Item 1.01 Entry into a Material Definitive Agreement.
Agreement and Plan of Merger
On December 11, 2018, Waitr Holdings Inc.,
a Delaware corporation (the “Company”), entered into an Agreement and Plan of Merger (the “Merger Agreement”)
with Wingtip Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of the Company (“Merger Sub”), and
BiteSquad.com, LLC, a Minnesota limited liability company (“Bite Squad”), pursuant to which, subject to the satisfaction
or waiver of certain conditions set forth therein, Merger Sub will merge with and into Bite Squad, with Bite Squad surviving the
merger in accordance with the Minnesota Revised Uniform Limited Liability Company Act (the “MN LLC Act”) as a wholly
owned indirect subsidiary of the Company (the transactions contemplated by the Merger Agreement, the “Merger”).
Merger Consideration
The consideration for the Merger will consist
of (i)
an aggregate of
$202.08 million payable in cash ($204.58
million in the event the effective time of the Merger has not occurred on or before January 31, 2019, for any reason other than
a delay and/or non-performance under the Merger Agreement of Bite Squad), subject to adjustments as described in the Merger Agreement,
and (ii) an aggregate of 10,592,000 shares of the Company’s common stock, par value $0.0001 per share (“common stock”).
Board Designee
The Merger Agreement provides that, at the
effective time of the Merger, the Company will increase the size of its board of directors to eight and appoint
Kian
Salehi as a director of the Company.
Representations, Warranties and Covenants
The parties to the Merger Agreement have
made customary representations, warranties and covenants in the Merger Agreement, including, among others, covenants with respect
to the conduct of Bite Squad during the period between execution of the Merger Agreement and the completion of the Merger. The
Company and Bite Squad have each agreed to use commercially reasonable efforts to cause the Merger to be consummated.
Conditions to Closing
The closing of the Merger is subject to
certain conditions, including, among others, (i) approval by certain of Bite Squad’s unitholders, (ii) delivery by Bite Squad
of evidence of termination of certain management agreements, (iii) delivery of the Blocker Agreement (as defined in the Merger
Agreement), and (iv) the expiration or termination of the applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended.
Termination
The Merger Agreement may be terminated by
the Company and Bite Squad under certain circumstances, including, among others, (i) by mutual written consent of the Company and
Bite Squad, (ii) by written notice of Bite Squad if the Completed Order Adjustment (as defined in the Merger Agreement) results
in a decrease of the Base Merger Consideration (as defined in the Merger Agreement) in excess of five percent (5%); and (iii) by
the Company or Bite Squad if the closing of the Merger has not occurred on or prior to February 28, 2019 for any reason other than
delay and/or non-performance of the party seeking such termination.
The foregoing description of the Merger
Agreement and the Merger does not purport to be complete and is qualified in its entirety by the terms and conditions of the Merger
Agreement, a copy of which is attached hereto as Exhibit 2.1 and is incorporated herein by reference. The Merger Agreement
contains representations, warranties and covenants that the respective parties made to each other as of the date of such 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 Merger Agreement has been attached to provide investors with information regarding its terms.
It is not intended to provide any other factual information about the Company, Bite Squad or any other party to the Merger Agreement.
In particular, the representations, warranties, covenants and agreements contained in the Merger Agreement, which were made only
for purposes of such agreement and as of specific dates, were solely for the benefit of the parties to the Merger Agreement, may
be subject to limitations agreed upon by the contracting parties (including being qualified by confidential disclosures made for
the purposes of allocating contractual risk between the parties to the Merger Agreement instead of establishing these matters as
facts) and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to
investors and reports and documents filed with the U.S. Securities and Exchange Commission (the “SEC”). Investors should
not rely on the representations, warranties, covenants and agreements, or any descriptions thereof, as characterizations of the
actual state of facts or condition of any party to the Merger Agreement. In addition, the representations, warranties, covenants
and agreements and other terms of the Merger Agreement may be subject to subsequent waiver or modification. Moreover, information
concerning the subject matter of the representations and warranties and other terms may change after the date of the Merger Agreement,
which subsequent information may or may not be fully reflected in the Company’s public disclosures.
Blocker Agreement
In connection with the Merger Agreement,
on December 11, 2018, the Company entered into a Stock Purchase Agreement with Bregal Sagemount II L.P., Bregal Sagemount II-A
L.P. and Bregal Sagemount II-B L.P. (collectively, the “Selling Stockholders”), and, solely for purposes of Section
1.1, 5 and Section 8, Bite Squad (the “Blocker Agreement”).
Pursuant to the Blocker Agreement, the Company
agreed to purchase from the Selling Stockholders all of the issued and outstanding shares of BSI2 Hold Daisy Inc., which holds
an aggregate of 1,092,034 Series C Preferred Units of Bite Squad, for an amount in cash equal to the amount required to be paid
to the Selling Stockholders for such shares pursuant to the terms of Bite Squad’s operating agreement as in effect immediately
prior to the closing of the Merger. Assuming the closing of the Merger occurs prior to January 6, 2020, such amount will be approximately
$60,000 for each such share. The obligations of the Company and the Selling Stockholders to consummate the transactions contemplated
by the Blocker Agreement are conditioned upon, among other things, the satisfaction or waiver of the closing conditions set forth
in the Merger Agreement.
The foregoing description of the Blocker
Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions of the Blocker Agreement,
a copy of which is attached hereto as Exhibit 2.2 and is incorporated herein by reference.
Commitment Letter
On December 11, 2018,
the Company and its wholly owned subsidiary, Waitr Inc. (“Waitr”), 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 amend its existing Credit and Guaranty
Agreement, dated as of November 15, 2018 (the “Existing Credit Agreement” and as amended, the “Credit Agreement”),
among Waitr, as borrower, Waitr Intermediate Holdings, LLC, the guarantors party thereto, the lenders party thereto and Luxor,
as administrative agent and collateral agent, to provide to Waitr additional senior secured first priority term loans in the aggregate
principal amount of $42,080,000 the (“Additional Term Loans”), in each case concurrently with the closing of the Merger.
The
Additional Term Loans will be guaranteed by the Company and the other guarantors party to the Existing Credit Agreement and secured
by a lien on substantially all assets of the Company and the other guarantors under the Existing Credit Agreement. The Additional
Term Loans and the existing term loans (the “Existing Term Loans” and together with the Additional Term Loans, the
“Term Loans”) under the Existing Credit Agreement will mature on November 15, 2022. Interest on the Additional
Term Loans and the Existing Term Loans will accrue at a rate of 7.125% 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 Term Loans 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 Additional Term Loans, the Company has agreed to issue to the lenders under the Credit Agreement 325,000 shares
of common stock of the Company.
From
the closing date of the Additional Term Loans through November 15, 2019, the Company will be required to pay a prepayment premium
of 5.0% of the principal amount of any Term Loans to be prepaid during such period 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 convertible promissory
notes issued by the Company to Luxor. Thereafter, the Term Loans may be prepaid without penalty or premium.
The foregoing description of the Commitment
Letter does not purport to be complete and is qualified in its entirety by the terms and conditions of the Commitment Letter, a
copy of which is attached hereto as Exhibit 10.1 and is incorporated herein by reference.