Item 1.02 Termination of a Material Definitive Agreement
The Merger Agreement
As previously disclosed, on April 6, 2021, Mudrick Capital Acquisition
Corporation II ("MUDS") entered into an Agreement and Plan of Merger (the
"Merger Agreement"), by and among MUDS, Titan Merger Sub I, Inc., a Delaware
corporation and direct, wholly owned subsidiary of MUDS, Titan Merger Sub II,
LLC, a Delaware limited liability company and direct, wholly owned subsidiary of
MUDS, Topps Intermediate Holdco, Inc., a Delaware corporation ("Topps"), and
Tornante-MDP Joe Holding LLC, a Delaware limited liability company and the sole
stockholder of Topps ("Holdings"). The Merger Agreement was amended on May 10,
2021 and August 15, 2021.
On August 19, 2021, Topps informed MUDS that Major League Baseball and the Major
League Baseball Players Association had notified Topps on August 19, 2021 that
neither party would be renewing their respective licensing agreements with Topps
when they come up for renewal at the end of 2025 and 2022, respectively.
On August 20, 2021, pursuant to Section 12.01(a) of the Merger Agreement, Topps
and MUDS entered into a Mutual Termination Agreement pursuant to which the
Merger Agreement was terminated effective as of August 20, 2021. MUDS intends to
continue to pursue a business combination.
The Subscription Agreements
As previously disclosed, in connection with the execution of the Merger
Agreement, on April 6, 2021, MUDS entered into subscription agreements with
certain investors (each, a "Subscription Agreement"), pursuant to which such
investors agreed to purchase an aggregate of 24,630,542 shares of MUDS' Class A
common stock, for a purchase price of $10.15 per share and for an aggregate
commitment of $250 million, inclusive of the full Backstop Amount (as defined
below) (the "PIPE Investment"). As part of the PIPE Investment, and concurrently
with the execution of the Merger Agreement, MUDS entered into a subscription
agreement with funds and accounts managed by Mudrick Capital Management, L.P.
(the "Mudrick Backstop Parties" and, such subscription agreement, the "Backstop
Agreement"), pursuant to which the Mudrick Backstop Parties agreed to purchase
an aggregate of up to 9,852,216 shares of MUDS' Class A common stock, for a
purchase price of $10.15 per share and for an aggregate commitment of up to
approximately $100 million (the "Backstop Amount"). The Subscription Agreements,
including the Backstop Agreement, were automatically terminated in accordance
with their respective terms upon the termination of the Merger Agreement.
The Sponsor Support Agreement
As previously disclosed, in connection with the execution of the Merger
Agreement, on April 6, 2021, MUDS and Mudrick Capital Acquisition Holdings II
LLC, a Delaware limited liability company (the "Sponsor"), entered into the
Sponsor Support Agreement (the "Sponsor Support Agreement"), pursuant to which
the Sponsor agreed (i) to vote all of its shares of MUDS common stock (a) in
favor of (x) adoption of the Merger Agreement and (y) approval of the
transactions contemplated thereby (the "Transactions") and the other MUDS
stockholder proposals and (b) against any proposal that would materially impede
the Transactions, (ii) not to redeem any shares of MUDS' Class A common stock in
connection with the Transactions, (iii) for a period of three (3) years
following the closing of the Transactions, not to form a "group" for the purpose
of voting against persons nominated by the equityholders of Holdings for
election as directors of MUDS, (iv) waive anti-dilution rights that would result
in MUDS' Class B common stock converting on anything other than a 1-to-1 basis
and (v) if more than 20% of MUDS' Class A common stock is redeemed by MUDS'
stockholders in connection with the Transactions, to surrender for cancellation
up to 2,635,416 shares of MUDS' Class B common stock in proportion to the
incremental percentage of shares redeemed above such 20% threshold. The Sponsor
Support Agreement was automatically terminated in accordance with its terms upon
the termination of the Merger Agreement.
Item 8.01 Other Events
On August 20, 2021, MUDS issued a press release (the "Press Release") announcing
the termination of the Merger Agreement. A copy of the Press Release is attached
as Exhibit 99.1 hereto and is incorporated herein by reference.
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