Item 1.01. Entry into a Material Definitive Agreement
simple or ground lease interests in 19 properties owned indirectly by Orion
(collectively, the “
bears interest a fixed rate of 4.821% per annum (subject to the paragraph below)
and matures on
only and all principal is due at maturity. The proceeds of the Loan were used to
repay the CMBS Bridge Credit Agreement (as defined below). Upon closing of the
Loan, the Mortgage Borrowers funded
future rent concessions and tenant improvement allowances under the leases with
respect to the 19
transaction expenses incurred in connection with the Loan, were funded with cash
on hand and borrowings under Orion’s three year
credit facility dated
The Loan is intended to be securitized as a single asset single borrower CMBS
issuance. In connection therewith, the Lender has the right to increase the
interest rate by up to 0.15% in order to effect a successful securitization,
resulting in a maximum fixed interest rate of 4.971%.
The Loan is secured by, among other things, first priority mortgages and deeds
of trust granted by the Mortgage Borrowers and encumbering the
The Loan is generally not freely prepayable by the Mortgage Borrowers without
payment of certain prepayment premiums and costs. The Loan may be prepaid in
whole, but not in part, except as provided in the Loan Agreement, at any time
following the Prepayment Lockout Release Date (as defined in the Loan Agreement)
(generally two years after the Loan has been fully securitized), subject to the
payment of a yield maintenance premium and the satisfaction of other terms and
conditions set forth in the Loan Agreement. Further, releases of individual
properties are permitted in connection with an arms’ length third party sale
upon repayment of the Release Price (as defined in the Loan Agreement) for the
applicable individual property and subject to payment of the applicable yield
maintenance premium and the satisfaction of other terms and conditions set forth
in the Loan Agreement.
The Loan Agreement also contains customary cash management provisions, including
certain trigger events (such as failure of the Mortgage Borrowers to satisfy a
minimum debt yield) which allow the Lender to retain any excess cash flow as
additional collateral for the Loan, until such trigger event is cured.
In connection with the Loan Agreement, Orion (as the guarantor) delivered a
customary non-recourse carveout guaranty to the Lender (the “Guaranty”), under
which Orion guaranteed the obligations and liabilities of the Mortgage Borrowers
to the Lender with respect to certain non-recourse carveout events and the
circumstances under which the Loan will be fully recourse to the Mortgage
Borrowers, and which includes requirements for Orion to maintain a net worth of
no less than
case, exclusive of the values of the collateral for the Loan. The Mortgage
Borrowers and Orion also provided a customary environmental indemnity agreement,
pursuant to which the Mortgage Borrowers and Orion agreed to protect, defend,
indemnify, release and hold harmless the Lender from and against certain
environmental liabilities relating to the
The loan documents evidencing the Loan (including the Loan Agreement, the
Guaranty, mortgages, deeds of trust, notes, and other documents, collectively,
the “Loan Documents”) include customary representations, warranties and
covenants of the Mortgage Borrowers and Orion. The Loan Documents also include
customary events of default, the occurrence of which, following any applicable
grace period, would permit the Lender to, among other things, declare the
principal, accrued interest and other obligations of the Mortgage Borrowers
under the Loan Documents to be immediately due and payable and foreclose on the
The above description of the Loan Agreement and the Guaranty does not purport to
be complete and is qualified in its entirety by reference to the full text of
the Loan Agreement and the Guaranty, which are attached as Exhibit 10.1 and
Exhibit 10.2, respectively, to this Current Report on Form 8-K, each of which is
incorporated by reference herein.
Item 1.02. Termination of a Material Definitive Agreement
The Loan Documents replaced that certain credit agreement (the “CMBS Bridge
Credit Agreement”), dated
guaranty related thereto, both of which were repaid in full and terminated
concurrently with the execution of the Loan Documents.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant
The information included in Item 1.01 of this Current Report on Form 8-K is
incorporated by reference into this Item 2.03.
Item 5.02. Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Orion, approved the award to each of Orion’s named executive officers,
bonus equal to
significant contributions to Orion in 2021.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits. Exhibit No Description 10.1 Loan Agreement, dated
February 10, 2022, by and between the entities identified on Schedule I thereto, as Borrower, and Wells Fargo Bank, National Association, as Lender. 10.2 Guaranty of Recourse Obligations, dated February 10, 2022, made by Orion Office REIT Inc.in favor of Wells Fargo Bank, National Association, as Lender. 104 Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).
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