CIM COMMERCIAL TRUST CORPORATION (NASDAQ:CMCT) Files An 8-K Material Modification to Rights of Security Holders

ME Staff 8-k
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CIM COMMERCIAL TRUST CORPORATION (NASDAQ:CMCT) Files An 8-K Material Modification to Rights of Security Holders
Item 3.03 Material Modification to Rights of Security Holders.

The information in Item 5.03 below is incorporated herein by reference.

Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

On November15, 2017, CIM Commercial Trust Corporation (the “Company”) filed Articles Supplementary (the “Articles Supplementary”) with the State Department of Assessments and Taxation of Maryland to reclassify 9,000,000 shares of authorized but unissued preferred stock, $0.001 par value per share, of the Company as shares of SeriesL Preferred Stock (the “SeriesL Preferred Stock”).

Subject to the preferential rights of holders of any class or series of capital stock of the Company ranking senior to the SeriesL Preferred Stock and certain conditions as described in the Articles Supplementary, holders of the SeriesL Preferred Stock are entitled to receive if, as and when authorized by the Board of Directors and declared by the Company, preferential cumulative cash distributions in ILS on each share of SeriesL Preferred Stock at the rate of 5.5% per annum of the “SeriesL Stated Value,” which is initially 100 Israeli new shekels (“ILS”) and is subject to adjustment, as converted to U.S. Dollars (“USD”) at the weighted-average exchange rate at which proceeds from the offering of SeriesL Preferred Stock are converted from ILS to USD (the “Initial Exchange Rate”).

The distributions on each share of SeriesL Preferred Stock are cumulative from (and including) the date of issuance and are payable annually on the date selected by the Board of Directors (or its designee) (each, a “SeriesL Distribution Payment Date”), provided that a SeriesL Distribution Payment Date will be no earlier than December1 of the year for which the distribution is declared and no later than January31 of the year following the year for which such distribution is declared. If the Company fails to timely declare distributions or fails to timely pay distributions on the SeriesL Preferred Stock, the annual dividend rate will temporarily increase by 1.0%, up to a maximum rate of 8.5%, as described in the Articles Supplementary.

From and after the fifth anniversary of the date of original issuance the SeriesL Preferred Stock, subject to certain conditions specified in the Articles Supplementary, the Company may redeem shares of SeriesL Preferred Stock at a redemption price equal to 50% of the SeriesL Stated Value (as converted to USD at the Initial Exchange Rate), plus all accrued and unpaid distributions. Additionally, from and after the fifth anniversary of the date of original issuance of the SeriesL Preferred Stock, each holder of shares of SeriesL Preferred Stock will have the right to require the Company to redeem such shares at a redemption price equal to 50% of the SeriesL Stated Value (as converted to USD at the Initial Exchange Rate), plus, provided certain conditions specified in the Articles Supplementary are satisfied as of the applicable redemption date and the Company is otherwise permitted to pay distributions on the SeriesL Preferred Stock, all accrued and unpaid distributions, if any, up to and including the applicable redemption date. Notwithstanding the foregoing, a holder of shares of SeriesL Preferred Stock may require the Company to redeem such shares at any time prior to the fifth anniversary of the date of original issuance of the SeriesL Preferred Stock if (1)the Company does not declare and pay in full the distributions on the SeriesL Preferred Stock for any annual period prior to such fifth anniversary (provided that the first distribution on the SeriesL Preferred Stock is not payable until January2019) and (2)the Company does not declare and pay all accrued and unpaid distributions on the SeriesL Preferred Stock for all past dividend periods prior to the applicable holder redemption date.

The redemption price will be paid at the election of the Company, in its sole discretion, (1)in cash in ILS, based on the Current Exchange Rate (as defined below) on the third TASE Trading Day (as defined below) preceding the redemption payment date, (2)in shares of common stock, $0.001 par value per share, of the Company (the “Common Stock”), based on the lower of (i)the net asset value of the Company per share of Common Stock as most recently published by the Company as of the redemption date and (ii)the 20-day volume-weighted average price per share of the Common Stock as described in the Articles Supplementary, or (3)in any combination of cash, in ILS, and Common Stock, based on the foregoing conversion mechanisms. The “Current Exchange Rate” is the weighted-average exchange rate at which a given distribution or payment is converted from USD to ILS in accordance with the Articles Supplementary. A “TASE Trading Day” is any day on which the TASE is open for trading.

With respect to rights to the payment of dividends and other distributions, the SeriesL Preferred Stock ranks: (1)senior to (i)all classes or series of Common Stock, except with respect to and only to the extent of the minimum dividend on the Common Stock, if any, announced by the Company before the end of the prior fiscal year (the “Initial Dividend”), and (ii)any other class or series of stock of the Company, the terms of which specifically provide that the holders of the SeriesL Preferred Stock are entitled to receive dividends and other distributions in preference or priority to the holders of shares of such class or series; (2)on a parity with any class or series of stock of the Company, the terms of which specifically provide that the holders of such class or series of stock and the SeriesL Preferred Stock are entitled to receive dividends and other distributions on parity and without preference or priority of one over the other (the “Parity Dividend Stock”); and (3)junior to (i)the SeriesA Preferred Stock, $0.001 par value per share, of the Company (the “SeriesA Preferred Stock”), (ii)the Common Stock, with respect to and only to the extent of the Initial Dividend, and (iii)any other class or series of stock of the Company the terms of which specifically provide that the holders of such class or series are entitled to receive dividends and other distributions in preference or priority to the holders of the SeriesL Preferred Stock.

With respect to the distribution of assets upon the liquidation, dissolution or winding up of the Company, the SeriesL Preferred Stock ranks: (1)senior to the Common Stock both (i)to the extent of the SeriesL Stated Value and (ii)following payment of an amount equal to any unpaid Initial Dividend, to the extent of any accrued and unpaid distributions on the SeriesL Preferred Stock, senior to any other class or series of stock of the Company the terms of which specifically provide that the holders of the SeriesL Preferred Stock are entitled to receive amounts distributable upon the liquidation, dissolution or winding up of the Company in preference or priority to the holders of shares of such class or series (the “Junior Liquidation Stock”); (2)on a parity with (i)the SeriesA Preferred Stock, to the extent of the SeriesL Stated Value, and (ii)any other class or series of stock of the Company, the terms of which specifically provide that the holders of such class or series of stock and the SeriesL Preferred Stock are entitled to receive amounts distributable upon the liquidation, dissolution or winding up of the Company in proportion to their respective amounts of liquidation preferences, on parity and without preference or priority of one over the other (the “Parity Liquidation Stock”); and (3)junior to (i)the SeriesA Preferred Stock and the Common Stock, to the extent of the Initial Dividend, with respect to any accrued and unpaid distributions on SeriesL Preferred Stock, and (ii)any class or series of stock of the Company the terms of which specifically provide that the holders of such class or series are entitled to receive amounts distributable upon the liquidation, dissolution or winding up of the Company in preference or priority to the holders of the SeriesL Preferred Stock (the “Senior Liquidation Stock”).

Upon any voluntary or involuntary liquidation, dissolution or winding up of the Company, after satisfaction of liabilities to creditors and subject to the preferential rights of holders of any class or series of Senior Liquidation Stock, before the Company may make or set apart any payment or distribution for the holders of any shares of Junior Liquidation Stock, the holders of shares of the SeriesL Preferred Stock will be entitled to be paid out of the assets of the Company that are legally available for distribution to the stockholders, a liquidation preference equal to the SeriesL Stated Value (as converted to USD at the Initial Exchange Rate) (the “SeriesL Liquidation Preference”). Until the holders of the SeriesL Preferred Stock have been paid the SeriesL Liquidation Preference in full (plus any accrued and unpaid distributions on the Series L Preferred Stock that are payable in accordance with the Articles Supplementary), no payment will be made to any holder of Junior Liquidation Stock upon the liquidation, dissolution or winding up of the Company. If upon the voluntary or involuntary liquidation, dissolution or winding up of the Company, the available assets of the Company, or proceeds thereof, distributable among the holders of the SeriesL Preferred Stock are insufficient to pay in full the SeriesL Liquidation Preference and the liquidating payments on any shares of any class or series of Parity Liquidation Stock (including any accrued and unpaid distributions that are required to be paid in accordance with the terms of such Parity Liquidation Stock), then such assets, or the proceeds thereof, will be distributed among the holders of the SeriesL Preferred Stock and any such Parity Liquidation Stock ratably in the same proportion as the respective amounts that would be payable on such SeriesL Preferred Stock and any such Parity Liquidation Stock if all amounts payable thereon were paid in full.

Prior to the fifth anniversary of the date of original issuance of SeriesL Preferred Stock, the Company will not be permitted to issue any preferred stock ranking senior to or on parity with the SeriesL Preferred Stock (with respect to the payment of dividends, other distributions, liquidation, and/or dissolution or winding up of the Company) unless the Minimum Fixed Charge Coverage Ratio, which is a ratio of (i)the Company’s earnings before interest, taxes, depreciation and amortization to (ii)amounts required to service the Company’s debt, calculated as set forth in the Articles Supplementary, is equal to or greater than 1.25:1.00 for the trailing 12-month period ending on the last day of the quarter preceding the date of such issuance. The Company’s good faith determination of an


About CIM COMMERCIAL TRUST CORPORATION (NASDAQ:CMCT)

CIM Commercial Trust Corporation is engaged in acquiring, owning and operating Class A office investments in urban communities throughout the United States. These communities are located in areas that include traditional downtown areas and suburban main streets. The Company operates in the business segments, including the acquisition, redevelopment, ownership and management of office real estate, multifamily real estate and hotels. Its real estate portfolio consists of over 30 assets. It has approximately 20 office properties (including over two parking garages and over two development sites), totaling approximately 5.6 million rentable square feet, which are approximately 86.9% occupied; multifamily properties, composed of over 930 units, which are approximately 92.4% occupied, and hotels, which have a total of approximately 1,070 rooms. Its office, multifamily and hotel assets are located in over 10 of the United States markets.