Item 1.01 Entry Into A Material Definitive Agreement.
Transaction Agreement
On April 21, 2021, Horizon
Acquisition Corporation, a Cayman Islands exempted company (“Horizon”), entered into a Transaction Agreement (as it
may be amended, supplemented or otherwise modified from time to time, the “Transaction Agreement”), by and among Horizon,
Horizon Sponsor, LLC, a Delaware limited liability company (“Sponsor”), Hoya Topco, LLC, a Delaware limited liability
company (“Topco”), Hoya Intermediate, LLC, a Delaware limited liability company (“Intermediate”),
and Vivid Seats Inc., a Delaware corporation and a direct wholly owned subsidiary of Intermediate (“VS PubCo” and collectively
with Topco and Intermediate, the “VS Entities”).
The Transaction Agreement
and the transactions contemplated thereby were approved by the boards of directors of each of Horizon and VS PubCo.
The Business Combination
Upon the terms and subject
to the conditions of the Transaction Agreement, and in accordance with the Delaware General Corporation Law and the Cayman Islands Companies
Act, Horizon will merge with and into VS PubCo (the “Merger”), the separate corporate existence of Horizon will cease
and VS PubCo will be the surviving corporation of the Merger (hereinafter referred to for the periods at and after the effective time of the Merger (the “Effective Time”)
(as defined below) as the “Surviving Corporation”). At the Effective Time, by virtue of the Merger, each Class A ordinary
share of Horizon, par value $0.0001 per share (“Horizon Class A Common Stock”) and each Class B ordinary share of Horizon,
par value $0.0001 per share (“Horizon Class B Common Stock”, and together with the Horizon Class A Common Stock, the
“Horizon Common Stock”) issued and outstanding immediately prior to the Effective Time will be automatically cancelled
and converted into the right to receive one (1) share of Class A Common Stock of VS PubCo, par value $0.0001 (“VS PubCo Class
A Common Stock”). At the Effective Time, each warrant to purchase shares of Horizon Common Stock issued and outstanding immediately
prior to the Effective Time will automatically become a warrant to purchase shares of VS PubCo Class A Common Stock. The Merger and the
other transactions contemplated by the Transaction Agreement are hereinafter referred to as the “Business Combination”
and the closing date of the Business Combination is hereinafter referred to as the “Closing.”
Prior to the Merger, and pursuant
to the Transaction Agreement, the VS Entities will complete the Pre-Closing Restructuring (as defined in the Transaction Agreement), which
will include, among other things, a merger of a newly formed subsidiary of Topco with and into Intermediate, pursuant to which Intermediate
will recapitalize its existing common units and preferred units, the issuance of common units of Intermediate to certain existing unitholders
of Intermediate, and the issuance to Topco of (i) 3,000,000 warrants to purchase additional common units of Intermediate at a price of
$10.00 per unit and (ii) 3,000,000 warrants to purchase additional common units of Intermediate at a price of $15.00 per unit. The number of
common units of Intermediate issued pursuant to the Pre-Closing Restructuring was determined based on an implied pre-Closing equity value
of $1.182 billion on a cash-free and debt-free basis.
At least one day prior to
the Merger, Sponsor will exchange its existing shares of Horizon Class B Common Stock in exchange for shares of Horizon Class A Common
Stock and warrants to purchase Horizon Class A Common Stock in accordance with the Exchange Agreement described below.
At the Closing, and immediately
following the Effective Time, VS PubCo will consummate the transactions contemplated by the PIPE Financing (as defined below) and the
PIPE Investors (as defined below) will receive shares of VS PubCo Class A Common Stock in exchange for their investment. Immediately following
the completion of the PIPE Financing, VS PubCo will acquire, directly or indirectly pursuant to the acquisition of certain holders of
common units in Intermediate (“Intermediate Common Units”) as described in the Transaction Agreement, common units
of Intermediate and warrants to purchase common units of Intermediate in amounts equal to the then-outstanding number of shares of VS
PubCo Class A Common Stock and warrants to purchase VS PubCo Class A common Stock, in exchange for the available cash then held by VS
PubCo, as described below (the “Transaction Consideration”).
Also at the Closing, VS PubCo
will issue to Topco a number of shares of Class B Common Stock of VS PubCo, par value $0.0001 per share (“VS PubCo Class B Common
Stock” and together with VS PubCo Class A Common Stock, “VS PubCo Common Stock”) equal to the number of Intermediate
Common Units held by Topco, as well as 6,000,000 warrants to purchase shares of Class B Common Stock.
Following the foregoing transactions,
Topco is expected to own approximately 61% of the outstanding Intermediate Common Units and an equivalent percentage of the outstanding
voting shares of VS PubCo, and VS PubCo will own the remainder of the outstanding Intermediate Common Units. The Business Combination
is expected to close in the second half of 2021, following the receipt of the required approvals by Horizon’s shareholders and the
fulfillment of other customary closing conditions.
Transaction Consideration
Horizon currently has approximately
$544 million in its Trust Account, net of deferred underwriting fees of approximately $13.6 million. In addition, $225 million will be
raised via a PIPE Financing (at a price of $10.00 per share) which has been committed upon signing of the Transaction
Agreement and will not be subject to any closing conditions other than the Closing of the Business Combination. Eldridge Industries, LLC,
an affiliate of the Sponsor, and its related parties will invest in the PIPE Financing on the same terms as the other investors in an
amount equal to $190 million of the $225 million.
Representations and Warranties; Covenants
The Transaction
Agreement contains representations, warranties and covenants of each of the parties thereto that are customary for transactions of
this type, including with respect to corporate organization and authorization, third party consents, capitalization, financial
statements, material contracts, tax matters, compliance with laws, employee and benefits matters and intellectual property, among
others. Effective immediately following the Closing, VS PubCo’s board of directors shall be comprised of nine (9) directors,
who shall initially be (i) the chief executive officer of VS PubCo, (ii) five (5) directors designated by the Topco Equityholders
(as defined in the Stockholders’ Agreement (as defined below)), of which at least one (1) shall qualify as an
“independent director” under stock exchange regulations applicable to VS PubCo and (iii) three (3) directors designated
by the Horizon Equityholders (as defined in the Stockholders’ Agreement (as defined below)), of which at least two (2)
directors shall qualify as “independent directors” under stock exchange regulations applicable to VS PubCo.
Conditions to Each Party’s Obligations
The obligations of Horizon
and VS PubCo to consummate the Business Combination are subject to certain closing conditions, including, but not limited to, (i) the
requisite approvals of the Horizon stockholders, (ii) the registration statement shall have become effective under the Securities Act
(as defined below), (iii) the VS PubCo Class A Common Stock shall have been approved for listing on a national exchange and (iv) performance
of each parties’ covenants to be performed under the Transaction Agreements in all material respects.
Termination
The Transaction Agreement
may be terminated under certain customary and limited circumstances prior to the Closing, including, (i) by mutual written consent of
Topco and Horizon, (ii) by written notice from Topco or Horizon to the other if any Governmental Authority (as defined in the Transaction
Agreement) shall have enacted, issued, promulgated, enforced or entered any Governmental Order (as defined in the Transaction Agreement)
which has become final and non-appealable and has the effect of making consummation of the Business Combination illegal or otherwise preventing
or prohibiting consummation of the Business Combination, (iii) by written notice from Topco to Horizon if the Horizon Stockholder Approval
(as defined in the Transaction Agreement) shall not have been obtained by reason of the failure to obtain the required vote at the Horizon
Stockholders’ Meeting (as defined in the Transaction Agreement) duly convened therefor or at any adjournment or postponement thereof,
(iv) by written notice from Topco to Horizon after there has been a Modification in Recommendation (as defined in the Transaction Agreement),
(v) prior to the Closing, by written notice to Topco from Horizon if (A) there is any breach of any representation, warranty, covenant
or agreement on the part of the VS Entities set forth in the Transaction Agreement such that certain conditions to closing cannot be satisfied
and such breach is not cured within the cure period window or (B) the Closing has not occurred on or before October 21, 2021, unless Horizon
is then in material breach of the Transaction Agreement, or (vi) prior to the Closing, by written notice from Horizon to Topco if (A)
there is any breach of any representation, warranty, covenant or agreement on the part of Horizon or Sponsor set forth in the Transaction
Agreement such that certain conditions to closing cannot be satisfied and such breach is not cured within the cure period window or (B)
the Closing has not occurred on or before October 21, 2021, unless any of the VS Entities is then in material breach of the Transaction
Agreement.
If the Transaction Agreement
is validly terminated, none of the parties to the Transaction Agreement will have any liability or any further obligation under the Transaction
Agreement other than customary confidentiality obligations and other miscellaneous provisions, except in the case of fraud or willful
and material breach of the Transaction Agreement.
A copy of the Transaction
Agreement will be filed by Amendment on Form 8-K/A to this Current Report on Form 8-K within four business days of the date hereof as
Exhibit 2.1 (the terms of which are incorporated herein by reference), and the foregoing description of the Transaction Agreement is qualified
in its entirety by reference thereto. The Transaction Agreement contains representations, warranties and covenants that the respective
parties made to each other as of the date of the Transaction Agreement or other specific dates. The assertions embodied in those representations,
warranties and covenants were made for purposes of the contract among the respective parties and are subject to important qualifications
and limitations agreed to by the parties in connection with negotiating such agreement. The representations, warranties and covenants
in the Transaction Agreement are also modified in important part by the underlying disclosure schedules which are not filed publicly and
which are subject to a contractual standard of materiality different from that generally applicable to shareholders and were used for
the purpose of allocating risk among the parties rather than establishing matters as facts. Horizon does not believe that these schedules
contain information that is material to an investment decision.
Exchange Agreement
Concurrently with the execution
of the Transaction Agreement, Sponsor and Horizon entered into an exchange agreement (the “Exchange Agreement”), pursuant
to which, effective at least one day prior to the Merger, Sponsor agreed to irrevocably tender to Horizon 13,599,608 shares of Horizon
Class B Common Stock for cancellation in exchange (the “Exchange”) for (a) warrants to purchase 17,000,000 shares of
Horizon Class A Common Stock, at an exercise price of $10.00 per share, (b) warrants to purchase 17,000,000 shares of Horizon Class A
Common Stock at an exercise price of $15.00 per share and (c) 50,000 shares of Horizon Class A Common Stock.
A copy of the Exchange Agreement will be filed
by Amendment on Form 8-K/A to this Current Report on Form 8-K within four business days of the date hereof as Exhibit 10.1 (the terms
of which are incorporated herein by reference), and the foregoing description of the Exchange Agreement is qualified in its entirety by
reference thereto.
Sponsor Agreement
Concurrently with the execution
of the Transaction Agreement, the Sponsor, Horizon and Topco entered into a sponsor agreement (the “Sponsor Agreement”),
pursuant to which the Sponsor agrees, among other things, (i) to vote at any meeting of Horizon’s stockholders, and in any action
by written consent of Horizon’s stockholders, all of its Horizon equity securities in favor of the adoption and approval of the
Transaction Agreement, the transactions contemplated thereby, including the Merger, and the other approvals contemplated to be sought
with respect thereto; (ii) be bound by certain other covenants and agreements related to the Business Combination, (iii) be bound by certain
transfer restrictions with respect to such securities and (iv) increase the amount of its subscription of shares of VS PubCo Class A Common
Stock, by the amount the available cash held by VS PubCo at the closing of the Business Combination is less than approximately $769 million,
in consideration for a fee of approximately $11.7 million, in each case, on the terms and subject to the conditions set forth in the Sponsor
Agreement.
A copy of the Sponsor Agreement
will be filed by Amendment on Form 8-K/A to this Current Report on Form 8-K within four business days of the date hereof as Exhibit 10.2
(the terms of which are incorporated herein by reference), and the foregoing description of the Sponsor Agreement is qualified in its
entirety by reference thereto.
PIPE Financing
In connection with the signing
of the Transaction Agreement, Horizon and VS PubCo entered into subscription agreements (the “Subscription Agreements”)
with certain investors (the “PIPE Investors”). Pursuant to the Subscription Agreements, the PIPE Investors agreed to
subscribe for and purchase, and Horizon agreed to issue and sell to such investors, on the closing date, an aggregate of 22,500,000 shares
of VS PubCo Class A Common Stock, in a private placement for a purchase price of $10.00 per share, for aggregate gross proceeds of $225
million (the “PIPE Financing”). The closing of the PIPE Financing is contingent
upon, among other things, the substantially concurrent consummation of the Business Combination. The Subscription Agreements provide that
VS PubCo will grant the investors in the PIPE Financing certain customary registration rights. VS PubCo will, within 30 days after the
consummation of the Business Combination, file with the SEC a registration statement registering the resale of such shares of VS
PubCo Class A Common Stock and will use its commercially reasonable efforts to have such registration statement declared effective as
soon as practicable after the filing thereof.
A copy of the form of Subscription
Agreement will be filed by Amendment on Form 8-K/A to this Current Report on Form 8-K within four business days of the date hereof as
Exhibit 10.3 (the terms of which are incorporated herein by reference), and the foregoing description of the Subscription Agreements and
the PIPE Financing is qualified in its entirety by reference thereto.
Stockholders’ Agreement
At the Closing, VS PubCo,
Topco and Sponsor will enter into a stockholders’ agreement (the “Stockholders’ Agreement”), which will
provide for, among other things, director nomination rights of Topco and Sponsor for the VS PubCo board of directors as described above.
Such director nomination rights of Topco and Sponsor shall step down as their respective aggregate ownership interests in VS PubCo decrease.
In addition to the aforementioned
nomination rights, pursuant to the Stockholders’ Agreement, Sponsor and Topco will agree, subject to limited exceptions, not to
transfer shares of VS PubCo Common Stock or warrants to purchase shares of VS PubCo Common Stock held by Topco (and, in certain circumstances,
certain of Topco’s members and their affiliates) or held by the Sponsor or any of its affiliates for a lock-up period after Closing
as follows: (i) 50.0% of such shares and warrants will be subject to lock-up restrictions until the six (6) month anniversary of Closing
and (ii) 50.0% of such shares and warrants will be subject to lock-up restrictions until the twelve (12) month anniversary of Closing;
provided that 50.0% of these shares and warrants shall be released from the lock-up early upon the occurrence of both (a) the post-Closing
share price exceeding $15.00 per share for twenty (20) trading days within a consecutive thirty (30)-trading day period commencing at
least five (5) months after Closing and (b) the average daily trading volume exceeding one million (1,000,000) during such period.
The Stockholders’ Agreement
also provides for, among other things, VS PubCo’s obligation to maintain “controlled company” qualification (under applicable
stock exchange rules) unless otherwise agreed by Topco and certain other voting agreements of Sponsor and Topco with respect to VS PubCo.
A copy of the Stockholders’
Agreement will be filed by Amendment on Form 8-K/A to this Current Report on Form 8-K within four business days of the date hereof as
Exhibit 10.4 (the terms of which are incorporated herein by reference), and the foregoing description of the Stockholders’ Agreement
is qualified in its entirety by reference thereto.
Registration Rights Agreement
At the Closing, VS PubCo,
Sponsor and Topco will amend and restate the Registration Rights Agreement, dated as of August 25, 2020, by and between Horizon and Sponsor
(such amended and restated agreement, the “Registration Rights Agreement”), pursuant to which, among other things,
VS PubCo will agree to file a registration statement for a shelf registration on Form S-1 or Form S-3 within 30 days following Closing
and Sponsor and Topco will be granted certain customary registration rights with respect to the securities of VS PubCo.
A copy of the form of Registration
Rights Agreement will be filed as Exhibit C to the Transaction Agreement, a copy of which will be filed by Amendment on Form 8-K/A to
this Current Report on Form 8-K within four business days of the date hereof as Exhibit 2.1 (the terms of which are incorporated herein
by reference), and the foregoing description of the Registration Rights Agreement is qualified in its entirety by reference thereto.
Tax Receivable Agreement
At the Closing, VS PubCo,
Intermediate, the TRA Holder Representative (as defined in the Tax Receivable Agreement), Topco and the Blocker TRA Holders (as defined
in the Tax Receivable Agreement) will enter into a tax receivable agreement (the “Tax Receivable Agreement”), pursuant
to which, among other things, VS PubCo will generally be required to pay to Topco, the Blocker TRA Holders or their respective transferees
85% of the amount of savings, if any, in income taxes, and any interest related thereto, that VS PubCo and certain of its subsidiaries
realize, or are deemed to realize, as a result of certain tax attributes.
A copy of the form of Tax
Receivable Agreement will be filed as Exhibit D to the Transaction Agreement, a copy of which will be filed by Amendment on Form 8-K/A
to this Current Report on Form 8-K within four business days of the date hereof as Exhibit 2.1 (the terms of which are incorporated herein
by reference), and the foregoing description of the Tax Receivable Agreement is qualified in its entirety by reference thereto.
Second Amended and Restated Limited Liability Company Agreement
of Intermediate
At the Closing, Intermediate,
VS PubCo and Topco will enter into a Second Amended and Restated Limited Liability Company Agreement of Intermediate (the “LLC
Agreement”) setting forth the rights and obligations of the members and board of managers of Intermediate, pursuant to which,
among other things, the board of managers will be controlled by VS PubCo. In addition, the LLC Agreement contains customary provisions
for operating partnerships held by a public company, including providing for VS PubCo to maintain a one-to-one ratio between its outstanding
VS PubCo Class A Common Stock and the number of Intermediate Common Units held by VS PubCo.
A copy of the form of LLC
Agreement will be filed as Exhibit F to the Transaction Agreement, a copy of which will be filed by Amendment on Form 8-K/A to this Current
Report on Form 8-K within four business days of the date hereof as Exhibit 2.1 (the terms of which are incorporated herein by reference),
and the foregoing description of the LLC Agreement is qualified in its entirety by reference thereto.
