Amendment to Shopko Master Lease
On January 16, 2018, two wholly-owned subsidiaries of Spirit Realty Capital, Inc. (the Company), Spirit SPE Portfolio
2006-1,
LLC and Spirit SPE Portfolio
2006-2,
LLC (collectively, the Landlord), entered into an amendment (the Amendment) to the amended and restated
master lease between the Landlord and Shopko Stores Operating Co., LLC (the Tenant or Shopko) dated as of December 15, 2014 (the Master Lease).
The Amendment provides that Landlord may, without the consent of Tenant, enter into transfers and assignments of Landlord, the premises subject to the Master
Lease, any property location subject to the Master Lease, or the Master Lease, Landlords right, title and interest in the Master Lease, the servicing rights with respect to any of the foregoing, or participations in any of the foregoing.
The Amendment also requires Tenant to deliver to Landlord, or to cause Specialty Retail Shops Holding Corp. to deliver to Landlord, on an annual and quarterly
basis, various financial statements and other information required for Landlord or its affiliates to satisfy its or their filing obligations under the rules and regulations of the Securities and Exchange Commission.
Subject to certain conditions, Tenant has a
one-time
right, upon at least 60 days written notice to Landlord, to defer
payment of the monthly base rent (the Deferred Rent) for a period of not more than three months (each one month period of deferred payments, a Monthly Deferred Rent Period); provided, however, that if Tenant defers payment of
the monthly base rent for more than one month, such months shall not be consecutive. The deferred rent is subject to interest at the rate of 11% per annum, which accrues from and after the commencement of the applicable Monthly Deferred Rent Period,
and such interest, together with the Deferred Rent, is due and payable on the date that immediately precedes the first anniversary of the commencement of the applicable Monthly Deferred Rent Period. The repayment of the Deferred Rent, together with
the interest, is secured by a second priority lien on the interests of Tenant in its assets, which are subject to a first priority lien under a loan pursuant to the ABL Facility Amendment (as defined below).
The Amendment modifies several other provisions of the Master Lease related to assignment by Tenant, subletting by Tenant, sale by Landlord and rent payment
date. The description of the Amendment in this Current Report on Form
8-K
is not complete and is qualified in its entirety by the terms of the Amendment, which is attached as exhibit 99.1 hereto.
Amendment to ABL Facility
On January 16,
2018, Spirit Realty, L.P., as lender and agent (the Operating Partnership), entered into an amendment (the ABL Facility Amendment) to the credit agreement (the Credit Agreement), dated as of February 7, 2012,
among its tenant, Shopko Properties, LLC, as borrower (Shopko), certain affiliates and subsidiaries of Shopko, as borrowers and guarantors, Wells Fargo Bank, National Association, as agent, and the other lenders party
thereto.
Pursuant to the ABL Facility Amendment, the Operating Partnership extended a senior secured term loan (the
B-1
Term Loan) in the amount of $35.0 million to Shopko. The
B-1
Term Loan bears interest at a rate of 12% per annum, will be repaid in consecutive quarterly
installments of $583,625 commencing on November 1, 2018 and matures on June 19, 2020. The
B-1
Term Loan is unconditionally guaranteed by, and secured by the assets of, Shopko and the other borrowers
and guarantors. The proceeds of the collateral will be applied to the
B-1
Term Loan on a
last-out
basis after all outstanding amounts owing under the other loans under
the Credit Agreement have been repaid in full. The Operating Partnership received a commitment fee equal to 3.00% of the
B-1
Term Loan.
The description of the ABL Facility Amendment in this Current Report on Form
8-K
is not complete and is qualified in
its entirety by the terms of the ABL Facility Amendment, which is attached as exhibit 99.2 hereto.
Press Release
On January 16, 2018, the Company issued a press release announcing the closing of the transactions described above, as well as the receipt of a letter
from Shopko providing an update on Shopkos select financial results. A copy of that press releases is attached hereto as Exhibit 99.3. This information, including the information contained in the press release, shall not be deemed
filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not incorporated by reference into any of the Companys filings, whether made before or after the date hereof, regardless of any
general incorporation language in any such filing.