Equity Purchase Agreement
On September 27, 2021, Scientific Games Corporation, a Nevada corporation (the “Company” or “Scientific Games”), Endeavor Operating Company, LLC,
a Delaware limited liability company (“Endeavor”), and, solely with respect to certain sections of the definitive agreement, Endeavor Group Holdings, Inc., a Delaware corporation (“Endeavor Holdings”), entered into an Equity Purchase
Agreement (the “Purchase Agreement”). Pursuant to the terms and subject to the conditions set forth in the Purchase Agreement, Endeavor has agreed to acquire from Scientific Games, and certain of its subsidiaries, all of the issued and
outstanding equity interests of the companies (the “Transaction”) which together constitute Scientific Games’ Digital sports betting business (the “Sports Betting Business”).
The total consideration to be paid to Scientific Games in connection with the Transaction is $1.2 billion on a cash-free, debt-free basis (the
“Purchase Price”), consisting of $1 billion in cash, subject to certain customary adjustments as set forth in the Purchase Agreement, and 7,605,199 shares of Class A common stock, par value $0.00001, of Endeavor Holdings.
The Purchase Agreement provides that completion of the Transaction is subject to the satisfaction or waiver of customary closing conditions,
including, among other things, obtaining certain required regulatory approvals.
The Purchase Agreement contains customary representations, warranties and covenants related to the Sports Betting Business and the Transaction.
Between the date of the Purchase Agreement and the completion of the Transaction, subject to certain exceptions, Scientific Games agrees to, and to cause its subsidiaries to, operate the Sports Betting Business in the ordinary course of
business in all material respects and to, among other things, use commercially reasonable efforts to preserve substantially intact the business organizations, retain current officers and preserve relationships with customers, suppliers,
employees and others.
The Purchase Agreement includes customary termination provisions for both Scientific Games and Endeavor. Both Scientific Games and Endeavor will
have the right to terminate the Purchase Agreement if the closing has not occurred by June 27, 2022, subject to a three month extension in the event that conditions relating to regulatory approvals have not been satisfied as of that date.
The representations and warranties of Scientific Games, Endeavor and Endeavor Holdings contained in the Purchase Agreement have been made solely
for the benefit of the parties to the Purchase Agreement. In addition, such representations and warranties (a) have been made only for purposes of the Purchase Agreement, (b) have been qualified by confidential disclosures made to Endeavor
and Endeavor Holdings in connection with the Purchase Agreement, (c) are subject to materiality qualifications contained in the Purchase Agreement which may differ from what may be viewed as material by investors, (d) were made only as of the
date of the Purchase Agreement or such other date as is specified in the Purchase Agreement, (e) have been included in the Purchase Agreement for the purpose of allocating risk between Scientific Games, Endeavor and Endeavor Holdings rather
than establishing matters as facts and (f) will not survive consummation of the Transaction. Accordingly, the Purchase Agreement is included with this filing only to provide investors with information regarding the terms of the Purchase
Agreement, and not to provide investors with any other factual information regarding Scientific Games, Endeavor or Endeavor Holdings or their respective subsidiaries or businesses. Investors should not rely on the representations and
warranties or any descriptions thereof as characterizations of the actual state of facts or condition of Scientific Games, Endeavor or Endeavor Holdings or any of their respective subsidiaries, affiliates or businesses. Moreover, information
concerning the subject matter of the representations and warranties may change after the date of the Purchase Agreement, which subsequent information may or may not be fully reflected in the Scientific Games’ public disclosures.
The foregoing description of the Purchase Agreement is not complete and is qualified in its entirety by reference to the Purchase Agreement,
which is filed as Exhibit 2.1 hereto and is incorporated herein by reference.