Item 1.01.
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Entry into a Material Definitive Agreement.
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Second Amendment to Bridge Credit Agreement
On October 16, 2020, Pennsylvania Real Estate Investment Trust (“PREIT”), PREIT Associates, L.P. and PREIT-RUBIN, Inc. (collectively with PREIT and PREIT Associates, L.P., the “Borrower”) entered into a Second Amendment to Credit Agreement (the “Second Amendment”) that amends that certain Credit Agreement, dated August 11, 2020 (as amended, the “Bridge Credit Agreement”) with Wells Fargo Bank, National Association and the financial institutions signatory thereto and their assignees.
The Second Amendment, among other things, (i) increased the aggregate amount of Term Loan Commitments under the Bridge Credit Agreement by $25 million and (ii) permitted the Borrower to draw the entire unfunded amount of the Term Loan Commitments on the effective date of the Second Amendment, subject to certain restrictions, the proceeds of which were disbursed into a cash collateral account controlled by the administrative agent. Disbursements from such account will be subject to certain conditions, including that they be determined according to a multiple of amounts set forth in the Loan Budget, and the Borrower may only draw from such cash collateral account when its unrestricted cash and cash equivalents (not including the cash in such account) is equal to or less than $12.5 million. The Borrower must pay certain fees in connection with the Second Amendment.
The Bridge Credit Agreement contains certain affirmative and negative covenants customarily found in facilities of its type that remain unchanged under the Second Amendment, and which are described in PREIT’s Current Report on Form 8-K filed on August 12, 2020, in addition to certain representations, some of which are qualified under the Second Amendment. All capitalized terms used in Item 1.01 of this Current Report on Form 8-K under the caption “Second Amendment to Bridge Credit Agreement” and not otherwise defined herein have the meanings ascribed to such terms in the Bridge Credit Agreement. The description above is qualified in its entirety by reference to the Second Amendment, which is filed as Exhibit 10.1 to this Current Report on Form 8-K.
Amendment and Waiver to Restructuring Support Agreement
On October 16, 2020, PREIT and the other Company Parties under the Restructuring Support Agreement, dated as of October 7, 2020, among the Company Parties and the Consenting Lenders entered into an Amendment and Waiver to Restructuring Support Agreement (“RSA Amendment and Waiver”; the Restructuring Support Agreement, as so amended, the “RSA”), with the Requisite Consenting Lenders and the Requisite Consenting Bridge Lenders. All capitalized terms used in Item 1.01 of this Current Report on Form 8-K under the caption “Amendment and Waiver to Restructuring Support Agreement” and not otherwise defined herein have the meanings ascribed to such terms in the RSA.
The RSA Amendment and Waiver amended the defined term “Financing Order” to include interim and final orders of the Bankruptcy Court authorizing the Company to use cash collateral securing Bridge Indebtedness, such orders to be in form and substance acceptable to the Agent and Requisite Consenting Bridge Lenders, to the extent that DIP Financing is not sought at the outset of any potential Chapter 11 Cases.
In addition, under the RSA Amendment and Waiver, the Consenting Lenders waived the Company Parties’ failure to commence the Solicitation by 11:59 p.m. (Eastern Time) on October 8, 2020, subject to additional terms and related cure periods.
The description above is qualified in its entirety by reference to the RSA Amendment and Waiver, which is filed as Exhibit 10.2 to this Current Report on Form 8-K.