ITEM 1.01.
ENTRY INTO A MATERIAL
DEFINITIVE AGREEMENT.
Effective as of November 16, 2021, Orchid Island Capital, Inc.
(the “Company”) and the Company’s external manager, Bimini
Advisors, LLC (the “Manager”), entered into
a Third Amendment (the “Amendment”)
to the Management Agreement between
the Company and the Manager dated February 20, 2013
(the “Agreement”).
The Agreement was previously amended on April
1, 2014 and June 30, 2014.
Pursuant to the Agreement, the Manager performs management
and other activities relating to the mortgage-backed
securities
portfolio,
business
activities
and
day-to-day
operations
of
the
Company
as
set
forth
in
the
Management
Agreement,
and
provides the Company
with its management
team. In consideration
for such services, the
Manager receives management
fees
as well
as reimbursement
of certain
costs and
expenses.
Certain repurchase
agreement trading,
clearing and
administrative
services have been provided to the Company by AVM,
L.P.
(“AVM”).
Pursuant to Section 7 of the Agreement, the Company
is required to pay the fees for such services directly to AVM.
Pursuant to
the Amendment,
the Company
and the
Manager have
agreed the
services that
are currently
performed by
AVM
will be performed
by the Manager.
Bimini Capital Management,
Inc., the sole
member of the
Manager (“Bimini”), has
hired
Patrick Doyle,
effective as
of December
1, 2021,
to perform
the services
currently handled
by AVM.
The transition
of such
services from AVM
to the Manager
shall occur on
the first business day
immediately after the
termination of the
Company’s
arrangements with AVM,
which the Company currently expects will occur on approximately March
31, 2022.
Pursuant
to
the
Amendment,
following
termination
of
the
AVM
arrangements
and
in
consideration
for
the
repurchase
agreement trading, clearing and administrative services being performed by the Manager,
the Company will pay the following
fees to the Manager:
●
A daily fee
for repurchase agreement
funding transaction services
that is based
on the outstanding
principal balance
of the Company’s repurchase agreement funding.
The fee for
each day shall be
equal to the product
of the outstanding
principal balance
of repurchase
agreement funding
in place as
of the
end of
such day
and the
applicable basis
point
factor set forth in Appendix A of the Amendment, divided by 360; and
●
A fee for the clearing and operational services provided by personnel of the
Manager equal to $10,000 per month.
Pursuant
to
the
Amendment,
the
Company
is
also
required
to
pay
its
allocable
share
of
fees
incurred
for
safekeeping,
transactions and cash
services provided to the
Company by the Bank
of New York
Mellon (the “BNYM Fee”)
directly to the
Bank of New York
Mellon.
The Company’s allocable share of the BNYM Fee
shall be equal to the Company’s percentage of
all assets under management by the Manager,
inclusive of Bimini’s assets (measured as of
the first day of each month).
The
foregoing
description
of
the
Amendment
is
not
complete
and
is
qualified
in
its
entirety
by
reference
to
the
entire
Amendment, a copy of which is attached hereto as Exhibit 10.1, and incorporated
herein by reference.
ITEM 7.01.
REGULATION FD DISCLOSURE.
The Company
also issued a
press release today
announcing that Mr.
Doyle has been
hired by Bimini
and that the
repurchase
agreement funding
services and
clearing and
operational functions
currently handled
by AVM
are being
internalized by
the
Manager and will be handled by employees of the
Manager following a transition period. This press release is attached
hereto
as Exhibit 99.1 and is incorporated herein by reference.
The information referenced in this
Item
7.01 (including Exhibit 99.1 referenced in
Item 9.01 below) is
being “furnished” under
this Item 7.01. Regulation
FD Disclosure and, as such, shall
not be deemed to be
“filed” for the purposes of
Section 18 of the
Securities Exchange Act of
1934, as amended,
or otherwise subject
to the liabilities
of that Section and
shall not be
incorporated
by reference into any registration statement or other document filed by the Company pursuant to the Securities Act of 1933, as
amended, except as shall be expressly set forth by specific reference in
such filing.
Caution About Forward-Looking Statements.
This Current Report on Form 8-K contains forward-looking statements within
the meaning of the Private Securities Litigation
Reform Act of 1995 and
other federal securities laws, including, but
not limited to, statements about
the timing of the transition
of services from AVM to the Manager.
These forward-looking statements are based upon the Company’s present expectations,
but the Company
cannot assure investors
that actual results
will not vary
from the expectations
contained in the
forward-looking
statements. Investors
should not
place undue
reliance upon
forward looking
statements. For
further discussion
of the
factors
that could affect
outcomes, please refer
to the “Risk
Factors” section of
the Company's Annua
l
Report on Form
10-K for the