Item 1.01 Entry into a Material Definitive Agreement.
On
In order to incur any of the Delayed Draw Term Loans, the Company must satisfy
certain conditions, including, but not limited to, the following: (i) if the
incurrence of such Delayed Draw Term Loans occurs on or prior to
The Company's obligations under the Credit Agreement are guaranteed by certain subsidiaries of the Company (collectively with the Company, the "Guarantors"). On the Closing Date, the Company, the Guarantors and the Administrative Agent entered into a guarantee and collateral agreement (the "Guarantee and Collateral Agreement") pursuant to which the Guarantors guaranteed the debt under the Credit Agreement and the Company and the Guarantors granted a first-priority lien on substantially all of their assets (subject to certain exceptions) in favor of the Administrative Agent and the Lenders.
On the Closing Date, the Company paid in-kind in the form of additional term
loans a closing fee equal to
--------------------------------------------------------------------------------
The Credit Agreement also provides that PW Partners Capital Management LLC may
elect to provide, on or prior to
The Credit Agreement contains customary covenants, including, but not limited to, restrictions on the Company's ability to incur indebtedness, grant liens or security interests on assets, make acquisitions, loans, advances or investments, pay dividends, sell or otherwise transfer assets, or enter into transactions with affiliates.
Additionally, the Credit Agreement provides that, upon the occurrence of certain events of default, the Company's obligations thereunder may be accelerated and the lending commitments with respect to the Delayed Draw Term Loans terminated. Such events of default include payment defaults to the Lenders, material . . .
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 1.01 above relating to the Credit Agreement and Guarantee and Collateral Agreement is incorporated herein by reference into this Item 2.03.
Item 3.02 Unregistered Sales of
As described in Item 1.01 above, as consideration for agreeing to the provide the Loans, the Company issued the Consideration Shares to certain affiliates of KLIM on the Closing Date. No other commission or other remuneration was paid in connection with the issuance and sale of the Consideration Shares.
The issuance and sale of the Consideration Shares are exempt from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"), pursuant to Section 4(a)(2) thereof. Each recipient of the Consideration Shares was required to represent that it is (i) an "accredited investor" as defined in Rule 501 of Regulation D under the Securities Act and (ii) was acquiring the Consideration Shares for investment and not with a view to resell or distribute. The Company did not engage in general solicitation or advertising and did not offer securities to the public in connection with such issuances.
The information regarding the issuance of the Common Stock set forth in Item 1.01 above is incorporated herein by reference into this Item 3.02.
Item 5.01 Changes in Control of Registrant.
The information set forth in Item 1.01 and Item 5.02, respectively, regarding the issuance of the Consideration Shares and the Company's board of directors (the "Board") following the Closing Date are incorporated by reference into this Item 5.01.
--------------------------------------------------------------------------------
Item 5.02 Departure of Directors or Principal Officers; Election of Directors;
Appointment of Principal Officers.
Appointment of Directors
Pursuant to the Credit Agreement, the Company and the Board agreed to set the number of directors on the Board at five directors and provide KLIM with the right to nominate three directors to the Board. As a result, effective concurrently with the closing of the Credit Agreement,
? the Board increased the size of the Company's Board to five members;
? each of
and any committees of the Board on which they respectively served; and
? the remaining members of the Board elected
Logigian as members of the Board to fill the vacancies created by the increase
in Board size (with the appointment of
after transmission of the Information Statement on Form 14f-1 to all holders of
our Common Stock) and resignation of
serve until the Company's next annual meeting or their earlier resignation,
termination or death.
Committee membership of the post-Transaction Board members will be determined at the first Board meeting following the Transactions.
Indemnification Agreements
On the Closing Date, the Company entered into indemnification agreements with each of its newly elected directors. Pursuant to the indemnification agreements, the Company has agreed to indemnify and hold harmless these directors to the fullest extent permitted by the Delaware General Corporation Law. The agreements generally cover expenses that a director incurs or amounts that a director becomes obligated to pay in connection with any proceeding in any way connected with, resulting from or relating to his or her service as a current or former director, officer, employee or agent of the Company or any direct or indirect subsidiary of the Company. The agreements also provide for the advancement of expenses to the directors subject to specified conditions. There are certain exceptions to the Company's obligation to indemnify the directors, including with respect to "short-swing" profit claims under Section 16(b) of the Securities Exchange Act of 1934, as amended; with respect to conduct by him or her that is established to be knowingly fraudulent or deliberately dishonest or constituted willful misconduct; and, with certain exceptions, with respect to proceedings that he or she initiates.
The foregoing description of the indemnification agreements is not complete and is subject to and qualified in its entirety by reference to the form of indemnification agreement, which is attached as Exhibit 10.4 hereto and incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
Exhibit No. 4.1 Registration Rights Agreement dated as ofDecember 28, 2020 , by and amongTown Sports International Holdings, Inc. and the holders party thereto. 10.1 Credit Agreement dated as ofDecember 28, 2020 , by and amongTown Sports International Holdings, Inc. , the several lenders from time to time party thereto andAlter Domus (US) LLC 10.2 Form of Indemnification Agreement, by and betweenTown Sports International Holdings, Inc. and each of its newly elected directors 99.1 Press Release, datedDecember 24, 2020
--------------------------------------------------------------------------------
© Edgar Online, source