Item 1.01 Entry into a Material Definitive Agreement
Securities Purchase Agreement
On April 3, 2020, Great Ajax Corp., a Maryland corporation (the "Company"), and
its operating partnership and manager, entered into a securities purchase
agreement (the "Purchase Agreement") with Magnetar Constellation Fund V Ltd.,
Magnetar Constellation Fund V LLC, Magnetar Longhorn Fund LP, Magnetar SC Fund
Ltd., Magnetar Structured Credit Fund, LP and Magnetar Xing He Master Fund Ltd.
(the "Purchasers"). Pursuant to the Purchase Agreement, the Company, in a
private placement made in reliance on the exemption from the registration
requirements of the Securities Act of 1933, as amended (the "Securities Act"),
afforded by Section 4(a)(2) of the Securities Act, agreed to issue and sell to
the Purchaser 820,000 shares of a new series of 7.25% Fixed-to-Floating Rate
Preferred Stock, par value $0.01 per share (the "Series A Preferred Stock") and
2,380,000 shares of a new series of 5.00% Fixed-to-Floating Rate Preferred
Stock, par value $0.01 per share (the "Series B Preferred Stock," and together
with the Series A Preferred Stock, the "Preferred Stock"), each for $25.00 per
share for gross proceeds of approximately $80,000,000 (the "Private Placement").
The Company also agreed to issue and sell to the Purchaser two series of
warrants (the "Warrants") to purchase an aggregate of 4,000,000 shares of the
Company's common stock, par value $0.01 per share ("Common Stock," and such
Common Stock issuable upon exercise of the Warrants, the "Warrant Shares"), at
an exercise price of $10.00 (the "Exercise Price") with an exercise period
expiring five years after closing. The Warrants include a put option that will
allow the Purchaser to sell the Warrants to the Company at a specified put price
on or after July 6, 2023. In addition, within 60 days of the closing date, at
the option of the Purchaser, the Company agreed to sell to the Purchaser up to
an additional 800,000 shares of Preferred Stock , $25.00 per share for an
aggregate purchase price of up to $20,000,000 and warrants to purchase up to an
additional aggregate of 1,000,000 shares of Common Stock (collectively, the
"Option Securities"). The Company expects to use the net proceeds from the
Private Placement to acquire mortgage loans and mortgage-related assets
consistent with the Company's investment strategy.
Registration Rights Agreement
Pursuant to the terms of a Registration Rights Agreement entered into between
the Company and the Purchaser, the Company will be obligated to prepare and file
with the Securities and Exchange Commission (the "SEC") a registration statement
(the "Registration Statement") to register for resale the Preferred Stock, the
Warrant Shares and the Option Securities, if any, as soon as practicable, but in
no event later than 90 days following the closing of the Private Placement (the
"Filing Deadline"), and use its best commercially reasonable efforts, subject to
receipt of necessary information from the Purchaser, to cause the SEC to declare
the Registration Statement effective within 30 days following the Filing
Deadline or, if the Registration Statement is selected for review by the SEC,
within 90 days after the Filing Deadline.
The foregoing description of the Registration Rights Agreement does not purport
to be complete and is qualified in its entirety by the full text of the
Registration Rights Agreement attached as Exhibit 10.2 hereto.
Series A Preferred Stock and Series B Preferred Stock
On April 6, 2020, the Company filed Articles Supplementary with the Maryland
Department of Assessments and Taxation to classify and designate 4,000,000
shares of authorized but unissued preferred stock, par value $0.01 per share, of
the Company as 7.25% Series A Preferred Stock and 5.00% Series B Preferred Stock
(the "Articles Supplementary"). The preferences, limitations, powers and
relative rights of the Series A Preferred Stock and the Series B Preferred Stock
are set forth in the Articles Supplementary and are described below.
The Series A Preferred Stock will rank, with respect to rights to the payment of
dividends and the distribution of assets upon liquidation, dissolution or
winding up of the Company, (i) senior to all classes or series of the Company's
common stock and to all classes or series of stock of the Company other than
Parity Stock (as defined below) and Senior Stock (as defined below)
(collectively, "Junior Stock"); (ii) on a parity with all classes or series of
stock of the Company with terms specifically providing that such stock ranks on
a parity with the Series A Preferred Stock and the Series B Preferred Stock with
respect to rights to the payment of dividends and the distribution of assets
upon any liquidation, dissolution or winding up of the Company (collectively,
"Parity Stock"), and, for the avoidance of doubt, Series A Preferred Stock and
Series B Preferred Stock shall be viewed as Parity Stock with respect to each
other; and (iii) junior to all classes or series of stock of the Company with
terms specifically providing that such stock ranks senior to the Series A
Preferred Stock and the Series B Preferred Stock with respect to rights to the
payment of dividends and the distribution of assets upon any liquidation,
dissolution or winding up of the Company (collectively, "Senior Stock").
In the event of any voluntary or involuntary liquidation, dissolution or winding
up of the Company, the holders of shares of Series A Preferred Stock and Series
B Preferred Stock will be entitled to be paid out of the assets the Company has
legally available for distribution to its stockholders, subject to the payment
of the Company's debts and other liabilities and the preferential rights of the
holders of shares of any class or series of Senior Stock, a liquidation
. . .
Item 3.02 Unregistered Sales of Equity Securities
At the closing of the Private Placement, the Company will issue shares of
Preferred Stock and Warrants to the Purchasers in reliance on the exemption from
registration under the Securities Act provided by Section 4(a)(2) of the
Securities Act.
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal
Year
The information set forth under Item 1.01 of this Current Report on Form 8-K is
incorporated by reference into this Item 5.03.
Item 8.01 Other Events
On April 3, 2020, the Company issued a press release (the "Press Release")
announcing the Private Placement. A copy of the Press Release is attached as
Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by
reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit Description
3.1 Articles Supplementary to the Articles of Amendment and Restatement
4.1 Form of Series A Warrant
4.2 Form of Series B Warrant
10.1 Form of Securities Purchase Agreement
10.2 Registration Rights Agreement
99.1 Press Release dated April 3, 2020
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GREAT AJAX CORP. 
