Fifth Street enters limited guaranty and contribution agreement

By Wendy Van Sickle

Columbus, Ohio, May 17 – Fifth Street Holdings LP, a partially owned subsidiary of Fifth Street Asset Management Inc., entered into a limited guaranty and contribution agreement with Leonard M. Tannenbaum, chief executive officer of Fifth Street Asset Management and a limited partner of Fifth Street Holdings on Monday, according to an 8-K filing with the Securities and Exchange Commission.

Under the agreement, in the event of an acceleration of Fifth Street Holdings’ credit facility, Tannenbaum agreed to backstop any shortfall in the funds and assets available to Fifth Street Holdings and the other guarantors to the credit facility to repay outstanding obligations under the credit facility, in the form of an equity contribution or a subordinated loan to Fifth Street Holdings.

In exchange, Fifth Street Holdings agreed to pay Tannenbaum “reasonable consideration” in amounts to be determined by the audit committee of Fifth Street Asset Management’s board of directors.

The limited guaranty will terminate upon the earliest of Aug. 15, 2018; mutual agreement of the parties; repayment of the credit facility; any change of control of Fifth Street Holdings or Fifth Street Asset Management; or any material amendment, waiver or other modification of the credit facility.

Fifth Street Asset Management is an alternative asset manager based in Greenwich, Conn.

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