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) March 29, 2004
BRT REALTY TRUST
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(Exact name of Registrant as specified in charter)
Maryland 1-7172 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
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Item 5. Other Events and Required FD Disclosure
Attached is a press release that sets forth the fact that on March 29,
2004, Registrant consummated an amendment to its existing $30 million revolving
credit facility with North Fork Bank increasing the maximum borrowing to
$45,000,000.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial Statements - none.
(b) Pro Forma Financial Information - not applicable. (c) Exhibits -
1. Press release dated March 30, 2004
2. Consolidated and Restated Secured Promissory Note dated as
of March 29, 2004 by BRT Realty Trust to the order of
North Fork Bank;
3. Second Amendment to Revolving Credit Agreement dated as of
March 29, 2004 between BRT Realty Trust and North Fork
Bank;
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned officer thereunto duly authorized.
BRT REALTY TRUST
Date: March 31, 2004 By: /s/ Simeon Brinberg
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Simeon Brinberg
Secretary
Exhibit 1
BRT REALTY TRUST
60 Cutter Mill Road, Suite 303
Great Neck, NY 11021
Telephone (516) 466-3100
Fax (516) 466-3132
www.BRTRealty.com
FOR IMMEDIATE RELEASE
BRT Realty Trust Increases Line of Credit to $45,000,000
March 30, 2004, Great Neck, NY -- BRT Realty Trust (NYSE:BRT) announced today
that it has closed on a modification of its existing $30,000,000 line of credit
increasing the maximum availability to $45,000,000. Jeffrey A. Gould, President
and Chief Executive Officer of BRT, commented that "this increased line of
credit will give us additional flexibility in servicing our clients."
The line of credit is with North Fork Bank, has a maturity date of April 1, 2006
and provides for two 1 year renewal options. The line of credit is secured by
mortgage receivables held by BRT and the maximum availability is contingent on
the collateral posted from time to time. A complete copy of the amendment to the
line of credit and the restated promissory note will be filed as Exhibits to
Form 8-K being filed with the Securities and Exchange Commission to report the
credit line modification.
BRT Realty Trust is a mortgage REIT which originates first and second mortgage
loans, short term bridge loans and participating loans. BRT's financial
resources, flexibility and expertise enable rapid turnaround on loan requests
for income-producing retail, office, industrial and multifamily properties
nationwide. Please visit BRT on the internet at www.brtrealty.com.
Materials included in this filing may contain "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors that could cause actual results to be materially different from
historical results or from any future results expressed or implied by such
forward-looking statements. Statements that include the words "may," "will,"
"would," "could," "should," "believes," "estimates," "projects," "potential,"
"expects," "plans," "anticipates," "intends," "continues," "forecast,"
"designed," "goal," or the negative of those words or other comparable words
should be considered uncertain and forward-looking.
CONTACT: Mark H. Lundy, Vice President
516.773.2703
Exhibit 2
SECOND CONSOLIDATED AND RESTATED PROMISSORY NOTE
BRT REALTY TRUST
- to -
NORTH FORK BANK
Stark, Amron, Liner & Narotsky, LLP
7 Penn Plaza, Suite 600
New York, New York 10001
NORTH FORK BANK
SECOND CONSOLIDATED AND RESTATED
SECURED PROMISSORY NOTE
BORROWER: BRT REALTY TRUST
PRINCIPAL: $45,000,000.00 Date: As of March 29, 2004
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PROMISE TO PAY: The undersigned Borrower, jointly and severally if more than one
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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 Forty Five Million and 00/100 ($45,000,000.00) 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: The unpaid principal balance hereunder shall bear interest at
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the rate of the Bank's Prime Rate plus one half of one (1/2%) percent per annum,
adjusted monthly, subject to increase or reduction as hereinafter provided (the
"Interest Rate"). Interest shall be payable monthly beginning on April 1, 2004
and on the 1st day of each month thereafter until April 1, 2006, when all unpaid
principal and interest shall be due in full, unless the term hereof is extended
as hereinafter provided.
Until the Debt, as defined in that certain Revolving Credit Agreement between
Borrower and Bank dated as of July 25, 2001, as modified by that certain First
Amendment to Revolving Credit Agreement dated June 6, 2003, as further modified
by that certain Second Amendment to Revolving Credit Agreement of even date
herewith (as so amended, the "Agreement"), has been repaid in full, the Borrower
agrees to maintain its account (account #6224002938) 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 Promissory Note and/or the other documents executed in connection
herewith.
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. If the
Interest Rate is based on the Bank's announced Prime Rate, the Interest Rate
shall change when the Prime Rate changes and nothing herein shall prevent the
Bank from loaning money at less than prime on such terms and conditions as it
deems advisable. Interest shall be calculated on the basis of a 360 day year and
shall be collected based upon actual number of days elapsed.
GRID NOTE: This is the promissory note referenced to in the Agreement and shall
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be governed by the terms thereof. The Borrower may borrow, repay in whole or in
part on a revolving basis aggregate amounts up to Forty Five Million and 00/100
($45,000,000.00) Dollars, subject to the provisions of the Agreement. The date
and amount of each advance made and each payment of principal 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.
PREPAYMENT: Prepayment in whole or in part may be made at any time without
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penalty. Prepayment must be made in the event and to the extent that the
outstanding amount hereunder exceeds sixty-five (65%) of the principal amount of
the Collateral. 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
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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 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).
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RIGHT OF OFFSET: If any payment is not made on time, or if the entire balance
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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 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
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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
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unpaid balance of the 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
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three (3) 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 sixty-five (65%) percent of the outstanding principal
balance of the Mortgages (as defined in the Agreement) then pledged as
Collateral for the repayment of the sums advance hereunder, provided that none
of the loans secured by such Mortgages are monetarily delinquent (other than
minor escrow shortages) for more than sixty (60) days or are otherwise in
material default.
OPTION TO EXTEND. A. Provided that: (i) the Borrower is not in default under the
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terms of this Note or the Agreement as of March 1, 2006 up to and including
April 1, 2006; (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 "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 April 1, 2006 but not prior to March 1, 2006 (with time
being of the essence) and must simultaneously therewith submit to the Bank an
extension fee the sum of One Hundred Twelve Thousand Five Hundred and 00/100
($112,500.00) Dollars.
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 March 1, 2007 up to and including April 1, 2007; (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 "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 April 1,
2007 but not prior to March 1, 2007 (with time being of the essence) and must
simultaneously therewith submit to the Bank an extension fee the sum of One
Hundred Twelve Thousand Five Hundred and 00/100 ($112,500.00) Dollars.
NO ORAL MODIFICATIONS. This Note may not be changed or terminated orally.
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CONSOLIDATED AND RESTATED NOTE: This Consolidated and Restated Note shall
serve to consolidate and restate in their entirety the following three
(3) notes:
(a) Secured Promissory Note made by Borrower to Bank in the sum
of $15,000,000.00, dated as of July 25, 2001;
(b) Gap Secured Promissory Note made by Borrower to Bank in the
sum of $15,000,000.00, dated June 6, 2003;
which two (2) notes were consolidated to evidence the sum of
$30,000,000.00 by Consolidated and Restated Note made by
Borrower to Bank dated June 6, 2003;
(C) Gap Secured Promissory Note made by Borrower to Bank in the
sum of $15,000,000.00, dated March ___, 2004.
IN WITNESS WHEREOF, the Borrower has signed this Note as of the 29th day of
March, 2004.
BRT Realty Trust
By: /s/ Mark H. Lundy
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Mark H. Lundy,
Vice President
STATE OF NEW YORK )
)ss.:
COUNTY OF NASSAU )
On the 29th day of March, 2004, 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.
/s/ Richard M. Figueroa
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Notary Public
Exhibit 3
SECOND AMENDMENT TO REVOLVING CREDIT AGREEMENT
BRT REALTY TRUST
- to -
NORTH FORK BANK
Stark, Amron, Liner & Narotsky, LLP
7 Penn Plaza, Suite 600
New York, New York 10001
SECOND AMENDMENT TO REVOLVING CREDIT AGREEMENT
THIS SECOND AMENDMENT TO REVOLVING CREDIT AGREEMENT (this ("Agreement")
is made as of the 29th day of March, 2004, 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 July 25, 2001, the Borrower and the Lender entered into
a Revolving Credit Agreement (the "2001 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 July 25, 2001in the amount of Fifteen
Million and 00/100 ($15,000,000.00) Dollars (the "2001 Note"); and
WHEREAS, as of June 6, 2003, the 2001 Agreement was amended by that
certain First Amendment to Revolving Credit Agreement (the "First Amendment",
and, together with the 2001 Agreement, the "Original Agreement"), a copy of
which is annexed hereto as Exhibit B, amended to increase the amount secured
thereby to Thirty Million ($30,000,000.00) Dollars, which obligations are set
forth in Borrower's Consolidated and Restated Secured Promissory Note (as so
consolidated and restated, the "Original Note"); and
WHEREAS, pursuant to a commitment letter dated February 24, 2004, the
Lender has agreed to increase the line of credit available to the Borrower
pursuant to the Original Note and the Original Agreement from Fifteen Million
and 00/100 ($15,000,000.00) Dollars to Forty Five Million and 00/100
($45,000,000.00) 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 and to
otherwise reflect the terms and conditions of the Commitment.
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 to the Note shall be deemed
to refer to the Restated Note. All references in the Original Agreement 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 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 terms not defined herein shall have the meanings ascribed
thereto in the Original Agreement.
2. The Borrower hereby remakes and reaffirms all representations,
covenants and warranties made in the Original Agreement as if same were more
fully set forth herein.
3. Paragraph 9 of the Original Agreement is hereby deemed deleted
in its entirety, and replaced with the following:
"9. In the event that a default (other than minor escrow
shortfalls) shall occur under any Mortgage Note, Mortgage or
any of the Other Documents executed in connection with any
Loan, and such default shall continue for a period of sixty
(60) days, the defaulted Mortgage, together with the Mortgage
Note and the Other Documents executed in connection therewith,
shall be reassigned to the Borrower and the Borrower shall
simultaneously be required to either (i) repay the Debt to the
extent necessary to cause the outstanding balance of the Debt
to be not more than sixty five percent (65%) of all
non-defaulting Loans then assigned to the Lender as collateral
for the Debt or (ii) replace the subject Loan with a different
Loan of equivalent or greater comparable value, as determined
by the Lender in its sole discretion, encumbering income
producing properties located in the 48 contiguous continental
United States or the District of Columbia (the "Substitute
Collateral"). The Mortgage, Mortgage Note and Other Documents
with respect to any such Substitute Collateral shall (i) be
prepared on standard forms (the "Forms") which have been
preapproved by the Lender and (ii) be acceptable to Lender in
all respects in its reasonable discretion. Without limiting
the generality of the foregoing, prior to the Lender accepting
any such Substitute Collateral, the Lender will receive (i)
the original Mortgage, Mortgage Note and Other Documents with
respect to the Substitute Collateral, along with a written
explanation of all changes that have been made to the Forms in
connection with such Substitute Collateral, which changes
shall be subject to review and approval by the Lender and the
Lender's counsel prior to the Lender accepting any such Loan
for assignment; (ii) an affidavit executed by a knowledgeable
representative of the Borrower, stating that such Loan or
Loans being assigned are not in default, and setting forth the
unpaid principal balance thereof; (iii) an executed Collateral
Assignment with respect to such Substitute Collateral, in the
form annexed hereto as Exhibit B; and (iv) to the extent that
the mortgagee with respect to such Substitute Collateral is
not the Borrower hereunder, the guaranty of such mortgagee
with respect to the Debt, to the extent of the principal
amount of such Substitute Collateral."
4. Paragraph 12 of the Original Agreement is hereby deemed
deleted in its entirety, and replaced with the following:
"12.The Lender shall assign any Mortgage Note, Mortgage and Other
Documents (i) back to the Borrower upon (A) payment to the Lender
of an amount sufficient to reduce the outstanding principal amount
of the Debt to not more than sixty-five (65%) percent of the
unpaid principal amount of the Collateral, plus accrued and unpaid
interest thereon if any or (B) delivery of Substitute Collateral
meeting the requirements of paragraph 9 hereof to the Lender and
the acceptance of same by the Lender or (ii) to or at the
direction of the Mortgagor, upon the payment to the Lender of all
amounts due with respect to the applicable Loan. The Borrower will
pay the Lender's reasonable expenses in connection with such
assignment, including, but not limited to, recording charges and
reasonable attorneys fees."
5. Paragraph 33 of the Original Agreement is hereby deemed deleted
in its entirety, and replaced with the following:
"33. At all times throughout the term hereof, the Borrower
shall maintain liquid assets (in the form of cash or
marketable securities) in no less than $9,000,000.00."
6. Paragraph 34 of the Original Agreement is hereby deemed deleted
in its entirety, and replaced with the following"
"34. At all times throughout the term hereof (i) the ratio of
bank debt to shareholder equity of the Borrower shall not
exceed forty (40%) percent, (ii) the minimum ratio of
shareholder equity to debt shall be not less than 1.75:1
(increasing to 2.0:1 on September 30, 2004), and (iii) the
Borrower's annual debt service coverage ratio (based upon the
full amount of the of the Debt, whether or not advanced) is
not less than 1.65:1. Borrower shall provide Lender with
evidence of the foregoing, satisfactory to Lender in Lender's
sole discretion, at any time on ten (10) days written notice."
7. Paragraph 35 of the Original Agreement is hereby deleted in
its entirety, and replaced with the following:
"35. To the extent that, on the date hereof, sixty-five (65%)
of the principal due with respect to the Loans is less than
$45,000,000.00, the Borrower shall have the right, subsequent
to the date hereof, to deliver additional Loans to the Lender
as collateral for the Debt, provided that such additional
Loans meet the definition of "Substitute Collateral" as
provided for herein."
8. This Amendment cannot be changed orally but only in writing by the
person to be charged.
9. Except as otherwise set forth herein, all terms and conditions of
the Original Agreement 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: /s/ Mark H. Lundy
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Mark H. Lundy, Vice President
NORTH FORK BANK
By: /s/ Matt Vega
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Matt Vega, Senior Vice President