Exhibit 10.5

 

EXPENSE ADVANCEMENT AGREEMENT

 

THIS EXPENSE ADVANCEMENT AGREEMENT (this “Agreement”), dated as of December 1,
2017, is made and entered into by and among Leisure Acquisition Corp., a
Delaware corporation (the “Company”), Hydra Management, LLC (“Hydra”), MLCP GLL
Funding LLC (“MLCP”) and HG Vora Special Opportunities Master Fund, Ltd. (“HG
Vora” and together with Hydra and MLCP, the “Funding Parties”).

 

RECITALS

 

WHEREAS, the Company is engaged in an initial public offering (the “Offering”)
pursuant to which the Company will issue and deliver up to 23,000,000 units (the
“Units”) (including up to 3,000,000 Units subject to an over-allotment option
granted to the underwriters of the Offering), with each Unit comprised of one
share of common stock, par value $0.0001 per share (the “Common Stock”), of the
Company and one-half of one warrant, each whole warrant exercisable to purchase
one share of Common Stock (only whole warrants are exercisable) at $11.50 per
share, subject to certain adjustments (each, a “Warrant,” and collectively, the
“Warrants”);

 

WHEREAS, the Company has filed with the Securities and Exchange Commission a
registration statement on Form S-1, No. 333-221330 (the “Registration
Statement”) for the registration, under the Securities Act of 1933, as amended
(the “Securities Act”), of the Units, and the Warrants and Common Stock
underlying the Units, including a prospectus (the “Prospectus”);

 

WHEREAS, the gross proceeds of the Offering will be deposited in a trust account
(the “Trust Account”) at J.P. Morgan Chase Bank, N.A. and managed by Continental
Stock Transfer & Trust Company, as trustee, as described in the Registration
Statement and the Prospectus; and

 

WHEREAS, the Funding Parties desire to enter into this Agreement in order to
facilitate the Offering and the other transactions contemplated in the
Registration Statement and the Prospectus, including any merger, capital stock
exchange, asset acquisition, stock purchase, reorganization or other similar
business combination by the Company with one or more businesses (a “Business
Combination”).

 

NOW, THEREFORE, in consideration of the representations, covenants and
agreements contained herein, and certain other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto, intending to be legally bound, hereby agree as follows:

 

1.             (a)             From time to time, as may be requested by the
Company, each of the Funding Parties agrees to advance to the Company from time
to time up to the maximum amount allocated thereto on Schedule I hereto on a pro
rata basis (collectively, the “Advances”), up to a maximum of $1,000,000 in the
aggregate among all Funding Parties, in each instance pursuant to the terms of
the form of promissory note attached as Exhibit A hereto (the “Note”), as may be
necessary to fund the Company’s expenses relating to investigating and selecting
a target business and other working capital requirements following the Offering
and prior to completion of any potential Business Combination.

 

 

 

  

(b)       Each of the Funding Parties represents to the Company that they are
capable of making such Advances to satisfy their respective obligations under
clause (a) of this Section 1. In addition, the Company acknowledges and agrees
that the respective obligations of each of the Funding Parties to provide such
Advances are several and not joint, and that the failure of any Funding Party to
fund any Advance when due shall not impose any additional obligation on the
other non-defaulting Funding Parties.

 

(c)       Notwithstanding anything to the contrary herein or in the Note, each
of the Funding Parties hereby irrevocably waives any and all right, title,
interest, causes of action and claims of any kind or nature whatsoever (each, a
“Claim”) in or to, and any and all right to seek payment of any amounts due to
it out of, the trust account established for the benefit of the public
stockholders of the Company and into which substantially all of the proceeds of
the Company’s initial public offering will be deposited (the “Trust Account”),
and hereby irrevocably waives any Claim it presently has or may have in the
future as a result of, or arising out of, this agreement, which Claim would
reduce, encumber or otherwise adversely affect the Trust Account or any monies
or other assets in the Trust Account, and further agrees not to seek recourse,
reimbursement, payment or satisfaction of any Claim against the Trust Account or
any monies or other assets in the Trust Account for any reason whatsoever;
provided, however, that if the Company completes a Business Combination, the
Company shall promptly repay any amounts outstanding under the Note out of the
proceeds released to the Company from the Trust Account.

 

2.             This Agreement, together with the Note, constitutes the entire
agreement and understanding of the parties hereto in respect of the advancement
of expenses contemplated herein and supersedes all prior understandings,
agreements, or representations by or among the parties hereto, written or oral,
to the extent they relate in any way thereto or to the transactions contemplated
hereby in connection therewith. This Agreement may not be changed, amended,
modified or waived (other than to correct a typographical error) as to any
particular provision, except by a written instrument executed by the parties
hereto.

 

3.             No party may assign either this Agreement or any of his, her or
its rights, interests, or obligations hereunder without the prior written
consent of the other party. Any purported assignment in violation of this
paragraph shall be void and ineffectual and shall not operate to transfer or
assign any interest or title to the purported assignee. This Agreement shall be
binding on the undersigned and each of his or its heirs, personal
representatives, successors and assigns including, in the case of the Company,
any successor thereto as a result of the completion of a Business Combination.

 

4.             All notices, statements or other documents which are required or
contemplated by this Agreement shall be: (i) in writing and delivered personally
or sent by first class registered or certified mail, overnight courier service
or facsimile or electronic transmission to the address designated in writing,
(ii) by facsimile to the number most recently provided to such party or such
other address or fax number as may be designated in writing by such party and
(iii) by electronic mail, to the electronic mail address most recently provided
to such party or such other electronic mail address as may be designated in
writing by such party. Any notice or other communication so transmitted shall be
deemed to have been given on the day of delivery, if delivered personally, on
the business day following receipt of written confirmation, if sent by facsimile
or electronic transmission, one (1) business day after delivery to an overnight
courier service or five (5) days after mailing if sent by mail. Such notice,
statement or demand shall be addressed as follows:

 

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If to the Company or Hydra Management, LLC or MLCP GLL Funding LLC:

 

Leisure Acquisition Corp.
250 W. 57th Street, Suite 2223
New York, NY 10107
Attn: George Peng

 

with a copy in each case (which shall not constitute notice) to:

 

Proskauer Rose LLP
Eleven Times Square
New York, New York 10036
Attn: Jeffrey A. Horwitz, Esq.

 

If to HG Vora Special Opportunities Master Fund, Ltd.:

 

HG Vora Capital Management, LLC

330 Madison Avenue, 20th Floor

New York, NY 10017

Attn: Mandy Lam, Esq.

 

5.             This Agreement may be executed in any number of original or
facsimile counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.

 

6.             This Agreement shall be deemed severable, and the invalidity or
unenforceability of any term or provision hereof shall not affect the validity
or enforceability of this Agreement or of any other term or provision hereof.
Furthermore, in lieu of any such invalid or unenforceable term or provision, the
parties hereto intend that there shall be added as a part of this Agreement a
provision as similar in terms to such invalid or unenforceable provision as may
be possible and be valid and enforceable.

 

7.             This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of New York, without giving effect to
conflicts of law principles that would result in the application of the
substantive laws of another jurisdiction. The parties hereto (i) agree that any
action, proceeding, claim or dispute arising out of, or relating in any way to,
this Agreement shall be brought and enforced in the courts of New York, in the
State of New York, and irrevocably submit to such jurisdiction and venue, which
jurisdiction and venue shall be exclusive and (ii) waive any objection to such
exclusive jurisdiction and venue or that such courts represent an inconvenient
forum.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed as
of the date first written above.

 

  LEISURE ACQUISITION CORP.         By: /s/ A. Lorne Weil     Name: A. Lorne
Weil     Title: Executive Chairman         PURCHASERS:       HYDRA MANAGEMENT,
LLC         By: /s/ A. Lorne Weil     Name: A. Lorne Weil     Title: Principal  
      MLCP GLL FUNDING LLC         By: Matthews Lane Capital Partners LLC, its
Manager         By: /s/ Daniel B. Silvers     Name: Daniel B. Silvers     Title:
Managing Member         HG VORA SPECIAL OPPORTUNITIES MASTER FUND, LTD.        
By: HG Vora Capital Management, LLC, as investment adviser         By: /s/
Philip M. Garthe     Name: Philip M. Garthe     Title: Chief Operating Officer

 

 

 

 

Schedule I

Allocation

 

   Maximum Advances   Percentage  HG Vora Special Opportunities Master Fund,
Ltd  $500,000.00    50.00% Hydra Management, LLC  $256,883.42    25.69% MLCP GLL
Funding LLC  $243,116.58    24.31% Total  $1,000,000.00    100.00%

 

 

 

 

Exhibit A

Promissory Note

 

 

 

 

THIS PROMISSORY NOTE (“NOTE”) HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”). THIS NOTE HAS BEEN ACQUIRED FOR
INVESTMENT ONLY AND MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF
REGISTRATION OF THE RESALE THEREOF UNDER THE SECURITIES ACT OR AN OPINION OF
COUNSEL REASONABLY SATISFACTORY IN FORM, SCOPE AND SUBSTANCE TO THE COMPANY THAT
SUCH REGISTRATION IS NOT REQUIRED.

 

PROMISSORY NOTE

 

Dated as of _____, 2017

Principal Amount: $____________

New York, New York

 

Pursuant to that certain Expense Advance Agreement (the “Agreement”), dated as
of December 1, 2017, by and between Leisure Acquisition Corp., a Delaware
corporation (the “Maker”), and [________] (the “Payee”), the Maker hereby
promises to pay to the order of the Payee or its registered assigns or
successors in interest, or order, the principal sum of _________ Dollars
($_________) in lawful money of the United States of America, on the terms and
conditions described below. All payments on this Note shall be made by check or
wire transfer of immediately available funds or as otherwise determined by the
Maker to such account as the Payee may from time to time designate by written
notice in accordance with the provisions of this Note. Certain terms used herein
but not defined herein shall have the meaning given to such terms in the
Agreement.

 

This Note, together with (i) that certain Promissory Note, dated as of the date
hereof, between the Maker and [        ], and (ii) that certain Promissory Note,
dated as of the date hereof, between the Maker and [   ],  are collectively
referred to as the Working Capital Promissory Notes. The “Payees” under the
Working Capital Promissory Notes are collectively referred to as the WC Payees
and each as an WC Payee.

 

1.           Principal. The unpaid principal balance of this Note shall be
payable on the date on which Maker consummates its Businesses Combination (the
“Maturity Date”). The principal balance may be prepaid at any time.

 

2.           Interest. No interest shall accrue on the unpaid principal balance
of this Note.

 

3.           Drawdown Requests. Maker and Payee agree that Maker may request up
to [                               ] ($[     ]) for working capital in
connection with Maker’s pursuit of a Business Combination. The principal of this
Note may be drawn down from time to time prior to the Maturity Date, upon
written request from Maker to Payee (each, a “Drawdown Request”). Each Drawdown
Request must state the amount to be drawn down, and must not be an amount less
than Ten Thousand Dollars ($10,000). Payee shall fund each Drawdown Request no
later than five (5) business days after receipt of a Drawdown Request; provided,
however, that the maximum amount of drawdowns collectively under the Working
Capital Promissory Notes is [      ] ($[     ]) and that amounts of principal
may only be drawn down upon under this Note on a pro rata basis (based on the
allocation set forth on Schedule I of the Agreement) with amounts drawn down
upon under the other Working Capital Promissory Notes. The obligation of each WC
Payee to fund Drawdown Requests shall be several and not joint. Once an amount
is drawn down under this Note, it shall not be available for future Drawdown
Requests even if prepaid. No fees, payments or other amounts shall be due to
Payee in connection with, or as a result of, any Drawdown Request by Maker.
Notwithstanding the foregoing, all payments shall be applied first to payment in
full of any reasonable costs incurred in collection of any sum due under this
Note, including (without limitation) reasonable attorneys' fees, and then to the
reduction of the unpaid principal balance of this Note.

 

 

 

 

 

4.            Application of Payments. All payments shall be applied first to
payment in full of any reasonable costs incurred in the collection of any sum
due under this Note, including (without limitation) reasonable attorney’s fees,
and then to the reduction of the unpaid principal balance of this Note.

 

5.           Events of Default. The following shall constitute an event of
default (“Event of Default”):

 

(a)       Failure to Make Required Payments. Failure by Maker to pay the
principal amount due pursuant to this Note within five (5) business days of the
date specified above.

 

(b)       Voluntary Bankruptcy, Etc. The commencement by Maker of a voluntary
case under any applicable bankruptcy, insolvency, reorganization, rehabilitation
or other similar law, or the consent by it to the appointment of or taking
possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator
(or other similar official) of Maker or for any substantial part of its
property, or the making by it of any assignment for the benefit of creditors, or
the failure of Maker generally to pay its debts as such debts become due, or the
taking of corporate action by Maker in furtherance of any of the foregoing.

 

(c)       Involuntary Bankruptcy, Etc. The entry of a decree or order for relief
by a court having jurisdiction in the premises in respect of Maker in an
involuntary case under any applicable bankruptcy, insolvency or other similar
law, or appointing a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or similar official) of Maker or for any substantial part of its
property, or ordering the winding-up or liquidation of its affairs, and the
continuance of any such decree or order unstayed and in effect for a period of
60 consecutive days.

 

(d)       Cross Defaults, Etc. The provision of notice of an Event of Default to
Maker by any other WC Payee with respect to any other Working Capital Promissory
Note.

 

6.           Remedies.

 

(a)       Upon the occurrence of an Event of Default specified in Section 5(a)
hereof, Payee may, by written notice to Maker, declare this Note to be due
immediately and payable, whereupon the unpaid principal amount of this Note, and
all other amounts payable hereunder, shall become immediately due and payable
without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived, anything contained herein or in the documents
evidencing the same to the contrary notwithstanding.

 

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(b)       Upon the occurrence of an Event of Default specified in Section 5(b)
or 5(c) hereof, the unpaid principal balance of this Note, and all other sums
payable with regard to this Note, shall automatically and immediately become due
and payable, in all cases without any action on the part of Payee.

 

7.           Waivers. Maker and all endorsers and guarantors of, and sureties
for, this Note waive presentment for payment, demand, notice of dishonor,
protest, and notice of protest with regard to the Note, all errors, defects and
imperfections in any proceedings instituted by Payee under the terms of this
Note, and all benefits that might accrue to Maker by virtue of any present or
future laws exempting any property, real or personal, or any part of the
proceeds arising from any sale of any such property, from attachment, levy or
sale under execution, or providing for any stay of execution, exemption from
civil process, or extension of time for payment; and Maker agrees that any real
estate that may be levied upon pursuant to a judgment obtained by virtue hereof,
on any writ of execution issued hereon, may be sold upon any such writ in whole
or in part in any order desired by Payee.

 

8.           Unconditional Liability. Maker hereby waives all notices in
connection with the delivery, acceptance, performance, default, or enforcement
of the payment of this Note, and agrees that its liability shall be
unconditional, without regard to the liability of any other party, and shall not
be affected in any manner by any indulgence, extension of time, renewal, waiver
or modification granted or consented to by Payee, and consents to any and all
extensions of time, renewals, waivers, or modifications that may be granted by
Payee with respect to the payment or other provisions of this Note, and agrees
that additional makers, endorsers, guarantors, or sureties may become parties
hereto without notice to Maker or affecting Maker’s liability hereunder.

 

9.           Notices. All notices, statements or other documents which are
required or contemplated by this Agreement shall be: (i) in writing and
delivered personally or sent by first class registered or certified mail,
overnight courier service or facsimile or electronic transmission to the address
designated in writing, (ii) by facsimile to the number most recently provided to
such party or such other address or fax number as may be designated in writing
by such party and (iii) by electronic mail, to the electronic mail address most
recently provided to such party or such other electronic mail address as may be
designated in writing by such party. Any notice or other communication so
transmitted shall be deemed to have been given on the day of delivery, if
delivered personally, on the business day following receipt of written
confirmation, if sent by facsimile or electronic transmission, one (1) business
day after delivery to an overnight courier service or five (5) days after
mailing if sent by mail.

 

10.         Governing Law; Construction; Jurisdiction. This Note shall be
governed by and construed and enforced in accordance with the laws of the State
of New York, without giving effect to conflicts of law principles that would
result in the application of the substantive laws of another jurisdiction. The
parties hereto (i) agree that any action, proceeding, claim or dispute arising
out of, or relating in any way to, this Note shall be brought and enforced in
the courts of New York, in the State of New York, and irrevocably submits to
such jurisdiction and venue, which jurisdiction and venue shall be exclusive and
(ii) waive any objection to such exclusive jurisdiction and venue or that such
courts represent an inconvenient forum.

 

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11.         Severability. Any provision contained in this Note which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

 

12.         Trust Waiver. Notwithstanding anything herein to the contrary, the
Payee hereby irrevocably waives any and all right, title, interest, causes of
action and claims of any kind or nature whatsoever (each, a “Claim”) in or to,
and any and all right to seek payment of any amounts due to it out of, the trust
account established for the benefit of the public stockholders of the Company
and into which substantially all of the proceeds of the Company’s initial public
offering will be deposited (the “Trust Account”), and hereby irrevocably waives
any Claim it presently has or may have in the future as a result of, or arising
out of, this agreement, which Claim would reduce, encumber or otherwise
adversely affect the Trust Account or any monies or other assets in the Trust
Account, and further agrees not to seek recourse, reimbursement, payment or
satisfaction of any Claim against the Trust Account or any monies or other
assets in the Trust Account for any reason whatsoever; provided, however, that
if the Maker completes a Business Combination, the Maker shall promptly repay
the principal balance of this Note out of the proceeds released to the Maker
from the Trust Account.

 

13.         Amendment; Waiver. Any amendment hereto or waiver of any provision
hereof may be made with, and only with, the written consent of the Maker and the
Payee.

 

14.         Assignment. No assignment or transfer of this Note or any rights or
obligations hereunder may be made by any party hereto (by operation of law or
otherwise) without the prior written consent of the other party hereto and any
attempted assignment without the required consent shall be void; provided,
however, that the foregoing shall not apply to an affiliate of the Payee who
agrees to be bound to the terms of this Note.

 

15.         Conversion.

 

(a)       At the Payee’s option, at any time prior to payment in full of the
principal balance of this Note, the Payee may elect to convert all or any
portion of the outstanding principal amount of this Note into that number of
warrants (the “Conversion Warrants”) equal to: (i) the portion of the principal
amount of the Note being converted pursuant to this Section 15, divided by (ii)
$1.00, rounded up to the nearest whole number. Each Conversion Warrant shall
have the same terms and conditions as the warrants issued by the Maker to the
Payee pursuant to a private placement, as described in Maker’s Registration
Statement on Form S-1 (333-XXXXXX). The Conversion Warrants, the shares of
Common Stock underlying the Conversion Warrants and any other equity security of
Maker issued or issuable with respect to the foregoing by way of a stock
dividend or stock split or in connection with a combination of shares,
recapitalization, amalgamation, consolidation or reorganization (the “Warrant
Shares”), shall be entitled to the registration rights set forth in Section 16
hereof.

 

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(b)       Upon any complete or partial conversion of the principal amount of
this Note, (i) such principal amount shall be so converted and such converted
portion of this Note shall become fully paid and satisfied, (ii) the Payee shall
surrender and deliver this Note, duly endorsed, to Maker or such other address
which Maker shall designate against delivery of the Conversion Warrants, (iii)
Maker shall promptly deliver a new duly executed Note to the Payee in the
principal amount that remains outstanding, if any, after any such conversion and
(iv) in exchange for all or any portion of the surrendered Note, Maker shall
deliver to Payee the Conversion Warrants, which shall bear such legends as are
required, in the opinion of counsel to Maker or by any other agreement between
Maker and the Payee and applicable state and federal securities laws.

 

(c)       The Payee shall pay any and all issue and other taxes that may be
payable with respect to any issue or delivery of the Conversion Warrants upon
conversion of this Note pursuant hereto; provided, however, that the Payee shall
not be obligated to pay any transfer taxes resulting from any transfer requested
by the Payee in connection with any such conversion.

 

(d)       The Conversion Warrants shall not be issued upon conversion of this
Note unless such issuance and such conversion comply with all applicable
provisions of law.

 

16.         Registration Rights.

 

(a)       Reference is made to that certain Registration Rights Agreement
between the Maker and the parties thereto, dated as of the date hereof (the
“Registration Rights Agreement”). All capitalized terms used in this Section 16
shall have the same meanings ascribed to them in the Registration Rights
Agreement.

 

(b)       The holders (“Holders”) of the Conversion Warrants (or the Warrant
Shares) shall be entitled to Demand Registration as set forth in Section 2.1 of
the Registration Rights Agreement.

 

(c)       The Holders shall also be entitled to include the Conversion Warrants
(or the Warrant Shares) in Piggyback Registrations, which shall be subject to
the same provisions as set forth in Section 2.2 of the Registration Rights
Agreement; provided, however, that in the event that an underwriter advises the
Maker that the Maximum Number of Securities has been exceeded with respect to a
Piggyback Registration, the Holders shall not have any priority for inclusion in
such Piggyback Registration.

 

(d)       Except as set forth above, the Holders and the Maker, as applicable,
shall have all of the same rights, duties and obligations set forth in the
Registration Rights Agreement.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, Maker, intending to be legally bound hereby, has caused this
Note to be duly executed by the undersigned as of the day and year first above
written.

 

  LEISURE ACQUISITION CORP.             By:         Name:       Title: