Item 1.01 Entry into a Material Definitive Agreement.
$7,500,000 Tourism
Development District (“TDD”) Bond Proceeds
On October 19, 2022,
HOF Village Center for Performance, LLC (“HOFV CFP”), a wholly-owned subsidiary of Hall of Fame Resort & Entertainment
Company (the “Company”), received proceeds from the sale by Stark County Port Authority (the “Port Authority”),
of $7,500,000 principal amount of tourism development district special obligation bonds (the “TDD Bonds”) issued October 19,
2022, to Director of Development of the State of Ohio, acting on behalf of the State of Ohio. HOFV CFP must use the funds to pay, or for
reimbursement of payment of, project costs associated with the Center for Performance being constructed by HOFV CFP (the “Center
for Performance”).
The Center for Performance
is part of the Hall of Fame Village powered by Johnson Controls, a multi-use sports, entertainment and media destination centered around
the Pro Football Hall of Fame’s campus (“Hall of Fame Village”). The facilities and other improvements being constructed,
and contemplated to be constructed, as part of Hall of Fame Village, are located and to be located within a tourism development district
(a “Tourism Development District”) established by the City of Canton (the “HOFV TDD”). The HOFV TDD district was
created with the intent of levying certain taxes and charges within its boundaries, the proceeds of which would be used to foster and
develop tourism within the HOFV TDD (“TDD Revenues”).
Interest rate on the
TDD Bonds is 5.413%. The term of the TDD Bonds is approximately 24.75 years, with first principal and interest payment due December 1,
2022 and final payment December 1, 2046.
The TDD Revenues, net
of a fee charged by the City of Canton equal to 1% of the admissions tax collections, are required to be deposited in the City’s
HOFV Fund, a special fund created by the City (the “City HOFV Fund”). Money in the City HOFV Fund is authorized by ordinance
to be used, pursuant to requisition requests from the Company, for the purposes for paying for, or providing reimbursement for payments
made, for costs associated with the HOFV TDD incurred to foster and develop tourism. Under an existing Development Agreement between HOF
Village, LLC (predecessor of the Company) and City of Canton, the City agreed to enter into a cooperative agreement whereby the City would
pledge the net TDD Revenues (“City Pledged Revenue”) to the TDD Bonds trustee, as the primary source of repayment of obligations
issued by the Port Authority, the payment of which is intended to be secured by a pledge of the City Pledged Revenue.
Payment Guaranty;
Loan Agreement; Mortgage; Intercreditor Agreement
In connection with the
issuance of TDD Bonds by the Port Authority, the Treasurer of the State of Ohio issued $7,500,000 principal amount economic development
revenue bonds of the State of Ohio (Ohio Enterprise Bond Fund) (“OEBF Bonds”), the proceeds of which were used to purchase
the TDD Bonds in accordance with a loan (the “Loan”) to the Port Authority under the terms of a Loan Agreement, dated October
1, 2022 (the “Loan Agreement”) by and among the Director of Development of the State of Ohio, acting on behalf of the State
of Ohio, as lender, the Port Authority, as borrower, and HOFV CFP, as beneficiary. The Loan Agreement provides for the execution and delivery
of certain other documents (the “Loan Documents”). Pursuant to the Loan Agreement, the Director loaned the proceeds from the
sale of the OEBF Bonds (the “Loan”), to the Port Authority, and the TDD Bonds Beneficiary agreed to construct, own, and operate
the Project, as described in the Loan Agreement. The interest rate and term of the OEBF Bonds is the same as the TDD Bonds. The loan payments
under the Loan Agreement shall also be deemed repayments under the TDD Bonds.
On October 19, 2022,
as a condition precedent to disbursement of the Loan proceeds, HOF Village Newco, LLC (“Newco”), a wholly-owned subsidiary
of the Company, entered into a Payment Guaranty (the “Payment Guaranty”) to and for the benefit of the Director, and The Huntington
National Bank, as trustee (the “Trustee”) under the trust agreement for the OEBF Bonds. Under the Payment Guaranty, Newco
guarantees the payment of any “Shortfall”, defined as the difference between TDD Revenues available for payment of, and the
amounts required to be paid for, debt service and obligations owed by the Port Authority and the TDD Bonds Beneficiary under the Loan
Agreement.
As security for the prompt
and complete payment and performance when due of all of the obligations of the Port Authority, as borrower, under the Loan Agreement,
HOFV CFP has entered into the Mortgage, dated and recorded in the Stark County, Ohio Recorder’s Office (the “Recording Office”)
on October 19, 2022 (the “Mortgage”), under which HOFV CFP has granted a security interest in the Center for Performance,
including buildings, fixtures and equipment, all revenues derived from leases or subleases of the Center for Performance, proceeds from
any insurance claims, and other interests (the “HOFV Collateral”). HOFV CFP also entered into an intercreditor and subordination
agreement (the “Intercreditor Agreement”) by and among the Director of Development of the State of Ohio, as junior lender,
acting on behalf of the State of Ohio (the “State”); Midwest Lender Fund, LLC, as senior lender, and HOFV CFP, as borrower
and recorded in Recording Office on October 19, 2022. Under the Intercreditor Agreement, the lenders set forth therein certain agreements
among them regarding their respective priorities regarding collection of their respective loans to HOFV CFP, notwithstanding the date
the loans were or are made or the date that any funds were or shall be advanced thereunder.
In connection with entering
into the Payment Guaranty, the Loan Agreement, and the Intercreditor Agreement, the Company paid customary fees and expenses.
The foregoing description
of the Payment Guaranty, the Loan Agreement, and the Intercreditor Agreement does not purport to be complete and is subject to, and qualified
in its entirety by, the full text of the Payment Guaranty, the Loan Agreement, and the Intercreditor Agreement, which are attached as
Exhibits 10.1 to 10.3, respectively, to this Current Report on Form 8-K, and are incorporated herein by reference.