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) August 10, 2007
DVL, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 1-8356 13-2892858
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
70 East 55th Street, 7th Floor, New York, NY 10022
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 350-9900
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(Former name or former address, if changed since last report.)
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:
|_| 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 240.13a-4(c))
Item 1.01 Entry into a Material Definitive Agreement
1) In connection with the development of the Property (as defined below), in
August 2007, the Company's wholly owned subsidiary, DVL Kearny Holdings, LLC
("DVL Holdings") entered into a Construction Loan Agreement (the "Construction
Loan Agreement") between CapMark Bank ("CapMark"), Urban Development Fund II,
LLC ("Urban Fund") and Paramount Community Development Fund ("Paramount" and
collectively with CapMark and Urban Fund, the "Lenders"). On October 24, 2006,
the town of Kearny, New Jersey (the "Town"), approved a conditional agreement
(the "Conditional Agreement") between the Company and the Town, pursuant to
which the Town agreed to designate DVL (as defined below) as the conditional
redeveloper of a portion of the Passaic Avenue Redevelopment Area located in the
Town (such portion, the "Property"), a substantial portion of which Property is
currently owned by DVL.
Pursuant to the Construction Loan Agreement, the Lenders agreed to extend
loans to DVL Holdings in the aggregate principal amount of up to $30.2 million
(the "Loans") to finance construction, acquisition and other costs associated
with the Property. The Loans are secured by a first lien on the Property and a
first lien on the OutParcel (as defined below). The Loans mature in phases with
a final maturity date of March 1, 2010. The Loans accrue interest at a rate per
annum is equal to the 30 day libor rate plus the applicable margin, as defined.
In the Initial Predevelopment Loan Phase (as defined in the Construction Loan
Agreement), advances of $4,225 principal amount were made to DVL Holdings in
August, 2007 and such advances currently accrue interest at a rate per annum
equal to 2.50% over the 30 day LIBOR rate with interest payable monthly;
provided, however, that in no event shall the aggregate principal amount of
advances of the Loans during the Predevelopment Loan Phase exceed $6,600,000;
and provided, that any such additional advances may only be used to pay interest
on the Loans and to acquire a certain property adjacent to the Property (the
"OutParcel"). At September 30, 2007 the applicable interest rate is 8.18%. The
Initial Predevelopment Loan Phase expires on December 11, 2007. The principal
amount of Loans made during the Predevelopment Loan Phase will mature on March
1, 2010; provided, however, that in the event that certain conditions are not
satisfied by December 11, 2007 (including, without limitation, obtaining
necessary approvals by the Town, the entering into a definitive redevelopment
agreement and approval by the lenders of the final plans for the development of
the Property), such loans will become due and payable on December 11, 2007.
Although the Company believes that it is unlikely that such conditions will fail
to be satisfied by December 11, 2007, in such event , the Company's inability to
receive an extension of such date from the Lenders or its inability to refinance
the Loans would have a material adverse effect on the Company's financial
condition. Additional borrowings may be made from time to time in accordance
with the terms of the Construction Loan Agreement based on satisfaction of
certain conditions including acquisition of the OutParcel and the completion of
certain phases of the construction of the Property. Any additional loans made
pursuant to the Construction Loan Agreement accrue interest at a rate per annum
equal to the 30 day libor rate plus the applicable margin, as defined. Principal
plus accrued and unpaid interest are payable March 1, 2010 unless extended per
the Construction Loan Agreement. Commencement of the Construction Loan Phase (as
defined in the Construction Loan Agreement) is conditioned on submission by DVL
Holdings of the final plans for the development of the Property and approval of
such Plans by the Lenders. Events of Default (as defined in the Construction
Loan Agreement) include, among other things, the failure of DVL Holdings to
acquire the OutParcel within nine months after August 14, 2007 or the failure to
commence construction by such date.
2) On October 31, 2007, DVL, Inc. ("DVL"), Professional Services Corporation
("PSC"), K.M. Realty Corporation ("KMR") and NPO Management, LLC ("NPO") entered
into an Asset Servicing Extension Agreement ("Extension Agreement") to the Asset
Servicing Agreement (the "Servicing Agreement") dated March 27, 1996. Although,
the Servicing Agreement had previously been informally extended in [2001] under
the same terms and conditions, the Extension Agreement formally extends the
Servicing Agreement with an effective termination date of March 31, 2008.
Certain affilates of DVL are affiliated with NPO as is fully disclosed in the
Company's 10-KSB filed on April 2, 2007 and therefore have a material interest
in the transactions that take place between the Company and NPO.
3) On August 10, 2007, DVL and Amtad Property, Inc. ("Amtad"), entered into the
First Amendment to Lease ("First Amendment") to that certain Lease, dated as of
November 7, 2002 (the "Existing Lease") whereby Amtad leases to DVL the premises
located at Heron Tower, 70 East 55th Street, New York New York in the City,
County and State of New York (the "Premises"). The First Amendment extends the
term of the Existing Lease through March 31, 2015 ("Extended Term") from its
prior expiration scheduled for termination on January 31, 2008. Through and
including January 31, 2008, DVL's rent for the Premises is the same as set forth
in the Existing Lease. Pursuant to the First Amendment, during the period
commencing February 1, 2008, and ending on March 31, 2013, DVL's rent will be
$386,172.00 per annum and during the period commencing on April 1, 2013 and
ending on March 31, 2015, DVL's rent will be $408,888.00 per annum. At
expiration of the Existing Lease, DVL will have the option to extend the lease
for an additional period of five years which will commence on April 1, 2015 and
end on March 31, 2020 provided among other things that the lease was not
terminated and there was no monetary default or non-monetary Event of Default
(as defined in the Existing Lease).
Signature
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.
DVL, Inc.
By: /s/ Henry Swain
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Name: Henry Swain
Title: Executive Vice President
and Chief Financial Officer
Date: November 14, 2007