BRT Apartments Corp 8-K, filed Jul 15, 2024
BRT Apartments Corp. (BRT)
8-K
2024-07-15
For: 2024-07-12
View Original
Added on
April 11, 2026
About this 8-K
BRT Apartments Corp filed this 8-K on July 15, 2024, reporting on events of July 12, 2024.
Items reported
- Item 1.01: Entered into a material agreement
- Item 2.03: New debt or off-balance-sheet obligation
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 12, 2024
(Exact name of Registrant as specified in charter)
| (State or other jurisdiction of incorporation) | (Commission file No.) | (IRS Employer I.D. No.) | ||||||||||||
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: 516 -466-3100
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
240.14d-2(b))
240.13e-4(c)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405) of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Item 1.01 Entry into a Material Definitive Agreement
The information set forth in Item 2.03 is incorporated herein by this reference.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off- Balance Sheet
Arrangement of a Registrant.
On July 12, 2024, we and VNB New York, LLC (the "Lender") entered into the third amendment dated July 9, 2024 (the "Amendment") to the Amended and Restated Loan Agreement made as of November 18, 2021, as amended, by and between us and the Lender (the "Initial Credit Facility"; the Initial Credit Facility as amended by the Amendment, the "Credit Facility"). The Amendment extended the maturity of the facility by two years (i.e., from September 2025 to September 2027) and reduced the amount available under the facility by $20 million (i.e., from $60 million to $40 million). The Amendment (i) modified several of the covenants under the facility to, among other things, reflect the reduced availability under the facility and (ii) increased the number of wholly-owned properties we are required to own from five properties to ten properties (we currently wholly-own 21 properties). As of July 12, 2024, we are able to borrow $40 million pursuant to the facility.
We reduced the amount available under the facility in connection with obtaining approximately $28 million of seven-year mortgage debt (the “Financing”) on our Woodland Trails – LaGrange, Georgia property. We anticipate that the Financing will be completed in August 2024, will bear a fixed interest rate of 5.22%, and will be interest only until maturity in 2031. We anticipate using the proceeds from the Financing to invest in multi-family property opportunities and for general corporate purposes (which may include repurchases of our common stock). Such proceeds will be invested initially in short-term US Treasury securities until they are applied. In connection with the Amendment, we paid the lender aggregate fees of approximately $317,000.
We can provide no assurance that the Financing will be obtained or that if obtained, that we will invest the proceeds therefrom in accretive/profitable investments.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
In reviewing the Amendment included as exhibit 10.1 to this Current Report on Form 8-K, please remember it is included to provide you with information regarding its terms and is not intended to provide any other factual or disclosure information about us or the other party to the agreement. The agreement contains representations and warranties by one or more of the parties thereto. These representations and warranties have been made solely for the benefit of the other party to the agreement and:
•should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate;
•have been qualified by disclosures that were made to the other party in connection with the negotiation of the agreement, which disclosures are not necessarily reflected in the agreement;
•may apply standards of materiality in a way that is different from what may be viewed as material to you or other investors; and
•are subject to more recent developments. Accordingly, these representations and warranties may not describe the actual state of affairs as of the date they were made or at any other time.
| Exhibit No. | Description | |||||||
Third amendment dated as of July 9, 2024 to the Amended and Restated Loan Agreement made as of November 18, 2021, as amended, by and between us and VNB New York, LLC. | ||||||||
| 101 | Cover Page Interactive Data File - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |||||||
| 104 | Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document | |||||||
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| BRT APARTMENTS CORP. | ||||||||
| July 15, 2024 | /s/ George Zweier | |||||||
| George Zweier, Vice President | ||||||||
| and Chief Financial Officer | ||||||||
Exhibit 10.1
THIRD AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT
THIS THIRD AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT (this “Amendment”) is dated as of July 9, 2024 between VNB New York, LLC, having an office at 350 Madison Avenue, 5th Floor, New York, New York 10017 (hereinafter referred to as “Lender”) and BRT Apartments Corp., having an office at 60 Cutter Mill Road, Suite 303, Great Neck, New York 11021 (hereinafter referred to as “Borrower”).
W I T N E S S E T H :
WHEREAS, Borrower executed and delivered to Lender a $60,000,000 Replacement Revolving Credit Note dated September 14, 2022 (as the same may be amended, modified or replaced from time to time, the “Note”); and
WHEREAS, Borrower and Lender executed an Amended and Restated Loan Agreement dated November 18, 2021, as modified by that certain Letter Agreement dated as of November 19, 2021, as further modified by that certain Amendment to Loan Agreement dated as of September 14, 2022 and as further modified by that certain Second Amendment to Amended and Restated Loan Agreement dated as of August 22, 2023 (as the same may be further amended, modified or replaced from time to time, collectively, the “Loan Agreement”); and
WHEREAS, Borrower has requested that Lender modify the terms of the Loan Agreement to, among other things, decrease the maximum principal amount available thereunder to $40,000,000; and
WHEREAS, Borrower and Lender now agree to make further certain changes to the Loan Agreement and the terms thereof, all as set forth in the succeeding provisions of this Amendment; and
NOW, THEREFORE, in consideration of the premises and of the mutual promises and covenants contained herein, the receipt and sufficiency are hereby acknowledged, Borrower and Lender hereby agree as follows:
1. DEFINITIONS. Capitalized terms used but not defined in this Amendment shall have the meaning given to them in the Loan Agreement.
2. REPRESENTATIONS. Borrower represents and warrants to Lender and its successors and assigns that: (i) that there is currently an outstanding principal balance under the Loan Documents of $-0-. (ii) the Loan Agreement and the Note are the valid and binding obligations of Borrower, (iii) except as may have been disclosed to Lender in writing prior to the date hereof, any and all representations and warranties and schedules contained in the Note, Loan Agreement or Loan Documents are true and correct in all material aspects on and as of the date hereof as though made on and as of such date, (v) no event has occurred and is continuing which constitutes an Event of Default under the Note, Loan Agreement or under any of the other Loan Documents or which upon the giving of notice or the lapse of time or both would constitute an Event of Default, and (vi) it has no defenses, set-offs, or counterclaims of any kind or nature whatsoever against Lender with respect to the Note, Loan Agreement or Loan Documents or obligations thereunder, or any action previously taken by Lender with respect thereto.
3. AMENDMENTS. The Loan Agreement is hereby amended as follows:
a.The definition of the term “Borrowing Base Availability”, set forth under Section 1.01 of the Loan Agreement, shall be modified so as to delete the amount “$60,000,000” and to insert the amount “$40,000,000” in its place and stead.
b.The definition of the term “Borrowing Base Calculation Result”, set forth under Section 1.01 of the Loan Agreement, shall be modified so as to delete the amount “$15,000,000” in both places therein and to insert the amount “$10,000,000” in its place and stead in both of these places.
c.The definition of the term “Commitment”, set forth under Section 1.01 of the Loan Agreement, shall be deleted in its entirety and replaced with the following: “Commitment” means Lender’s
obligation to make Revolving Credit Loans to Borrower in an outstanding amount not to exceed FORTY MILLION AND 00/100 Dollars ($40,000,000.00) pursuant to the terms and subject to the conditions of this Agreement.
d.The Revolving Credit Note, annexed to the Loan Agreement as Exhibit A, shall be deleted in its entirety and replaced with that certain $40,000,000 Replacement Revolving Credit Note in the form annexed hereto and a part hereof. All references in the Loan Documents to the Revolving Credit Note shall hereafter be deemed to mean that certain Replacement Revolving Credit Note in the form annexed hereto as Exhibit A.
e.Section 2.07(a) of the Loan Agreement, under the heading “Maturity; Maximum Revolving Credit Obligations; Prepayments”, is hereby amended to delete the date “September 14, 2025”, which date is set forth as the definition of the “Maturity Date”, and to insert the date “September 14, 2027” in its place and stead.
f.Section 2.17, titled “Additional Loan Commitments,” is hereby deleted in its entirety and replaced with the following: “Intentionally Omitted”.
g.Exhibit M, set forth at Section 5.01(b)(ix) of the Loan Agreement as the form of Enhanced Collateral Properties Ownership Verification, is hereby deleted in its entirety and Exhibit M, annexed hereto and a part hereof, shall be inserted in its place and stead. All references to the term Enhanced Collateral Properties Ownership Verification shall hereafter be deemed to mean the Enhanced Collateral Properties Ownership Verification as set forth on Exhibit M annexed hereto.
h.Exhibit N, set forth at Section 5.01(b)(x) of the Loan Agreement as the form of Enhanced Collateral Properties and 100% Properties Compliance Certificate, is hereby deleted in its entirety and Exhibit N, annexed hereto and a part hereof, shall be inserted in its place and stead. All references to the term Enhanced Collateral Properties Compliance Certificate and/or Enhanced Collateral Properties and 100% Properties Compliance Certificate shall hereafter be deemed to mean the Enhanced Collateral Properties and 100% Properties Compliance Certificate as set forth on Exhibit N annexed hereto.
i.Exhibit F, set forth at Section 5.01(b)(xii) of the Loan Agreement as the form of Borrowing Base Certificate, is hereby deleted in its entirety and Exhibit F, annexed hereto and a part hereof, shall be inserted in its place and stead. All references to the term Borrowing Base Certificate shall hereafter be deemed to mean the Borrowing Base Certificate as set forth on Exhibit F annexed hereto.
j.Section 5.03(b), titled “Number of 100% Properties”, under the heading “Financial Requirements”, is hereby deleted in its entirety and replaced with the following:
(b) Number of 100% Properties. Borrower shall own, directly or indirectly, not less than ten (10) 100% Properties, of which a minimum of four (4) must be Positive 100% Properties, of which a minimum of three (3) must be a Four Quarter Property.
k.Section 5.03(c), titled “Number and Value of Enhanced Collateral Properties”, under the heading “Financial Requirements”, is hereby deleted in its entirety and replaced with the following:
(c) Number and Value of Enhanced Collateral Properties. Borrower shall own, directly or indirectly, not less than two (2) Enhanced Collateral Properties having a minimum aggregate Enhanced Collateral Properties Value of $50,000,000.
4. CONDITIONS PRECEDENT The obligations of Lender under this Amendment are subject to the following conditions precedent, all of which shall be performed or satisfied in a manner in form and substance satisfactory to Lender and its counsel:
a.Lender shall have received this Amendment fully executed by all parties hereto; and
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b.Lender shall have received that certain $40,000,000 Replacement Revolving Credit Note duly executed by Borrower;
c.Lender shall have received that certain Rider to Deposit Account Control Agreement duly executed by Borrower and Valley National Bank;
d.Lender shall have received payment of a modification fee in the amount of $50,000;
e.Lender shall have received payment of an extension fee in the amount of $266,667; and
f.Lender’s counsel shall have received payment of its legal fees and expenses for the preparation and negotiation of this Amendment and related documents.
5. CONFLICTING PROVISIONS. If the terms and provisions contained in the Loan Agreement in any way conflict with the terms and provisions contained in this Amendment, the terms and provisions herein contained shall prevail.
6. RATIFICATION. All terms and conditions of the Loan Documents, except as modified by this Amendment are hereby affirmed and ratified.
7. RELEASE OF WOODLANDS. Reference is made to (i) that certain Pledge Agreement dated as of November 18, 2021 given by TRB Avondale LLC and TRB Woodlands LLC (“TRB Woodlands”) in favor of Lender (as amended, modified or replaced from time to time, the “Woodlands- Avondale Pledge Agreement”), (ii) that certain Negative Pledge Agreement dated as of November 18, 2021 given by Borrower, TRB Holdings LLC, TRB Avondale LLC, Avondale 212, LLC, TRB Woodlands and Woodlands 236 LLC (“Woodlands 236,” together with TRB Woodlands, collectively for these two entities, the “Woodlands Parties”) in favor of Lender (as amended, modified or replaced from time to time, the “Woodlands-Avondale Negative Pledge Agreement”), and (iii) that certain Unlimited Guaranty given by TRB Holdings LLC, TRB Avondale LLC, Avondale 212, LLC, and the Woodlands Parties in favor of Lender (as amended, modified or replaced from time to time, the “Woodlands-Avondale Guaranty,” together with the Woodlands-Avondale Pledge Agreement and the Woodlands-Avondale Negative Pledge Agreement, collectively, the “Woodlands-Avondale Collateral Documents”). In connection with the execution and delivery of this Amendment, Borrower and the Woodlands Parties have requested that Lender release and discharge specifically and only the Woodlands Parties from all obligations and liabilities under the Woodlands-Avondale Collateral Documents, and subsequently return that certain Share Certificate Power executed by TRB Woodlands to Borrower (marked void). For good and valuable consideration provided in connection with this transaction, the receipt of which is hereby acknowledged, Lender hereby acknowledges and agrees that effective as of the date hereof, the Woodlands Parties are hereby released and discharged from any and all obligations and/or liabilities under the Woodlands-Avondale Collateral Documents and the other Loan Documents. The release set forth herein applies only to the Woodlands Parties and shall be effective only to the extent specifically set forth herein and shall not (a) be construed as a release or modification of any obligations of any other party under the Woodlands-Avondale Collateral Documents or the other Loan Documents, each of which is hereby ratified and confirmed as in full force and effect or (b) affect the right of Lender to demand compliance by any parties to the Woodlands-Avondale Collateral Documents or the other Loan Documents other than the Woodlands Parties.
8. RATIFICATION OF GUARANTORS. Each of the undersigned Guarantors acknowledge that they are legally and validly indebted to Lender under their respective Guaranty, without defense, counterclaim or offset, and affirm that each such Guaranty remains in full force and effect and includes, without limitation, the indebtedness, liabilities and obligations arising under, or in any way connected with the obligations of Borrower to Lender as governed by the Loan Agreement as modified by this Amendment and any of the Loan Documents, whether now existing or hereafter arising.
9. AUTHORIZATION. The execution and delivery by Borrower of this Amendment and the performance by Borrower of the transactions herein contemplated (i) are and will be within its powers, (ii) have been duly authorized by all necessary action on behalf of Borrower and (iii) are not and will not be in contravention of any order of court or other agency of government, of law or of any indenture, agreement or undertaking to which Borrower is a party or by which the property of Borrower is bound, or be in conflict with, result in a breach of or
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constitute (with due notice and/or lapse of time) a default under any such indenture, agreement or undertaking, or result in the imposition of any lien, charge or encumbrance of any nature on any of the properties of Borrower.
10. MISCELLANEOUS. It is expressly stipulated and agreed that this Amendment is entered into in modification of and not for purposes of replacement or extinguishment of the Note or Loan Agreement. This Amendment (a) shall bind and benefit Borrower and Lender and their respective heirs, beneficiaries, administrators, executors, receivers, trustees, successors and assigns (provided, that Borrower shall not assign its rights hereunder without the prior written consent of Lender); (b) can be modified or amended only by a writing signed by each party; (c) can be terminated only by a writing signed by each party; (d) shall be governed by and construed in accordance with the laws of the State of New York and the United States of America; (e) may be executed in several counterparts, and by the parties hereto on separate counterparts, and each counterpart, when executed and delivered, shall constitute an original agreement enforceable against all who signed it without production of or accounting for any other counterpart, and all separate counterparts shall constitute the same agreement; and (f) embodies the entire agreement and understanding between the parties with respect to modifications of instruments provided for herein and supersedes all prior conflicting or inconsistent agreements, consents and understandings relating to such subject matter. All appropriate corporate authorizations have been obtained for execution of this Amendment by Borrower. The headings in this Amendment shall be accorded no significance in interpreting it. The recitals contained therein are incorporated into this Amendment.
[Signature Page to Follow]
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WHEREFORE, this Amendment has been executed and is effective as of the date first written above.
LENDER: VNB New York, LLC By: _______________________________________ Name: Title: | |||||
BORROWER: BRT Apartments Corp. By: _______________________________________ Name: Title: | |||||
GUARANTORS: Avondale 212, LLC By: TRB Avondale LLC, its sole member By: TRB Holdings LLC, its sole member By: BRT Apartments Corp., its sole member By: _______________________________________ Name: Title: Avalon 276, LLC By: TRB Avalon, LLC, its sole member By: TRB Holdings, LLC, its sold member By: BRT Apartments Corp., its sole member By: _______________________________________ Print Name: Print Title: | (Signatures Continue on Following Page) | ||||
| TRB Avondale LLC By: TRB Holdings LLC, its sole member By: BRT Apartments Corp., its sole member By: _______________________________________ Name: Title: | |||||
| TRB Avalon LLC By: TRB Holdings LLC, its sole member By: BRT Apartments Corp., its sole member By: _______________________________________ Print Name: Print Title: | |||||
| TRB Holdings LLC By: BRT Apartments Corp., its sole member By: _______________________________________ Name: Title: | |||||
(End of Signatures)
EXHIBIT A
[Insert Revolving Credit Note]
EXHIBIT F
[Insert Borrowing Base Certificate]
EXHIBIT M
[Insert Enhanced Collateral Properties Ownership Verification]
EXHIBIT N
[Insert Enhanced Collateral Properties and 100% Properties Compliance Certificate]