Second Amendment to Restructuring Support Agreement, dated as of October 23, 2020, by and among PREIT Associates, L.P., PREIT-RUBIN, Inc., Pennsylvania Real Estate Investment Trust, and the financial institutions party thereto and their assignees
Exhibit 10.11
SECOND AMENDMENT TO
RESTRUCTURING SUPPORT AGREEMENT
This amendment, dated as of October 23, 2020 (as may be amended, supplemented, amended and restated or otherwise modified from time to time in accordance with the terms hereof, this “Second Amendment”) to that certain Restructuring Support Agreement dated as of October 7, 2020 (together with all exhibits, schedules and attachments thereto, and as may be further amended, supplemented, amended and restated or otherwise modified from time to time in accordance with the terms thereof, the “Restructuring Support Agreement”), is entered into by and among (i) the Company Parties, (ii) the Requisite Consenting Lenders and (iii) the Requisite Consenting Bridge Lenders. Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the Restructuring Support Agreement.
WHEREAS, on October 16, 2020, the Company Parties, the Requisite Consenting Lenders and the Requisite Consenting Bridge Lenders executed that certain Amendment to Restructuring Support Agreement (the “First Amendment”);
WHEREAS, pursuant to Paragraph 2 of the First Amendment, in the event the Plan Transactions are pursued, the Company Parties agreed to commence the Chapter 11 Cases on or before October 18, 2020; and
WHEREAS, on October 19, 2020, certain Consenting Lenders transmitted a Notice of Default; Reservation of Rights letter to the Company, alleging that the Company Parties’ failure to commence the Chapter 11 Cases breached the obligations under the Restructuring Support Agreement (the “Alleged RSA Breach”);
WHEREAS, the Company Parties dispute that any such RSA Breach has occurred;
WHEREAS, the Parties have agreed to enter into a limited tolling of the Alleged RSA Breach pursuant to which each of the Requisite Consenting Lenders and Requisite Consenting Bridge Lenders shall not exercise remedies relating to the Alleged RSA Breach, to the extent valid, subject to the conditions contained herein; it being understood that, except as provided in this Second Amendment, all rights and defenses of the Requisite Consenting Lenders, the Requisite Consenting Bridge Lenders and the Company Parties are preserved; and
WHEREAS, pursuant to Section 9 of the Restructuring Support Agreement, except as otherwise expressly provided for therein, the Restructuring Support Agreement may be modified, amended, or supplemented in a writing signed by the Company Parties, the Requisite Consenting Lenders and the Requisite Consenting Bridge Lenders; and
WHEREAS, on October 23, 2020, in accordance with the terms and conditions of Section 9 of the Restructuring Support Agreement, the Company Parties, the Requisite Consenting Lenders and the Requisite Consenting Bridge Lenders agreed to amend the Restructuring Support Agreement as set forth herein;
NOW, THEREFORE, in consideration of the promises and the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, agree as follows:
1. Amendments to the Restructuring Support Agreement. Subject to (i) all Consenting Lenders becoming party to this Second Amendment, and (ii) each of Strategic Value Dislocation Master Fund LP, Strategic Value Master Fund, Ltd., Strategic Value Special Situations Master Fund IV, L.P. executing a Joinder Agreement to the Restructuring Support Agreement:
(a)The section entitled “Extension Option” on page 6 of the Out-of-Court Restructuring Term Sheet annexed as Exhibit A to the Restructuring Support Agreement shall hereby be amended and restated in its entirety to read as follows:
| Extension Option: | One one-year extension at Borrowers’ option, subject to (i) minimum liquidity of $35,000,000, (ii) minimum Corporate Debt Yield of 8.0%, and (iii) maximum LTV of 105% for Borrowing Base Properties to the drawn Facilities (Senior Facility and Second Lien Term Loan Facility), as determined by an appraisal. |
(b)The section entitled “Financial Covenants” on page 8-9 of the Out-of-Court Restructuring Term Sheet annexed as Exhibit A to the Restructuring Support Agreement shall hereby be amended and restated in its entirety to read as follows:
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| Financial Covenants: | • Minimum liquidity of $25,000,000, which liquidity amount shall not include any portion of the Remargin Subfacility. • Anti-cash hoarding of $40,000,000 • Cash Trap at 8.50% Senior Debt Yield (based on NOI (excluding tenant improvement costs and leasing commissions) of properties included in the Collateral / Senior Facilities) (which, for the purposes of the financial covenants, shall include only drawn commitments under the Revolving Facility and outstanding amounts under the Senior Term Loan Facility), starting in Q2 2021, with an annualization ramp (i.e., starting with 1 quarter annualized, then 2 quarters annualized, then 3 quarters annualized, and finally a trailing 12 month test). • Minimum Senior Debt Yield test 8.0% (based on NOI (excluding tenant improvement costs and leasing commissions) of properties included in the Collateral / Senior Facilities) starting in Q2 2021 with an annualization ramp up as set forth above. • Minimum Corporate Debt Yield of 6.50% (based on total proportional NOI/total proportional debt) in Q2/Q3 2021, and 7.25% in Q4 2021 and onwards, with an annualization ramp-up as set forth above. |
2. Tolling. Notwithstanding anything to the contrary contained in the Restructuring Support Agreement, in the event the Plan Transactions are pursued, the Company Parties shall be required to commence the Chapter 11 Cases on or before October 28, 2020; it being understood that a “Lender Termination Event” occurring as a result of the Alleged RSA Breach, if any, shall be tolled from October 22, 2020 until October 28, 2020.
3. Agreement to be Bound. Each of the Parties hereby agrees to be bound by all of the terms of the Restructuring Support Agreement not inconsistent with the terms hereof.
4. Representation and Warranties. The Company Parties each hereby represent and warrant to the Consenting Lenders that as of the Effective Date (as defined below) (a) there exists no Lender Termination Event or Company Termination Event under Section 5(b) or 5(c) of the Restructuring Support Agreement other than the Alleged RSA Breach and (b) neither the execution, delivery or performance by the Company of this Second Amendment, nor compliance by it with the terms and provisions hereof (i) will contravene in any material respect with any provision of any law, statute, rule or regulation or any order, writ, injunction or decree of any court of government authority or (ii) will violate any provision of the certificate of articles of incorporation, certificate or formation, limited liability company agreement or by-laws (or equivalent constitutional, organizational and/or formation documents), as applicable, of any Company Party.
5. Effective Date. This Second Amendment shall not become effective until the date of satisfaction of the following conditions (the “Effective Date”):
(a)The Company Parties and the Consenting Lenders constituting Requisite Consenting Lenders and Requisite Consenting Bridge Lenders have duly executed counterparts to this Second Amendment.
(b)All representations and warranties of the Company Parties contained herein shall be true and correct as of the Effective Date.
6. Reservation of Rights. The tolling set forth in Section 2 shall be limited precisely as written and relate solely to the Alleged RSA Breach and nothing in this Second Amendment shall be deemed to prejudice any right or remedy that the Consenting Lenders, the Agent, or the Company Parties may now have (except to the extent of the express provision set forth herein) or may have in the future under or in connection with the Restructuring Support Agreement or any instrument or agreement referred to therein. Upon termination of this Second Amendment, the Consenting Lenders, the Agent and the Company Parties (as applicable) shall be entitled to
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immediately take any and all actions and remedies under the Restructuring Support Agreement and applicable law in respect of any Lender Termination Events or Company Termination Events (as applicable) then existing.
7. Miscellaneous.
(a)Except as expressly provided herein, this Second Amendment shall not, by implication or otherwise, alter, modify, amend or in any way affect any of the obligations, covenants or rights contained in the Restructuring Support Agreement, all of which are ratified and confirmed in all respects by the Parties and shall continue in full force and effect.
(b)THIS SECOND AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO ANY CONFLICTS OF LAW PROVISIONS WHICH WOULD REQUIRE THE APPLICATION OF THE LAW OF ANY OTHER JURISDICTION (EXCEPT TO THE EXTENT IT MAY BE PREEMPTED BY THE BANKRUPTCY CODE).
(c)This Second Amendment, together with the Restructuring Support Agreement, the First Amendment and all exhibits thereto, constitutes the entire agreement among the Parties with respect to the subject matter hereof and supersedes all prior agreements and understandings among the Parties with respect to such subject matter. Each reference to the Restructuring Support Agreement hereafter made in any document, agreement, instrument, filing, pleading, notice or communication shall mean and be a reference to the Restructuring Support Agreement as amended and modified by the First Amendment and hereby hereby.
(d)In the event the terms and conditions as set forth in the Restructuring Support Agreement and this Second Amendment are inconsistent, the terms and conditions of this Second Amendment shall control.
(e)This Second Amendment may be executed in counterparts, each of which shall be deemed an original, but all of which shall constitute the same instrument. Delivery of a copy of this Second Amendment bearing an original signature by electronic transmission shall have the same effect as physical delivery of the paper document bearing the original signature.
(f)If any term, condition or other provision of this Second Amendment is invalid, illegal or incapable of being enforced by any rule of law or public policy, all other terms, conditions and provisions of this Second Amendment shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in a manner adverse to any Party. Upon such determination that any term, condition or other provision is invalid, illegal or incapable of being enforced, the Parties shall negotiate in good faith to modify this Second Amendment so as to effect the original intent of the Parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the fullest extent possible.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the Parties hereto have caused this Second Amendment to be executed and delivered by their respective duly authorized officers, solely in their respective capacity as officers of the undersigned and not in any other capacity, as of the date first set forth above.
“COMPANY PARTIES”
PREIT Associates, L.P.
By:Pennsylvania Real Estate Investment Trust,
its general partner
By:/s/ Andrew Ioannou
Name:Name:Andrew Ioannou
Title:Executive Vice President, Finance & Acquisitions
and Treasurer
PREIT-RUBIN, INC.
By:/s/ Andrew Ioannou
Name:Name:Andrew Ioannou
Title:Executive Vice President, Finance & Acquisitions and
Treasurer
PENNSYLVANIA REAL ESTATE INVESTMENT TRUST
By:/s/ Andrew Ioannou
Name:Name:Andrew Ioannou
Title:Executive Vice President, Finance & Acquisitions and
Treasurer
[Signatures Continue on Following Page]
Signature Page to Restructuring Support Agreement
PR CHERRY HILL OFFICE GP, LLC
By:PREIT Associates, L.P., sole member
BALA CYNWYD ASSOCIATES, L.P.
By:PR Cherry Hill Office GP, LLC, general partner
By:PREIT Associates, L.P., sole member
PR MOORESTOWN ANCHOR-M, LLC
By:PREIT Associates, L.P., sole member
PR MOORESTOWN LLC
By:PREIT Associates, L.P., sole member
PR Moorestown Limited Partnership
By:PR Moorestown LLC, general partner
By:PREIT Associates, L.P., sole member
MOORESTOWN MALL LLC
By:PR Moorestown Limited Partnership, sole member
By: PR Moorestown LLC, general partner
By:PREIT Associates, L.P., sole member
PLYMOUTH GROUND ASSOCIATES LLC
By:PREIT Associates, L.P., sole member
PLYMOUTH GROUND ASSOCIATES LP
By:Plymouth Ground Associates LLC, general partner
By:PREIT Associates, L.P., sole member
PR AEKI PLYMOUTH LLC
By:PREIT Associates, L.P., sole member
PR AEKI PLYMOUTH, L.P.
By:PR AEKI Plymouth LLC, general partner
By:PREIT Associates, L.P., sole member
PR BVM, LLC
By:PREIT Associates, L.P., sole member
PR CUMBERLAND OUTPARCEL LLC
By:PREIT Associates, L.P., sole member
PR VALLEY VIEW OP-DSG/CEC, LLC
By:PREIT Associates, L.P., sole member
PR MOORESTOWN ANCHOR-L&T, LLC
By:PREIT Associates, L.P., sole member
By:Pennsylvania Real Estate Investment Trust, general partner
By:/s/ Andrew Ioannou
Name:Andrew Ioannou
Title:Executive Vice President, Finance & Acquisitions
and Treasurer
[Signatures Continued on Next Page]
Signature Page to Restructuring Support Agreement
PR EXTON LLC
By:PREIT Associates, L.P., sole member
PR EXTON LIMITED PARTNERSHIP
By:PR Exton LLC, general partner
By:PREIT Associates, L.P., sole member
PR EXTON OUTPARCEL GP, LLC
By:PREIT Associates, L.P., sole member
PR EXTON OUTPARCEL HOLDINGS, LP
By:PR Exton Outparcel GP, LLC, general partner
By:PREIT Associates, L.P., sole member
PR EXTON OUTPARCEL LIMITED PARTNERSHIP
By:PR Exton Outparcel GP, LLC, general partner
By:PREIT Associates, L.P., sole member
XGP LLC
By:PR Exton Limited Partnership, sole member
By:PR Exton LLC, general partner
By:PREIT Associates, L.P., sole member
PR EXTON SQUARE PROPERTY L.P.
By:XGP LLC, general partner
By:PR Exton Limited Partnership, sole member
By:PR Exton LLC, general partner
By:PREIT Associates, L.P., sole member
PR FIN DELAWARE, LLC
By:PREIT Associates, L.P., sole member
PR FINANCING II LLC
By:PREIT Associates, L.P., sole member
PR FINANCING I LLC
By:PREIT Associates, L.P., member and
By:PR Financing II LLC, member
By: PREIT Associates, L.P., sole member
PR FINANCING LIMITED PARTNERSHIP,
By:PR Financing I LLC, general partner
By:PREIT Associates, L.P., member and
By:PR Financing II, LLC, member
By:PREIT Associates, L.P., sole member
By:Pennsylvania Real Estate Investment Trust, general partner
By:/s/ Andrew Ioannou
Name:Andrew Ioannou
Title:Executive Vice President, Finance & Acquisitions and Treasurer
[Signatures Continued on Next Page]
PR GAINESVILLE LLC
By:PREIT Associates, L.P., sole member
PR GAINESVILLE LIMITED PARTNERSHIP
By: PR Gainesville LLC, general partner
By:PREIT Associates, L.P., sole member
PR GV LLC
By:PREIT Associates, L.P., sole member
PR GV LP
By:PR GV LLC, general partner
By:PREIT Associates, L.P., sole member
PR PRINCE GEORGE’S PLAZA LCC
By:PREIT Associates, L.P., sole member
PR HYATTSVILLE LLC
By:PR Prince George’s Plaza LLC, general partner
By:PREIT Associates, L.P., sole member
PR JK LLC
By:PREIT Associates, L.P., sole member
PR JACKSONVILLE LLC
By:PREIT Associates, L.P. member and
By:PR JK LLC, member
By: PREIT Associates, L.P., sole member
PR JACKSONVILLE LIMITED PARTNERSHIP
By:PR Jacksonville LLC, general partner
By:PREIT Associates, L.P., member and
By:PR JK LLC, member
By:PREIT Associates, sole member
PR MAGNOLIA LLC
By:PREIT Associates, L.P., sole member
PR VALLEY ANCHOR-S, LLC
By:PREIT Associates, L.P., sole member
PR WOODLAND ANCHOR-S, LLC
By:PREIT Services, LLC, manager
By:PREIT Associates, L.P., sole member
By:Pennsylvania Real Estate Investment Trust, general partner
By:/s/ Andrew Ioannou
Name:Andrew Ioannou
Title:Executive Vice President, Finance & Acquisitions
and Treasurer
[Signatures Continued on Next Page]
PR PLYMOUTH ANCHOR-M, LLC
By:PREIT Associates, L.P., sole member
PR PLYMOUTH ANCHOR-M, L.P.
By:PR Plymouth Anchor-M, LLC, general partner
By:PREIT Associates, L.P., sole member
PR PM PC ASSOCIATES LLC
By:PREIT Services, LLC, non-member manager
By:PREIT Associates, L.P., sole member
PR PLYMOUTH MEETING ASSOCIATES PC LP
By:PR PM PC Associates LLC, general partner
By:PREIT Services, LLC, non-member manager
By:PREIT Associates, L.P., sole member
PR PLYMOUTH MEETING LLC
By:PREIT Associates, L.P., sole member
PR PLYMOUTH MEETING LIMITED PARTNERSHIP
By:PR Plymouth Meeting LLC, general partner
By:PREIT Associates, L.P., sole member
PR PM PC ASSOCIATES LP
By:PR PM PC Associates LLC, general partner
By:PREIT Services, LLC, non-member manager
By:PREIT Associates, L.P., sole member
By:Pennsylvania Real Estate Investment Trust, general partner
By:/s/ Andrew Ioannou
Name:Andrew Ioannou
Title:Executive Vice President, Finance & Acquisitions and Treasurer
[Signatures Continued on Next Page]
PR SPRINGFIELD TOWN CENTER LLC
By:PREIT Associates, L.P., sole member
PR SWEDES SQUARE LLC
By:PREIT Associates, L.P., sole member
PR TP LLC
By:PREIT Associates, L.P., sole member
PR TP LP
By:PR TP LLC, general partner
By:PREIT Associates, L.P., sole member
PR Valley Anchor-M, LLC
By:PREIT Associates, L.P., sole member
PR Valley Anchor-M Limited Partnership
By:PR Valley Anchor-M, LLC, general partner
By:PREIT Associates, L.P., sole member
PR VALLEY LLC
By:PREIT Associates, L.P., sole member
PR VALLEY LIMITED PARTNERSHIP
By:PR Valley LLC, its general partner
By:PREIT Associates, L.P., sole member
PR VALLEY VIEW ANCHOR-M, LLC
By:PREIT Associates, L.P., sole member
PR VALLEY VIEW ANCHOR-M LIMITED PARTNERSHIP
By:PR Valley View Anchor-M, LLC, its general partner
By:PREIT Associates, L.P., sole member
By:Pennsylvania Real Estate Investment Trust, general partner
By:/s/ Andrew Ioannou
Name:Andrew Ioannou
Title:Executive Vice President, Finance & Acquisitions
and Treasurer
[Signatures Continued on Next Page]
PR MONROE OLD TRAIL, LLC
PR MONROE OLD TRAIL LIMITED PARTNERSHIP
By: PR Monroe Old Trail, LLC, general partner
PR MONROE OLD TRAIL HOLDINGS, LLC
PR MONROE OLD TRAIL HOLDINGS, L.P.
By: PR Monroe Old Trail Holdings, LLC, general partner
PR SUNRISE OUTPARCEL 2, LLC
PR VALLEY SOLAR LLC
By: PREIT – RUBIN, Inc., sole member
By:/s/ Andrew Ioannou
Name:Andrew Ioannou
Title:Executive Vice President, Finance
& Acquisitions and Treasurer
PREIT – RUBIN, INC.
PREIT – RUBIN OP, INC.
By:/s/ Andrew Ioannou
Name:Andrew Ioannou
Title:Executive Vice President, Finance & Acquisitions
and Treasurer
[Signatures Continued on Next Page]
PR CAPITAL CITY LIMITED PARTNERSHIP
By:PR Capital City LLC, general partner
By:PREIT Associates, L.P., its member
By:PR CC II LLC, its member
By:PREIT Associates, L.P.,
its sole member
PR CC LIMITED PARTNERSHIP
By:PR CC I LLC, general partner
By:PREIT Associates, L.P., its member
By:PR CC II LLC, its member
By:PREIT Associates, L.P.,
its sole member
PR CAPITAL CITY LLC
By:PREIT Associates, L.P., its member
By:PR CC II LLC, its member
By:PREIT Associates, L.P., its sole member
PR CC I LLC
By:PREIT Associates, L.P., its member
By:PR CC II LLC, its member
By:PREIT Associates, L.P., its sole member
PR CC II LLC
By:PREIT Associates, L.P., its sole member
By:Pennsylvania Real Estate Investment Trust, its general partner
By:/s/ Andrew Ioannou
Name:Andrew Ioannou
Title:Executive Vice President, Finance & Acquisitions
and Treasurer
CONSENTING LENDER
WELLS FARGO BANK, NATIONAL ASSOCIATION,
By:/s/ Ryan Sansavera
Name:Ryan Sansavera
Title:Senior Vice President
Notice Address:
Wells Fargo Bank, National Association
10 South Wacker Drive, 32nd Floor
Chicago, IL 60606
Attention: Brandon Barry
Email: ***@***
With a copy to:
Wells Fargo Bank, National Association
600 South 4th Street, 9th Floor
Minneapolis, MN 55415
MAC N9300-091
Attention: Anthony J. Gangelhoff
Email: ***@***
CONSENTING LENDER
CITIZENS BANK, N.A.
By:/s/ Adrienne Bain
Name:Adrienne Bain
Title:Authorized Signer
Notice Address:
Citizens Bank, N.A.
1250 Congress Street, Suite 300
Charlotte, NC 28209
Attention: Adrienne Bain
Email: ***@***
CONSENTING LENDER
MANUFACTURERS AND TRADERS TRUST COMPANY
By:/s/ Glenn L. Best
Name:Glenn L. Best
Title:Vice President
Notice Address:
1100 North Market Street
Wilmington, DE 19801
Attention: Glenn L. Best
Email: ***@***
CONSENTING LENDER
MUFG UNION BANK, N.A.
By:/s/ Mark Menda
Name:Mark Menda
Title:Director
Notice Address: 50 Pointe Drive, Suite 200, Brea, CA 92821
Attention:
Email: ***@***
CONSENTING LENDER
JPMORGAN CHASE BANK, N.A., (“JPMC”)
solely in respect of its Commercial Banking Corporate Client Banking & Specialized Industries unit (“CCBSI”) and not any other unit, group, division or affiliate of JPMC and solely in respect of CCBSI’s PREIT Loan Claims and any Swap Claim holdings. For the avoidance of doubt, and notwithstanding anything to the contrary contained in this Agreement, this Agreement shall not apply to JPMC (other than with respect to Claims arising from the PREIT Loan Claims and any Swap Claim held by CCBSI).
By:/s/ Dianne M. Stark
Name:Dianne M. Stark
Title:Authorized Officer
Notice Address:
10 S. Dearborn, 37th Floor
Chicago, IL 60670
Attention: D. Stark
Email: ***@***
CONSENTING LENDER
ASSOCIATED BANK, NATIONAL ASSOCIATION
By:/s/ Adam Harding
Name:Adam Harding
Title:Vice President
Notice Address:
Associated Bank
45 South 7th Street, Suite 2900
Minneapolis, MN 55402
Attention: Adam Harding
Email: ***@***
CONSENTING LENDER
CITIBANK, N.A.
By:/s/ Christopher J. Albano
Name:Christopher J. Albano
Title:Authorized Signatory
Notice Address: 388 Greenwich St., 10th Floor, New York, NY 10013
Attention: Paul Giarratano
Email: ***@***
