Item 3.02. Unregistered Sales of Equity Securities.
As previously reported by Redbox Entertainment Inc.(the "Company") on a Current
Report on Form 8-K filed with the Securities and Exchange Commission on April
15, 2022 (the "Prior 8-K"), certain of the Company's subsidiaries entered into
an Incremental Assumption and Amendment Agreement No. 6 (the "Sixth Amendment"),
further amending that certain amended Credit Agreement, dated as of October 20,
2017 (as further amended by the Sixth Amendment, the "Amended Credit
Agreement").
In connection with the Sixth Amendment, the Company entered into a warrant
agreement (the "Warrant Agreement") and issued to the HPS Lenders (as defined in
the Credit Agreement) warrants, with an exercise price of $0.0001 per share (the
"Warrants") to purchase 11,416,700 shares of Class A common stock of the Company
("Common Stock"). Each Warrant will become exercisable in the event certain
milestones are not met under the Amended Credit Agreement. The number of shares
of Common Stock issuable upon exercise of the Warrants are subject to customary
anti-dilution provisions for stock splits, stock dividends and similar
transactions. The aggregate shares of Common Stock issuable pursuant to the
exercise of Warrants will not exceed 19.9% of either (i) the total number of the
Company's outstanding Equity Interests (as defined in the Warrant Agreement) on
April 16, 2022 and (ii) the total voting power of the Company's outstanding
Equity Interests on April 16, 2022 without approval of the Company's
stockholders.
The issuance of the Warrants was exempt from the registration requirements of
the Securities Act of 1933, as amended, pursuant to 4(a)(2) thereof and/or
Regulation D promulgated thereunder. The issuances of any shares of Common Stock
in connection with the exercise of the Warrants is also expected to be exempt
from the registration requirements of the Securities Act, pursuant to Section
4(a)(2) thereof and/or Regulation D promulgated thereunder.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
On April 17, 2022, Jay Burnham, Emanuel R. Pearlman, Michael Redd, Reed Rayman,
David B. Sambur, Lee J. Solomon and Charles Yamarone resigned from the Company's
board of directors (the "Board") and each of its committees. The resignations
were among certain changes to the composition and size of the Board that the
Company agreed to implement in connection with the execution of the Sixth
Amendment, as further reported in the Prior 8-K, and not the result of any
disagreements with the Company relating to the Company's operations, policies or
practices. Kimberly Kelleher and Galen C. Smith will remain on the Board.
In connection with the execution of the Sixth Amendment, the Board also approved
a decrease in the size of the Board from nine (9) to five (5) members, and
elected Gregory W. Frenzel, Neal P. Goldman and Robert H. Warshauer (the "New
Directors") to the Board, to fill the remaining vacancies.
The Board also reconstituted its committees as follows: Gregory W. Frenzel,
Kimberly Kelleher and Robert H. Warshauer serve on the Audit Committee; Gregory
W. Frenzel, Neal P. Goldman and Kimberly Kelleher serve on the Compensation
Committee; and Neal P. Goldman, Kimberly Kelleher and Robert H. Warshauer serve
on the Nominating and Corporate Governance Committee of the Board.
There are no arrangements or understandings between Messrs. Frenzel, Goldman and
Warshauer and any other persons pursuant to which they were each elected as a
director. Messrs. Frenzel, Goldman and Warshauer have no direct or indirect
material interest in any transaction required to be disclosed by the Company
pursuant to Item 404(a) of Regulation S-K. Each of the New Directors will enter
into the Company's standard form of indemnification agreement between the
Company and its directors and executive officers.
Refer to the Prior 8-K for additional information regarding the Sixth Amendment
and the Amended Credit Agreement.
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