|
Item 1.01.
|
Entry Into a Material Definitive Agreement.
|
On October 2, 2018, Landcadia Holdings,
Inc. (the “Company”) and its wholly owned subsidiary (“Merger Sub”) entered into a debt commitment letter
(the “Commitment Letter”) with Luxor Capital Group, LP, on behalf of Lugard Road Capital Master Fund, LP, and of one
or more of its funds and/or affiliates (collectively, “Luxor”), pursuant to which Luxor agreed to (a) provide a senior
secured first priority term loan facility to Merger Sub in the aggregate principal amount of $25,000,000 (the “Debt Facility”)
and (b) purchase from the Company an aggregate principal amount of $60,000,000 of the Company’s convertible promissory notes
(the “Notes” and, together with the Debt Facility, the “Debt Financings”), in each case concurrently with
the closing of the previously announced business combination (the “Business Combination”) between the Company and Waitr
Incorporated (“Waitr”).
Debt Facility
The
Debt Facility will be guaranteed by the Company and secured by a lien on substantially all assets of the Company. Loans advanced
under the Debt Facility will mature four years after the closing of the Business Combination (the “Closing Date”).
Interest on borrowings under the Debt Facility will accrue at a rate of 7.0% per annum, payable quarterly, in cash or, at the election
of the borrower, as a payment-in-kind. Any amounts paid in kind will be added to the principal amount of the Debt Facility on such
interest payment date (increasing the principal amount thereof) and will thereafter bear interest at the rate set forth above.
In
connection with the Debt Facility, the Company has agreed to issue to the lenders under the Debt Facility warrants to purchase
an aggregate of $5.0 million of common equity in the Company (the “Warrants”). The Warrants will become exercisable
after the Business Combination and (i) will expire four (4) years from the Closing Date, (ii) will have an exercise price of $13.00
per share, and (iii) will include standard anti-dilution protection, including weighted average adjustments for issuances of additional
shares. Holders of the Warrants will have customary registration rights with respect to the shares underlying the warrants. In
addition, the Company will be required to repay the Debt Facility in full in the event that either (i) the registration statement
for the resale of the Notes (as defined below) and the shares of common stock underlying the Notes and Warrants has not been filed
within 30 days after the Closing Date, or (ii) such registration statement is not effective within 180 days after the Closing Date.
Such repayment shall be payable within nine months after the Debt Facility becomes due.
During
the first 12 months following the Closing Date, the Company will be required to pay a prepayment premium of 5.0% of the principal
amount to be prepaid in connection with (i) any prepayments (whether before or after an event of default), (ii) any payment, repayment
or redemption of the obligations following an acceleration, (iii) certain bankruptcy events, or (iv) the termination for any reason
of the definitive agreements documenting the issuance of the Notes. Thereafter, the Debt Facility may be prepaid without penalty
or premium.
Convertible Notes
The
Notes will bear interest at 1.0% per annum, paid quarterly in cash and will mature four years from the Closing Date. Upon maturity,
the Notes (and any accrued but unpaid interest) will be repaid in cash or converted into shares of common equity of the Company,
at the holder’s election.
At
any time at the holder’s election, each Note may be converted in whole or in part into shares of common equity of the Company
at a rate of $13.00 per share (subject to a 9.9% conversion cap). The Notes will include customary anti-dilution protection, and
the Notes (and the shares issuable upon their conversion) will have certain registration rights.
The
Company may only prepay the Notes with the consent of the holders of at least a majority-in-interest of the outstanding Notes.
Private Placement Warrant Exchange
In connection
with the Debt Financings, the Company’s co-sponsors, Fertitta Entertainment, Inc. (“FEI”) and
Jefferies Financial Group Inc., have agreed to exchange the 14,000,000 warrants purchased by them in connection with the
Company’s initial public offering (“private placement warrants”) for 1,600,000 shares of the
Company’s common stock. In addition, the parties have agreed that the Company will repay FEI $1,250,000 in cash and
issue to FEI 75,000 shares of the Company’s common stock at the closing of the Business Combination, in full
satisfaction of FEI’s prior $1,500,000 convertible loan to the Company.
Board Nomination Rights
Pursuant
to the terms of the Commitment Letter, the Company has agreed to include in its proxy statement for the Business Combination two
directors designated by Luxor to serve on the Company’s board of directors upon the closing of the Business Combination.
Luxor will thereafter have nomination rights with respect to two directors for so long as it satisfies a minimum ownership threshold
to be agreed by the parties in connection with the definitive documentation for the Debt Financings.
Other Provisions
The definitive documentation for the Debt
Financings will include customary affirmative and negative covenants, representations and warranties and events of default. The
definitive documentation for the Debt Financings will not include any financial maintenance covenants.
The obligation of Luxor to provide the Debt
Financings under the Commitment Letter is subject to a number of customary conditions, including, without limitation, the negotiation
and execution of applicable definitive financing documents contemplated by the Commitment Letter and the consummation of the Business
Combination in accordance with the terms of the Merger Agreement. In addition, the Company has agreed to reimburse Luxor for all
reasonable and documented out-of-pocket expenses incurred in connection with the preparation and negotiation of the Commitment
Letter and certain definitive documentation and ancillary documents related to the Debt Financings in an amount not to exceed $850,000.
The foregoing description of the Commitment
Letter does not purport to be complete and is qualified in its entirety by reference to the Commitment Letter, which is filed as
Exhibit 10.1 hereto, and is incorporated herein by reference.