subscription agreement, (ii) all conditions precedent to the Closing of the Business Combination set forth in the Business Combination Agreement, including the approval of the RedBall shareholders, are satisfied or waived, and the Closing of the Business Combination is scheduled to occur concurrently with or immediately following the sale of the warrant, and (iii) there are no suspensions of the qualification of the New SeatGeek Common Stock in effect. In addition, subject to and upon the assumption of the warrant by New SeatGeek, with respect to each exercisable share subject to such warrant, the holder will be entitled to receive from New SeatGeek one third of one warrant to purchase a one whole share of Common Stock at an exercise price of $11.50 per share and with terms substantially similar to the redeemable warrants included as part of the RedBall’s Units issued in the IPO.
The foregoing description of the Warrant Subscription Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions of the form of Warrant Subscription Agreement, a copy of which is attached hereto as Exhibit 10.2 and is incorporated herein by reference.
Backstop Subscription Agreement
On October 13, 2021, concurrently with the execution of the Merger Agreement, Sponsor entered into a backstop subscription agreement (the “Backstop Subscription Agreement”) with RedBall, pursuant to which, on the terms and subject to the conditions set forth therein, the Sponsor has committed to purchase, following the Domestication and prior to the Closing, shares of New SeatGeek Common Stock, in a private placement for a purchase price of $10.00 per share, up to an aggregate of $65 million, to backstop certain redemptions by RedBall shareholders.
The foregoing description of the Backstop Subscription Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions of the Backstop Subscription Agreement, a copy of which is attached hereto as Exhibit 10.3 and is incorporated herein by reference.
Sponsor Support Agreement
On October 13, 2021, in connection with the execution of the Business Combination Agreement, RedBall, the Sponsor, RedBall’s directors and SeatGeek entered into a sponsor support agreement (the “Sponsor Support Agreement”), pursuant to which the Sponsor and each director of RedBall agreed to, among other things, vote in favor of the Business Combination Agreement and the transactions contemplated thereby, in each case, subject to the terms and conditions contemplated by the Sponsor Support Agreement.
Additionally, Sponsor and each director of RedBall has agreed that it will not, during a twelve month lock-up period, unless earlier released, and subject to customary exceptions, (i) sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option to purchase or otherwise dispose of or agree to dispose of, directly or indirectly, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position any shares of New SeatGeek Common Stock held by it immediately after the Closing, any shares of New SeatGeek Common Stock issuable upon the exercise of options or warrants to purchase shares of New SeatGeek Common Stock held by it immediately after Closing or any securities convertible into or exercisable or exchangeable for New SeatGeek Common Stock held by it immediately after Closing (collectively, the “Sponsor Lock-Up Shares”), (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Sponsor Lock-Up Shares, or (iii) publicly announce any intention to effect any transaction specified in clause (i) or (ii). Notwithstanding the foregoing, if at any time before twelve months after the Closing, (x) New SeatGeek consummates a Subsequent Transaction (as defined in the Sponsor Support Agreement) which results in its stockholders having the right to exchange their shares of New SeatGeek Common Stock for cash, securities or other property having a value that equals or exceeds $12.00 per share, or (y) the closing price of the New SeatGeek Common Stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock capitalizations, reorganizations, recapitalizations and the like) for any twenty trading days within any thirty trading day period commencing at least one hundred fifty days after the Closing, then each party’s sponsor Lock-Up Shares will be automatically released from the lock-up restrictions. The lock-up restrictions contain customary exceptions, including, but not limited to, estate planning transfers, affiliate transfers, and transfers upon death or by will.
The Sponsor has also agreed to forfeit 1,000,000 shares of New SeatGeek common stock upon the Closing, and to subject 7,187,500 shares issued and outstanding of New SeatGeek Common Stock, which are comprised of two separate tranches of 3,593,750 shares per tranche, to potential forfeiture to New SeatGeek for no consideration until the occurrence of the certain earnout vesting conditions.