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Item 5.02
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Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements
of Certain Officers.
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Key Employee Retention Agreements
On
September 8, 2020, TSI LLC entered into Retention Award Agreements (the “Retention Agreements”) with each of the
Chief Executive Officer and Chief Financial Officer for the award of certain one-time lump sum cash retention bonuses. In
recognition of the importance to the Registrant and its stakeholders of retaining highly qualified executives to manage the
operations and finances of the Registrant and its subsidiaries during a time of great uncertainty for the business, and in
order to incentivize the continued service of Mr. Walsh, our Chief Executive Officer, and Mr. Juhan, our Chief Financial
Officer, one-time cash payments were made to these executives pursuant to the Retention Agreements in the amount of $1.5
million to Mr. Walsh, and $750,000 to Mr. Juhan (the “Retention Bonuses”). Each Retention Bonus is subject to
repayment of 100% of such award if prior to the date that is six months following the date of the applicable Retention
Agreement (i) the employment of the applicable executive with TSI LLC is terminated by TSI LLC for Cause (as defined in the
applicable Retention Agreement) or by the executive without Good Reason (as defined in the applicable Retention Agreement) or
(ii) the case of TSI LLC before the Court is converted to a liquidation pursuant to chapter 7, title 11 of the Bankruptcy
Code (except in the event that such conversion occurs after Court approval and closing on a sale of all or substantially
all of TSI LLC’s assets as a going concern).
The
foregoing description of the Retention Agreements does not purport to be complete and is qualified in its entirety by reference to
the terms and conditions of the Retention Agreements attached hereto as Exhibits 10.1 and 10.2.
Resignation of General Counsel
On
September 10, 2020, Stuart Steinberg notified the Registrant of his resignation as the Registrant’s General Counsel. Mr.
Steinberg’s resignation is effective immediately, and was not due to any disagreement with the Registrant on any matter relating
to the operations, policies or practices of the Registrant or any of its subsidiaries.
In
connection with Mr. Steinberg’s resignation, on September 10, 2020, the Registrant entered into a letter agreement (the “Letter
Agreement”) with Mr. Steinberg’s firm, Stuart M. Steinberg, P.C. (“Steinberg P.C.”), amending the Amended
Engagement Letter Agreement (the “Engagement Letter”), dated May 1, 2017, by and between the Registrant and Steinberg
P.C. Pursuant to the Letter Agreement, the Registrant will pay Steinberg P.C. a fee of $200,000 to provide transition services
for a period of sixty days to facilitate the transition of the firm’s former duties. The Letter Agreement also terminated
the engagement of Steinberg P.C. as counsel to the Registrant. The foregoing description of the Letter Agreement and the Engagement
Letter does not purport to be complete and is qualified in its entirety by reference to the terms and conditions of the Letter
Agreement and the Engagement Letter, each as attached hereto as Exhibits 10.3 and 10.4 respectively.
Forward-Looking Statements
Certain statements in this Current Report
regarding the Registrant’s future intentions contain “forward-looking” statements within the meaning of the Private
Securities Litigation Reform Act of 1995. You can identify these forward-looking statements by the use of words such as “outlook,”
“believes,” “expects,” “potential,” “continues,” “may,” “will,”
“should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,”
“estimates,” “anticipates,” “target,” “could,” or the negative version of these
words or other comparable words. Such statements are subject to various risks and uncertainties, many of which are outside our
control, including, among others, the impact of and risks and uncertainties related to the Chapter 11 Cases, the Debtors’
ability to obtain timely approval by the Court of the motions filed in the Chapter 11 Cases, the Debtors’ ability to obtain
debtor-in-possession financing, objections to any such debtor-in-possession financing facility or other pleadings that could protract
the Chapter 11 Cases, employee attrition and the Registrant’s ability to retain senior management and other key personnel,
the Registrant’s ability to comply with the continued listing criteria of NASDAQ and risks arising from the potential delisting
of the Registrant’s common stock from NASDAQ, the duration and severity of the COVID-19 pandemic, actions that may be taken
by governmental authorities to contain the COVID-19 outbreak or treat its impact, the potential negative impacts of COVID-19 on
the economy in the United States and the impact of COVID-19 on our financial condition and business operations, and other specific
risk factors disclosed in our prior SEC filings. We believe that all forward-looking statements are based on reasonable assumptions
when made; however, we caution that it is impossible to predict actual results or outcomes or the effects of risks, uncertainties
or other factors on anticipated results or outcomes and that, accordingly, one should not place undue reliance on these statements.
Forward-looking statements speak only as of the date when made, and we undertake no obligation to update these statements in light
of subsequent events or developments. Actual results may differ materially from anticipated results or outcomes discussed in any
forward-looking statement.