Item
1.01. Entry into a Material Definitive Agreement.
Amended
and Restated Agreement and Plan of Merger
As
previously reported in the Current Report on Form 8-K filed by FAST Acquisition Corp. II, a Delaware corporation (“SPAC”),
with the Securities and Exchange Commission (the “SEC”) on July 12, 2022 (the “Original 8-K”),
SPAC, Falcon’s Beyond Global, LLC, a Florida limited liability company (the “Company”), Falcon’s Beyond
Global, Inc., a Delaware corporation and a wholly owned subsidiary of the Company which was formerly known as Palm Holdco, Inc. (“Pubco”),
and Palm Merger Sub LLC, a Delaware limited liability company and a wholly owned subsidiary of Pubco (“Merger Sub”),
entered into an Agreement and Plan of Merger on July 11, 2022 (as amended by that certain Amendment No. 1 to Agreement and Plan of Merger,
dated September 13, 2022 as previously disclosed in the Current Report on Form 8-K filed by SPAC with the SEC on September 16, 2022,
the “Original Merger Agreement”). Capitalized terms in this Item 1.01 not otherwise defined have the meanings ascribed
to such terms in the Original 8-K.
On
January 31, 2023, SPAC, the Company, Pubco and Merger Sub entered into that certain Amended and Restated Agreement and Plan of Merger
(the “A&R Merger Agreement”), which amended and restated the Original Merger Agreement in its entirety to, among
other things, provide for the following:
| ● | Changes
to Acquisition Merger Consideration: The number of shares of Pubco Class B Common Stock
and New Company Units to be issued in exchange for current Company Units (excluding Company
Financing Units) in the Acquisition Merger has been reduced from 88,653,263 to 48,587,077. |
| ● | EBITDA
and Revenue Earnouts: In addition to the 40 million Seller Earnout Shares earned based
on the Pubco Common Share Price provided for in the Original Merger Agreement, the holders
of Company Units immediately before the Closing (other than the holders of Company Financing
Units in their capacity as holders of Company Financing Units) will now be entitled to receive
a pro rata portion of a total of up to 40 million additional Seller Earnout Shares based
on Pubco’s achievement of specified EBITDA and revenue targets in 2023 and 2024. Up
to 2% of the 80 million Seller Earnout Shares will be allocated to each of FAST Sponsor II
LLC, a Delaware limited liability company (the “Sponsor”), and Jefferies
LLC if they are earned. |
| ● | Changes
to Sponsor Consideration: |
| ○ | 80%
of the founder shares held by the Sponsor are now subject to forfeiture pro rata based
on the amount of funds available at the Acquisition Merger Closing that are primarily sourced
by SPAC and the Sponsor (including funds in the Trust Account after redemptions) (the “SPAC
Capital Received”), measured against a target amount of $222,336,870; provided
the Sponsor will retain a minimum of 1,250,000 founder shares. The Sponsor will continue
to forfeit the remaining 20% of its founder shares, but will now have the opportunity to
earn them back (as well as any shares forfeited based on SPAC Capital Received) based on
achievement of the Pubco Common Share Price, Pubco revenue and Pubco EBITDA earnout targets. |
| ○ | The
Sponsor further agreed to forfeit 50% of its private placement warrants if SPAC Capital Received
is less than $50 million and to amend the Warrant Agreement to provide that its private placement
warrants are redeemable (subject to the concurrent redemption of other warrants) at a redemption
price of $0.01 per warrant if the Reference Value (as defined below) is at least $18 per
share (the “Warrant Agreement Amendment”). “Reference Value”
means the last reported sales price of the shares of SPAC Class A Common Stock for any twenty
(20) trading days within the thirty (30) trading-day period ending on the third trading day
prior to the date on which notice of the redemption is given. |
| ● | Extension:
SPAC agreed to take certain actions to extend the date by which it has to complete a business
combination to October 18, 2023 (the “Extension”). Infinite Acquisitions
LLLP, a majority equity holder of the Company (“Infinite”), agreed to
fund up to $2,000,000 of expenses related to the Extension pursuant to a promissory note,
described in more detail below. |
| ● | Termination:
The Termination Date was extended from April 11, 2023 to September 30, 2023. SPAC’s
termination right if the Company fails to deliver its audited financial statements by a specified
date was eliminated. Termination rights in favor of SPAC were added in the case where Infinite
defaults under the Promissory Note or if the Company enters into certain specified interim
financing arrangements (the “Interim Financing Termination”). Mutual termination
rights were added in the case where, following a cure period, SPAC is not listed on an approved
exchange or is in default of the listing requirements of the exchange it is listed on (the
“Delisting Termination”) or if the closing condition related to the listing
of Pubco shares on an approved exchange is not satisfied following the satisfaction of all
other closing conditions (the “Pubco Listing Termination”). |
| ● | Termination
Fee: SPAC will be entitled to a termination fee of $12,500,000 (minus 50% of
any amounts funded by Infinite under the Promissory Note) at the time of termination if the
A&R Merger Agreement is terminated for any reason specified in the Merger Agreement other
than: (i) mutual agreement of the Company and SPAC; (ii) SPAC’s breach of the Merger
Agreement in a manner that causes the failure of a condition to Closing under the Merger
Agreement (when the Company is not also in breach); (iii) the consummation of either Merger
is permanently enjoined or prohibited by the terms of a final, non-appealable Governmental
Order or other Law if the final, non-appealable Governmental Order or other Law is generally
applicable to all special purpose acquisition companies or primarily caused by any action
or inaction of SPAC; (iv) the SPAC Stockholder Approval is not obtained at the Special Meeting;
(v) if the SPAC board changes its recommendation to stockholders or fails to recommend the
Merger in the proxy statement; (vi) pursuant to the Delisting Termination; or (vii) failure
to close by the Termination Date or two days after the Special Meeting (when the Company
is not in breach). In addition, no termination fee will be payable at any time the Company
could terminate the Merger Agreement pursuant to the Delisting Termination or because of
SPAC’s breach of the Merger Agreement in a manner that causes the failure of a condition
to Closing under the Merger Agreement. The termination fee will be reduced by 50% and payable
at any time within 12 months of termination instead of at the time of termination if the
Merger Agreement is terminated pursuant to the Interim Financing Termination or the Pubco
Listing Termination, or is terminated at a time when SPAC or the Company could terminate
the Merger Agreement pursuant to the Pubco Listing Termination. |
| ● | Alternative
Financing: SPAC may enter into one or more agreements with any investor to effect certain
Pre-Approved Financing Arrangements without any consent or approval required from the Company. |
The
A&R Merger Agreement also makes certain technical and other changes to the Original Merger Agreement. The foregoing description of
the A&R Merger Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions of the A&R
Merger Agreement, a copy of which is attached hereto as Exhibit 2.1 and is incorporated herein by reference. The A&R Merger Agreement
contains representations, warranties, and covenants that the parties to the A&R Merger Agreement made to each other as of the date
of the A&R Merger Agreement or other specific dates. The assertions embodied in those representations, warranties, and covenants
were made for purposes of the contract among the parties and are subject to important qualifications and limitations agreed to by the
parties in connection with negotiating the A&R Merger Agreement. The A&R Merger Agreement has been attached to provide investors
with information regarding its terms and is not intended to provide any other factual information about FAST Acquisition Corp. II, the
Company, Pubco or any other party to the A&R Merger Agreement. In particular, the representations, warranties, covenants and agreements
contained in the A&R Merger Agreement, which were made only for purposes of the A&R Merger Agreement and as of specific dates,
were solely for the benefit of the parties to the A&R 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 A&R 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 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 A&R Merger Agreement. In addition, the representations, warranties, covenants, and
agreements and other terms of the A&R 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 A&R Merger Agreement,
which subsequent information may or may not be fully reflected in SPAC’s public disclosures.
Amended
and Restated Sponsor Support Agreement
As
previously reported in the Original 8-K, Sponsor, SPAC, the Company and Pubco entered into a Sponsor Support Agreement on July 11, 2022
(the “Original Sponsor Agreement”) in connection with the parties’ entrance into the Original Merger Agreement.
On January 31, 2023, in connection with the A&R Merger Agreement, Sponsor, SPAC, the Company and Pubco amended and restated the Original
Sponsor Agreement by entering into an Amended and Restated Sponsor Support Agreement whereby, among other things, the Sponsor agreed
(i) to exchange its shares of SPAC Class B Common Stock for shares of SPAC Class A Common Stock in accordance with SPAC’s amended
and restated certificate of incorporation such that, prior to the SPAC Merger Effective Time, there shall cease to be outstanding any
shares of SPAC Class B Common Stock, (ii) to forfeit a portion of its founder shares and private placement warrants to the extent and
as described above and (iii) to support the Warrant Agreement Amendment.
The
foregoing description does not purport to be complete and is qualified in its entirety by reference to the full text of the Amended
& Restated Sponsor Support Agreement. A copy of the Amended & Restated Sponsor Support Agreement is filed as Exhibit 10.1 to
this Current Report on Form 8-K and incorporated herein by reference.
Amended
and Restated Company Member Support Agreement
As
previously reported in the Original 8-K, SPAC, the Company, Pubco and the holders of Company Units entered into a Company Member Support
Agreement on July 11, 2022 (the “Original Company Member Support Agreement”) in connection with the parties’
entrance into the Original Merger Agreement. On January 31, 2023, in connection with the A&R Merger Agreement, SPAC, the Company,
Pubco and the holders of Company Units amended and restated the Original Company Member Support Agreement by entering into an Amended
and Restated Company Member Support Agreement whereby, among other things, the holders of Company Units agreed to support the A&R
Merger Agreement.
The
foregoing description does not purport to be complete and is qualified in its entirety by reference to the full text of the A&R
Company Member Support Agreement. A copy of the A&R Company Member Support Agreement is filed as Exhibit 10.2 to this Current Report
on Form 8-K and incorporated herein by reference.
Amended
and Restated Sponsor Lockup Agreement
As
previously reported in the Original 8-K, Sponsor, SPAC, the Company and Pubco entered into a Sponsor Lockup Agreement on July 11, 2022
(the “Original Sponsor Lockup Agreement”) in connection with the parties’ entrance into the Original Merger
Agreement. On January 31, 2023, in connection with the A&R Merger Agreement, the Sponsor, SPAC, the Company and Pubco amended and
restated the Original Sponsor Lockup Agreement by entering into an Amended and Restated Sponsor Lockup Agreement whereby, among other
things, the Sponsor agreed to increase the lockup term for up to 1,250,000 of its retained shares to be two years from the Closing.
The
foregoing description does not purport to be complete and is qualified in its entirety by reference to the full text of the A&R
Sponsor Lockup Agreement. A copy of the A&R Sponsor Lockup Agreement is filed as Exhibit 10.3 to this Current Report on Form 8-K
and incorporated herein by reference.
Promissory
Note
SPAC
and Infinite entered into a promissory note (the “Promissory Note”) pursuant to which Infinite agreed to advance up
to $2,000,000 to SPAC, with any advances under the Promissory Note to be used by SPAC to pay certain expenses of the Extension. The Promissory
Note is non-interest bearing and repayable, in cash, or, at Pubco’s option, in shares of Pubco Class A Common Stock at a conversion
price of $10.00 per share, at the effective time of the Acquisition Merger and will be forgiven without payment if the A&R Merger
Agreement is terminated.
The
foregoing description does not purport to be complete and is qualified in its entirety by reference to the full text of the Promissory
Note. A copy of the Promissory Note is filed as Exhibit 10.4 to this Current Report on Form 8-K and incorporated herein by reference.