Redbox 2008 Annual Report Download - page 81

As part of the GAM Purchase Agreement, we will initially pay to GAM cash in the amount of $10.0 million
and deliver to GAM 1.5 million shares of Common Stock (the “Initial Consideration”) on the closing date, which,
subject to fulfillment or waiver of customary closing conditions, is expected to be on February 26, 2009. In addition
to the Initial Consideration, we will pay deferred consideration to GAM in cash and/or shares of Common Stock at
our election and subject to the satisfaction of certain conditions at one or more later dates, with at least 50% of such
deferred consideration payable by July 31, 2009 and the remaining 50% payable by October 30, 2009 (the
“Deferred Consideration” and together with the Initial Consideration, the “Total Consideration”), subject to
mandatory prepayment on the occurrence of certain events. The amount of Deferred Consideration to be paid will
be based upon a schedule that we will deliver to GAM on the business day immediately preceding the closing date of
the transaction. The total amount of Deferred Consideration will ultimately depend upon the amount of Initial
Consideration paid by us and the months in which we pay such Deferred Consideration, with Coinstar paying less
Deferred Consideration to the extent that we pay more Initial Consideration on the closing date. The Total
Consideration to be paid to GAM is expected to be between approximately $134.0 million and $151.0 million. Any
consideration paid in shares of Common Stock will be paid in newly issued, unregistered shares of Common Stock
and will be valued based on the average of the volume weighted average price per share of Common Stock for each
of the eight NASDAQ trading days prior to, but not including, the date of issuance (the “VWAP Price”). GAM will
be entitled to registration rights under the Securities Act of 1933, as amended, with respect to the shares of Common
Stock acquired in connection with the transaction. The GAM Purchase Agreement provides that in no event will the
shares of Common Stock issued to GAM as consideration exceed 5,653,398 shares. In addition, if certain conditions
are not met, we will not have the option to pay Deferred Consideration in shares of Common Stock, including if such
payment would cause GAM to beneficially hold greater than 9.9% of our outstanding Common Stock.
The consummation of the transaction contemplated by the GAM Purchase Agreement is subject to various
conditions (or applicable waivers of such conditions), including, but not limited to, a VWAP Price of not less than
$15 per share of Common Stock at the closing date. The GAM Purchase Agreement contains customary
representations and warranties between us and GAM for such a transaction, as well as certain covenants restricting
us from operating outside the ordinary course of business until the Total Consideration has been paid.
In connection with the transaction with GAM, we expect to purchase the remaining outstanding interests of
Redbox from minority interest and non-voting interest holders in Redbox. Consideration to be paid by Coinstar for
these remaining interests will be paid on similar terms to those of the GAM Purchase Agreement, with the minority
interest and non-voting interest holders receiving for their respective interests initial consideration in cash and/or
shares of Common Stock at the closing date, and then receiving deferred consideration in cash and/or shares of
Common Stock at such date(s) as GAM is paid Deferred Consideration. Any consideration to be paid in shares of
Common Stock to these interest holders will be valued in the same manner as any consideration to be paid in shares
of Common Stock to GAM and such shares will either be newly issued, unregistered shares of Common Stock with
similar registration rights to those of GAM or newly issued shares of Common Stock for which we already have an
existing effective registration statement. The total consideration to be paid in these transactions is expected to be
between $21.5 million and $24.9 million.
Secured Credit Facility: On February 12, 2009, we amended our senior secured revolving line of credit
facility to enable us to complete the acquisition of Redbox. As part of the amendment, upon closing the transaction
with GAM, Redbox will become a guarantor of our debt and Redbox financial results will be included in our debt
covenant calculation requirements. See Note 7 for discussion of our credit facility, as amended.
79