UNITED STATES
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): May 1, 2019
TREMONT MORTGAGE TRUST
(Exact Name of Registrant as Specified in Its Charter)
Maryland
(State or Other Jurisdiction of Incorporation)
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001-38199 |
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82-1719041 |
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(Commission File Number) |
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(IRS Employer Identification No.) |
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Two Newton Place, 255 Washington Street, Suite 300 |
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02458-1634 |
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(Address of Principal Executive Offices) |
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(Zip Code) |
617-796-8317
(Registrant’s Telephone Number, Including Area Code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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 x
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. o
Securities Registered Pursuant to Section 12(b) of the Act:
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Title of Each Class |
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Trading Symbol(s) |
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Name Of Each Exchange On Which Registered |
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Common Shares of Beneficial Interest |
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TRMT |
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The Nasdaq Stock Market LLC |
In this Current Report on Form 8-K, the terms “we”, “us” and “our” refer to Tremont Mortgage Trust and / or its applicable wholly owned subsidiary.
Item 1.01. Entry into a Material Definitive Agreement.
On May 1, 2019, we amended one of the agreements governing our master repurchase facility with Citibank, N.A., as lender, to increase the maximum amount available for advancement to us under that facility from $210.0 million to $250.0 million and, on May 3, 2019, we also amended the agreement governing our subordinated, unsecured credit facility with our manager, Tremont Realty Advisors, LLC, as lender, to increase the maximum amount available for borrowing by us under that facility from $25.0 million to $50.0 million.
The foregoing description of the amendments to the agreements governing our master repurchase facility with Citibank, N.A. and our subordinated, unsecured credit facility with our manager is not complete and is qualified in its entirety by reference to the full text of the amendments to the applicable agreements, copies of which are attached hereto as Exhibit 10.1 and 10.2, respectively, and are incorporated herein by reference.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information contained in Item 1.01 of this Current Report on Form 8-K is incorporated into this Item 2.03 by reference.
Warning Concerning Forward-Looking Statements
This Current Report on Form 8-K contains statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. Also, whenever we use words such as “believe”, “expect”, “anticipate”, “intend”, “plan”, “estimate”, “will”, “may” and negatives or derivatives of these or similar expressions, we are making forward-looking statements. These forward-looking statements are based upon our present intent, beliefs or expectations, but forward-looking statements are not guaranteed to occur and may not occur. Actual results may differ materially from those contained in or implied by our forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors, some of which are beyond our control. For example:
· Continued availability of financing under our master repurchase facility is subject to our satisfying certain financial covenants and other conditions that we may be unable to satisfy,
· Financing for floating rate mortgages and other related assets that we may seek to sell pursuant to our master repurchase facility is subject to approval by Citibank, N.A., which approval we may not obtain, and
· Our ability to obtain additional financing under our master repurchase facility is contingent upon our ability to effectively originate additional investments. However, we cannot be sure that we will be able to use our master repurchase facility as we expect or effectively originate additional investments in the near future or at all.
The information contained elsewhere in our filings with the Securities and Exchange Commission, or SEC, including under the caption “Risk Factors” in our periodic reports, or incorporated therein, identifies other important factors that could cause differences from our forward-looking statements. Our filings with the SEC are available on the SEC’s website at www.sec.gov.
You should not place undue reliance upon our forward-looking statements.
Except as required by law, we do not intend to update or change any forward-looking statements as a result of new information, future events or otherwise.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
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10.1 |
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10.2 |
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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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TREMONT MORTGAGE TRUST | |
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By: |
/s/ G. Douglas Lanois |
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Name: |
G. Douglas Lanois |
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Title: |
Chief Financial Officer and Treasurer |
Date: May 3, 2019
THIRD AMENDMENT TO FEE AGREEMENT
THIS THIRD AMENDMENT TO FEE AGREEMENT (this “Amendment”), dated as of May 1, 2019 (the “Effective Date”), is made by and among CITIBANK, N.A. (together with its successors and/or assigns, “Buyer”), TRMT CB LENDER LLC, a Delaware limited liability company (“Seller”), and for the purpose of acknowledging and agreeing to the provision set forth in Section 3 hereof, TREMONT MORTGAGE TRUST, a Maryland real estate investment trust (“Guarantor”).
W I T N E S S E T H:
WHEREAS, Seller and Buyer have entered into that certain Master Repurchase Agreement, dated as of February 9, 2018, as amended by the First Amendment to Master Repurchase Agreement, dated as of November 6, 2018, and the Second Amendment to Master Repurchase Agreement, dated as of the date hereof (as such agreement may be further amended, supplemented, extended, restated, replaced or otherwise modified from time to time, the “Repurchase Agreement”);
WHEREAS, in connection with the Repurchase Agreement, Seller and Buyer entered into that certain Fee Agreement, dated as of February 9, 2018, as amended by the First Amendment to Fee Agreement, dated as of November 6, 2018 and the Second Amendment to Fee Agreement, dated as of February 4, 2019 (as the same may be further amended, supplemented or otherwise modified from time to time, the “Fee Agreement”);
WHEREAS, all capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the Repurchase Agreement; and
WHEREAS, Seller and Buyer desire to modify the definitions of Facility Amount and Supplemental Facility Fee as set forth herein.
NOW, THEREFORE, in consideration of ten dollars ($10) and for other good and valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged, Seller and Buyer covenant and agree as follows as of the Effective Date, and Guarantor acknowledges and agrees as to the provision set forth in Section 3 as of the Effective Date:
1. Amendment to Fee Agreement.
(a) The following definitions in Section 1 of the Fee Agreement are hereby deleted in their entirety and replaced by the versions below:
“Facility Amount” shall mean $135,000,000; provided, that, notwithstanding the foregoing, commencing on and after the date Guarantor has issued Indebtedness which, in the reasonable determination of Buyer, satisfies the requirements to be treated as RMR Indebtedness, then the Facility Amount shall equal the sum of (x) $135,000,000 plus (y) the product of (i) three (3) and (ii) the greater of (a) the amount of RMR Indebtedness borrowed and (b) the net cash proceeds received by Guarantor in connection with a public offering of common stock or issuance of preferred equity, subject to a maximum Facility Amount equal to $250,000,000, which increase shall be effective on the date
such borrowing under the RMR Indebtedness occurs or the date such net cash proceeds are actually raised. Seller shall notify Buyer in writing of each borrowing under the RMR Indebtedness by not later than the second (2nd) Business Day prior to the Business Day on which funds are advanced or received, as applicable.
“Supplemental Facility Fee” shall mean an amount equal to the product of (x) 0.50%, (y) the increase in the Facility Amount described and established under the proviso to the definition of Facility Amount and (z) a fraction, expressed as a percentage, the numerator of which equals the number of calendar days from the Business Day on which such increase in the Facility Amount is effective to November 6, 2021 and the denominator of which equals 1,095.
2. Seller’s Representations. Seller has taken all necessary action to authorize the execution, delivery and performance of this Amendment. This Amendment has been duly executed and delivered by or on behalf of Seller and constitutes the legal, valid and binding obligation of Seller enforceable against Seller in accordance with its terms subject to bankruptcy, insolvency, and other limitations on creditors’ rights generally and to equitable principles. No Event of Default has occurred and is continuing, and no Event of Default will occur as a result of the execution, delivery and performance by Seller of this Amendment. Any consent, approval, authorization, order, registration or qualification of or with any Governmental Authority required for the execution, delivery and performance by Seller of this Amendment has been obtained and is in full force and effect (other than consents, approvals, authorizations, orders, registrations or qualifications that if not obtained, are not reasonably likely to have a Material Adverse Effect).
3. Reaffirmation of Guaranty. Guarantor has executed this Amendment for the purpose of acknowledging and agreeing that, notwithstanding the execution and delivery of this Amendment and the amendment of the Repurchase Agreement hereunder, all of Guarantor’s obligations under the Guaranty remain in full force and effect and the same are hereby irrevocably and unconditionally ratified and confirmed by Guarantor in all respects.
4. Conditions Precedent. This Amendment and its provisions shall become effective upon the execution and delivery of this Amendment by a duly authorized officer of each of Seller, Buyer and Guarantor.
5. Agreement Regarding Expenses. Seller agrees to pay Buyer’s reasonable out of pocket expenses (including reasonable legal fees) incurred in connection with the preparation and negotiation of this Amendment promptly (and after Buyer or Buyer’s counsel gives Seller an invoice for such expenses).
6. Full Force and Effect. Except as expressly modified hereby, all of the terms, covenants and conditions of the Repurchase Agreement and the other Transaction Documents remain unmodified and in full force and effect and are hereby ratified and confirmed by Seller. Any inconsistency between this Amendment and the Repurchase Agreement (as it existed before this Amendment) shall be resolved in favor of this Amendment, whether or not this Amendment specifically modifies the particular provision(s) in the Repurchase Agreement inconsistent with this Amendment. All references to the “Agreement” in the Repurchase Agreement or to the
“Repurchase Agreement” in any of the other Transaction Documents shall mean and refer to the Repurchase Agreement as modified and amended hereby.
7. No Waiver. The execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of the Buyer under the Repurchase Agreement, the Guaranty, any of the other Transaction Documents or any other document, instrument or agreement executed and/or delivered in connection therewith.
8. Headings. Each of the captions contained in this Amendment are for the convenience of reference only and shall not define or limit the provisions hereof.
9. Counterparts. This Amendment may be executed in any number of counterparts, and all such counterparts shall together constitute the same agreement. Signatures delivered by email (in PDF format) shall be considered binding with the same force and effect as original signatures.
10. Governing Law. This Amendment shall be governed in accordance with the terms and provisions of Article 19 of the Repurchase Agreement.
[No Further Text on this Page; Signature Pages Follow]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their duly authorized representatives as of the day and year first above written and effective as of the Effective Date.
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SELLER: | ||
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TRMT CB LENDER LLC, | ||
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a Delaware limited liability company | ||
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By: |
/s/ G. Douglas Lanois | |
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Name: |
G. Douglas Lanois |
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Title: |
Chief Financial Officer and Treasurer |
[SIGNATURES PAGES CONTINUE ON NEXT PAGE]
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GUARANTOR: | |
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TREMONT MORTGAGE TRUST, | |
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a Maryland real estate investment trust | |
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By: |
/s/ G. Douglas Lanois |
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Name: |
G. Douglas Lanois |
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Title: |
Chief Financial Officer and Treasurer |
[SIGNATURES PAGES CONTINUE ON NEXT PAGE]
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BUYER: | ||
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CITIBANK, N.A. | ||
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By: |
/s/ Richard B. Schlenger | |
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Name: |
Richard B. Schlenger |
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Title: |
Authorized Signatory |
Execution Version
AMENDMENT NO. 1 TO CREDIT AGREEMENT
THIS AMENDMENT NO. 1 TO CREDIT AGREEMENT, dated as of May 3, 2019 (this “Agreement”), is made by and between TREMONT MORTGAGE TRUST (the “Borrower”) and TREMONT REALTY ADVISORS LLC (the “Lender”). Capitalized terms not otherwise defined herein shall have the meanings set forth in the Credit Agreement referred to below unless the context otherwise requires.
W I T N E S S E T H:
WHEREAS, the Borrower and the Lender have heretofore entered into that certain Credit Agreement, dated as of February 4, 2019 (as amended, restated, amended and restated, supplemented or otherwise modified prior to the date hereof, the “Existing Credit Agreement”);
WHEREAS, the Borrower and the Lender desire to amend the Existing Credit Agreement;
ACCORDINGLY, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Borrower and the Lender hereby agree to an amendment to the Existing Credit Agreement (the Existing Credit Agreement as so amended hereby, the “Credit Agreement”).
ARTICLE I
AMENDMENT OF EXISTING CREDIT AGREEMENT
SECTION 1.1 Section 2 of the Existing Credit Agreement is hereby amended by deleting such section in its entirety and substituting the following therefor:
“Section 2. Principal Amount and Terms of the Credit. The Lender agrees to extend to the Borrower any time within six (6) months after the Agreement Date (such period, the “Availability Period”), subject to the terms and conditions of this Agreement and in reliance upon the representations and warranties of the Borrower set forth in Section 10, loan(s) in the aggregate principal amount of up to Fifty Million Dollars ($50,000,000.00) (the “Loans”), to be disbursed in minimum amounts of Five Hundred Thousand Dollars ($500,000.00) and in whole multiples of Fifty Thousand Dollars ($50,000.00) in excess thereof (“Loan Increments”), from time to time, to an account designated in writing to the Lender by a Responsible Officer of Borrower pursuant to a Borrowing Request; provided, for the avoidance of doubt, that after the Availability Period, the undrawn funds will be unavailable and the Borrower will not be able to request any further borrowings on such undrawn funds. Amounts borrowed under this Agreement can only be repaid pursuant to the terms hereof and may not be reborrowed. A Loan may only be requested in Loan Increments. A Loan may be requested on any date during the Availability Period when all of the conditions precedent to lending described in Section 11 below have been satisfied, and the Borrower has delivered a Borrowing Request to the Lender no later than 12:00 noon, Eastern time, two (2) Business Days prior to the date such Loan is being requested.”.
SECTION 1.2 Each of the parties hereto acknowledges and agrees that the terms of this Agreement do not constitute a novation but, rather, an amendment of the terms of a pre-existing agreement, as evidenced by the Existing Credit Agreement. The Borrower hereby consents to this Agreement and hereby restates, ratifies and reaffirms each and every term and condition set forth in the Credit Agreement and the Loan Documents effective as of the date hereof and as amended hereby and
hereby reaffirms its obligations (including the Obligations) under each Loan Document to which it is a party.
ARTICLE II
MISCELLANEOUS
SECTION 2.1 Full Force and Effect; Amendment and Restatement. Except as expressly provided herein and in the Existing Credit Agreement, this Agreement shall not by implication or otherwise limit, impair, constitute a waiver of, or otherwise affect the rights and remedies of the Lender under the Existing Credit Agreement or any other Loan Document, and shall not alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in the Existing Credit Agreement or any other Loan Document, all of which are ratified and affirmed in all respects and shall continue in full force and effect. Nothing herein shall be deemed to entitle the Borrower to a consent to, or a waiver, amendment, modification or other change of, any of the terms, conditions, obligations, covenants or agreements contained in the Existing Credit Agreement or any other Loan Document in similar or different circumstances.
SECTION 2.2 Loan Document Pursuant to Credit Agreement. This Agreement is a Loan Document executed pursuant to the Existing Credit Agreement and shall be construed, administered and applied in accordance with all of the terms and provisions of the Existing Credit Agreement, including, without limitation, the provisions relating to forum selection, consent to jurisdiction and waiver of jury trial included in Section 15 of the Existing Credit Agreement, which provisions are hereby acknowledged and confirmed by each of the parties hereto.
SECTION 2.3 Headings. The various headings of this Agreement are inserted for convenience only and shall not affect the meaning or interpretation of this Agreement or any provisions hereof.
SECTION 2.4 Execution in Counterparts. This Agreement may be executed by the parties hereto in counterparts, each of which shall be deemed to be an original and all of which shall constitute together but one and the same agreement.
SECTION 2.5 Severability. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such provision and such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions of this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction.
SECTION 2.6 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.
SECTION 2.7 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the Borrower and the Lender have caused this Agreement to be executed by their authorized representatives as of the day and year first above written.
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TREMONT MORTGAGE TRUST, as the Borrower | ||
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By: |
/s/ G. Douglas Lanois | |
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Name: |
G. Douglas Lanois |
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Title: |
Chief Financial Officer and Treasurer |
[Signature Page to Amendment No. 1 to Credit Agreement]
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TREMONT REALTY ADVISORS LLC, as the Lender | ||
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By: |
/s/ Matthew P. Jordan | |
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Name: |
Matthew P. Jordan |
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Title: |
Chief Financial Officer |
[Signature Page to Amendment No. 1 to Credit Agreement]