Item 1.01 Entry into a Material Definitive Agreement.
On November 23, 2021, Hall of Fame Resort & Entertainment Company (the
"Company"), and Industrial Realty Group, LLC, a Nevada limited liability company
that is controlled by the Company's director Stuart Lichter ("IRG"), entered
into a promissory note (the "Note") pursuant to which IRG made a loan to the
Company in the aggregate amount of $8,500,000 (the "Loan Amount"). Interest will
accrue on the outstanding balance of the Note at a rate of 8% per annum,
compounded monthly. The Company will pay interest to IRG under the Note on the
first day of each month, in arrears. The Note has a maturity date of June 30,
2022 (the "Maturity Date"). The Company may prepay all or any portion of the
Note at any time prior to the Maturity Date without penalty or premium.
The Note contains customary terms regarding events of default, which include
payment defaults and breach of any non-monetary covenant of the Note. Upon the
occurrence of an event of default, IRG may, at its option, declare the Note
immediately due and payable. The Company paid an origination fee of 0.25% of the
Loan Amount to IRG under the Note. If the loan evidenced by the Note is not
repaid in full by December 31, 2021, the Company will pay IRG a fee equal to
0.25% of the total then-outstanding amount due under the Note on or before the
earlier to occur of (i) the Maturity Date and (ii) date on which the loan
evidenced by the Note is repaid in full. The Note contains certain customary
terms regarding payment of IRG expenses and indemnification of IRG.
The rights of IRG under the Note are subordinated in right of payment to all
obligations owed by the Company under its term loan agreement, dated as of
December 1, 2020, as amended, with Aquarian Credit Funding, LLC (the "Term Loan
Agreement"). The loan evidenced by the Note will remain unsecured until such
time as the loan evidenced by the Term Loan Agreement is repaid in full. In
connection with the Company's repayment of the Term Loan Agreement, each of the
Company's direct and indirect subsidiaries (with certain exceptions) will
execute and deliver to IRG a mortgage as security for the loan evidenced by the
Note.
The foregoing description of the Note is not complete and is qualified in its
entirety by reference to the full text of the Note, a copy of which is filed
herewith as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated
herein by reference.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information set forth in Item 10.1 is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. Document
10.1 Promissory Note, date November 23, 2021, issued by Hall of Fame Resort
& Entertainment Company to Industrial Realty Group, LLC
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
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