Clause 1.01 Entering into a Material Definitive Agreement.
Waterpark Sale and Leaseback
On November 7, 2022, HOF Village Water Park, LLC (“HOFV Water Park”), an indirect subsidiary of Hall of Fame Resort & Entertainment Company (the “Company”), as a seller, has entered into an agreement for the purchase and sale of real estate (the “Purchase and Sale Agreement”) HFAKOH001 LLCa subsidiary of Oak Street Real Estate Capital, LLC (“Oak Street”) as the buyer, after which the parties have agreed to enter into a sale and leaseback transaction (the “Waterpark Sale and Leaseback Transaction”). Under the terms of the purchase and sale agreement, Oak Street paid the sum of $1,000,000 as the purchase price for the property of the HOFV Waterpark in Hall of glory village, Canton, Ohio (the “Water Park Property”) and paid the sum of $49,000,000 for the Pledged Collateral (defined below). The net proceeds accruing to the HOFV water park will be reduced by transaction commissions and costs incurred in connection with the sale.
At the closing of the purchase and sale agreement, HOFV Waterpark leased the Waterpark property back from Oak Street pursuant to a dated leasehold agreement November 7, 2022, between HOFV Waterpark as lessee and Oak Street as lessor (the “Tenant Lease”), the term of which is approximately 99 years. In connection with the Ground Lease, HOFV Newco (defined below) is providing a Limited Recourse Carveout Warranty, dated November 7, 2022
(the “Limited Warranty”) in favor of Oak Street. The HOFV water park will be located on the water park property (the “water park project“). Proceeds from the transfer of the Waterpark property to Oak Street will be used to fund the
water park project and other costs related to the purchase and sale agreement and the leasehold agreement.
HOF Village Stadium, LLC (“HOFV Stadium“), which is owned by HOF Village Newco, LLCa subsidiary of the Company (“HOFV Newco”), owns leases (the “Stadium Leases”) in certain properties in the City of Canton, Ohio on which the Tom Benson Hall of Fame Stadium (the “Stadium”) is located. In connection with Waterpark’s sale and leaseback transaction, and as additional security for HOFV Waterpark’s obligations under the ground lease, HOFV pledged 100% of the registered and beneficial membership interest to Newco HOFV Stadium (the “Pledged Interests”) in Oak Street pursuant to a pledge and security agreement (the “Pledge Agreement”) dated November 7, 2022.
Pursuant to a Post-Closing Matters Agreement dated November 7, 2022 of and between HOFV Waterpark, HOFV Newco and Oak Street (“Post-Closing Agreement”), Oak Street: (1) reserves the right, which may be exercised much November 30, 2022cause HOFV Waterpark to purchase the Waterpark Property if Oak Street determines that there is a material deficiency in the status, condition or adequacy of the collateral for the Pledge Agreement and (2) retains the right to cause it to do so HOFV Stadium to grant a mortgage on the Stadium Leasehold Interests (the “Stadium Leasehold Mortgage”).
On November 7, 2022Oak Street and HOFV Waterpark also entered into an option to purchase agreement (the “Option to Purchase Agreement”) granting HOFV Waterpark an option to repurchase the Waterpark property from Oak Street, exercisable during the period beginning on December 1, 2027 and ends up November 30, 2034 (the “Option Period”).
Loan approval for hotel construction
On November 3, 2022does the company have a letter of commitment (the “Loan approval for hotel construction“), through and between society, as guarantor,
HOF Dorfhotel WP, LLC (“Hotel”), an indirect subsidiary of the Company, as a borrower and Industrial Realty Group, Inc. (“IRGInc”) as Lender. Stuart Lightsa director of the company, is President and Chairman of Chairman of Industrial Realty Group, LLC (“IRGLLC”). According to the provisions of Loan approval for hotel constructionIRGInc has committed to a loan of $28,000,000 (the “Building loans for hotels“) to finance part of the hotel’s costs and expenses related to the fundamental development of a 180-room family hotel (the “hotel project“) on an approximately 1.64 acre lot in the hall of glory village, Canton, Ohio (the “hotel property“), adjacent to the water park property. The obligation to provide the Building loans for hotels is subject to certain conditions, including the execution and delivery of the final documentation relating to the Building loans for hotels.
The hotel construction loan has a term of two years with an option to extend by twelve months, subject to customary renewal terms. The collateral for the Building loans for hotels includes without limitation: (a) a first lien perfected mortgage encumbering the hotel property; (b) a first-order perfected attribution of lease and rent payments in relation to the hotel property; (c) a first priority perfected assignment of all permits, licences, permissions, permits and contracts relating to the hotel property; (d) UCC-1 financial statements (all personal property, statements and accounts and reserves); (e) equity pledge; and (f) all other agreements and representations customary in similar financings by IRGInc. The hotel construction loan will bear interest at a floating rate per annum equal to the SOFR for a one month term plus 6%, subject to a SOFR floor at the greater of (i) 4% and (ii) the SOFR applicable at the time of closing Building loans for hotels. Only interest payments will be made during the initial two-year term, and principal and interest payments, if any, based on a 25-year amortization during the renewal term. The hotel pays 1% of the Building loans for hotels Amount as incorporation fee, payable in full upon closing. The hotel construction loan The final documentation contains representations, warranties and defaults that are common and customary for this type of loan.
IRG Financial Assistance and Consideration
On November 7, 2022the Company entered into a written agreement with IRGLLC (the “IRG Letter Agreement”) in which IRGLLC agreed that IRGLLC and IRGLLC’s affiliates and related parties may provide certain financial support to the Company and its subsidiaries in return for certain consideration, as described below .
The financial support provided under the IRG Letter Agreement consists of the following (the “IRG Financial Support”):
Facilitate the financing of water park construction. IRGLLC agreed that its subsidiary
CH Capital Lending, LLC (“CHCL”), would help complete financing with Oak Street for construction of the water park projectincluding by releasing CHCL’s first mortgage lien on the stadium lease interests and pledging membership interests HOFV Stadium. In addition, IRGLLC has agreed to provide a completion guarantee to facilitate other required financing for the project water park projectupon need.
CHCL Bridging Loan Extension. IRGLLC agreed that CHCL would extend March 31, 2024 the due date of the promissory note June 16, 2022published by the company, HOF Village Retail I, LLC and HOF Village Retail II, LLCas Borrower, to CHCL as Lender (the “Bridge Loan”).
Offer a one-year renewal option for all IRG partner loans. All loans from IRGLLC affiliates and related parties (“IRG Affiliated Lenders”) will be modified to allow for an optional one-year term extension
March 31, 2025 for a 1% renewal fee, which is due when you renew an IRG affiliate lender loan. The IRG Affiliate Lender Loans consist of the following: (i) bridging loanwith an existing modified due date of
March 31, 2024; (ii) the Term Loan, payable to CHCL, with an existing term of March 31, 2024; (iii) the first amended and restated promissory note, dated
March 1, 2022payable to IRG, LLCwith an existing term of March 31, 2024; (iv) the first amended and restated promissory note, dated March 1, 2022payable to JKP Financial, LLCwith an existing term of March 31, 2024; (v) the secured promissory note of Cognovit dated on June 19, 2020assigned June 30, 2020 and changed December 1, 2020 and March 1, 2022payable to JKP Financial, LLCwith an existing term of March 31, 2024; and (vi) the promissory note, dated April 27, 2022payable to Midwest Lender Fund, LLC
(“MLF”), with an existing term of April 30, 2023and with an option to extend until March 31, 2024.
Tapestry letter of commitment to finance hotel construction. IRGLLC agreed to make a commitment to fund the hotel projectas set out in the Loan approval for hotel construction.
In consideration for the financial support received from IRG by the Company and its subsidiaries, the Company agreed in the IRG Writing Agreement to provide IRGLLC and IRG-affiliated lenders with the following consideration:
The company agreed to make a payment of $4,500,000 attributable as a fee for providing the Completion Bond and other financial support from IRG described above, payable to CHCL to be held in trust for the IRG Affiliated Lenders, as determined by the IRG Affiliated Lenders. The Company also agreed to issue 2,000,000 common shares at par $0.0001 per share (“Common Shares”) to the IRG Affiliated Lenders who rank like the IRG Affiliated Lenders. . .
Item 2.03 – Incurrence of a direct financial obligation or an obligation under an off-balance sheet arrangement by a registrant
The information set forth above in Item 1.01 of this current report on Form 8-K is incorporated herein by reference in this Item 2.03.
Item 9.01 Financial Statements and Appendices.
Exhibit No. Document
10.1 Purchase and Sale Agreement, dated November 7, 2022, between HFAKOH001
LLC as buyer and HOF Village Waterpark, LLC as seller
10.2 Ground Lease Agreement, dated November 7, 2022, between HFAKOH001 LLC
as landlord and HOF Village Waterpark, LLC as tenant
10.3 Limited Recourse Carveout Guaranty, dated November 7, 2022, by HOF
Village Newco, LLC as guarantor and HFAKOH001 LLC as landlord
10.4 Pledge and Security Agreement, dated November 7, 2022, by HOF Village
Newco, LLC as pledgor and HFAKOH001 LLC as landlord
10.5 Post-Closing Matters Agreement, dated November 7, 2022, among HOF
Village Waterpark, LLC, HOF Village Newco, LLC and HFAKOH001 LLC
10.6 Purchase Option Agreement, dated November 7, 2022, between HFAKOH001
LLC and HOF Village Waterpark, LLC
10.7 Hotel Construction Loan Commitment Letter, signed November 3, 2022,
among Industry Realty Group, Inc. as lender, Hall of Fame Resort &
Entertainment Company as guarantor, and HOF Village Hotel WP, LLC as
10.8 IRG Letter Agreement, dated November 7, 2022, between Industrial
Realty Group, LLC and its various affiliates and related parties and
Hall of Fame Resort & Entertainment Company
99.1 Press Release dated November 9, 2022
104 Cover Page Interactive Data File (embedded within the Inline XBRL
© Edgar Online, Source insights