ACRES Commercial Realty Corp 8-K, filed Jul 25, 2023
ACRES Commercial Realty Corp. (ACR)
About this 8-K
ACRES Commercial Realty Corp filed this 8-K on July 25, 2023, reporting on events of July 21, 2023.
Items reported
- Item 8.01: Other events
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 8.01 Other Events
On July 21, 2023, ACRES Commercial Realty Corp. (the “Company”), entered into Amendment No. 5 to Guarantee Agreement (the “JPM Guarantee Amendment”) with JPMorgan Chase Bank, National Association (“JPM”), which made certain amendments and modifications to the Guarantee Agreement dated October 26, 2018 between the Company and JPM, as amended (the “JPM Guarantee”), including but not limited to amending the (i) EBITDA to Interest Expense ratio (as defined in the JPM Guarantee), (ii) maximum ratio of Total Indebtedness to its Total Equity (as defined in the JPM Guarantee) and (iii) minimum unencumbered Liquidity requirement (as defined in the JPM Guarantee), each through December 2024.
On July 21, 2023, RCC Real Estate SPE 8, LLC ("SPE 8"), an indirect, wholly owned subsidiary of the Company, entered into Amendment No. 4 to Master Repurchase Agreement (the “JPM Master Repurchase Amendment”) with JPM, which made certain amendments and modifications to the Master Repurchase Agreement dated October 26, 2018 between the Company and JPM, as amended, including but not limited to amending the maturity date from October 26, 2024 to July 21, 2026.
The foregoing descriptions of the JPM Guarantee Amendment and JPM Master Repurchase Amendment do not purport to be complete and are qualified in their entirety by reference to the full text of the amendments, which have been filed with this Current Report on Form 8-K as Exhibits 99.1 and 99.2, respectively.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. |
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Description |
99.1 |
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99.2 |
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104 |
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Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURES
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.
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ACRES COMMERCIAL REALTY CORP. |
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Date: |
July 25, 2023 |
By: |
/s/ David J. Bryant |
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David J. Bryant |
EXHIBIT 99.1
AMENDMENT NO. 5 TO GUARANTEE AGREEMENT
AMENDMENT NO. 5 TO GUARANTEE AGREEMENT, dated as of July 21, 2023 (this “Amendment”), between ACRES COMMERCIAL REALTY CORP, f/k/a Exantas Capital Corp., a Maryland corporation (“Guarantor”), and JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, a national banking association (“Buyer”). Capitalized terms used but not otherwise defined herein shall have the meanings given to them in the Repurchase Agreement (as defined below).
RECITALS
WHEREAS, RCC REAL ESTATE SPE 8, LLC (“Seller”) and Buyer are parties to that certain Uncommitted Master Repurchase Agreement, dated as of October 26, 2018 (as amended by that certain First Amendment to Uncommitted Master Repurchase Agreement, dated as of August 14, 2020, as further amended by that certain Amendment No. 2 to Master Repurchase Agreement, dated as of September 1, 2021, as further amended by that certain Amendment No. 3 to Master Repurchase Agreement and Guarantee Agreement, dated as of October 26, 2021, as further amended by that certain Term SOFR Conforming Changes Amendment, dated as of December 31, 2021, as further amended by that certain Amendment No. 4 to Master Repurchase Agreement, dated as of July 21, 2023, as amended hereby, and as may be further amended, restated, supplemented or otherwise modified and in effect from time to time, the “Repurchase Agreement”);
WHEREAS, in connection with the Repurchase Agreement, Guarantor entered into that certain Guarantee Agreement, dated as of October 26, 2018 (as amended by that certain Amendment No. 1 to Guarantee Agreement, dated as of May 6, 2020, as further amended by that certain Amendment No. 2 to Guarantee Agreement, dated as October 2, 2020, as further amended by that certain Amendment No. 3 to Master Repurchase Agreement and Guarantee Agreement, dated as of October 26, 2021, as further amended by that certain Amendment No. 4 to Guarantee Agreement, dated as of November 17, 2022, as amended hereby, and as may be further amended, restated, supplemented or otherwise modified and in effect from time to time, the “Guarantee Agreement”); and
WHEREAS, Guarantor and Buyer have agreed to amend certain provisions of the Guarantee Agreement in the manner set forth herein.
NOW THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Guarantor and Buyer agree as follows:
“(i) At all times, Guarantor shall maintain unpledged, unencumbered Liquidity of (1) from the Closing Date through October 25, 2021, not less than the greater of (A) $10,000,000 and (B) ten percent (10%) of the aggregate outstanding Repurchase Price of all Purchased Assets as of such time; (2) from October 26, 2021 through September 30, 2022, not less than the greater of (A) $10,000,000 and (B) five percent (5%) of the aggregate outstanding Repurchase Price of all Purchased Assets as of such time; (3) from October 1, 2022 through December 31, 2024, not less than the greater of (A) $15,000,000 and (B) seven and a half percent (7.5%) of the aggregate outstanding Repurchase Price of all Purchased Assets as of such time; and (4) from and after January 1, 2025, not less than the greater of (A) $10,000,000 and (B) five percent (5%) of the aggregate outstanding Repurchase Price of all Purchased Assets as of such time.”
“(iii) Guarantor shall not permit, for any Test Period, the ratio of its Total Indebtedness to its Total Equity to be (1) from the Closing Date through the calendar quarter ending September 30, 2022, greater than 6.00 to 1.00; (2) from calendar quarter ending December 31, 2022 through the calendar quarter ending December 31, 2024, greater than 5.50 to 1.00; and (3) at all times after the calendar quarter ending December 31, 2024, greater than 6.00 to 1.00. For the avoidance of doubt, any calculation of Total Indebtedness will include any and all recourse and non-recourse debt of any Consolidated Subsidiary of Guarantor.”
“(v) Guarantor shall not permit, for any Test Period, the ratio of (i) the sum of the trailing four (4) fiscal quarters EBITDA for Guarantor and its Consolidated Subsidiaries for such Test Period to (ii) the trailing four (4) fiscal quarters Interest Expense for Guarantor and its Consolidated Subsidiaries for such Test Period to be (1) from the Closing Date through the calendar quarter ending September 30, 2022, less than 1.50 to 1.00; (2) from the calendar quarter ending December 31, 2022 through the calendar quarter ending December 31, 2024, less than 1.25 to 1.00; and at all times after the calendar quarter ending December 31, 2024, less than 1.50 to 1.00.”
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The parties hereto hereby irrevocably consent to the service of any summons and complaint and any other process by the mailing of copies of such process to them at their respective address specified in the Guarantee Agreement. The parties hereto hereby agree that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Section 9 shall affect the right of Buyer to serve legal process in any other manner permitted by law or affect the right of Buyer to bring any action or proceeding against Guarantor or its property in the courts of other jurisdictions.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered as of the day and year first above written and effective as of the Amendment Effective Date.
ACRES COMMERCIAL REALTY CORP, f/k/a Exantas Capital Corp., a Maryland corporation
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/s/ Michael Pierro |
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Name: Michael Pierro |
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Title: Senior Vice President |
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, a national banking association
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/s/ Thomas N. Cassino |
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Name: Thomas N. Cassino |
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Title: Managing Director |
Exhibit 99.2
AMENDMENT NO. 4 TO MASTER REPURCHASE AGREEMENT
AMENDMENT NO. 4 TO MASTER REPURCHASE AGREEMENT, dated as of July 21, 2023 (this “Amendment”), between RCC REAL ESTATE SPE 8, LLC (“Seller”), a Delaware limited liability company and JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, a national banking association (the “Buyer”). Capitalized terms used but not otherwise defined herein shall have the meanings given to them in the Repurchase Agreement (as defined below).
RECITALS
WHEREAS Seller and Buyer are parties to that certain Uncommitted Master Repurchase Agreement, dated as of October 26, 2018 (as amended by that certain First Amendment to Uncommitted Master Repurchase Agreement, dated as of August 14, 2020, as further amended by that certain Amendment No. 2 to Master Repurchase Agreement, dated as of September 1, 2021, as further amended by that certain Amendment No. 3 to Master Repurchase Agreement and Guarantee Agreement, dated as of October 26, 2021, as further amended by that certain Term SOFR Conforming Changes Amendment, dated as of December 31, 2021, and as further amended hereby, and as may be further amended, restated, supplemented or otherwise modified and in effect from time to time, the “Repurchase Agreement”); and
WHEREAS, Seller and Buyer have agreed, subject to the terms and conditions hereof, that the Repurchase Agreement shall be amended as set forth in this Amendment and ACRES COMMERCIAL REALTY CORP, f/k/a Exantas Capital Corp., a Maryland corporation (“Guarantor”) has agreed to make the acknowledgements set forth herein.
NOW THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Seller and Buyer each agree as follows:
(i) The first line of the defined term “Maturity Date”, as set forth in Article 2 of the Repurchase Agreement, is hereby amended to change the date “October 26, 2024” to “July 21, 2026”.
(ii) The last line of the defined term “Maturity Date”, as set forth in Article 2 of the Repurchase Agreement, is hereby amended to change the words “five (5) years from the Closing Date” to “July 21, 2028”.
“Fourth Amendment Effective Date” shall mean July 21, 2023.
“(n)(i) Notwithstanding the definition of Maturity Date herein, upon written request of Seller prior to the then current Maturity Date, provided that Buyer has determined that all of the extension conditions listed in clause (ii) below (collectively, the “Maturity Date Extension Conditions”) shall have been satisfied, Buyer may, in its sole discretion, agree to extend the Maturity Date for a period of up to three hundred sixty-four (364) additional days (the “Extension Period”) by giving notice to Seller of such extension; provided, that any failure by Buyer to deliver such notice of extension to Seller within thirty (30)) days from the date first received by Buyer shall be deemed a denial of Seller’s request to extend such Maturity Date. Notwithstanding anything to the contrary in this Article 3(n)(i) hereof, in no event shall the Maturity Date be extended for more than two (2) Extension Periods and in no event shall the Final Maturity Date be after July 21, 2028.”
(a) Conditions Precedent. This Amendment shall become effective on the Fourth Amendment Effective Date provided that on or prior to such date all of the following have occurred: (a) a counterpart of this Amendment being duly executed and delivered by a duly authorized officer of each of the Seller, Guarantor and Buyer and (b) payment to Buyer of a fee in the amount of $458,904.11, which constitutes the first installment of the Structuring Fee minus a credit in an amount equal to the unamortized portion of the structuring fee previously paid by Seller to Buyer.
(b) Conditions Subsequent. Seller shall deliver to Buyer within ten (10) Business Days of the date hereof, a bring down of the bankruptcy safe harbor opinion previously delivered in form and substance acceptable to Buyer in its sole discretion. Failure to so deliver such opinion in the time specified, or such later time as may be acceptable to Buyer, shall be an Event of Default under the Repurchase Agreement.
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[SIGNATURES FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered as of the day and year first above written.
BUYER:
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
a national banking association organized under the laws of the United States of America
By: |
/s/ Thomas N. Cassino |
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Name: Thomas N. Cassino |
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Title: Managing Director |
SELLER:
RCC REAL ESTATE SPE 8, LLC, a Delaware limited liability company
By: |
/s/ Michael Pierro |
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Name: Michael Pierro |
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Title: Senior Vice President |
Acknowledged and Agreed:
GUARANTOR:
ACRES COMMERCIAL REALTY CORP, f/k/a Exantas Capital Corp., a Maryland corporation
By: |
/s/ Michael Pierro |
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Name: Michael Pierro |
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Title: Senior Vice President |