APOLLO COMMERCIAL REAL ESTATE FINANCE, INC. Item 3.02. Unregistered Sales of
On
The issuance of the shares of the Series B-1 Preferred Stock to the Existing Holders in exchange for the shares of the Series B Preferred Stock was exempt from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"), pursuant to Section 3(a)(9), as the Series B-1 Preferred Stock was exchanged by the Company with the Existing Holders in a transaction where no commission or other remuneration was paid or given directly or indirectly for soliciting such exchange.
The Existing Holders are entitled to the benefits of a registration rights
agreement with respect to the Series B-1 Preferred Stock (the "Registration
Rights Agreement"), by and between the Company, on the one hand, and the
Existing Holders, on the other hand, dated
The preceding description is qualified in its entirety by reference to the Registration Rights Agreement, a copy of which is attached as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Item 3.03 Material Modifications to Rights of Security Holders.
OnJuly 14, 2021 , the Company filed with theState Department of Assessments and Taxation of Maryland (the "SDAT") Articles Supplementary (the "Articles Supplementary") to its charter, classifying and designating 6,770,393 shares of its authorized capital stock as shares of the Series B-1 Preferred Stock. A description of the material terms of the Series B-1 Preferred Stock, as contained within the Articles Supplementary, is set forth below. Capitalized terms not defined herein shall have the meaning set forth in the Articles Supplementary. Securities 6,770,393 shares of 7.25% Series B-1 Cumulative Redeemable Perpetual Preferred Stock,$0.01 par value per share. So long as any shares of Series B-1 Preferred Stock are outstanding, the approval of two-thirds of the votes entitled to be cast by the holders of outstanding shares of Series B-1 Preferred Stock is required to issue additional shares of Series B-1 Preferred Stock. Dividends Holders of the Series B-1 Preferred Stock will be entitled to receive cumulative cash dividends at a rate of 7.25% per annum of the$25.00 liquidation preference per share of Series B-1 Preferred Stock (equivalent to an annual amount of$1.8125 per share of Series B-1 Preferred Stock). Dividends on the Series B-1 Preferred Stock will be payable quarterly in arrears on or about the 15th day of January, April, July and October of each year. The first dividend on the Series B-1 Preferred Stock is payable onOctober 15, 2021 . No Maturity The Series B-1 Preferred Stock has no stated maturity date and, except as set forth below under "Change of Control Redemption," the Company is not required to repurchase or redeem the Series B-1 Preferred Stock. Accordingly, shares of Series B-1 Preferred Stock will remain outstanding indefinitely, unless the Company decides to redeem them or, under certain circumstances where a "Change of Control" has occurred, as described under "Change of Control" below. The Company is not required to set aside funds to redeem the Series B-1 Preferred Stock.
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Ranking The Series B-1 Preferred Stock will, with respect to rights to
receive dividends and to participate in distributions or
payments upon liquidation, dissolution or winding up of the
Corporation, rank (a) senior to the Company's common stock and
any other class or series of junior stock the Company may
authorize or issue in the future, if any, (b) on parity with any
class or series of stock the Company may issue in the future
that, pursuant to the terms thereof, ranks on parity with the
Series B-1 Preferred Stock as to the payment of dividends and
amounts upon liquidation, dissolution or winding up of the
Company and (c) junior to any class or series of stock the
Company may authorize or issue in the future that, pursuant to
the terms thereof, rank senior to the Series B-1 Preferred Stock
as to the payment of dividends or amounts upon liquidation,
dissolution or winding up of the Company.
Optional Except in instances relating to preservation of the Company's
Redemption qualification as a real estate investment trust for U.S. federal
income tax purposes, the Company may not voluntarily redeem the
Series B-1 Preferred Stock prior to July 15, 2026 . On and after
July 15, 2026 , the Company may, at its option, redeem the Series
B-1 Preferred Stock, in whole, at any time, or in part, from
time to time, for cash at a redemption price of $25.00 per
share, plus any accrued and unpaid dividends (whether or not
declared) to, but not including, the date of redemption (unless
the applicable redemption date is after the record date fixed
for a Series B-1 Preferred Stock dividend and prior to the
corresponding dividend payment date, in which case no additional
amount for such accrued and unpaid dividend will be included in
the redemption price). Any partial redemption will be selected
pro rata or by any other equitable method the Company may choose
acting reasonably.
To the extent that the Company has exercised its optional
redemption right relating to the Series B-1 Preferred Stock
before the applicable conversion date, holders of Series B-1
Preferred Stock will not be permitted to exercise the conversion
right described below in respect of any shares called for
redemption.
Change of Upon the occurrence of a Change of Control (as defined below),
Control the Company will be obligated to redeem the Series B-1 Preferred
Redemption Stock in whole if the holders of a majority of the shares of
Series B-1 Preferred Stock outstanding on the date of the Change
of Control elect to cause the Company to redeem the outstanding
shares of Series B-1 Preferred Stock, subject to any shares that
may be converted as described in "Conversion Rights" below, as
soon as practicable and in any event within 120 days after the
first date on which such Change of Control has occurred for cash
at a redemption price of $25.00 per share, plus any accrued and
unpaid dividends (whether or not declared) to, but not
including, the redemption date (unless such redemption date is
after the record date fixed for a Series B-1 Preferred Stock
dividend and prior to the corresponding dividend payment date,
in which case no additional amount for such accrued and unpaid
dividend will be included in the redemption price).
A "Change of Control" is when the following have occurred:
(a) (1) the acquisition by any person, including any syndicate
or group deemed to be a "person" under
Section 13(d)(3) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), of beneficial ownership, directly
or indirectly, through a purchase, merger or other acquisition
transaction or series of purchases, mergers or other acquisition
transactions of shares of the Company's capital
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stock entitling that person to exercise more than 50% of the
total voting power of all shares of the Company's capital stock
entitled to vote generally in elections of directors (except
that such person will be deemed to have beneficial ownership of
all securities that such person has the right to acquire,
whether such right is currently exercisable or is exercisable
only upon the occurrence of a subsequent condition); and
(2) following the closing of any transaction referred to in
(a)(1) above, neither the Company nor the acquiring or surviving
entity has a class of common securities (or American Depository
Receipts representing such common securities) listed on the New
York Stock Exchange (the "NYSE"), the NYSE MKT (the "NYSE MKT"
or the NASDAQ Stock Market ("NASDAQ"), or listed or quoted on an
exchange or quotation system that is a successor to the NYSE,
the NYSE MKT or the NASDAQ (an "Ownership Change of Control");
or
(b) if ACREFI Management, LLC or an affiliate of Apollo Global
Management, LLC is no longer the external manager of the
Company.
Conversion Rights Upon the occurrence of an Ownership Change of Control, each
. . .
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal
Year.
On
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits. 3.1 Articles Supplementary designatingApollo Commercial Real Estate Finance, Inc.'s 7.25% Series B-1 Cumulative Redeemable Perpetual Preferred Stock 10.1 Registration Rights Agreement with respect toApollo Commercial Real Estate Finance, Inc.'s 7.25% Series B-1 Cumulative Redeemable Perpetual Preferred Stock datedJuly 14, 2021 by and betweenApollo Commercial Real Estate Finance, Inc. ,QH RE Asset Company LLC andDIC Holding II LLC 104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
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