Eventbrite(US:EB)2025-08-07 20:08Credit Agreement Overview This agreement outlines the parties, facility details, and purpose of the $60,000,000 Initial Term A Loan Parties and Facility Details the parties involved, the $60,000,000 Initial Term A Loan facility, and its intended use for transactions and balance sheet funding Credit Facility Details | Item | Detail | | :--- | :--- | | Borrower | Eventbrite, Inc. | | Administrative Agent | Silicon Valley Bank, a division of First-Citizens Bank & Trust Company | | Joint Lead Arrangers | Morgan Stanley Senior Funding, Inc., Silicon Valley Bank, Axos Bank | | Facility Type | Initial Term A Loans | | Aggregate Principal Amount | $60,000,000 | | Use of Proceeds | To consummate the Transactions, pay related costs and expenses, and fund cash to the Borrower's balance sheet | ARTICLE 1: Definitions and Accounting Terms This article defines key terms and establishes accounting principles for interpreting the credit agreement Defined Terms Provides comprehensive definitions for all capitalized terms, including financial metrics, legal concepts, and operational terms governing the agreement Applicable Interest Rate Margins for Initial Term A Loans (Post-First Anniversary) | Pricing Level | Consolidated Net Total Leverage Ratio | Term SOFR Margin | Base Rate Margin | | :--- | :--- | :--- | :--- | | 1 | > 0.50x | 2.50% | 1.50% | | 2 | < 0.50x | 2.25% | 1.25% | - A "Change of Control" is triggered if any person or group (other than Permitted Holders) acquires beneficial ownership of 50% or more of the Borrower's Voting Equity Interests or obtains the power to elect a majority of the board71 - The "Collateral and Guarantee Requirement" outlines assets excluded from collateral obligations ("Excluded Assets"), including leased real property, motor vehicles, certain commercial tort claims under $2.5 million, and assets where pledging would cause material adverse tax consequences808182 - The "Closing Date" is defined as August 6, 202575 Other Interpretive & Accounting Provisions Establishes rules for interpreting the agreement, construing accounting terms, calculating financial ratios, and handling interest rate calculations - All accounting terms are to be construed in conformity with GAAP, with parties agreeing to negotiate amendments if GAAP changes materially affect a provision to preserve original intent322324 - Financial ratios and tests related to any "Specified Transaction" (e.g., acquisitions, dispositions, incurrence of debt) must be calculated on a Pro Forma Basis, as if the transaction occurred on the first day of the measurement period317 ARTICLE 2: The Commitments and Credit Extensions This article details loan commitments, borrowing procedures, repayment terms, and provisions for debt modifications and defaulting lenders Loan Commitments and Borrowing Procedures Outlines lenders' commitment to the $60,000,000 Initial Term A Loan and procedures for borrowing, converting, and continuing loans - Each Term A Lender severally agrees to make a loan on the Closing Date up to its Initial Term A Commitment, with amounts borrowed and repaid under this section not reborrowable333 - Borrowings, conversions, or continuations of SOFR Loans require three business days' notice, while Base Rate Loans require one business day's notice, with a maximum of seven active Interest Periods (plus three for each new class of loans)334339 Prepayments, Commitment Reductions, and Repayment Specifies terms for voluntary and mandatory loan prepayments, commitment reductions, and the scheduled amortization of Term A Loans - The Borrower may voluntarily prepay Term Loans in whole or in part at any time without premium or penalty, subject to notice requirements341 - Mandatory prepayments are required with 100% of the Net Proceeds from certain asset dispositions, casualty events, and the incurrence of non-permitted indebtedness, with Lenders having the right to decline their pro-rata share345346350 Term A Loan Amortization Schedule | Payment Dates | Quarterly Installment (% of Initial Principal) | | :--- | :--- | | Nov 2025 - Aug 2026 | 1.25% | | Nov 2026 - Aug 2028 | 2.50% | | Nov 2028 - May 2029 | 25.00% | | Maturity Date | Remaining Principal | Interest, Fees, and Payments Details the calculation and payment of interest based on SOFR or Base Rate, applicable fees, and general payment mechanics - SOFR Loans bear interest at Term SOFR plus the Applicable Rate, while Base Rate Loans bear interest at the Base Rate plus the Applicable Rate361 - An Upfront Fee of 0.50% of the aggregate principal amount of the Term A Loans is due and payable on the Closing Date364 - If any lender receives a payment in excess of its ratable share, it must purchase participations from other lenders to ensure pro-rata sharing of the payment379 Incremental Debt, Refinancing, Extensions, and Defaulting Lenders Provides flexibility for the Borrower to modify debt structure through incremental facilities, refinancing, extensions, and addresses defaulting lenders - The Borrower may request new Incremental Commitments not to exceed the "Available Incremental Amount," which is the sum of a $15,000,000 "Incremental Base Amount" plus amounts from voluntary prepayments and an additional amount subject to meeting a pro forma leverage ratio test173381387 - The Borrower may request to extend the maturity date of existing Term Loans or Revolving Credit Commitments through an "Extension Amendment" with the consent of only the extending lenders402404408 - A "Defaulting Lender" (one who fails to fund its obligations) has its voting rights restricted and its payments may be reallocated to cover its funding shortfalls or other obligations116411412 ARTICLE 3: Taxes, Increased Costs Protection and Illegality Addresses financial contingencies like tax withholdings, increased costs due to law changes, benchmark rate issues, and lender replacement rights Taxes, Costs, and Contingencies Covers tax withholdings, compensation for increased lender costs, benchmark rate replacement, and the Borrower's right to replace certain lenders - All payments by the Borrower must be made free of deductions for Taxes, with the Borrower paying additional amounts if withholding is required to ensure the Lender receives the full sum416 - If a change in law makes it unlawful for a Lender to maintain SOFR Loans, the Lender's obligation is suspended, and the Borrower must prepay or convert the affected loans to Base Rate Loans431 - The agreement includes a benchmark replacement mechanism to handle a "Benchmark Transition Event," allowing the Administrative Agent to replace the current benchmark (e.g., Term SOFR) with an alternative like Daily Simple SOFR or another market-accepted rate50435 - The Borrower must compensate Lenders for increased costs or reduced returns resulting from changes in law or capital adequacy rules (e.g., Basel III, Dodd-Frank Act) after the Closing Date440441 - The Borrower has the right to replace any Lender that requests compensation for increased costs or taxes, becomes a Defaulting Lender, or is a Non-Consenting Lender to a proposed amendment455 ARTICLE 4: Conditions Precedent to Credit Extensions Specifies conditions required for loan funding, including extensive documentation for the initial closing and ongoing requirements for subsequent borrowings Conditions to Credit Extensions Outlines documentation required for initial funding on the Closing Date and ongoing conditions for all subsequent credit extensions - Conditions for the initial Closing Date funding include receipt of executed Loan Documents, Collateral Documents, legal opinions, a solvency certificate, and payment of all fees460461463 - The Borrower must provide all necessary documentation for "know your customer" and anti-money laundering regulations, including the USA PATRIOT Act and a Beneficial Ownership Certification, at least 3 business days prior to the Closing Date464 - For all credit extensions after the Closing Date, the Borrower's representations and warranties must be true and correct in all material respects, and no Default or Event of Default must exist468469 ARTICLE 5: Representations and Warranties Contains the Borrower's key assurances to lenders regarding legal status, financial condition, compliance, property, solvency, and security interests Representations and Warranties Covers the Borrower's legal status, financial condition, compliance with laws, property ownership, solvency, and validity of security interests - The Borrower represents that its financial statements fairly present its financial condition in all material respects and that no Material Adverse Effect has occurred since the Closing Date477479 - The Borrower confirms it is not engaged in the business of extending credit for purchasing or carrying Margin Stock in violation of Regulation U, and it is not required to be registered as an "investment company"491492 - On the Closing Date, after giving effect to the Transactions, the Borrower and its subsidiaries are represented to be Solvent on a consolidated basis498 - The Borrower represents that neither it nor its subsidiaries, directors, officers, or employees are in violation of AML Laws, Sanctions, Anti-Corruption Laws, or Export Controls, and that no proceeds will be used in violation of these laws499502 - The Borrower represents that the proceeds of the Term A Loans will be used for the Transactions, general corporate purposes, and to fund cash to its balance sheet509 ARTICLE 6: Affirmative Covenants Sets forth ongoing actions the Borrower must take, including financial reporting, compliance, tax payments, and maintaining corporate existence and insurance Affirmative Covenants Details obligations such as financial reporting, compliance certificates, default notices, maintaining corporate existence, and adding new guarantors - Financial Reporting: The Borrower must deliver audited annual financial statements within 90 days of fiscal year-end and unaudited quarterly statements within 45 days of each quarter-end515 - Compliance Certificate: A Compliance Certificate, including calculations for Liquidity, Consolidated Net Total Leverage Ratio, and Consolidated Fixed Charge Coverage Ratio, must be delivered with each set of financial statements519 - Notice of Default: The Borrower must promptly notify the Administrative Agent of any Default or Event of Default523 - Additional Guarantors: New wholly-owned domestic subsidiaries (unless excluded) must become Guarantors and provide collateral within 75 days of their formation or acquisition536 - Post-Closing Actions: The Borrower must complete specific actions and deliver documents as outlined in Schedule 6.15 within the specified timeframes after the Closing Date543544 ARTICLE 7: Negative Covenants Details restrictions on the Borrower's activities, including limits on liens, indebtedness, investments, asset dispositions, and restricted payments Core Negative Covenants (Liens, Indebtedness, Investments, Dispositions, etc.) Restricts liens, new debt, investments, asset sales, mergers, and restricted payments, each with specific exceptions and baskets - Liens (7.01): Prohibits creating liens on assets, subject to permitted exceptions including liens securing the Loan Documents, existing liens, and certain tax and statutory liens550 - Investments (7.02): Restricts investments but permits acquisitions if the pro forma Consolidated Net Total Leverage Ratio is no greater than the Financial Covenant TNLR Threshold, among other exceptions557558 - Indebtedness (7.03): Limits incurring new debt, with exceptions for debt under the Loan Documents, existing debt, intercompany debt, and certain other debt up to specified baskets, including a basket tied to a leverage ratio test562564 - Dispositions (7.05): Restricts asset sales but allows for dispositions of obsolete assets, sales in the ordinary course, and other sales provided that at least 75% of the consideration is cash or Cash Equivalents570571 - Restricted Payments (7.06): Limits dividends and share repurchases, but permits repurchases up to $15 million, plus an additional $35 million subject to maintaining minimum liquidity of $50 million577 Financial Covenants Establishes key financial maintenance tests, including maximum leverage ratio, minimum fixed charge coverage ratio, and minimum LTM revenue Maximum Consolidated Net Total Leverage Ratio | Period | Maximum Ratio | | :--- | :--- | | Closing Date - Dec 31, 2025 | 3.25 to 1.00 | | Jan 1, 2026 - Mar 31, 2026 | 3.00 to 1.00 | | Apr 1, 2026 - Jun 30, 2026 | 2.75 to 1.00 | | Jul 1, 2026 - Sep 30, 2026 | 2.50 to 1.00 | | Oct 1, 2026 - Dec 31, 2026 | 2.25 to 1.00 | | Thereafter | 2.00 to 1.00 | - Minimum Consolidated Fixed Charge Coverage Ratio: Must be no less than 1.10 to 1.00, tested quarterly starting December 31, 2025584 - Minimum LTM Revenue: Must be no less than $270,000,000, tested quarterly starting December 31, 2025585 Other Negative Covenants Imposes further restrictions on prepaying junior debt and prohibits using loan proceeds for unlawful purposes or sanctioned parties - The Borrower is restricted from voluntarily prepaying, redeeming, or purchasing any Junior Financing, except in connection with a Permitted Refinancing or the conversion of such debt into equity587 - The Borrower and its subsidiaries are prohibited from using loan proceeds to fund any activity involving or benefiting a Restricted Party in violation of Sanctions, or in any manner that would cause any party to breach Sanctions or Export Controls590593 ARTICLE 8: Events of Default and Remedies Defines events triggering default and outlines remedies available to lenders, including acceleration of obligations and fund application Events of Default and Remedies Defines default events like non-payment, covenant breaches, and change of control, and outlines lender remedies including loan acceleration - Events of Default include: - Non-Payment: Failure to pay principal when due, or interest/other amounts within 5 business days of the due date296595596 - Covenant Breach: Failure to comply with negative covenants (Article 7) or certain affirmative covenants - Cross-Default: Default on other indebtedness exceeding the Threshold Amount ($10,000,000)296 - Insolvency: Bankruptcy, receivership, or similar proceedings - Change of Control: Occurrence of a Change of Control - Remedies: Upon an Event of Default, the Administrative Agent (at the request of Required Lenders) can terminate commitments and declare all outstanding Loans and other Obligations immediately due and payable599600 - Application of Funds: After acceleration, any collected funds are applied in a specific order (the "waterfall"): first to Agent fees/expenses, then Lender fees/expenses, then accrued interest, then principal, and finally to other Obligations602 ARTICLE 9: Administrative Agent and Other Agents Establishes the Administrative Agent's role, authority, protections, and procedures for resignation, replacement, and collateral matters Agent Roles, Rights, and Protections Clarifies the Agent's administrative role, protections from liability, indemnification rights, and procedures for resignation and collateral release - Each Lender irrevocably appoints SVB as Administrative Agent and Collateral Agent to act on its behalf607 - The Agent is not liable for any action taken or omitted, except for its own gross negligence or willful misconduct, and has no duty to ascertain covenant performance or representation accuracy612613 - The Agent may resign upon 30 days' notice, and a successor agent must be appointed by the Required Lenders, subject to the Borrower's consent (unless an Event of Default exists)621 - The Collateral Agent is authorized to automatically release liens on collateral that is sold in a permitted disposition or when a Guarantor is released from its obligations as permitted by the agreement628 - The agreement includes detailed procedures for the recovery of "Erroneous Payments" made by the Administrative Agent to any Lender, establishing that such funds remain the property of the Agent and must be returned promptly upon demand641642 ARTICLE 10: Miscellaneous Contains standard legal clauses for amendments, notices, indemnification, assignments, governing law, and waiver of jury trial Miscellaneous Provisions Covers amendments, notices, indemnification, assignments, confidentiality, New York governing law, and a mutual jury trial waiver - Amendments (10.01): Amendments generally require the consent of the Required Lenders and the Borrower, but certain fundamental changes require the consent of each affected Lender656 - Indemnification (10.05): The Borrower agrees to indemnify the Agents, Arrangers, and Lenders from all liabilities and expenses arising in connection with the Loan Documents, except those resulting from the indemnitee's own gross negligence, bad faith, or willful misconduct673 - Assignments (10.07): Lenders may assign their loans and commitments to other Eligible Assignees, subject to the consent of the Borrower and Administrative Agent (unless an Event of Default exists or the assignee is another Lender or affiliate), with assignments to Disqualified Lenders restricted677682 - Governing Law and Jurisdiction (10.15): The agreement is governed by the law of the State of New York, and the parties consent to the exclusive jurisdiction of New York state and federal courts709710 - Jury Trial Waiver (10.16): All parties to the agreement expressly waive their right to a trial by jury for any claim or action arising under the Loan Documents711 ARTICLE 11: Guaranty Details the unconditional and irrevocable guarantee provided by Guarantors for all Guaranteed Obligations, including release conditions Guaranty Provisions Outlines the joint and several, unconditional guarantee by Guarantors for all obligations, and conditions for automatic release - Each Guarantor provides a joint and several guarantee for the prompt payment in full of all Guaranteed Obligations, acting as a primary obligor and not merely as a surety731 - The obligations of the Guarantors are absolute and unconditional, irrespective of the validity or enforceability of the underlying obligations or any other circumstance that might otherwise constitute a legal or equitable discharge732 - A Guarantor is automatically released from its obligations if it is sold or otherwise ceases to be a Restricted Subsidiary in a transaction permitted by the agreement, provided it is not also a guarantor of any other material Junior Financing743 Schedules and Exhibits Lists various schedules providing specific details and exhibits serving as templates for required legal forms Schedules and Exhibits List Provides a list of schedules detailing specific agreement information and exhibits serving as templates for legal forms - Schedules: Key schedules include 1.01A (Commitments), 7.01(b) (Existing Liens), 7.03(b) (Existing Indebtedness), and 6.15 (Post-Closing Covenants)19 - Exhibits: Key exhibits provide forms for A (Committed Loan Notice), E-1 (Compliance Certificate), F (Assignment and Assumption), and G (Security Agreement)20