UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 6-K

 

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13A-16 OR 15D-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

May 8, 2024

Commission File Number: 001-40352

 

 

Genius Sports Limited

(Translation of registrant’s name into English)

 

 

Genius Sports Group

1st Floor, 27 Soho Square,

London, W1D 3QR

(Address of principal executive office)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F ☒    Form 40-F ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐

 

 

 


INFORMATION CONTAINED IN THIS REPORT ON FORM 6-K

On May 8, 2024, Genius Sports Limited (the “Company”) issued an interim report for the three month period ended March 31, 2024. A copy of the interim report is attached hereto as Exhibit 99.1. The information contained in Exhibit 99.1 is incorporated by reference into the Company’s registration statements on Form F-3 (File No: 333-265466) and on Form S-8 (File Nos: 333-264254, 333-266904, 333-269093 and 333-278001).

In addition, on May 8, 2024, the Company issued a press release announcing the first quarter 2024 financial results for the Company. A copy of the press release is attached hereto as Exhibit 99.2.

On April 29, 2024, we entered into a credit agreement with Citibank, N.A. and Deutsche Bank Securities Inc., in connection with a $90 million senior secured revolving credit facility (the “Credit Agreement”) as described in the interim report in exhibit 99.1. The description of the Credit Agreement is qualified in its entirety by the agreement itself attached hereto as exhibit 10.1.

 

2



SIGNATURES

Pursuant to the requirements 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.

 

    GENIUS SPORTS LIMITED
Date: May 8, 2024     By:  

/s/ Mark Locke

    Name:   Mark Locke
    Title:   Chief Executive Officer

 

 

4

Exhibit 99.1

PRELIMINARY NOTE

The unaudited Condensed Consolidated Financial Statements for the three month period ended March 31, 2024 included herein, have been prepared in accordance with accounting principles accepted in the United States of America (“US GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. The condensed consolidated financial statements are presented in United States Dollars (“USD”). All references in this interim report to “$,” and “US dollars” mean US dollars and all references to “£” and “GBP” mean British Pounds Sterling, unless otherwise noted.

This interim report, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” contains or may contain forward-looking statements as defined in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that involve significant risks and uncertainties. All statements other than statements of historical facts are forward-looking statements. These forward-looking statements include information about our possible or assumed future results of operations or our performance. Words such as “expects,” “intends,” “plans,” “believes,” “anticipates,” “estimates,” and variations of such words and similar expressions are intended to identify the forward-looking statements. The risk factors and cautionary language referred to or incorporated by reference in this Report provide examples of risks, uncertainties and events that may cause actual results to differ materially from the expectations described in our forward-looking statements, including among other things, the items identified in the section entitled “Risk Factors” of the Company’s Annual Report on Form 20-F for the year ended December 31, 2023 (“2023 20-F”), as filed with the SEC on March 15, 2024.

 

1


Genius Sports Limited

Condensed Consolidated Balance Sheets

(Amounts in thousands, except share and per share data)

 

     (Unaudited)    

 

 
     March 31     December 31  
     2024     2023  

ASSETS

    

Current assets:

    

Cash and cash equivalents

   $ 67,532     $ 100,331  

Accounts receivable, net

     100,264       71,088  

Contract assets

     25,920       38,802  

Prepaid expenses

     23,653       27,231  

Other current assets

     11,814       7,329  
  

 

 

   

 

 

 

Total current assets

     229,183       244,781  
  

 

 

   

 

 

 

Property and equipment, net

     11,551       11,552  

Intangible assets, net

     119,780       129,670  

Operating lease right of use assets

     8,019       7,011  

Goodwill

     323,302       326,011  

Investments

     25,045       26,399  

Restricted cash, non-current

     25,251       25,462  

Other assets

     3,290       4,838  
  

 

 

   

 

 

 

Total assets

   $ 745,421     $ 775,724  
  

 

 

   

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

    

Current liabilities:

    

Accounts payable

   $ 51,377     $ 57,379  

Accrued expenses

     63,385       56,331  

Deferred revenue

     45,115       44,345  

Current debt

     23       7,573  

Operating lease liabilities, current

     3,471       3,610  

Other current liabilities

     11,526       13,676  
  

 

 

   

 

 

 

Total current liabilities

     174,897       182,914  
  

 

 

   

 

 

 

Long-term debt – less current portion

     13       19  

Deferred tax liability

     15,212       15,335  

Operating lease liabilities, non-current

     4,765       3,501  

Other liabilities

           936  
  

 

 

   

 

 

 

Total liabilities

     194,887       202,705  
  

 

 

   

 

 

 

Commitments and contingencies (Note 16)

    

Shareholders’ equity

    

Common stock, $0.01 par value, unlimited shares authorized, 215,022,361 shares issued and 210,916,413 shares outstanding at March 31, 2024; unlimited shares authorized, 213,224,868 shares issued and 209,118,920 shares outstanding at December 31, 2023

     2,150       2,132  

B Shares, $0.0001 par value, 22,500,000 shares authorized, 18,500,000 shares issued and outstanding at March 31, 2024 and December 31, 2023

     2       2  

Additional paid-in capital

     1,652,776       1,646,082  

Treasury stock, at cost, 4,105,948 shares at March 31, 2024 and December 31, 2023

     (17,653     (17,653

Accumulated deficit

     (1,050,028     (1,024,487

Accumulated other comprehensive loss

     (36,713     (33,057
  

 

 

   

 

 

 

Total shareholders’ equity

     550,534       573,019  
  

 

 

   

 

 

 

Total liabilities and shareholders’ equity

   $ 745,421     $ 775,724  
  

 

 

   

 

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

2


Genius Sports Limited

Condensed Consolidated Statements of Operations

(Unaudited)

(Amounts in thousands, except share and per share data)

 

     Three Months Ended  
     March 31,  
     2024     2023  

Revenue

   $ 119,718     $ 97,229  

Cost of revenue

     106,911       87,697  
  

 

 

   

 

 

 

Gross profit

     12,807       9,532  
  

 

 

   

 

 

 

Operating expenses:

    

Sales and marketing

     8,415       7,391  

Research and development

     6,621       6,269  

General and administrative

     21,585       18,074  

Transaction expenses

     464       828  
  

 

 

   

 

 

 

Total operating expense

     37,085       32,562  
  

 

 

   

 

 

 

Loss from operations

     (24,278     (23,030
  

 

 

   

 

 

 

Interest income, net

     666       418  

Loss on disposal of assets

     (7     (11

Loss on fair value remeasurement of contingent consideration

           (2,433

Change in fair value of derivative warrant liabilities

           (534

(Loss) gain on foreign currency

     (1,087     801  
  

 

 

   

 

 

 

Total other expense

     (428     (1,759
  

 

 

   

 

 

 

Loss before income taxes

     (24,706     (24,789
  

 

 

   

 

 

 

Income tax expense

     (1,100     (648

Gain from equity method investment

     265       269  
  

 

 

   

 

 

 

Net loss

   $ (25,541   $ (25,168
  

 

 

   

 

 

 

Loss per share attributable to common stockholders:

    

Basic and diluted

   $ (0.11   $ (0.11

Weighted average common stock outstanding:

    

Basic and diluted

     229,326,772       221,707,413  

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

3


Genius Sports Limited

Condensed Consolidated Statements of Comprehensive Loss

(Unaudited)

(Amounts in thousands)

 

     Three Months Ended  
     March 31,  
     2024     2023  

Net loss

   $ (25,541   $ (25,168

Other comprehensive (loss) income:

    

Foreign currency translation adjustments

     (3,656     8,968  
  

 

 

   

 

 

 

Comprehensive loss

   $ (29,197   $ (16,200
  

 

 

   

 

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

4


Genius Sports Limited

Condensed Consolidated Statements of Changes in Shareholders’ Equity

(Unaudited)

(Amounts in thousands, except share data)

 

    Common
Stock
    Amounts     B Shares     Amounts     Additional
Paid in
Capital
    Treasury
Stock
    Amounts     Accumulated
Deficit
    Accumulated
Other
Comprehensive
Loss
    Total
Shareholders’
Equity
 

Balance at January 1, 2024

    213,224,868     $ 2,132       18,500,000     $ 2     $ 1,646,082       (4,105,948   $ (17,653   $ (1,024,487   $ (33,057   $ 573,019  

Net loss

                                              (25,541           (25,541

Stock-based compensation

                            6,712                               6,712  

Vesting of shares

    1,797,493       18                   (18                              

Foreign currency translation adjustment

                                                    (3,656     (3,656
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance at March 31, 2024

    215,022,361     $ 2,150       18,500,000     $ 2     $ 1,652,776       (4,105,948   $ (17,653   $ (1,050,028   $ (36,713   $ 550,534  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
    Common
Stock
    Amounts     B Shares     Amounts     Additional
Paid in
Capital
    Treasury
Stock
    Amounts     Accumulated
Deficit
    Accumulated
Other
Comprehensive
Loss
    Total
Shareholders’
Equity
 

Balance at January 1, 2023

    201,853,695     $ 2,019       18,500,000     $ 2     $ 1,568,917           $     $ (938,953   $ (55,169   $ 576,816  

Net loss

                                              (25,168           (25,168

Stock-based compensation

                            10,543                               10,543  

Vesting of shares

    953,117       10                   (10                              

Issuance of common stock in connection with business combinations

    1,677,920       17                   8,423                               8,440  

Issuance (acquisition) of common shares in connection with warrant redemptions

    7,668,280       76                   31,877       (4,105,948     (17,653                 14,300  

Foreign currency translation adjustment

                                                    8,968       8,968  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance at March 31, 2023

    212,153,012     $ 2,122       18,500,000     $ 2     $ 1,619,750       (4,105,948   $ (17,653   $ (964,121   $ (46,201   $ 593,899  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

5


Genius Sports Limited

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(Amounts in thousands)

 

     Three Months Ended
March 31,
 
     2024     2023  

Cash Flows from operating activities:

    

Net loss

   $ (25,541   $ (25,168

Adjustments to reconcile net loss to net cash used in operating activities:

    

Depreciation and amortization

     21,138       17,308  

Loss on disposal of assets

     7       11  

Loss on fair value remeasurement of contingent consideration

           2,433  

Stock-based compensation

     6,745       10,561  

Change in fair value of derivative warrant liabilities

           534  

Non-cash interest expense, net

           72  

Non-cash lease expense

     1,096       964  

Amortization of contract cost

     292       226  

Deferred income taxes

     5       227  

Provision for expected credit losses

     243       58  

Gain from equity method investment

     (265     (269

Loss (gain) on foreign currency remeasurement

     715       (795

Changes in operating assets and liabilities

    

Accounts receivable

     (30,698     (5,657

Contract asset

     12,577       (3,143

Prepaid expenses

     3,357       (143

Other current assets

     (5,568     1,066  

Other assets

     2,234       (576

Accounts payable

     (5,533     (12,306

Accrued expenses

     7,532       2,113  

Deferred revenue

     1,140       (6,592

Other current liabilities

     (3,005     925  

Operating lease liabilities

     (1,065     (1,019

Other liabilities

           327  
  

 

 

   

 

 

 

Net cash used in operating activities

     (14,594     (18,843

Cash flows from investing activities:

    

Purchases of property and equipment

     (1,453     (310

Capitalization of internally developed software costs

     (10,927     (9,979

Distributions from equity method investments

     1,410       1,398  
  

 

 

   

 

 

 

Net cash used in investing activities

     (10,970     (8,891

Cash flows from financing activities:

    

Repayment of loans and mortgage

     (5     (5

Proceeds from exercise of Public Warrants

           6,812  

Repayment of promissory notes

     (7,575     (7,387
  

 

 

   

 

 

 

Net cash used in financing activities

     (7,580     (580

Effect of exchange rate changes on cash, cash equivalents and restricted cash

     134       766  

Net decrease in cash, cash equivalents and restricted cash

     (33,010     (27,548

Cash, cash equivalents and restricted cash at beginning of period

     125,793       159,020  
  

 

 

   

 

 

 

Cash, cash equivalents and restricted cash at end of period

   $ 92,783     $ 131,472  
  

 

 

   

 

 

 

Supplemental disclosure of cash activities:

    

Cash paid during the period for interest

   $     $ 1  

Cash paid during the period for income taxes

   $ 322     $ 179  

Supplemental disclosure of noncash investing and financing activities:

    

Acquisition of common shares by subsidiary in connection with warrant redemptions

   $     $ 17,653  

Issuance of common stock in connection with business combinations

   $     $ 8,440  

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

6


Genius Sports Limited

Notes to Condensed Consolidated Financial Statements

(Unaudited)

Note 1. Description of Business and Summary of Significant Accounting Policies

Description of Business

Genius Sports Limited (the “Company” or “Genius”) is a non-cellular company limited by shares incorporated on October 21, 2020 under the laws of Guernsey. The Company was formed for the purpose of effectuating a merger pursuant to a definitive business combination agreement (“Business Combination Agreement”), dated October 27, 2020, by and among dMY Technology Group, Inc. II (“dMY”), Maven Topco Limited (“Maven Topco”), Maven Midco Limited, Galileo NewCo Limited, Genius Merger Sub, Inc., and dMY Sponsor II, LLC (the “Merger”). Upon the closing of the Merger on April 20, 2021 (the “Closing”), the Company changed its name from Galileo NewCo Limited to Genius Sports Limited. The Company’s ordinary shares are currently listed on the New York Stock Exchange (“NYSE”) under the symbol “GENI”.

The Company is a provider of scalable, technology-led products and services to the sports, sports betting, and sports media industries. The Company is a data and technology company that enables consumer-facing businesses such as sports leagues, sportsbook operators and media companies to engage with their customers. The scope of the Company’s software bridges the entire sports data journey, from intuitive applications that enable accurate real-time data capture, to the creation and provision of in-game betting odds and digital content that helps the Company’s customers create engaging experiences for the ultimate end-users, who are primarily sports fans.

Basis of Presentation and Principles of Consolidation

The Merger was accounted for as a reverse capitalization in accordance with accounting principles accepted in the United States of America (“US GAAP”). The Merger was first accounted for as a capital reorganization whereby the Company was the successor to its predecessor Maven Topco. As a result of the first step described above, the existing shareholders of Maven Topco continued to retain control through ownership of the Company. The capital reorganization was immediately followed by the acquisition of dMY, which was accounted for within the scope of Accounting Standards Codification (“ASC”) 805, Business Combinations (“ASC 805”). Under this method of accounting, dMY was treated as the “acquired” company for financial reporting purposes. This determination was primarily based on post-combination relative voting rights, composition of the governing board, relative size of the pre-combination entities, and intent of the Merger. Accordingly, for accounting purposes, the Merger was treated as the equivalent of the Company issuing stock for the net assets of dMY, accompanied by a recapitalization. The net assets of dMY were stated at historical cost, which approximated fair value, with no goodwill or other intangible assets recorded. Operations prior to the Merger are those of legacy Maven Topco. Upon Closing, outstanding capital stock of legacy shareholders of Maven Topco was converted to the Company’s common stock, in an amount determined by application of the exchange ratio of 37.38624 (“Exchange Ratio”), which was based on Maven Topco’s implied price per share prior to the Merger. For periods prior to the Merger, the reported share and per share amounts have been retroactively converted by applying the Exchange Ratio.

The accompanying unaudited condensed consolidated financial statements are presented in conformity with US GAAP and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with US GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements and accompanying notes thereto included in our 2023 20-F as filed with the SEC on March 15, 2024. The condensed consolidated balance sheet as of December 31, 2023, included herein, was derived from the audited financial statements of the Company as of that date.

The unaudited condensed consolidated interim financial statements, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the Company’s financial position as of March 31, 2024, its results of operations, comprehensive loss and shareholders’ equity for the three months ended March 31, 2024 and 2023, and its cash flows for the three months ended March 31, 2024 and 2023. The results of the three months ended March 31, 2024 are not necessarily indicative of the results to be expected for the year ended December 31, 2024 or for any interim period or for any other future year.

The condensed consolidated financial statements include the accounts and operations of the Company, inclusive of its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

Reclassifications

Certain prior period amounts reported in our condensed consolidated financial statements and notes thereto have been reclassified to conform to current period presentation. There is no change to the Company’s historical revenues, operating expenses or net loss, nor any change to any balance sheet account, the Company’s liquidity, or cash flows in any period.

 

7


Genius Sports Limited

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

Revisions to Previously Issued Financial Statements

During the fourth quarter of fiscal year 2023, management identified a misstatement related to the omission of the impact of vested warrants on the calculation of basic and diluted weighted average common stock outstanding and thus impacting loss per share. The Company assessed the materiality of these misstatements on prior period financial statements in accordance with US Securities and Exchange Commission Staff Accounting Bulletin No. 99, Materiality, codified in ASC 250, Presentation of Financial Statements, and concluded that these misstatements were not material to any prior annual or interim period.

The Company revised the calculation of weighted average common stock outstanding for the three months ended March 31, 2023 to include the impact of vested warrants and adjusted loss per share from $(0.12) to $(0.11). See Note 11 – Loss Per Share. There is no change to the Company’s historical revenues, operating expenses or net loss, nor any change to any balance sheet account, the Company’s liquidity, or cash flows in any period.

Recent Accounting Pronouncements

There are no accounting pronouncements that are not yet effective and that are expected to have a material impact to the condensed consolidated financial statements.

Recently Adopted Accounting Guidance

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which is intended to improve the accounting for acquired revenue contracts with customers in a business combination. ASU 2021-08 is effective for the Company beginning January 1, 2024, with early adoption permitted. The Company adopted ASU 2021-08 on January 1, 2024. The adoption of the standard did not have a material impact on the condensed consolidated financial statements.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which is intended to improve reportable segment disclosures, primarily through enhanced disclosures about significant segment expenses. ASU 2023-07 is effective for the Company for the annual reporting period beginning January 1, 2024 and interim periods after December 15, 2024, with early adoption permitted. The Company adopted ASU 2023-07 on January 1, 2024. The adoption of the standard did not have a material impact on the condensed consolidated financial statements.

 

8


Genius Sports Limited

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

Note 2. Revenue

Disaggregation of Revenues

Revenue by Major Product Line

The Company’s product offerings primarily deliver a service to a customer satisfied over time, and not at a point in time. Revenue for the Company’s major product lines consists of the following (in thousands):

 

     Three Months Ended March 31,  
     2024      2023  

Revenue by Product Line

     

Betting Technology, Content and Services

   $ 73,897      $  64,740  

Media Technology, Content and Services

     35,475        21,764  

Sports Technology and Services

     10,346        10,725  
  

 

 

    

 

 

 

Total

   $  119,718      $ 97,229  
  

 

 

    

 

 

 

Revenue by Geographic Market

Geographical regions are determined based on the region in which the customer is headquartered or domiciled. Revenues by geographical market consists of the following (in thousands):

 

     Three Months Ended March 31,  
     2024      2023  

Revenue by geographical market:

     

Americas

   $ 57,962      $  37,244  

Europe

     55,411        55,020  

Rest of the world

     6,345        4,965  
  

 

 

    

 

 

 

Total

   $  119,718      $ 97,229  
  

 

 

    

 

 

 

In the three months ended March 31, 2024, the United States and Gibraltar represented 41% and 12% of total revenue, respectively. In the three months ended March 31, 2023, the United States, Gibraltar and Malta represented 30%, 13% and 10% of total revenue, respectively. No other countries represented more than 10% of revenues.

Revenues by Major Customers

One customer accounted for 15% of revenue in the three months ended March 31, 2024. No customers accounted for 10% or more of revenue in the three months ended March 31, 2023.

Revenue from Other Sources

For the three months ended March 31, 2024 and 2023, revenue for the Sports Technology and Services product line includes an immaterial amount of revenue from other sources in relation to equipment rental income.

 

9


Genius Sports Limited

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

Remaining Performance Obligations

Revenue allocated to remaining performance obligations represents contracted revenue that has not yet been recognized, which includes unearned revenue and unbilled amounts that will be recognized as revenue in future periods and excludes constrained variable consideration. The Company has excluded contracts with an original expected term of one year or less and variable consideration allocated entirely to wholly unsatisfied promises that form part of a single performance obligation from the disclosure of remaining performance obligations.

Revenue allocated to remaining performance obligations was $207.6 million as of March 31, 2024. The Company expects to recognize approximately 60% in revenue within one year, and the remainder within the next 13 – 105 months.

During the three months ended March 31, 2024 and 2023, the Company recognized revenue of $20.5 million and $18.0 million, respectively for variable consideration related to revenue share contracts for Betting Technology, Content and Services.

Contract Balances

The timing of revenue recognition may differ from the timing of invoicing to customers, and these timing differences result in receivables (see Note 4 – Accounts Receivable, Net), contract assets, or contract liabilities (deferred revenue) on the Company’s condensed consolidated balance sheets. The Company records a contract asset when revenue is recognized prior to the right to invoice or deferred revenue when invoicing occurs prior to performance obligations being met. Contract assets are transferred to receivables when the rights to invoice and receive payment become unconditional.

As of March 31, 2024, the Company had $25.9 million contract assets and $45.1 million of contract liabilities, recognized as deferred revenue. As of December 31, 2023, the Company had $38.8 million of contract assets and $44.3 million of contract liabilities, recognized as deferred revenue.

The Company expects to recognize substantially all of the deferred revenue as of March 31, 2024 within the next 12 months.

Note 3. Cash, Cash Equivalents and Restricted Cash

Cash, cash equivalents and restricted cash as of March 31, 2024 and December 31, 2023 are as follows (in thousands):

 

     March 31,      December 31,  
     2024      2023  

Cash and cash equivalents

   $  67,532      $  100,331  

Restricted cash, non-current

     25,251        25,462  
  

 

 

    

 

 

 

Cash, cash equivalents and restricted cash

   $ 92,783      $ 125,793  
  

 

 

    

 

 

 

Restricted cash relates to a guarantee issued by the Company to Barclays Bank PLC in connection with a letter of credit that Barclays provided to Football DataCo Limited for and on behalf of the Company for an aggregate amount of £20.0 million as of March 31, 2024 and December 31, 2023 ($25.3 million and $25.5 million as of March 31, 2024 and December 31, 2023, respectively).

Note 4. Accounts Receivable, Net

As of March 31, 2024, accounts receivable, net consisted of accounts receivable of $105.2 million less allowance for credit losses of $4.9 million. As of December 31, 2023, accounts receivable, net consisted of accounts receivable of $76.2 million less allowance for credit losses of $5.1 million.

 

10


Genius Sports Limited

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

Note 5. Intangible Assets, Net

Intangible assets subject to amortization as of March 31, 2024 consist of the following (in thousands, except years):

 

     Weighted
Average
Remaining Useful
Lives
   Gross Carrying
Amount
     Accumulated
Amortization
     Net Carrying
Amount
 
     (years)       

Data rights

   4    $ 66,507      $ 37,133      $ 29,374  

Marketing products

   9      58,608        40,349        18,259  

Technology

   1      106,400        100,263        6,137  

Capitalized software

   2      163,641        97,631        66,010  
     

 

 

    

 

 

    

 

 

 

Total intangible assets

   $  395,156      $  275,376      $  119,780  
  

 

 

    

 

 

    

 

 

 

Intangible assets subject to amortization as of December 31, 2023 consist of the following (in thousands, except years):

 

     Weighted
Average
Remaining Useful
Lives
   Gross Carrying
Amount
     Accumulated
Amortization
     Net Carrying
Amount
 
     (years)       

Data rights

   5    $ 67,064      $ 35,768      $ 31,296  

Marketing products

   7      59,099        37,552        21,547  

Technology

   1      107,292        95,633        11,659  

Capitalized software

   2      154,045        88,877        65,168  
     

 

 

    

 

 

    

 

 

 

Total intangible assets

   $  387,500      $  257,830      $  129,670  
  

 

 

    

 

 

    

 

 

 

Amortization expense was $19.8 million and $16.1 million for the three months ended March 31, 2024 and 2023, respectively.

Note 6. Goodwill

Changes in the carrying amount of goodwill for the periods presented in accompanying condensed consolidated financial statements are as follows (in thousands):

 

Balance as of December 31, 2023

   $  326,011  

Effect of currency translation remeasurement

     (2,709
  

 

 

 

Balance as of March 31, 2024

   $ 323,302  
  

 

 

 

No impairment of goodwill was recognized for the three months ended March 31, 2024 and 2023.

Note 7. Other Assets

Other assets (current and long-term) as of March 31, 2024 and December 31, 2023 are as follows (in thousands):

 

     March 31,
2024
     December 31,
2023
 

Other current assets:

     

Non-trade receivables

   $ 69      $ 227  

Deposits

     5,808         

Corporate tax receivable

     5,682        6,755  

Sales tax receivable

     1         

Inventory

     254        347  
  

 

 

    

 

 

 

Total other current assets

   $  11,814      $  7,329  
  

 

 

    

 

 

 

Other assets:

     

Security deposit

   $ 1,327      $ 1,364  

Sales tax receivable

            1,501  

Contract costs

     1,963        1,973  
  

 

 

    

 

 

 

Total other assets

   $ 3,290      $ 4,838  
  

 

 

    

 

 

 

 

11


Genius Sports Limited

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

Note 8. Debt

The following table summarizes outstanding debt balances as of March 31, 2024 and December 31, 2023 (in thousands):

 

Instrument

   Date of Issuance      Maturity Date      Effective
interest rate
  March 31,
2024
    December 31,
2023
 

Genius Sports Italy Srl Mortgage

     December 2010        December 2025        5.5   $ 36     $ 43  

Promissory Note

     January 2022        January 2024        4.7           7,549  
          

 

 

   

 

 

 
           $ 36     $ 7,592  

Less current portion of debt

 

          (23     (7,573
 

 

 

   

 

 

 

Non-current portion of debt

 

        $ 13     $ 19  
 

 

 

   

 

 

 

Genius Sports Italy Srl Mortgage

On December 1, 2010, Genius Sports entered into a loan agreement in Euros for €0.3 million, equivalent to less than $0.1 million as of March 31, 2024, to be paid in accordance with the quarterly floating rate amortization schedule over the course of the loan.

Promissory Notes

As part of the equity investment in the Canadian Football League (“CFL”), the Company issued two promissory notes, denominated in Canadian Dollars, with an aggregate face value of $20.0 million Canadian Dollars. The promissory notes incur no cash interest. The Company has determined an effective interest rate of 4.7%. The first promissory note matured and was repaid on January 1, 2023, and the second promissory note matured and was repaid on January 1, 2024.

Secured Overdraft Facility

The Company has access to short-term borrowings and lines of credit. The Company’s main facility is a £0.2 million secured overdraft facility with Barclays Bank PLC, which incurs a variable interest rate of 4.0% over the Bank of England rate. As of March 31, 2024 and December 31, 2023, the Company had no outstanding borrowings under its lines of credit.

Interest Expense

Interest expense was less than $0.1 million and $0.3 million for the three months ended March 31, 2024 and 2023, respectively.

Debt Maturities

Expected future payments for all borrowings as of March 31, 2024 are as follows:

 

Fiscal Period:

   (in thousands)  

2024 (Remaining)

   $ 17  

2025

     19  

2026

      

2027

      

2028

      

Thereafter

      
  

 

 

 

Total payment outstanding

   $  36  
  

 

 

 

 

12


Genius Sports Limited

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

Note 9. Derivative Warrant Liabilities

As part of dMY’s initial public offering (“IPO”) in 2020, dMY issued 9,200,000 warrants to third party investors, and each whole warrant entitled the holder to purchase one share of the Company’s Class A common stock at an exercise price of $11.50 per share (the “Public Warrants”). Simultaneously with the closing of the IPO, dMY completed the private sale of 5,013,333 warrants to dMY’s sponsor (“Private Placement Warrants”) and each Private Placement Warrant allowed the sponsor to purchase one share of the Company’s Class A common stock at $11.50 per share. During fiscal year 2021 the Private Placement Warrants were exercised in full.

Public Warrants may only be exercised for a whole number of shares. No fractional Public Warrants will be issued upon separation of the units and only whole Public Warrants will trade. The Public Warrants will become exercisable on the later of (a) 30 days after the completion of a Business Combination or (b) 12 months from the closing of the IPO. The Public Warrants had an exercise price of $11.50 per share, subject to adjustments and will expire five years after the completion of the Business Combination as of April 20, 2021 or earlier upon redemption or liquidation and are exercisable on demand.

On January 20, 2023, the Company announced the successful offer to exercise and consent solicitation (the “Exercise and Consent Solicitation”) of the Company’s outstanding public warrants. Holders of 2,149,000 warrants elected to exercise their public warrants prior to the expiration date of the Exercise and Consent Solicitation on a cash basis at a reduced exercise price of $3.1816 per share, resulting in cash proceeds of $6.8 million and the issuance of 2,149,000 shares of Common Stock. Holders of 4,685,987 warrants elected to exercise their public warrants prior to the expiration date of the Exercise and Consent Solicitation on a cashless basis at a reduced exercise price of $3.1816 per share, and the remaining 833,293 public warrants were exercised automatically on a cashless basis at a reduced exercise price of $3.2933 per share. The Company issued 5,519,280 shares of Common Stock for warrants that were exercised on a cashless basis, of which 4,105,948 shares were retained as Treasury Stock. None of the Company’s public warrants remained outstanding as of March 31, 2023 and the warrants ceased trading on the NYSE.

The Company accounts for Public Warrants as liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in FASB ASC 480, Distinguishing Liabilities from Equity (ASC 480) and ASC 815, Derivatives and Hedging (ASC 815). Specifically, the Public Warrants meet the definition of a derivative but do not qualify for an exception from derivative accounting since the warrants are not indexed to the Company’s stock and therefore, are precluded from equity classification. Since the Public Warrants meet the definition of a derivative under ASC 815, the Company recorded these warrants as liabilities on the balance sheet at fair value upon the closing of the Merger, with subsequent changes in their respective fair values recognized in the condensed consolidated statement of operations.

For the three months ended March 31, 2024 and 2023, zero and a loss of $0.5 million was recognized from the change in fair value of the Public Warrants in the Company’s condensed consolidated statements of operations, respectively.

Note 10. Other Liabilities

Other current liabilities as of March 31, 2024 and December 31, 2023 are as follows (in thousands):

 

     March 31,      December 31,  
     2024      2023  

Other current liabilities:

     

Other payables

   $ 932      $ 1,241  

Corporate tax payable

     1,609        1,800  

Deferred consideration

     4,325        6,201  

Contingent consideration

     4,660        4,434  
  

 

 

    

 

 

 

Total other current liabilities

   $  11,526      $  13,676  
  

 

 

    

 

 

 

Other liabilities:

     

Contingent consideration

   $      $ 420  

Deferred consideration

            516  
  

 

 

    

 

 

 

Total other liabilities

   $      $ 936  
  

 

 

    

 

 

 

 

13


Genius Sports Limited

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

Note 11. Loss Per Share

The Company’s basic net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted-average shares of common stock outstanding (incl. warrants issued to the NFL), net of weighted average treasury stock outstanding, during periods with undistributed losses. Additionally, the B Shares, issued in connection with the License Agreement (defined below), are not included in the loss per share calculations below as they are non-participating securities with no rights to dividends or distributions. Diluted net loss per share attributable to common stockholders is computed by giving effect to all potentially dilutive securities. Basic and diluted net loss per share attributable to common stockholders was the same for all periods presented as the inclusion of all potentially dilutive securities outstanding was anti-dilutive.

The computation of loss per share and weighted average shares of the Company’s common stock outstanding for the three months ended March 31, 2024 and 2023 is as follows (in thousands except share and per share data):

 

     Three Months ended March 31,  
     2024      2023  

Net loss attributable to common stockholders – basic and diluted

   $ (25,541)      $ (25,168)  

Basic and diluted weighted average common stock outstanding

     210,826,772        206,207,413  

Adjustment for warrants issued to NFL to purchase common stock

     18,500,000        15,500,000  
  

 

 

    

 

 

 

Adjusted basic and diluted weighted average common stock outstanding

     229,326,772        221,707,413  
  

 

 

    

 

 

 

Loss per share attributable to common stockholders – basic and diluted

   $ (0.11)      $ (0.11)  
  

 

 

    

 

 

 

 

The following table presents the potentially dilutive securities that were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented because including them would have been antidilutive:

 

     Three months ended March 31,  
     2024      2023  

Stock options to purchase common stock

     117,529        357,945  

Unvested restricted shares

     1,519,598        3,245,735  

Unvested equity-settled restricted share units

     3,532,412        2,436,923  

Unvested equity-settled performance-based restricted share units

     9,473,562        4,422,907  
  

 

 

    

 

 

 

Total

     14,643,101        10,463,510  
  

 

 

    

 

 

 

Note 12. Stock-based Compensation

Restricted Shares

2021 Restricted Share Plan

On October 27, 2020, in anticipation of the Merger, the Board of Directors approved a Management Equity Term Sheet (“Term Sheet”) which modified the terms of Maven Topco’s legacy Incentive Securities (defined below) and allowed for any unvested Incentive Securities at Closing to be converted to restricted shares under the 2021 Restricted Share Plan, using the Exchange Ratio established during the Merger.

Specifically, historical unvested Class B and Class C Incentive Securities were converted to restricted shares subject only to service conditions (“Time-Vesting Restricted Shares”) and subject to graded vesting over four years. Historical Class D unvested Incentive Securities were converted to restricted shares with service and market conditions (“Performance-Vesting Restricted Shares”), subject to graded vesting over three years based on a market condition related to volume weighted average trading price performance of the Company’s common stock.

The Company determined that a modification to the terms of Maven Topco’s legacy Incentive Securities occurred on October 27, 2020 (“October Modification”) because the Company removed the Bad Leaver provision (discussed below in “Incentive Securities” section) for vested awards, contingent upon the Closing, representing a change in vesting conditions. The Company further determined that another modification occurred on April 20, 2021 (“April Modification”) since the Incentive Securities, which are private company awards, were exchanged for restricted shares, which are public company awards, representing a change in vesting conditions.

 

14


Genius Sports Limited

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

No compensation cost was recognized as a result of the October Modification because the awards were improbable of vesting both before and after the modification date as of October 27, 2020. Upon Closing, the Company recognized total compensation cost of $183.2 million to account for the vesting of the historical Incentive Securities upon removal of the Bad Leaver provision. The Company measured the awards based on their fair values as of October 27, 2020, which is considered to be the grant date fair value of the awards, adjusted for any incremental compensation cost resulting from the April Modification, which is determined to be immaterial.

A summary of the Company’s overall restricted shares activities for the three months ended March 31, 2024 is as follows:

 

     Number of
Shares
    Weighted Average Grant Date
Fair Value per Share
 

Unvested restricted shares as of December 31, 2023

     1,757,495     $  7.22  

Vested

     (101,004   $ 8.62  

Forfeited

     (136,893   $ 7.13  
  

 

 

   

Unvested restricted shares as of March 31, 2024

     1,519,598     $ 7.14  

The compensation cost recognized for the restricted shares during the three months ended March 31, 2024 and 2023 was $0.8 million, and $2.2 million, respectively.

As of March 31, 2024, total unrecognized compensation cost related to the restricted shares was $0.1 million and is expected to be recognized over a weighted-average service period of 0.1 years.

Stock Options

2021 Option Plan

On April 20, 2021 (“2021 Grant Date”), as part of the Merger, the Board of Directors adopted the 2021 Option Plan and granted employees options to purchase the Company’s common stock via an employee benefit trust including 1) options which shall immediately vest upon Closing (“Immediate-Vesting Options”), 2) options subject only to service conditions (“Time-Vesting Options”) and 3) options with service and market conditions (“Performance-Vesting Options”). Immediate-Vesting Options became fully vested and exercisable immediately following the Closing, which aligns with the 2021 Grant Date. Time-Vesting Options are subject to graded vesting over the four years following the 2021 Grant Date. Performance-Vesting Options are subject to graded vesting over the three years from the 2021 Grant Date, subject to a market condition related to volume weighted average trading price performance of the Company’s common stock.

A summary of the Company’s options activity for the three months ended March 31, 2024 is as follows:

 

     Number of
Options
     Weighted
Average Exercise
Price
     Weighted Average
Remaining
Contractual Life
     Aggregate Intrinsic
Value
 
                   (in years)      (in thousands)  

Outstanding as of December 31, 2023

     117,529      $  10.00        2.3      $  —  
  

 

 

          

Outstanding as of March 31, 2024

     117,529      $ 10.00        2.1      $  

Exercisable as of March 31, 2024

     13,490           
  

 

 

          

Unvested as of March 31, 2024

     104,039           

The compensation cost recognized for options during the three months ended March 31, 2024 and 2023 was $0.1 million and $0.2 million, respectively. The total fair value of options that vested during the three months ended March 31, 2024 was $0.1 million, respectively.

As of March 31, 2024, the Company had $0.6 million of unrecognized stock-based compensation expense related to the stock options. This cost is expected to be recognized over a weighted-average period of 1.1 years.

 

15


Genius Sports Limited

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

Employee Incentive Plan

The Company created an employee incentive plan involving share-based and cash-based incentives to support the success of the Company by further aligning the personal interests of employees, officers, and directors to those of our shareholders by providing an incentive to drive performance and sustained growth.

2022 Employee Incentive Plan

On April 5, 2022, (“2022 Grant Date”) the Board of Directors adopted the 2022 Employee Incentive Plan and granted employees 1) Equity-settled Restricted Share Units (“RSUs”), 2) Cash-settled Restricted Share Units (“Cash-settled RSUs”) and 3) Equity-settled Performance-Based Restricted Share Units (“PSUs”).

The RSUs and Cash-settled RSUs are subject to a service condition with graded vesting over the three years following the 2022 Grant Date. PSUs vest after three years, subject to a service condition, a market condition related to volume weighted average trading price performance of the Company’s common stock, and performance conditions related to the Company’s cumulative revenue and cumulative adjusted EBITDA.

2023 Employee Incentive Plan

On December 7, 2023, (“2023 Grant Date”) the Board of Directors granted employees 1) RSUs, 2) Cash-settled RSUs and 3) PSUs.

The RSUs and Cash-settled RSUs are subject to a service condition with graded vesting over the three years following the 2023 Grant Date. PSUs vest after three years, subject to a service condition, and performance conditions related to the Company’s cumulative revenue and cumulative adjusted EBITDA.

Equity-settled Restricted Share Units

The estimated grant date fair value of the Company’s RSUs is estimated to be equal to the closing price of the Company’s common stock on each grant date.

A summary of the Company’s Equity-settled Restricted Share Units activity for the three months ended March 31, 2024 is as follows:

 

     Number of RSUs     Weighted Average Grant Date
Fair Value per RSU
 

Unvested RSUs as of December 31, 2023

     5,162,177     $  4.94  

Granted

     104,575     $ 6.96  

Forfeited

     (37,851   $ 4.46  

Vested

     (1,696,489   $ 4.77  
  

 

 

   

Unvested RSUs as of March 31, 2024

     3,532,412     $ 5.08  

The compensation cost recognized for RSUs during the three months ended March 31, 2024 and 2023 was $2.6 million and $1.3 million, respectively.

As of March 31, 2024, the Company had $13.9 million of unrecognized stock-based compensation expense related to the RSUs. This cost is expected to be recognized over a weighted-average period of 1.6 years.

Cash-settled Restricted Share Units

Our outstanding Cash-settled RSUs entitle employees to receive cash based on the fair value of the Company’s common stock on the vesting date. The Cash-settled RSUs are accounted for as liability awards and are re-measured at fair value each reporting period until they become vested with compensation expense being recognized over the requisite service period. The Company has a liability, which is included in “Other current liabilities” within the condensed consolidated balance sheets of less than $0.1 million and $0.2 million as of March 31, 2024 and December 31, 2023, respectively.

 

16


Genius Sports Limited

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

The estimated grant date fair value of the Company’s Cash-settled RSUs is estimated to be equal to the closing price of the Company’s common stock on each grant date.

A summary of the Company’s Cash-settled RSUs activity for the three months ended March 31, 2024 is as follows:

 

     Number of Cash-
settled RSUs
    Weighted Average Grant Date
Fair Value per Cash-settled RSU
 

Unvested Cash-settled RSUs as of December 31, 2023

     63,901     $  5.13  

Vested

     (22,592   $ 5.06  
  

 

 

   

Unvested Cash-settled RSUs as of March 31, 2024

     41,309     $ 5.16  

The compensation cost recognized for Cash-settled RSUs during the three months ended March 31, 2024 and 2023 was less than $0.1 million.

As of March 31, 2024, the Company had $0.2 million of unrecognized stock-based compensation expense related to the Cash-settled RSUs. This cost is expected to be recognized over a weighted-average period of 1.7 years.

Equity-settled Performance-Based Restricted Share Units

The Company’s PSUs were adopted in order to provide employees, officers and directors with stock-based compensation tied directly to the Company’s performance, further aligning their interests with those of shareholders and provides compensation only if the designated performance goals are met over the applicable performance period. The awards have the potential to be earned at 50%, 100% or 150% of the number of shares granted depending on achievement the performance goals, but remain subject to vesting for the full three-year service period.

The grant date fair values of PSUs subject to performance conditions are based on the most recent closing stock price of the Company’s shares of common stock. The stock-based compensation expense is recognized over the remaining service period at the time of grant, adjusted for the Company’s expectation of the achievement of the performance conditions.

A summary of the Company’s PSUs activity for the three months ended March 31, 2024 is as follows:

 

     Number of
PSUs
    Weighted Average Grant Date
Fair Value per PSU
 

Unvested PSUs as of December 31, 2023

     9,550,502     $  4.09  

Forfeited

     (76,940   $ 3.72  
  

 

 

   

Unvested PSUs as of March 31, 2024

     9,473,562     $ 4.09  

The compensation cost recognized for PSUs during the three months ended March 31, 2024 and 2023 was $3.2 million and $1.0 million, respectively.

As of March 31, 2024, the Company had $20.6 million of unrecognized stock-based compensation expense related to the PSUs. This cost is expected to be recognized over a weighted-average period of 1.8 years.

NFL Warrants

On April 1, 2021, the Company entered into a multi-year strategic partnership with NFL Enterprises LLC (“NFL”) (the “License Agreement”). Under the terms of the License Agreement, the Company obtains the right to serve as the worldwide exclusive distributor of NFL official data to the global regulated sports betting market, the worldwide exclusive distributor of NFL official data to the global media market, the NFL’s exclusive international distributor of live digital video to the regulated sports betting market (outside of the United States of America where permitted), and the NFL’s exclusive sports betting and i-gaming advertising partner. The License Agreement contemplates a four-year period commencing April 1, 2021. Pursuant to the License Agreement, the Company agreed to issue the NFL an aggregate of up to 18,500,000 warrants with each warrant entitling NFL to purchase one ordinary share of the Company for an exercise price of $0.01 per warrant share. The warrants will be subject to vesting over the four-year Term. Additionally, each warrant is issued with one share of redeemable B Share with a par value of $0.0001. The B Shares, which are not separable from the warrants, are voting only shares with no economic rights to dividends or distributions. Pursuant to the License Agreement, when the warrants are exercised, the Company shall purchase or, at its discretion, redeem at the par value an equivalent number of B Shares, and any such purchased or redeemed B Shares shall thereafter be cancelled.

 

17


Genius Sports Limited

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

The Company accounts for the License Agreement as an executory contract for the ongoing Data Feeds and the warrants will be accounted for as share-based payments to non-employees. The awards are measured at grant date fair value when all key terms and conditions are understood by both parties, including for unvested awards and are expensed over the term to align with the data services to be provided over the periods.

The grant date fair value of the warrants is estimated to be equal to the closing price of dMY’s common stock of $15.63, as of the grant date on April 1, 2021. The Company used dMY’s stock price to approximate the fair value of the Company as the grant date was before the Merger was consummated.

A summary of the Company’s warrants activity for the three months ended March 31, 2024 is as follows:

 

     Number of
Warrants
 

Outstanding as of December 31, 2023

     18,500,000  
  

 

 

 

Outstanding as of March 31, 2024

     18,500,000  

The cost recognized for the warrants during the three months ended March 31, 2024 and 2023 was zero and $5.9 million, respectively. The warrants vested over a three year period, ending on April 1, 2023, and as of March 31, 2024, the Company had no unrecognized stock-based compensation expense related to the warrants. No warrants vested in the three months ended March 31, 2024.

Stock-based Compensation Summary

The Company’s total stock-based compensation expense was summarized as follows (in thousands):

 

     Three Months Ended
March 31,
 
     2024      2023  

Cost of revenue

   $ 122      $ 5,979  

Sales and marketing

     676        568  

Research and development

     840        441  

General and administrative

     5,107        3,573  
  

 

 

    

 

 

 

Total

   $  6,745      $  10,561  
  

 

 

    

 

 

 

Note 13. Fair Value Measurements

The Company uses valuation approaches that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Company determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels:

 

   

Level 1 inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date.

 

   

Level 2 inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability.

 

   

Level 3 inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date.

The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

 

18


Genius Sports Limited

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

Contingent consideration are classified as Level 3 financial instruments. The fair value of contingent consideration is determined based on significant unobservable inputs including discount rate, estimated revenue of the acquired business, and estimated probabilities of achieving specified technology development and operational milestones. Significant judgment is employed in determining the appropriateness of the inputs described above. Changes to the inputs could have a material impact on the company’s financial position and results of operations in any given period.

With respect to the contingent consideration obligation arising from the acquisition of Photospire Limited (“Spirable”), the Company estimates the fair value at each subsequent reporting period using a probability weighted discounted cash flow model for contingent milestone payments and Monte Carlo simulation for contingent revenue payments.

The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis as of March 31, 2024 (in thousands):

 

Description    Level 1      Level 2      Level 3      Total  

Liabilities:

           

Contingent Consideration

   $      $      $  4,660      $  4,660  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total liabilities

   $  —      $  —      $ 4,660      $ 4,660  
  

 

 

    

 

 

    

 

 

    

 

 

 

The change in the fair value of the contingent consideration is summarized as follows (in thousands):

 

     2024  

Beginning balance – January 1

   $  4,854  

Contingent consideration payments

     (191

Foreign currency translation adjustments

     (3
  

 

 

 

Ending balance – March 31

   $ 4,660  
  

 

 

 

As of March 31, 2024, the Company had no transfers between levels of the fair value hierarchy of its assets or liabilities measured at fair value.

Note 14. Income Taxes

The Company had an income tax expense of $1.1 million and $0.6 million, relative to pre-tax loss of $24.7 million and $24.8 million for the three months ended March 31, 2024 and 2023, respectively.

As of March 31, 2024 and December 31, 2023, the Company had no unrecognized tax benefits.

Note 15. Operating Leases

The Company leases offices under operating lease agreements. Some of the Company’s leases include one or more options to renew. For a majority of our leases, we do not assume renewals in our determination of the lease term as the renewals are not deemed to be reasonably assured. The Company’s lease agreements generally do not contain any material residual value guarantees or material restrictive covenants. As of March 31, 2024, the Company’s lease agreements typically have terms not exceeding five years.

Payments under the Company’s lease arrangements may be fixed or variable, and variable lease payments primarily represent costs related to common area maintenance and utilities. The components of lease expense are summarized as follows (in thousands):

 

     Three months ended
March 31,
 
     2024     2023  

Operating lease cost

   $  1,309     $  1,016  

Short term lease cost

     235       288  

Variable lease cost

     176       68  

Sublease income

     (36     (310
  

 

 

   

 

 

 

Total lease cost

   $ 1,684     $ 1,062  
  

 

 

   

 

 

 

 

19


Genius Sports Limited

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

Other information related to leases is summarized as follows (in thousands, except lease term and discount rate):

 

     Three months ended March 31,  
     2024     2023  

Cash paid for amounts included in the measurement of lease liabilities:

    

Operating cash flows from operating leases

   $  1,065     $  1,019  

Right-of-use assets obtained in exchange for new operating lease liabilities

     2,218       1,113  

Weighted-average remaining lease term (in years):

    

Operating leases

     3.1       2.2  

Weighted-average discount rate:

    

Operating leases

     8.7     2.5

During the three months ended March 31, 2024, the Company exercised a renewal option for office space, and entered into a long-term lease for additional office space in Medellin, Colombia, resulting in additional liabilities of $2.2 million. During the three months ended March 31, 2023, the Company entered into a long-term lease for office space in London, United Kingdom, resulting in additional lease liabilities of $1.1 million.

The Company calculated the weighted-average discount rates using incremental borrowing rates, which equal the rates of interest that it would pay to borrow funds on a fully collateralized basis over a similar term.

As of March 31, 2024, the maturity of lease liabilities are as follows (in thousands):

 

     (in thousands)  

2024 (Remaining)

   $ 3,141  

2025

     3,164  

2026

     1,640  

2027

     602  

2028

     625  

Thereafter

     503  

Total minimum lease payments

     9,675  

Less: Imputed interest

     (1,439
  

 

 

 

Present value of lease liabilities

   $ 8,236  
  

 

 

 

Note 16. Commitments and Contingencies

Sports Data License Agreements

The Company enters into certain license agreements with sports federations and leagues primarily for the right to supply data and/or live video feeds to the betting industry. These license agreements may include rights to live and past game data, live videos and marketing rights. The license agreements entered into by the Company are complex and deviate in the specific rights granted, but are generally for a fixed period of time, with payments typically made in installments over the length of the contract. As of March 31, 2024, future minimum commitments under the Company’s data rights license agreements accounted for as executory contracts are as follows (in thousands):

 

     (in thousands)  

2024 (Remaining)

   $  132,354  

2025

     170,795  

2026

     149,140  

2027

     163,545  

2028

     9,817  

Thereafter

     8,744  
  

 

 

 

Total

   $ 634,395  
  

 

 

 

 

20


Genius Sports Limited

Notes to Condensed Consolidated Financial Statements

(Unaudited)

 

Purchase Obligations

The Company purchases goods and services from vendors in the ordinary course of business. Purchase obligations are defined as agreements that are enforceable and legally binding and that specify all significant terms, including fixed or minimum quantities to be purchased, fixed, minimum, or variable price provisions, and the approximate timing of the transaction. The Company’s long-term purchase obligations primarily include service contracts related to cloud-based hosting arrangements. Total purchase obligations under these services contracts are $79.8 million as of March 31, 2024, with approximately $21.8 million due within one year and the remaining due by 2028.

General Litigation

From time to time, the Company is or may become subject to various legal proceedings arising in the ordinary course of business, including proceedings initiated by users, other entities, or regulatory bodies. Estimated liabilities are recorded when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. In many instances, the Company is unable to determine whether a loss is probable or to reasonably estimate the amount of such a loss and, therefore, the potential future losses arising from a matter may differ from the amount of estimated liabilities the Company has recorded in the condensed consolidated financial statements covering these matters. The Company reviews its estimates periodically and makes adjustments to reflect negotiations, estimated settlements, rulings, advice of legal counsel, and other information and events pertaining to a particular matter.

Bank Letters of Credit and Guarantees

In the normal course of business, the Company provides standby letters of credit or other guarantee instruments to certain parties initiated by either the Company or its subsidiaries.

Note 17. Related Party Transactions

The Company made payments of $0.1 million and $0.1 million to Carbon Group Limited in respect to consultancy services provided by a director and shareholder of the Company for the three months ended March 31, 2024 and 2023.

The Company recognized compensation cost of $0.2 million and $0.2 million during the three months ended March 31, 2024 and 2023, respectively, in general and administrative expense in the condensed consolidated statements of operations for awards granted to independent members of the board of directors.

Note 18. Subsequent Events

In preparing the condensed consolidated financial statements as of March 31, 2024, the Company has evaluated subsequent events through May 8, 2024, which is the date the condensed consolidated financial statements were issued.

Credit Agreement

On April 29, 2024, the Company entered into a Credit Agreement with Citibank, N.A. and Deutsche Bank Securities Inc., in connection with a $90.0 million senior secured revolving credit facility (the “Credit Agreement”). Unless previously terminated in accordance with its terms, the Credit Agreement will mature on April 29, 2029.

 

21


MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

For purposes of this section, “we,” “our,” “us”, “Genius” and the “company” refer to Genius Sports Limited and all of its subsidiaries.

The following discussion includes information that Genius’ management believes is relevant to an assessment and understanding of Genius’ unaudited condensed consolidated results of operations and financial condition.

The discussion should be read together with the unaudited interim condensed consolidated financial statements for the three month periods ended March 31, 2024 and 2023 included in this interim report. This management’s discussion and analysis should also be read together with our audited consolidated financial statements for the year ended December 31, 2023 in our 2023 20-F.

Overview

Genius is a B2B provider of scalable, technology-led products and services to the sports, sports wagering and sports media industries. Genius is a fast-growing business with significant scale, distribution and an expanding addressable market and opportunity ahead.

Genius’ mission is to be the official data, technology and commercial partner that powers the global ecosystem connecting sports, betting and media. In doing so, Genius creates engaging and immersive fan experiences while simultaneously providing sports leagues with essential technology and vital, sustainable revenue streams.

Genius uniquely sits at the heart of the global sports betting ecosystem where Genius has deep, critical relationships with over 400 sports leagues and federations, over 800 sportsbook brands and over 170 marketing customers (which includes some of the aforementioned sportsbook brands).

Genius’ Offerings

Sports Technology and Services. Genius builds and supplies technology and services that allow sports leagues to collect, analyze and monetize their data with added tools to deepen fan engagement. These tools include creation of fan-facing websites, rich statistical content such as team and player standings, immersive social media content, and its streaming product, a tool that allows sports leagues to automatically produce, distribute and commercialize live, audio-visual game content. Genius also provides sports leagues with bespoke monitoring technology and education services to help protect their competitions and athletes from the threats of match fixing and betting-related corruption. Genius is a leading provider of cutting-edge data tracking and visualization solutions that partners with elite football and basketball clubs, leagues, federations, and media organizations around the world.

Genius’ technology has become essential to their partners’ operations and it would be inefficient or unaffordable for most sports leagues to build similar technology themselves. In return for the provision of their essential technology, the sports leagues typically grant to Genius the official sports data and streaming rights to collect, distribute and monetize the official data or streaming content.

Betting Technology, Content and Services. Genius builds and supplies data-driven technology that powers sportsbooks globally. Genius’ offerings include official data, outsourced bookmaking, trading/risk management services and live audio-visual game content that is derived from its streaming partnerships with sports leagues.

Media Technology, Content and Services. Genius builds and supplies technology, services and data that enables sportsbooks, sports organizations, and other brands to target, acquire and retain sports fans as their customers in a highly effective and cost-efficient manner. Key services include the creation, delivery and measurement of personalized online marketing campaigns, all delivered using Genius’ proprietary technology and proven to help advertisers reduce spend and wastage. Genius’ sports media solutions provide incremental revenue opportunities for stakeholders across the entire sports ecosystem.

 

22


Events under Official Sports Data and Streaming Rights

Genius establishes long-term, mutually beneficial relationships with sports leagues, federations and teams that enable its partners to collect, organize and communicate data internally (e.g., for coaching analysis) or externally (e.g., for posting on fan-facing websites) and grant to Genius the rights to collect, distribute and monetize official sport data. Genius seeks to maintain an optimal portfolio of data rights, from high profile, widely followed sports events, such as the English Premier League (“EPL”), National Football League (“NFL”) and other Tier 1 sports, to more specialized and less widely followed events, such as non-European soccer, non-US basketball, professional volleyball and other Tier 2 to 4 sports. This provides Genius with global breadth and depth of coverage across all tiers of sport, all time zones, and all geographical locations.

Data rights for Tier 1 sports, which include the most popular sports leagues, are typically acquired via formal tender processes and competitive bidding often resulting in high acquisition costs. For example, Genius’ UK soccer data rights contract, which runs through the end of the 2024-2025 season and NFL data rights contract, which runs through the end of the 2027-2028 season, accounts for a significant majority of Genius’ third-party data rights fees. Genius believes that its inventory of selectively acquired Tier 1 data rights is important to establishing relationships with sportsbooks on beneficial terms.

Data rights for lower tier sports are typically acquired through long-term agreements with the respective leagues in exchange for Genius’ technology and software solutions (and, occasionally, cash fees). These non-Tier 1 sports are typically smaller leagues that are less prominent at a global level, although often are highly popular in their local countries or regions and often have large localized fan bases. Genius estimates that these sports comprise approximately 90% of the total volume of sporting events offered to sportsbooks.

Genius’ events under official sports data and streaming rights form the backbone of its business model, and are a principal driver of revenue, particularly for the Betting Technology, Content and Services product line. Genius defines an “event” as a single sports match or competitive event. Genius’ rights to collect, distribute and monetize the data related to such events may be exclusive (meaning that Genius has the exclusive right to collect, distribute, and monetize such data), co-exclusive (meaning that Genius shares collection, distribution, and monetization rights with one other company) or non-exclusive.

The following table presents Genius’ number of events under official sports data and streaming rights, and the portion thereof under exclusive rights, as of the dates indicated:

 

     March 31,  
     2024      2023  

Events under official rights

     159,387        182,247  

Of which, exclusive

     123,682        123,145  

Genius believes that data under official sports data and streaming rights is critical to sportsbooks, as only official data provides guaranteed access to the fast and reliable data necessary for in-game betting. To remain competitive, sportsbooks must be able to operate and provide customers with betting content around the clock, every single day of the year. This requires an extensive and broad portfolio of data and other content from Tier 1 and Tier 2-4 sports events. Events under exclusive rights give Genius an added commercial advantage over competitors and serve as a barrier of entry, making Genius an essential provider to its customers.

Additionally, Genius collects, distributes, and monetizes data from additional sporting events where no official sports data and streaming rights have been granted or it is legally permissible to do so. Accordingly, the total number of events to which Genius delivers data to its customers in a given period may exceed its total inventory of events under official sports data and streaming rights.

 

23


Factors Affecting Comparability of Financial Information

Warrant Consent Solicitation

On January 20, 2023, the Company announced the successful completion of its offer to exercise and solicitation of consents relating to the Company’s outstanding public warrants (the “Warrant Consent Solicitation”). Holders of 6,834,987 public warrants elected to exercise their public warrants prior to the expiration date of the Warrant Consent Solicitation (including holders of 2,149,000 public warrants that elected to exercise such warrants on a cash basis), resulting in cash proceeds of $6.8 million. The remaining 833,293 public warrants were exercised automatically on a cashless basis.

None of the Company’s public warrants remain outstanding and the warrants ceased trading on the NYSE as of January 20, 2023. The ordinary shares continue to be listed and trade on the NYSE under the symbol “GENI”.

Foreign Exchange Exposure

Genius’ results of operations between periods are affected by changes in foreign currency exchange rates. Genius’ assets and liabilities and results of operations are translated from its functional currency, the British Pound Sterling (“GBP”) into its reporting currency, the United States Dollar (“USD”), using the average exchange rate during the relevant period for income and expense items and the period-end exchange rate for assets and liabilities.

The effect of translating Genius’ functional currency amounts into USD is reported in accumulated other comprehensive income within shareholders’ equity but is not reported in Genius’ income statement. However, changes in GBP-USD exchange rate between periods directly impact the amount of revenue and expense reported by Genius, and therefore its results of operations between periods may not be comparable. Genius estimates that a hypothetical 10% appreciation of the USD against the GBP would have resulted in a $5.3 million and $5.7 million decrease in reported revenue for the three months ended March 31, 2024 and 2023, respectively. Throughout this quarterly report on Form 6-K, Genius reports certain items on a constant currency basis to facilitate comparability between periods.

In addition, Genius is a global business that transacts with customers and vendors worldwide and makes and receives payments in several different currencies, and from time to time may also engage in intercompany transfers to and from its subsidiaries. Genius re-measures amounts payable on transactions denominated in currencies other than GBP into GBP and records the relevant gain or loss, which occurs due to timing differences between recognition of a transaction on the income statement and the related payment, under the income statement caption “gain (loss) on foreign currency.” Genius does not hedge its foreign currency translation or transaction exposure, though it may do so in the future.

Seasonality

Genius’ products and services cover the entire sporting calendar, which from a global perspective is year-round. On the other hand, the relative importance of different sporting events varies based on the geographic locations in which Genius’ customers operate. Accordingly, Genius’ operations are subject to seasonal fluctuations that may result in revenue and cash flow volatility between fiscal quarters. For example, Genius’ revenue is typically impacted by the European soccer season calendars and the NFL season. Genius’ revenue trends may also be affected by the scheduling of major sporting events such as the FIFA World Cup or the cancellation/postponement of sporting events and races.

 

24


Key Components of Revenue and Expenses

Revenue

Genius generates revenue primarily through delivery of products and services to customers in connection with the following major product lines: Betting Technology, Content and Services, Media Technology, Content and Services, and Sports Technology and Services. The following table shows Genius’ revenue split by product line, for the periods indicated:

 

     Three Months Ended
March 31,
 
     2024      2023  
     (dollars, in thousands)  

Revenue by Product Line

     

Betting Technology, Content and Services

   $ 73,897      $ 64,740  

Media Technology, Content and Services

     35,475        21,764  

Sports Technology and Services

     10,346        10,725  
  

 

 

    

 

 

 

Total Revenue

   $  119,718      $  97,229  
  

 

 

    

 

 

 

Betting Technology, Content and Services — revenue is primarily generated through the delivery of official sports data for in-game and pre-match betting and outsourced bookmaking services through the Genius’ proprietary sportsbook platform. Customers access Genius’ sportsbook platform and associated services through the cloud over the contract term. Customer contracts are typically either on (i) a “fixed” basis, requiring customers to pay a guaranteed minimum recurring fee for a specified number of events, with incremental per-event fees thereafter, or (ii) a “variable” basis, based on a percentage share of the customer’s Gross Gaming Revenue (“GGR”), typically with minimum payment guarantees. Minimum guarantee amounts are generally recognized over the life of the contract on a straight-line basis, while generally variable fees based on profit sharing and per event overage fees are recognized as earned. Genius believes that its minimum payment guarantees provide for enhanced revenue visibility while the variable component of its contracts benefits Genius as its partners grow.

Media Technology, Content and Services — revenue is primarily generated from providing data-driven performance marketing technology and services, including personalized online marketing campaigns, to sportsbooks, sports leagues and federations, along with other global brands in the sports ecosystem. Genius typically offers its solutions on a fixed fee basis, which is generally prepaid by customers. Revenue is generally recognized over time as the services are performed using an input method based on costs to secure advertising space. Genius also provides customers with data driven video marketing capabilities, and a suite of technology solutions for digital fan engagement products and free to play (“F2P”) games. Customers subscribe or access these products through hosted service over the contractual term in exchange for a fixed annual fee, subject to certain variable components.

Sports Technology and Services — revenue is primarily generated through the delivery of technology that enables sports leagues and federations to capture, manage and distribute their official sports data, along with other tools and services, including software updates and technical support. These software solutions are tailored for specific sports. In some instances, Genius receives noncash consideration in the form of official sports data and streaming rights, along with other rights, in exchange for these services, particularly to non-Tier 1 sports organizations. Because there is not a readily determinable fair value for these unique data rights, Genius estimates the fair value of noncash consideration based on the standalone selling price of the services promised to customers. Revenue is recognized either ratably over the contract term or as the services are provided, by event or season, depending on the nature of the underlying promised product or service. Genius also provides sports teams and leagues with player tracking systems that capture and produce fast and accurate location data used to power new ways to understand, evaluate, improve and create content their game, enhanced data analytics programs and real-time video augmentation services. Depending on the nature of the underlying product or service, revenue is recognized ratably over the contract term or recognized over time using an output method based on deliverables to the customer.

 

25


Costs and Expenses

Cost of revenue. Genius’ cost of revenue includes costs related to (i) amortization of intangible assets, mainly related to Genius’ capitalized internally developed software and acquired intangibles, (ii) fees for third-party data and streaming rights under executory contracts, including stock-based compensation for non-employees, (iii) data collection and production, third-party server and bandwidth and outsourced bookmaking, (iv) advertising costs directly associated with Genius’ Media Technology, Content and Services offerings, and (v) stock-based compensation for employees (including related employer payroll taxes).

Genius believes that its cost of revenue is highly scalable and can be leveraged over the longer term. While key components of cost of revenue, such as server and bandwidth costs and personnel costs related to revenue-generating activities, are variable, Genius expects them to grow at a slower pace than revenue. Other key costs, such as third-party data including those related to Genius’ EPL and NFL contract, are typically fixed.

Sales and marketing. Sales and marketing (“S&M”) expenses consist primarily of sales personnel costs, including compensation, stock-based compensation for employees (including related employer payroll taxes), commissions and benefits, amortization of costs to obtain a contract associated with capitalized commissions costs, event attendance, event sponsorships, association memberships, marketing subscriptions, and third-party consulting fees.

Research and development. Research and development (“R&D”) expenses consist primarily of costs incurred for the development of new products related to Genius’ platform and services, as well as improving existing products and services. The costs incurred included related personnel salaries and benefits, stock-based compensation for employees (including related employer payroll taxes), facility costs, server and bandwidth costs, consulting costs, and amortization of production software costs.

R&D expenses can be volatile between periods, as Genius capitalizes a significant portion of its internally developed software costs, in periods where a product completes the preliminary project stage and it is probable the project will be completed and performed as intended. Capitalized internally developed software costs are typically amortized in cost of revenue.

General and administrative. General and administrative expenses (“G&A”) consist primarily of administrative personnel costs, including executive salaries, bonuses and benefits, stock-based compensation for employees (including related employer payroll taxes), professional services (including legal, regulatory and audit), lease costs and depreciation of property and equipment.

Transaction expenses. Transaction expenses consists primarily of advisory, legal, accounting, valuation, other professional or consulting fees, and bonuses in connection with Genius’ corporate development activities. Direct and indirect transaction expenses in a business combination are expensed as incurred when the service is received.

Loss on fair value remeasurement of contingent consideration. Loss on fair value remeasurement of contingent consideration represents the change in fair value of contingent consideration liabilities related to historical acquisitions. Contingent consideration liabilities are revalued at each reporting period.

Change in fair value of derivative warrant liabilities. Change in fair value of derivative warrant liabilities represents the change in fair value of public warrant liabilities assumed as part of the Merger.

Income tax expense. Genius accounts for income taxes using the asset and liability method whereby deferred income taxes are recognized for the tax consequences of temporary differences between the financial statement carrying amounts and the tax basis of the assets and liabilities. The provision for income taxes reflects income earned and taxed, mainly in jurisdictions outside the United Kingdom. See Note 14 – Income Taxes, to Genius’ unaudited condensed consolidated financial statements included elsewhere herein.

Gain from equity method investment. Gain from equity method investment represents the Company’s proportionate share of net earnings or losses recognized from the Company’s equity method investments.

 

26


Non-GAAP Financial Measures

This report on Form 6-K includes certain non-GAAP financial measures.

Adjusted EBITDA

Genius presents Adjusted EBITDA, a non-GAAP performance measure, to supplement its results presented in accordance with US GAAP. Adjusted EBITDA is defined as earnings before interest, income tax, depreciation and amortization and other items that are unusual or not related to Genius’ revenue-generating operations, including stock-based compensation expense (including related employer payroll taxes), change in fair value of derivative warrant liabilities, remeasurement of contingent consideration and gain or loss on foreign currency.

Adjusted EBITDA is used by management to evaluate Genius’ core operating performance on a comparable basis and to make strategic decisions. Genius believes Adjusted EBITDA is useful to investors for the same reasons as well as in evaluating Genius’ operating performance against competitors, which commonly disclose similar performance measures. However, Genius’ calculation of Adjusted EBITDA may not be comparable to other similarly titled performance measures of other companies. Adjusted EBITDA is not intended to be a substitute for any US GAAP financial measure.

The following table presents a reconciliation of Genius’ Adjusted EBITDA to the most directly comparable US GAAP financial performance measure, which is net loss for the periods indicated:

 

     Three Months Ended
March 31,
 
     2024      2023  
     (dollars, in thousands)  

Consolidated net loss

   $  (25,541    $  (25,168

Adjusted for:

     

Interest income, net

     (666      (418

Income tax expense

     1,100        648  

Amortization of acquired intangibles (1)

     10,204        9,733  

Other depreciation and amortization (2)

     11,226        7,801  

Stock-based compensation (3)

     7,669        10,705  

Transaction expenses

     464        828  

Litigation and related costs (4)

     1,199        784  

Change in fair value of derivative warrant liabilities

            534  

Loss on fair value remeasurement of contingent consideration

            2,433  

Loss (gain) on foreign currency

     1,087        (801

Other (5)

     136        963  
  

 

 

    

 

 

 

Adjusted EBITDA

   $ 6,878      $ 8,042  
  

 

 

    

 

 

 

 

(1)

Includes amortization of intangible assets generated through business acquisitions (inclusive of amortization for marketing products, acquired technology, and historical data rights related to the acquisition of a majority interest in Genius in 2018).

(2)

Includes depreciation of Genius’ property and equipment, amortization of contract costs, and amortization of internally developed software and other intangible assets. Excludes amortization of intangible assets generated through business acquisitions.

(3)

Includes restricted shares, stock options, equity-settled restricted share units, cash-settled restricted share units and equity-settled performance-based restricted share units granted to employees and directors (including related employer payroll taxes) and equity-classified non-employee awards issued to suppliers.

(4)

Includes mainly legal and related costs in connection with non-routine litigation.

(5)

Includes expenses incurred related to earn-out payments on historical acquisitions, gain/loss on disposal of assets, severance costs and non-recurring compensation payments.

On a constant currency basis, Adjusted EBITDA would have been $8.4 million the three months ended March 31, 2023.

 

27


Constant Currency

Certain income statement items in this Report on Form 6-K are discussed on a constant currency basis. As discussed under “Quantitative and Qualitative Disclosures about Market Risk—Foreign Exchange Exposure,” Genius’ results between periods may not be comparable due to foreign currency translation effects. Genius presents certain income statement items on a constant currency basis, as if GBP:USD exchange rate had remained constant period-over-period, to enhance the comparability of its results. Genius calculates income statement constant currency amounts by taking the relevant average GBP:USD exchange rate used in the preparation of its income statement for the more recent comparative period and applies it to the actual GBP amount used in the preparation of its income statement for the prior comparative period.

Constant currency amounts only adjust for the impact related to the translation of Genius’ consolidated financial statements from GBP to USD. Constant currency amounts do not adjust for any other translation effects, such as the translation of results of subsidiaries whose functional currency is other than GBP or USD.

Operating Results

Three Months Ended March 31, 2024 Compared to the Three Months Ended March 31, 2023

The following table summarizes Genius’ consolidated results of operations for the periods indicated.

 

     Three Months Ended
March 31,
    Variance  
     2024     2023     In dollars      In%  
                           
     (dollars, in thousands)         

Revenue

   $  119,718     $ 97,229     $  22,489        23%  

Cost of revenue(1)

     106,911       87,697       19,214        22%  
  

 

 

   

 

 

   

 

 

    

 

 

 

Gross profit

     12,807       9,532       3,275        34%  
  

 

 

   

 

 

   

 

 

    

 

 

 

Operating expenses:

         

Sales and marketing(1)

     8,415       7,391       1,024        14%  

Research and development(1)

     6,621       6,269       352        6%  

General and administrative(1)

     21,585       18,074       3,511        19%  

Transaction expenses

     464       828       (364      (44%
  

 

 

   

 

 

   

 

 

    

 

 

 

Total operating expense

     37,085       32,562       4,523        14%  
  

 

 

   

 

 

   

 

 

    

 

 

 

Loss from operations

     (24,278     (23,030     (1,248      (5%
  

 

 

   

 

 

   

 

 

    

 

 

 

Interest income, net

     666       418       248        59%  

Loss on disposal of assets

     (7 )       (11     4        36%  

Loss on fair value remeasurement of contingent consideration

     —        (2,433     2,433        100%  

Change in fair value of derivative warrant liabilities

     —        (534 )       534        100%  

(Loss) gain on foreign currency

     (1,087 )       801       (1,888      (236%
  

 

 

   

 

 

   

 

 

    

 

 

 

Total other expense

     (428 )       (1,759 )       1,331        76%  
  

 

 

   

 

 

   

 

 

    

 

 

 

Loss before income taxes

     (24,706 )       (24,789 )       83        0%  
  

 

 

   

 

 

   

 

 

    

 

 

 

Income tax expense

     (1,100 )       (648 )       (452      (70%

Gain from equity method investment

     265       269       (4      (1%
  

 

 

   

 

 

   

 

 

    

 

 

 

Net loss

   $  (25,541 )     $  (25,168 )     $ (373 )      (1%
  

 

 

   

 

 

   

 

 

    

 

 

 

 

(1)

Includes stock-based compensation (including related employer payroll taxes) as follows:

 

     Three Months Ended
March 31,
     Variance  
     2024      2023      In dollars     In%  
                            
     (dollars, in thousands)        

Cost of revenue

   $ 174      $ 5,979      $  (5,805     (97%

Sales and marketing

     756        568        188       33%  

Research and development

     1,119        441        678       154%  

General and administrative

     5,620        3,717        1,903       51%  
  

 

 

    

 

 

    

 

 

   

 

 

 

Total stock-based compensation

   $  7,669      $  10,705      $ (3,036     (28%
  

 

 

    

 

 

    

 

 

   

 

 

 

 

28


Revenue

Revenue was $119.7 million for the three months ended March 31, 2024 compared to $97.2 million for the three months ended March 31, 2023. Revenue increased $22.5 million, or 23%. On a constant currency basis, revenue would have increased $20.0 million, or 20% in the three months ended March 31, 2024.

Betting Technology, Content and Services revenue increased $9.2 million, or 14%, to $73.9 million for the three months ended March 31, 2024 from $64.7 million for the three months ended March 31, 2023. New customer acquisitions contributed $7.9 million to the increase, while a further $2.2 million was driven by growth in business with existing customers as a result of price increases on contract renewals and renegotiations powered by Genius’ official data rights strategy, expansion of value-add services, and new service offerings, offset by $1.0 million due to lower customer utilization of Genius’ available event content. On a constant currency basis, Betting Technology, Content and Services revenue would have increased $7.1 million, or 11% in the three months ended March 31, 2024.

Media Technology, Content and Services revenue increased $13.7 million, or 63%, to $35.5 million for the three months ended March 31, 2024 from $21.8 million for the three months ended March 31, 2023, driven by growth in the Americas region, primarily for programmatic advertising services. On a constant currency basis, Media Technology, Content and Services revenue would have increased $13.4 million, or 61% in the three months ended March 31, 2024.

Sports Technology and Services revenue decreased $0.4 million, or 4%, to $10.3 million for the three months ended March 31, 2024 from $10.7 million for the three months ended March 31, 2023. Revenue for contracts where Genius receives non-cash consideration in the form of official sports data and streaming rights was $3.5 million in the three months ended March 31, 2024 compared to $3.3 million in the three months ended March 31, 2023. On a constant currency basis, Sports Technology and Services revenue would have decreased $0.6 million, or 5% in the three months ended March 31, 2024.

Cost of revenue

Cost of revenue was $106.9 million for the three months ended March 31, 2024, compared to $87.7 million for the three months ended March 31, 2023. The $19.2 million increase in cost of revenue includes a $5.8 million decrease in stock-based compensation. Excluding the impact of stock-based compensation, cost of revenue would have increased by $25.0 million, which is primarily driven by higher fees paid for data rights, media direct costs and increased amortization and depreciation.

Data and streaming rights costs were $50.6 million for the three months ended March 31, 2024, compared to $38.7 million for the three months ended March 31, 2023. The $12.0 million increase is driven primarily by Genius’s official data rights strategy.

Media direct costs were $18.3 million for the three months ended March 31, 2024, compared to $9.5 million for the three months ended March 31, 2023. The $8.8 million increase is driven primarily by higher programmatic advertising revenues.

Amortization of capitalized software development costs was $9.5 million for the three months ended March 31, 2024, compared to $6.3 million for the three months ended March 31, 2023. This increase is driven primarily by Genius’ continued investment in new product offerings which has resulted in increased capitalization of internally developed software costs. Other amortization and depreciation was $11.1 million for the three months ended March 31, 2024, compared to $10.4 million for the three months ended March 31, 2023.

Sales and marketing

Sales and marketing expenses were $8.4 million for the three months ended March 31, 2024, compared to $7.4 million for the three months ended March 31, 2023. The $1.0 million increase includes a $0.2 million increase in stock-based compensation related to equity awards issued to management and employees. Excluding the impact of stock-based compensation, the increase would have been $0.8 million, which is primarily driven by higher overhead costs.

Research and development

Research and development expenses were $6.6 million for the three months ended March 31, 2024, compared to $6.3 million for the three months ended March 31, 2023. The $0.4 million increase includes a $0.7 million increase in stock-based compensation related to equity awards issued to management and employees, and a $0.6 million decrease in deferred consideration costs related to historical acquisitions. Excluding the impact of stock-based compensation and deferred consideration costs related to historical acquisitions, the increase would have been $0.3 million, which was primarily due to higher staff costs.

 

29


General and administrative

General and administrative expenses were $21.6 million for the three months ended March 31, 2024, compared to $18.1 million for the three months ended March 31, 2023. The $3.5 million increase includes a $1.9 million increase in stock-based compensation related to equity awards issued to management and employees. Excluding the impact of stock-based compensation, the increase would have been $1.6 million, which was driven by higher overhead costs.

Transaction expenses

Transaction expenses were $0.5 million for the three months ended March 31, 2024 and $0.8 million for the three months ended March 31, 2023, respectively. Transaction expenses in the three months ended March 31, 2024 related to corporate transactions.

Interest income, net

Interest income, net was $0.7 million for the three months ended March 31, 2024, compared to $0.4 million for the three months ended March 31, 2023. The movement is primarily due to lower interest expense due to the settlement of the second promissory note in January 2024.

Loss on fair value remeasurement of contingent consideration

Genius recorded a loss of zero and $2.4 million for the three months ended March 31, 2024 and 2023, respectively, related to historical acquisitions.

Change in fair value of derivative warrant liabilities

Change in fair value of derivative warrant liabilities was a loss of $0.5 million for the three months ended March 31, 2023 due to revaluation of the public warrants assumed as part of the Merger. The outstanding public warrants were exercised in full in January 2023.

(Loss) gain on foreign currency

Genius recorded a foreign currency loss of $1.1 million and a foreign currency gain of $0.8 million for the three months ended March 31, 2024 and 2023, respectively. The loss in the three months ended March 31, 2024 and gain in the three months ended March 31, 2023 was mainly due to movements in exchange rates other than the functional currency of Genius’ main operating entities during that period.

Income tax expense

Income tax expense was $1.1 million for the three months ended March 31, 2024 and $0.6 million for the three months ended March 31, 2023, respectively. The $0.5 million increase is primarily due to the effect of income tax expenses in overseas jurisdictions, together with the inability to take any additional tax timing benefit for the additional UK losses incurred in the period.

Gain from equity method investment

Gain from equity method investment was $0.3 million and $0.3 million for the three months ended March 31, 2024 and 2023, respectively, due to Genius’ share of profits from its equity investment in CFL Ventures.

Net loss

Net loss was $25.5 million and $25.2 million for the three months ended March 31, 2024 and 2023, respectively.

 

30


Liquidity and Capital Resources

Genius measures liquidity in terms of its ability to fund the cash requirements of its business operations, including working capital and capital expenditure needs, contractual obligations and other commitments, with cash flows from operations and other sources of funding. Genius’ current working capital needs relate mainly to launching its product offerings and acquiring new data rights in new geographies, as well as compensation and benefits of its employees. Genius’ recurring capital expenditures consist primarily of internally developed software costs and property and equipment (such as buildings, IT equipment, and furniture and fixtures). Genius expects its capital expenditure and working capital requirements to increase as it continues to expand its product offerings across the United States, but has not made any firm capital commitments. Genius’ ability to expand and grow its business will depend on many factors, including its working capital needs and the evolution of its operating cash flows.

Genius cannot guarantee that its available cash resources will be sufficient to meet its liquidity needs. Genius may need additional cash resources due to changed business conditions or other developments, including unanticipated regulatory developments, significant acquisitions or competitive pressures. Genius believes that its cash on hand, in addition to amounts available under the revolving credit facility, will be sufficient to meet its working capital and capital expenditure requirements for the next twelve months. To the extent that its current resources are insufficient to satisfy its cash requirements, Genius may need to seek additional equity or debt financing. If the needed financing is not available, or if the terms of financing are less desirable than expected, Genius may be forced to decrease its level of investment in new product launches and related marketing initiatives or to scale back its existing operations, which could have an adverse impact on its business and financial prospects.

Debt

Genius had less than $0.1 million and $7.6 million in debt outstanding as of March 31, 2024 and December 31, 2023, respectively.

In addition, Genius has a $90.0 million revolving credit facility (the “Credit Agreement”) and £0.2 million overdraft facility (the “Overdraft Facility”), which were both undrawn at the date of this Report on Form 6-K.

 

31


Cash Flows

The following table summarizes Genius’ cash flows for the periods indicated:

 

     Three Months Ended
March 31,
 
     2024      2023  
    

 

    

 

 
     (dollars, in thousands)  

Net cash used in operating activities

   $  (14,594)      $  (18,843)  

Net cash used in investing activities

     (10,970)        (8,891)  

Net cash used in financing activities

     (7,580)        (580)  

Operating activities

Net cash used in operating activities was $14.6 million and $18.8 million in the three months ended March 31, 2024 and 2023, respectively. In the three months ended March 31, 2024, net cash used in operating activities primarily reflected changes in working capital of $19.0 million, offset by Genius’ net loss net of non-cash items of $4.4 million, due to improved trading performance. In the three months ended March 31, 2023, net cash used in operating activities primarily reflected changes in working capital of $25.0 million, offset by Genius’ net loss net of non-cash items of $6.2 million.

Investing activities

Net cash used in investing activities was $11.0 million and $8.9 million in the three months ended March 31, 2024 and 2023, respectively. In the three months ended March 31, 2024, investing cash flows primarily reflected internally developed software costs and purchases of intangible assets of $10.9 million and purchases of property and equipment of $1.5 million, offset by distributions from equity method investments of $1.4 million. In the three months ended March 31, 2023, investing cash flows primarily reflected internally developed software costs and purchases of intangible assets of $10.0 million and purchases of property and equipment of $0.3 million, offset by distributions from equity method investments of $1.4 million.

Financing activities

Net cash used in financing activities was $7.6 million and $0.6 million in the three months ended March 31, 2024 and 2023, respectively. In the three months ended March 31, 2024, financing cash flows primarily reflect the settlement of promissory notes of $7.6 million. In the three months ended March 31, 2023, financing cash flows primarily reflect the settlement of promissory notes of $7.4 million, offset by proceeds from the exercise of Public Warrants of $6.8 million.

 

32


Critical Accounting Estimates

Genius’ condensed consolidated financial statements have been prepared in accordance with US generally accepted accounting principles, or US GAAP. Preparation of the financial statements requires Genius’ management to make judgments, estimates and assumptions that impact the reported amount of revenue and expenses, assets and liabilities and the disclosure of contingent assets and liabilities. Management considers an accounting judgment, estimate or assumption to be critical when (1) the estimate or assumption is complex in nature or requires a high degree of judgment and (2) the use of different judgments, estimates and assumptions could have a material impact on Genius’ consolidated financial statements. Genius’ significant accounting estimates include the following:

 

   

Revenue Recognition

 

   

Internally Developed Software

 

   

Stock-based Compensation

 

   

Warrants

 

   

Income Tax

 

   

Goodwill Impairment

Recently Adopted and Issued Accounting Pronouncements

Recently issued and adopted accounting pronouncements are described in Note 1 – Description of Business and Summary of Significant Accounting Policies, to Genius’ unaudited condensed consolidated financial statements included elsewhere in this report on Form 6-K.

Section 102(b)(1) of the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”) exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can choose not to take advantage of the extended transition period and comply with the requirements that apply to non-emerging growth companies, and any such election to not take advantage of the extended transition period is irrevocable. Genius Sports Limited is an “emerging growth company” as defined in Section 2(a) of the Securities Act of 1933, as amended, and has elected to take advantage of the benefits of this extended transition period. This may make it difficult to compare Genius Sports Limited’s financial results with the financial results of another public company that is either not an emerging growth company or is an emerging growth company that has chosen not to take advantage of the extended transition period because of the potential differences in accounting standards used.

Quantitative and Qualitative Disclosures about Market Risk

Genius’ primary and currently only material market risk exposure is to foreign currency exchange. See “Factors Affecting Comparability of Financial Information–Foreign Exchange Exposure” above for additional information about Genius’ foreign currency exposure and sensitivity analysis.

 

33


Other Information

Legal Proceedings

In the ordinary course of business, we are involved in various pending and threatened litigation and regulatory matters relating to our operations. We are not currently involved in material legal proceedings. See Note 16 – Commitments and Contingencies to Genius’ condensed consolidated financial statements appearing elsewhere herein.

If accruals are not appropriate, we further evaluate each legal proceeding to assess whether an estimate of the possible loss or range of possible loss can be made. The results of any current or future legal proceedings cannot be predicted with certainty and, regardless of the outcome, can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.

Risk Factors

There have been no material changes from the risk factors described in the section titled “Risk Factors” in our 2023 20-F.

Recent Developments

On April 29, 2024, Genius and certain of its subsidiaries, entered into a Credit Agreement with Citibank N.A., as administrative agent, joint lead arranger and sole bookrunner and Deutsche Bank Securities Inc. as a joint lead arranger, in connection with a $90.0 million senior secured revolving credit facility (the “Credit Agreement”). Unless previously terminated in accordance with its terms, the Credit Agreement will mature in April 29, 2029.

Borrowings under the Credit Agreement will bear interest at the rates specified in the Credit Agreement, which vary based on the type of loan and the Company’s Consolidated Total Net Leverage Ratio (as defined in the Credit Agreement). The Company is also required to pay certain fees in connection with the Credit Agreement, including commitment fees on a quarterly basis in respect of the unutilized portion of the commitments under the Credit Agreement which vary based on the Company’s Consolidated Total Net Leverage Ratio (as defined in the Credit Agreement) and certain fees to the administrative agent upon the effectiveness of the Credit Agreement.

The Credit Agreement contains financial covenants regarding the Consolidated Total Net Leverage Ratio and Interest Coverage Ratio (each as defined in the Credit Agreement) of the Company and its subsidiaries. The Credit Agreement also contains other customary covenants and events of default for credit facilities of this type. Upon an event of default that is not cured or waived within any applicable cure periods, in addition to other remedies that may be available to the lenders, the obligations under the Credit Agreement may be accelerated.

 

34

Exhibit 99.2

 

LOGO

Genius Sports Reports First Quarter Results Above Expectations and Raises 2024

Group Revenue and Adj. EBITDA Guidance

 

   

Group Revenue of $120m, exceeding first quarter guidance of $117m

 

   

Group Net Loss of ($26m) and Group Adj. EBITDA of $7m, exceeding guidance of $6m

 

   

Raised 2024 Group Revenue and Adj. EBITDA guidance to $500m and $82m, respectively, up from prior guidance of $480m and $75m

 

   

Reaffirming expectation to generate positive cash flow in 2024

 

   

Increased financial flexibility by entering into $90 million committed revolving credit facility with Citibank and Deutsche Bank

LONDON & NEW YORK, May 8, 2024 – Genius Sports Limited (NYSE:GENI) (“Genius Sports” or the “Group”), the official data, technology and broadcast partner that powers the global ecosystem connecting sports, betting and media, today announced financial results for its fiscal first quarter ended March 31, 2024.

“Following a strong year of execution in 2023, we are pleased to continue our momentum to start the new year, with the first quarter of 2024 marking another period of outperformance relative to expectations,” said Mark Locke, Genius Sports Co-Founder and CEO. “As we expand our technology footprint and work to extend one of our most important data partnerships with Football DataCo, we feel an enhanced sense of excitement and confidence in our outlook for 2024 and beyond.”

 

$ in thousands

   Q124     Q123     %  

Group Revenue

     119,718       97,229       23.1

Betting Technology, Content & Services

     73,897       64,740       14.1

Media Technology, Content & Services

     35,475       21,764       63.0

Sports Technology & Services

     10,346       10,725       (3.5 %) 

Group Net loss

     (25,541     (25,168     (1.5 %) 

Group Adjusted EBITDA

     6,878       8,042       (14.5 %) 

Group Adjusted EBITDA Margin

     5.7     8.3     (260 bps

Q1 2024 Financial Highlights

 

 

   

Group Revenue: Group revenue increased 23% year-over-year to $119.7 million.

 

     

Betting Technology, Content & Services: Revenue increased 14% year-over-year to $73.9 million, driven by new customer acquisitions and growth in business with existing customers as a result of price increases on contract renewals and renegotiations.

 

     

Media Technology, Content & Services: Revenue increased by 63% year-over-year to $35.5 million, driven by growth in the Americas region, primarily for programmatic advertising services.

 

     

Sports Technology & Services: Revenue decreased by 4% year-over-year to $10.3 million.

 

   

Group Net Loss: Group net loss was relatively unchanged from ($25.2 million) in the first quarter ended March 31, 2023, to ($25.5 million) in the first quarter ended March 31, 2024.


   

Group Adjusted EBITDA: Group Adjusted (non-GAAP) EBITDA was $6.9 million in the quarter vs. $6.0 million guidance and vs. $8.0 million in the first quarter ended March 31, 2023. This year-on-year change is primarily driven by new NFL domestic streaming rights to power our BetVision product, representing a new product offering vs. the prior year. These rights are expensed equally in each month during the NFL season, uniquely effecting Q1 2024 profitability, due to the fewer number of NFL games to generate revenue in the quarter.

Q1 2024 Business Highlights

 

 

   

Chosen as the successful bidder for exclusive Football DataCo betting rights through 20291

 

   

Selected as the optical tracking provider to the WNBA, representing the first women’s professional sports league in the U.S. with leaguewide 3D tracking data

 

   

Partnered with Lithuanian Basketball League to deliver AI-powered technology to automate rich data collection, live video production and optical player tracking

 

   

Unveiled ‘Edge’, an automated pricing tool that enables sportsbooks to maximize profitability

 

   

Launched a new suite of interactive free-to-play games for sports betting brands, designed to meet the customer acquisition and loyalty challenges facing sportsbook operators

 

   

Struck a new partnership with DVSport to power officiating and coaching solutions with live college sports data

 

   

After the reporting period, Genius Sports launched augmented, AI-powered in-game highlights in partnership with Brentford FC and its sponsor, Gtech

 

1 

The agreement remains subject to contract and approval of the Leagues and their respective Clubs.

Financial Outlook

 

Genius Sports expects to generate Group Revenue of approximately $500 million and Group Adjusted EBITDA of approximately $82 million in 2024. This implies year-on-year Group Revenue and Adj. EBITDA growth of 21% and 54%, respectively. The Company also expects to generate positive cash flow in the full year of 2024.

 

$ in millions

   Q1 2024A      Q2 2024E      Q3 2024E      Q4 2024E      FY 2024E  

Group Revenue

     120        94        119        167        500  

Group Adjusted EBITDA

     7        21        25        29        82  


Financial Statements & Reconciliation Tables

 

Genius Sports Limited

Condensed Consolidated Statements of Operations

(Unaudited)

(Amounts in thousands, except share and per share data)

 

     Three Months Ended  
     March 31,  
     2024     2023  

Revenue

   $ 119,718     $ 97,229  

Cost of revenue

     106,911       87,697  
  

 

 

   

 

 

 

Gross profit

     12,807       9,532  
  

 

 

   

 

 

 

Operating expenses:

    

Sales and marketing

     8,415       7,391  

Research and development

     6,621       6,269  

General and administrative

     21,585       18,074  

Transaction expenses

     464       828  
  

 

 

   

 

 

 

Total operating expense

     37,085       32,562  
  

 

 

   

 

 

 

Loss from operations

     (24,278     (23,030
  

 

 

   

 

 

 

Interest income, net

     666       418  

Loss on disposal of assets

     (7     (11

Loss on fair value remeasurement of contingent consideration

           (2,433

Change in fair value of derivative warrant liabilities

           (534

(Loss) gain on foreign currency

     (1,087     801  
  

 

 

   

 

 

 

Total other expense

     (428     (1,759
  

 

 

   

 

 

 

Loss before income taxes

     (24,706     (24,789
  

 

 

   

 

 

 

Income tax expense

     (1,100     (648

Gain from equity method investment

     265       269  
  

 

 

   

 

 

 

Net loss

   $ (25,541   $ (25,168
  

 

 

   

 

 

 

Loss per share attributable to common stockholders:

    

Basic and diluted

   $ (0.11   $ (0.11

Weighted average common stock outstanding:

    

Basic and diluted

     229,326,772       221,707,413  


Genius Sports Limited

Condensed Consolidated Balance Sheets

(Amounts in thousands, except share and per share data)

 

     (Unaudited)        
     March 31     December 31  
     2024     2023  

ASSETS

    

Current assets:

    

Cash and cash equivalents

   $ 67,532     $  100,331  

Accounts receivable, net

     100,264       71,088  

Contract assets

     25,920       38,802  

Prepaid expenses

     23,653       27,231  

Other current assets

     11,814       7,329  
  

 

 

   

 

 

 

Total current assets

     229,183       244,781  
  

 

 

   

 

 

 

Property and equipment, net

     11,551       11,552  

Intangible assets, net

     119,780       129,670  

Operating lease right of use assets

     8,019       7,011  

Goodwill

     323,302       326,011  

Investments

     25,045       26,399  

Restricted cash, non-current

     25,251       25,462  

Other assets

     3,290       4,838  
  

 

 

   

 

 

 

Total assets

   $ 745,421     $ 775,724  
  

 

 

   

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

    

Current liabilities:

    

Accounts payable

   $ 51,377     $ 57,379  

Accrued expenses

     63,385       56,331  

Deferred revenue

     45,115       44,345  

Current debt

     23       7,573  

Operating lease liabilities, current

     3,471       3,610  

Other current liabilities

     11,526       13,676  
  

 

 

   

 

 

 

Total current liabilities

     174,897       182,914  
  

 

 

   

 

 

 

Long-term debt – less current portion

     13       19  

Deferred tax liability

     15,212       15,335  

Operating lease liabilities, non-current

     4,765       3,501  

Other liabilities

     —        936  
  

 

 

   

 

 

 

Total liabilities

     194,887       202,705  
  

 

 

   

 

 

 

Shareholders’ equity

    

Common stock, $0.01 par value, unlimited shares authorized, 215,022,361 shares issued and 210,916,413 shares outstanding at March 31, 2024; unlimited shares authorized, 213,224,868 shares issued and 209,118,920 shares outstanding at December 31, 2023

     2,150       2,132  

B Shares, $0.0001 par value, 22,500,000 shares authorized, 18,500,000 shares issued and outstanding at March 31, 2024 and December 31, 2023

     2       2  

Additional paid-in capital

     1,652,776       1,646,082  

Treasury stock, at cost, 4,105,948 shares at March 31, 2024 and December 31, 2023

     (17,653     (17,653

Accumulated deficit

     (1,050,028     (1,024,487

Accumulated other comprehensive loss

     (36,713     (33,057
  

 

 

   

 

 

 

Total shareholders’ equity

     550,534       573,019  
  

 

 

   

 

 

 

Total liabilities and shareholders’ equity

   $ 745,421     $ 775,724  
  

 

 

   

 

 

 


Genius Sports Limited

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(Amounts in thousands)

 

    

Three Months Ended

March 31,

 
     2024     2023  

Cash Flows from operating activities:

    

Net loss

   $ (25,541   $ (25,168

Adjustments to reconcile net loss to net cash used in operating activities:

    

Depreciation and amortization

     21,138       17,308  

Loss on disposal of assets

     7       11  

Loss on fair value remeasurement of contingent consideration

     —        2,433  

Stock-based compensation

     6,745       10,561  

Change in fair value of derivative warrant liabilities

     —        534  

Non-cash interest expense, net

     —        72  

Non-cash lease expense

     1,096       964  

Amortization of contract cost

     292       226  

Deferred income taxes

     5       227  

Provision for expected credit losses

     243       58  

Gain from equity method investment

     (265     (269

Loss (gain) on foreign currency remeasurement

     715       (795

Changes in operating assets and liabilities

    

Accounts receivable

     (30,698     (5,657

Contract asset

     12,577       (3,143

Prepaid expenses

     3,357       (143

Other current assets

     (5,568     1,066  

Other assets

     2,234       (576

Accounts payable

     (5,533     (12,306

Accrued expenses

     7,532       2,113  

Deferred revenue

     1,140       (6,592

Other current liabilities

     (3,005     925  

Operating lease liabilities

     (1,065     (1,019

Other liabilities

     —        327  
  

 

 

   

 

 

 

Net cash used in operating activities

     (14,594     (18,843

Cash flows from investing activities:

    

Purchases of property and equipment

     (1,453     (310

Capitalization of internally developed software costs

     (10,927     (9,979

Distributions from equity method investments

     1,410       1,398  
  

 

 

   

 

 

 

Net cash used in investing activities

     (10,970     (8,891

Cash flows from financing activities:

    

Repayment of loans and mortgage

     (5     (5

Proceeds from exercise of Public Warrants

     —        6,812  

Repayment of promissory notes

     (7,575     (7,387
  

 

 

   

 

 

 

Net cash used in financing activities

     (7,580     (580

Effect of exchange rate changes on cash, cash equivalents and restricted cash

     134       766  

Net decrease in cash, cash equivalents and restricted cash

     (33,010     (27,548

Cash, cash equivalents and restricted cash at beginning of period

      125,793       159,020  
  

 

 

   

 

 

 

Cash, cash equivalents and restricted cash at end of period

   $ 92,783     $  131,472  
  

 

 

   

 

 

 

Supplemental disclosure of cash activities:

    

Cash paid during the period for interest

   $ —      $ 1  

Cash paid during the period for income taxes

   $ 322     $ 179  

Supplemental disclosure of noncash investing and financing activities:

    

Acquisition of common shares by subsidiary in connection with warrant redemptions

   $ —      $ 17,653  

Issuance of common stock in connection with business combinations

   $ —      $ 8,440  


Genius Sports Limited

Reconciliation of U.S. GAAP Net loss to Adjusted EBITDA

(Unaudited)

(Amounts in thousands)

 

     Three Months Ended
March 31,
 
     2024     2023  
     (dollars, in thousands)  

Consolidated net loss

   $ (25,541   $ (25,168

Adjusted for:

    

Interest income, net

     (666     (418

Income tax expense

     1,100       648  

Amortization of acquired intangibles (1)

     10,204       9,733  

Other depreciation and amortization (2)

     11,226       7,801  

Stock-based compensation (3)

     7,669       10,705  

Transaction expenses

     464       828  

Litigation and related costs (4)

     1,199       784  

Change in fair value of derivative warrant liabilities

     —        534  

Loss on fair value remeasurement of contingent consideration

     —        2,433  

Loss (gain) on foreign currency

     1,087       (801

Other (5)

     136       963  
  

 

 

   

 

 

 

Adjusted EBITDA

   $ 6,878     $ 8,042  
  

 

 

   

 

 

 

 

(1)

Includes amortization of intangible assets generated through business acquisitions (inclusive of amortization for marketing products, acquired technology, and historical data rights related to the acquisition of a majority interest in Genius in 2018).

(2)

Includes depreciation of Genius’ property and equipment, amortization of contract costs, and amortization of internally developed software and other intangible assets. Excludes amortization of intangible assets generated through business acquisitions.

(3)

Includes restricted shares, stock options, equity-settled restricted share units, cash-settled restricted share units and equity-settled performance-based restricted share units granted to employees and directors (including related employer payroll taxes) and equity-classified non-employee awards issued to suppliers.

(4)

Includes mainly legal and related costs in connection with non-routine litigation.

(5)

Includes expenses incurred related to earn-out payments on historical acquisitions, gain/loss on disposal of assets, severance costs and non-recurring compensation payments.

Webcast and Conference Call Details

Genius Sports management will host a conference call and webcast today at 8:00AM ET to discuss the Company’s first quarter results.

The conference call may be accessed by dialing (646) 307-1963.

A live audio webcast may be accessed on the Company’s investor relations website at investors.geniussports.com along with Genius’ earnings press release and related materials. A replay of the webcast will be available on the website within 24 hours after the call.

About Genius Sports

Genius Sports is the official data, technology and broadcast partner that powers the global ecosystem connecting sports, betting and media. Our technology is used in over 150 countries worldwide, creating highly immersive products that enrich fan experiences for the entire sports industry.

We are the trusted partner to over 400 sports organizations, including many of the world’s largest leagues and federations such as the NFL, EPL, FIBA, NCAA, NASCAR, AFA and Liga MX.

Genius Sports is uniquely positioned through cutting-edge technology, scale and global reach to support our partners. Our innovative use of big data, computer vision, machine learning, and augmented reality, connects the entire sports ecosystem from the rights holder all the way through to the fan.


Non-GAAP Financial Measures

This press release includes non-GAAP financial measures not presented in accordance with U.S. GAAP. A reconciliation of the most comparable GAAP measure to its non-GAAP measure is included above.

Adjusted EBITDA

We present Group adjusted EBITDA and Group adjusted EBITDA margin, non-GAAP performance measures, to supplement our results presented in accordance with U.S. GAAP. Group adjusted EBITDA is defined as earnings before interest, income tax, depreciation and amortization and other items that are unusual or not related to our revenue-generating operations, including stock-based compensation expense (including related employer payroll taxes), change in fair value of derivative warrant liabilities, remeasurement of contingent consideration, and gain or loss on foreign currency. Group adjusted EBITDA margin is calculated as Group adjusted EBITDA divided by Group revenue.

Group adjusted EBITDA and Group adjusted EBITDA margin are used by management to evaluate our core operating performance on a comparable basis and to make strategic decisions. We believe Group adjusted EBITDA and Group adjusted EBITDA margin are useful to investors for the same reasons as well as in evaluating our operating performance against competitors, which commonly disclose similar performance measures. However, our calculation of Group adjusted EBITDA and Group adjusted EBITDA margin may not be comparable to other similarly titled performance measures of other companies. Group adjusted EBITDA and Group adjusted EBITDA margin are not intended to be a substitute for any U.S. GAAP financial measure.

We do not provide a reconciliation of Group adjusted EBITDA to consolidated net income/(loss) on a forward-looking basis because we are unable to forecast certain items required to develop meaningful comparable GAAP financial measures without unreasonable efforts. These items are difficult to predict and estimate and are primarily dependent on future events. The impact of these items could be significant to our projections.

Forward-Looking Statements

This press release contains forward-looking statements as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that involve significant risks and uncertainties. All statements other than statements of historical facts are forward-looking statements. These forward-looking statements include information about our possible or assumed future results of operations or our performance. Words such as “expects,” “intends,” “plans,” “believes,” “anticipates,” “estimates,” and variations of such words and similar expressions are intended to identify such forward looking statements. Although we believe that the forward-looking statements contained in this press


release are based on reasonable assumptions, you should be aware that many factors could affect our actual financial results or results of operations and could cause actual results to differ materially from those in such forward-looking statements, including but not limited to: risks related to our reliance on relationships with sports organizations and the potential loss of such relationships or failure to renew or expand existing relationships, including failure to renew our UK soccer data rights contract; fraud, corruption or negligence related to sports events, or by our employees or contracted statisticians; risks related to changes in domestic and foreign laws and regulations or their interpretation; compliance with applicable data protection and privacy laws; pending litigation and investigations; the failure to protect or enforce our proprietary and intellectual property rights; claims for intellectual property infringement; our reliance on information technology; elevated interest rates and inflationary pressures, including fluctuating foreign currency and exchange rates; risks related to domestic and international political and macroeconomic uncertainty; and other factors included under the heading “Risk Factors” in our Annual Report on Form 20-F filed with the SEC on March 15, 2024.

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Although we believe that the expectations reflected in such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct. These statements involve known and unknown risks and are based upon a number of assumptions and estimates which are inherently subject to significant uncertainties and contingencies, many of which are beyond our control. Actual results may differ materially from those expressed or implied by such forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements contained in this press release, or the documents to which we refer readers in this press release, to reflect any change in our expectations with respect to such statements or any change in events, conditions or circumstances upon which any statement is based.

Contact:

Media

Chris Dougan, Chief Communications Officer

+1 (202) 766-4430

chris.dougan@geniussports.com

Investors

Brandon Bukstel, Investor Relations Manager

+1 (954)-554-7932

brandon.bukstel@geniussports.com

Exhibit 10.1

 

LOGO

EXECUTION VERSION

 

 

 

CREDIT AGREEMENT

dated as of

April 29, 2024

among

GENIUS SPORTS SS, LLC,

GENIUS SPORTS MEDIA INC.,

GENIUS SPORTS TECHNOLOGIES LIMITED

and

GENIUS SPORTS UK LIMITED,

as the Borrowers,

THE OTHER LOAN PARTIES PARTY HERETO,

THE LENDERS PARTY HERETO,

and

CITIBANK, N.A.,

as Administrative Agent

 

 

CITIBANK, N.A.,

as a Joint Lead Arranger and Sole Bookrunner,

and

DEUTSCHE BANK SECURITIES INC.,

as a Joint Lead Arranger

 

 

 


TABLE OF CONTENTS

 

         Page  

ARTICLE I DEFINITIONS

     1  

SECTION 1.01

  Defined Terms      1  

SECTION 1.02

  Classification of Loans and Borrowings      61  

SECTION 1.03

  Terms Generally      61  

SECTION 1.04

  Accounting Terms; GAAP      62  

SECTION 1.05

  Status of Obligations      62  

SECTION 1.06

  Rates      62  

SECTION 1.07

  Divisions      63  

SECTION 1.08

  Exchange Rates; Currency Equivalents      63  

SECTION 1.09

  Borrower Representative      63  

SECTION 1.10

  Guernsey Terms      64  

SECTION 1.11

  Certain Calculations and Tests      65  

SECTION 1.12

  Co-Borrowers      66  

ARTICLE II THE CREDITS

     66  

SECTION 2.01

  Commitments      66  

SECTION 2.02

  Loans and Borrowings      67  

SECTION 2.03

  Requests for Borrowings      68  

SECTION 2.04

  Swingline Loans      69  

SECTION 2.05

  [Reserved]      71  

SECTION 2.06

  Letters of Credit      71  

SECTION 2.07

  Funding of Borrowings      78  

SECTION 2.08

  Interest Elections      79  

SECTION 2.09

  Termination and Reduction of Commitments      81  

SECTION 2.10

  Repayment of Loans; Evidence of Debt      82  

SECTION 2.11

  Prepayment of Loans      83  

SECTION 2.12

  Fees      84  

SECTION 2.13

  Interest      85  

SECTION 2.14

  Alternate Rate of Interest      86  

SECTION 2.15

  Increased Costs      88  

SECTION 2.16

  Break Funding Payments      89  

SECTION 2.17

  Withholding of Taxes; Gross-Up      90  

SECTION 2.18

  Payments Generally; Allocation of Proceeds; Sharing of Setoffs      97  

SECTION 2.19

  Mitigation Obligations; Replacement of Lenders      100  

SECTION 2.20

  Defaulting Lenders      101  

SECTION 2.21

  Returned Payments      104  

SECTION 2.22

  Increase of Commitments      104  

SECTION 2.23

  Banking Services and Swap Agreements       106  

SECTION 2.24

  Benchmark Replacement Setting      106  

 

-i-


TABLE OF CONTENTS

(continued)

 

         Page  

ARTICLE III REPRESENTATIONS AND WARRANTIES

     109  

SECTION 3.01

  Organization; Powers      110  

SECTION 3.02

  Authorization; Enforceability      110  

SECTION 3.03

  Governmental Approvals; No Conflicts      110  

SECTION 3.04

  Financial Condition; No Material Adverse Change      111  

SECTION 3.05

  Properties      111  

SECTION 3.06

  Litigation and Environmental Matters      112  

SECTION 3.07

  Compliance with Laws and Agreements      112  

SECTION 3.08

  Investment Company Status      112  

SECTION 3.09

  Taxes      112  

SECTION 3.10

  ERISA      112  

SECTION 3.11

  Disclosure      113  

SECTION 3.12

  Capitalization and Subsidiaries      113  

SECTION 3.13

  Security Interest in Collateral      114  

SECTION 3.14

  Federal Reserve Regulations      114  

SECTION 3.15

  Anti-Corruption Laws and Sanctions; USA PATRIOT Act      114  

SECTION 3.16

  [Reserved]      115  

SECTION 3.17

  Not an Affected Financial Institution      115  

SECTION 3.18

  Solvency      115  

SECTION 3.19

  Employee Benefit Plans      115  

SECTION 3.20

  Foreign Loan Parties and Foreign Law Loan Documents      117  

ARTICLE IV CONDITIONS

     118  

SECTION 4.01

  Conditions to Initial Loans      118  

SECTION 4.02

  Each Credit Event      122  

ARTICLE V AFFIRMATIVE COVENANTS

     122  

SECTION 5.01

  Financial Statements and Other Information      122  

SECTION 5.02

  Notices of Material Events      125  

SECTION 5.03

  Existence; Conduct of Business      126  

SECTION 5.04

  Payment of Taxes      126  

SECTION 5.05

  Maintenance of Properties; Insurance; Casualty and Condemnation      126  

SECTION 5.06

  Books and Records; Inspection Rights      126  

SECTION 5.07

  Compliance with Laws      127  

SECTION 5.08

  Use of Proceeds      127  

SECTION 5.09

  Additional Collateral; Further Assurances      128  

 

-ii-


TABLE OF CONTENTS

(continued)

 

         Page  

SECTION 5.10

  Anti-Corruption Laws and Sanctions      132  

SECTION 5.11

  USA PATRIOT Act; Beneficial Ownership      132  

SECTION 5.12

  ERISA      132  

SECTION 5.13

  Compliance with Environmental Laws      132  

SECTION 5.14

  Intellectual Property      132  

SECTION 5.15

  Control Agreements; Cash Management      133  

SECTION 5.16

  Further Assurances      133  

SECTION 5.17

  Post-Closing Obligations      133  

SECTION 5.18

  People with Significant Control Regime (United Kingdom)      134  

ARTICLE VI NEGATIVE COVENANTS

     134  

SECTION 6.01

  Indebtedness      134  

SECTION 6.02

  Liens      137  

SECTION 6.03

  Fundamental Changes      140  

SECTION 6.04

  Investments, Loans, Advances, Guarantees and Acquisitions      140  

SECTION 6.05

  Asset Dispositions; Sale and Leaseback Transactions      143  

SECTION 6.06

  Swap Agreements.      144  

SECTION 6.07

  Restricted Payments; Payments of Indebtedness      144  

SECTION 6.08

  Transactions with Affiliates      146  

SECTION 6.09

  Restrictive Agreements      147  

SECTION 6.10

  Amendment of Material Documents      148  

SECTION 6.11

  Financial Covenants      148  

SECTION 6.12

  United Kingdom Pension Act.      148  

ARTICLE VII EVENTS OF DEFAULT

     149  

SECTION 7.01

  Events of Default      149  

SECTION 7.02

  CAM Exchange      152  

ARTICLE VIII THE ADMINISTRATIVE AGENT

     153  

SECTION 8.01

  Appointment      153  

SECTION 8.02

  Rights as a Lender      154  

SECTION 8.03

  Duties and Obligations      154  

SECTION 8.04

  Reliance      155  

SECTION 8.05

  Actions through Sub-Agents      155  

SECTION 8.06

  Resignation      155  

SECTION 8.07

  Non-Reliance      157  

SECTION 8.08

  Not Partners or Co-Venturers; Administrative Agent as Representative of the Secured Parties      157  

SECTION 8.09

  Certain ERISA Matters      158  

 

-iii-


TABLE OF CONTENTS

(continued)

 

         Page  

SECTION 8.10

  Erroneous Payment      159  

SECTION 8.11

  Flood Laws      163  

SECTION 8.12

  Powers Supplemental: Disapplication      163  

ARTICLE IX MISCELLANEOUS

     164  

SECTION 9.01

  Notices      164  

SECTION 9.02

  Waivers; Amendments      166  

SECTION 9.03

  Expenses; Indemnity; Damage Waiver      170  

SECTION 9.04

  Successors and Assigns      173  

SECTION 9.05

  Survival      178  

SECTION 9.06

  Counterparts; Integration; Effectiveness; Electronic Execution      178  

SECTION 9.07

  Severability      179  

SECTION 9.08

  Right of Setoff      179  

SECTION 9.09

  Governing Law; Jurisdiction; Consent to Service of Process      179  

SECTION 9.10

  WAIVER OF JURY TRIAL      181  

SECTION 9.11

  Headings      181  

SECTION 9.12

  Confidentiality      181  

SECTION 9.13

  Several Obligations; Non-reliance; Violation of Law      183  

SECTION 9.14

  USA PATRIOT Act      183  

SECTION 9.15

  Disclosure      183  

SECTION 9.16

  Appointment for Perfection      184  

SECTION 9.17

  Interest Rate Limitation      184  

SECTION 9.18

  No Advisory or Fiduciary Responsibility      184  

SECTION 9.19

  Acknowledgement and Consent to Bail-In of Affected Financial Institutions      185  

SECTION 9.20

  Acknowledgment Regarding any Supported QFCs      185  

ARTICLE X LOAN GUARANTY

     186  

SECTION 10.01

  Guaranty      186  

SECTION 10.02

  Guaranty of Payment      187  

SECTION 10.03

  No Discharge or Diminishment of Loan Guaranty      187  

SECTION 10.04

  Defenses Waived      188  

SECTION 10.05

  Rights of Subrogation      188  

SECTION 10.06

  Reinstatement; Stay of Acceleration      189  

SECTION 10.07

  Information      189  

SECTION 10.08

  Termination      189  

SECTION 10.09

  Taxes      189  

SECTION 10.10

  Maximum Liability      190  

SECTION 10.11

  Contribution      190  

SECTION 10.12

  Liability Cumulative      191  

SECTION 10.13

  Keepwell      191  

 

-iv-


SCHEDULES:

Commitment Schedule

 

Schedule 3.12

         

Capitalization and Subsidiaries

Schedule 3.19

         

Employee Benefit Plan

Schedule 5.17

         

Post-Closing Obligations

Schedule 6.01

         

Existing Indebtedness

Schedule 6.02

         

Existing Liens

Schedule 6.04

         

Existing Investments

Schedule 6.08

         

Transactions with Affiliates

Schedule 6.09

         

Restrictive Agreements

EXHIBITS:

 

Exhibit A       Form of Assignment and Assumption
Exhibit B       Form of Compliance Certificate
Exhibit C       Joinder Agreement
Exhibit D       Form of Solvency Certificate
Exhibit E - 1       U.S. Tax Certificate (For Foreign Lenders that are not Partnerships for U.S. Federal Income Tax Purposes)
Exhibit E - 2       U.S. Tax Certificate (For Foreign Participants that are not Partnerships for U.S. Federal Income Tax Purposes)
Exhibit E - 3       U.S. Tax Certificate (For Foreign Participants that are Partnerships for U.S. Federal Income Tax Purposes)
Exhibit E - 4       U.S. Tax Certificate (For Foreign Lenders that are Partnerships for U.S. Federal Income Tax Purposes)
Exhibit F       Form of Borrowing Request
Exhibit G       Form of Notice of Continuation/Conversion
Exhibit H       Form of Swingline Request
Exhibit I       Form of Intercompany Loan Agreement

 

-v-


THIS CREDIT AGREEMENT, dated as of April 29, 2024 (as it may be amended, restated, amended and restated or otherwise modified from time to time, this “Agreement”), among GENIUS SPORTS SS, LLC, a Delaware limited liability company (“Genius SS”), GENIUS SPORTS MEDIA INC., a Delaware corporation (“GS Media” and, together with Genius SS, the “U.S. Borrowers”), GENIUS SPORTS TECHNOLOGIES LIMITED, a company incorporated under the law of England and Wales, with company number 10197219 (“Genius Technologies”), GENIUS SPORTS UK LIMITED, a company incorporated under the law of England and Wales, with company number 04062777 (“GS UK” and, together with Genius Technologies, the “UK Borrowers”; the U.S. Borrowers and the UK Borrowers, each individually, a “Borrower” and collectively, the “Borrowers”), GENIUS SPORTS LIMITED, a non-cellular company limited by shares incorporated in Guernsey with registration number 68277 and having its registered office at East Wing, Trafalgar Court, Les Banques, St Peter Port, Guernsey GY1 3PP (“Holdings”), THE OTHER LOAN PARTIES PARTY HERETO FROM TIME TO TIME, THE LENDERS PARTY HERETO FROM TIME TO TIME, THE ISSUING BANKS PARTY HERETO FROM TIME TO TIME, and CITIBANK, N.A., as the Administrative Agent.

PRELIMINARY STATEMENTS

WHEREAS, the Borrowers have requested that the Lenders and the Issuing Banks extend credit to the Borrowers as described in this Agreement, and the Lenders and Issuing Banks are willing to make such credit available to Borrowers upon and subject to the provisions, terms and conditions hereinafter set forth.

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, the parties hereto agree:

ARTICLE I

DEFINITIONS

SECTION 1.01 Defined Terms. As used in this Agreement, the following terms have the meanings specified below:

ABR,” when used in reference to any Loan or Borrowing denominated in dollars, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Alternate Base Rate.

Acquisition” means any transaction or series of related transactions for the purpose of or resulting, directly or indirectly, in (a) the acquisition by a Loan Party or a Subsidiary of a Loan Party of all or substantially all of the assets of (or all or substantially all the assets constituting a business unit, division, product line or line of business of) a Person, or of any business or division of a Person, (b) the acquisition by a Loan Party or a Subsidiary of a Loan Party of the Equity Interests of any Person, or otherwise causing any Person to become a Subsidiary, or (c) a merger, amalgamation or consolidation or any other combination by a Loan Party or a Subsidiary of a Loan Party with another Person.


Additional Lender” has the meaning assigned to such term in Section 2.22(a)(ii).

Adjusted Covenant Period” has the meaning assigned to such term in Section 6.11(a).

Adjusted EURIBOR Rate” means, with respect to any Term Benchmark Borrowing denominated in Euros for any Interest Period, an interest rate per annum equal to (a) the EURIBOR Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate.

Adjusted Term SOFR” means, with respect to any Term Benchmark Borrowing denominated in Dollars for any Interest Period, a rate per annum equal to (a) Term SOFR for such Interest Period plus (b) the SOFR Adjustment; provided, that if Adjusted Term SOFR as so determined shall ever be less than 0.00%, then Adjusted Term SOFR shall be deemed to be 0.00%.

Administrative Agent” means Citibank, N.A., including its branches and Affiliates, in its capacity as administrative agent for the Lenders hereunder, or any successor administrative agent.

Administrative Questionnaire” means an administrative questionnaire in a form supplied by the Administrative Agent.

Affected Financial Institution” means (a) any EEA Financial Institution or (b) any UK Financial Institution.

Affiliate” means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the specified Person.

Agent Parties” has the meaning assigned to such term in Section 9.01(d)(ii).

Aggregate Credit Exposure” means, at any time, the aggregate Credit Exposure of all the Lenders at such time.

Agreed Currencies” means Dollars and each Approved Currency.

Agreement” has the meaning assigned to such term in the introductory paragraph.

 

2


Alternate Base Rate” means, for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective Rate in effect on such day plus 12 of 1% and (c) Adjusted Term SOFR for a one (1) month tenor in effect on such day plus 1%. Any change in the Alternate Base Rate due to a change in the Prime Rate, the Federal Funds Effective Rate or Adjusted Term SOFR shall be effective from and including the effective date of such change in the Prime Rate, the Federal Funds Effective Rate or Adjusted Term SOFR, respectively. If the Alternate Base Rate is being used as an alternate rate of interest pursuant to Section 2.14 hereof, then the Alternate Base Rate shall be the greater of clause (a) and (b) above and shall be determined without reference to clause (c) above until the circumstances giving rise to such inability no longer exist. In the event that that the Alternate Base Rate is less than zero, it shall be deemed to be zero for purposes of this Agreement.

Anti-Corruption Laws” means all laws, rules and regulations of any jurisdiction applicable to either Borrower or any of its Subsidiaries from time to time concerning or relating to bribery, corruption or money laundering, including, but not limited to, the Foreign Corrupt Practices Act of 1977, as amended, and the rules thereunder, the UK Bribery Act and the Prevention of Corruption (Bailiwick of Guernsey) Law, 2003.

Applicable Foreign Loan Party Documents” has the meaning assigned to such term in Section 3.20(a)(i).

Applicable Percentage” means, with respect to any Lender, (a) with respect to Loans and LC Exposure, a percentage equal to a fraction the numerator of which is such Lender’s Commitment and the denominator of which is the aggregate Commitment of all Lenders (if the Commitments have terminated or expired, the Applicable Percentage shall be determined based upon such Lender’s share of the Aggregate Credit Exposure at that time); provided, that in the case of Section 2.20 when a Defaulting Lender shall exist, any such Defaulting Lender’s Commitment shall be disregarded in the calculation, and (b) with respect to the Aggregate Credit Exposure, a percentage based upon its share of the Aggregate Credit Exposure and the unused Commitments; provided, that in the case of Section 2.20 when a Defaulting Lender shall exist, any such Defaulting Lender’s Aggregate Credit Exposure and Commitment shall be disregarded in the calculation.

Applicable Rate” means, for any day, with respect to any ABR Loan, Term Benchmark Loan, RFR Loan, or with respect to the commitment fees or letter of credit fees payable hereunder, as the case may be, the applicable rate per annum set forth below under the caption “ABR Spread,” “Term Benchmark and RFR Spread” or “Commitment Fee Rate,” as the case may be, determined by reference to the Consolidated Total Net Leverage Ratio as set forth in the most recent compliance certificate received by the Administrative Agent pursuant to Section 5.01(c); provided that, until the delivery to the Administrative Agent, pursuant to Section 5.01, of the financial statements and corresponding compliance certificate the first fiscal quarter ending after the Effective Date, the “Applicable Rate” shall be the applicable rate per annum set forth below in Level II:

 

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Level

  

Consolidated Total Net

Leverage Ratio

   ABR Spread     Term
Benchmark and
RFR Spread
    Commitment
Fee Rate
 

I

   Greater than or equal to 2.50 to 1.00      2.25     3.25     0.40

II

   Greater than or equal to 1.50 to 1.00 but less than 2.50 to 1.00      2.00     3.00     0.35

III

   Less than 1.50 to 1.00      1.75     2.75     0.30

For purposes of the foregoing, (a) the Applicable Rate shall be determined as of the end of each fiscal quarter of Holdings based upon the financial statements delivered to the Administrative Agent pursuant to Section 5.01(a) or (b), as applicable, and the corresponding compliance certificate delivered pursuant to Section 5.01(c), and (b) each change in the Applicable Rate resulting from a change in the Consolidated Total Net Leverage Ratio shall be effective three (3) Business Days after the date of delivery to the Administrative Agent of such financial statements and the corresponding compliance certificate indicating such change and ending on the date immediately preceding the effective date of the next such change; provided that the Consolidated Total Net Leverage Ratio shall be deemed to be in Level I for the period commencing after the Borrower Representative fails to deliver the financial statements required to be delivered by it pursuant to Section 5.01(a) or (b), as applicable, and the corresponding compliance certificate required to be delivered by it pursuant to Section 5.01(c) and ending on the date which is three (3) Business Days after such statements and certificate are actually delivered.

In the event that any financial statement delivered pursuant to Section 5.01(a) or (b) or any compliance certificate delivered pursuant to Section 5.01(c), as applicable, is inaccurate, and such inaccuracy, if corrected would have led to the imposition of a higher Applicable Rate for any period than the Applicable Rate applied for that period, then (i) the Borrower Representative shall promptly deliver to the Administrative Agent a corrected financial statement and a corrected compliance certificate for that period (the “Corrected Financials Date”), (ii) the Applicable Rate shall be determined based on the corrected compliance certificate for that period, and (iii) the Borrowers shall promptly pay to the Administrative Agent (for the account of the Lenders that hold the Commitments and Loans at the time such payment is received, regardless of whether those Lenders held the Commitments and Loans during the relevant period) the accrued additional interest owing as a result of such increased Applicable Rate for that period; provided that, for the avoidance of doubt, such deficiency shall be due and payable as at such Corrected Financials Date and no Default or Event of Default under Section 7.01(b) shall be deemed to have occurred with respect to such deficiency prior to such date (but if not so paid on such date, shall constitute an Event of Default immediately thereafter). This paragraph shall not limit the rights of the Administrative Agent or the Lenders with respect to Section 2.13(d) and Article VII hereof, and shall survive the termination of this Agreement until Payment in Full.

 

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Applicable Time” means, with respect to any Borrowings and payments in any Approved Currency, the local time in the place of settlement for such Approved Currency as may be determined by the Administrative Agent or the Issuing Bank, as the case may be, to be necessary for timely settlement on the relevant date in accordance with normal banking procedures in the place of payment.

Approved Currency” means Euros and Sterling and any other currency (other than Dollars) approved by the Administrative Agent, each Lender and the Issuing Bank.

Approved Fund” means any Person (other than a natural person) that is engaged in making, purchasing, holding or investing in bank loans and similar extensions of credit as a significant part and in the ordinary course of its business and that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

Assignment and Assumption” means an assignment and assumption entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by Section 9.04), and accepted by the Administrative Agent, in the form of Exhibit A or any other form (including electronic records generated by the use of an electronic platform) approved by the Administrative Agent.

Availability Period” means the period from and including the Effective Date to but excluding the earlier of the Maturity Date and the date of termination of the Commitments.

Available Commitment” means, at any time, the aggregate Commitments of all Lenders then in effect minus the Aggregate Credit Exposure at such time.

Available Tenor” means, as of any date of determination with respect to any then-current Benchmark, as applicable, (x) if such Benchmark is a term rate, any tenor for such Benchmark (or component thereof) that is or may be used for determining the length of an Interest Period pursuant to this Agreement or (y) otherwise, any payment period for interest calculated with reference to such Benchmark (or component thereof) that is or may be used for determining any frequency of making payments of interest calculated with reference to such Benchmark pursuant to this Agreement, in each case, as of such date and not including, for the avoidance of doubt, any tenor for such Benchmark that is then-removed from the definition of “Interest Period” pursuant to Section 2.24(d).

 

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Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable Resolution Authority in respect of any liability of an Affected Financial Institution.

Bail-In Legislation” means, (a) with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law, regulation, rule or requirement for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule and (b) with respect to the United Kingdom, Part I of the United Kingdom Banking Act 2009 (as amended from time to time) and any other law, regulation or rule applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (other than through liquidation, administration or other insolvency proceedings).

Bank Levy” means any amount payable by a Recipient or any of its Affiliates on the basis of or in relation to (a) its balance sheet or capital base or any part of that person or its liabilities or minimum regulatory capital or interest margin or any combination thereof, including, without limitation, the UK bank levy as set out in the UK Finance Act 2011 (as amended) and any other levy, surcharge or tax levied on a similar basis or for a similar purpose or (b) any financial activities taxes (or other taxes) of a kind contemplated in the European Commission consultation paper on financial sector taxation dated February 22, 2011 or the Single Resolution Mechanism established by EU Regulation n 806/2014 of July 15, 2014 and any other levy, surcharge or tax levied on a similar basis or for a similar purpose.

Banking Services” means each and any of the following bank services provided to any Loan Party or any Subsidiary of a Loan Party by any Lender or any of its Affiliates: (a) credit cards for commercial customers (including, without limitation, “commercial credit cards” and purchasing cards) or for corporate purposes, (b) stored value cards, netting services, employee credit card, commercial credit card, debit card or purchase card programs and similar arrangements, (c) treasury management services (including, without limitation, controlled disbursement, automated clearinghouse transactions, return items, overdrafts. interstate depository network services, cash pooling arrangements and cash management services, any automated clearing house transfers of funds and other payment processing services), (d) documentary services, and foreign currency exchange services, and (e) any arrangement or services similar to, or for the purpose of effectuating, any of the foregoing.

Banking Services Obligations” means any and all obligations of the Loan Parties or any Subsidiary of a Loan Party, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor) in connection with Banking Services, but excluding any Swap Agreement Obligations.

Bankruptcy Code” means Title 11 of the U.S. Code (11 U.S.C. § 101 et seq.).

 

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Bankruptcy Event” means, with respect to any Person, when such Person becomes the subject of a voluntary or involuntary bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, administrator, custodian, assignee for the benefit of creditors or similar Person charged with the reorganization or liquidation of its business or assets appointed for it, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity, or, in the good faith determination of the Administrative Agent, has taken any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any such proceeding or appointment; provided, that a Bankruptcy Event shall not result solely by virtue of any ownership interest, or the acquisition of any ownership interest, in such Person by a Governmental Authority or instrumentality thereof; provided, further, that such ownership interest does not result in or provide such Person with immunity from the jurisdiction of courts within the United States, Guernsey or the United Kingdom or from the enforcement of judgments or writs of attachment on its assets or permit such Person (or such Governmental Authority or instrumentality) to reject, repudiate, disavow or disaffirm any contracts or agreements made by such Person.

Benchmark” means, initially, with respect to any Loan in any Agreed Currency, the applicable Relevant Rate for such Agreed Currency or the applicable then-current Benchmark; provided, that if a Benchmark Transition Event has occurred with respect to such Relevant Rate for such Agreed Currency or the then-current Benchmark, then “Benchmark” means the applicable Benchmark Replacement to the extent that such Benchmark Replacement has replaced such prior benchmark rate pursuant to Section 2.24(a).

Benchmark Replacement” means, with respect to any Benchmark Transition Event, the sum of: (a) the alternate benchmark rate that has been selected by the Administrative Agent and the Borrower Representative as the replacement for the applicable then-current Benchmark giving due consideration to (i) any selection or recommendation of a replacement benchmark rate or the mechanism for determining such a rate by the Relevant Governmental Body or (ii) any evolving or then-prevailing market convention for determining a benchmark rate as a replacement to the applicable then-current Benchmark for syndicated credit facilities denominated in the applicable Agreed Currency at such time in the United States and (b) the related Benchmark Replacement Adjustment; provided, that if such Benchmark Replacement as so determined would be less than 0.00%, such Benchmark Replacement will be deemed to be 0.00% for the purposes of this Agreement and the other Loan Documents. All parties hereto acknowledge that the establishment of any such Benchmark Replacement (together with any necessary or related changes, including Conforming Changes) is not intended to result in a deemed exchange for U.S. federal income tax purposes of any obligation of any Borrower under any Loan Document.

Benchmark Replacement Adjustment” means, with respect to any replacement of the applicable then-current Benchmark with an Unadjusted Benchmark Replacement the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by the Administrative Agent and the Borrower Representative giving due consideration to (a) any selection or recommendation of a

 

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spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body or (b) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for syndicated credit facilities denominated in the applicable Agreed Currency at such time.

Benchmark Replacement Date” means the earliest to occur of the following events with respect to any then-current Benchmark:

(a) in the case of clause (a) or (b) of the definition of “Benchmark Transition Event,” the later of (i) the date of the public statement or publication of information referenced therein and (ii) the date on which the administrator of such Benchmark (or the published component used in the calculation thereof) permanently or indefinitely ceases to provide all Available Tenors of such Benchmark (or such component thereof); or

(b) in the case of clause (c) of the definition of “Benchmark Transition Event,” the first date on which such Benchmark (or the published component used in the calculation thereof) has been determined and announced by the regulatory supervisor for the administrator of such Benchmark (or such component thereof) to be non-representative; provided, that such non-representativeness will be determined by reference to the most recent statement or publication referenced in such clause (c) and even if any Available Tenor of such Benchmark (or such component thereof) continues to be provided on such date.

For the avoidance of doubt, the “Benchmark Replacement Date” will be deemed to have occurred in the case of clause (a) or (b) with respect to any Benchmark upon the occurrence of the applicable event or events set forth therein with respect to all then-current Available Tenors of such Benchmark (or the published component used in the calculation thereof).

Benchmark Transition Event” means the occurrence of one or more of the following events with respect to any then-current Benchmark:

(a) a public statement or publication of information by or on behalf of the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that such administrator has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof), permanently or indefinitely; provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof);

 

8


(b) a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof), the Federal Reserve Board, the Federal Reserve Bank of New York, the European Central Bank, the central bank for the Agreed Currency, an insolvency official with jurisdiction over the administrator for such Benchmark (or such component), a resolution authority with jurisdiction over the administrator for such Benchmark (or such component) or a court or an entity with similar insolvency or resolution authority with jurisdiction over the administrator for such Benchmark (or such component), which states that the administrator of such Benchmark (or such component) has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof) permanently or indefinitely; provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof); or

(c) a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that all Available Tenors of such Benchmark (or such component thereof) are not, or as of a specified future date will not be, representative.

For the avoidance of doubt, “Benchmark Transition Event” will be deemed to have occurred with respect to any Benchmark if a public statement or publication of information set forth above has occurred with respect to each then-current Available Tenor of such Benchmark (or the published component used in the calculation thereof).

Benchmark Transition Start Date” means, in the case of a Benchmark Transition Event, the earlier of (a) the applicable Benchmark Replacement Date and (b) if such Benchmark Transition Event is a public statement or publication of information of a prospective event, the ninetieth (90th) day prior to the expected date of such event as of such public statement or publication of information (or if the expected date of such prospective event is fewer than ninety (90) days after such statement or publication, the date of such statement or publication).

Benchmark Unavailability Period” means, with respect to any Benchmark, the period (if any) (a) beginning at the time that a Benchmark Replacement Date has occurred if, at such time, no Benchmark Replacement has replaced the applicable then-current Benchmark for all purposes hereunder and under any Loan Document in accordance with Section 2.24 and (b) ending at the time that a Benchmark Replacement has replaced the applicable then-current Benchmark for all purposes hereunder and under any Loan Document in accordance with Section 2.24.

Beneficial Owner” means, with respect to any U.S. federal withholding Tax, the beneficial owner, for U.S. federal income tax purposes, to whom such Tax relates.

Beneficial Ownership Certification” means a certification regarding beneficial ownership or control as required by the Beneficial Ownership Regulation.

Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230.

 

9


Benefit Plan” means any of (a) an “employee benefit plan” (as defined in ERISA) that is subject to Title I of ERISA, (b) a “plan” as defined in Section 4975 of the Code or (c) any Person whose assets include (for purposes of ERISA Section 3(42) or otherwise for purposes of Title I of ERISA or Section 4975 of the Code) the assets of any such “employee benefit plan” or “plan.”

BHC Act Affiliate” means an “affiliate” (as such term is defined under and interpreted in accordance with 12 U.S.C. 1841(k)) of a party.

Billing Statement” has the meaning assigned to such term in Section 2.18(g).

Board” means the Board of Governors of the Federal Reserve System of the United States of America.

Borrower” or “Borrowers” have the meanings assigned to such terms in the introductory paragraph.

Borrower Representative” means Genius SS.

Borrowing” means (a) Loans of the same Type, made, converted or continued on the same date and, in the case of Term Benchmark Loans, as to which a single Interest Period is in effect or (b) a Swingline Loan.

Borrowing Request” has the meaning assigned to such term in Section 2.03.

Business Day” means any day that is not a Saturday, Sunday or other day on which commercial banks in New York City or London are authorized or required by law to remain closed; provided that, “Business Day” shall exclude (a) Euros and in relation to the calculation or computation of EURIBOR, any day that is not a TARGET Day, (b) in relation to RFR Loans and any interest rate settings, fundings, disbursements, settlements or payments of any such RFR Loan, or any other dealings in the applicable Agreed Currency of such RFR Loan, any such day that is not an RFR Business day and (c) in relation to any Term Benchmark Loan denominated in Dollars or ABR Loans calculated pursuant to clause (c) of the definition of “Alternate Base Rate” and any interest rate settings, fundings, disbursements, settlements or payments of any such Term Benchmark Loan, any such day that is not a U.S. Government Securities Business Day.

CAM Exchange” means the exchange of the Lenders’ interests provided in Section 7.02.

CAM Exchange Date” means the date on which any event referred to in Section 7.01(h) or (i) shall occur in respect of any Borrower or the date on which the Loans are accelerated in accordance with the last paragraph of Section 7.01.

 

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CAM Percentage” means, as to each Lender, a fraction, expressed as a decimal, of which (a) the numerator shall be the aggregate U.S. Dollar Equivalent of the Obligations owed to such Lender (whether or not at the time due and payable) and such Lender’s participations in undrawn amounts of Letters of Credit immediately prior to the CAM Exchange Date and (b) the denominator shall be the aggregate U.S. Dollar Equivalent (as so determined) of the Obligations owed to all the Lenders (whether or not at the time due and payable) and the aggregate undrawn amount of all Letters of Credit immediately prior to the CAM Exchange Date.

Capital Lease Obligation” means an obligation that is a Capitalized Lease; and the amount of Indebtedness represented thereby at any time shall be the amount of the liability in respect thereof that would at that time be required to be capitalized on a balance sheet in accordance with GAAP subject to Section 1.04.

Capitalized Leases” means all leases that have been or should be, in accordance with GAAP subject to Section 1.04.

Capitalized Software Expenditures” means, for any period, the aggregate of all expenditures (whether paid in cash or accrued as liabilities) by a Person and its Subsidiaries during such period in respect of purchased software or internally developed software and software enhancements that, in conformity with GAAP, are or are required to be reflected as capitalized costs on the consolidated balance sheet of a Person and its Subsidiaries.

Cash Equivalents” means:

(a) Dollars, Euros, Sterling, Australian dollars, Canadian dollars, Yuan and such other currencies held by it from time to time in the ordinary course of business;

(b) readily marketable obligations issued or directly and fully guaranteed or insured by the government or any agency or instrumentality of (i) the United States or (ii) any member nation of the European Union rated A-2 (or the equivalent thereof) or better by S&P or P-2 (or the equivalent thereof) or better by Moody’s, having average maturities of not more than twelve (12) months from the date of acquisition thereof; provided that the full faith and credit of the United States or such member nation of the European Union is pledged in support thereof;

(c) time deposits with, or insured certificates of deposit or bankers’ acceptances of, any commercial bank that (i) is a Lender or (ii) has combined capital and surplus of at least (x) $250,000,000 in the case of U.S. banks and (y) $100,000,000 (or the U.S. Dollar Equivalent as of the date of determination) in the case of non-U.S. banks (any such bank meeting the requirements of clause (i) or (ii) above being an “Approved Bank”), in each case with average maturities of not more than twelve (12) months from the date of acquisition thereof;

(d) commercial paper and variable or fixed rate notes issued by an Approved Bank (or by the parent company thereof) or any variable or fixed rate note issued by, or guaranteed by, a corporation rated A-2 (or the equivalent thereof) or better by S&P or P-2 (or the equivalent thereof) or better by Moody’s, in each case with average maturities of not more than twelve (12) months from the date of acquisition thereof;

 

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(e) repurchase agreements entered into by any Person with an Approved Bank, a bank or trust company (including any of the Lenders) or recognized securities dealer, in each case, having capital and surplus in excess of $250,000,000 (or the U.S. Dollar Equivalent as of the date of determination), in each case, for direct obligations issued by or fully guaranteed or insured by the government or any agency or instrumentality of (i) the United States or (ii) any member nation of the European Union rated A (or the equivalent thereof) or better by S&P and A2 (or the equivalent thereof) or better by Moody’s, in which such Person shall have a perfected first priority security interest (subject to no other Liens) and having, on the date of purchase thereof, a fair market value of at least 100% of the amount of the repurchase obligations;

(f) marketable short-term money market and similar highly liquid funds either (i) having assets in excess of $250,000,000 (or the U.S. Dollar Equivalent as of the date of determination) or (ii) having a rating of at least A-2 or P-2 from either S&P or Moody’s (or, if at any time neither S&P nor Moody’s shall be rating such obligations, an equivalent rating from another nationally recognized rating service);

(g) securities with average maturities of twelve (12) months or less from the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the United States, or by any political subdivision or taxing authority of any such state, commonwealth or territory or by a foreign government having an investment grade rating from either S&P or Moody’s (or the equivalent thereof);

(h) investments similar to the foregoing made by Foreign Subsidiaries of the Loan Parties (i) consistent with the Borrower Representative’s investment guidelines as approved from time to time by the Borrower Representative’s board of directors or (ii) are of comparable credit quality and are customarily used in the jurisdiction of such Foreign Subsidiary for cash management purposes.

Central Bank Rate” means, (A) the greater of (i) one of the following three rates as may be selected by the Administrative Agent in its reasonable discretion: (1) the fixed rate for the main refinancing operations of the European Central Bank (or any successor thereto), or, if that rate is not published, the minimum bid rate for the main refinancing operations of the European Central Bank (or any successor thereto), each as published by the European Central Bank (or any successor thereto) from time to time, (2) the rate for the marginal lending facility of the European Central Bank (or any successor thereto), as published by the European Central Bank (or any successor thereto) from time to time or (3) the rate for the deposit facility of the central banking system of the Participating Member States, as published by the European Central Bank (or any successor thereto) from time to time and (ii) zero; plus (B) the applicable Central Bank Rate Adjustment.

 

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Central Bank Rate Adjustment” means, a rate equal to the difference (which may be a positive or negative value or zero) of (i) the average of the EURIBOR Rate for the five (5) most recent Business Days preceding such day for which the EURIBOR Screen Rate was available (excluding, from such averaging, the highest and the lowest EURIBOR Rate applicable during such period of five (5) Business Days) minus (ii) the Central Bank Rate in respect of Euro in effect on the last Business Day in such period. For purposes of this definition, (x) the term Central Bank Rate shall be determined disregarding clause (B) of the definition of such term and (y) the EURIBOR Rate on any day shall be based on the EURIBOR Screen Rate on such day at approximately the time referred to in the definition of such term for deposits in Euros for a maturity of one (1) month (or, in the event the EURIBOR Screen Rate for deposits is not available for such maturity of one (1) month, shall be based on the EURIBOR Interpolated Rate as of such time); provided that if such rate as so determined would be less than zero, such rate shall be deemed to be zero.

CFC” means a “controlled foreign corporation” as defined in Section 957 of the Code, all or substantially all of the shares of which are treated as owned directly or indirectly by one or more “United States Shareholders” (within the meaning of Section 951(b) of the Code) as determined under Section 958(a) of the Code; provided that (x) no Loan Party as of the date hereof other than Second Spectrum UK Limited shall ever be treated as a CFC, and (y) no current or future Subsidiary shall be treated as a CFC if a “United States Shareholder” (as previously defined) that is a Loan Party (or a Subsidiary of a Loan Party) acquires ownership of the shares of such Subsidiary from another Loan Party (or another Subsidiary of a Loan Party) in contemplation of treating such Subsidiary as a CFC for purposes of this Agreement. For the avoidance of doubt, as of the date hereof, the only Subsidiary organized under the laws of Guernsey or the United Kingdom that is a CFC is Second Spectrum UK Limited.

Change in Control” means:

(a) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or group (within the meaning of the Securities Exchange Act of 1934 and the rules of the SEC thereunder as in effect on the date hereof) of Equity Interests representing more than 50% of the aggregate ordinary voting power represented by the issued and outstanding Equity Interests of Holdings;

(b) occupation of a majority of the seats (other than vacant seats) on the board of directors of Holdings by Persons who were neither (1) nominated by the then-existing board of directors of the Borrower nor (2) appointed by directors so nominated; or

(c) Holdings shall beneficially own and control less than 100% on a fully diluted basis of the economic interest and voting power represented by the issued and outstanding Equity Interests of each Borrower.

 

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Change in Law” means the occurrence after the date of this Agreement (or, with respect to any Lender, such later date on which such Lender becomes a party to this Agreement) of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty; (b) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority; or (c) compliance by any Lender or the Issuing Bank (or, for purposes of Section 2.15(b), by any lending office of such Lender or by such Lender’s or such Issuing Bank’s holding company, if any) with any request, guideline, requirement or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement; provided, that, notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines, requirements or directives thereunder or issued in connection therewith or in the implementation thereof and (y) all requests, rules, guidelines, requirements or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law,” regardless of the date enacted, adopted, issued or implemented.

Change in Tax Law” means any change which occurs after the date of this Agreement (or, with respect to any Lender, such later date on which such Lender becomes a party to this Agreement) in any law, regulation or treaty (or in the published interpretation, administration or application of any law, regulation or treaty) or any published practice or published concession of any relevant tax authority, other than a change that occurs pursuant to, or in connection with the adoption, ratification, approval or acceptance of, the MLI in or by any jurisdiction.

Charges” has the meaning assigned to such term in Section 9.17.

Code” means the Internal Revenue Code of 1986, as amended from time to time.

Collateral” has the meaning given to such term or its equivalent in the applicable Collateral Document and includes all assets pledged or purported to have been pledged by the Loan Parties to the Administrative Agent pursuant to the Collateral Documents.

Collateral Documents” means, collectively, any Security Agreement, the IP Security Agreements, the UK Collateral Documents, the Guernsey Collateral Documents, the Control Agreements, the Mortgages (if any) and any other documents granting a Lien upon the Collateral as security for payment of the Secured Obligations.

Commitment” means, with respect to each Lender, the commitment of such Lender to make Loans and to acquire participations in Letters of Credit and Swingline Loans hereunder, expressed in an amount representing the maximum possible aggregate amount of such Lender’s Credit Exposure hereunder, as such commitment may be reduced or increased from time to time pursuant to (a) Section 2.09 or Section 2.22 and (b) assignments by or to such Lender pursuant to

 

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Section 9.04. The initial amount of each Lender’s Commitment is set forth on the Commitment Schedule, or in the Assignment and Assumption pursuant to which such Lender shall have assumed its Commitment, as applicable. The initial aggregate amount of the Lenders’ Commitments as of the Effective Date is $90,000,000.

Commitment Date” has the meaning assigned to such term in Section 2.22(a)(i).

Commitment Increase” has the meaning assigned to such term in Section 2.22(a).

Commitment Schedule” means the Schedule attached hereto identified as such.

Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute.

Communications” has the meaning assigned to such term in Section 9.01(d)(ii).

Conforming Changes” means with respect to either the use or administration of any Benchmark Replacement, any technical administrative or operational changes (including changes to the definition of “Alternate Base Rate,” the definition of “Business Day,” the definition of “U.S. Government Securities Business Day,” the definition of “RFR Business Day,” the definition of “Interest Period” or “Interest Payment Date” or any similar or analogous definition (or the addition of a concept of “interest period”), timing and frequency of determining rates and making payments of interest, timing of borrowing requests or prepayment, conversion or continuation notices, the applicability and length of lookback periods, the applicability of Section 2.16 and other technical, administrative or operational matters) that the Administrative Agent decides may be appropriate to reflect the adoption and implementation of any such rate or to permit the use and administration thereof by the Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative Agent decides that adoption of any portion of such market practice is not administratively feasible or if the Administrative Agent determines that no market practice for the administration of any such rate exists, in such other manner of administration as the Administrative Agent decides is reasonably necessary in connection with the administration of this Agreement and the other Loan Documents).

Consolidated Interest Coverage Ratio” means, as of any date of determination, the ratio of (a) EBITDA less Capitalized Software Expenditures, to (b) cash Interest Expense, all calculated for Holdings and its Subsidiaries on a consolidated basis for the period of four consecutive fiscal quarters ended on such date (or if such date is not the last day of a fiscal quarter, ended on the last day of the fiscal quarter most recently ended prior to such date).

Consolidated Total Assets” means, at any date, all amounts that would, in conformity with GAAP, be set forth opposite the caption “total assets” (or any like caption) on a consolidated balance sheet of the applicable Person at such date.

 

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Consolidated Total Net Leverage Ratio” means, as of any date of determination, the ratio of (a) (i) Funded Indebtedness of Holdings and its Subsidiaries outstanding on such date, determined on a consolidated basis in accordance with GAAP, minus (ii) Unrestricted Cash as of such date up to an aggregate amount not to exceed the greater of (x) $50,000,000 and (y) 50% of EBITDA for the most recently ended Reference Period for which financial statements have been delivered pursuant to Section 5.01(a) or (b) to (b) EBITDA of Holdings and its Subsidiaries on a consolidated basis for the period of four consecutive fiscal quarters ending on such date (or, if such date is not the last day of a fiscal quarter, ended on the last day of the fiscal quarter most recently ended prior to such date).

Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto.

Control Agreement” means a tri-party control agreement among the applicable Loan Party, a depository institution or securities intermediary or commodities intermediary, as applicable, and the Administrative Agent, which agreement is in form and substance acceptable to the Administrative Agent and which provides (a) to the Administrative Agent “control” of such deposit or commodity account within the meaning of Article 9 of the UCC, or security account within the meaning of Article 8 of the UCC, as applicable, (b) for a limitation of the set-off rights of such intermediary on terms reasonably satisfactory to the Administrative Agent and (c) for “springing” dominion upon the occurrence of an Event of Default.

Convertible Debt Securities” means Indebtedness that is (i) convertible into (a) Qualified Equity Interests (or other securities or property following a merger event, reclassification or other change of such Qualified Equity Interests) and cash in lieu of fractional shares, (b) cash (in an amount determined by reference to the price of such Qualified Equity Interests or such other securities or property) or (c) a combination of the foregoing or (ii) sold as units with call options, warrants or rights to purchase (or substantially equivalent derivative transactions) that are exercisable for Qualified Equity Interests or cash (in an amount determined by reference to the price of such Qualified Equity Interests or such other securities or property).

Copyrights” has the meaning assigned to such term in the Security Agreement.

Covered Entity” means any of the following: (i) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b); (ii) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or (iii) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).

Covered Liabilities” has the meaning assigned to such term in Section 9.19.

 

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Covered Party” has the meaning assigned to such term in Section 9.20(a).

Credit Exposure” means, with respect to any Lender at any time, the sum of the outstanding principal amount of such Lender’s Loans and its LC Exposure at such time.

Credit Party” means the Administrative Agent, any Issuing Bank, any Swingline Lender or any Lender.

CTA” means the UK Corporation Tax Act 2009.

Currency Due” has the meaning assigned to such term in Section 9.03(g).

Daily Simple RFR” means, for any day (an “RFR Interest Day”), a rate per annum equal to the greater of: (a) for any RFR Loan denominated in Sterling, the sum of (i) SONIA for the day that is five (5) Business Days prior to (A) if such RFR Interest Day is a Business Day, such RFR Interest Day or (B) if such RFR Interest Day is not a Business Day, the Business Day immediately preceding such RFR Interest Day plus (ii) 0.1193%, and (b) zero; provided that if such rate as determined above is less than zero, such rate shall be deemed to be zero. Any change in Daily Simple RFR due to a change in the RFR shall be effective from and including the effective date of such change in the RFR without notice to the Borrowers.

Default” means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or waived, becomes an Event of Default.

Default Right” has the meaning assigned to such term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.

Defaulting Lender” means, subject to Section 2.20(f), any Lender that (a) has failed, within two (2) Business Days of the date required to be funded or paid, to (i) fund any portion of its Loans, (ii) fund any portion of its participations in Letters of Credit or Swingline Loans or (iii) pay over to any Credit Party any other amount required to be paid by it hereunder, unless, in the case of clause (i) above, such Lender notifies the Administrative Agent in writing that such failure is the result of such Lender’s good faith determination that a condition precedent to funding (specifically identified and including the particular Default, if any) has not been satisfied; (b) has notified the Borrower Representative or any Credit Party in writing, or has made a public statement to the effect, that it does not intend or expect to comply with any of its funding obligations under this Agreement (unless such writing or public statement indicates that such position is based on such Lender’s good faith determination that a condition precedent (specifically identified and including the particular Default, if any) to funding a Loan under this Agreement cannot be satisfied) or generally under other agreements in which it commits to extend credit; (c) has failed, within three (3) Business Days after request by the Borrower Representative or a Credit Party, acting in good faith, to provide a certification in writing from an authorized officer of such Lender

 

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that it will comply with its obligations (and is financially able to meet such obligations) to fund prospective Loans and participations in then outstanding Letters of Credit or Swingline Loans under this Agreement; provided, that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon the Borrower Representative and such Credit Party’s receipt of such certification in form and substance satisfactory to it and the Administrative Agent; (d) has become the subject of a Bankruptcy Event; or (e) has become (or whose direct or indirect parent company has become) subject to a Bail-In Action; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender. Any determination by the Administrative Agent that a Lender is a Defaulting Lender under any one or more of clauses (a) through (e) above shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 2.20(f)) upon delivery of written notice of such determination to the Borrower Representative and each Credit Party.

Disposition” or “Dispose” means the sale, transfer, license, lease or other disposition of any property by any Person (or the granting of any option or other right to do any of the foregoing), including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith, in each case, for all such transactions in any fiscal year in excess of $2,000,000.

Disqualified Equity Interest” means Equity Interests that by their terms (or by the terms of any security into which such Equity Interests are convertible, or for which such Equity Interests are exchangeable, in each case at the option of the holder thereof) or upon the happening of any event (i) mature or are mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or are required to be redeemed or redeemable at the option of the holder for consideration other than Qualified Equity Interests, (ii) are convertible either mandatorily or at the option of the holder into Disqualified Equity Interests or exchangeable for Indebtedness or (iii) is redeemable or is required to be repurchased by such Person or any of its Affiliates, in whole or in part, at the option of the holder thereof, in each case of clauses (i), (ii) and (iii) prior to the date that is ninety-one (91) days after the final Maturity Date hereunder; provided, however, that (i) an Equity Interest in any Person that would not constitute a Disqualified Equity Interest but for terms thereof giving holders thereof the right to require such Person to redeem or purchase such Equity Interest upon the occurrence of an “asset sale,” a “change of control,” eminent domain event, condemnation event, or similar event shall not constitute a Disqualified Equity Interest if any such requirement becomes operative only after repayment in full of all the Loans and all other Loan Document Obligations that are accrued and payable and the termination of the Commitments, (ii) if an Equity Interest in any Person is issued pursuant to any plan for the benefit of directors, officers, employees, members of management or managers, of Holdings or any Subsidiary or by any such

 

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plan to such employees, such Equity Interest shall not constitute a Disqualified Equity Interest solely because it may be required to be repurchased by Holdings or any other Subsidiary in order to satisfy applicable statutory or regulatory obligations of such Person and (iii) no Equity Interest held by any future, present or former employee, director, officer, manager or member of management (or their respective affiliates) of the Borrowers (or any direct or indirect parent thereof or any subsidiary) shall be considered a Disqualified Equity Interest solely because such stock is redeemable or subject to repurchase pursuant to any customary stock option, employee stock award or similar agreement that may be in effect from time to time.

Disqualified Lender” means (a) any competitors of the Borrowers or their Subsidiaries designated in writing by or on behalf of the Borrower Representative to the Administrative Agent from time to time, (b) any Persons engaged as principals primarily in private equity, mezzanine financing or venture capital and bank, financial institution or other institutional lender, in each case, designated in writing by the Borrower Representative to the Administrative Agent on or prior to the Effective Date and (c) any Person that is (or becomes) an Affiliate of the entities described in the preceding clauses (a) and (b); provided that such Person is either readily identifiable as an Affiliate on the basis of its name or is identified in writing from time to time to the Administrative Agent by or on behalf of the Borrower Representative; provided, further, that “Disqualified Lender” shall exclude any Person that the Borrower Representative has designated as no longer being a “Disqualified Lender” by written notice to the Administrative Agent; provided, further, that nothing herein shall apply retroactively to disqualify any parties that have previously acquired an assignment or participation interest in Loans to the extent that any such party was not a Disqualified Lender at the time of the applicable assignment or participation, as the case may be.

Disqualified Person” has the meaning assigned to such term in Section 9.04(e).

Dollars,” “dollars” or “$” refers to lawful money of the United States of America.

Domestic Loan Party” means the U.S. Borrowers and any other Loan Party that is organized under the laws of the United States, any State thereof or the District of Columbia.

Domestic Subsidiary” means any Subsidiary incorporated or organized under the laws of the United States, any state thereof or the District of Columbia that is not a Foreign Subsidiary, Foreign Subsidiary Holding Company, or CFC.

EBITDA” means, for any period, the sum of:

(a) Net Income for such period; plus

(b) without duplication and to the extent deducted in determining Net Income for such period, the sum of:

 

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(i) Interest Expense for such period;

(ii) provision for taxes based on income for such period;

(iii) all amounts attributable to depreciation and amortization expense for such period;

(iv) amortization of intangibles (including, but not limited to, goodwill) for such period;

(v) any non-cash charges, expenses or losses for such period;

(vi) non-cash compensation expenses, including as a result of any grant of equity or options to employees, officers, directors or contractors;

(vii) costs and expenses incurred with respect to this Agreement and the other Loan Documents and the Transactions incurred on or prior to the sixth (6th) month anniversary of the Effective Date;

(viii) expenses, charges and losses incurred in such period, and which are reimbursed in cash during such period by Persons (other than by the Loan Parties and their respective Subsidiaries) so long as such payments were not added in determining Net Income for such period;

(ix) non-recurring fees, costs and expenses directly incurred during such period in connection with any of the following which are attempted, whether or not consummated: any Investment permitted under Section 6.04 and any related debt or equity offering undertaken in connection therewith; provided that such addback shall be limited to $6,000,000 in any fiscal year for such fees, costs and expenses incurred in connection with non-consummated transactions;

(x) non-cash purchase accounting adjustments made during such period;

(xi) any one-time restructuring charges incurred during such period (determined in accordance with GAAP); provided that the aggregate amount added back pursuant to this clause (xi), together with those addbacks in clauses (xii) and (xiii) for such period, shall not exceed, in the aggregate, 20% of EBITDA for the relevant period (calculated prior to giving effect to such addbacks);

 

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(xii) the amount of any “run-rate” cost savings, operating expense reductions and other cost synergies (collectively, “Expected Cost Savings”) (net of actual amounts realized) that are projected to result from actions taken (including those taken prior to the Effective Date), committed to be taken or expected to be taken within twelve (12) months and permitted as an adjustment pursuant to Article 11 of Regulation S-X under the Securities Act of 1933; provided that the aggregate amount of Expected Cost Savings, together with those addbacks in clauses (xi) and (xiii) for such period, shall not exceed, in the aggregate, 20% of EBITDA for the relevant period (calculated prior to giving effect to such addbacks);

(xiii) extraordinary, unusual, infrequent or non-recurring items, in each case, as reasonably acceptable to the Administrative Agent; provided that the aggregate amount added back pursuant to this clause (xiii), together with those addbacks in clauses (xi) and (xii) for such period, shall not exceed, in the aggregate, 20% of EBITDA for the relevant period (calculated prior to giving effect to such addbacks); minus,

(c) without duplication and to the extent included in Net Income, any extraordinary gains and any non-cash items of income for such period;

all calculated for Holdings and its Subsidiaries on a consolidated basis in accordance with GAAP. For the purposes of calculating EBITDA for any period of four (4) consecutive fiscal quarters (each, a “Reference Period”), (i) if at any time during such Reference Period any Loan Party or any Subsidiary shall have made any sale, transfer, or disposition of property, EBITDA for such Reference Period shall be reduced by an amount equal to the EBITDA (if positive) attributable to the property that is the subject of such sale, transfer, or disposition, as applicable, for such Reference Period or increased by an amount equal to the EBITDA (if negative) attributable thereto for such Reference Period; and (ii) if during such Reference Period any Loan Party or any of its Subsidiaries shall have made a Permitted Acquisition, EBITDA for such Reference Period shall be calculated after giving effect thereto on a pro forma basis as if such Permitted Acquisition occurred on the first day of such Reference Period. Notwithstanding the foregoing, (i) for the period commencing on January 1, 2024 and ending on the Effective Date, EBITDA shall be EBITDA for Holdings and its Subsidiaries on a consolidated basis for such period, as estimated in good faith by the Borrower Representative and adjusted in a manner consistent with the adjustments to EBITDA reflected in EBITDA for the fiscal quarters ended September 30, 2023 and December 31, 2023 set forth in the immediately succeeding clause (ii); and (ii) EBITDA shall be deemed to be the following amounts for the following periods: (A) for the fiscal quarter ending September 30, 2023, $17,695,000; and (B) for the fiscal quarter ending December 31, 2023, $11,958,000.

ECP” means an “eligible contract participant” as defined in Section 1(a)(18) of the Commodity Exchange Act or any regulations promulgated thereunder and the applicable rules issued by the Commodity Futures Trading Commission and/or the SEC.

 

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EEA Financial Institution” means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition and is subject to the supervision of an EEA Resolution Authority or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clause (a) or (b) of this definition and is subject to consolidated supervision of an EEA Resolution Authority with its parent.

EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein and Norway.

EEA Resolution Authority” means any public administrative authority or any person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.

Effective Date” means April 29, 2024.

Electronic Signature” means an electronic sound, symbol, or process attached to, or associated with, a contract or other record and adopted by a Person with the intent to sign, authenticate or accept such contract or record.

Electronic System” means any electronic system, including e-mail, e-fax, Intralinks®, ClearPar®, Debt Domain, Syndtrak and any other Internet or extranet-based site, whether such electronic system is owned, operated or hosted by the Administrative Agent and the Issuing Banks and any of its respective Related Parties or any other Person, providing for access to data protected by passcodes or other security system.

Eligible Assignee” means any Person that meets the requirements to be an assignee under Section 9.04(b) (subject to such consents, if any, as may be required thereunder); provided that none of the Borrowers, any Affiliate of the Borrowers, any Defaulting Lender or any natural person shall be an Eligible Assignee.

Employee Benefit Plans” means each “employee benefit plan” (within the meaning of Section 3(3) of ERISA, whether or not subject to ERISA) that is sponsored, maintained or contributed to by a Loan Party, not including a Multiemployer Plan or any plan, fund, program or arrangement sponsored and administered solely by a Governmental Authority.

English Law Debenture” means that certain English law all asset debenture entered into or to be entered into between, among others, each UK Guarantor and UK Borrower in favor of the Administrative Agent.

 

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Environmental Laws” means all laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into by any Governmental Authority, relating in any way to the environment, preservation or reclamation of natural resources, the management, release or threatened release of any Hazardous Material or relating to employee health and safety matters and includes, in respect of any Governmental Authority of the United Kingdom, any applicable law or regulation which relates to the conditions of the workplace and /or the generation, handling, storage, use, release or spillage of any substance which, alone or in combination with any other, is capable of causing harm to the environment, including, without limitation, any waste.

Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Loan Parties or any Subsidiary directly or indirectly resulting from or based upon (a) any violation of any Environmental Law; (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials; (c) any exposure to any Hazardous Materials; (d) the Release or threatened Release of any Hazardous Materials into the environment; or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

Equity Interests” means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person; provided that Equity Interests shall not include Convertible Debt Securities (irrespective of whether the Convertible Debt Securities are settled in Qualified Equity Interests, cash or a combination thereof).

ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the rules and regulations promulgated thereunder.

ERISA Affiliate” means any trade or business (whether or not incorporated) that, together with any Loan Party, is treated as a single employer under Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414(b), (c), (m) or (o) of the Code.

ERISA Event” means (a) any “reportable event,” as defined in Section 4043 of ERISA or the regulations issued thereunder with respect to a Plan (other than an event for which the thirty (30) day notice period is waived); (b) the failure to make any “minimum required contribution” (as defined in Section 430(a) of the Code) with respect to any Plan, at the time and in the amount provided for in Section 430 of the Code; (c) the filing pursuant to Section 412(c) of the Code or Section 302(c) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan; (d) the incurrence by any Loan Party or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan; (e) the receipt by any Loan Party or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans in a distress termination described in Section 4041(c) of ERISA or to appoint a trustee to administer any Plan under Section 4042(b) of ERISA; (f) the incurrence by any Loan Party or any of its ERISA Affiliates of any liability described in

 

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Title IV of ERISA with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the receipt by any Loan Party or any ERISA Affiliate of any notice concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent within the meaning of Section 4245 of ERISA or in endangered or critical status (within the meaning of Section 305 of ERISA).

Erroneous Payment” has the meaning assigned to such term in Section 8.10(a).

Erroneous Payment Deficiency Assignment” has the meaning assigned to such term in Section 8.10(d).

Erroneous Payment Impacted Class” has the meaning assigned to such term in Section 8.10(d)(i).

Erroneous Payment Return Deficiency” has the meaning assigned to such term in Section 8.10(d)(i).

Erroneous Payment Subrogation Rights” has the meaning assigned to such term in Section 8.10(e).

EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor person), as in effect from time to time.

EURIBOR Interpolated Rate” means, at any time, with respect to any Term Benchmark Loan denominated in Euros and for any Interest Period, the rate per annum (rounded to the same number of decimal places as the EURIBOR Screen Rate) determined by the Administrative Agent (which determination shall be conclusive and binding absent manifest error) to be equal to the rate that results from interpolating on a linear basis between: (a) the EURIBOR Screen Rate for the longest period (for which the EURIBOR Screen Rate is available for Euros) that is shorter than the Impacted EURIBOR Rate Interest Period; and (b) the EURIBOR Screen Rate for the shortest period (for which the EURIBOR Screen Rate is available for Euros) that exceeds the Impacted EURIBOR Rate Interest Period, in each case, at such time; provided that, if any EURIBOR Interpolated Rate as so determined would be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.

EURIBOR Rate” means, with respect to any Term Benchmark Borrowing denominated in Euros and for any Interest Period, the EURIBOR Screen Rate at approximately 11:00 a.m., Brussels time, two (2) TARGET Days prior to the commencement of such Interest Period; provided that, if the EURIBOR Screen Rate shall not be available at such time for such Interest Period (an “Impacted EURIBOR Rate Interest Period”) with respect to Euros then the EURIBOR Rate shall be the EURIBOR Interpolated Rate.

 

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EURIBOR Screen Rate” means the Euro interbank offered rate administered by the European Money Markets Institute (or any other person which takes over the administration of that rate) for the relevant period displayed (before any correction, recalculation or republication by the administrator) on page EURIBOR01 of the Thomson Reuters screen (or any replacement Thomson Reuters page which displays that rate) or on the appropriate page of such other information service which publishes that rate from time to time in place of Thomson Reuters at approximately 11:00 a.m., Brussels time, two (2) TARGET Days prior to the commencement of such Interest Period. If such page or service ceases to be available, the Administrative Agent may specify another page or service displaying the relevant rate after consultation with the Borrowers. If the EURIBOR Screen Rate shall be less than zero, the EURIBOR Screen Rate shall be deemed to be zero for purposes of this Agreement.

Euro” and “” means the single currency of the Participating Member States.

Event of Default” has the meaning assigned to such term in Section 7.01.

Excluded Account” means any (a) trust or escrow account, (b) account used exclusively for payroll, (c) zero balance accounts, (d) other deposit accounts, so long as at any time the balance in all such accounts excluded pursuant to this clause (d) does not exceed $1,000,000 individually, and $5,000,000 in the aggregate for all such accounts and (e) accounts exclusively holding cash collateral subject to a Permitted Encumbrance other than a Lien in favor of the Administrative Agent.

Excluded Subsidiary” means (a) solely with respect to the US Obligations, (i) any Subsidiary that is a CFC, (ii) any Subsidiary that is a Foreign Subsidiary Holding Company, (iii) any Domestic Subsidiary of a CFC, (b) Immaterial Subsidiaries, (c) any Subsidiary prohibited by (i) applicable law or regulations, (ii) any contractual obligation existing on the Effective Date or on the date any such Subsidiary is acquired (so long as, in respect of any such contractual prohibition, such prohibition is not incurred in contemplation of such acquisition and only for so long as such restriction is continuing), in each case from guaranteeing the Secured Obligations or which would require governmental (including regulatory) consent, approval, license or authorization to provide a Guarantee (unless such consent, approval, license or authorization has been received) or (iii) for which the provision of a Guarantee would result in a material adverse tax consequence to the Borrowers, their direct or indirect equityholders or one of their Subsidiaries, as reasonably determined by the Administrative Agent, (d) broker-dealer subsidiary, special purpose entity captive insurance subsidiary or not for profit subsidiaries and (e) other Subsidiaries with respect to which the cost or consequence of providing such guaranty would, as reasonably determined by the Administrative Agent, be excessive of the benefits to be obtained by the Lenders therefrom.

 

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Excluded Swap Obligation” means, with respect to any Loan Guarantor, any Swap Obligation if, and to the extent that, all or a portion of the Guarantee of such Loan Guarantor of, or the grant by such Loan Guarantor of a security interest to secure, such Swap Obligation (or any Guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Loan Guarantor’s failure for any reason to constitute an ECP at the time the Guarantee of such Loan Guarantor or the grant of such security interest becomes or would become effective with respect to such Swap Obligation. If a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such Guarantee or security interest is or becomes illegal.

Excluded Taxes” means any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient: (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being a resident of, being organized under the laws of, or having its principal office or, in the case of any Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes; (b) U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Recipient with respect to an applicable interest in a Loan, Note, Letter of Credit, Commitment or other Loan Document pursuant to a law in effect on the date on which (i) such Lender acquires such interest in the Loan, Note, Letter of Credit or Commitment or (ii) such Recipient changes its lending office, except in each case to the extent that, pursuant to Section 2.17, an amount that was due and payable, but not yet paid to (A) such Lender’s assignor immediately before such Lender acquired the applicable interest in a Loan, Note, Letter of Credit, Commitment or other Loan Document or (B) such Lender immediately before it changed its lending office; (c) Taxes attributable to such Recipient’s failure to comply with any of its obligations under Section 2.17(f); (d) any UK withholding Taxes imposed on amounts payable by or on behalf of a UK Loan Party to or for the account of such Lender where on the date on which the payment falls due: (i) the relevant Lender is not or has ceased to be a UK Qualifying Lender other than as a result of any Change in Tax Law, or (ii) the relevant Lender is a UK Qualifying Lender solely by virtue of sub-paragraph (b) of the definition of “UK Qualifying Lender” and a HMRC officer has given (and not revoked) a direction (a “Direction”) under section 931 of Income Tax Act 2007 which relates to the payment, that Lender has received from the relevant UK Loan Party a certified copy of that Direction and the payment could have been made to the Lender without any UK withholding Taxes if that Direction had not been made; or (iii) the relevant Lender is a UK Qualifying Lender solely by virtue of sub-paragraph (b) of the definition of “UK Qualifying Lender,” the relevant Lender has not given a UK Tax Confirmation to the relevant UK Loan Party and the payment could have been made to the Lender without any UK withholding Taxes if the Lender had given a UK Tax Confirmation to the relevant UK Loan Party, on the basis that that UK Tax Confirmation would have enabled the UK Loan Party to have formed a reasonable belief that the payment was an “excepted payment” for the purposes of section 930 of the Income Tax Act 2007; (e) any Taxes imposed under FATCA; (d) any Bank Levy or any payment attributable to or liability arising as a consequence of any Bank Levy; and (g) any VAT for which the provisions of Section 2.17(i) shall apply.

 

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FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof or administrative practice thereunder, any agreements entered into pursuant to Section 1471(b)(1) of the Code (or any amended or successor version described above) and any intergovernmental agreement, treaty or convention among Governmental Authorities (and any related law, regulation or official administrative practice) implementing or relating to the foregoing.

Federal Funds Effective Rate” means, for any day, the weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds transactions with members of the Federal Reserve System, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average (rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for such day for such transactions received by the Administrative Agent from three (3) Federal funds brokers of recognized standing selected by it.

Fee Letter” means that certain Amended & Restated Fee Letter, dated as of April 29, 2024, by and among the Borrower Representative and the Administrative Agent, as the same may be amended, restated, amended and restated, supplemented or otherwise modified from time to time.

Financial Covenants” means the covenants set forth in Section 6.11.

Financial Officer” means the chief executive officer, chief financial officer, principal accounting officer, treasurer or controller or officer of equivalent duties of the applicable Loan Party.

Flood Laws” has the meaning assigned to such term in Section 8.11.

Foreign Borrower” means any Borrower other than a U.S. Borrower.

Foreign Lender” means any Lender that is not a “United States person” as defined in Section 7701(a)(30) of the Code.

Foreign Loan Party” means any Loan Party that is not organized under the laws of the United States, any state thereof or the District of Columbia.

Foreign Obligations” means all Obligations other than U.S. Obligations.

Foreign Plan” has the meaning assigned to such term in Section 3.19(d).

 

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Foreign Subsidiary” means any Subsidiary of the Loan Parties that is not a Domestic Subsidiary.

Foreign Subsidiary Holding Company” means any Subsidiary that owns no material assets (whether held directly or through one or more subsidiaries) other than (i) Equity Interests or Equity Interests and Indebtedness of one or more Foreign Subsidiaries that are CFCs and (ii) cash or cash equivalents.

Funded Indebtedness” means, with respect to any Person and without duplication, (a) all Indebtedness of such Person of the types referred to in clauses (a), (b), (c), (d) (other than the portion thereof consisting of contingent or unliquidated earn-outs), (g) and (j) of the definition of “Indebtedness”; (b) all Indebtedness of others of the type referred to in clause (a)of this definition secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) a Lien on, or payable out of the proceeds of production from, any property or asset of such Person, whether or not the obligations secured thereby have been assumed by such Person; and (c) all Guarantees of such Person with respect to Indebtedness of others of the type referred to in clause (a) of this definition. The Funded Indebtedness of any Person shall include the Funded Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Funded Indebtedness provide that such Person is not liable therefor.

GAAP” means generally accepted accounting principles in the United States of America subject to Section 1.04.

Governmental Authority” means the government of the United States of America, the United Kingdom or Guernsey, any other nation or any political subdivision of any of the foregoing, whether state, provincial, territorial or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including, without limitation, any supranational bodies, such as the European Union or the European Central Bank).

Guarantee” of or by any Person (the “guarantor”) means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof; (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof; (c) to maintain working capital, equity capital or any other financial statement condition or

 

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liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation; or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or obligation; provided, that the term Guarantee shall not include endorsements for collection or deposit in the ordinary course of business or customary and reasonable indemnity obligations in effect on the Effective Date or entered into after the Effective Date in connection with any acquisition or disposition of assets permitted under this Agreement (other than such obligations with respect to Indebtedness). The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined in good faith by a Financial Officer. The term “Guarantee” as a verb has a corresponding meaning.

Guaranteed Obligations” has the meaning assigned to such term in Section 10.01.

Guarantor Payment” has the meaning assigned to such term in Section 10.11.

Guernsey” means the Island of Guernsey

Guernsey Collateral Documents” means a Guernsey law governed security interest agreement over the shares in Maven Topco Limited granted by the holder of the shares in Maven Topco Limited.

Guernsey Guarantor” means initially each Loan Guarantor organized under the laws of Guernsey as of the Effective Date and set forth on Schedule 3.12 hereto, and, after the Effective Date, any other Loan Guarantor organized under the laws of Guernsey.

Guernsey Loan Party” means any Loan Party organized under the Laws of Guernsey.

Hazardous Materials” means: (a) any substance, material, or waste that is included within the definitions of “hazardous substances,” “hazardous materials,” “hazardous waste,” “toxic substances,” “toxic materials,” “toxic waste,” or words of similar import in any Environmental Law; (b) those substances listed as hazardous substances by the United States Department of Transportation (or any successor agency) (49 C.F.R. 172.101 and amendments thereto) or by the Environmental Protection Agency (or any successor agency) (40 C.F.R. Part 302 and amendments thereto); and (c) any substance, material, or waste that is petroleum, petroleum-related, or a petroleum by-product, asbestos or asbestos-containing material, polychlorinated biphenyls, flammable, explosive, radioactive, freon gas, radon, or a pesticide, herbicide or any other agricultural chemical.

HMRC” means HM Revenue & Customs of the UK.

 

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HMRC DTTP Scheme” means HMRC’s double taxation treaty passport scheme, as modified from time to time.

Holdings” has the meaning assigned to such term in the introductory paragraph hereof.

Immaterial Subsidiary” means, as of any date, any Subsidiary of Holdings having (x) total assets of less than 5.0% of the Consolidated Total Assets of Holdings and its Subsidiaries on a consolidated basis as of the last day of the most recent fiscal quarter for which financial statements have been delivered to the Administrative Agent pursuant to Section 5.01(a) or Section 5.01(b), or (y) total revenues of less than 5.0% of the consolidated total revenues of Holdings and its Subsidiaries on a consolidated basis as of the last day of the most recent fiscal quarter for which financial statements have been delivered to the Administrative Agent pursuant to Section 5.01(a) or Section 5.01(b); provided, that the (x) Consolidated Total Assets of all Immaterial Subsidiaries shall not exceed 10.0% of the Consolidated Total Assets of Holdings and its Subsidiaries on a consolidated basis at any time, and (y) consolidated total revenues of all Immaterial Subsidiaries shall not exceed 10.0% of the consolidated total revenues of Holdings and its Subsidiaries on a consolidated basis at any time.

Increasing Lender” has the meaning assigned to such term in Section 2.22(a)(i).

Indebtedness” of any Person means, without duplication, (a) all obligations of such Person for borrowed money or with respect to deposits or advances of any kind; (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments to the extent the same would appear as a liability on a balance sheet of such Person prepared in accordance with GAAP; (c) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person; (d) all obligations of such Person in respect of the deferred purchase price of property or services (excluding (i) trade accounts payable in the ordinary course of business, (ii) any earn-out obligation, purchase price adjustment or similar obligation until such obligation becomes a liability on the balance sheet of such Person in accordance with GAAP and if not paid when due and payable and (iii) liabilities associated with customer prepayments and deposits); (e) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed; (f) to the extent not otherwise included, all Guarantees by such Person of Indebtedness of others; (g) all Capital Lease Obligations of such Person; (h) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guaranty; (i) all obligations, contingent or otherwise, of such Person in respect of bankers’ acceptances; (j) any other Off-Balance Sheet Liability; and (k) any obligations with respect to any Swap Agreements to the extent required to be reflected as a liability on a balance sheet of such Person under GAAP; provided that the term “Indebtedness” shall not include (i) deferred or prepaid revenue, (ii) purchase price holdbacks in respect of a portion of the purchase price of an asset to satisfy warranty or other unperformed obligations of the seller, (iii) contingent indemnity and similar obligations incurred

 

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in the ordinary course of business and (iv) customary obligations under employment agreements and deferred compensation arrangements. The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor. The amount of Indebtedness of any Person for purposes of clause (e) above shall (unless such Indebtedness has been assumed by such Person) be deemed to be equal to the lesser of (A) the aggregate unpaid amount of such Indebtedness and (B) the fair market value of the property encumbered thereby as determined by such Person in good faith. For all purposes hereof, the Indebtedness of Holdings and the Subsidiaries shall exclude intercompany liabilities arising from their cash management, tax, and accounting operations and made in the ordinary course of business and consistent with past practice.

Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by, or on account of any obligation of, any Loan Party under any Loan Document and (b) to the extent not otherwise described in subsection (a), Other Taxes.

Indemnitee” has the meaning assigned to such term in Section 9.03(b).

Ineligible Institution” means a (a) natural person; (b) a Defaulting Lender; (c) holding company, investment vehicle or trust for, or owned and operated for the primary benefit of, a natural person or relative(s) thereof; provided, that such holding company, investment vehicle or trust shall not constitute an Ineligible Institution if it (x) has not been established for the primary purpose of acquiring any Loans or Commitments; (y) is managed by a professional advisor, who is not such natural person or a relative thereof, having significant experience in the business of making or purchasing commercial loans; and (z) has assets greater than $25,000,000 and a significant part of its activities consist of making or purchasing commercial loans and similar extensions of credit in the ordinary course of its business; or (d) a Loan Party or a Subsidiary or other Affiliate of a Loan Party.

Information” has the meaning assigned to such term in Section 9.12.

Intellectual Property” has the meaning assigned to such term in the Security Agreement.

Intercompany Loan Agreement” means that certain Intercompany Loan Agreement, dated as of the Effective Date, in substantially in the Form of Exhibit I.

Interest Election Request” means a request by a Borrower to convert or continue a Borrowing in accordance with Section 2.08.

 

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Interest Expense” means, with reference to any period, total interest expense (including that attributable to Capital Lease Obligations) of Holdings and its Subsidiaries for such period with respect to all outstanding Funded Indebtedness of Holdings and its Subsidiaries net of any interest income, which shall be determined on a cash basis only (including all commissions, discounts and other fees and charges owed with respect to letters of credit and bankers’ acceptance financing and net costs under Swap Agreements in respect of interest rates to the extent such net costs are allocable to such period in accordance with GAAP), calculated on a consolidated basis for Holdings and its Subsidiaries for such period in accordance with GAAP.

Interest Payment Date” means (a) with respect to any ABR Loan, the first Business Day of each January, April, July and October and the Maturity Date; (b) with respect to any RFR Loan, each date that is on the numerically corresponding day in each calendar month that is three months after the Borrowing of such Loan (or, if there is no numerically corresponding day in such month, then the last day of such month) and the Maturity Date; (c) with respect to any Term Benchmark Loan, the last day of the Interest Period applicable to the Borrowing of which such Loan is a part and, in the case of a Term Benchmark Borrowing with an Interest Period of more than three months’ duration, each day prior to the last day of such Interest Period that occurs at intervals of three months’ duration after the first day of such Interest Period and the Maturity Date; and (d) with respect to any Swingline Loan, the day that such Loan is required to be repaid or the Revolving Maturity Date, if earlier.

Interest Period” means with respect to any Term Benchmark Borrowing, the period commencing on the date of such Borrowing and ending on the numerically corresponding day in the calendar month that is one, three or six months thereafter (in each case, subject to the availability for the Benchmark applicable to the relevant Loan or Commitment for any Agreed Currency), as the relevant Borrower may elect; provided, that (i) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless, in the case of a Term Benchmark Borrowing only, such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day; (ii) any Interest Period pertaining to a Term Benchmark Borrowing that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period; and (iii) no Interest Period may extend beyond the Maturity Date. For purposes hereof, the date of a Borrowing initially shall be the date on which such Borrowing is made and thereafter shall be the effective date of the most recent conversion or continuation of such Borrowing.

Investment” means, as to any Person, any direct or indirect acquisition or investment by such Person, by means of (a) the purchase or other acquisition of Equity Interests or Indebtedness or other securities of another Person, (b) a loan, advance or capital contribution to, Guarantee or assumption of Indebtedness of, or purchase or other acquisition of any other Indebtedness or equity participation or interest in, another Person, including any partnership or joint venture interest in such other Person (excluding, in the case of the Loan Parties and their Subsidiaries, intercompany loans, advances or indebtedness arising from cash management, tax and accounting operations

 

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made in the ordinary course of business and consistent with past practices) or (c) the purchase or other acquisition (in one transaction or a series of transactions) of all or substantially all of the property and assets or business of another Person or assets constituting a business unit, line of business or division of such Person. The amount, as of any date of determination, of (i) any Investment in the form of a loan or an advance shall be the principal amount thereof outstanding on such date, minus any cash payments actually received by such investor representing interest in respect of such Investment (to the extent any such payment to be deducted does not exceed the remaining principal amount of such Investment), but without any adjustment for write-downs or write-offs (including as a result of forgiveness of any portion thereof) with respect to such loan or advance after the date thereof, (ii) any Investment in the form of a Guarantee shall be equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof, as determined in good faith by a Financial Officer, (iii) any Investment in the form of a transfer of Equity Interests or other non-cash property by the investor to the investee, including any such transfer in the form of a capital contribution, shall be the fair market value of such Equity Interests or other property as of the time of the transfer, minus any payments actually received by such investor representing a return of capital of, or dividends or other distributions in respect of, such Investment (to the extent such payments do not exceed, in the aggregate, the original amount of such Investment), but without any other adjustment for increases or decreases in value of, or write-ups, write-downs or write-offs with respect to, such Investment after the date of such Investment, and (iv) any Investment (other than any Investment referred to in clause (i), (ii) or (iii) above) by the specified Person in the form of a purchase or other acquisition for value of any Equity Interests, evidences of Indebtedness or other securities of any other Person shall be the original cost of such Investment (including any Indebtedness assumed in connection therewith), plus (A) the cost of all additions thereto and minus (B) the amount of any portion of such Investment that has been repaid to the investor in cash as a repayment of principal or a return of capital, and of any cash payments actually received by such investor representing interest, dividends or other distributions in respect of such Investment (to the extent the amounts referred to in clause (B) do not, in the aggregate, exceed the original cost of such Investment plus the costs of additions thereto), but without any other adjustment for increases or decreases in value of, or write-ups, write-downs or write-offs with respect to, such Investment after the date of such Investment. For purposes of Section 6.04, if an Investment involves the acquisition of more than one Person, the amount of such Investment shall be allocated among the acquired Persons in accordance with GAAP; provided that pending the final determination of the amounts to be so allocated in accordance with GAAP, such allocation shall be as reasonably determined by a Financial Officer.

IP Security Agreement” means any intellectual property security agreement entered into, on or after the date of this Agreement by any Loan Party (as required by this Agreement or any other Loan Document), as the same may be amended, restated, amended and restated, supplemented or otherwise modified from time to time.

 

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IRS” means the United States Internal Revenue Service.

Issuing Banks” means, individually and collectively as the context may require, each Lender, in its capacity as an issuer of Letters of Credit hereunder, and its successors in such capacity. Any Issuing Bank may, in its discretion, arrange for one or more Letters of Credit to be issued by Affiliates of such Issuing Bank, in which case the term “Issuing Bank” shall include any such Affiliate with respect to Letters of Credit issued by such Affiliate; provided that Deutsche Bank AG New York Branch shall be required to issue only standby Letters of Credit. At any time there is more than one Issuing Bank, all singular references to the Issuing Bank shall mean any Issuing Bank, either Issuing Bank, each Issuing Bank, the Issuing Bank that has issued the applicable Letter of Credit, or both (or all) Issuing Banks, as the context may require.

Joinder Agreement” means a joinder agreement substantially in the form of Exhibit C hereto.

Judgment Currency” has the meaning assigned to such term in Section 9.03(g).

LC Collateral Account” has the meaning assigned to such term in Section 2.06(j).

LC Commitment” has the meaning assigned to such term in the definition of “LC Sublimit.”

LC Disbursement” means a payment made by any Issuing Bank pursuant to a Letter of Credit.

LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of all outstanding Letters of Credit at such time plus (b) the aggregate amount of all LC Disbursements relating to Letters of Credit that have not yet been reimbursed by or on behalf of the applicable Borrower at such time. The LC Exposure of any Lender at any time shall be its Applicable Percentage of the total LC Exposure at such time.

LC Sublimit” means an aggregate amount equal to $50,000,000, subject to increase in accordance with Section 2.23 hereof, provided, that, as of the Effective Date, Citibank, N.A.’s allocation of the LC Sublimit is $27,777,777.78 and Deutsche Bank AG New York Branch’s allocation of the LC Sublimit is $22,222,222.22 (such allocated amount as to such Issuing Bank at such time, its “LC Commitment”), which such Issuing Bank’s LC Allocation may be decreased or increased (up to the LC Sublimit) without the need for an amendment to this Agreement with the written consent of the applicable Issuing Bank, the Borrower Representative and the Administrative Agent.

LCA Election” has the meaning specified in Section 1.11.

LCA Test Date” has the meaning specified in Section 1.11.

 

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Lead Arranger” means (i) Citibank, N.A., in its capacity as sole bookrunner and (ii) Citibank, N.A. and Deutsche Bank Securities Inc., in their capacities as joint lead arranger.

Legal Reservations” means (a) the principle under English law that equitable remedies are remedies which may be granted or refused at the discretion of the court and principles under English law of good faith and fair dealing; (b) the limitation on enforcement by English laws relating to bankruptcy, insolvency, reorganization, court schemes, administration and other laws generally affecting the rights of creditors; (c) the time barring of claims under applicable English limitation laws and the defenses under English law of set-off or counterclaim and the possibility that an undertaking to assume liability for, or to indemnify a Person against, non-payment of UK stamp duty may be void under English law; (d) the principle under English law that under certain circumstances a Lien expressed to take effect as fixed security may, as a result of the ability of the Loan Party granted such Lien to deal with the assets subject to that security on terms permitted under the Loan Documents, be re-characterized as a floating charge or that a Lien purported to be constituted as an assignment may be re-characterized as a charge; (e) the principle under English law that additional interest imposed pursuant to any relevant agreement may be held to be unenforceable on the grounds that it is a penalty and thus void; (f) the principle that an English court may not give effect to an indemnity for legal costs incurred by an unsuccessful litigant; (g) the principle under English law that the creation or purported creation of a Lien over any claim, other right, contract or agreement which is subject to a prohibition on transfer, assignment or charging may be void, ineffective or invalid and may give rise to a breach of the contract or agreement (or contract or agreement relating to or governing the claim or other right) over which a Lien has purportedly been created; (h) the principles of private and procedural laws of the Relevant Jurisdiction which affect the enforcement of a foreign court judgment; (i) similar principles, rights and defenses under the laws of any Relevant Jurisdiction; and (j) any other matters which are set out as qualifications or reservations as to matters of law of general application in any legal opinions delivered to the Administrative Agent as a condition precedent under this Agreement.

Lenders” means the Persons listed on the Commitment Schedule and any other Person that shall have become a party hereto pursuant to an Assignment and Assumption, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption. Unless the context otherwise requires, the term “Lenders” includes the Issuing Banks and the Swingline Lenders.

Letter of Credit” means each letter of credit issued pursuant to this Agreement, and the term “Letter of Credit” means any one of them or each of them singularly, as the context may require.

Licenses” has the meaning assigned to such term in the Security Agreement.

 

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Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge, hypothec or security interest in, on or of such asset and (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset.

Limited Condition Acquisition” means any Acquisition that any Borrower or any Subsidiary is contractually committed to consummate (it being understood that such commitment may be subject to conditions precedent, which conditions precedent may be amended, satisfied or waived in accordance with the terms of the applicable agreement) and whose consummation is not conditioned on the availability of, or on obtaining, third party financing; provided that, in the event the consummation of any such Acquisition shall not have occurred within one hundred twenty (120) days following the signing of the applicable contractual commitment, such Acquisition or shall no longer constitute a Limited Condition Acquisition for any purpose.

Liquidity” means, as of any date of determination, the sum of (x) all cash and Cash Equivalents (except, for the avoidance of doubt, any Restricted Cash) held by the Loan Parties in the United States or the United Kingdom that is in an account included in Collateral and that is subject to a Control Agreement on such date, plus (y) Available Commitments.

Loan Documents” means, collectively, this Agreement, the Notes, any Letter of Credit application, the Collateral Documents, the Loan Guaranty, the Fee Letter and all other agreements, instruments and documents executed and delivered by a Loan Party to, or in favor of, the Administrative Agent or any Lenders and including all other pledges, powers of attorney, consents, assignments, contracts, notices, letter of credit agreements and all other written matter whether heretofore, now or hereafter executed by or on behalf of any Loan Party and delivered to the Administrative Agent or any Lender in connection with this Agreement or the transactions contemplated hereby, together with any amendment, modification, supplement or joinder to the foregoing. Any reference in this Agreement or any other Loan Document to a Loan Document shall include all appendices, exhibits or schedules thereto, and all amendments, restatements, supplements or other modifications thereto and shall refer to the Agreement or such Loan Document as the same may be in effect at any and all times such reference becomes operative.

Loan Guarantor” means (a) Holdings, (b) (i) on the Effective Date, each Borrower and each other Subsidiary of Holdings (other than any Subsidiary that is an Excluded Subsidiary on the Effective Date) and (ii) thereafter, each wholly-owned Subsidiary of Holdings that becomes a guarantor of the Secured Obligations pursuant to the terms of this Agreement, in each case of the foregoing clauses (i) and (ii), until such time as the relevant Subsidiary is released from its obligations under the Loan Guaranty in accordance with the terms and provisions hereof (for so long as such Subsidiary remains a non-wholly-owned Subsidiary); provided that this clause (b)(ii) shall not be deemed to exclude (or release) any Subsidiary which is a Loan Guarantor in the case of a disposition of a portion of the Equity Interests in such Loan Guarantor as a result of (A) the

 

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disposition or issuance of Equity Interests of such Subsidiary in either case to an Affiliate that is not any Borrower or any Subsidiary; (B) any transaction entered into primarily in contemplation of such Subsidiary’s ceasing to constitute a Loan Party; or (C) the disposition or issuance of Equity Interests of such Subsidiary for materially less than the fair market value of such shares as reasonably determined by the Borrower Representative);, and (c) with respect to Secured Obligations owed by any other Loan Party or other Subsidiary, each Borrower; provided, that the Borrower Representative, with the consent of the Administrative Agent, may elect to make any Excluded Subsidiary (including any Foreign Subsidiary) a Loan Guarantor (a “Voluntary Guarantor”) in accordance with the terms of the Loan Documents and Section 5.09 hereof, and such election and conversion shall be subject to customary conditions and, in the case of any Foreign Subsidiary, including, but not limited to, (i) jurisdiction of incorporation of such potential Voluntary Guarantor being reasonably satisfactory to the Required Lenders, (ii) any reasonable and customary local law guaranty documentation (to the extent reasonably necessary to effect such guaranty) and security documentation with respect to Voluntary Guarantors organized under the laws of any non-U.S. jurisdiction shall be governed by reasonable and customary local law security documentation acceptable to the Administrative Agent and (iii) Voluntary Foreign Guarantor Amendments to this Agreement and the other Loan Documents as may be reasonably necessary or appropriate, in the reasonable opinion of the Administrative Agent, in connection with a Foreign Subsidiary becoming a Loan Guarantor.

Loan Guaranty” means Article X of this Agreement.

Loan Parties” means the Borrowers and each Loan Guarantor and any other Person who becomes a party to this Agreement pursuant to a Joinder Agreement and their successors and assigns, and the term “Loan Party” shall mean any one of them or all of them individually, as the context may require.

Loans” means the loans made by the Lenders to the Borrowers pursuant to this Agreement.

Local Time” means, with respect to any extensions of credit hereunder denominated in dollars, New York, New York time, with respect to any extensions of credit hereunder denominated in Sterling or Euro, London time and with respect to any extensions of credit denominated in any other Approved Currency, the local time in the place of settlement for such Approved Currency as may be determined by the Administrative Agent or the Issuing Bank, as the case may be, to be necessary for timely settlement on the relevant date in accordance with normal banking procedures in the place of payment.

Material Acquisition” means a Permitted Acquisition the aggregate consideration with respect to which exceeds $50,000,000.

 

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Material Adverse Effect” means, a circumstance or condition that would materially and adversely affect (a) the business, assets, properties, liabilities (actual or contingent), condition (financial or otherwise) or results of operations, in each case, of the Loan Parties and their Subsidiaries, taken as a whole; (b) the ability of the Loan Parties (taken as a whole) to perform their payment obligations under the applicable Loan Documents; (c) any material portion of the Collateral, or the Administrative Agent’s Liens (on behalf of itself and the Lenders) on any material portion of the Collateral or the priority of such Liens (in each case, subject to Permitted Liens); or (d) the rights and remedies (taken as a whole) of the Administrative Agent and the Lenders under the applicable Loan Documents.

Material Indebtedness” means Indebtedness (other than the Loans and Letters of Credit), or any obligations under Swap Agreements, of any one or more of the Loan Parties and their Subsidiaries in an aggregate principal amount exceeding the Threshold Amount. For purposes of determining Material Indebtedness, the aggregate principal amount of “obligations” of the any Loan Party or any Subsidiary in respect of any Swap Agreement at any time shall be the aggregate amount that such Loan Party or such Subsidiary would be required to pay if such Swap Agreement were terminated at such time and after giving effect to any rights available under applicable laws or agreements with regard to Collateral, netting, setoff or similar rights.

Material Property” means any owned real property owned by a Loan Party that has a fair market value of $5,000,000 or greater.

Maturity Date” means the earliest to occur of (a) April 29, 2029, (b) any earlier date on which the Commitments are reduced to zero or otherwise terminated pursuant to the terms hereof, and (c) the date that the Loans, if any, are declared due and payable pursuant to Article VII hereof.

Maximum Rate” has the meaning assigned to such term in Section 9.17.

MLI” means the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting of November 24, 2016.

Moody’s” means Moody’s Investors Service, Inc.

Mortgages” means any mortgage or deed of trust now or hereafter encumbering Loan Parties’ Material Property as described therein in favor of the Administrative Agent, in form and substance reasonably satisfactory to the Administrative Agent, as such security instrument may be amended, supplemented or otherwise modified from time to time; provided, however, in the event any such Material Property is located in a jurisdiction which imposes mortgage recording taxes or similar fees, the applicable Mortgage shall not secure an amount in excess of 100% of the fair market value of such Material Property.

 

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Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3) of ERISA.

Net Cash Proceeds” means, with respect to any event, (a) the cash proceeds received in respect of such event, minus (b) the sum of (i) all fees and out-of-pocket expenses (including attorney’s fees, investment banking fees, survey costs, title insurance premiums, and related search and recording charges, transfer taxes, deed or mortgage recording taxes, underwriting discounts and commissions, other customary expenses and brokerage, consultant, accountant and other customary fees) paid in connection with such event and (ii) the amount of all taxes paid (or reasonably estimated to be payable) and the amount of any reserves established to fund contingent liabilities reasonably estimated to be payable, in each case during the year that such event occurred or the next succeeding year and that are attributable to such event (as determined reasonably and in good faith by a Financial Officer).

Net Income” means, for any period, the consolidated net income (or loss) of Holdings and its Subsidiaries, determined on a consolidated basis in accordance with GAAP; provided, that there shall be excluded from such net income (to the extent otherwise included therein), without duplication: (a) the income (or deficit) of any Person accrued prior to the date it becomes a Subsidiary or is merged into or consolidated with any Loan Party or any of its Subsidiaries, (b) the income (or deficit) of any Person (other than a Subsidiary) in which any Loan Party or any of its Subsidiaries has an ownership interest, except to the extent that any such income is actually received by any Loan Party or such Subsidiary in the form of dividends or similar distributions and (c) the undistributed earnings of any Subsidiary to the extent that the declaration or payment of dividends or similar distributions by such Subsidiary is not at the time permitted by the terms of any contractual obligation (other than under any Loan Document) or Requirement of Law applicable to such Subsidiary.

Non-Consenting Lender” has the meaning assigned to such term in Section 9.02(d).

Non-U.S. Collateral” means any Collateral granted by, or over the share capital of, a Foreign Loan Party (in each case, subject to and accordance with Section 5.09(g)).

Non-U.S. Collateral Document” means (a) each security or pledge agreement executed by any Foreign Loan Party and (b) each other security or pledge agreement executed by any Foreign Loan Party pursuant to this Agreement in form and substance reasonably satisfactory to the Administrative Agent and the Borrower Representative.

Note” and “Notes” have the meanings assigned to such terms in Section 2.10(e).

Notice of Increase” has the meaning assigned to such term in Section 2.22(a)(i).

Obligated Party” has the meaning assigned to such term in Section 10.02.

 

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Obligations” means all unpaid principal of and accrued and unpaid interest on the Loans, all LC Exposure, all accrued and unpaid fees and all expenses, reimbursements, indemnities and other obligations and indebtedness (including interest and fees accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding), obligations and liabilities of any of any Loan Party and its Subsidiaries to any of the Lenders, the Administrative Agent, any Issuing Bank or any indemnified party, individually or collectively, existing on the Effective Date or arising thereafter, direct or indirect, joint or several, absolute or contingent, matured or unmatured, liquidated or unliquidated, secured or unsecured, arising by contract, operation of law or otherwise, arising or incurred under this Agreement or any of the other Loan Documents or in respect of any of the Loans made or reimbursement or other obligations incurred or any of the Letters of Credit or other instruments at any time evidencing any thereof. For the avoidance of doubt, the “Obligations” of any Loan Guarantor shall include the Guaranteed Obligations.

Off-Balance Sheet Liability” of a Person means (a) any repurchase obligation or liability of such Person with respect to accounts or notes receivable sold by such Person (other than any customary repurchase obligations resulting from a breach of representations and warranties, covenants, servicing obligations and indemnities under a securitization facility); (b) any indebtedness, liability or obligation under any so-called “synthetic lease” transaction entered into by such Person; or (c) any indebtedness, liability or obligation arising with respect to any other transaction which is the functional equivalent of or takes the place of borrowing but which does not constitute a liability on the balance sheets of such Person (other than operating leases) but does not constitute an off-balance sheet liability under GAAP.

Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Taxes (other than a connection solely arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to, or enforced, any Loan Document, or sold or assigned an interest in any Loan, Letter of Credit or any Loan Document) including any Bank Levy.

Other Taxes” means all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except in each case any such Taxes that are Other Connection Taxes that would not have arisen but for (a) an assignment, novation, participation, trust or sub-contract or a designation of a new applicable lending office or other office for receiving payments under any Loan Document (other than where made pursuant to a written request by the Borrower under Section 2.19(b)) or (b) a delivery, registration or perfection by a Lender if such delivery, registration or perfection is not necessary to evidence, prove, maintain, enforce, compel or otherwise assert the rights of such party or obligations of such party under a Loan Document.

 

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Paid in Full or Payment in Full” means (i) the indefeasible payment in full in cash of all outstanding Loans and LC Disbursements, together with accrued and unpaid interest thereon; (ii) the termination, expiration, or cancellation and return of all outstanding Letters of Credit (or alternatively, with respect to each such Letter of Credit, the furnishing to the Administrative Agent of a cash deposit, or at the discretion of the Administrative Agent a back-up standby letter of credit satisfactory to the Administrative Agent and the Issuing Bank, in an amount equal to 103 % of the LC Exposure as of the date of such payment); (iii) the indefeasible payment in full in cash of the accrued and unpaid fees; (iv) the indefeasible payment in full in cash of all reimbursable expenses and other Secured Obligations, together with accrued and unpaid interest thereon; (v) the termination of all Commitments; and (vi) the termination of the Swap Agreement Obligations and the Banking Services Obligations or entering into other arrangements satisfactory to the Secured Parties counterparties thereto.

Parent” means, with respect to any Lender, any Person as to which such Lender is, directly or indirectly, a subsidiary.

Participant” has the meaning assigned to such term in Section 9.04(c).

Participant Register” has the meaning assigned to such term in Section 9.04(c).

Participating Member State” means any member state of the European Union that has the Euro as its lawful currency in accordance with legislation of the European Union relating to Economic and Monetary Union.

Patents” has the meaning assigned to such term in the Security Agreement.

Payment Recipient” has the meaning assigned to such term in Section 8.10(a).

PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar functions.

Perfection Requirements” means the making or the procuring of filings, stampings, registrations, notarizations, endorsements, translations, intimations and/or notifications of any Collateral Document (and any Lien created under it) necessary for the validity, enforceability (as against the relevant Loan Party or any relevant third party) and/or perfection of that Collateral Document or to achieve the relevant priority expressed therein.

Periodic Term SOFR Determination Day” has the meaning assigned to such term in the definition of “Term SOFR.”

 

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Permitted Acquisition” means any Acquisition (whether by purchase, merger, amalgamation, consolidation or otherwise) completed after the Effective Date in which each of the following conditions is satisfied:

(a) the Person or business or assets which is the subject of such Acquisition is in a line of business that the Loan Parties and their Subsidiaries are permitted to be engaged in under Section 5.03(b);

(b) if acquiring a Person, unless such Person is contemporaneously merged with and into a Loan Party or a Subsidiary of a Loan Party, such Person becomes a wholly-owned direct or indirect Subsidiary of a Loan Party and, simultaneously with such Acquisition (or at such later date as the Administrative Agent may agree in its sole discretion), the Loan Parties shall have complied with or will comply with the requirements of Section 5.09 to the extent applicable; provided that, with respect to Acquisitions of assets that do not constitute Collateral or investments in entities that do not become Loan Parties, the aggregate amount of all such Investments shall not exceed $10,000,000 in the aggregate for all such Acquisitions;

(c) except in the case of a Limited Condition Acquisition (in which case, compliance with this clause (c) shall be determined in accordance with Section 1.11, (i) no Default or Event of Default shall have occurred and be continuing or would result therefrom, and (ii) all representations and warranties contained in this Agreement shall be true and correct in all material respects on the date of the consummation of such Acquisition, except (A) to the extent that any such representation or warranty specifically refers to an earlier date, in which case they shall be true and correct in all material respects as of such earlier date and (B) any representation and warranty that is qualified as to “materiality” or “Material Adverse Effect” shall be true and correct in all respects;

(d) the Borrower Representative shall have furnished to the Administrative Agent (for distribution to the Lenders) at least five (5) Business Days prior to the consummation of such Acquisition (or such shorter period of time as the Administrative Agent agrees) (i) to the extent available, audited financial statements (or, if unavailable, management prepared financial statements) of the target for its two (2) most recent fiscal years and for any fiscal quarters ended within the fiscal year to date and (y) pro forma financial statements of Holdings and its Subsidiaries giving effect to the consummation of such Acquisition; provided that no such financial statements shall be required for any Acquisition which is being consummated for less than $10,000,000 in aggregate consideration;

(e) the Acquisition shall have been approved by the board of directors or other governing body or controlling Person of the Person from whom such Equity Interests or assets are proposed to be acquired (and such approval shall not have been rescinded);

 

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(f) after giving effect to such Acquisition (including the incurrence, assumption or acquisition of any Indebtedness in connection therewith), the Consolidated Total Net Leverage Ratio, calculated on a pro forma basis as if such Acquisition (including the incurrence, assumption or acquisition of any Indebtedness in connection therewith) had been consummated at the beginning of such period, shall not exceed 0.50x less than the Consolidated Total Net Leverage Ratio covenant level then in effect pursuant to Section 6.11(a); and

(g) as of the date of the Acquisition, a Financial Officer shall provide a certificate to the Administrative Agent and the Lenders certifying as to the matters set forth in the foregoing clauses.

Permitted Call Hedging Agreement” means any agreement pursuant to which a Loan Party acquires a call or a capped call option (or substantively equivalent derivative transaction requiring the counterparty thereto to deliver to the applicable Loan Party shares of common stock of such Loan Party (or other securities or property following a merger event, reclassification or other change of such common stock), the cash value of such shares (or such other securities property) or a combination thereof, or cash representing the termination value of such option from time to time upon settlement, exercise or early termination of such option, entered into by a Loan Party in connection with the issuance of Convertible Debt Securities (including, without limitation the exercise of any over-allotment or initial purchaser’s or underwriter’s option).

Permitted Encumbrances” means:

(a) Liens for taxes, assessments or other governmental charges that are not delinquent for a period of more than thirty (30) days or that are being contested in good faith and by appropriate proceedings diligently conducted, if adequate reserves with respect thereto are maintained on the books of the applicable Person in accordance with GAAP, or the nonpayment of which could not reasonably be expected to result in a Material Adverse Effect;

(b) Liens imposed by statutory or common law, such as landlords’ carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or construction contractors’ Liens and other similar Liens imposed by law, arising in the ordinary course of business that secure amounts not overdue for a period of more than thirty (30) days or are being contested in good faith and by appropriate proceedings diligently conducted, if adequate reserves with respect thereto are maintained on the books of the applicable Person in accordance with GAAP;

(c) (i) Liens incurred, pledges or deposits made in the ordinary course of business in connection with workers’ compensation, payroll taxes, unemployment insurance and other social security legislation, (ii) pledges or deposits made in the ordinary course of business securing liability for reimbursement or indemnification obligations of (including obligations in respect of letters of credit or bank guarantees or similar instruments for the benefit of) insurance carriers providing property, casualty or liability insurance to Holdings or any Subsidiary or (iii) deposit arrangements in the ordinary course of business under which software or source code is placed in escrow with customers or a third party agent for the benefit of customers on a non-exclusive basis;

 

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(d) Liens incurred or deposits made to secure the performance of tenders, bids, trade contracts (other than for the payment of Indebtedness), governmental contracts and leases (other than Capital Lease Obligations), statutory obligations, surety, stay, customs and appeal bonds, performance bonds, bankers’ acceptance facilities and other obligations of a like nature (including those to secure health, safety and environmental obligations) and obligations in respect of letters of credit, bank guarantees or similar instruments that have been posted to support the same, in each case incurred in the ordinary course of business or consistent with past practices;

(e) easements, rights-of-way, restrictions, covenants, conditions, encroachments, protrusions, zoning restrictions and other similar non-monetary encumbrances, matters that are or would be reflected on a survey of any real property, irregularities of title, title defects affecting real property that, in the aggregate, do not materially interfere with the ordinary conduct of the business of Holdings and the Subsidiaries, taken as a whole;

(f) Liens securing, or otherwise arising from, judgments, awards attachments and/or decrees and notices of lis pendens and associated rights relating to litigation being contested in good faith not constituting an Event of Default under Section 7.01(k);

(g) Liens on goods the purchase price of which is financed by a documentary letter of credit issued for the account of Holdings or any of the Subsidiaries or Liens on bills of lading, drafts or other documents of title arising by operation of law or pursuant to the standard terms of agreements relating to letters of credit, bank guarantees and other similar instruments; provided that such Lien secures only the obligations of Holdings or such Subsidiaries in respect of such letter of credit, bank guarantee or other similar instrument to the extent such obligations are permitted by Section 6.01;

(h) Liens arising from precautionary UCC financing statements or any similar filings made in respect of operating leases or consignment or bailee arrangements entered into by Holdings or any of the Subsidiaries; and

(i) Liens given to a public utility or any municipality or Governmental Authority when required by such utility or other authority in connection with the ordinary conduct of the business of Holdings or any Subsidiary.

Permitted Liens” means all Liens permitted under Section 6.02.

Permitted Warrant Transaction” means any call option, warrant or right to purchase (or similar transaction), on or linked to a Loan Party’s shares of common stock, regardless of the issuer or seller thereof, issued substantially concurrently with any purchase of a related Permitted Call Hedging Agreement.

 

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Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

Plan” means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which any Loan Party or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

Prime Rate” means the rate of interest per annum publicly announced from time to time by Citibank, N.A. as its prime rate in effect at its principal offices in New York City. Each change in the Prime Rate shall be effective from and including the date such change is publicly announced as being effective.

Prohibited Transaction” means the occurrence of a “prohibited transaction” within the meaning of Section 4975(c) of the Code or Section 406 of ERISA for which there was no exemption under Section 4975(d).

PTE” means a prohibited transaction class exemption issued by the U.S. Department of Labor, as any such exemption may be amended from time to time.

QFC” has the meaning assigned to the term “qualified financial contract” in, and shall be interpreted in accordance with, 12 U.S.C. 5390(c)(8)(D).

QFC Credit Support” has the meaning assigned to such term in Section 9.20.

Qualified ECP Guarantor” means, in respect of any Swap Obligation, each Loan Party that has total assets exceeding $10,000,000 at the time the relevant Loan Guaranty or grant of the relevant security interest becomes or would become effective with respect to such Swap Obligation or such other person as constitutes an “eligible contract participant” under the Commodity Exchange Act or any regulations promulgated thereunder and can cause another person to qualify as an “eligible contract participant” at such time by entering into a keepwell under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

Qualified Equity Interests” means any Equity Interests that are not Disqualified Equity Interests.

Receiving Party” has the meaning assigned to such term in Section 2.17(h)(ii).

 

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Recipient” means, as applicable, (a) the Administrative Agent, (b) any Lender and (c) any Issuing Bank, or any combination thereof (as the context requires).

Reference Period” has the meaning assigned to such term in the definition of “EBITDA.”

Register” has the meaning assigned to such term in Section 9.04(b)(iv).

Regulation” has the meaning assigned to such term in Section 3.20(a)(ii).

Regulatory Authority” has the meaning assigned to such term in Section 9.12.

Related Indemnitee Parties” shall mean with respect to any specified Indemnitee, such Indemnitee’s controlled Affiliates and the respective officers, directors, employees, advisors, agents or other representatives of such Indemnitee or such Indemnitee’s controlled Affiliates acting at the direction of such Indemnitee.

Related Parties” means, with respect to any specified Person, such Person’s Affiliates and the respective directors, officers, partners, members, trustees, employees, agents administrators, managers, representatives and advisors of such Person and such Person’s Affiliates.

Release” means any releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, migrating, disposing or dumping of any substance into the environment.

Relevant Governmental Body” means (a) with respect to a Benchmark Replacement in respect of Loans denominated in Dollars, the Board of Governors of the Federal Reserve System or the Federal Reserve Bank of New York, as applicable, or a committee officially endorsed or convened by the Board of Governors of the Federal Reserve System or the Federal Reserve Bank of New York or, in each case, any successor thereto; (b) with respect to a Benchmark Replacement in respect of Loans denominated in Sterling, the Bank of England, or a committee officially endorsed or convened by the Bank of England or, in each case, any successor thereto; (c) with respect to a Benchmark Replacement in respect of Loans denominated in Euros, the European Central Bank, or a committee officially endorsed or convened by the European Central Bank or, in each case, any successor thereto; and (d) with respect to a Benchmark Replacement in respect of Loans denominated in any other currency, (i) the central bank for the currency in which such Benchmark Replacement is denominated or any central bank or other supervisor which is responsible for supervising either (A) such Benchmark Replacement or (B) the administrator of such Benchmark Replacement or (ii) any working group or committee officially endorsed or convened by (A) the central bank for the currency in which such Benchmark Replacement is denominated, (B) any central bank or other supervisor that is responsible for supervising either (1) such Benchmark Replacement or (2) the administrator of such Benchmark Replacement, (C) a group of those central banks or other supervisors or (D) the Financial Stability Board or any part thereof.

 

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Relevant Jurisdiction” means, in relation to a Loan Party (i) the jurisdiction under whose laws that Loan Party is incorporated as at the date of this Agreement; (ii) any jurisdiction where any asset subject to or intended to be subject to a Lien to be created by it is situated (iii) and any jurisdiction where it conducts its business.

Relevant Party” has the meaning assigned to such term in Section 2.17(h)(ii).

Relevant Rate” means (a) with respect to any Term Benchmark Borrowing denominated in Dollars, the Term SOFR Rate; (b) with respect to any Term Benchmark Borrowing denominated in Euros, the EURIBOR Rate; and (c) with respect to Loans denominated in Sterling, Daily Simple RFR, as applicable.

Relevant Screen Rate” means (a) with respect to any Term Benchmark Borrowing denominated in Dollars, the Term SOFR Reference Rate; or (b) with respect to any Term Benchmark Borrowing denominated in Euros, the EURIBOR Screen Rate.

Requested Increase Amount” has the meaning assigned to such term in Section 2.22(a)(i).

Requested Increase Date” has the meaning assigned to such term in Section 2.22(a)(i).

Required Lenders” means, at any time, Lenders (other than Defaulting Lenders) having Credit Exposure and unused Commitments representing more than 50% of the sum of the total Credit Exposure and unused Commitments at such time; provided that, if at any time there are two (2) or more Lenders having or holding Credit Exposure, the “Required Lenders” shall require not less than two (2) Lenders (with Affiliates of a Lender being considered one Lender for this purpose).

Requirement of Law” means, with respect to any Person, (a) the charter, articles or certificate of organization or incorporation and bylaws or operating, management or partnership agreement, or other organizational or governing documents of such Person; and (b) any statute, law (including common law), treaty, rule, regulation, code, ordinance, order, decree, writ, judgment, injunction or determination of any arbitrator or court or other Governmental Authority (including Environmental Laws), in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

Resolution Authority” means an EEA Resolution Authority or, with respect to any UK Financial Institution, a UK Resolution Authority.

 

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Responsible Officer” means the chief executive officer, president, vice president, chief financial officer, secretary, company secretary, treasurer or assistant treasurer, or other similar officer, manager or a director of a Loan Party (and in respect of a UK Guarantor or a UK Borrower, will be a director of that Loan Party) and with respect to certain limited liability companies or partnerships that do not have officers, any manager, sole member, managing member or general partner thereof. Any document delivered hereunder that is signed by a Responsible Officer of a Loan Party shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such Loan Party and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Loan Party.

Restricted Cash” means, at any time, the cash and Cash Equivalents of the Loan Parties or their Subsidiaries to the extent (a) classified (or required to be classified) as restricted cash or restricted cash equivalents on the balance sheet of the Loan Parties or their Subsidiaries in accordance with GAAP or (b) such cash or Cash Equivalents are subject to any Lien (including without limitation, Permitted Liens) and not subject to a Lien in favor of the Administrative Agent for the benefit of the Secured Parties pursuant to a Collateral Document.

Restricted Payment” means any dividend or other distribution (whether in cash, securities or other property) with respect to any Equity Interests in any Loan Party or any Subsidiary of a Loan Party, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such Equity Interests in such Loan Party or such Subsidiary or any option, warrant or other right to acquire any such Equity Interests in such Loan Party or such Subsidiary.

Revaluation Date” means (a) with respect to any Loan denominated in any Approved Currency, each of the following: (i) the date of the Borrowing of such Loan and (ii) (A) with respect to any Term Benchmark Loan, each date of a conversion into or continuation of such Loan pursuant to the terms of this Agreement and (B) with respect to an RFR Loan, each date that is on the numerically corresponding day in each calendar month that is three (3) months after the borrowing of such Loan (or, if there is no such numerically corresponding day in such month, then the last day of such month; (b) with respect to any Letter of Credit denominated in an Approved Currency, each of the following: (i) the date on which such Letter of Credit is issued, (ii) the first Business Day of each calendar month and (iii) the date of any amendment of such Letter of Credit that has the effect of increasing the face amount thereof; and (c) any additional date as the Administrative Agent may determine at any time when an Event of Default exists.

RFR” means, for any RFR Loan denominated in Sterling, SONIA.

RFR Borrowing” means, as to any Borrowing, the RFR Loans comprising such Borrowing.

RFR Business Day” means, for any Loan denominated in Sterling, any day except for (a) a Saturday, (b) a Sunday or (c) a day on which banks are closed for general business in London.

 

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RFR Interest Day” has the meaning assigned to such term in the definition of “Daily Simple RFR.”

RFR Loan” means a Loan that bears interest at a rate based on Daily Simple RFR.

S&P” means Standard & Poor’s Ratings Services, a Standard & Poor’s Financial Services LLC business.

Sanctioned Country” means, at any time, a country or territory which is the subject or target of any comprehensive Sanctions (which, as of the date of this Agreement, includes Cuba, Iran, North Korea, Syria, the so-called Luhansk People’s Republic, the so-called Donetsk People’s Republic and the Crimea and non-government controlled portions of the Zaporizhzhia and Kherson regions of Ukraine).

Sanctioned Person” means, at any time, (a) any Person listed in any Sanctions-related list of designated Persons maintained by the Office of Foreign Assets Control of the U.S. Department of the Treasury, the U.S. Department of State, the United Nations Security Council, the European Union, any EU member state, the United Kingdom, His Majesty’s Treasury of the United Kingdom or France; (b) any Person located operating, organized or resident in a Sanctioned Country; or (c) any Person directly or indirectly majority-owned or controlled by any such Person or Persons described in the foregoing clause (a) or (b).

Sanctions” means economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by (a) the U.S. government, including those administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State; (b) the United Kingdom, including those administered by His Majesty’s Treasury of the United Kingdom; (c) the Bailiwick of Guernsey, the Policy and Resources Committee of the States of Guernsey, His Majesty’s Procureur in Guernsey; or (d) the United Nations Security Council, the European Union or the government of France.

Secured Banking Services Obligations” has the meaning assigned to such term in the definition of “Secured Obligations.”

Secured Obligations” means all Obligations, together with all (i) Banking Services Obligations; provided, that no Banking Services Obligations (other than Banking Services Obligations owing to the Administrative Agent) shall constitute “Secured Obligations” unless the applicable Borrower and the applicable Secured Party shall each have provided written notice to the Administrative Agent (such Banking Services Obligations, “Secured Banking Services Obligations”); (ii) Swap Agreement Obligations owing to any Person that, at the time of entering into such arrangement with a Loan Party or any Subsidiary, was the Administrative Agent, a Lender or an Affiliate thereof, in each case, with respect to such Swap Agreement Obligations, to the extent designated by the Borrower Representative in a written statement to the Administrative

 

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Agent as constituting Secured Obligations (such Swap Agreement Obligations, “Secured Swap Agreement Obligations”); and (iii) Erroneous Payment Subrogation Rights; provided, however, that the definition of “Secured Obligations” shall not create any Guarantee by any Guarantor of (or grant of security interest by any Guarantor to support, as applicable) any Excluded Swap Obligations of such Guarantor for purposes of determining any obligations of any Guarantor.

Secured Parties” means the Administrative Agent, each Lender, each Issuing Bank, the Swingline Lender and each other provider of Secured Obligations as permitted pursuant to the definition thereof.

Secured Swap Agreement Obligations” has the meaning assigned to such term in the definition of “Secured Obligations.”

Securities Act” means the Securities Act of 1933 of the United States, as amended, and the rules and regulations of the Commission promulgated thereunder.

Security Agreement” means that certain Pledge and Security Agreement, dated as of the Effective Date, among the Loan Parties and each Subsidiary party thereto from time to time and the Administrative Agent, for the benefit of the Administrative Agent, the Lenders and the other Secured Parties, and any other pledge or security agreement entered into, after the date of this Agreement by any Loan Party (as required by this Agreement or any other Loan Document), as the same may be amended, restated, amended and restated, supplemented or otherwise modified from time to time.

Service of Process Agent” has the meaning assigned to such term in Section 9.09(d).

SOFR” means a rate equal to the secured overnight financing rate as administered by the SOFR Administrator.

SOFR Adjustment” means, for any calculation with respect to Term SOFR Loans, a percentage per annum equal to 0.10%.

SOFR Administrator” means the Federal Reserve Bank of New York (or a successor administrator of the secured overnight financing rate).

Solvent” and “Solvency” means with respect to any Person on any date of determination, that on such date (a) each of the Fair Value and the Present Fair Saleable Value of the assets of such Person and its Subsidiaries, on a consolidated basis, exceed their Stated Liabilities and Identified Contingent Liabilities; (b) such Person and its Subsidiaries, on a consolidated basis, do not have Unreasonably Small Capital; (c) in the case of a Person organized under the laws of the United Kingdom or any nation or political subdivision thereof, such person is able to pay its debts within the meaning of section 173(2) of the United Kingdom Insolvency Act 1986; and (d) such

 

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Person and its Subsidiaries, on a consolidated basis, can pay their Stated Liabilities and Identified Contingent Liabilities as those liabilities mature or (in the case of contingent liabilities) otherwise become payable. For purposes of the foregoing, (i) “Fair Value” shall mean the amount at which the assets (both tangible and intangible), in their entirety, of a Person and its Subsidiaries, on a consolidated basis, would change hands between a willing buyer and a willing seller, within a commercially reasonable period of time, each having reasonable knowledge of the relevant facts, with neither being under any compulsion to act; (ii) “Present Fair Salable Value” means the amount that could be obtained by an independent willing seller from an independent willing buyer if the assets (both tangible and intangible) of a Person and its Subsidiaries, on a consolidated basis, are sold on a going concern basis with reasonable promptness in an arm’s-length transaction under present conditions for the sale of comparable business enterprises insofar as such conditions can be reasonably evaluated; (iii) “Stated Liabilities” means the recorded liabilities (including contingent liabilities that would be recorded in accordance with GAAP) of a Person and its Subsidiaries, on a consolidated basis, determined in accordance with GAAP consistently applied; (iv) “Identified Contingent Liabilities” means the maximum estimated amount of liabilities reasonably likely to result from pending litigation, asserted claims and assessments, guaranties, uninsured risks and other contingent liabilities of a Person and its Subsidiaries, on a consolidated basis; (v) “Can pay their Stated Liabilities and Identified Contingent Liabilities as they mature” means a Person and its Subsidiaries, on a consolidated basis, will have sufficient assets and cash flow to pay their respective Stated Liabilities and Identified Contingent Liabilities as those liabilities mature or (in the case of contingent liabilities) otherwise become payable; and (vi) “Do not have Unreasonably Small Capital” means a Person and its Subsidiaries, on a consolidated basis, will have sufficient capital to ensure that it is a going concern; provided that, for purposes of determining Solvency of the Borrowers and their Subsidiaries, on a consolidated basis, on the Effective Date, (A) clauses (ii), (iii) and (v) above shall be calculated after giving effect to the consummation of the Transactions (including the execution and delivery of this Agreement, the making of the Loans and the use of proceeds of such Loans on the Effective Date) and (B) clause (iv) above shall be calculated after giving effect to the consummation of the Transactions (including the execution and delivery of this Agreement, the making of the Loans and the use of proceeds of such Loans on the Effective Date (including all fees and expenses related thereto but exclusive of such contingent liabilities to the extent reflected in Stated Liabilities pursuant to the proviso in clause (iii) above)) as identified and explained in terms of their nature and estimated magnitude by a Responsible Officer of the Borrower Representative.

SONIA” means, with respect to any Business Day, a rate per annum equal to the Sterling Overnight Index Average for such Business Day published by the SONIA Administrator on the SONIA Administrator’s Website on the immediately succeeding Business Day.

SONIA Administrator” means the Bank of England (or a successor administrator of the Sterling Overnight Index Average).

 

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SONIA Administrator’s Website” means the Bank of England’s website, currently at http://www.bankofengland.co.uk, or any successor source for the Sterling Overnight Index Average identified as such by the SONIA Administrator from time to time.

Specified Quarter” means a fiscal quarter of the Borrowers during which a Material Acquisition has been consummated by a Loan Party.

Statutory Reserve Rate” means a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the aggregate of the maximum reserve percentages (including any marginal, special, emergency or supplemental reserves) expressed as a decimal established by the Federal Reserve Board to which the Administrative Agent is subject, with respect to the Adjusted EURIBOR Rate for eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in Regulation D) or any other reserve ratio or analogous requirement of any central banking or financial regulatory authority imposed in respect of the maintenance of the Commitments or the funding of the Loans. Such reserve percentages shall include those imposed pursuant to such Regulation D. Term Benchmark Loans shall be deemed to constitute eurocurrency funding and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under such Regulation D or any comparable regulation. The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any change in any reserve percentage.

Sterling,” “£” refers to lawful money of the United Kingdom.

Subordinated Indebtedness” means any Indebtedness contractually subordinated in right of payment to the Obligations.

Subsequent Transaction” has the meaning assigned to such term in Section 1.11.

subsidiary” means, with respect to any Person (a) any corporation more than 50.0% of whose stock of any class or classes having by the terms thereof ordinary voting power to elect a majority of the directors of such corporation (irrespective of whether or not at the time stock of any class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency) is at the time owned by such Person directly or indirectly through Subsidiaries and (b) any limited liability company, partnership, association, joint venture or other entity in which such Person directly or indirectly through Subsidiaries has more than a 50.0% of the Equity Interests of such Person at the time or in which such Person, one or more other Subsidiaries of such Person or such Person and one or more Subsidiaries of such Person, directly or indirectly, has the power to direct the policies, management and affairs thereof.

Subsidiary” means any direct or indirect subsidiary of a Loan Party.

 

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Supplier” has the meaning assigned to such term in Section 2.17(h)(ii).

Supported QFC” has the meaning assigned to such term in Section 9.20.

Swap Agreement” means any agreement with respect to any swap, forward, spot, future, credit default or derivative transaction or option or similar agreement 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 any combination of these transactions; provided, that no phantom stock or similar plan providing for payments only on account of services provided by current or former directors, officers, employees or consultants of the Borrower Representative or the Subsidiaries shall be a Swap Agreement.

Swap Agreement Obligations” means any and all obligations of the Loan Parties or any Subsidiary, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor), under (a) any and all Swap Agreements permitted hereunder with a Person that, at the time of entering into such Swap Agreement, is the Administrative Agent, a Lender or an Affiliate of a Lender; and (b) any and all cancellations, buy backs, reversals, terminations or assignments of any such Swap Agreement transaction.

Swap Obligation” means, with respect to any Guarantor, any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of section 1a(47) of the Commodity Exchange Act or any rules or regulations promulgated thereunder.

Swingline Commitment” means $10,000,000 or such lesser amount as agreed upon by the Borrower Representative and the Swingline Lender.

Swingline Exposure” means, at any time, the aggregate principal amount of all Swingline Loans outstanding at such time. The Swingline Exposure of the Swingline Lender at any time shall be the sum of (a) its Applicable Percentage of the total Swingline Exposure at such time other than with respect to any Swingline Loans made by the Swingline Lender in its capacity as the Swingline Lender and (b) the principal amount of all Swingline Loans made by the Swingline Lender in its capacity as the Swingline Lender outstanding at such time (less the amount of participations funded by the other Lenders in such Swingline Loans).

Swingline Lender” Citibank, N.A. in its capacity as a lender of Swingline Loans and its successors and assigns in such capacity.

Swingline Loan” means a Loan made pursuant to Section 2.04.

 

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Swingline Request” has the meaning set forth in Section 2.04(b).

TARGET Day” means any day on which the real-time gross settlement system (T2), or any successor system (or, if such payment system ceases to be operative, such other payment system, if any, determined by the Administrative Agent in its sole discretion to be a suitable replacement) is open for the settlement of payments in Euro.

Taxes” means any and all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

Term Benchmark” when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Adjusted Term SOFR Rate or the Adjusted EURIBOR Rate.

Term SOFR” means,

(a) for any calculation with respect to a Term SOFR Loan denominated in Dollars, the Term SOFR Reference Rate for a tenor comparable to the applicable Interest Period on the day (such day, the “Periodic Term SOFR Determination Day”) that is two (2) U.S. Government Securities Business Days prior to the first day of such Interest Period, as such rate is published by the Term SOFR Administrator; provided, however, that if as of 5:00 p.m. (New York City time) on any Periodic Term SOFR Determination Day the Term SOFR Reference Rate for the applicable tenor has not been published by the Term SOFR Administrator and a Benchmark Replacement Date with respect to the Term SOFR Reference Rate has not occurred, then Term SOFR will be the Term SOFR Reference Rate for such tenor as published by the Term SOFR Administrator on the first preceding U.S. Government Securities Business Day for which such Term SOFR Reference Rate for such tenor was published by the Term SOFR Administrator so long as such first preceding U.S. Government Securities Business Day is not more than three (3) U.S. Government Securities Business Days prior to such Periodic Term SOFR Determination Day, and

(b) for any calculation with respect to an ABR Loan on any day, the Term SOFR Reference Rate for a tenor of one (1) month on the day (such day, the “ABR Term SOFR Determination Day”) that is two (2) U.S. Government Securities Business Days prior to such day, as such rate is published by the Term SOFR Administrator; provided, however, that if as of 5:00 p.m. (New York City time) on any ABR Term SOFR Determination Day the Term SOFR Reference Rate for the applicable tenor has not been published by the Term SOFR Administrator and a Benchmark Replacement Date with respect to the Term SOFR Reference Rate has not occurred, then Term SOFR will be the Term SOFR Reference Rate for such tenor as published by the Term SOFR Administrator on the first preceding U.S. Government Securities Business Day for which such Term SOFR Reference Rate for such tenor was published by the Term SOFR Administrator so long as such first preceding U.S. Government Securities Business Day is not more than three (3) U.S. Government Securities Business Days prior to such ABR SOFR Determination Day.

 

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Term SOFR Administrator” means CME Group Benchmark Administration Limited (CBA) (or a successor administrator of the Term SOFR Reference Rate selected by the Administrative Agent in its reasonable discretion).

Term SOFR Borrowing” means, as to any Borrowing, the Term SOFR Loans compromising such Borrowing.

Term SOFR Loan” means a Loan that bears interest at a rate based on the Adjusted Term SOFR other than pursuant to clause (c) of the definition of “Alternate Base Rate.”

Term SOFR Reference Rate” means the forward-looking term rate based on SOFR.

Threshold Amount” means $8,000,000.