UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
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Item 1.01 Entry into a Material Definitive Agreement.
Amendment Number 10 to Term Loan Agreement
On January 11, 2024, Hall of Fame Resort & Entertainment Company (the “Company”), HOF Village Newco, LLC (“HOF Village”) and HOF Village Youth Fields, LLC (“HOFV YF”) entered into Amendment Number 10 to Term Loan Agreement (“Amendment Number 10”) with CH Capital Lending, LLC (“Lender”), an affiliate of our director Stuart Lichter.
Amendment Number 10, and the related amendments described below, were entered as a condition of closing the Transaction, defined below, to (i) release HOFV YF from certain debt instruments with Lender, IRG, LLC, a Nevada limited liability company, JKP Financial, LLC, a Delaware limited liability company, and Midwest Lender Fund, LLC, a Delaware limited liability company; (ii) partially release a mortgage by CH Capital Lending, LLC releasing the leasehold property owned by HOFV YF from the mortgage; and (iii) release collateral owned by HOFV YF from the security agreement.
Amendment Number 10 also memorializes the outstanding principal amount of $6,142,308.45 after applying proceeds from the Transaction and adding $4,400,000 back to the outstanding principal amount for funds immediately advanced to the Company resulting in a new loan amount of $10,542,308.45. Additionally, the Company and HOF Village irrevocably instructed the Purchaser (defined below) in the Transaction to deliver the Holdback Amount (defined below), if any, owing to HOF Village pursuant to the Transaction to Lender for and on behalf of the Company.
Amendment Number 10 is attached hereto as Exhibit 10.1 and incorporated herein by reference. The foregoing summary does not purport to be complete and is qualified in its entirety by reference to such exhibit.
Second Amendment to Second Amended and Restated Secured Cognovit Promissory Note
On January 11, 2024, the Company and HOF Village entered into a Second Amendment to Second Amended and Restated Secured Cognovit Promissory Note (“Second Amendment to Second A&R Secured Cognovit Promissory Note with CH Capital Lending, LLC (“Lender”), an affiliate of our director Stuart Lichter.
The Second Amendment to Second A&R Secured Cognovit Promissory Note was entered to (i) credit $8,126,633.95 in proceeds from the closing of the Transaction toward the principal amount of $14,268,942.40 resulting in a balance of approximately $6,142,308.45; (ii) add $4,400,000 to the outstanding principal amount for funds immediately advanced to the Company resulting in a new loan amount of $10,542,308.45 with all other terms, covenants and conditions of the Note, the Loan Agreement and other Loan Documents remaining as originally written.
The Second Amendment to Second A&R Secured Cognovit Promissory Note is attached hereto as Exhibit 10.2 and incorporated herein by reference. The foregoing summary does not purport to be complete and is qualified in its entirety by reference to such exhibit.
Sixth Amendment to and Spreader of Pledge and Security Agreement
On January 11, 2024, the Company, HOF Village and HOFV YF entered into a Sixth Amendment to and Spreader of Pledge and Security Agreement (“Sixth Amendment & Spreader”) with CH Capital Lending, LLC (“Administrative Agent”), IRG, LLC, Midwest Lender Fund, LLC, affiliates of our director Stuart Lichter, and JKP Financial, LLC (collectively “Secured Parties”).
The Sixth Amendment & Spreader memorializes deletion of Article 9, the collateral section, of the existing Security Agreement with respect to the sports complex (i.e., youth fields).
The Sixth Amendment & Spreader is attached hereto as Exhibit 10.3 and incorporated herein by reference. The foregoing summary does not purport to be complete and is qualified in its entirety by reference to such exhibit.
Fourth Amendment to and Spreader of Open-End Fee and Leasehold Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing
On January 11, 2024, HOF Village Parking, LLC, HOF Village Hotel WP, LLC and HOF Village entered into a Fourth Amendment to and Spreader of Open-End Fee and Leasehold Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing (“Fourth Amendment & Spreader”) with CH Capital Lending, LLC (“Administrative Agent” or “Secured Party”), an affiliate of our director Stuart Lichter.
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The Fourth Amendment & Spreader was entered to secure indebtedness to the Lender and states (i) HOF Village Parking, LLC will mortgage, grant and convey its subleasehold interest in certain real property to Lender; (ii) HOF Village Hotel WP, LLC will mortgage, grant and convey its fee simple interest in certain real property to Lender; (iii) amend the existing mortgage to secure the obligations under all of the instruments; (iv) amend and spread the maximum principal indebtedness to Lender to include principal amounts of all the secured instruments and the total principal indebtedness shall not exceed $66,003,898.56, exclusive of interest, taxes, legal fees and costs advanced for preservation of the property; and (v) describes an event of default under the existing mortgage to include a failure to pay timely under, or to perform the other obligations under, any of the secured instruments.
The Fourth Amendment & Spreader is attached hereto as Exhibit 10.4 and incorporated herein by reference. The foregoing summary does not purport to be complete and is qualified in its entirety by reference to such exhibit.
Partial Release of Mortgage
On January 11, 2024, CH Capital Lending, LLC (“Administrative Agent”), IRG, LLC, Midwest Lender Fund, LLC, affiliates of our director Stuart Lichter, and JKP Financial, LLC (collectively “Lenders”) issued a partial release under the mortgage (“Partial Release”) made by HOFV YF, HOF Village Parking, LLC and HOF Village. The Secured Party released and discharged from the lien of the mortgage the sports complex portion of the leasehold estate.
The Partial Release is attached hereto as Exhibit 10.5 and incorporated herein by reference. The foregoing summary does not purport to be complete and is qualified in its entirety by reference to such exhibit.
Omnibus Release of Youth Fields Borrower from Certain Debt Instruments
On January 11, 2024, CH Capital Lending, LLC (“Administrative Agent”), IRG, LLC, Midwest Lender Fund, LLC, affiliates of our director Stuart Lichter, and JKP Financial, LLC (collectively “Lenders”) agreed to amend certain existing debt instruments and release certain real and personal property collateral and for the benefit of HOFV YF by way of an omnibus release of HOFV YF borrower form certain debt instruments (“Omnibus Release”).
In addition to releasing HOFV YF from certain debt instruments, the Omnibus Release memorializes the Lender’s agreement to contemporaneously release the mortgage, terminate applicable UCC financing statements, and execute the necessary amendments to terminate its security interest in certain real and personal property collateral.
The Omnibus Release is attached hereto as Exhibit 10.6 and incorporated herein by reference. The foregoing summary does not purport to be complete and is qualified in its entirety by reference to such exhibit.
Amendment Number 11 to Term Loan Agreement
On January 17, 2024, the Company and HOF Village (collectively “Term Loan Borrower”) entered into Amendment Number 11 to Term Loan Agreement (“Amendment Number 11”) with CH Capital Lending, LLC (“Lender”), an affiliate of our director Stuart Lichter.
Amendment Number 11 was entered to advance $2,200,000 to Term Loan Borrower resulting in an increase of the principal amount of the loan to a total of $12,751,934.09. In consideration for the advance, the Term Loan Borrower executed a Third Amendment to the Second Amended and Restated Note to reflect the increase in principal.
Amendment Number 11 is attached hereto as Exhibit 10.7 and incorporated herein by reference. The foregoing summary does not purport to be complete and is qualified in its entirety by reference to such exhibit.
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Third Amendment to Second Amended and Restated Secured Cognovit Promissory Note
On January 17, 2024, the Company and HOF Village, entered into a Third Amendment to Second Amended and Restated Secured Cognovit Promissory Note (“Third Amendment to Second A&R Secured Cognovit Promissory Note”) with CH Capital Lending, LLC (“Lender”), an affiliate of our director Stuart Lichter.
The Third Amendment to Second A&R Secured Cognovit Promissory Note was entered to increase by $2,200,000 the principal amount under the Note resulting in an increase in the maximum principal amount from $10,551,934.09 to $12,751,934.09 with all other terms, covenants and conditions of the Note, the Loan Agreement and other Loan Documents remaining as originally written.
The Third Amendment to Second A&R Secured Cognovit Promissory Note is attached hereto as Exhibit 10.8 and incorporated herein by reference. The foregoing summary does not purport to be complete and is qualified in its entirety by reference to such exhibit.
Item 8.01 Other Events.
On January 11, 2024, HOF Village completed the sale to Sandlot Facilities, LLC (“Purchaser”) for a $10 million purchase price, subject to adjustment (the “Purchase Price”), of 80% of a newly formed limited liability company named Sandlot HOFV Canton SC, LLC (“Sports Complex Newco”), to which the Company, HOF Village and HOF Village Youth Fields, LLC had contributed the ForeverLawn Sports Complex business prior to closing (the “Transaction”). The Transaction occurred pursuant to the terms of the previously disclosed Membership Interest Purchase Agreement, dated December 22, 2023 (the “Purchase Agreement”), among the Company, HOF Village, Purchaser and Sandlot Youth Sports Holdings, LLC (“Purchaser Guarantor”)
Under the Purchase Agreement, the Purchaser held back $1.5 million of the Purchase Price (the “Holdback Amount”) to secure certain indemnification obligations of the Company and HOF Village, which holdback will be released by Purchaser for HOF Village in three $500,000 increments at 6, 12 and 18 months after the January 11, 2024 closing date of the Transaction (the “Closing”), subject to post-Closing adjustment of the Purchase Price and any indemnification claims pursuant to the Purchase Agreement.
Under the Purchase Agreement, at the Closing, HOF Village entered into certain commercial arrangements that consist of (i) the Facilities Management Agreement between HOF Village and Sports Complex Newco, pursuant to which HOF Village provides certain facilities services to Sports Complex Newco, (ii) the Marketing and SC Programming Collaboration Agreement among HOF Village, Sports Complex Newco and Purchaser Guarantor, pursuant to which the parties thereto collaborate with regard to marketing and programming of the ForeverLawn Sports Complex, (iii) the Marketing and CFP Programming Collaboration Agreement between HOF Village and Sports Complex Newco, pursuant to which the parties thereto collaborate with regard to marketing and programming at the Center for Performance, and (iv) the Food and Beverage Services Agreement between HOF Village and Sports Complex Newco, pursuant to which HOF Village provides certain food and beverage services to Sports Complex Newco.
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Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| HALL OF FAME RESORT & ENTERTAINMENT COMPANY | |||
| By: | /s/ Michael Crawford | ||
| Name: | Michael Crawford | ||
| Title: | President and Chief Executive Officer | ||
| Dated: January 18, 2024 | |||
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