| Item 1.01. |
Entry into a Material Definitive Agreement. |
Merger Agreement
As previously disclosed in
the Current Report on Form 8-K amended hereby, on August 11, 2022, the Company consummated its acquisition of Redbox through a series
of mergers under the terms of the previously disclosed Merger Agreement, dated as of May 10, 2022, by and among the Company, Redbox,
RB First Merger Sub Inc., a Delaware corporation and direct wholly owned subsidiary of the Company (“Merger Sub Inc.”), RB
Second Merger Sub LLC, a Delaware limited liability company and wholly owned subsidiary of the Company (“Merger Sub LLC”),
Redwood Opco Merger Sub LLC, a Delaware limited liability company and wholly owned subsidiary of the Company (“Opco Merger Sub LLC”),
and Redwood Intermediate LLC, a Delaware limited liability company (“Opco LLC”).
In accordance with the terms
of the Merger Agreement, (i) at the time the First Company Merger (as defined below) became effective (“Effective Time”),
(A) Merger Sub Inc. merged (the “First Company Merger”) with and into Redbox, with Redbox continuing as the surviving
entity (the “Surviving Corporation”); and (B) simultaneously with the First Company Merger, Opco Merger Sub LLC merged
(the “Opco Merger”) with and into Opco LLC, with Opco LLC continuing as the surviving entity; and (ii) immediately following
the First Company Merger and Opco Merger, the Surviving Corporation merged with and into Merger Sub LLC (the “Second Company Merger”
and, together with the First Company Merger, the “Integrated Mergers,” and the Integrated Mergers together with the Opco Merger,
the “Mergers”), with Merger Sub LLC continuing as the surviving entity and a wholly owned subsidiary of the Company.
In accordance with the terms
of the Merger Agreement, at the Effective Time, (i) each share of Class A common stock of Redbox, par value $0.0001 per share
(the “Redbox Class A Common Stock”), was cancelled and exchanged for 0.087 shares (the “Exchange Ratio”)
of Company Class A Common Stock, (ii) each unit of Opco LLC was converted into 0.087 shares of Company Class A Common Stock
and (iii) each share of Class B common stock of Redbox, par value $0.0001 per share (the “Redbox Class B Common Stock”),
was cancelled for no additional consideration.
At the Effective Time the
vested and unvested restricted stock units of Redbox (each “Redbox RSU Award”) that were outstanding immediately prior to
the Effective Time was converted into that number of shares of Company Class A Common Stock equal to the Exchange Ratio multiplied
by the number of vested and unvested Redbox RSU Awards held by each holder immediately prior to the Effective Time.
The obligations of Redbox
under its outstanding public warrants and private warrants (collectively, the “Assumed Warrants”) were assumed by the Company
but the Assumed Warrants now evidence the right to receive upon valid exercise thereof shares of Company
Class A Common Stock equal to the product of (A) the number of shares of Redbox Class A Common Stock that were
subject to such warrant immediately prior to the Effective Time and (B) the Exchange Ratio, as further described under Item 3.03,
below.
The foregoing description
of the Merger Agreement and the Mergers do not purport to be complete and is qualified in its entirety by the Merger Agreement, which
was filed by the Company as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on May 12, 2022.