or remedies shall not in any way limit, restrict or prejudice the exercise of any other rights or remedies.
In the event of any default under the Master Lease, a separate action or actions may be brought and prosecuted against
Guarantor whether or not Tenant is joined therein or a separate action or actions are brought against Tenant. Landlord may
maintain successive actions for other defaults. Landlord’s rights hereunder shall not be exhausted by its exercise of any of its
rights or remedies or by any such action or by any number of successive actions until and unless all indebtedness and Obligations
the payment and performance of which are hereby guaranteed have been paid and fully performed.
4.
Obligations Not Affected. In such manner, upon such terms and at such times as Landlord in its sole discretion
deems necessary or expedient, and without notice to any Guarantor, Landlord may: (a) amend, alter, compromise, accelerate,
extend or change the time or manner for the payment or the performance of any Obligation hereby guaranteed; (b) extend, amend
or terminate the Master Lease; or (c) release Tenant by consent to any assignment (or otherwise) as to all or any portion of the
Obligations hereby guaranteed, in each case pursuant to the terms of the Master Lease. Any exercise or non-exercise by Landlord
of any right hereby given Landlord, dealing by Landlord with any Guarantor or any other guarantor, Tenant or any other person,
or change, impairment, release or suspension of any right or remedy of Landlord against any person including Tenant and any
other guarantor will not affect any of the Obligations of any Guarantor hereunder or give any Guarantor any recourse or offset
against Landlord.
|US-DOCS\126208570.12||
3
5.
Waiver. With respect to the Master Lease, each Guarantor hereby waives and relinquishes all rights and remedies
accorded by applicable law to sureties and/or guarantors or any other accommodation parties, under any statutory provisions,
common law or any other provision of law, custom or practice, and agrees not to assert or take advantage of any such rights or
remedies including, but not limited to:
(a)
any right to require Landlord to proceed against Tenant or any other person or to proceed against or
exhaust any security held by Landlord at any time or to pursue any other remedy in Landlord’s power before proceeding
against such Guarantor or to require that Landlord cause a marshaling of Tenant’s assets or the assets, if any, given as
collateral for this Guaranty or to proceed against Tenant and/or any collateral, including collateral, if any, given to secure
such Guarantor’s obligation under this Guaranty, held by Landlord at any time or in any particular order;
(b)
any defense that may arise by reason of the incapacity or lack of authority of any other person or persons;
(c)
notice of the existence, creation or incurring of any new or additional indebtedness or obligation or of any
action or non-action on the part of Tenant, Landlord, any creditor of Tenant or such Guarantor or on the part of any other
person whomsoever under this or any other instrument in connection with any obligation or evidence of indebtedness held
by Landlord or in connection with any obligation hereby guaranteed;
any defense based upon an election of remedies by Landlord which destroys or otherwise impairs the
subrogation rights of such Guarantor or the right of such Guarantor to proceed against Tenant for reimbursement, or both;
(d)
(e)
any defense based upon any statute or rule of law which provides that the obligation of a surety must be
neither larger in amount nor in other respects more burdensome than that of the principal;
(f)
any duty on the part of Landlord to disclose to such Guarantor any facts Landlord may now or hereafter
know about Tenant, regardless of whether Landlord has reason to believe that any such facts materially increase the risk
beyond that which such Guarantor intends to assume or has reason to believe that such facts are unknown to such
Guarantor or has a reasonable opportunity to communicate such facts to Guarantor, it being understood and agreed that
such Guarantor is fully responsible for being and keeping informed of the financial condition of Tenant and of all
circumstances bearing on the risk of non-payment or non-performance of any Obligations or indebtedness hereby
guaranteed;
(g)
any defense arising because of Landlord’s election, in any proceeding instituted under the federal
Bankruptcy Code, of the application of Section 1111(b)(2) of the federal Bankruptcy Code;
(h)
any defense based on any borrowing or grant of a security interest under Section 364 of the federal
Bankruptcy Code; and
(i)
all rights and remedies accorded by applicable law to guarantors, including without limitation, any
extension of time conferred by any law now or hereafter in effect and any requirement or notice of acceptance of this
Guaranty or any other notice to which the undersigned may now or hereafter be entitled to the extent such waiver of
notice is permitted by applicable law.
|US-DOCS\126208570.12||
4
6.
Information. Each Guarantor assumes all responsibility for being and keeping itself informed of the financial
condition and assets of the Tenant and each other Guarantor, and of all other circumstances bearing upon the risk of nonpayment
of the Obligations and the nature, scope and extent of the risks that such Guarantor assumes and incurs hereunder and agrees that
the Landlord will not have any duty to advise such Guarantor of information regarding such circumstances or risks.
7.
No Subrogation. Until all Obligations of Tenant under the Master Lease have been satisfied and discharged in full,
Guarantor shall have no right of subrogation and waives any right to enforce any remedy which Landlord now has or may
hereafter have against Tenant and any benefit of, and any right to participate in, any security now or hereafter held by Landlord
with respect to the Master Lease.
8.
Agreement to Comply with terms of Master Lease. Each Guarantor hereby agrees (a) to comply with all terms of
the Master Lease applicable to it, (b) that it shall take no action, and that it shall not omit to take any action, which action or
omission, as applicable, would cause a breach of the terms of the Master Lease applicable to it and (c) that it shall not commence
an involuntary proceeding or file an involuntary petition in any court of competent jurisdiction seeking (i) relief in respect of the
Tenant or any of its Subsidiaries, or of a substantial part of the property or assets of the Tenant or any of its Subsidiaries, under
Title 11 of the United States Code, as now constituted or hereafter amended, or any other federal, state or foreign bankruptcy,
insolvency, receivership or similar law or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for the Tenant or any of its Subsidiaries or for a substantial part of the property or assets of the Tenant or any of its
Subsidiaries.
9.
Agreement to Pay; Contribution; Subordination. Without limitation of any other right of the Landlord at law or in
equity, upon the failure of Tenant to pay any Obligation when and as the same shall become due, each Guarantor hereby promises
to and will forthwith pay, or cause to be paid, to the Landlord in cash the amount of such unpaid Obligation. Each Guarantor
hereby unconditionally and irrevocably agrees that in the event any payment shall be required to be made to the Landlord under
this Guaranty, such Guarantor will contribute, to the maximum extent permitted by law, such amounts to each other Guarantor so
as to maximize the aggregate amount paid to the Landlord in respect of this Guaranty and in respect of the Master Lease. Upon
payment by any Guarantor of any sums to the Landlord as provided above, all rights of such Guarantor against the Tenant or any
other Guarantor arising as a result thereof by way of subrogation, contribution, reimbursement, indemnity or otherwise shall be
subject to the limitations set forth in this Section 9. If for any reason whatsoever Tenant or any Guarantor now or hereafter
becomes indebted to any Guarantor or any Affiliate of any Guarantor, such indebtedness and all interest thereon shall at all times
be subordinate to Tenant’s obligation to Landlord to pay as and when due in accordance with the terms of the Master Lease the
guaranteed Obligations, it being understood that each Guarantor and each Affiliate of any Guarantor shall be permitted to receive
payments from the Tenant or any Guarantor on account of such obligations except during the continuance of an Event of Default
under the Master Lease relating to failure to pay amounts due under the Master Lease. During any time in which an Event of
Default relating to failure to pay amounts due under the Master Lease has occurred and is continuing under the Master Lease (and
provided that Guarantor has received written notice thereof), Guarantor agrees to make no claim for such indebtedness that does
not recite that such claim is expressly subordinate to Landlord’s rights and remedies under the Master Lease.
10.
Application of Payments. With respect to the Master Lease, and with or without notice to Guarantor, Landlord, in
Landlord’s sole discretion and at any time and from time to time and in such manner and upon such terms as Landlord deems
appropriate, may (a) apply any or all payments or recoveries following the occurrence and during the continuance of an Event of
Default from Tenant or from any other guarantor under any other instrument or realized from any
|US-DOCS\126208570.12||
5
security, in such manner and order of priority as Landlord may determine, to any indebtedness or other obligation of Tenant with
respect to the Master Lease and whether or not such indebtedness or other obligation is guaranteed hereby or is otherwise
secured, and (b) refund to Tenant any payment received by Landlord under the Master Lease.
11.
Guaranty Default. Upon the failure of any Guarantor to pay the amounts required to be paid hereunder when due
following the occurrence and during the continuance of an Event of Default under the Master Lease, Landlord shall have the right
to bring such actions at law or in equity, including appropriate injunctive relief, as it deems appropriate to compel compliance,
payment or deposit, and among other remedies to recover its reasonable attorneys’ fees in any proceeding, including any appeal
therefrom and any post judgment proceedings.
12. Maximum Liability. Each Guarantor and, by its acceptance of the guarantees provided herein, Landlord, hereby
confirms that it is the intention of all such persons that the guarantees provided herein and the obligations of each Guarantor
hereunder not constitute a fraudulent transfer or conveyance for purposes of the United States Bankruptcy Code or any other
federal, state or foreign bankruptcy, insolvency, receivership or similar law, the Uniform Fraudulent Conveyance Act, the
Uniform Fraudulent Transfer Act or any similar foreign, federal or state law to the extent applicable to the guarantees provided
herein and the obligations of each Guarantor hereunder. To effectuate the foregoing intention, Landlord hereby irrevocably agrees
that the obligations of each Guarantor under this Guaranty shall be limited to the maximum amount as will result in such
obligations not constituting a fraudulent transfer or conveyance.
13.
Release. A Guarantor (other than Tenant’s Parent) shall automatically be released from its obligations hereunder
(other than with respect to amounts then due and payable by such Guarantor) upon the consummation of any transaction
permitted by the Master Lease, the result of which is that such Guarantor ceases to be a Subsidiary of the “Tenant” under the
Master Lease; provided that the Landlord shall have consented to such transaction to the extent such consent is required by the
terms of the Master Lease; and provided further that a Change in Control (and any transaction related thereto) shall not be
deemed to be permitted by the Master Lease without Landlord consent except to the extent any actual or deemed assignment
under the Master Lease relating to such Change in Control is permitted under the Master Lease; and provided further that no
release of such Guarantor shall be permitted or occur in a Foreclosure COC or a Foreclosure Assignment.
Tenant’s Parent shall automatically be released from its obligations hereunder (other than with respect to amounts then
due and payable by Tenant’s Parent) upon the consummation of any transaction permitted by the Master Lease, the result of
which is that the “Tenant” under the Master Lease ceases to be a Subsidiary of Tenant’s Parent and ceases to be owned by
Tenant’s Parent; provided that the Landlord shall have consented to such transaction to the extent such consent is required by the
terms of the Master Lease; and provided further that a Change in Control (and any transaction related thereto) shall not be
deemed to be permitted by the Master Lease without Landlord consent except to the extent any actual or deemed assignment
under the Master Lease relating to such Change in Control is permitted under the Master Lease; and provided further that no
release of Tenant’s Parent shall be permitted to occur in a Foreclosure COC or Foreclosure Assignment.
14.
Additional Guarantors. Upon the execution and delivery by the Landlord and any Subsidiary of the Tenant that is
required to become a party hereto pursuant to the Master Lease of an instrument in the form of Appendix A hereto, such
Subsidiary shall become a Guarantor hereunder with the same force and effect as if originally named as a Guarantor herein. The
execution and delivery of any such instrument shall not require the consent of any other party to this Guaranty. The rights and
obligations of each party to this Guaranty shall remain in full force and effect notwithstanding the addition of any new party to
this Guaranty.
|US-DOCS\126208570.12||
6
15.
Notices. Any notice, request or other communication to be given by any party hereunder shall be in writing and
shall be sent by registered or certified mail, postage prepaid and return receipt requested, by hand delivery or express courier
service, by facsimile transmission or by an overnight express service to the following address:
To Guarantor:
With a copy to:
(that shall not
constitute notice)
To Landlord:
And with copy to
(which shall not
constitute notice):
c/o Caesars Entertainment, Inc.
100 West Liberty Street, 12 Floor
Reno, Nevada 89501
Attention: General Counsel
Facsimile: (281) 683-7511
th
Latham & Watkins LLP
12670 High Bluff Drive
San Diego, CA 92130
Attention: Sony Ben-Moshe, Esq.
Facsimile No.: (858) 523-5450
GLP Capital, L.P.
c/o Gaming and Leisure Properties, Inc.
845 Berkshire Blvd., Suite 200
Wyomissing, Pennsylvania 19610
Attention: Chief Executive Officer
Facsimile: (610) 401-2901
Goodwin Procter LLP
The New York Times Building
620 Eighth Avenue
New York, New York 10018
Attention: Yoel Kranz, Esq.
Facsimile: (617) 649-1471
or to such other address as either party may hereafter designate. Notice shall be deemed to have been given on the date of
delivery if such delivery is made on a Business Day, or if not, on the first Business Day after delivery. If delivery is refused,
Notice shall be deemed to have been given on the date delivery was first attempted. Notice sent by facsimile transmission shall be
deemed given upon confirmation that such Notice was received at the number specified above or in a Notice to the sender.
16. Miscellaneous.
(a)
No term, condition or provision of this Guaranty may be waived except by an express written instrument to
that effect signed by Landlord. No waiver of any term, condition or provision of this Guaranty will be deemed a waiver of
any other term, condition or provision, irrespective of similarity, or constitute a continuing waiver of the same term,
condition or provision, unless otherwise expressly provided. No term, condition or provision of this Guaranty may be
amended or modified with respect to any Guarantor except by an express written instrument to that effect signed by
Landlord and the applicable Guarantor to which such amendment or modification is to be effective.
(b)
If any one or more of the terms, conditions or provisions contained in this Guaranty is found in a final
award or judgment rendered by any court of competent
|US-DOCS\126208570.12||
7
jurisdiction to be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining
terms, conditions and provisions of this Guaranty shall not in any way be affected or impaired thereby, and this Guaranty
shall be interpreted and construed as if the invalid, illegal, or unenforceable term, condition or provision had never been
contained in this Guaranty.
(c)
THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, EXCEPT THAT THE LAWS OF THE STATE WHERE THE LEASED
PROPERTY IS LOCATED SHALL GOVERN THIS AGREEMENT TO THE EXTENT NECESSARY (I) TO OBTAIN
THE BENEFIT OF THE RIGHTS AND REMEDIES SET FORTH HEREIN WITH RESPECT TO ANY OF THE
LEASED PROPERTY AND (II) FOR PROCEDURAL REQUIREMENTS WHICH MUST BE GOVERNED BY THE
LAWS OF THE STATE. EACH GUARANTOR CONSENTS TO IN PERSONAM JURISDICTION BEFORE THE
STATE AND FEDERAL COURTS OF NEW YORK AND AGREES THAT ALL DISPUTES CONCERNING THIS
GUARANTY SHALL BE HEARD IN THE STATE AND FEDERAL COURTS LOCATED IN THE STATE OF NEW
YORK. EACH GUARANTOR FURTHER CONSENTS TO IN PERSONAM JURISDICTION BEFORE THE STATE
AND FEDERAL COURTS OF EACH STATE WITH RESPECT TO ANY ACTION COMMENCED BY LANDLORD
SEEKING TO RETAKE POSSESSION OF ANY OR ALL OF THE LEASED PROPERTY IN WHICH GUARANTOR
IS REQUIRED TO BE NAMED AS A NECESSARY PARTY. EACH GUARANTOR AGREES THAT SERVICE OF
PROCESS MAY BE EFFECTED UPON IT UNDER ANY METHOD PERMISSIBLE UNDER THE LAWS OF THE
STATE OF NEW YORK AND IRREVOCABLY WAIVES ANY OBJECTION TO VENUE IN THE STATE AND
FEDERAL COURTS LOCATED IN THE STATE OF NEW YORK OR, TO THE EXTENT APPLICABLE IN
ACCORDANCE WITH THE TERMS HEREOF, LOCATED IN THE STATE.
(d)
EACH OF THE GUARANTORS, BY ITS EXECUTION OF THIS GUARANTY, AND LANDLORD,
BY ITS ACCEPTANCE OF THIS GUARANTY, HEREBY WAIVE TRIAL BY JURY AND THE RIGHT THERETO
IN ANY ACTION OR PROCEEDING OF ANY KIND ARISING ON, UNDER, OUT OF, BY REASON OF OR
RELATING IN ANY WAY TO THIS GUARANTY OR THE INTERPRETATION, BREACH OR ENFORCEMENT
THEREOF.
(e)
In the event of any suit, action, arbitration or other proceeding to interpret this Guaranty, or to determine or
enforce any right or obligation created hereby, the prevailing party in the action shall recover such party’s reasonable out-
of-pocket costs and expenses incurred in connection therewith, including, but not limited to, reasonable out-of-pocket
attorneys’ fees and costs of appeal, post judgment enforcement proceedings (if any) and bankruptcy proceedings (if any).
Any court, arbitrator or panel of arbitrators shall, in entering any judgment or making any award in any such suit, action,
arbitration or other proceeding, in addition to any and all other relief awarded to such prevailing party, include in such
judgment or award such party’s reasonable costs and expenses as provided in this Section 17(e).
(f)
Each Guarantor (i) represents that it has been represented and advised by counsel in connection with the
execution of this Guaranty; (ii) acknowledges receipt of a copy of the Master Lease; and (iii) further represents that such
Guarantor has been advised by counsel with respect thereto. This Guaranty shall be construed and interpreted in
accordance with the plain meaning of its language, and not for or against such Guarantor or Landlord, and as a whole,
giving effect to all of the terms, conditions and provisions hereof.
|US-DOCS\126208570.12||
8
(g)
Except as provided in any other written agreement now or at any time hereafter in force between Landlord
and any Guarantor, this Guaranty shall constitute the entire agreement of each Guarantor with Landlord with respect to
the subject matter hereof, and no representation, understanding, promise or condition concerning the subject matter hereof
will be binding upon Landlord or any Guarantor unless expressed herein.
(h)
All stipulations, obligations, liabilities and undertakings under this Guaranty shall be binding upon each
Guarantor and its respective successors and assigns and shall inure to the benefit of Landlord and to the benefit of
Landlord’s successors and assigns.
(i)
Whenever the singular shall be used hereunder, it shall be deemed to include the plural (and vice-versa)
and reference to one gender shall be construed to include all other genders, including neuter, whenever the context of this
Guaranty so requires. Section captions or headings used in this Guaranty are for convenience and reference only, and shall
not affect the construction thereof.
(j)
This Guaranty may be executed in any number of counterparts, each of which shall be a valid and binding
original, but all of which together shall constitute one and the same instrument.
(k)
This Guaranty amends and restates the Existing Guaranty in its entirety, and Landlord and the Guarantors
hereby adopt this Guaranty in full substitution of the Existing Guaranty.
[Signature Page to Follow]
|US-DOCS\126208570.12||
9
EXECUTED as of the date first set forth above.
GUARANTORS:
CAESARS ENTERTAINMENT, INC.,
a Delaware corporation
By:
Name:
Title:
LIGHTHOUSE POINT, LLC,
a Mississippi limited liability company
By:
Name:
Title:
TROPICANA LAUGHLIN, LLC,
a Nevada limited liability company
By:
Name:
Title:
[Signature Page to Second Amended and Restated Guaranty of Master Lease]
EXECUTED as of the date first set forth above.
GLP CAPITAL, L.P.,
a Pennsylvania limited partnership
By: Gaming and Leisure Properties, Inc.,
its general partner
By:
Name:
Title:
[Signature Page to Second Amended and Restated Guaranty of Master Lease]
Appendix A
SUPPLEMENT NO. ______ dated as of _____________ (this “Supplement”), to the SECOND AMENDED AND
RESTATED GUARANTY OF MASTER LEASE (as amended, restated, supplemented or replaced, the “Guaranty”), dated as of
[ ], by and among CAESARS ENTERTAINMENT, INC., a Delaware corporation, LIGHTHOUSE POINT, LLC, a Mississippi
limited liability company, and TROPICANA LAUGHLIN, LLC, a Nevada limited liability company (each, “Guarantor”, and
collectively, the “Guarantors”) and GLP CAPITAL, L.P., a Pennsylvania limited partnership (“Landlord”).
A. Reference is made to that certain Third Amended and Restated Master Lease, dated as of [ ], (the “Master Lease”),
between Landlord, Tropicana Entertainment Inc., IOC Black Hawk County, Inc. and Isle of Capri Bettendorf, L.C. (collectively,
“Tenant”).
B. Capitalized terms used herein and not otherwise defined shall have the meanings assigned to such terms in the
Guaranty.
C. The Guarantors have entered into the Guaranty in order to induce the Landlord to enter into the Master Lease.
Section 14 of the Guaranty provides that additional Subsidiaries of the Tenant may become Guarantors under the Guaranty by
execution and delivery of an instrument in the form of this Supplement. The undersigned subsidiary of Tenant (the “New
Subsidiary”) is executing this Supplement in accordance with the requirements of the Master Lease to become a Guarantor under
the Guaranty.
Accordingly, Landlord and the New Subsidiary agree as follows:
SECTION 1. In accordance with Section 14 of the Guaranty, the New Subsidiary by its signature below becomes a
Guarantor under the Guaranty with the same force and effect as if originally named therein as a Guarantor, and the New
Subsidiary hereby (a) agrees to all the terms and provisions of the Guaranty applicable to it as a Guarantor thereunder, and
(b) represents and warrants that the representations and warranties made by it as a Guarantor thereunder are true and correct, in
all material respects, on and as of the date hereof. Each reference to a “Guarantor” in the Guaranty shall be deemed to include the
New Subsidiary. The Guaranty is hereby incorporated herein by reference.
SECTION 2. The New Subsidiary represents and warrants to the Landlord that this Supplement has been duly
authorized, executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in
accordance with its terms, subject to (i) the effects of bankruptcy, insolvency, moratorium, reorganization, fraudulent conveyance
or other similar laws affecting creditors’ rights generally, (ii) general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law) and (iii) implied covenants of good faith and fair dealing.
SECTION 3. This Supplement may be executed in two or more counterparts, each of which shall constitute an original
but all of which when taken together shall constitute but one contract. This Supplement shall become effective when (a) the
Landlord shall have received a counterpart of this Supplement that bears the signature of the New Subsidiary, and (b) the
Landlord has executed a counterpart hereof.
SECTION 4. Except as expressly supplemented hereby, the Guaranty shall remain in full force and effect.
SECTION 5. THIS SUPPLEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER
THIS SUPPLEMENT SHALL BE CONSTRUED IN
|US-DOCS\126208570.12||
Appendix A-1
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
SECTION 6. In the event any one or more of the provisions contained in this Supplement should be held invalid, illegal
or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and in the
Guaranty shall not in any way be affected or impaired thereby. The parties shall endeavor in good-faith negotiations to replace the
invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that
of the invalid, illegal or unenforceable provisions.
SECTION 7. All communications and notices hereunder shall be in writing and given as provided in Section 15 of the
Guaranty.
SECTION 8. The New Subsidiary agrees to reimburse Landlord for its reasonable out-of-pocket expenses in connection
with this Supplement, including the reasonable fees, disbursements and other charges of counsel for Landlord.
IN WITNESS WHEREOF, the New Subsidiary and the Landlord have duly executed this Supplement to the Guaranty as
of the day and year first above written.
[NAME OF NEW SUBSIDIARY]
By:
Name:
Title:
GLP CAPITAL, L.P.,
a Pennsylvania limited partnership
as Landlord
By:
Name:
Title:
|US-DOCS\126208570.12||
Appendix A-2
FORM OF NONDISTURBANCE AND ATTORNMENT AGREEMENT
EXHIBIT E
1
This NON-DISTURBANCE AND ATTORNMENT AGREEMENT (the “Agreement”) is dated as of
_____________, and is by and among [LENDER], a [ ] [ ], having an address at [ ] (together with its successors and assigns,
“Lender” ), TROPICANA ENTERTAINMENT INC., a Delaware corporation (together with its permitted successors and
assigns, “TEI”), IOC BLACK HAWK COUNTY, INC., an Iowa corporation (together with its permitted successors and assigns,
“Waterloo Operator”), and ISLE OF CAPRI BETTENDORF, L.C., an Iowa limited liability company (together with its
permitted successors and assigns, “Bettendorf Operator” and, collectively with TEI and Waterloo Operator, “Tenant”), each
having an office at c/o Caesars Entertainment, Inc., 100 West Liberty Street, 12 Floor, Reno, Nevada 89501.
th
WHEREAS, by a Third Amended and Restated Master Lease (as amended, modified or otherwise supplemented,
the “Lease”), dated as of [ ], among GLP Capital, L.P. (“Landlord”) (or Landlord’s predecessor in title) and Tenant, Landlord
leased to Tenant a portion of the Property, as said portion is more particularly described in the Lease (such portion of the Property
hereinafter referred to as the “Premises”);
WHEREAS, Lender has made or intends to make a loan to Landlord (the “Loan”), which Loan shall be evidenced
by one or more promissory notes (as the same may be amended, modified, restated, severed, consolidated, renewed, replaced, or
supplemented from time to time, the “Promissory Note”) and secured by, among other things, that certain Mortgage or Deed of
Trust, Assignment of Leases and Rents and Security Agreement (as the same may be amended, restated, replaced, severed, split,
supplemented or otherwise modified from time to time, the “Mortgage”) encumbering the real property located in
______________________ more particularly described on Exhibit A annexed hereto and made a part hereof (the “Property”);
2
WHEREAS, Tenant acknowledges that Lender will rely on this Agreement in making the Loan to Landlord;
as hereinafter provided; and
WHEREAS, Lender and Tenant desire to evidence their understanding with respect to the Mortgage and the Lease
WHEREAS, pursuant to Section 31.1 of the Lease, Tenant has agreed to deliver this Agreement and Lender has
agreed not to disturb Tenant’s possessory rights in the Premises under the Lease on the terms and conditions hereinafter set forth.
agree as follows:
NOW, THEREFORE, in consideration of the mutual agreements hereinafter set forth, the parties hereto hereby
Lender agrees that if Lender exercises any of its rights under the Mortgage, including entry or foreclosure
of the Mortgage or exercise of a power of sale under the Mortgage, Lender, or any person who acquires any portion of the
Property in a foreclosure or
1.
1
References to “Lender” may be modified to reflect an agent, trustee or other representative acting for a group of lenders or debt holders.
2
Subject to modification to reflect terms and type of financing secured by the applicable mortgage.
|US-DOCS\126208570.12||
E-1
similar proceeding or in a transfer in lieu of any such foreclosure, (a) will not terminate or disturb Tenant’s right to use, occupy
and possess the Premises, nor any of Tenant’s rights, privileges and options under the terms of the Lease, , so long as Tenant is
not in default beyond any applicable grace period under any term, covenant or condition of the Lease and (b) will be bound by
the provisions of Article XVII of the Lease for the benefit of each Permitted Leasehold Mortgagee. In addition, Lender or any
person prosecuting such rights and remedies agrees that so long as the Lease has not been terminated on account of Tenant’s
default that has continued beyond applicable notice and cure periods, Lender or such other person, as the case may be, shall not
name or join Tenant as a defendant in any exercise of Lender’s or such person’s rights and remedies arising upon a default under
the Mortgage unless applicable law requires Tenant to be made a party thereto as a condition to proceeding against Landlord. In
the latter case, Lender or any person prosecuting such rights and remedies may join Tenant as a defendant in such action only for
such purpose and not to terminate the Lease or otherwise adversely affect Tenant’s rights under the Lease or this Agreement in
such action.
2.
If, at any time Lender (or any person, or such person’s successors or assigns, who acquires the interest of
Landlord under the Lease through foreclosure of the Mortgage or otherwise) shall succeed to the rights of Landlord under the
Lease as a result of a default or event of default under the Mortgage, Tenant shall attorn to and recognize such person so
succeeding to the rights of Landlord under the Lease (herein sometimes called “Successor Landlord”) as Tenant’s landlord under
the Lease, said attornment to be effective and self-operative without the execution of any further instruments.
3.
Landlord authorizes and directs Tenant to honor any written demand or notice from Lender instructing
Tenant to pay rent or other sums to Lender rather than Landlord (a “Payment Demand”), regardless of any other or contrary
notice or instruction which Tenant may receive from Landlord before or after Tenant’s receipt of such Payment Demand. Tenant
may rely upon any notice, instruction, Payment Demand, certificate, consent or other document from, and signed by, Lender and
shall have no duty to Landlord to investigate the same or the circumstances under which the same was given. Any payment made
by Tenant to Lender or in response to a Payment Demand shall be deemed proper payment by Tenant of such sum pursuant to the
Lease.
If Lender shall become the owner of the Property or the Property shall be sold by reason of foreclosure or
other proceedings brought to enforce the Mortgage or if the Property shall be transferred by deed in lieu of foreclosure, Lender or
any Successor Landlord shall not be:
4.
(a)
liable for any act or omission of any prior landlord (including Landlord) or bound by any obligation to
make any payment to Tenant which was required to be made prior to the time Lender succeeded to any prior landlord
(including Landlord); or
(b)
obligated to cure any defaults of any prior landlord (including Landlord) which occurred, or to make any
payment to Tenant which was required to be paid by any prior landlord (including Landlord), prior to the time that Lender
or any Successor Landlord succeeded to the interest of such landlord under the Lease; or
(c)
obligated to perform any construction obligations of any prior landlord (including Landlord) under the
Lease or liable for any defects (latent, patent or otherwise) in the design, workmanship, materials, construction or
otherwise with respect to improvements and buildings constructed on the Property; or
(d)
subject to any offsets, defenses or counterclaims which Tenant may be entitled to assert against any prior
landlord (including Landlord); or
|US-DOCS\126208570.12||
E-2
(e)
bound by any payment of rent or additional rent by Tenant to any prior landlord (including Landlord) for
more than one month in advance; or
(f)
consent of Lender.
bound by any amendment, modification, termination or surrender of the Lease made without the written
Notwithstanding the foregoing, Tenant reserves its right to any and all claims or causes of action (i) against Landlord for prior
losses or damages and (ii) against the Successor Landlord for all losses or damages arising from and after the date that such
Successor Landlord takes title to the Property.
5.
Tenant hereby represents, warrants, covenants and agrees to and with Lender:
(a)
to deliver to Lender, by certified mail, return receipt requested, a duplicate of each notice of default
delivered by Tenant to Landlord at the same time as such notice is given to Landlord and no such notice of default shall be
deemed given by Tenant under the Lease unless and until a copy of such notice shall have been so delivered to Lender.
Lender shall have the right (but shall not be obligated) to cure such default. Tenant shall accept performance by Lender of
any term, covenant, condition or agreement to be performed by Landlord or its designee under the Lease with the same
force and effect as though performed by Landlord. Tenant further agrees to afford Lender or its designee a period of thirty
(30) days beyond any period afforded to Landlord for the curing of such default during which period Lender or its
designee may elect (but shall not be obligated) to seek to cure such default, or, if such default cannot be cured within that
time, then such additional time as may be necessary to cure such default (including but not limited to commencement of
foreclosure proceedings) during which period Lender or its designee may elect (but shall not be obligated) to seek to cure
such default, prior to taking any action to terminate the Lease. If the Lease shall terminate for any reason, upon Lender’s
written request given within thirty (30) days after such termination, Tenant, within fifteen (15) days after such request,
shall execute and deliver to Lender (or its designee to the extent constituting a permitted successor landlord under the
Lease) a new lease of the Premises for the remainder of the term of the Lease and upon all of the same terms, covenants
and conditions of the Lease;
(b)
that Tenant is the sole owner of the leasehold estate created by the Lease; and
(c)
to promptly certify in writing to Lender, in connection with any proposed assignment of the Mortgage,
whether or not any default on the part of Landlord then exists under the Lease and to deliver to Lender any tenant estoppel
certificates required under the Lease.
6.
Tenant acknowledges that the interest of Landlord under the Lease is assigned to Lender solely as security
for the Promissory Note , and Lender shall have no duty, liability or obligation under the Lease or any extension or renewal
thereof, unless Lender shall specifically undertake such liability in writing or Lender becomes and then only with respect to
periods in which Lender becomes, the fee owner of the Property.
3
3
Subject to modification to reflect terms of debt.
|US-DOCS\126208570.12||
E-3
4
York .
7.
This Agreement shall be governed by and construed in accordance with the laws of the State of New
8.
This Agreement and each and every covenant, agreement and other provisions hereof shall be binding
upon and shall inure to the benefit of the parties hereto and their respective successors and assigns (including, without limitation,
any successor holder of the Promissory Note ) and may be amended, supplemented, waived or modified only by an instrument in
writing executed by the party against which enforcement of the termination, amendment, supplement, waiver or modification is
sought. Each Permitted Leasehold Mortgagee (as defined in the Lease) (for so long as such Permitted Leasehold Mortgagee (as
defined in the Lease) holds a Permitted Leasehold Mortgage (as defined in the Lease)) is an intended third party beneficiary of
Section 1(b) entitled to enforce the same as if a party to this Agreement.
5
9.
All notices to be given under this Agreement shall be in writing and shall be deemed served upon receipt
by the addressee if served personally or, if mailed, upon the first to occur of receipt or the refusal of delivery as shown on a return
receipt, after deposit in the United States Postal Service certified mail, postage prepaid, addressed to the address of Landlord,
Tenant or Lender appearing below. Such addresses may be changed by notice given in the same manner. If any party consists of
multiple individuals or entities, then notice to any one of same shall be deemed notice to such party.
4
Subject to modification solely and to the extent the law of any jurisdiction in which the Premises are located is required to govern the subordination of
Tenant’s interests in such jurisdiction.
5
Subject to modification to reflect terms of debt.
|US-DOCS\126208570.12||
E-4
To Lender:
With a copy to:
(that shall not
constitute notice)
To Tenant:
With a copy to:
(that shall not
constitute notice)
To Landlord:
And with copy to
(which shall not
constitute notice):
th
[___________________]
[___________________]
[___________________]
[___________________]
[___________________]
[___________________]
[___________________]
[___________________]
Tropicana Entertainment Inc.
IOC Black Hawk County, Inc.
Isle of Capri Bettendorf, L.C.
c/o Caesars Entertainment, Inc.
100 West Liberty Street, 12 Floor
Reno, Nevada 89501
Attention: General Counsel
Facsimile No.: 281-683-7511
Latham & Watkins LLP
12670 High Bluff Drive
San Diego, CA 92130
Attention: Sony Ben-Moshe
Facsimile No.: (858) 523-5450
GLP Capital, L.P.
c/o Gaming and Leisure Properties, Inc.
845 Berkshire Blvd., Suite 200
Wyomissing, Pennsylvania 19610
Attention: Chief Executive Officer
Facsimile: (610) 401-2901
Goodwin Procter LLP
The New York Times Building
620 Eighth Avenue
New York, New York 10018
Attention: Yoel Kranz, Esq.
Facsimile: (617) 649-1471
10.
If this Agreement conflicts with the Lease, then this Agreement shall govern as between the parties and
any Successor Landlord, including upon any attornment pursuant to this Agreement. This Agreement supersedes, and constitutes
full compliance with, any provisions in the Lease that provide for subordination of the Lease to, or for delivery of nondisturbance
agreements by the holder of, the Mortgage.
11.
In the event Lender shall acquire Landlord’s interest in the Premises, Tenant shall look only to the estate
and interest, if any, of Lender in the Property for the satisfaction of Tenant’s remedies for the collection of a judgment (or other
judicial process) requiring the payment of money in the event of any default by Lender as a Successor Landlord under the Lease
or under this Agreement, and no other property or assets of Lender shall be subject to levy, execution or other enforcement
procedure for the satisfaction of Tenant’s remedies under or with respect to the Lease, the relationship of the landlord and tenant
under the Lease or Tenant’s use or occupancy of the Premises or any claim arising under this Agreement.
12.
If any provision of this Agreement is held to be invalid or unenforceable by a court of competent
jurisdiction, such provision shall be deemed modified to the extent
|US-DOCS\126208570.12||
E-5
necessary to be enforceable, or if such modification is not practicable, such provision shall be deemed deleted from this
Agreement, and the other provisions of this Agreement shall remain in full force and effect, and shall be liberally construed in
favor of Lender.
original and all of which together shall constitute one and the same instrument.
13.
This Agreement may be executed in any number of counterparts, each of which shall be deemed an
[Remainder of Page Intentionally Left Blank]
|US-DOCS\126208570.12||
E-6
EXHIBIT F
FORM OF SUBORDINATION, NONDISTURBANCE
AND ATTORNMENT AGREEMENT
6
This SUBORDINATION, NON-DISTURBANCE, AND ATTORNMENT AGREEMENT (the “Agreement”)
is dated as of _____________, and is by and among [LENDER], a [ ] [ ], having an address at [ ] (together with its successors and
assigns, “Lender” ), GLP CAPITAL, L.P., a Pennsylvania limited partnership (“Landlord”), TROPICANA ENTERTAINMENT
INC., a Delaware corporation (together with its permitted successors and assigns, “TEI”), IOC BLACK HAWK COUNTY, INC.,
an Iowa corporation (together with its permitted successors and assigns, “Waterloo Operator”), and ISLE OF CAPRI
BETTENDORF, L.C., an Iowa limited liability company (together with its permitted successors and assigns, “Bettendorf
Operator” and, collectively with TEI and Waterloo Operator, “Tenant”).
WHEREAS, by a Third Amended and Restated Master Lease (as amended, modified or supplemented, the
“Lease”) dated as of [ ], between Landlord (or Landlord’s predecessor in title) and Tenant, Landlord leased to Tenant a portion of
the Property, as said portion is more particularly described in the Lease (such portion of the Property hereinafter referred to as the
“Premises”);
WHEREAS, Lender has made or intends to make a loan to Landlord (the “Loan”), which Loan shall be evidenced
by one or more promissory notes (as the same may be amended, modified, restated, severed, consolidated, renewed, replaced, or
supplemented from time to time, the “Promissory Note”) and secured by, among other things, that certain Mortgage or Deed of
Trust, Assignment of Leases and Rents and Security Agreement (as the same may be amended, restated, replaced, severed, split,
supplemented or otherwise modified from time to time, the “Mortgage”) encumbering the real property located in
______________________ more particularly described on Exhibit A annexed hereto and made a part hereof (the “Property”);
7
WHEREAS, Tenant acknowledges that Lender will rely on this Agreement in making the Loan to Landlord;
as hereinafter provided; and
WHEREAS, Lender and Tenant desire to evidence their understanding with respect to the Mortgage and the Lease
WHEREAS, pursuant to Section 31.1 of the Lease, Tenant has agreed to deliver this Agreement and will
subordinate the Lease to the Security Instruments and to the lien thereof and, in consideration of Tenant’s delivery of this
Agreement, Lender has agreed not to disturb Tenant’s possessory rights in the Premises under the Lease on the terms and
conditions hereinafter set forth.
agree as follows:
NOW, THEREFORE, in consideration of the mutual agreements hereinafter set forth, the parties hereto hereby
the Property thereunder (including but not limited to any option
1.
Tenant covenants, stipulates and agrees that the Lease and all of Tenant’s right, title and interest in and to
6
References to “Lender” may be modified to reflect an agent, trustee or other representative acting for a group of debt holders.
7
Subject to modification to reflect terms and type of financing secured by the applicable mortgage.
|US-DOCS\126208570.12||
F-1
to purchase, right of first refusal to purchase or right of first offer to purchase the Property or any portion thereof) is hereby, and
shall at all times continue to be, subordinated and made secondary and inferior in each and every respect to the Mortgage and the
lien thereof, to all of the terms, conditions and provisions thereof and to any and all advances made or to be made thereunder, so
that at all times the Mortgage shall be and remain a lien on the Property prior to and superior to the Lease for all purposes, subject
to the provisions set forth herein. Subordination is to have the same force and effect as if the Mortgage and such renewals,
modifications, consolidations, replacements and extensions had been executed, acknowledged, delivered and recorded prior to the
Lease, any amendments or modifications thereof and any notice thereof.
2.
Lender agrees that if Lender exercises any of its rights under the Mortgage, including entry or foreclosure
of the Mortgage or exercise of a power of sale under the Mortgage, Lender, or any person who acquires any portion of the
Property in a foreclosure or similar proceeding or in a transfer in lieu of any such foreclosure, (a) will not terminate or disturb
Tenant’s right to use, occupy and possess the Premises, nor any of Tenant’s rights, privileges and options under the terms of the
Lease, so long as Tenant is not in default beyond any applicable grace period under any term, covenant or condition of the Lease
and (b) will be bound by the provisions of Article XVII of the Lease for the benefit of each Permitted Leasehold Mortgagee. In
addition, Lender or any person prosecuting such rights and remedies agrees that so long as the Lease has not been terminated on
account of Tenant’s default that has continued beyond applicable notice and cure periods, Lender or such other person, as the case
may be, shall not name or join Tenant as a defendant in any exercise of Lender’s or such person’s rights and remedies arising
upon a default under the Mortgage unless applicable law requires Tenant to be made a party thereto as a condition to proceeding
against Landlord. In the latter case, Lender or any person prosecuting such rights and remedies may join Tenant as a defendant in
such action only for such purpose and not to terminate the Lease or otherwise adversely affect Tenant’s rights under the Lease or
this Agreement in such action.
3.
If, at any time Lender (or any person, or such person’s successors or assigns, who acquires the interest of
Landlord under the Lease through foreclosure of the Mortgage or otherwise) shall succeed to the rights of Landlord under the
Lease as a result of a default or event of default under the Mortgage, Tenant shall attorn to and recognize such person so
succeeding to the rights of Landlord under the Lease (herein sometimes called “Successor Landlord”) as Tenant’s landlord under
the Lease, said attornment to be effective and self-operative without the execution of any further instruments.
4.
Landlord authorizes and directs Tenant to honor any written demand or notice from Lender instructing
Tenant to pay rent or other sums to Lender rather than Landlord (a “Payment Demand”), regardless of any other or contrary
notice or instruction which Tenant may receive from Landlord before or after Tenant’s receipt of such Payment Demand. Tenant
may rely upon any notice, instruction, Payment Demand, certificate, consent or other document from, and signed by, Lender and
shall have no duty to Landlord to investigate the same or the circumstances under which the same was given. Any payment made
by Tenant to Lender or in response to a Payment Demand shall be deemed proper payment by Tenant of such sum pursuant to the
Lease.
If Lender shall become the owner of the Property or the Property shall be sold by reason of foreclosure or
other proceedings brought to enforce the Mortgage or if the Property shall be transferred by deed in lieu of foreclosure, Lender or
any Successor Landlord shall not be:
5.
(a)
liable for any act or omission of any prior landlord (including Landlord) or bound by any obligation to
make any payment to Tenant which was required to be made prior to the time Lender succeeded to any prior landlord
(including Landlord); or
|US-DOCS\126208570.12||
F-2
(b)
obligated to cure any defaults of any prior landlord (including Landlord) which occurred, or to make any
payment to Tenant which was required to be paid by any prior landlord (including Landlord), prior to the time that Lender
or any Successor Landlord succeeded to the interest of such landlord under the Lease; or
(c)
obligated to perform any construction obligations of any prior landlord (including Landlord) under the
Lease or liable for any defects (latent, patent or otherwise) in the design, workmanship, materials, construction or
otherwise with respect to improvements and buildings constructed on the Property; or
(d)
subject to any offsets, defenses or counterclaims which Tenant may be entitled to assert against any prior
landlord (including Landlord); or
(e)
bound by any payment of rent or additional rent by Tenant to any prior landlord (including Landlord) for
more than one month in advance; or
(f)
consent of Lender.
bound by any amendment, modification, termination or surrender of the Lease made without the written
Notwithstanding the foregoing, Tenant reserves its right to any and all claims or causes of action (i) against Landlord for prior
losses or damages and (ii) against the Successor Landlord for all losses or damages arising from and after the date that such
Successor Landlord takes title to the Property.
6.
Tenant hereby represents, warrants, covenants and agrees to and with Lender:
(a)
to deliver to Lender, by certified mail, return receipt requested, a duplicate of each notice of default
delivered by Tenant to Landlord at the same time as such notice is given to Landlord and no such notice of default shall be
deemed given by Tenant under the Lease unless and until a copy of such notice shall have been so delivered to Lender.
Lender shall have the right (but shall not be obligated) to cure such default. Tenant shall accept performance by Lender or
its designee of any term, covenant, condition or agreement to be performed by Landlord under the Lease with the same
force and effect as though performed by Landlord. Tenant further agrees to afford Lender or the designee a period of
thirty (30) days beyond any period afforded to Landlord or its designee for the curing of such default during which period
Lender or its designee may elect (but shall not be obligated) to seek to cure such default, or, if such default cannot be
cured within that time, then such additional time as may be necessary to cure such default (including but not limited to
commencement of foreclosure proceedings) during which period Lender or its designee may elect (but shall not be
obligated) to seek to cure such default, prior to taking any action to terminate the Lease. If the Lease shall terminate for
any reason, upon Lender’s written request given within thirty (30) days after such termination, Tenant, within fifteen (15)
days after such request, shall execute and deliver to Lender (or its designee to the extent constituting a permitted
successor landlord under the Lease) a new lease of the Premises for the remainder of the term of the Lease and upon all of
the same terms, covenants and conditions of the Lease;
(b)
that Tenant is the sole owner of the leasehold estate created by the Lease; and
(c)
to promptly certify in writing to Lender, in connection with any proposed assignment of the Mortgage,
whether or not any default on the part of Landlord then
|US-DOCS\126208570.12||
F-3
exists under the Lease and to deliver to Lender any tenant estoppel certificates required under the Lease.
7.
Tenant acknowledges that the interest of Landlord under the Lease is assigned to Lender solely as security
for the Promissory Note , and Lender shall have no duty, liability or obligation under the Lease or any extension or renewal
thereof, unless Lender shall specifically undertake such liability in writing or Lender becomes and then only with respect to
periods in which Lender becomes, the fee owner of the Property.
8
York.
9
8.
This Agreement shall be governed by and construed in accordance with the laws of the State of New
9.
This Agreement and each and every covenant, agreement and other provisions hereof shall be binding
upon and shall inure to the benefit of the parties hereto and their respective successors and assigns (including, without limitation,
any successor holder of the Promissory Note ) and may be amended, supplemented, waived or modified only by an instrument in
writing executed by the party against which enforcement of the termination, amendment, supplement, waiver or modification is
sought. Each Permitted Leasehold Mortgagee (as defined in the Lease) (for so long as such Permitted Leasehold Mortgagee (as
defined in the Lease) holds a Permitted Leasehold Mortgage (as defined in the Lease)) is an intended third party beneficiary of
Section 2(b) entitled to enforce the same as if a party to this Agreement.
10
10.
All notices to be given under this Agreement shall be in writing and shall be deemed served upon receipt
by the addressee if served personally or, if mailed, upon the first to occur of receipt or the refusal of delivery as shown on a return
receipt, after deposit in the United States Postal Service certified mail, postage prepaid, addressed to the address of Landlord,
Tenant or Lender appearing below. Such addresses may be changed by notice given in the same manner. If any party consists of
multiple individuals or entities, then notice to any one of same shall be deemed notice to such party.
8
Subject to modification to reflect terms of debt.
9
Subject to modification solely and to the extent the law of any jurisdiction in which the Premises are located is required to govern the subordination of
Tenant’s interests in such jurisdiction.
10
Subject to modification to reflect terms of debt.
|US-DOCS\126208570.12||
F-4
To Lender:
With a copy to:
(that shall not
constitute notice)
To Tenant:
With a copy to:
(that shall not
constitute notice)
To Landlord:
And with copy to
(which shall not
constitute notice):
th
[___________________]
[___________________]
[___________________]
[___________________]
[___________________]
[___________________]
[___________________]
[___________________]
Tropicana Entertainment Inc.
IOC Black Hawk County, Inc.
Isle of Capri Bettendorf, L.C.
c/o Caesars Entertainment, Inc.
100 West Liberty Street, 12 Floor
Reno, Nevada 89501
Attention: General Counsel
Facsimile No.: 281-683-7511
Latham & Watkins LLP
12670 High Bluff Drive
San Diego, CA 92130
Attention: Sony Ben-Moshe
Facsimile No.: (858) 523-5450
GLP Capital, L.P.
c/o Gaming and Leisure Properties, Inc.
845 Berkshire Blvd., Suite 200
Wyomissing, Pennsylvania 19610
Attention: Chief Executive Officer
Facsimile: (610) 401-2901
Goodwin Procter LLP
The New York Times Building
620 Eighth Avenue
New York, New York 10018
Attention: Yoel Kranz, Esq.
Facsimile: (617) 649-1471
11.
If this Agreement conflicts with the Lease, then this Agreement shall govern as between the parties and
any Successor Landlord, including upon any attornment pursuant to this Agreement. This Agreement supersedes, and constitutes
full compliance with, any provisions in the Lease that provide for subordination of the Lease to, or for delivery of nondisturbance
agreements by the holder of, the Mortgage.
12.
In the event Lender shall acquire Landlord’s interest in the Premises, Tenant shall look only to the estate
and interest, if any, of Lender in the Property for the satisfaction of Tenant’s remedies for the collection of a judgment (or other
judicial process) requiring the payment of money in the event of any default by Lender as a Successor Landlord under the Lease
or under this Agreement, and no other property or assets of Lender shall be subject to levy, execution or other enforcement
procedure for the satisfaction of Tenant’s remedies under or with respect to the Lease, the relationship of the landlord and tenant
under the Lease or Tenant’s use or occupancy of the Premises or any claim arising under this Agreement.
|US-DOCS\126208570.12||
F-5
13.
If any provision of this Agreement is held to be invalid or unenforceable by a court of competent
jurisdiction, such provision shall be deemed modified to the extent necessary to be enforceable, or if such modification is not
practicable, such provision shall be deemed deleted from this Agreement, and the other provisions of this Agreement shall remain
in full force and effect, and shall be liberally construed in favor of Lender.
original and all of which together shall constitute one and the same instrument.
14.
This Agreement may be executed in any number of counterparts, each of which shall be deemed an
|US-DOCS\126208570.12||
F-6
SCHEDULE A
DISCLOSURE ITEMS
Ground Leases
Tropicana Laughlin
None
Tropicana Atlantic City
None
Tropicana Greenville
Lease Agreement dated October 1, 2013 by and between City of Greenville, Mississippi, as landlord, and Landlord (as successor
in interest to Lighthouse Point, LLC d/b/a Trop Casino Greenville), as tenant
Lease Agreement dated February 19, 1997 by and between the Board of Mississippi Levee Commissioners, as landlord, and
Landlord (as successor in interest to Lighthouse Point, LLC d/b/a Trop Casino Greenville, as successor in interest to Alpha
Greenville Hotel, Inc.), as tenant, as amended and restated by that certain Restated and Amended Lease Agreement dated April
18, 1997, as further amended by that certain Amendment to Lease dated October 5, 2010
Amended and Restated Lease Agreement dated January 20, 1995 by and between Greenville Marine Corporation , as landlord,
and Landlord (as successor in interest to Lighthouse Point, LLC d/b/a Trop Casino Greenville, as successor in interest Rainbow
Entertainment, LLC), as tenant, as amended by that certain Assignment and Assumption, dated October 24, 1995, as further
amended by that certain First Amendment to Amended and Restated Lease Agreement, dated October 26, 1995, as further
amended by that certain Second Amendment to Amended and Restated Lease Agreement, dated July 1, 2003, as further amended
by that certain Third Amendment to Amended and Restated Lease Agreement, dated March 4, 2010, and as further amended by
that certain Second Amended and Restated Lease Agreement, dated October 27, 2010
Isle Bettendorf
None
Isle Waterloo
None
|US-DOCS\126208570.12||
Schedule A-1
SCHEDULE A
DISCLOSURE ITEMS
Specified Subleases
Those subleases, together with any amendments relating thereto, in effect as of the Commencement Date with the following
subtenants:
Tropicana Atlantic City
1. ADAM GOOD CRAB HOUSE, LLC, a New Jersey limited liability company, trading as ADAM GOOD CRAB SHACK
AND SPORTS BAR
2. MARSHALL RETAIL GROUP, LLC, a Delaware Limited Liability Company d/b/a AKA
3. ATC INDOOR DAS LLC, a Delaware limited liability company
4. ATLANTICARE HEALTH SERVICES , INC., a New Jersey Corporation d/b/a AtlantiCare LifeCenter at Tropicana
5. A TIME FOR WINE, LLC., a New Jersey Limited Liability Company, trading as A TIME FOR WINE
6. BLUEMERCURY, INC., a Delaware corporation authorized to do business in the State of New Jersey, trading as
bluemercury APOTHECARY AND RESORT SPA
7. ARK AC BURGER BAR LLC, a Delaware Limited Liability Company authorized to transact business in New Jersey, t/a
Broadway Burger
8. CARMINE'S ATLANTIC CITY, LLC, a New Jersey limited liability company, trading as CARMINE'S
9. FRIDAY ENTERPRISES, LLC, a Pennsylvania limited liability company authorized to do business in the State of New
Jersey, trading as CUBA LIBRE RESTAURANT and RUM BAR. Tenant name amended to FRIDAY ENTERPRISES,
LLC, a New Jersey limited liability company
10. DYNAMIC DUO 8, LLC., a New Jersey Limited Liability Company, trading as Anthem
11. ERWIN PEARL RETAIL, INC., a New York corporation authorized to do business in the State of New Jersey, trading as
ERWIN PEARL
12. GLOBE VENDING, INC., a New Jersey corporation, trading as FAMILY FUN STATION
13. FRANCESCA'S COLLECTIONS, INC., a Texas Corporation authorized to transact business in New Jersey, t/a
FRANCESCA'S COLLECTIONS
14. Intentionally Omitted
15. Intentionally Omitted
|US-DOCS\126208570.12||
F-2
16. DEE M. S. ENTERPRISES, INC., a New Jersey Corporation, d/b/a Hats Emporium
17. JAVA PLUS II, LLC, a Delaware limited liability company, t/a Starbucks
18. KISS KISS ATLANTIC CITY, LLC., a New Jersey limited company d/b/a IVAN KANE'S KISS KISS A GO GO
19. BOARDWALK FAVORITES, LLC., t/a LA PETITE CREPERIE, a New Jersey Limited Liability Company
20. MARSHALL RETAIL GROUP, LLC, a Delaware limited liability company d/b/a Lick
21. MARSHALL RETAIL GROUP, LLC, a Delaware limited liability company d/b/a Havana Sundries, Tropicana Casino
Market, Boardwalk Corner Store and Tropicana Lobby Market
22. MARSHALL RETAIL GROUP, LLC, a Delaware Limited Liability Company d/b/a MARSHALL ROUSSO
23. MARSHALL RETAIL GROUP, LLC, a Delaware Limited Liability Company d/b/a M.C. SWEET'S Bath Delights
24. R & R FOODS LLC, a New Jersey limited liability company, t/a Mrs. Fields Cookies
25. NEWZOOM, INC, a California corporation authorized to transact business in New Jersey, d/b/a ZoomSystems
26. THE GENERAL STORE OFA, LLC, a New Jersey limited liability company, trading as OLD FARMER'S ALMANAC
27. ATLANTIC CITY PALM, LLC, a New Jersey limited liability company, trading as THE PALM
28. P.F. CHANG'S CHINA BISTRO, INC., a Delaware corporation authorized to do business in the State of New Jersey,
trading as P.F. CHANG'S CHINA BISTRO
29. PLANET ROSE, LLC, a New Jersey limited liability company, trading as PLANET ROSE
30. PROVIDENCE AC, INC., a New Jersey corporation, t/a Providence Atlantic City
31. RI RA ATLANTIC CITY, LLC, a limited liability company authorized to do business in the State of New Jersey, trading as
RI RA IRISH PUB
32. Intentionally Omitted
33. DEE M. S. ENTERPRISES, INC., a New Jersey Corporation, d/b/a Step Up
34. SMNJ, LLC, d/b/a Sunglass Menagerie
35. SWAROVSKI RETAIL VENTURES, LTD., a Rhode Island corporation authorized to do business in the State of New
Jersey, trading as SWAROVSKI
|US-DOCS\126208570.12||
F-3
36. TALK OF THE WALK, INC., a New Jersey corporation, trading as TALK OF THE WALK
37. TIME AFTER TIME AC, LLC, a New Jersey limited liability company, d/b/a Time After Time
38. MARSHALL RETAIL GROUP, LLC, a Delaware Limited Liability Company d/b/a TRAVELAB
39. MARSHALL RETAIL GROUP, LLC, a Delaware Limited Liability Company d/b/a TUMI
40. WWVB, LLC, a New Jersey Limited Liability Company d/b/a Wet Willie's
41. THE WHITE HOUSE, INC., a Florida corporation authorized to do business in the State of New Jersey, trading as WHITE
HOUSE/BLACK MARKET. Lease assigned to WHITE HOUSE/BLACK MARKET, INC., a Florida corporation
42. ZEPHYR GALLERY I, LLC, a New Jersey limited liability company, trading as ZEPHYR GALLERY
43. ZEYTINIA, L.L.C., a New Jersey limited liability company, trading as ZEYTINIA
44. GILCHRIST AT TROPICANA, LLC, a New Jersey Limited Liability Company
45. ADAM GOOD, LLC, a New Jersey Limited Liability Company, authorized to do business in the name of FIREWATERS
BEER GARDEN and ADAM GOODDELI
46. BOARDWALK FAVORITES, LLC, a New Jersey limited liability company t/a BOARDWALK FAVORITES
47. BOARDWALK FAVORITES, LLC, a New Jersey limited liability company t/a BOARDWALK FAVORITES- ICE
CREAM
48. B&K BICYCLE RENTAL, INC.
49. AC-CPC, LLC, a New Jersey limited liability company, d/b/a Chickie's and Pete's
50. ESCAPE AC, LLC, a New Jersey limited liability company d/b/a ESCAPE AC
51. GLOBE VENDING, INC., a New Jersey corporation, trading as FAMILY SPORTS STATION
52. A.C WINGS, L.L.C. D/B/A HOOTERS RESTAURANT, a limited liability corporation in the State of New Jersey
53. JAMES CANDY COMPANY, a New Jersey corporation, d/b/a JAMES CANDY COMPANY
54. LUXE SALON, LLC, a New Jersey limited liability company d/b/a LUXE SALON
55. PREFERRED COFFEE II, L.L.C., a Delaware limited liability company, authorized to do business in the name of
STARBUCKS
|US-DOCS\126208570.12||
F-4
56. BOARDWALK FAVORITES, LLC, a New Jersey limited liability company d/b/a THE CORNER MARKET
Tropicana Greenville
None
Tropicana Laughlin
1. The MARSHALL RETAIL GROUP, LLC (Gift Shop)
2. The MARSHALL RETAIL GROUP, LLC (Boutique)
3. WILLIAM HILL
Those subleases, together with any amendments relating thereto, in effect as of the Second A&R Effective Date with the
following subtenants:
Isle Bettendorf
1. WILLIAM HILL
Isle Waterloo
1. WILLIAM HILL
|US-DOCS\126208570.12||
F-5
SCHEDULE A
DISCLOSURE ITEMS
Environmental Reports
All matters disclosed in the following reports:
Tropicana Atlantic City
• Legionella Water Sampling Report – September 20-21, 2016
• Room 1151 Legionella Sampling Report – July 9, 2014
Chelsea (Tropicana AC)
•
•
Phase I ESA (Holiday Inn Boardwalk) – May 2, 2006
Phase I ESA (Howard Johnson Boardwalk) – May 4, 2006
Wellington Ave
•
•
•
•
•
Soil and Groundwater Remedial Investigation – Phase I Report (TropWorld Maintenance Yard) – July 16, 1996
Site Assessment Report (TropWorld Maintenance Yard) – December 4, 2006
Site Assessment Report Addendum – December 28, 2006
Sub-Slab Soil Gas & Indoor Air Sampling ARH Report – December 28, 2012
Soil and Groundwater Remedial Investigation – Phase I Report (TropWorld Maintenance Yard) – July 16, 1996
Tropicana Laughlin
• E26272 Legionella Potable Water Report – December 10, 2015
• E26319 Legionella Cooling Tower Report – December 17, 2015
• E26319 Legionella Potable Water Report – December 17, 2015
•
Swan Hall Final Report – May 21, 2014
Tropicana Greenville
None
Isle Bettendorf
None
Isle Waterloo
None
|US-DOCS\126208570.12||
F-6
SCHEDULE A
DISCLOSURE ITEMS
Encumbrances
The encumbrances, liens, attachments, title retention agreements or claims identified in the following title policies delivered to the
Landlord for the Leased Property, prior to or within the date one (1) month following (a) with respect to any Facility other than the
Iowa Facilities, the Commencement Date and (b) with respect to any Iowa Facility, the Second A&R Effective Date, in each case,
issued in the form of the following Pro Forma Title Policies:
• Tropicana Laughlin (Laughlin, NV): Fidelity National Title Insurance Company, Pro Forma Policy No. NV-FNCP-IMP-
2730628-1-18-42041739
• Tropicana Atlantic City (Atlantic City, NJ): Fidelity National Title Insurance Company, Pro Forma Policy Nos. 18-
000383NCS-OP, 18-000382NCS-OP, 18-000380NCS-OP
• Tropicana Greenville (Greenville, MS): Fidelity National Title Insurance Company, Policy No. MS 1-6685
•
•
Isle Bettendorf (Bettendorf, IA): Fidelity National Title Insurance Company, Pro Forma Policy No. IA252008018R
Isle Waterloo (Waterloo, IA): Fidelity National Title Insurance Company, Pro Forma Policy No. IA252008019R
|US-DOCS\126208570.12||
F-7
None.
SCHEDULE B
PROPERTY AGREEMENTS
|US-DOCS\126208570.12||
Schedule B
Eligble Replacement Properties
Scioto Downs
The Row
Pompano
Black Hawk
Boonville
Replaced Property
Greenville
SCHEDULE C
PROPERTY VALUES
Property Value
$448.481
$396.220
$219.344
$214.100
$184.260
$46.916
|US-DOCS\126208570.12||
Schedule C
SCHEDULE D
2019 FACILITY ADJUSTED REVENUES
1.
2.
3.
4.
5.
6.
7.
8.
9.
Tropicana Atlantic City: $82.077 million
Tropicana Greenville: $8.355 million
Tropicana Laughlin: $24.165 million
Eldorado - Scioto Downs in Columbus, Ohio: $79.868 million
The Row in Reno, Nevada: $70.561 million
Isle Casino Racing at Pompano Park in Pompano Beach, Florida: $39.062 million
Isle and Lady Luck Casino Hotels in Black Hawk, Colorado: $38.128 million
Isle Casino Hotel in Waterloo, Iowa: $35.536 million
Isle Casino Hotel in Bettendorf, Iowa: $23.175 million
10.
Isle of Capri Casino and Hotel in Boonville, Missouri: $32.814 million
|US-DOCS\126208570.12||
SCHEDULE 1.1
EXCLUSIONS FROM LEASED PROPERTY
1. Any immaterial assets or property not necessary to the operation of the Leased Property to the extent and for so long as the
same are not permitted or capable of being mortgaged or pledged to a Permitted Leasehold Mortgagee, whether as a result of a
contractual restriction, legal restrictions or otherwise; provided that this paragraph shall not apply to exclude from Leased
Property any assets or property to the extent that (x) Tenant’s leasehold interest therein is then subject to a valid, enforceable and
perfected mortgage or other lien in favor of a Permitted Leasehold Mortgagee or (y) no Debt Agreement then in effect requires
Tenant’s leasehold interest therein to be mortgaged or pledged.
|US-DOCS\126208570.12||
Schedule 1.1
SCHEDULE 6.3
GUARANTORS UNDER THE MASTER LEASE
Caesars Entertainment, Inc., a Delaware corporation (f/k/a Eldorado Resorts, Inc., a Nevada corporation)
Lighthouse Point, LLC, a Mississippi limited liability company
Tropicana Laughlin, LLC, a Nevada limited liability company
|US-DOCS\126208570.12||
Schedule 6.3
Exhibit 14.1
Caesars Entertainment, Inc.
Code of Ethics and Business Conduct
This Code of Ethics and Business Conduct, which includes our Conflicts of Interest Policy attached as Exhibit A hereto
(collectively, the “Code”), embodies the commitment of Caesars Entertainment, Inc. and its subsidiaries (the “Company”) to
conduct business in accordance with all applicable laws, rules and regulations, and ethical standards. All employees, officers,
and members of the Caesars Entertainment, Inc. Board of Directors (the “Board”) are expected to adhere to those principals
and procedures set forth in the Code that apply to them.
We also expect the consultants that we retain generally to abide by the Code.
The Code includes standards that are designed to deter wrongdoing and to promote:
(1)
(2)
(3)
(4)
Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest
between personal and professional relationships;
Full, fair, accurate, timely, and understandable disclosure in reports and documents that the Company
files with, or submits to, the Securities and Exchange Commission (the “SEC”) and in other public
communications made by the Company;
Compliance with applicable governmental laws, rules and regulations;
The prompt internal reporting of violations of the Code to an appropriate person or persons identified
in the Code; and
(5)
Accountability for adherence to the Code.
Section I
A.
Implementation and Oversight of The Code
The Board is ultimately responsible for the implementation of the Code. The Board has designated the Company’s
Chief Legal Officer to be the compliance officer (such person, or such other person as the Board may subsequently designate
as the compliance officer, the “Compliance Officer”) for the implementation and administration of the Code, provided,
however, that notwithstanding any provision to the contrary in this Code, any matter submitted to the Audit Committee of the
Board pursuant to the Company’s Whistleblower Hotline Policy and Procedures shall not be reviewed or otherwise
administered by the Compliance Officer unless so directed by the Audit Committee.
Questions regarding the application or interpretation of the Code are inevitable.
Directors, officers, employees and consultants of the Company should direct all questions to the Compliance Officer.
1
The Code, and all amendments of the Code, will be included in the Company’s periodic filings with the SEC and will
be available on the Company’s website.
Statements in the Code to the effect that certain actions may be taken only with the “Company’s approval” mean that
the Compliance Officer must give prior written approval before the proposed action may be undertaken. The Compliance
Officer will act in a manner that is consistent with the requirements and spirit of the Code.
The Code should be read in conjunction with the Company’s other policy statements, including, without limitation, the
Company’s Whistleblower Hotline Policy and Procedures, Conflicts of Interest Policy, Company’s Securities Trading Policy
and Gaming Compliance Policy.
Periodic training may be provided regarding the contents and importance of the Code and related policy statements and
the manner in which violations must be reported and waivers must be requested.
B.
Honest and Ethical Conduct
One person’s dishonest or unethical conduct can harm the Company’s reputation and compromise the trust that the
public and our shareholders have in the Company. For that reason, each director, officer, employee and consultant must be
familiar with and comply with the Code. Compliance with the Code - and therefore all laws and regulations - forms the
foundation of honest and ethical conduct. Accordingly, compliance with the Code is not simply expected; it is mandatory. In
addition, the Company expects that directors, officers, employees and consultants of the Company will:
o Establish an example by their behavior as a model for others subject to the Code.
o Sustain a culture where honest and ethical conduct is recognized, valued and exemplified by all directors, officers,
employees, consultants and other representatives of the Company.
o Personally participate in, and where applicable, lead compliance efforts through meetings with others subject to the
Code and monitor compliance matters and programs.
o Raise and encourage others to raise concerns and questions about ethical conduct and integrity.
The Company will take such disciplinary or preventive action as it deems appropriate to address any existing or
potential violation of the Code brought to its attention. The Company’s Conflicts of Interest Policy, which is attached to the
Code as Exhibit A, is an integral part of the Code and all Company directors, officers, employees and consultants should
conduct themselves in accordance with its requirements and spirit.
A personal conflict of interest occurs when an individual’s private interest improperly interferes with the interests
of the Company. Personal conflicts of interest are prohibited as a matter of Company policy, unless they have been
approved by the Company. In particular, a
2
director, officer, employee, or consultant must never use his or her position with the Company to obtain any improper personal
benefit for himself or herself, for his or her family members, or for any other person, including loans or guarantees of
obligations, from any person or entity, provided, however, that the Code is not intended to prohibit doing business with
vendors, service providers, licensed lenders and the like who do business with the Company, so long as one does not exploit
his or her position with the Company to obtain preferential treatment and so long as any such actions are not in violation of
any applicable law or regulation (including, without limitation, SEC and Nasdaq rules).
Service to the Company should never be subordinated to personal gain and advantage.
Conflicts of interest, unless properly waived by the Company, must be avoided.
Any director, officer, employee or consultant who is aware of a transaction or relationship that could reasonably be
expected to give rise to a conflict of interest should disclose and discuss the matter fully and promptly with the Compliance
Officer, provided however, that alternatively, any complaint may be reported anonymously as provided by the Company’s
Whistleblower Policy and Procedures referenced herein.
C.
Full, Fair, Accurate, Timely and Understandable Public Disclosure
It is the Company’s policy that the information in its public communications, including SEC filings, be full, fair,
accurate, timely, and understandable. All directors, officers, employees and consultants who are involved in the Company’s
disclosure process are responsible for acting in furtherance of this policy. In particular, these individuals are required to
maintain familiarity with the disclosure requirements applicable to the Company and are prohibited from knowingly
misrepresenting, omitting, or causing others to misrepresent or omit, material facts about the Company to others, whether
within or outside the Company, including the Company’s independent auditors. Our disclosures should comply with the letter
and the spirit of applicable law.
All directors, officers, employees and consultants must follow these guidelines:
o Act honestly, ethically and with integrity.
o Comply with the Code.
o Endeavor to ensure full, fair, timely, accurate and understandable disclosure in the Company’s filings with the
SEC.
o Through communication, make sure that others at the Company understand the Company’s obligations to the
public and under the law with respect to its disclosures, including that results are never more important than
compliance with the law.
o Encourage others at the Company to raise questions and concerns regarding the Company’s public
disclosures and ensure that such questions and concerns are appropriately addressed.
3
o Provide the Company’s directors, officers, employees, consultants and advisors involved in the preparation of the
Company’s disclosures to the public with information that is accurate, complete, objective, relevant, timely and
understandable.
o Act in good faith, responsibly, and with due care, competence and diligence, without misrepresenting material
facts or allowing such person’s independent judgment to be subordinated by others.
o Proactively promote honest and ethical behavior among peers in the work environment.
o Achieve proper and responsible use of and control over Company assets and resources.
o Record or participate in the recording of entries in the Company’s books and records that are accurate.
o Comply with the Company’s disclosure controls and procedures, internal controls and procedures for financial
reporting and other policy statements.
D.
Compliance with Laws, Rules, and Regulations
It is the Company’s policy to comply with all applicable laws, rules, and regulations. Some laws carry criminal
penalties. It is the personal responsibility of each director, officer, employee and consultant to adhere to the standards and
restrictions imposed by those laws, rules, and regulations. The Company expects each director, officer, employee and
consultant to refrain from any illegal, dishonest, or unethical conduct.
Generally, it is both illegal and against Company policy for any director, officer, employee and consultant who is aware
of material nonpublic information relating to the Company, any of the Company’s customers or any other private or
governmental issuer of securities to buy or sell any securities of those issuers, or recommend that another buy, sell or hold the
securities of those issuers. It is the Company’s policy for all directors, officers, employees and consultants to comply with the
Company’s Securities Trading Policy. Any director, officer, employee or consultant with questions regarding these types of
transactions should contact the Compliance Officer.
E.
Duty to Report and Raise Questions and Concerns; Internal Reporting Procedure
Each director, officer, employee, and consultant must report promptly to the Compliance Officer, as well as the
Director of Compliance of any involved Property, the existence (or good faith suspected existence) of any of the following:
• Any outside association, interest, relationship or activity, as it arises, that actually, potentially or apparently
involves a conflict of interest violation (or suspected violation) of the Code;
•
any action or inaction that does not comply with gaming laws or regulations in any jurisdiction in which the
Company does business;
4
•
•
•
any action or inaction that does not comply with any condition or limitation placed on any license or
approval granted by any Gaming Authority to the Company or any of its gaming operations;
any other event or circumstance which the employee, officer, director or consultant believes, in good faith,
could impact the Company’s suitability for licensure, or may bring discredit to the Company or the gaming
industry; and
any violation of the Code.
Failure to report such relationships, activities, interests, non-compliance with gaming laws or regulations or violations of the
Code will be a ground for disciplinary action.
In addition to the foregoing obligation to report to the Compliance Officer, employees who serve as Directors of
Compliance shall also report such relationships, activities, interests, non-compliance with gaming laws or regulations or
violations of the Code to the General Manager of the involved Property (unless the General Manager is the subject of, or
otherwise involved in, such actual or potential violation). If, after consultation with the Compliance Officer and the General
Manager, the Director of Compliance still maintains a good faith belief that the actual or potential violation has not been
adequately addressed, he or she shall report such matter directly to the Company’s Compliance Committee.
Subject to the provisions of the Code, the Compliance Officer will review disclosures of any actual, potential or
apparent violation of the Code with at least one member of the Company’s Audit Committee and , if applicable, at least one
member of the Company’s Compliance Committee, to determine the appropriate manner by which the Company’s approval or
disapproval would be provided. Each director, officer, employee, and consultant must cooperate fully in the review process by
providing all information that the Compliance Officer deems necessary to conduct an effective review. Company actions with
respect to the conflict of interest or potential conflict of interest will take into account the spirit of the Code.
Upon becoming employed by or associated with the Company each director, officer, employee, and consultant must
sign a statement reflecting awareness and understanding of the Code, including the Conflicts of Interest Policy (“Ethics
Statement”). At the same time, each director, officer, employee and consultant must report either the absence or presence of
actual, potential or apparent conflicts of interest. The Company may from time to time request that any such person affirm his
or her awareness of the Code and Conflicts of Interest Policy by delivering an updated Ethics Statement. A form of Ethics
Statement is attached as Exhibit B hereto.
All interests, relationships or participation in transactions disclosed by any director, officer, employee or consultant in
accordance with this policy shall be held in confidence unless the best interests of the Company dictate otherwise.
The Company recognizes the potentially serious impact of a false accusation.
Employees, officers, directors and consultants are expected as part of the ethical standards required by this Code to act
responsibly in reporting violations. Making a complaint without a
5
good-faith basis is itself a violation of the Code. Any employee, officer, director or consultant who makes a complaint in bad
faith will be subject to disciplinary action, up to and including separation of employment.
Employees, officers, directors and consultants who report violations or suspected violations in good faith, as well as
those who participate in investigations, will not be subject to retaliation of any kind.
Retaliation, which will be broadly construed, is generally defined as the use of authority or influence for the purpose of
interfering with, or discouraging a report of, a violation of the Code or an investigation of an alleged Code violation. The
Company will not permit retaliation where a report of an actual or potential violation was made in good faith.
If you believe someone has retaliated against you because of your good faith report of an actual or suspected violation,
you should immediately advise Human Resources as well as the Compliance Officer, and the Director of Compliance of the
involved Property.
F.
Accountability
All who are subject to the Code are responsible for complying with it and for reporting any known or suspected
violations of it. The Company recognizes that such a mandate may not be meaningful without an accompanying provision for
accountability and discipline of violations of the Code.
Subject to the terms of the Code, reported violations of the Code will be investigated, addressed promptly and treated
confidentially to the extent possible. The Company will strive to impose discipline for each Code violation that fits the nature
and particular facts of the violation. The Company uses a system of progressive discipline and generally will issue warnings or
letters of reprimand for less significant, first-time violations. Violations of a more serious nature may result in termination of
employment or suspension without pay, demotion, loss or reduction of bonus or option awards, or any combination of such
disciplinary measures.
Violations of the Code that go unaddressed are treated by the SEC as implicit waivers of the Code. Accordingly, any
violation that is discovered and not addressed will have to be disclosed in accordance with the rules and regulations of the SEC
or applicable listing standards. In such cases, the SEC’s rules will require disclosure of the nature of any violation, the date of
the violation and the name of the person who committed the violation. Such disclosure would be harmful to the Company and
the individuals involved in the violation.
Subject to the provisions of the Code and the Company’s Whistleblower Policy and Procedures, all investigations of
reported violations of the Code will be supervised by the Compliance Officer. A violation shall be deemed to have occurred
and appropriate consequences shall be determined only by the Board of Directors, any of its committees, or such other person
designated by the Board to act on its behalf.
6
G.
Protected Disclosures
Nothing in this Code or any agreement between you and the Company:
• will preclude, prohibit or restrict you from (i) communicating with, any federal, state or local administrative or
regulatory agency or authority, including but not limited to the Securities and Exchange Commission (the
“SEC”); (ii) participating or cooperating in any investigation conducted by any governmental agency or
authority; or (iii) filing a charge of discrimination with the United States Equal Employment Opportunity
Commission or any other federal state or local administrative agency or regulatory authority.
•
•
prohibits, or is intended in any manner to prohibit, you from (i) reporting a possible violation of federal or other
applicable law or regulation to any governmental agency or entity, including but not limited to the Department
of Justice, the SEC, the U.S. Congress, and any governmental agency Inspector General, or (ii) making other
disclosures that are protected under whistleblower provisions of federal law or regulation. Nothing in this Code
or any agreement between you and the Company is intended to limit your right to receive an award (including,
without limitation, a monetary reward) for information provided to the SEC. You do not need the prior
authorization of anyone at the Company to make any such reports or disclosures, and you are not required to
notify the Company that you have made such reports or disclosures.
is intended to interfere with or restrain the immunity provided under 18 U.S.C.
§1833(b). You cannot be held criminally or civilly liable under any federal or state trade secret law for the
disclosure of a trade secret that is made (i) (A) in confidence to federal, state or local government officials,
directly or indirectly, or to an attorney, and (B) for the purpose of reporting or investigating a suspected
violation of law; (ii) in a complaint or other document filed in a lawsuit or other proceeding, if filed under seal;
or (iii) in connection with a lawsuit alleging retaliation for reporting a suspected violation of law, if filed under
seal and does not disclose the trade secret, except pursuant to a court order.
The foregoing provisions regarding protected disclosures are intended to comply with all applicable laws. If any laws
are adopted, amended or repealed after the date hereof, this Code shall be deemed to be amended to reflect the same.
A.
Corporate Opportunities
Section II
Directors, officers and employees owe a duty to the Company to advance the Company’s legitimate business interests
when the opportunity to do so arises. Directors, officers and employees are prohibited from taking for themselves (or directing
to a third party) a business opportunity that is discovered through the use of corporate property, information, or position unless
previously approved by the Board. More generally, directors, officers, employees and
7
consultants are prohibited from using corporate property, information, or position for personal gain or competing with the
Company.
Sometimes the line between personal and Company benefits may be difficult to discern. The only prudent course of
conduct for our directors, officers, employees and consultants is to make sure that any use of Company property or services
that is not solely for the benefit of the Company is approved beforehand through the Compliance Officer.
B.
Confidentiality
In carrying out the Company’s business, directors, officers, employees and consultants often learn confidential or
proprietary information about the Company, its customers, or other third parties. Directors, officers, employees and
consultants must maintain the confidentiality of all information so entrusted to them, except when disclosure is authorized or
legally mandated. Confidential or proprietary information includes, among other things, any non-public information
concerning the Company, including its business relationships, financial performance, results or prospects, personnel
information, guest information, compensation data, computer processes, customer lists, marketing strategies, pending projects
or proposals, and any non-public information provided by a third party with the expectation that the information be kept
confidential and used solely for the business purpose for which it was conveyed. Directors, officers, employees and
consultants should refer to the Company’s Legal Department for more detailed guidance on this topic.
C.
Fair Dealing
The successful business operation and reputation of the Company are built upon the principals of fair dealing and
ethical conduct. Our reputation for integrity and excellence requires careful observance of the spirit and letter of all applicable
laws and regulations as well as a scrupulous regard for standards of conduct and personal integrity consistent with this Code.
We do not seek competitive advantages through illegal or unethical business practices. Each director, officer, employee and
consultant should endeavor to deal fairly with the Company’s customers, service providers, suppliers, competitors, and other
employees. No director, officer, employee or consultant should take unfair advantage of anyone through manipulation,
concealment, abuse of privileged information, misrepresentation of material facts, or any unfair dealing practice.
D.
Equal Employment Opportunity and Harassment
Our focus in personnel decisions is on merit and contribution to the Company’s success.
Concern for the personal dignity and individual worth of every person is an indispensable element in the standard of conduct
that we have set for ourselves. The Company affords equal employment opportunity to all qualified persons without regard to
any impermissible criterion or circumstances. This means equal opportunity in regard to each individual’s terms and
conditions of employment and in regard to any other matter that affects in any way the working environment of the employee.
We do not tolerate or condone any type of discrimination prohibited by law, including harassment.
8
E.
Protection and Proper Use of Company Assets
All employees, officers, directors, and consultants should protect the Company’s assets and ensure their efficient use.
All Company assets should be used for legitimate business purposes only.
F.
Outside Activities/Employment
Non-salaried employees may hold a job with another employer so long as he or she notifies the Company and
satisfactorily performs his or her job responsibilities with the Company. All employees will be judged by the same
performance standards and will be subject to the Company’s scheduling demands, regardless of any existing outside work
requirements.
If the Company determines that an employee’s outside work interferes with performance or the ability to meet the
requirements of the Company as they are modified from time to time, the employee may be asked to terminate the outside
employment if he or she wishes to remain employed by the Company.
Any outside association, including employment and activities with other entities, should not encroach on the time and
attention any director, officer or employee is expected to devote to his or her Company duties and responsibilities, adversely
affect the quality or quantity of his or her work product or entail his or her use of any Company assets, including its real and
personal property, or imply (without the Company’s approval) the Company’s sponsorship or support. In addition, under no
circumstances is any director, officer or employee permitted to compete with the Company.
Section III
Waivers and Amendments of The Code
From time to time, the Board may amend the Code or waive certain provisions of the Code. Any such amendment shall
be disclosed in the manner and within the time required by applicable laws, regulations, rules and listing standards. Any
requests for a waiver of any provision of the Code must be submitted in writing to the Compliance Officer for review. If a
waiver of any provision of the Code is granted, the Company must publicly disclose the nature of the granted waiver, including
any implicit waiver, the name of the person requesting the waiver, the date of the waiver and any other disclosures as and to the
extent required by any rule of the SEC or applicable listing standard. Waivers of any provision of the Code may be made only
by the Board.
Section IV
Anonymous Reporting of Violations
Any violation of the Code and any violation by the Company or its directors, officers, employees or consultants of the
securities laws, rules or regulations or other laws, rules or regulations applicable to the Company may be reported
anonymously using any one of the methods described in the Company’s Whistleblower Hotline Policy and Procedures,
including,
9
without limitation, the making of a phone call to a whistleblower hotline at 800-418-6482, extension 687. All such calls shall
be subject to the Company’s Whistleblower Hotline Policy and Procedures. A copy of the Company’s Whistleblower Hotline
Policy and Procedures is available on the Company’s website, in employee break rooms and on employee bulletin boards.
Section V
Certain Relationships and Related Transactions
Any proposed transaction between the Company and a related party, or in which a related party would have a direct or
indirect material interest, must be promptly disclosed to the Compliance Officer, the Company’s Audit Committee, and the
Company’s Compliance Committee, and must be approved by the Company’s Audit Committee. Any director having an
interest in the transaction is not permitted to vote on such transaction.
The Audit Committee will determine whether or not to approve such transaction on a case by case basis and in
accordance with the provisions of the Audit Committee Charter and the Code.
A “related party” is any of the following:
•
•
•
•
•
•
an executive officer of the Company;
a director (or director nominee) of the Company;
an immediate family member of any executive officer or director (or director nominee);
a beneficial owner of five percent or more of any class of the Company’s voting securities;
an entity in which one of the above described persons has a substantial ownership interest or control of such
entity; or
any other person or entity that would be deemed to be a related person under Item 404 of SEC Regulation
S-K or applicable Nasdaq rules and regulations.
Originally Adopted by Board of Directors on October 31, 2019; Revised October 27, 2022
10
EXHIBIT A
I.
GENERAL STATEMENT OF POLICY
CAESARS ENTERTAINMENT, INC. CONFLICTS OF INTEREST POLICY
It is the policy of Caesars Entertainment, Inc. and its subsidiaries (the “Company”) that directors, officers and
employees (“covered persons”) at all levels be free from any interest, influence or relationship that might conflict, or appear to
conflict, with the best interests of the Company, and that they perform their work with undivided loyalty as measured by the
highest standards of law and ethics. The existence of an actual or potential conflict of interest depends on specific facts. The
principles discussed here are intended to alert covered persons to the possibilities and furnish general guidance. In any
uncertain situation, the covered persons should immediately discuss the matter fully and frankly with his/her supervisor.
Where there is any doubt as to the existence of a conflict of interest, the situation should be disclosed fully, in writing, to the
Compliance Officer (as defined in the Code of Ethics and Business Conduct).
II.
SCOPE OF COVERAGE
This policy applies to both direct and indirect interests of a covered person and members of his or her immediate
family. It extends to transactions by any person who may act on behalf of such covered person or family members in
connection with such interests. In general, a covered person will be regarded as having a beneficial interest in any property
owned or any transactions entered into by such covered person’s spouse or minor children.
Further, this policy is applicable to all parts of the Company including all domestic and foreign subsidiaries and
affiliated companies.
A.
Common Conflict of Interest Situations
The following sections describe a number of common categories of conflicts of interest. They illustrate the application
of Company policy to certain particular situations where conflicts are most likely to arise. They are not all-inclusive, however,
and do not cover all possible situations where conflicts might occur in violation of Company policy:
B.
Relationships with Vendors, Purchasers and Competitors of the Company
Any covered person who holds any position or employment with, or who receives any compensation, credits or loans
from, or who owns or acquires, directly or indirectly, a beneficial interest in, or rights to the profits of income of, any concern
he or she has reason to believe may supply products or services to, or purchase from, or compete with, the Company, is
required to disclose the full details concerning such interest or relationship. In such circumstances, a conflict may arise if such
covered person is in a position to influence decisions with respect to any Company transaction involving such other party and
if the interest or relationship is such that it might bring into question such covered person’s continued ability to make
independent, impartial judgments in the Company’s best interest. In this connection, the mere ownership of
1
securities of a vendor, purchaser or competitor which are listed on a stock exchange or publicly traded in a recognized over-
the-counter market and amounting to less than one percent of the class outstanding, need not be reported.
C.
Gifts or Favors
A covered person may not solicit money, entertainment, hospitality, gifts or favors, including the below market
purchases of goods or services (collectively, “gifts”), from any individual or concern which a covered person has reason to
believe may transact business, or may seek to transact business, with the Company.
Covered persons in one of the Company’s purchasing departments, or covered persons whose primary responsibility is
to purchase supplies or services on behalf of the Company, may not accept gifts from any individual or concern which a
covered person has reason to believe may transact business, or may seek to transact business, with the Company.
Other covered persons may accept gifts provided that:
(i)
the value of such gift (and the collective value of all such gifts from the same individual or concern in the same
calendar year) is trivial and inconsequential (generally $500 or less); or
(ii)
gifts involving entertainment or hospitality are not excessive or lavish under the circumstances as determined
by the Compliance Officer and, if such gift includes travel, it is also approved by the covered person’s supervisor.
1
All offers of gifts or favors beyond this policy should be immediately reported to the employee’s supervisor, in the case
of a covered person who is an employee, and to the Compliance Officer.
D.
Sensitive Payments
The use of the Company funds or assets by employees for any unlawful purpose is strictly prohibited. Covered
persons shall not:
1.
2.
3.
Establish for any purpose undisclosed or unrecorded funds or assets of the Company.
Make false or artificial entries in the books and records of the Company for any reason.
Engage in any arrangement that results in such prohibited acts.
_________________________
1
By way of example, gifts of entertainment or hospitality that would generally be permitted include regular season sporting or cultural events (e.g.,
baseball or football games, ballet, symphony, and theater) and local golf outings. Depending upon the circumstances, special events such as exclusive
cultural events and post-season sporting events may be permitted as determined by the Company’s Compliance Officer.
2
Any covered person having information or knowledge of any unrecorded fund or asset or any prohibited act shall
promptly report such matter to the Compliance Officer.
E.
Foreign Transactions and Payments
Having due regard for the responsibilities relating to international operations, it is the Company’s policy that all covered
persons and agents comply with the ethical standards and applicable legal requirements of the Foreign Corrupt Practices Act and
of each foreign country in which business is conducted.
The Foreign Corrupt Practices Act makes it a criminal offense for a United States company or agent acting on its
behalf to pay anything of value to any foreign government official to influence any official action in securing, retaining, or
directing business. This prohibition applies to bribes, kick-backs or like payments made directly to such foreign officials or
indirectly through seemingly legitimate payments such as commissions or consulting fees paid to overseas agents or
representatives.
F.
Political Campaign Contributions
Political campaign contributions include direct expenditures or contributions, in cash or property, to candidates for
nomination or election to public office or to political parties, as well as indirect assistance or support such as the furnishing of
goods, services or equipment, or other political fund-raising events.
No political campaign contributions shall be made by the Company in cash or by any other means whereby the amount
or origin of the contribution cannot be readily established by reference to the documents and records of the Company. All
contributions shall be made to the candidates authorized campaign committee, or to a political party, or to other recipients who
may legally receive such contributions and all reporting requirements of the state or local jurisdictions shall be complied with.
Each contribution shall be clearly recorded on the Company’s books as a political campaign contribution or its equivalent and
shall not be deducted for federal, state or local income tax purposes unless authorized under applicable law.
The Foreign Corrupt Practices Act also prohibits contributions to foreign political parties or candidates for foreign
political office for the purpose of influencing their actions to secure, retain or direct business. The prohibition applies
regardless of whether the contribution is lawful under the laws of the country in which it is made. Accordingly, company
policy strictly prohibits any payments with corporate funds, to, or any use of corporate assets for the benefit of, any foreign
political party or candidate for political office.
III.
SUMMARY OF GENERAL OBLIGATIONS OF EMPLOYEES
Under this policy, covered persons are responsible for:
o
Full and immediate disclosure to the Compliance Officer of any interest which they or members of their
immediate families have at the time of association with the Company, or acquire during such covered person’s
association with the Company, which create or appear to create a possible conflict with the
3
Company’s interests. In furtherance of this, all new employees will be routinely provided a copy of the
Conflicts of Interest Policy and will be required to execute a signed acknowledgement of its receipt; and
o
Taking any actions regarded by the Company as being necessary to eliminate or satisfactorily regulate a
conflict of interest situation.
IV.
FAILURE TO COMPLY
Failure to comply with this policy and procedures can result in disciplinary actions up to and including termination of
employment, and/or initiation of appropriate legal action.
V.
FURNISHING DISCLOSURE INFORMATION
With respect to any disclosure information furnished in accordance with the Company’s Conflicts of Interest Policy, the
Company will endeavor to properly protect such information.
4
EXHIBIT B
CAESARS ENTERTAINMENT, INC.
CODE OF ETHICS AND BUSINESS CONDUCT CONFIRMATION STATEMENT
I, hereby confirm the following statements to Caesars Entertainment, Inc. (the “Company”):
Date:
(1)
(2)
(3)
(4)
(5)
I am a director, officer, employee or consultant of the Company and/or one of its subsidiaries.
I have read and I understand the Company’s Code of Ethics and Business Conduct (the “Code”),
including its Conflicts of Interest Policy.
There is no actual, potential or apparent conflict of interest between myself or any of my immediate family
members and the Company (or any of its subsidiaries) as described in the Code, except:
.
I understand that I am under an ongoing obligation to notify the Compliance Officer should any of the
information in this confirmation statement change.
I understand that the Code and all amendments to the Code are available for my review on the Company’s
website and upon request from the Company’s Corporate Secretary.
________________________________________________
(Signature)
__________________________________________________
(Name)
__________________________________________________
(Title)
1
CAESARS ENTERTAINMENT, INC.
LIST OF SUBSIDIARIES
As of January 26, 2024
Name
1300 WSED, LLC
1301 WSED, LLC
1400 WSED, LLC
3535 LV Corp.
3535 LV Newco, LLC
AC Conference Newco, LLC
American Wagering, Inc.
Aster Insurance Ltd.
AWI Gaming, Inc.
AWI Manufacturing, Inc.
Aztar Riverboat Holding Company, LLC
Bally's Las Vegas Manager, LLC
Bally's Park Place, LLC
Benco, LLC
BetDC, LLC
BL Development, LLC
Black Hawk Holdings, L.L.C.
Boardwalk Regency LLC
Brandywine Bookmaking, LLC
BV Manager, LLC
BW Sub Co.
Caesars Asia Limited
Caesars Baltimore Investment Company, LLC
Caesars Baltimore Management Company, LLC
Caesars Convention Center Owner, LLC
Caesars Digital Canada, Inc.
Caesars Digital PR, Inc.
Caesars Dubai, LLC
Caesars Enterprise Services, LLC
Caesars Entertainment Japan, LLC
Caesars Entertainment Windsor Limited
(1)
(2)
Caesars Growth Bally's LV, LLC
Caesars Growth Baltimore Fee, LLC
Caesars Growth Cromwell, LLC
Caesars Growth Harrah's New Orleans, LLC
Caesars Growth Partners, LLC
Caesars Growth PH Fee, LLC
Caesars Growth PH, LLC
Caesars Growth Quad, LLC
Caesars Holdings, Inc.
Caesars Hospitality, LLC
Caesars Interactive Entertainment New Jersey, LLC
Caesars International Hospitality, LLC
Caesars Joint IP Company Limited
Exhibit 21.1
Jurisdiction of
Incorporation
Delaware
Maryland
Delaware
Nevada
Delaware
Delaware
Nevada
Bermuda
Nevada
Minnesota
Indiana
Delaware
New Jersey
Nevada
Delaware
Minnesota
Colorado
New Jersey
Delaware
Delaware
Nevada
Hong Kong
Delaware
Delaware
Delaware
Canada
Puerto Rico
Delaware
Delaware
Delaware
Canada
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
United Kingdom
Name
Caesars Korea Holding Company, LLC
Caesars Korea Services, LLC
Caesars License Company, LLC
Caesars Linq, LLC
Caesars Massachusetts Investment Company, LLC
Caesars Nevada Newco LLC
Caesars New Jersey, LLC
Caesars Octavius, LLC
Caesars Palace LLC
Caesars Palace Realty LLC
Caesars Palace Times Square, LLC
Caesars Parlay Holding, LLC
Caesars Resort Collection, LLC
Caesars Trademark LicenseCo, LLC
Caesars Trading and Technology Services Limited
Caesars Trex, Inc.
Caesars Virginia, LLC
Caesars World International Corporation (S) PTE, Ltd.
Caesars World International Far East Limited
Caesars World, LLC
Caesars World Marketing LLC
California Clearing Corporation
Casino Computer Programming, Inc.
(3)
CBAC Borrower, LLC
CBAC Gaming, LLC
CBAC Holding Company, LLC
CCR Newco, LLC
CCSC/Blackhawk, Inc.
Centaur Acquisition, LLC
Centaur Colorado, LLC
Centaur Holdings, LLC
CEOC, LLC
CEWL Holdco, LLC
Chester Downs and Marina LLC
Chester Facility Holding Company, LLC
(4)
CIE Growth, LLC
Circus and Eldorado Joint Venture, LLC
Columbus Southeast Hotel Group, LLC
Computerized Bookmaking Systems, Inc.
Corner Investment Company, LLC
CPLV Manager, LLC
CRC Finco, Inc.
Cromwell Manager, LLC
CRS Annex, LLC
CVA Holdco, LLC
CZR Maryland Mobile Opportunity, LLC
Des Plaines Development Limited Partnership
(5)
(6)
(7)
Exhibit 21.1
Jurisdiction of
Incorporation
Delaware
Delaware
Nevada
Delaware
Delaware
Nevada
New Jersey
Delaware
Delaware
Nevada
Delaware
Delaware
Delaware
Delaware
United Kingdom
Delaware
Delaware
Singapore
Hong Kong
Florida
New Jersey
California
Indiana
Delaware
Delaware
Delaware
Nevada
Colorado
Indiana
Delaware
Delaware
Delaware
Delaware
Pennsylvania
Delaware
Delaware
Nevada
Ohio
Nevada
Nevada
Delaware
Delaware
Delaware
Nevada
Delaware
Delaware
Delaware
Name
Desert Palace, LLC
Digital HoldCo, LLC
Eastside Convention Center, LLC
Eldo Fit, LLC
Eldorado Holdco LLC
Eldorado Limited Liability Company
Eldorado Shreveport #1, LLC
Eldorado Shreveport #2, LLC
Elgin Holdings I, LLC
Elgin Holdings II, LLC
Elgin Riverboat Resort - Riverboat Casino
Entertainment RMG Canada, Inc.
Flamingo CERP Manager, LLC
Flamingo Las Vegas Operating Company, LLC
Four Suits Technology
GB Investor, LLC
Giles Road Developer, LLC
Grand Casinos of Biloxi, LLC
Grand Casinos, Inc.
Harrah South Shore Corporation
Harrah's Arizona Corporation
Harrah's Atlantic City Operating Company, LLC
Harrah's Atlantic City Propco, LLC
Harrah's Chester Downs Investment Company, LLC
Harrah's Chester Downs Management Company, LLC
Harrah's Illinois LLC
Harrah's Interactive Investment Company
Harrah's Iowa Arena Management, LLC
Harrah's Las Vegas, LLC
Harrah's Laughlin, LLC
Harrah's Management Company
Harrah's NC Casino Company, LLC
Harrah's Nebraska, LLC
Harrah's New Orleans Management Company, LLC
Harrah's North Kansas City LLC
Harrah's Oklahoma, LLC
Harrah's Shreveport/Bossier City Investment Company, LLC
Harveys BR Management Company, Inc.
Harveys Iowa Management Company, LLC
Harveys Tahoe Management Company, LLC
HBR Realty Company, LLC
HCAL, LLC
HLV CERP Manager, LLC
Hole in the Wall, LLC
Hoosier Park, LLC
Horseshoe Entertainment
Horseshoe Gaming Holding, LLC
Exhibit 21.1
Jurisdiction of
Incorporation
Nevada
Delaware
Delaware
Nevada
Nevada
Nevada
Nevada
Nevada
Delaware
Delaware
Illinois
Canada
Nevada
Nevada
Poland
Delaware
Delaware
Minnesota
Minnesota
California
Nevada
New Jersey
Delaware
Delaware
Nevada
Nevada
Nevada
Delaware
Nevada
Nevada
Nevada
North Carolina
Delaware
Nevada
Missouri
Delaware
Delaware
Nevada
Nevada
Nevada
Nevada
Nevada
Nevada
Nevada
Indiana
Louisiana
Delaware
Name
Horseshoe GP, LLC
Horseshoe Hammond, LLC
HP Dining & Entertainment, LLC
HP Dining & Entertainment II, LLC
HTM Holding, LLC
IC Holdings Colorado, Inc.
IOC - Black Hawk Distribution Company, LLC
IOC - Boonville, Inc.
IOC - Lula, Inc.
IOC Black Hawk County, Inc.
IOC Holdings, L.L.C.
IOC Manufacturing, Inc.
IOC Services, LLC
IOC-Natchez, Inc.
IOC-PA, L.L.C.
IOC-Vicksburg, Inc.
IOC-Vicksburg, L.L.C.
IPB Services, LLC
Isle of Capri Bettendorf Marina Corporation
Isle of Capri Bettendorf, LLC
Isle of Capri Black Hawk, LLC
Isle of Capri Casinos, LLC
Isle Promotional Association, Inc.
Jazz Casino Company, LLC
JCC Fulton Development, LLC
JCC Holding Company II, LLC
JGB Vegas Retail Lessee, LLC
Keystone State Development, Inc.
Lady Luck Gaming Corporation
Lady Luck Vicksburg, Inc.
Laughlin CERP Manager, LLC
(8)
Laundry Newco, LLC
Lighthouse Point, LLC
LINQCUP, LLC
MTR Gaming Group, Inc.
New Centaur, LLC
New Gaming Capital Partnership
New Jazz Enterprises, LLC
New Robinson Property Group, LLC
Non-CPLV Manager, LLC
Old PID, Inc.
OS Holdco, LLC
Parball LLC
Parball Newco, LLC
Paris CERP Manager, LLC
Paris Las Vegas Operating Company, LLC
PHW Las Vegas, LLC
Exhibit 21.1
Jurisdiction of
Incorporation
Nevada
Indiana
Indiana
Indiana
Nevada
Colorado
Colorado
Nevada
Mississippi
Iowa
Louisiana
Mississippi
Delaware
Mississippi
Pennsylvania
Delaware
Delaware
Delaware
Iowa
Iowa
Colorado
Delaware
Colorado
Louisiana
Louisiana
Delaware
Nevada
Pennsylvania
Delaware
Mississippi
Nevada
Delaware
Mississippi
Delaware
Delaware
Delaware
Nevada
Nevada
Delaware
Delaware
Pennsylvania
Nevada
Nevada
Delaware
Nevada
Nevada
Nevada
Name
PHW Manager, LLC
(9)
PHWCUP, LLC
PHWLV, LLC
Pier at Caesars LLC
Players Holding, LLC
Players International, LLC
Pompano Park Holdings LLC
Pompano Park JV Holdings LLC
PPI Development, LLC
PPI Development Holdings, LLC
PPI, Inc.
Racelinebet, Inc.
Rio CERP Manager, LLC
Rio Properties, LLC
Robinson Property Group LLC
Roman Holding Company of Indiana, LLC
Romulus Risk and Insurance Company, Inc.
Scioto Downs, Inc.
SDRS, Inc.
Showboat Atlantic City Operating Company, LLC
Southern Illinois Riverboat/Casino Cruises, LLC
St. Charles Gaming Company, L.L.C.
(10)
Sterling Suffolk Racecourse, LLC
TEI (ES), LLC
TEI (St. Louis Re), LLC
TEI (STLH), LLC
The Paramount Baltimore
The Quad Manager, LLC
Tropicana Atlantic City Corp.
Tropicana Entertainment, Inc.
Tropicana Laughlin, LLC
Tropicana St. Louis LLC
Tropicana St. Louis RE LLC
Tunica Roadhouse LLC
Vegas Development Land Owner, LLC
WH NV III, LLC
William Hill DFSB, Inc.
William Hill Nevada I
William Hill Nevada III
William Hill New Jersey, Inc.
William Hill US Holdco, Inc.
Windsor Casino Limited
(11)
Exhibit 21.1
Jurisdiction of
Incorporation
Nevada
Delaware
Nevada
New Jersey
Nevada
Nevada
Florida
Florida
Delaware
Delaware
Florida
Oregon
Nevada
Nevada
Mississippi
Indiana
Nevada
Ohio
Ohio
New Jersey
Illinois
Delaware
Massachusetts
Delaware
Delaware
Delaware
Maryland
Delaware
New Jersey
Delaware
Nevada
Delaware
Delaware
Delaware
Delaware
Delaware
Delaware
Nevada
Nevada
New Jersey
Delaware
Canada
Exhibit 21.1
1
2
3
4
5
6
7
8
9
10
11
49% American Wagering, Inc.; 51% non-affiliate
69% CEOC, LLC; 31% Caesars Resort Collection, LLC
50% Caesars Entertainment, Inc.; 50% William Hill U.S. Holdco, Inc.
42% Scioto Downs, Inc.; 58% non-affiliates
50.5% non-affiliate; 49.5% Caesars Resort Collection, LLC
62.5% CBAC Borrower, LLC; 37.5% non-affiliate
80% Harrah's Illinois LLC; 20% non-affiliate
8.65% GB Investor, LLC; 91.35% non-affiliate
50% PPI Development, LLC; 50% non-affiliate
4.09% Caesars Massachusetts Investment Company, LLC; 95.91% non-affiliate
6% CBAC Borrower, LLC; 94% non-affiliate
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Exhibit 23.1
We consent to the incorporation by reference in Registration Statement Nos. 333-232336 and 333-245051 on Form S-8 of our reports dated February 20,
2024, relating to the financial statements of Caesars Entertainment, Inc. (the “Company”) and the effectiveness of the Company’s internal control over
financial reporting appearing in this Annual Report on Form 10-K for the year ended December 31, 2023.
/s/ DELOITTE & TOUCHE LLP
Las Vegas, Nevada
February 20, 2024
CERTIFICATION PURSUANT TO RULE 13a‑14(a) AND 15d‑14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
Exhibit 31.1
I, Thomas R. Reeg, certify that:
1.
2.
3.
4.
I have reviewed this Annual Report on Form 10‑K of Caesars Entertainment, Inc.;
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this
report;
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a‑15(e) and 15d‑15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a‑15(f) and
15d‑15(f) for the registrant and have:
(a)
(b)
(c)
(d)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this report is being prepared;
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles;
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most
recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably
likely to materially affect, the registrant’s internal control over financial reporting; and
5.
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to
the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a)
(b)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal
control over financial reporting.
Date: February 20, 2024
/s/ THOMAS R. REEG
Thomas R. Reeg
Chief Executive Officer
(Principal Executive Officer)
CERTIFICATION PURSUANT TO RULE 13a-14(a) AND 15d-14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
Exhibit 31.2
I, Bret Yunker, certify that:
1.
2.
3.
4.
I have reviewed this Annual Report on Form 10-K of Caesars Entertainment, Inc.;
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this
report;
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-
15(f) for the registrant and have:
(a)
(b)
(c)
(d)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this report is being prepared;
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles;
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most
recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably
likely to materially affect, the registrant’s internal control over financial reporting; and
5.
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to
the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a)
(b)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal
control over financial reporting.
Date: February 20, 2024
/s/ BRET YUNKER
Bret Yunker
Chief Financial Officer
(Principal Financial Officer)
CERTIFICATION
of
Thomas R. Reeg
Chief Executive Officer
Exhibit 32.1
I, Thomas R. Reeg, Chief Executive Officer of Caesars Entertainment, Inc. (the “Company”), do hereby certify in accordance with 18 U.S.C. 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:
1.
2.
The Annual Report on Form 10-K of the Company for the fiscal year ended December 31, 2023 (the “Report”) fully complies with the
requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
The information contained in the Report fairly represents, in all material respects, the financial condition and results of operations of the Company.
Date: February 20, 2024
/s/ THOMAS R. REEG
Thomas R. Reeg
Chief Executive Officer
CERTIFICATION
of
Bret Yunker
Chief Financial Officer
Exhibit 32.2
I, Bret Yunker, Chief Financial Officer of Caesars Entertainment, Inc. (the “Company”), do hereby certify in accordance with 18 U.S.C. 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:
1.
2.
The Annual Report on Form 10-K of the Company for the fiscal year ended December 31, 2023 (the “Report”) fully complies with the
requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
The information contained in the Report fairly represents, in all material respects, the financial condition and results of operations of the Company.
Date: February 20, 2024
/s/ BRET YUNKER
Bret Yunker
Chief Financial Officer
Exhibit 97.1
CAESARS ENTERTAINMENT, INC.
POLICY FOR RECOVERY OF ERRONEOUSLY AWARDED COMPENSATION
Caesars Entertainment, Inc. (the “Company”) has adopted this Policy for Recovery of Erroneously Awarded
Compensation (the “Policy”), effective as of December 1, 2023 (the “Effective Date”). This Policy supersedes and replaces in
its entirety the Clawback & Recoupment Policy adopted by the Board of Directors of the Company on February 27, 2019.
Capitalized terms used in this Policy but not otherwise defined herein are defined in Section 11.
1.
Persons Subject to Policy
This Policy shall apply to current and former Officers of the Company.
2.
Compensation Subject to Policy
This Policy shall apply to Incentive-Based Compensation received on or after the Effective Date. For purposes of this
Policy, the date on which Incentive-Based Compensation is “received” shall be determined under the Applicable Rules, which
generally provide that Incentive-Based Compensation is “received” in the Company’s fiscal period during which the relevant
Financial Reporting Measure is attained or satisfied, without regard to whether the grant, vesting or payment of the Incentive-
Based Compensation occurs after the end of that period.
3.
Recovery of Compensation
In the event that the Company is required to prepare a Restatement, the Company shall recover, reasonably promptly,
the portion of any Incentive-Based Compensation that is Erroneously Awarded Compensation, unless the Committee has
determined that recovery would be Impracticable. Recovery shall be required in accordance with the preceding sentence
regardless of whether the applicable Officer engaged in misconduct or otherwise caused or contributed to the requirement for
the Restatement and regardless of whether or when restated financial statements are filed by the Company. For clarity, the
recovery of Erroneously Awarded Compensation under this Policy will not give rise to any person’s right to voluntarily
terminate employment for “good reason” (or any similar term of like effect) under any plan, program or policy of or agreement
with the Company or any of its affiliates.
4.
Manner of Recovery; Limitation on Duplicative Recovery
The Committee shall, in its sole discretion, determine the manner of recovery of any Erroneously Awarded
Compensation, which may include, without limitation, reduction or cancellation by the Company or an affiliate of the
Company of Incentive-Based Compensation or Erroneously Awarded Compensation, reimbursement or repayment by any
person subject to this Policy of the Erroneously Awarded Compensation, and, to the extent permitted by law, an offset of the
Erroneously Awarded Compensation against other compensation payable by the Company or an affiliate of the Company to
such person. Notwithstanding the foregoing, unless otherwise prohibited by the Applicable Rules, to the extent this Policy
provides for recovery of Erroneously Awarded Compensation already recovered by the Company pursuant to Section 304 of
the
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Sarbanes-Oxley Act of 2002 or Other Recovery Arrangements, the amount of Erroneously Awarded Compensation already
recovered by the Company from the recipient of such Erroneously Awarded Compensation may be credited to the amount of
Erroneously Awarded Compensation required to be recovered pursuant to this Policy from such person.
5.
Administration
This Policy shall be administered, interpreted and construed by the Committee, which is authorized to make all
determinations necessary, appropriate or advisable for such purpose. The Board of Directors of the Company (the “Board”)
may re-vest in itself the authority to administer, interpret and construe this Policy in accordance with applicable law, and in
such event references herein to the “Committee” shall be deemed to be references to the Board. Subject to any permitted
review by the applicable national securities exchange or association pursuant to the Applicable Rules, all determinations and
decisions made by the Committee pursuant to the provisions of this Policy shall be final, conclusive and binding on all persons,
including the Company and its affiliates, equityholders and employees. The Committee may delegate administrative duties
with respect to this Policy to one or more directors or employees of the Company, as permitted under applicable law, including
any Applicable Rules.
6.
Interpretation
This Policy will be interpreted and applied in a manner that is consistent with the requirements of the Applicable Rules,
and to the extent this Policy is inconsistent with such Applicable Rules, it shall be deemed amended to the minimum extent
necessary to ensure compliance therewith.
7.
No Indemnification; No Liability
The Company shall not indemnify or insure any person against the loss of any Erroneously Awarded Compensation
pursuant to this Policy, nor shall the Company directly or indirectly pay or reimburse any person for any premiums for third-
party insurance policies that such person may elect to purchase to fund such person’s potential obligations under this Policy.
None of the Company, an affiliate of the Company or any member of the Committee or the Board shall have any liability to
any person as a result of actions taken under this Policy.
8.
Application; Enforceability
Except as otherwise determined by the Committee or the Board, the adoption of this Policy does not limit, and is
intended to apply in addition to, any other clawback, recoupment, forfeiture or similar policies or provisions of the Company or
its affiliates, including any such policies or provisions of such effect contained in any employment agreement, bonus plan,
incentive plan, equity-based plan or award agreement thereunder or similar plan, program or agreement of the Company or an
affiliate or required under applicable law (the “Other Recovery Arrangements”). The remedy specified in this Policy shall not
be exclusive and shall be in addition to every other right or remedy at law or in equity that may be available to the Company or
an affiliate of the Company.
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9.
Severability
The provisions in this Policy are intended to be applied to the fullest extent of the law; provided, however, to the extent
that any provision of this Policy is found to be unenforceable or invalid under any applicable law, such provision will be
applied to the maximum extent permitted, and shall automatically be deemed amended in a manner consistent with its
objectives to the extent necessary to conform to any limitations required under applicable law.
10.
Amendment and Termination
The Board or the Committee may amend, modify or terminate this Policy in whole or in part at any time and from time
to time in its sole discretion. This Policy will terminate automatically when the Company does not have a class of securities
listed on a national securities exchange or association.
11.
Definitions
“Applicable Rules” means Section 10D of the Exchange Act, Rule 10D-1 promulgated thereunder, the listing rules of
the national securities exchange or association on which the Company’s securities are listed, and any applicable rules,
standards or other guidance adopted by the Securities and Exchange Commission or any national securities exchange or
association on which the Company’s securities are listed.
“Committee” means the committee of the Board responsible for executive compensation decisions comprised solely of
independent directors (as determined under the Applicable Rules), or in the absence of such a committee, a majority of the
independent directors serving on the Board.
“Erroneously Awarded Compensation” means the amount of Incentive-Based Compensation received by a current or
former Officer that exceeds the amount of Incentive-Based Compensation that would have been received by such current or
former Officer based on a restated Financial Reporting Measure, as determined on a pre-tax basis in accordance with the
Applicable Rules.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Financial Reporting Measure” means any measure determined and presented in accordance with the accounting
principles used in preparing the Company’s financial statements, and any measures derived wholly or in part from such
measures, including GAAP, IFRS and non- GAAP/IFRS financial measures, as well as stock or share price and total
equityholder return.
“GAAP” means United States generally accepted accounting principles.
“IFRS” means international financial reporting standards as adopted by the International Accounting Standards Board.
“Impracticable” means (a) the direct costs paid to third parties to assist in enforcing recovery would exceed the
Erroneously Awarded Compensation; provided that the Company (i) has made reasonable attempts to recover the Erroneously
Awarded Compensation, (ii) documented
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such attempt(s), and (iii) provided such documentation to the relevant listing exchange or association, (b) to the extent
permitted by the Applicable Rules, the recovery would violate the Company’s home country laws pursuant to an opinion of
home country counsel; provided that the Company has (i) obtained an opinion of home country counsel, acceptable to the
relevant listing exchange or association, that recovery would result in such violation, and (ii) provided such opinion to the
relevant listing exchange or association, or (c) recovery would likely cause an otherwise tax-qualified retirement plan, under
which benefits are broadly available to employees of the Company, to fail to meet the requirements of 26 U.S.C. 401(a)(13) or
26 U.S.C. 411(a) and the regulations thereunder.
“Incentive-Based Compensation” means, with respect to a Restatement, any compensation that is granted, earned, or
vested based wholly or in part upon the attainment of one or more Financial Reporting Measures and received by a person: (a)
after beginning service as an Officer; (b) who served as an Officer at any time during the performance period for that
compensation; (c) while the issuer has a class of its securities listed on a national securities exchange or association; and (d)
during the applicable Three-Year Period.
“Officer” means each person who serves as an executive officer of the Company, as defined in Rule 10D-1(d) under the
Exchange Act.
“Restatement” means an accounting restatement to correct the Company’s material noncompliance with any financial
reporting requirement under securities laws, including restatements that correct an error in previously issued financial
statements (a) that is material to the previously issued financial statements or (b) that would result in a material misstatement if
the error were corrected in the current period or left uncorrected in the current period.
“Three-Year Period” means, with respect to a Restatement, the three completed fiscal years immediately preceding the
date that the Board, a committee of the Board, or the officer or officers of the Company authorized to take such action if Board
action is not required, concludes, or reasonably should have concluded, that the Company is required to prepare such
Restatement, or, if earlier, the date on which a court, regulator or other legally authorized body directs the Company to prepare
such Restatement. The “Three-Year Period” also includes any transition period (that results from a change in the Company’s
fiscal year) within or immediately following the three completed fiscal years identified in the preceding sentence. However, a
transition period between the last day of the Company’s previous fiscal year end and the first day of its new fiscal year that
comprises a period of nine to 12 months shall be deemed a completed fiscal year.
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Exhibit 99.1
General
Description of Governmental Regulations
The ownership, operation, and management of our gaming, betting and racing facilities (generically referred to herein as “gaming”) are subject to
significant regulation under the laws and regulations of each of the jurisdictions in which we operate. Gaming laws are generally based upon declarations of
public policy designed to protect gaming consumers and the viability and integrity of the gaming industry. Gaming laws may also be designed to protect
and maximize state and local revenues derived through taxes and licensing fees imposed on gaming industry participants, as well as to enhance
development and tourism. To accomplish these public policy goals, gaming laws establish stringent procedures to ensure that participants in the gaming
industry meet certain standards of character and fitness. In addition, gaming laws require gaming industry participants to:
•
•
•
ensure that unsuitable individuals and organizations have no role in gaming operations;
establish procedures designed to prevent cheating and fraudulent practices;
establish and maintain responsible accounting practices and procedures;
• maintain effective controls over their financial practices, including establishing minimum procedures for internal fiscal affairs and the
safeguarding of assets and revenues;
• maintain systems for reliable record keeping;
•
•
•
file periodic reports with gaming regulators;
ensure that contracts and financial transactions are commercially reasonable, reflect fair market value and are arms-length transactions; and
establish programs to promote responsible gaming.
Typically, a state regulatory environment is established by statute and is administered by a regulatory agency with broad discretion to regulate the affairs of
owners, managers, and persons with financial interests in gaming operations. Among other things, gaming authorities in the various jurisdictions in which
we operate:
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•
•
•
•
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•
adopt rules and regulations under the implementing statutes;
interpret and enforce gaming laws;
impose disciplinary sanctions for violations, including fines and penalties;
review the character and fitness of participants in gaming operations and make determinations regarding their suitability or qualification for
licensure;
grant licenses for participation in gaming operations;
collect and review reports and information submitted by participants in gaming operations;
review and approve transactions, such as acquisitions or change-of-control transactions of gaming industry participants, securities offerings and
debt transactions engaged in by such participants; and
establish and collect fees and taxes.
Any change in the laws or regulations of a gaming jurisdiction could have a material adverse effect on our gaming operations.
Licensing and Suitability Determinations
Gaming laws require us, each of our subsidiaries engaged in gaming operations, certain of our directors, officers and employees, and in some cases, certain
of our shareholders and holders of our debt securities, to obtain licenses from gaming authorities. Licenses typically require a determination that the
applicant qualifies or is suitable to hold the license. Gaming authorities have broad discretion in determining whether an applicant qualifies for licensing or
should be deemed suitable.
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Criteria used in determining whether to grant or renew a license to conduct gaming operations, while varying between jurisdictions, generally include
consideration of factors such as:
•
•
•
•
•
the good character, honesty and integrity of the applicant;
the financial stability, integrity and responsibility of the applicant, including whether the operation is adequately capitalized in the state and
exhibits the ability to maintain adequate insurance levels; the quality of the applicant’s casino facilities;
the amount of revenue to be derived by the applicable state from the operation of the applicant’s casino;
the applicant’s practices with respect to minority hiring and training; and
the effect on competition and general impact on the community.
In evaluating individual applicants, gaming authorities consider the individual’s business experience and reputation for good character, the individual’s
criminal history and the character of those with whom the individual associates.
Many gaming jurisdictions limit the number of licenses granted to operate casinos within the state, and some states limit the number of licenses granted to
any one gaming operator. Licenses under gaming laws are generally not transferable without regulatory approval. Licenses in most of the jurisdictions in
which we conduct gaming operations are granted for limited durations and require renewal from time to time. There can be no assurance that any of our
licenses will be renewed. The failure to renew any of our licenses could have a material adverse effect on our gaming operations.
In addition to us and our direct and indirect subsidiaries engaged in gaming operations, gaming authorities may investigate any individual who has a
material relationship to or material involvement with any of these entities to determine whether such individual is suitable or should be licensed. Our
officers, directors and certain key employees must file applications with the gaming authorities and may be required to be licensed, qualify or be found
suitable in many jurisdictions. Gaming authorities may deny an application for licensing for any cause which they deem reasonable. Qualification and
suitability determinations require submission of detailed personal and financial information followed by a thorough investigation. The applicant must pay
all the costs of the investigation. Changes in licensed positions must be reported to gaming authorities and in addition to their authority to deny an
application for licensure, qualification or a finding of suitability, gaming authorities have jurisdiction to disapprove a change in a corporate position.
If one or more gaming authorities were to find that an officer, director or key employee fails to qualify or is unsuitable for licensing or unsuitable to
continue having a relationship with us, we would be required to sever all relationships with such person. In addition, gaming authorities may require us to
terminate the employment of any person who refuses to file appropriate applications.
Moreover, in many jurisdictions, certain of our stockholders or holders of our debt securities may be required to undergo a suitability investigation similar
to that described above. Many jurisdictions require any person who acquires beneficial ownership of more than a certain percentage of our voting
securities, typically 5%, to report the acquisition to gaming authorities, and gaming authorities may require such holders to apply for qualification or a
finding of suitability.
Most gaming authorities, however, allow an “institutional investor” to apply for a waiver. An “institutional investor” is generally defined as an investor
acquiring and holding voting securities in the ordinary course of business as an institutional investor for passive investment purposes only, and not for the
purpose of causing, directly or indirectly, the election of a member of our board of directors, any change in our corporate charter, bylaws, management,
policies or operations, or those of any of our gaming affiliates, or the taking of any other action which gaming authorities find to be inconsistent with
holding our voting securities for passive investment purposes only. Even if a waiver is granted, an institutional investor generally may not take any action
inconsistent with its status when the waiver was granted without once again becoming subject to the foregoing reporting and application obligations.
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Generally, any person who fails or refuses to apply for a finding of suitability or a license within the prescribed period after being advised that it is required
by gaming authorities may be denied a license or found unsuitable, as applicable. Any stockholder found unsuitable or denied a license and who holds,
directly or indirectly, any beneficial ownership of our voting securities beyond such period of time, as may be prescribed by the applicable gaming
authorities, may be guilty of a criminal offense. Furthermore, we may be subject to disciplinary action if, after we receive notice that a person is unsuitable
to be a stockholder or to have any other relationship with us or any of our subsidiaries, we: (i) pay that person any dividend or interest upon our voting
securities; (ii) allow that person to exercise, directly or indirectly, any voting right conferred through securities held by that person; (iii) pay remuneration
in any form to that person for services rendered or otherwise; or (iv) fail to pursue all lawful efforts to require such unsuitable person to relinquish his
voting securities including, if necessary, the immediate purchase of said voting securities for cash at fair market value.
The gaming jurisdictions in which we operate also require that suppliers of certain goods and services to gaming industry participants be licensed and
require us to purchase and lease gaming equipment, and certain supplies and services only from licensed suppliers.
Violations of Gaming Laws
If we or our subsidiaries violate applicable gaming laws, our gaming licenses could be limited, conditioned, suspended or revoked by gaming authorities,
and we and any other persons involved could be subject to substantial fines. Further, a supervisor or conservator can be appointed by gaming authorities to
operate our gaming properties, or in some jurisdictions, take title to our gaming assets in the jurisdiction, and under certain circumstances, earnings
generated during such appointment could be forfeited to the applicable state or states. Furthermore, violations of laws in one jurisdiction could result in
disciplinary action in other jurisdictions. As a result, violations by us of applicable gaming laws could have a material adverse effect on our gaming
operations.
Some gaming jurisdictions prohibit certain types of political activity by a gaming licensee, its officers, directors and key people. A violation of such a
prohibition may subject the offender to criminal and/or disciplinary action.
Reporting and Recordkeeping Requirements
We are required periodically to submit detailed financial and operating reports and furnish any other information about us and our subsidiaries which
gaming authorities may require. Under federal law, we are required to record and submit detailed reports of currency transactions involving greater than
$10,000 at our casinos as well as any suspicious activity that may occur at such facilities. We are required to maintain a current stock ledger which may be
examined by gaming authorities at any time. If any securities are held in trust by an agent or by a nominee, the record holder may be required to disclose
the identity of the beneficial owner to gaming authorities. A failure to make such disclosure may be grounds for finding the record holder unsuitable.
Gaming authorities may require certificates for our securities to bear a legend indicating that the securities are subject to specified gaming laws.
Review and Approval of Transactions
Substantially all material loans, leases, sales of securities and similar financing transactions by us and our subsidiaries must be reported to and in some
cases approved by gaming authorities. Neither we nor any of our subsidiaries may make a public offering of securities without the prior approval of certain
gaming authorities. Changes in control through merger, consolidation, stock or asset acquisitions, management or consulting agreements, or otherwise are
subject to receipt of prior approval of gaming authorities. Entities seeking to acquire control of us or one of our subsidiaries must satisfy gaming authorities
with respect to a variety of stringent standards prior to assuming control. Gaming authorities may also require controlling stockholders, officers, directors
and other persons having a material relationship or involvement with the entity proposing to acquire control to be investigated and licensed as part of the
approval process relating to the transaction.
Certain gaming laws and regulations in jurisdictions we operate in establish that certain corporate acquisitions opposed by management, repurchases of
voting securities and corporate defense tactics affecting us or our subsidiaries may be injurious to stable and productive corporate gaming, and as a result,
prior approval may be required before we may make exceptional repurchases of voting securities (such as repurchases which treat holders differently)
above the current market price and before a corporate acquisition opposed by management can be consummated. In certain jurisdictions, the gaming
authorities also require prior approval of a plan of recapitalization proposed by the board of directors of a publicly traded corporation which is registered
with the gaming authority in response to a tender offer made directly to the registered corporation’s stockholders for the purpose of acquiring control of the
registered corporation.
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Because of regulatory restrictions, our ability to grant a security interest in any of our gaming assets is limited and subject to receipt of prior approval from
gaming authorities. Further, a pledge of the stock of a subsidiary holding a gaming license and the foreclosure of such a pledge may be ineffective without
the prior approval of gaming authorities in certain jurisdictions. Moreover, our subsidiaries holding gaming licenses may be unable to guarantee a security
issued by an affiliated or parent company pursuant to a public offering, or pledge their assets to secure payment of the obligations evidenced by the security
issued by an affiliated or parent company, without the prior approval of certain gaming authorities.
Some jurisdictions also require us to file a report with the gaming authority within a prescribed period of time following certain financial transactions and
the offering of debt securities. Certain gaming authorities reserve the right to order such transactions rescinded.
Certain jurisdictions require the implementation of a compliance review and reporting system created for the purpose of monitoring activities related to our
continuing qualification. These plans require periodic reports to senior management of our company and to the regulatory authorities.
Certain jurisdictions require that an independent audit committee oversee the functions of surveillance and internal audit departments at our casinos.
License Fees and Gaming Taxes
We pay substantial license fees and taxes in many jurisdictions, including some of the counties and cities in which our operations are conducted, in
connection with our casino gaming operations, computed in various ways depending on the type of gaming or activity involved. Depending upon the
particular fee or tax involved, these fees and taxes are payable with varying frequency. License fees and taxes are based upon such factors as:
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•
a percentage of the gross gaming revenues received;
the number of gaming devices and table games operated;
admission fees for customers boarding our riverboat casinos; and/or
one time fees payable upon the initial receipt of license and fees in connection with the renewal of license.
In many jurisdictions, gaming tax rates are graduated, such that they increase as gross gaming revenues increase. Furthermore, tax rates are subject to
change, sometimes with little notice, and such changes could have a material adverse effect on our gaming operations.
In addition to taxes specifically unique to gaming, we are required to pay all other applicable taxes.
Operational Requirements
In most jurisdictions, we are subject to certain requirements and restrictions on how we must conduct our gaming operations. In many states, we are
required to give preference to local suppliers and include minority and women-owned businesses as well as organized labor in construction projects to the
maximum extent practicable as well as in general vendor business activity. Similarly, we may be required to give employment preference to minorities,
women and in-state residents in certain jurisdictions.
Some gaming jurisdictions also prohibit a distribution, except to allow for the payment of taxes, if the distribution would impair the financial viability of
the gaming operation. Moreover, many jurisdictions require a gaming operation to maintain insurance and post bonds in amounts determined by their
gaming authority. In addition, our ability to conduct certain types of games, introduce new games or move existing games within our facilities may be
restricted or subject to regulatory review and approval. Some of our operations are subject to restrictions on the number of gaming positions we may have
and the maximum wagers allowed to be placed by our customers.
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Some jurisdictions apply specific conditions that impact our ability to conduct gaming and non-gaming operations. Examples include but are not limited to:
Our land-based casino in New Orleans operates under a casino operating contract (the “COC”) with the State of Louisiana by and through the Louisiana
Gaming Control Board, which assumed the regulatory authority, control and jurisdiction from the Louisiana Economic Development Control Board
pursuant to Louisiana Revised Statute 27:31. The COC was recently renegotiated to extend the term by thirty years to 2054. Under Louisiana state law, our
New Orleans casino is subject to restrictions on the number of hotel rooms, the amount of meeting space within the hotel and how we may market and
advertise the rates we charge for rooms. Also in Louisiana we are required to comply with certain operating conditions applicable to our subsidiaries. In
Mississippi we are required to provide certain amenities at our operations. In Iowa we have entered into agreements with non-profit organizations that hold
the license to conduct gambling games. Similar conditions are applicable to subsidiaries in additional jurisdictions.
Indian Gaming
The terms and conditions of management contracts and the operation of casinos and all gaming on Indian land in the United States are subject to the Indian
Gaming Regulatory Act of 1988, (the “IGRA”), which is administered by the National Indian Gaming Commission, (the “NIGC”), the gaming regulatory
agencies of tribal governments, and Class III gaming compacts between the tribes for which we manage casinos and the states in which those casinos are
located. IGRA established three separate classes of tribal gaming-Class I, Class II and Class III. Class I includes all traditional or social games solely for
prizes of minimal value played by a tribe in connection with celebrations or ceremonies. Class II gaming includes games such as bingo, pulltabs,
punchboards, instant bingo and non-banked card games (those that are not played against the house) such as poker. Class III gaming includes casino-style
gaming such as banked table games like blackjack, craps and roulette, and gaming machines such as slots and video poker, as well as lotteries and pari-
mutuel wagering. Harrah’s Ak-Chin and Harrah’s Resort Southern California (Rincon) provide Class II gaming and, as limited by the tribal-state compacts,
Class III gaming. Harrah’s Cherokee currently provides only Class III gaming.
IGRA prohibits all forms of Class III gaming unless the tribe has entered into a written agreement or compact with the state that specifically authorizes the
types of Class III gaming the tribe may offer. These compacts may address, among other things, the manner and extent to which each state will conduct
background investigations and certify the suitability of the manager, its officers, directors, and key employees to conduct gaming on tribal lands. We have
received our permanent certification from the Arizona Department of Gaming as management contractor for the Ak-Chin Indian Community’s casino, a
Tribal-State Compact Gaming Resource Supplier Finding of Suitability from the California Gambling Control Commission in connection with
management of the Rincon San Luiseno Band of Indians casino, and have been licensed by the relevant tribal gaming authorities to manage the Ak-Chin
Indian Community’s casino, the Eastern Band of Cherokee Indians’ casino and the Rincon San Luiseno Band of Indians’ casino, respectively. In addition,
we provide advisory services under an agreement with the Buena Vista Rancheria of We-Muk Indians of California tribe for their casino operated in Ione,
California.
IGRA requires NIGC approval of management contracts for Class II and Class III gaming as well as the review of all agreements collateral to the
management contracts. Management contracts which are not so approved are void.
Management contracts can be modified or canceled pursuant to an enforcement action taken by the NIGC based on a violation of the law or an issue
affecting suitability.
Indian tribes are sovereign with their own governmental systems, which have primary regulatory authority over gaming on land within the tribes’
jurisdiction. Therefore, persons engaged in gaming activities, including the company, are subject to the provisions of tribal ordinances and regulations on
gaming. These ordinances are subject to review by the NIGC under certain standards established by IGRA. The NIGC may determine that some or all of
the ordinances require amendment, and that additional requirements, including additional licensing requirements, may be imposed on the management
company. The possession of valid licenses from the Ak-Chin Indian Community, the Eastern Band of Cherokee Indians and the Rincon San Luiseno Band
of Indians, are ongoing conditions of our agreements with these tribes.
Riverboat Casinos
In addition to all other regulations generally applicable to the gaming industry, certain of our riverboat casinos are also subject to regulations applicable to
vessels operating on navigable waterways, including regulations of the U.S. Coast Guard, or alternative inspection requirements. These requirements set
limits on the operation of the vessel, mandate that it must be operated by a minimum complement of licensed personnel, establish periodic inspections,
including the physical inspection of the outside hull, and establish other mechanical and operational rules. In addition, the riverboat casinos may be subject
to future U.S. Coast Guard regulations, or alternative security procedures, designed to increase homeland security which could affect some of our
properties and require significant expenditures to bring such properties into compliance.
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Racetracks
We conduct standard bred harness racing at Harrah’s Hoosier Park in Anderson, Indiana, harness racing at Harrah’s Philadelphia in Chester, Pennsylvania,
thoroughbred racing at Horseshoe Indianapolis Racing & Casino in Shelbyville, Indiana, and live standard bred harness racing at Scioto Downs in the
Columbus, Ohio area. Each of these facilities also offer pari-mutuel wagering and live wagering on races held at other facilities.
We currently operate a mix of poker, slot, table games and video lottery terminals at our racetracks depending on the local regulatory environment.
Generally, our gaming operations at racetracks are regulated in the same manner as our gaming operations in other jurisdictions. In some jurisdictions, our
ability to conduct gaming operations may be conditioned on the maintenance of agreements or certain arrangements with horsemen’s or labor groups or
meeting minimum live racing requirements.
Regulations governing our horse, and harness racing operations are, in most jurisdictions, administered separately from the regulations governing gaming
operations, with separate licenses and license fee structures. The racing authorities responsible for regulating our racing operations have broad oversight
authority, which may include: annually reviewing and granting racing licenses and racing dates; approving the opening and operation of off track wagering
facilities; approving simulcasting activities; licensing all officers, directors, racing officials and certain other employees of a racing licensee; and approving
certain contracts entered into by a racing licensee affecting racing, pari-mutuel wagering, account wagering and off track wagering operations.
Interactive & Internet Business
We are subject to various federal, state and international laws and regulations that affect our interactive business, including those relating to the privacy and
security of customer and employee personal information and those relating to the Internet, behavioral tracking, mobile applications, advertising and
marketing activities, sweepstakes and contests. Additional laws in all of these areas are likely to be passed in the future, which could result in significant
limitations on or changes to the ways in which we can collect, use, host, store or transmit the personal information and data of our customers or employees,
communicate with our customers, and deliver products and services, or may significantly increase our compliance costs. As our business expands to
include new uses or collection of data that is subject to privacy or security regulations, our compliance requirements and costs will increase and we may be
subject to increased regulatory scrutiny.
Our Caesars Digital segment operates online sports betting and iGaming, including online poker, in various states where legalized. We have also entered
into agreements with third parties for the use of the World Series of Poker brand on online gaming websites internationally and domestically. We are
required to operate under the regulations and established licensing requirements for each state or international jurisdiction in which we operate. Failure to
maintain compliance with these regulations could result in fines or the suspension and possible revocation of our license(s). We and our partners continue
to monitor other domestic markets for points of entry.
The gaming and other laws and regulations to which we are subject could change or could be interpreted differently in the future, or new laws and
regulations could be enacted. For example, in 2018, the U.S. Department of Justice (the “DOJ”) reversed its previously- issued opinion published in 2011,
which stated that interstate transmissions of wire communications that do not relate to a “sporting event or contest” fall outside the purview of the Wire Act
of 1961 (the “Wire Act”). The DOJ’s updated opinion, which is the subject of ongoing litigation in federal court, stated instead that the Wire Act was not
uniformly limited to gaming relating to sporting events or contests and that certain of its provisions apply to non-sports-related wagering activity. Any such
material changes, new laws or regulations, or material differences in interpretations by courts or governmental authorities could adversely affect our
business and operating results.
Some of our social gaming products and features are based upon traditional casino games, such as slots and table games. Although we do not believe these
products and features constitute gambling, it is possible that additional laws or regulations may be passed in the future that would restrict or impose
additional requirements on our social gaming products and features.
Sports Book Wagering & Online Wagering
We and our partners are subject to various federal, state and international laws and regulations that affect our sports wagering and online wagering
businesses. Additional laws in any of these areas are likely to be passed in the future, which could result in impact to the ways in which we and our partners
are able to offer sports wagering and online wagering in jurisdictions that permit such activities.
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