Item 1.01. Entry in a Material Definitive Agreement.
Forbearance Agreement
On
Capitalized terms used herein and not otherwise defined have the meanings ascribed thereto in the Forbearance Agreement.
Pursuant to the terms of the Forbearance Agreement and related ancillary
documents, subject to certain conditions, (i) each Participating Counterparty
agrees to forbear from exercising any of its rights and remedies in respect of
events of default and any and all other defaults under the applicable repurchase
agreement with the Company until the earlier of (a)
A "Triggering Event" under the Forbearance Agreement includes (i) failure of the
Company to comply with the terms of the Forbearance Agreement or any of the
Security Documents or the related Intercreditor Agreement entered into in
relation to the Collateral; (ii) inaccuracy of representations and warranties
made by the Company in the Forbearance Agreement; (iii) filing of a voluntary or
involuntary bankruptcy petition with respect to the Company, and such petition
is not controverted within 10 days or is not dismissed within fifteen (15) days
after the filing thereof; (iv) appointment of a custodian, receiver, liquidator,
trustee, monitor, sequestrator or similar official for the Company or all or any
substantial part of its assets or properties; (v) the CMBX.NA.AAA.13 Index
remains 20% below the level of such index as of the commencement of the
Forbearance Period for three (3) consecutive trading days; (vi) the Company
makes a dividend or other distribution on any preferred or common stock; (vii)
the independent directors of the Company (other than independent directors of
certain special purpose entity subsidiaries of the Company) receive compensation
other than common stock; (viii) except as otherwise agreed to by the
Participating Counterparties, the making of any payments to or liens or
collateral granted for the benefit of any counterparty, including the
Participating Counterparties (other than as expressly set forth in the
Forbearance Agreement), or any lender or agent with respect to any material
indebtedness of the Company; (ix) the exercise of remedies in connection with a
Triggering Event by any Participating Counterparty; (x) payment by the Company
to any repurchase agreement counterparty, including a Participating Counterparty
or non-Participating Counterparty, other than as expressly set forth in the
Forbearance Agreement; (xi) the threat or commencement of litigation by the
Company against any Participating Counterparty (other than in connection with a
breach of the Forbearance Agreement by a Participating Counterparty); (xii) the
failure by the Company to take action's within the Company's control by
--------------------------------------------------------------------------------
and (xiv) the Security Documents cease to create a valid and perfected first priority security interest in the Collateral after such perfection occurs in accordance with the terms of the Forbearance Agreement and Security Documents.
During the Forbearance Period, notwithstanding any terms of any applicable repurchase agreement to the contrary, the rate of interest or the pricing rate that shall accrue on any and all obligations of the Company owed to each Participating Counterparty under the applicable repurchase agreement shall be the greater of (a) the sum of (i) LIBOR (for a period of three months commencing on the date of the Forbearance Agreement and each three month anniversary of such date) and (ii) 2.50% and (b) 3.50%. Notwithstanding the foregoing, during the Forbearance Period, the obligations owing under such applicable repurchase agreements shall accrue at the rate of interest the related Participating Counterparty is entitled to charge thereunder (the "Contractual Rate"), but the obligation to pay the excess in the amount of interest accrued at the Contractual Rate over the amount of interest accrued at the Common Rate shall be deferred for each Participating Counterparty until, and shall be payable to such Participating Counterparty upon, the termination of the Forbearance Period.
During the Forbearance Period, notwithstanding any term in any repurchase agreement to the contrary, each Participating Counterparty agrees to extend the maturity dates of each of its repurchase agreements until the end of the Forbearance Period.
Subject to advance written notice to all Participating Counterparties, the Company and a Participating Counterparty may agree to optionally terminate a repurchase transaction in whole or part through the sale of all or a portion of the assets subject to such repurchase agreement, provided that (x) such sale shall be made on an arm's length basis on customary market terms and (y) no such sale will result in such Participating Counterparty having a deficiency claim against the Company, unless such a sale resulting in a deficiency claim is approved by the Required Counterparties. During the Forbearance Period, all proceeds of any such termination (net of reasonable and customary expenses (if any) in connection with the applicable disposition) shall be remitted to and applied by the relevant Participating Counterparty as follows: (i) first, to the outstanding repurchase price in respect of the disposed applicable assets, (ii) second, to all other obligations owed under such applicable repurchase agreement, (iii) third, to all other obligations owed by the Companies to the relevant Participating Counterparty or its affiliates under any such applicable repurchase agreements, any other agreements or otherwise (regardless of whether the applicable Participating Counterparty or such affiliate has a contractual right to do so under the applicable repurchase agreement or any other agreement with any of the Companies), and (iv) fourth, any further proceeds shall be subject to the lien and security interest granted in the Forbearance Agreement. Further, all cash collateral that is held by any Participating Counterparty or any affiliate thereof in connection with any applicable repurchase agreement shall be applied by the relevant Participating Counterparty in accordance with the foregoing.
During the Forbearance Period, the Company, among other things, agrees (i) not
to pay any (a) management fees to
Item 7.01. Regulation FD Disclosure.
On
Exhibit 99.1 hereto is being furnished pursuant to Item 7.01, and the information contained therein shall not be deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
--------------------------------------------------------------------------------
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits. Exhibit No. Description Forbearance Agreement datedApril 10, 2020 , by and among AG 10.1Mortgage Investment Trust, Inc. and certain of its affiliates and the Participating Counterparties listed on Schedule 1 thereto 10.2 Promissory Note datedApril 10, 2020 fromAG Mortgage Investment Trust, Inc. payable toAG REIT Management, LLC Security and Collateral Agency Agreement datedApril 10, 2020 , by and amongAG Mortgage Investment Trust, Inc. and certain of its 10.3 subsidiaries and the Participating Counterparties, as set forth on Schedule 1 thereto, for whomWilmington Trust, National Association is acting as agent 10.4 Subordinated Security Agreement datedApril 10, 2020 amongAG Mortgage Investment Trust, Inc. and AG REIT Management, LCC Intercreditor and Subordination Agreement datedApril 10, 2020 by 10.5 and amongAG Mortgage Investment Trust, Inc. , AG REIT Management, LLC andWilmington Trust, National Association as collateral agent. 99.1 Press Release, datedApril 13, 2020
Forward-Looking Statements
When used in this report or other written or oral communications, statements
which are not historical in nature, including those containing words such as
"will," "believe," "expect," "anticipate," "estimate," "plan," "continue,"
"intend," "could," "would," "should," "may", "expect" or similar expressions,
are intended to identify "forward-looking statements" within the meaning of
Section 27A of the Securities Act and Section 21E of the Exchange Act, and, as
such, may involve known and unknown risks, uncertainties and assumptions.
Statements regarding the following subjects, among others, may
be forward-looking: our ability to accurately predict our outstanding
indebtedness and the status of our ongoing discussions with our financing
counterparties. Forward-looking statements are based on estimates, projections,
beliefs and assumptions of management of the Company at the time of such
statements and are not guarantees of future performance. Forward-looking
statements involve risks and uncertainties in predicting future results and
conditions. Actual results and outcomes could differ materially from those
projected in these forward-looking statements due to a variety of factors,
including, without limitation, changes in interest rates, changes in default
rates, changes in the yield curve, changes in prepayment rates, the availability
and terms of financing, changes in the market value of our assets, general
economic conditions, conditions in the market for Non-Agency RMBS and CMBS
securities, Excess MSRs and loans, our ability to predict and control costs,
conditions in the real estate market, legislative and regulatory changes that
could adversely affect the business of the Company, our ongoing negotiations
with our repurchase financing counterparties and the Manager and the ongoing
spread and economic effects of the novel coronavirus (COVID-19). Additional
information concerning these and other risk factors are contained in the
Company's filings with the
--------------------------------------------------------------------------------
© Edgar Online, source