Item 1.01 Entry into a Material Definitive Agreement.
As previously reported on
On
Pursuant to the terms of the Reinstatement Agreement, the parties agreed, effective as of the Effective Date, to terminate the Third Forbearance Agreement and each Participating Counterparty agreed to permanently waive all existing and prior events of default under its financing agreements with the Company (each, a "Bilateral Agreement") and to reinstate each Bilateral Agreement, as each may be amended by agreement between the Participating Counterparty and the Company. As a result of the termination of the Third Forbearance Agreement and entry into the Reinstatement Agreement, default interest on the Company's outstanding borrowings under each of the Bilateral Agreements ceased to accrue as of the Effective Date and the interest rate shall be the non-default rate of interest or pricing rate, as set forth in the applicable Bilateral Agreement; all cash margin will be applied to outstanding balances owed by the Company; and the DTC repo tracker coding for each Bilateral Agreement will be reinstated, thereby allowing principal and interest payments on the underlying collateral to flow to and be used by the Company, just as it was before the prior forbearance agreements were put in place. In addition, pursuant to the terms of the Reinstatement Agreement, the security interests granted to the Participating Counterparties as additional collateral under the various forbearance agreements are being terminated and released. The Company also agreed to pay the reasonable fees and out-of-pocket expenses of counsel and other professional advisors for the Participating Counterparties and the collateral agent.
Additionally, the Reinstatement Agreement provides a set of financial covenants that override and replace the financial covenants in each Bilateral Agreement, effective as of the Effective Date, as follows:
(a)Liquidity. The Company shall maintain at all times minimum Liquidity (as defined) of not less than$10,000,000 . (b)Leverage. As of the last day of each calendar quarter, the ratio of the Company's (A) Recourse Indebtedness (as defined) to (B) Stockholder's Equity (as defined) shall not be greater than 3:1. (c)Minimum Equity. As of the last day of each calendar quarter, the Company shall not permit its Stockholder's Equity to be less than$100,000,000 plus fifty percent (50%) of the net proceeds of any equity capital raised by the Company afterJune 1, 2020 . (d)Annual Equity Lookback. With respect to (i) the fiscal quarter ending onMarch 31, 2021 , the Stockholder's Equity of the Company shall not decline by 40% or more from the Stockholder's Equity of the Company as ofApril 30, 2020 , and (ii) the fiscal quarter ending onJune 30, 2021 , and each fiscal quarter thereafter, the Stockholder's Equity of the Company shall not decline by 40% or more from the Stockholder's Equity of the Company as of the end of the same fiscal quarter in the previous fiscal year. (e)Quarterly Equity Lookback. With respect to (i) the fiscal quarter ending onJune 30, 2020 , the Stockholder's Equity of the Company shall not decline by 30% or more from the Stockholder's Equity of the Company as ofApril 30, 2020 , and (ii) the fiscal quarter ending onSeptember 30, 2020 , and each fiscal quarter thereafter, the Stockholder's Equity of the Company shall not decline by 30% or more from the Stockholder's Equity of the Company as of the preceding fiscal quarter end.
The Reinstatement Agreement also sets forth various reporting requirements from the Company to the Participating Counterparties, releases, certain netting obligations and cross-default provisions.
On
The Reinstatement Agreement and the JPM Reinstatement Agreement collectively cover all of the Company's existing financing arrangements as of the date of this report.
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Item 2.02 Results of Operations and Financial Condition.
On
Pursuant to the rules and regulations of the
Item 8.01 Other Events.
As previously reported, on
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits. Exhibit No. Description 99.1 Press Release, datedJune 12, 2020 , issued byAG Mortgage Investment Trust, Inc.
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