SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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|Item 1.01||Entry into a Material Definitive Agreement|
Warrant Exercise Agreement
On June 17, 2022, Redbox Entertainment Inc., a Delaware corporation (the “Company”) entered into a Warrant Exercise Letter Agreement (the “Warrant Exercise Agreement”) with Seaport Global SPAC, LLC, a Delaware limited liability company (“Seaport”), pursuant to which, Seaport and the Company agreed that:
|1.||Seaport will exercise, or cause its affiliate to exercise, an aggregate of 1,000,000 private placement warrants, which Seaport and certain of its affiliates purchased pursuant to that certain Private Placement Warrant Agreement, dated November 27, 2020 (the “Private Placement Warrants”), on a cash basis as soon as practicable, and in no event later than four (4) business days following the date of this report. The exercise price for each warrant is $11.50 per share. The Company will receive $11.5 million in cash from the exercise of the warrants by Seaport. The Company will not receive any proceeds from the sale of the shares underlying such warrants.|
|2.||The Company will waive any applicable transfer restrictions set forth in any contract in existence as of the date of the Warrant Exercise Agreement to which the Company and Seaport are parties, including without limitation that certain Voting and Support Agreement dated as of April 15, 2022 and that certain Sponsor Lock-Up Agreement dated as of May 16, 2021, to the extent necessary to permit (i) the sale of the 1,005,197 Private Placement Warrants by Seaport to certain investors to whom Seaport previously transferred such Private Placement Warrants and the sale by such transferees of such Private Placement Warrants, and (ii) to permit the sale by Seaport and/or its affiliates of the 1,000,000 shares of Class A common stock of the Company to be received by Seaport upon the exercise of the Private Placement Warrants described in paragraph 1 above, provided, however, that such sale may not occur until one (1) business day following the date of this report.|
The foregoing description of the Warrant Exercise Agreement does not purport to be complete and is qualified in its entirety by the full text of the Warrant Exercise Letter Agreement, a copy of which is attached hereto as Exhibit 2.1 and is incorporated herein by reference.
Further, the Company may consider and agree to release Seaport or other security holders of their transfer restrictions with respect to the common stock or warrants of the Company held by such security holders. Any such release could have an adverse impact on the trading price for such securities.
|Item 9.01.||Financial Statements and Exhibits.|
|2.1*||Warrant Exercise Letter Agreement by and between the Company and Seaport, dated June 17, 2022.|
|104||Cover Page Interactive Data File (embedded within the Inline XBRL document contained in Exhibit 101)|
Pursuant to the requirement of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|Date: June 17, 2022||REDBOX ENTERTAINMENT INC.|
|By:||/s/ Frederick W. Stein|
|Frederick W. Stein|
|Chief Legal Officer and Secretary|
June 17, 2022
Redbox Entertainment Inc.
c/o Galen C. Smith
1 Tower Lane
Oakbrook Terrace, IL 60181
Re: Warrant Exercise Letter Agreement
Ladies and Gentlemen:
WHEREAS, Seaport Global SPAC, LLC, a Delaware limited liability company (“Seaport”) and Redbox Entertainment Inc., a Delaware corporation (f/k/a Seaport Global Acquisition Corp., the “Company”) entered into that certain Private Placement Warrant Purchase Agreement, dated November 27, 2020 (the “Warrant Agreement”), pursuant to which Seaport and certain of its affiliates purchased warrants of the Company (the “Private Placement Warrants”). Each capitalized term used and not otherwise defined herein has the meaning ascribed to such term in the Warrant Agreement; and
WHEREAS, the parties hereto desire to enter into this Letter Agreement (this “Letter Agreement”).
NOW, THEREFORE, for good and valuable consideration, including as set forth in this Letter Agreement, the receipt and sufficiency of which are hereby acknowledged, the parties hereby covenant and agree as follows:
|1.||Commitment to Exercise Warrants. Seaport hereby agrees that it will exercise, or will cause its affiliates to exercise, an aggregate of 1,000,000 Private Placement Warrants on a cash basis as soon as practicable, and in no event later than four (4) business days following the date on which the Company discloses this Letter Agreement in a Current Report on Form 8-K.|
|2.||Limited Waiver of Applicable Transfer Restrictions. By signing and returning a counterpart to this Letter Agreement, the Company agrees to waive any applicable transfer restrictions set forth in any contract in existence as of the date hereof to which the Company and Seaport are parties, including without limitation that certain Voting and Support Agreement dated as of April 15, 2022 and that certain Sponsor Lock-Up Agreement dated as of May 16, 2021, only to the extent necessary to permit the following actions of Seaport and certain of its affiliates:|
|a.||The sale of 520,042 Private Placement Warrants by Seaport and certain of its affiliates on June 13 and 14, 2022;|
|b.||The sale by Thomas Bernard of 485,155 Private Placement Warrants on June 14, 2022; and|
|c.||The sale by Seaport and/or its affiliates of the 1,000,000 shares of Class A common stock of the Company to be received by Seaport and/or its affiliates upon the exercise of the Private Placement Warrants described in Section 1 hereof; provided, however, that such sale may not occur until one (1) business day following the date on which the Company discloses this Letter Agreement in a Current Report on Form 8-K.|
This Letter Agreement will be exclusively governed by and construed and enforced in accordance with the laws of the State of New York, without regard to conflicts of law principles thereof. This Letter Agreement shall not be construed as a consent by the Company to any actions of Seaport and/or its affiliates other than the three transactions specifically identified in Section 3 hereof.
This Letter Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, and it shall not be necessary in making proof of this Agreement to produce or account for more than one such counterpart.
|SEAPORT GLOBAL SPAC, LLC,|
|a Delaware limited liability company|
|Acknowledged and agreed by:|
|REDBOX ENTERTAINMENT INC.,|
|a Delaware corporation|