Item 1.01. Entry into a Material Definitive Agreement.
Merger Agreement
On
Under that certain Credit Agreement, dated as of
The Merger Agreement provides that, among other things, upon the terms and
subject to the conditions set forth in the Merger Agreement, (i) at the time the
First Company Merger (as defined below) becomes effective ("Effective Time"),
(A)
Pursuant to the Merger Agreement, at the Effective Time, (i) each share of Class
A common stock of the Company, par value
At the Effective Time, each vested or unvested Company restricted stock unit (a "Company RSU Award") that is outstanding as of immediately prior to the Effective Time held by each holder will automatically be converted into the right to receive a number of shares of CSSE Class A Common Stock equal to the Exchange Ratio multiplied by the number of vested or unvested Company RSU Awards held by such holder immediately prior to the Effective Time.
The parties' obligation to consummate the Mergers (the "Closing") is subject to the satisfaction or waiver of certain conditions set forth in the Merger Agreement, including: (i) the approval of the Merger Agreement and the transactions contemplated by the Merger Agreement by the affirmative vote of the holders of at least a majority of the Company's outstanding Class A Common Stock and the Company's outstanding Class B Common Stock, voting as a single class (the "Requisite Company Vote"), (ii) the listing of CSSE Class A Common Stock issuable as merger consideration on Nasdaq, (iii) the approval of the issuance of the CSSE Class A Common Stock issuable as Merger Consideration (the "Parent Stock Issuance") by the affirmative vote, or consent of the holders, of a majority of the common stock of CSSE cast on the proposal, with CSSE Class A Common Stock and CSSE's class B common stock voting as a single class, which approval was satisfied by delivery of an irrevocable written consent from the controlling shareholder of CSSE (the "Written Consent"), (iv) the effectiveness of a registration statement on Form S-4 with respect to the CSSE Class A Common Stock issuable as Merger Consideration,(the "Registration Statement"), (v) the expiration or termination of applicable waiting periods under the HSR Act and no restraints or other injunctions prohibiting the Closing, (vi) no Material Adverse Effect on the Company or CSSE, (vii) HPS having executed and delivered to CSSE definitive financing agreements and (viii) certain other customary conditions relating to the parties' representations and warranties in the Merger Agreement and the performance of their respective obligations.
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Holders of a majority of the Company's common stock are parties to that certain
Voting and Support Agreement entered into on
pursuant to which the stockholder parties thereto agreed to vote their shares of the Company (i) in favor of any strategic transaction approved and recommended by the Company's Board of Directors (the "Board"), or any committee to which the Board delegates authority, subject to certain terms and conditions, (ii) in opposition to any transaction involving the Company that has not been approved and recommended by the Board, and (iii) in favor of any directors that are proposed or nominated to the Board by the Company at any annual meeting of the Company.
The Company has made customary representations and warranties in the Merger
Agreement. The Merger Agreement also contains customary covenants and
agreements, including covenants and agreements relating to the conduct of the
Company's business between the date of the signing of the Merger Agreement and
the Closing including that the Company will not borrow in excess of
The Merger Agreement also contains covenants by the Company not to directly or indirectly solicit an alternative transaction or participate in any discussions or negotiations with any person making any proposal for an alternative transaction, and requiring the Board to recommend to its stockholders that they approve the transactions contemplated by the Merger Agreement, in each case, subject to certain exceptions. The Board may change its recommendation in certain circumstances specified in the Merger Agreement in response to an unsolicited proposal for an alternative transaction or following an intervening event.
Under the Merger Agreement, each of the Company and CSSE has also agreed to use reasonable best efforts to consummate the Mergers.
The Company and CSSE will prepare, and CSSE will cause to be filed with the
The Merger Agreement contains certain termination rights for the Company and
CSSE, and provides that, upon termination of the Merger Agreement by the Company
or CSSE upon specified conditions including where the Board changes its
recommendation that its stockholders approve the transactions contemplated by
the Merger Agreement or where the Company breaches the Pre-Closing Borrowing
Covenant, the Company will be required to pay CSSE a termination fee equal to
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The foregoing description of the Merger Agreement and the Mergers does not
purport to be complete and is qualified in its entirety by the full text of the
Merger Agreement, a copy of which is attached hereto as Exhibit 2.1 and is
incorporated herein by reference. The descriptions of the terms of the Sixth
Amendment and the Voting and Support Agreement do not purport to be complete and
are qualified entirely by the full text of such agreements, copies of which are
attached as Exhibits 10.1 and 10.2 to the Form 8-K/A filed with the
B-2 Exchange Agreement
On
The B-2 Exchange Agreement provides that, before the Effective Time, Aspen
Parent shall cause to be exchanged the aggregate outstanding Term B-2 Loan
Obligations (as defined in the Amended Credit Agreement) for 4,035,943 shares of
Company Class B Common Stock and an equal number of Class A common units of
The foregoing description of the B-2 Exchange Agreement does not purport to be complete and is qualified in its entirety by the full text of the B-2 Exchange Agreement, a copy of which is attached hereto as Exhibit 10.1 and is incorporated herein by reference.
Mutual Release
On
In connection with the execution of the Merger Agreement, but effective as of the Closing, each of Redbox, CSSE, Apollo, HPS, and Seaport, severally and not jointly, on behalf of itself and its respective Mutual Release Parties and its and their respective subsidiaries or affiliates unconditionally, irrevocably and forever releases and discharges each of the other Mutual Release Parties and each of the former, current and future directors of Redbox and CSSE, to the . . .
Item 9.01. Financial Statements and Exhibits.
Exhibit Number Description 2.1† Merger Agreement, dated as ofMay 10, 2022 , by and among Chicken Soup for theSoul Entertainment, Inc. ,RB First Merger Sub Inc. ,RB Second Merger Sub LLC ,Redwood Opco Merger Sub LLC ,Redbox Entertainment Inc. andRedwood Intermediate LLC . 10.1* Contribution and Exchange Agreement, dated as ofMay 10, 2022 , by and amongRedbox Automated Retail, LLC ,Redwood Intermediate LLC ,Redwood Holdco, LP ,New Outerwall, Inc. ,Aspen Parent, Inc. ,Redbox Entertainment Inc. andHPS Investment Partners, LLC . 10.2* Release Agreement, dated as ofMay 10, 2022 , by and among (i)Redwood Holdco, LP ,AP VIII Aspen Holdings, L.P. and Apollo Global Management, Inc., (ii) Chicken Soup for theSoul Entertainment, Inc. ,RB First Merger Sub Inc. ,RB Second Merger Sub LLC andRedwood Opco Merger Sub, LLC , (iii)HPS Investment Partners, LLC , (iv)Redbox Entertainment Inc. ,Redwood Intermediate, LLC andRedbox Automated Retail, LLC and (v)Seaport Global SPAC, LLC . 10.3* Tax Receivable Agreement Amendment, dated as ofMay 10, 2022 , by and amongRedbox Entertainment Inc. , as successor toSeaport Global Acquisition Corp. , Chicken Soup for theSoul Entertainment, Inc. ,Redwood Holdco, LP andRedwood Intermediate, LLC . 99.1* Joint Press Release 104 Cover Page Interactive Data File (embedded within the Inline XBRL document contained in Exhibit 101) * Filed herewith
† Certain of the exhibits and schedules to this agreement have been omitted in
accordance with Regulation S-K Item 601(a)(5). The Company agrees to furnish a copy of all omitted exhibits and schedules to theSEC upon its request. 5
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