Exhibit 10.2
THIRD LOAN EXTENSION AND MODIFICATION AGREEMENT
THIS THIRD LOAN EXTENSION AND MODIFICATION AGREEMENT (this “Agreement”), dated as of May 1, 2023, is made by and among PR CHERRY HILL STW LLC, a Delaware limited liability company (“PR Cherry Hill”), and CHERRY HILL CENTER, LLC, a Maryland limited liability company (“Cherry Hill Center”; PR Cherry Hill and Cherry Hill Center are referred to herein individually and collectively, as the context may require, as “Borrower”), PREIT ASSOCIATES, L.P., a Delaware limited partnership (“Guarantor”), NEW YORK LIFE INSURANCE COMPANY, a New York mutual insurance company (“Co-Lender A-1”), and TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA, a New York corporation (“Co-Lender A-2”; Co-Lender A-1 and Co-Lender A-2, together with their successors and assigns, are referred to herein individually as “Co-Lender” and collectively as “Lender”).
RECITALS:
WHEREAS, on August 15, 2012, Lender made a loan (the “Loan”) to Borrower in the original principal amount of Three Hundred Million Dollars ($300,000,000.00);
WHEREAS, the Loan is evidenced by that certain Promissory Note A-1 dated August 15, 2012, made by Borrower and payable to Co-Lender A-1, in the original principal amount of One Hundred Fifty Million Dollars ($150,000,000.00) (“Note A-1”) and that certain Promissory Note A-2 dated August 15, 2012, made by Borrower and payable to Co-Lender A-2, in the original principal amount of One Hundred Fifty Million Dollars ($150,000,000.00) (“Note A-2”; Note A-1 and Note A-2 are referred to herein individually as a “Note” and collectively as the “Notes”);
WHEREAS, Borrower’s obligations under the Notes are secured by, among other things, that certain Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing made on August 9, 2012 and effective as of August 15, 2012, from Borrower to Lender, recorded on August 24, 2012 in Book 09648, at Page 0640 in the Public Records of Camden County, New Jersey, as amended by that certain Modification and Extension of Mortgage dated as of August 31, 2022 and recorded on October 5, 2022 in Book 12202, at Page 789 in the Public Records of Camden County, New Jersey (as so amended, the “Security Instrument”), covering certain real property and improvements thereon, more particularly described therein (the “Property”). Capitalized terms used but not otherwise defined in this Agreement shall have the meanings given to them in the Notes or the Security Instrument, as applicable;
WHEREAS, in connection with the Loan, (i) Guarantor executed and delivered to Lender that certain Guaranty dated as of August 15, 2012 (the “Guaranty”); and (ii) Borrower and Guarantor executed and delivered to Lender that certain Environmental Indemnity Agreement dated as of August 15, 2012 (the “Environmental Indemnity”);
WHEREAS, the stated Maturity Date of the Notes was previously extended to November 1, 2022 pursuant to that certain Loan Extension and Modification Agreement dated as of August 31, 2022 by and among Borrower, Guarantor and Lender (the “First Modification”), as further extended to May 1, 2023 pursuant to that certain Second Loan Extension and Modification
Agreement dated as of October 31, 2022 by and among Borrower, Guarantor and Lender (the “Second Modification”);
WHEREAS, Borrower has requested that Lender further extend the Maturity Date of the Notes; and
WHEREAS, Lender has agreed to further extend the Maturity Date of the Notes to December 1, 2023 and to provide Borrower with an additional extension option to May 1, 2024, in each case, subject to the terms and conditions of this Agreement.
NOW, THEREFORE, as an inducement to Lender to extend the Maturity Date of the Notes, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
TERMS:
Commencing on the first (1st) day of June, 2023 and on the first (1st) day of each and every month thereafter until and including the Maturity Date, Borrower shall pay to Lender a monthly payment of principal and interest payment in the amount of Eight Hundred Thousand Two Hundred Seventy-Three and 75/100 Dollars ($800,273.75) with respect to each Note, and One Million Six Hundred Thousand Five Hundred Forty Seven and 50/00 Dollars ($1,600, 547.50) in the aggregate as to the Notes.
“Maker shall have one (1) option to extend the Maturity Date (the “Extension Option”), on the same terms as set forth in this Note, for an additional period of five (5) months to end on May 1, 2024 (the “Extension Term”), provided that all of the following conditions are satisfied for the Extension Term: (i) Maker requests the extension in writing not less than fifteen (15) days prior to the Maturity Date, (ii) upon the closing of the Extension Option, no Event of Default has occurred and is continuing under any of the Loan Instruments, (iii) concurrently with the closing of the Extension Option, Maker pays to each Holder an amount equal to Two Million Five Hundred Thousand and 00/100 Dollars ($2,500,000.00) (i.e. Five Million and 00/100 Dollars ($5,000,000.00) in the aggregate with respect to both
Notes) which amount will be applied by the Holders as a principal repayment thereby reducing the outstanding balance of the Loan by such paid amount (the “Principal Reduction”), (iv) the maturity date of the Credit Agreements (as defined in the Second Modification) shall have been extended to December 2024 on commercially reasonable terms or PREIT shall have entered into a new credit facility for a minimum term of one (1) year on commercially reasonable terms, in each case as determined by Lender in the exercise of commercially reasonable and good faith judgment, and (v) concurrently with the closing of the Extension Option, Maker delivers satisfactory evidence to Holder, in Holder’s commercially reasonable discretion, of Maker’s continuation of the process to explore options to refinance the Loan or other corporate restructuring or equity sale transactions that would facilitate a repayment of the Loan. The closing of the Extension Option shall occur at least one (1) business day before the Maturity Date. If the closing of the Extension Option does not occur by such date, the Loan will mature on the Maturity Date and Maker shall have no further option to extend. Time is of the essence with respect to each of the time periods set forth in this paragraph.”
(b) On each Payment Date (or other applicable due date) provided no Event of Default has occurred, other than an Event of Default as to which Lender in its sole discretion has accepted a cure, Lender shall allocate and/or direct the disbursement of all funds received in the DACA Account during the related Collection Period in excess of the Minimum Balance, in the following amounts and order of priority:
With respect to any approvals for leases requested by Borrower, Borrower will send an initial notice requesting consent. If Lender has not approved or denied approval within ten (10) business days thereafter, Borrower may send a second notice, which shall conspicuously state that if Lender fails to respond to such second notice within five (5) business days after the date thereof, then Lender’s approval will be deemed granted. If Lender fails to so respond within five (5) business days after such second notice and provided no Event of Default then exists, then Lender’s approval will be deemed granted.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their duly authorized representatives, all as of the day and year first above written.
BORROWER:
PR CHERRY HILL STW LLC,
a Delaware limited liability company
By: PREIT Associates, L.P.,
a Delaware limited partnership,
its sole member
By: Pennsylvania Real Estate Investment
Trust, its sole general partner
By: | /s/ Andrew Ioannou |
Name: | Andrew M. Ioannou |
Title: | Executive Vice President Finance and Acquisitions |
CHERRY HILL CENTER, LLC,
a Maryland limited liability company
By: Cherry Hill Center Manager, LLC,
a Delaware limited liability company,
its managing member
By: PREIT Associates, L.P.,
a Delaware limited partnership,
its sole member
By: Pennsylvania Real Estate Investment
Trust, its sole general partner
By: | /s/ Andrew Ioannou |
Name: | Andrew M. Ioannou |
Title: | Executive Vice President Finance and Acquisitions |
GUARANTOR:
PREIT ASSOCIATES, L.P.,
a Delaware limited partnership
By: Pennsylvania Real Estate Investment Trust,
its sole general partner
By: | /s/ Andrew Ioannou |
Name: | Andrew M. Ioannou |
Title: | Executive Vice President Finance and Acquisitions |
LENDER:
NEW YORK LIFE INSURANCE COMPANY,
a New York mutual insurance company
By: | /s/ Roger Braxton |
Name: | Roger Braxton |
Title: | Corporate Vice President and Secretary |
TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA,
a New York corporation
By: Nuveen Alternatives Advisors LLC,
a Delaware limited liability company,
its investment manager
By: | /s/ Talia Feuerstein |
Name: | Talia Feuerstein |
Title: | Authorized Signer |