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) November 2, 2006
BRT REALTY TRUST
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(Exact name of Registrant as specified in charter)
Massachusetts 001-07172 13-2755856
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(State or other (Commission file No.) (IRS Employer
jurisdiction of I.D. No.)
incorporation)
60 Cutter Mill Road, Suite 303, Great Neck, New York 11021
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(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):
-- Written communications pursuant to Rule 425 under the
Securities Act (17 CFR 230.425)
-- Soliciting material pursuant to Rule 14a-12 under the
Exchange Act (17 CFR 240.14a-12)
-- Pre-commencement communications pursuant to Rule 14d-2(b)
under the Exchange Act (17 CFR 240.14d-2(b))
-- Pre-commencement communications pursuant to Rule 13e-4(c)
under the Exchange Act (17 CFR 240.13e-4(c))
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Item 1.01 Entry into a Material Definitive Agreement.
On November 2, 2006, the registrant closed an amendment to its revolving credit
facility, dated as of October 31, 2006, with North Fork Bank, VNB New York
Corp., Signature Bank and Manufacturers and Traders Trust Company, pursuant to
which the availability under the revolving credit facility was increased from
$155 million to $185 million.
In order to effect the increased revolving credit facility, the credit facility
documents were amended to provide, among other things, that (i) the aggregate
principal amount that can be outstanding under the credit facility is $185
million; and (ii) the fee payable by the registrant to extend the term of the
credit facility from February 1, 2008 to February 1, 2009, and from February 1,
2009 to February 1, 2010, is increased from $387,500 to $462,500. Except for
these changes, no other material changes were made to the credit facility
documents.
Reference is made to the registrant's Current Reports on Form 8-K filed with the
Securities and Exchange Commission on January 11, 2006, January 17, 2006 and
March 15, 2006.
Item 2.03 Creation of a Direct Financial Obligation or Obligation Under an
Off-Balance Sheet Arrangement of a Registrant.
See response to Item 1.01 above.
Item 9.01. Financial Statements and Exhibits.
(a) Financial Statements of Businesses Acquired. Not applicable.
(b) Pro Forma Financial PersonNameInformation. Not applicable.
(c) Pro Forma Financial Information. Not applicable.
(d) Exhibits.
10.1 Second Amendment to Revolving Credit Agreement, dated
as of October 31, 2006, between North Fork Bank and
BRT Realty Trust.
10.2 North Fork Bank Second Consolidated and Restated
Secured Promissory Note, dated October 31, 2006, by
BRT Realty Trust in favor of North Fork Bank, in the
aggregate principal amount of $185,000,000.
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 REALTY TRUST
Date: November 2, 2006 By: /s/ Simeon Brinberg
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Simeon Brinberg
Senior Vice President and Secretary
Exhibit 10.1
SECOND AMENDMENT TO REVOLVING CREDIT AGREEMENT
THIS SECOND AMENDMENT TO REVOLVING CREDIT AGREEMENT (this ("Agreement")
is made as of the 31st day of October, 2006, between BRT REALTY TRUST, a
Massachusetts business trust, with offices at 60 Cutter Mill Road, Suite 303,
Great Neck, New York 10021 (the "Borrower") and NORTH FORK BANK, a corporation
organized under the Banking Law of the State of New York having its principal
offices at 275 Broadhollow Road, Melville, New York 11747 (the "Lender").
W I T N E S S E T H
WHEREAS, as of January 9, 2006, the Borrower and the Lender entered
into a Revolving Credit Agreement (the "Original Agreement"), a copy of which is
annexed hereto as Exhibit A, securing the Borrower's obligations under that
certain Secured Promissory Note dated as of January 9, 2006 in the amount of ONE
HUNDRED FIFTY MILLION AND 00/100 ($150,000,000.00) DOLLARS (the "Original
Note"); and
WHEREAS, on February ___, 2006, the Lender increased the line of credit
available to the Borrower pursuant to the Original Note and the Original
Agreement from ONE HUNDRED FIFTY MILLION AND 00/100 ($150,000,000.00) DOLLARS to
ONE HUNDRED FIFTY FIVE MILLION AND 00/100 ($155,000,000.00) DOLLARS, and in
connection with such increase in the available line of credit, the Borrower
executed and delivered to the Lender a Consolidated and Restated Secured
Promissory Note dated February ___, 2006 (the "First Restated Note") and a First
Amendment to Revolving Credit Agreement dated February ___, 2006 (the "First
Amendment"); and
WHEREAS, the Lender has agreed to further increase the line of credit
available to the Borrower pursuant to the First Restated Note and the Original
Agreement, as modified by the First Amendment, from ONE HUNDRED FIFTY FIVE
MILLION AND 00/100 ($155,000,000.00) DOLLARS to ONE HUNDRED EIGHTY FIVE MILLION
AND 00/100 ($185,000,000.00) DOLLARS, and in connection with such increase in
the available line of credit, the Borrower has executed and delivered to the
Lender a Second Consolidated and Restated Secured Promissory Note of even date
herewith (the "Restated Note"); and
WHEREAS, the Borrower and the Lender desire to amend the Original
Agreement to reflect the increase in the available line of credit.
NOW, THEREFORE, in consideration of ten ($10.00) dollars, and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Borrower and the Lender hereby agree that the Original
Agreement shall be deemed amended as follows:
1. All references in the Original Agreement and/or the First Amendment
to the Note shall be deemed to refer to the Restated Note. All references in the
Original Agreement and/or the First Amendment to the Collateral Assignments
shall be deemed to refer to such Collateral Assignments as are now or shall be
from time to time in the possession of the Lender. All references in the
Original Agreement and/or the First Amendment to Mortgage Notes, the Mortgages
and the Other Documents shall be deemed to refer to such Mortgage Notes,
Mortgages and Other Documents as are now or shall be from time to time in the
possession of the Lender. All references in the Original Agreement and/or the
First Amendment to the Facility Amount shall be deemed to mean One Hundred
Eighty Five Million and 00/100 ($185,000.00) Dollars. All terms not defined
herein shall have the meanings ascribed thereto in the Original Agreement and/or
the First Amendment, as applicable.
2. The Borrower hereby remakes and reaffirms all representations,
covenants and warranties made in the Original Agreement as modified by the First
Amendment as if same were more fully set forth herein.
3. This Amendment cannot be changed orally but only in writing by the
person to be charged.
4. Except as otherwise set forth herein, all terms and conditions of
the Original Agreement as modified by the First Amendment shall remain in full
force and effect.
IN WITNESS WHEREOF, this Amendment has been duly executed by the
Borrower and the Lender as of the date first above written.
BRT REALTY TRUST
By:
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Mark H. Lundy, Senior Vice President
NORTH FORK BANK
By:
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Walter E. Malek, Senior Vice President
STATE OF NEW YORK )
)ss.:
COUNTY OF )
On the ___ day of October, 2006, before me, the undersigned, personally
appeared Mark H. Lundy, personally known to me or proved to me on the basis of
satisfactory evidence to be the individual whose name is subscribed to the
within instrument and acknowledged to me that he executed the same in his
capacity, and that by his signature on the instrument, the individual, or the
person on behalf of which the individual acted, executed the instrument.
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Notary Public
STATE OF NEW YORK )
)ss.:
COUNTY OF SUFFOLK )
On the ____ day of October, 2006, before me, the undersigned,
personally appeared Walter E. Malek, personally known to me or proved to me on
the basis of satisfactory evidence to be the individual whose name is subscribed
to the within instrument and acknowledged to me that he executed the same in his
capacity, and that by his signature on the instrument, the individual, or the
person on behalf of which the individual acted, executed the instrument.
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Notary Public
SECOND AMENDMENT TO REVOLVING CREDIT AGREEMENT
BRT REALTY TRUST
- to -
NORTH FORK BANK
Stark, Amron & Liner, LLP
7 Penn Plaza, Suite 600
New York, New York 10001
Exhibit 10.2
NORTH FORK BANK
SECOND CONSOLIDATED AND RESTATED
SECURED PROMISSORY NOTE
BORROWER: BRT REALTY TRUST
PRINCIPAL: $185,000,000.00 Date: As of October 31, 2006
PROMISE TO PAY: The undersigned Borrower, jointly and severally if more than one
signer, does hereby promise to pay to the order of NORTH FORK BANK (the "Bank")
at its offices at 275 Broadhollow Road, Melville, New York 11747, or at any of
its branches, the sum of ONE HUNDRED EIGHTY FIVE MILLION AND 00/100
($185,000,000.00) DOLLARS or the aggregate unpaid principal amount of all
advances made to the Borrower by the Bank, whichever is less, plus interest
thereon, from the date hereof in the manner set forth below.
RATE AND PAYMENT: Each advance made under this Second Consolidated and Restated
Secured Promissory Note (this "Note") shall bear interest at the Adjusted LIBOR
Rate (as hereinafter defined) plus two hundred twenty five (225) basis points
(the "Interest Rate"). Interest shall be payable monthly beginning on
November 1, 2006 and on the 1st day of each month (the "Debit Date") thereafter
until February 1, 2008, when all unpaid principal and interest shall be due in
full, unless the term hereof is extended as hereinafter provided. Interest will
be calculated on the basis of a 360-day year, and collected on the basis of the
actual number of days elapsed.
For purposes of this Paragraph:
LIBOR Rate shall mean the rate at which Eurodollar deposits in
the London Interbank Market for thirty (30) days are quoted on the Bloomberg
System, which rate will be reset on a monthly basis on the monthly anniversary
date of this Note.
Adjusted LIBOR Rate shall mean the LIBOR Rate, as adjusted for
statutory reserve requirements for eurocurrrency liabilities.
Until the entire unpaid principal balance hereunder, plus all accrued interest
thereon and all other sums due in connection therewith (collectively, the
"Debt"), has been repaid in full, with no further advances permitted,, the
Borrower agrees to maintain its account (account #6224002938, hereinafter the
"Account") with the Bank. Borrower hereby unconditionally and irrevocably
authorizes the Bank to automatically debit from such Account any and all
payments due hereunder and unconditionally warrant and represent to Bank that
Borrower shall, until the Debt has been repaid in full, maintain sufficient
funds in such Account to pay same. If no funds are available in such Account,
the Borrower hereby authorizes Bank to debit any such payment due from any other
account or accounts [other than tenant security deposit accounts and escrow
accounts in connection with the Collateral (as defined in the Agreement)]
maintained by Borrower with the Bank, provided, however, Bank's authorization to
debit such accounts is limited to the amounts due under this Note and/or the
other documents executed in connection herewith. Notwithstanding the foregoing,
if at any time there are insufficient funds in the Account to pay any amounts
due hereunder, the Borrower shall remain fully liable to pay same when due.
Payments shall be applied first to interest on unpaid principal balances to the
date payment is received by the Bank and then to reduction of principal.
GRID NOTE: This Note is the promissory note referenced in that certain Revolving
Credit Agreement between the Borrower and the Bank [fix] dated of even date
herewith (the "Agreement") and shall be governed by the terms thereof. The
Borrower may borrow and repay (in whole or in part) on a revolving basis
aggregate amounts up to ONE HUNDRED EIGHTY FIVE MILLION AND 00/100
($185,000,000.00) DOLLARS, subject to the provisions of this Note and the
Agreement. The date and amount of each advance made and each payment of
principal and interest received by the Bank hereunder shall be recorded and
entered on the books and records of the Bank, which shall, in absence of
manifest error, be presumptive evidence as to the outstanding principal amount
due hereunder; provided, however, that the failure to record any advance or
repayment shall not limit or otherwise affect the obligation of Borrower under
this Note and the Agreement.
PREPAYMENT: Prepayment in whole or in part may be made at any time without
penalty. Prepayment must be made in the event and to the extent that the
outstanding amount hereunder exceeds the Borrowing Base (as hereinafter
defined). During the Term hereof, any funds so prepaid may be re-advanced
pursuant to the terms hereof.
DEFAULT INTEREST RATE: The unpaid principal sum under this Note shall bear
interest at a rate equal to twenty four (24%) percent on and after the
occurrence of any event of default hereunder or under the Agreement, beyond
applicable notice, grace and cure periods, if any and upon the Bank exercising
its option to declare all sums due hereunder immediately due and payable by
reason thereof, and until the entire principal sum hereof has been fully paid,
both before and after the entry of any judgment with respect to such event, but
in no event shall the rate either before or after the occurrence of an event of
default exceed the highest rate of interest, if any, permitted under applicable
New York or Federal Law.
SECURITY: This Note is secured by the Collateral (as defined in the Agreement).
RIGHT OF OFFSET: If any payment is not made on time, or if the entire balance
becomes due and payable and is not paid, all or part of the amount due may be
offset out of any account or other property which the Borrower has at the Bank
or any affiliate of the Bank, or with any Participant (as hereinafter defined)
or any affiliate thereof, without prior notice or demand. This provision is in
addition to any not in limitation of any of the Bank's rights by statute or at
common law.
LATE CHARGES: Borrower will pay a charge of four (4%) percent of any amount
which cannot be debited from its account due to insufficient balances on the
Debit Date, as liquidated damages for failure to make timely payment and such
late charge shall be secured by the Collateral.
DEFAULT: The Bank may decline to make advances and/or may declare the entire
unpaid balance of this Note due and payable on the happening of any default
hereunder or under the Agreement or any of the other documents executed in
connection therewith.
ADVANCES: All advance requests must be in writing and must be made no less than
three (3) business days in advance of the date that the funds are to be
disbursed. No advance will be made if such advance will cause the amount then
outstanding under this Note to exceed the Borrowing Base. The Bank shall make
any requested advance to the Borrower on the third (3rd) business day after such
request is received, notwithstanding that the Bank may not have received the
funds required to be transferred to the Bank by VNB New York Corp., as assignee
of Valley National Bank, Signature Bank or Manufacturers and Traders Trust
Company (collectively, the "Participants") in accordance with the provisions of
that certain Participation Agreement dated as of January 9, 2006 between the
Bank and the Participants, as amended by that certain Amendment to Participation
Agreement dated as of February ___, 2006 between the Bank and the Participants,
as further amended by that certain Second Amendment to Participation Agreement
of even date herewith between the Bank and the Participants. Notwithstanding the
foregoing, however, in no event shall the Bank be required to advance in excess
of Eighty Million and 00/100 ($80,000,000.00) Dollars of its own funds
hereunder, and to the extent that any advance by the Bank on behalf of any
Participant would cause the Bank to have advanced more than Eighty Million and
00/100 ($80,000,000.00) Dollars, the Bank shall not be required to make such
advance until it shall have received the necessary funds from the Participants.
OPTION TO EXTEND. A. Provided that: (i) the Borrower is not in default under the
terms of this Note or the Agreement as of November 1, 2007 up to and including
February 1, 2008; (ii) the Borrower has furnished all of the information and
documentation the Borrower is required to furnish to the Bank pursuant to this
Note, the Agreement, and/or any other document executed in connection herewith
(including, without limitation, copies of all required SEC filings, monthly and
quarterly loan and delinquency reports, and other information as required in
paragraph 14 of the Agreement; and (iii) the Borrower has not been late in
making the monthly payments due hereunder more than three (3) times in any
twelve (12) month period, the Borrower shall have the option to extend the term
of this Note for an additional one (1) year (the "First Extended Term") on the
same terms and conditions as set forth herein. In order to exercise its option
the Borrower must give written notice to the Bank on or before December 1, 2007
but not prior to November 1, 2007 (with time being of the essence) and must
simultaneously therewith submit to the Bank an extension fee in the sum of Four
Hundred Sixty Two Thousand Five Hundred and 00/100 ($462,500.00) Dollars (the
"First Extension Fee").
B. In the event that Borrower has extended the maturity date hereunder for the
First Extended Term, as provided in paragraph A hereof, and provided that: (i)
the Borrower is not in default under the terms of this Note or the Agreement as
of November 1, 2008 up to and including February 1, 2009; (ii) the Borrower has
furnished all of the information and documentation the Borrower is required to
furnish to the Bank pursuant to this Note, the Agreement, and/or any other
document executed in connection herewith and (iii) the Borrower has not been
late in making the monthly payments due hereunder more than three (3) times in
any twelve (12) month period, the Borrower shall have the option to extend the
term of this Note for an additional one (1) year (the "Second Extended Term") on
the same terms and conditions as set forth herein. In order to exercise its
option the Borrower must give written notice to the Bank on or before December
1, 2008 but not prior to November 1, 2008 (with time being of the essence) and
must simultaneously therewith submit to the Bank an extension fee in the sum of
Four Hundred Sixty Two Thousand Five Hundred and 00/100 ($462,500.00) Dollars
(the "Second Extension Fee" and, together with the First Extension Fee, the
"Extension Fee").
NO ORAL MODIFICATIONS. This Note may not be changed or terminated orally.
ADMINISTRATIVE FEE. The Bank shall be entitled to an administrative fee of Four
Thousand and 00/100 ($4,000.00) per month in connection with this Note, which
shall be automatically debited from the Account on the first (1st) day of each
month.
BORROWING BASE: For purposes of this Note and the Agreement, the term "Borrowing
Base" shall mean the sum of (i) sixty-five (65%) percent of the principal amount
of the First Mortgage Collateral (as defined in the Agreement) calculated
exclusive of Defaulted Pledged Loans as defined in the Agreement; (ii) fifty
(50%) percent of the principal amount of the Subordinate Collateral (as defined
in the Agreement), calculated exclusive of Defaulted Pledged Loans (as defined
in the Agreement) and (iii) fifty (50%) percent of the fair market value (as
determined by the Bank in its sole and absolute discretion, which may, in the
Bank's sole and absolute discretion, be based upon an appraisal obtained by the
Bank at the Borrower's sole cost and expense) of real property obtained by the
Borrower as a result of the foreclosure of a Defaulted Loan, provided that the
Borrower shall pledge its ownership interests in the fee owner of such real
property as additional Collateral as provided in the Agreement. Notwithstanding
anything contained in this paragraph to the contrary, the sum of items (ii) and
(iii) of the foregoing sentence shall not at any time exceed the lesser of (x)
$22,500,000.00 or (y) fifteen (15%) percent of the Borrowing Base then existing.
AMENDED AND RESTATED NOTE: This Note shall serve to consolidate and restate in
their entirety the following four (4) notes:
(a) Secured Promissory Note made by Borrower to Bank in the sum of One
Hundred Fifty Million and 00/100 ($150,000,000.00) Dollars, dated as of
January 9, 2006;
(b) Gap Secured Promissory Note made by Borrower to Bank in the sum of
Five Million and 00/100 ($5,000,000.00) Dollars, dated February ___,
2006;
(c) Amended and Restated Promissory Note made by Borrower to Bank in
the sum of One Hundred Fifty Five Million and 00/100 ($155,000,000.00)
Dollars, dated February ___, 2006 and
(d) Gap Secured Promissory Note made by Borrower to Bank in the
sum of Thirty Million and 00/100 ($30,000,000.00) Dollars, dated
October ___, 2006.
COMMITMENT FEE: In connection with this Note, the Borrower agrees to pay a
commitment fee in the sum of Three Hundred Thousand and 00/100 ($300,000.00)
Dollars, which shall be paid simultaneously with the execution hereof as
follows: (i) One Hundred Thousand and 00/100 ($100,000.00) Dollars to Valley;
(ii) Fifty Thousand and 00/100 ($50,000.00) Dollars to Signature, and
(iii) One Hundred Fifty Thousand and 00/100 ($150,000.00) to M&T.
IN WITNESS WHEREOF, the Borrower has signed this Note as of the 31st day of
October, 2006.
BRT Realty Trust
By:
----------------------------
Mark H. Lundy, Senior Vice President
STATE OF NEW YORK )
)ss.:
COUNTY OF )
On the _____ day of October, 2006, before me, the undersigned,
personally appeared Mark H. Lundy, personally known to me or proved to me on the
basis of satisfactory evidence to be the individual whose name is subscribed to
the within instrument and acknowledged to me that he executed the same in his
capacity, and that by his signature on the instrument, the individual, or the
person on behalf of which the individual acted, executed the instrument.
------------------------------
Notary Public
SECOND CONSOLIDATED AND RESTATED SECURED PROMISSORY NOTE
BRT REALTY TRUST
- to -
NORTH FORK BANK
Stark, Amron & Liner, LLP
7 Penn Plaza, Suite 600
New York,New York 10001