Presidio Property Trust, Inc 8-K, filed Oct 14, 2022
Presidio Property Trust, Inc. (SQFT)
About this 8-K
Presidio Property Trust, Inc filed this 8-K on October 14, 2022, reporting on events of October 12, 2022.
Items reported
- Item 1.01: Entered into a material agreement
- Item 2.03: New debt or off-balance-sheet obligation
- Item 8.01: Other events
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Item 1.01 Entry into a Material Definitive Agreement.
On October 12, 2022, certain subsidiaries of Presidio Property Trust, Inc. (the “Company”), NETREIT MODEL HOMES, LLC (“NMH”), DUBOSE MODEL HOME INVESTORS #202 LP, a California limited partnership (“Dubose #202”), DUBOSE MODEL HOME INVESTORS #203 LP, a California limited partnership (“Dubose #203”), DUBOSE MODEL HOME INVESTORS 204, LP, a California limited partnership (“Dubose #204”), DUBOSE MODEL HOME INVESTORS #205, LP, a California limited partnership (“Dubose #205”) and DUBOSE MODEL HOME INVESTORS #206, LP, a California limited partnership (“Dubose #206”, and together with NMH, Dubose #202, Dubose #203, Dubose #204 and Dubose #205, collectively, “Borrowers” and each a “Borrower”) and FIRST HORIZON BANK (“Lender”) entered into the tenth amendment (“Amendment”) to their loan agreement, dated as of February 26, 2016, which was previously amended by the first nine amendments dated March 14, 2016, June 29, 2016, April 11, 2017, February 20, 2018, April 11, 2018, April 11, 2019, May 22, 2020, June 26, 2020, and August 19, 2021 (as amended, the “Loan Agreement”). The Amendment is effective August 17, 2022.
The Amendment extends the Loan Agreement through October 12, 2023, from August 17, 2022, and requires that the Borrowers maintain a quarterly debt service coverage ratio, in the aggregate, of no less than 1.10 to 1.00. The Amendment further provides that the interest rate shall be equal to the lesser of (a) the maximum rate permitted by applicable law or (b) the greater of (i) the sum of the Index Rate (as defined in the Loan Agreement) then in effect on the date Borrower directs Lender to fix the interest rate for an impending advance plus 2.25% and (ii) 3.00% per year; provided, however, that such fixing of the interest rate shall not be effective for more than 30 days and upon the expiration of such 30 day period, the interest rate shall be reset five business days prior to the date of such advance.
In connection with the Amendment, also on October 12, 2022, the Company executed a Guaranty Agreement effective August 17, 2022 (the “Guaranty Agreement”), pursuant to which it guaranteed to Lender the payment and performance of the Borrowers’ obligations under the Loan Agreement, up to 15% of the total outstanding principal, interest, fees and other obligations owed under the Loan Agreement.
The foregoing summaries of the Loan Amendment and Guaranty are qualified in their entirety by reference to the Amendment and Guaranty Agreement, copies of which are attached hereto as Exhibits 10.1 and 10.2 and incorporated herein by reference, and by reference to the original loan agreement and prior amendments, copies of which were filed as exhibits to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 25, 2021 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 set forth in response to Item 1.01 of this Form 8-K is incorporated by reference in response to this Item 2.03.
Item 8.01 Other Events.
On October 14, 2022, the Company issued a press release announcing the Amendment. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated by reference herein.
The information in this Item 8.01 of this Current Report on Form 8-K, including the information contained in the press release, is being furnished pursuant to Item 8.01 “Other Events,” and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and is not incorporated by reference into any of the filings of the Company under the Securities Act of 1933, as amended or the Exchange Act, whether made before or after the date hereof, regardless of any general incorporation language in any such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
SIGNATURE
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.
| PRESIDIO PROPERTY TRUST, INC. | ||
| By: | /s/ Adam Sragovicz | |
| Name: | Adam Sragovicz | |
| Title: | Chief Financial Officer | |
| Dated: October 14, 2022 | ||
Exhibit 10.1
TENTH AMENDMENT TO LOAN AGREEMENT
THIS TENTH AMENDMENT TO LOAN AGREEMENT (this “Amendment”), dated as of August 17, 2022, is among NETREIT DUBOSE MODEL HOME REIT, LP, a Delaware limited partnership (“NetREIT Dubose”), NETREIT MODEL HOMES, INC., a Delaware corporation, formerly NETREIT MODEL HOMES, LLC (“NMH”), DUBOSE MODEL HOME INVESTORS #202 LP, a California limited partnership (“Dubose #202”), DUBOSE MODEL HOME INVESTORS #203 LP, a California limited partnership (“Dubose #203”), DUBOSE MODEL HOME INVESTORS #204, LP, a California limited partnership (“Dubose #204”), DUBOSE MODEL HOME INVESTORS #205, LP, a California limited partnership (“Dubose #205”), and DUBOSE MODEL HOME INVESTORS #206, LP, a California limited partnership (“Dubose #206”, and together with NetREIT Dubose, NMH, Dubose #202, Dubose #203, Dubose #204, and Dubose #205 collectively, “Borrowers”), and FIRST HORIZON BANK (“Lender”).
RECITALS:
A. Borrowers and Lender entered into that certain Loan Agreement dated as of February 26, 2016, as amended by that certain First Amendment to the Loan Agreement dated as of March 14, 2016, by that certain Second Amendment to Loan Agreement dated as of June 29, 2016, by that certain Third Amendment to Loan Agreement dated as of April 11, 2017, by that certain Joinder and Fourth Amendment to Loan Agreement dated as of February 20, 2018, by that certain Fifth Amendment to Loan Agreement dated as of April 11, 2018, by that certain Joinder and Sixth Amendment to Loan Agreement dated as of April 11, 2019, by that certain Joinder and Seventh Amendment to Loan Agreement dated as May 22, 2020, Eighth Amendment to Loan Agreement dated as of June 26, 2020, and Ninth Amendment to Loan Agreement dated as of February 26, 2021 (as amended, the “Agreement”).
B. Pursuant to the Agreement, PRESIDIO PROPERTY TRUST, INC., a Maryland corporation, formerly NETREIT, INC. (“Guarantor”) executed that certain Guaranty Agreement dated as of February 26, 2016 (the “Guaranty Agreement”) pursuant to which Guarantor guaranteed to Lender the payment and performance of the Obligations (as defined in the Agreement).
C. Borrower and Lender now desire to amend the Agreement as herein set forth.
NOW, THEREFORE, in consideration of the premises herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE
I.
Definitions
Section 1.1 Definitions. Capitalized terms used in this Amendment, to the extent not otherwise defined herein, shall have the meanings given to such terms in the Agreement, as amended hereby.
ARTICLE
II.
Amendments
Section 2.1 Omnibus Amendment. Effective as of the date hereof, NETREIT DUBOSE MODEL HOME REIT, LP is deleted as a Borrower and as a party to the Loan Agreement.
Section 2.2 Amendment to Certain Definitions. Effective as of the date hereof, the definitions of the following terms contained in Section 1.1 of the Agreement are amended to read in their respective entireties as follows:
“Debt Service Coverage Ratio” means, in the aggregate, for all Borrowers, (a) the quarterly scheduled rental income under all leases of model homes, less operating expenses (excluding depreciation, amortization, interest expense and income taxes), divided by (b) the quarterly debt service for all model homes.
“Index Rate” means, on any day, the most recent three (3) year U.S. Treasury rate as published in The Wall Street Journal on that day under the section “Key Interest Rates,” the category “Interest Rate Swaps,” and the line “3-year” Treasury. If such section of The Wall Street Journal reflects more than one rate as being the “three year Treasury rate”, then the highest rate shall be the Index Rate. On days when The Wall Street Journal is not published, the Index Rate shall be the “three year LIBOR forward swap rate” stated in the most recently published edition of The Wall Street Journal. In the event The Wall Street Journal ceases to be published altogether, or ceases to publish the “three year Treasury rate”, then Lender or its successors or assigns shall establish and use a new Index Rate, in the exercise of its sole discretion, without any notice to Borrowers or any other Person being required. The Index Rate shall automatically fluctuate, upward and downward, without notice to Borrowers or any other Person, as and in the amount the said published “three year Treasury rate” shall fluctuate. The Index Rate is a reference rate and does not necessarily represent Lender’s best or lowest rate or a favored rate, and Lender disclaims any statement, representation or warranty to the contrary.
“Termination Date” means 11:00 a.m. on October 12, 2023 or such earlier date on which the Guidance Amount terminates as provided in this Agreement.
Section 2.3 Amendment to Section 2.3. Effective as of the date hereof, Section 2.3 of the Agreement is amended to read in its entirety as follows:
Section 2.3 Interest. The unpaid principal amount of any Advance shall bear interest prior to maturity at a fixed rate per annum equal to the lesser of (a) the Maximum Rate or (b) the greater of (i) the sum of the Index Rate then in effect on the date Borrower directs Lender to fix the interest rate for an impending Advance plus two and one-fourth percent (2.25%) and (ii) three percent (3.00%) per annum; provided, however, that such fixing of the Interest Rate shall not be effective for more than thirty (30) days and upon the expiration of such thirty (30) day period, the Index Rate shall be reset five (5) Business Days prior to the date of such Advance. Notwithstanding the foregoing, if an Event of Default has occurred and is continuing, the outstanding principal of all Advances (and accordingly, all Notes) shall bear interest at the Default Rate, and shall be payable from time to time upon demand.
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Section 2.4 Amendment to Section 2.4. Effective as of the date hereof, Section 2.4 of the Agreement is amended to read in its entirety as follows:
Section 2.4. Repayment of Advances/Option to Extend. (a) The principal amount of, and accrued and unpaid interest on, each Advance (and, therefore, the Note evidencing such Advance) shall be due and payable as follows:
(i) Twenty-nine (29) monthly installments principal and interest each in an amount sufficient to amortize the principal amount of such Advance over a period of twenty (20) years at the interest rate applicable to such Advance shall be due and payable monthly on the fifteenth (15th) day of each month, commencing on the fifteenth (15th) day of the month immediately following the month in which of such Advance was made; and
(ii) A final installment in the amount of all outstanding principal of and accrued unpaid interest on such Advance shall be due and payable on the fifteenth (15th) day of the thirtieth (30th) month immediately following the month in which such Advance was made.
(b) Provided no Event of Default or Unmatured Event of Default has previously occurred or has occurred and is continuing, upon the written request of the applicable Borrower given in the manner specified below, Lender agrees to extend the maturity date of any Note executed in connection with an Advance for up to two (2) fifteen (15) month periods (the “Extension Option”), provided each of the following terms and conditions are met in connection with each Extension Option:
(i) The applicable Borrower requests in writing that Lender extend such Note in an amount not to exceed the unpaid principal balance of such Note (the “Extension Amount”) at least sixty (60) days (but not more than ninety (90) days) prior to the commencement of such extension period.
(ii) Lender shall have received each Borrower’s and Guarantor’s current financial statements (bearing a date no more than ninety (90) days prior to the commencement of the extension period), certified as correct by such Person. No condition shall then exist which would cause a Material Adverse Effect upon any Borrower or Guarantor.
(iii) The applicable Borrower executes an extension and modification agreement (in form and substance acceptable to Lender providing for the payment by such Borrower of monthly installments of principal and interest based on a twenty (20) year mortgage amortization of the Extension Amount and an interest rate equal to the lesser of (y) the Maximum Rate and (z) the greater of (i) the sum of the Index Rate determined five (5) Business Days prior to the first day of the extension period plus two and one-fourth percent (2.25%) and (ii) three percent (3.00%), as calculated by Lender. The final installment on such Note being extended, which is payable fifteen (15) months after the effective date of such Extension Option, shall be in an amount equal to the outstanding balance of all unpaid principal of the Advance plus accrued and unpaid interest thereon.
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(iv) The applicable Borrower causes the Loan Documents to be modified and extended pursuant to the extension and modification agreement and such other agreements or other documents prepared by Lender’s counsel (but not otherwise increasing the amount of the Obligations so guaranteed), each of which agreements and documents shall be consented and agreed to by Guarantor.
(v) Borrowers pay all title and attorneys’ fees and other reasonable costs incurred by Lender in connection with such renewal.
(vi) There has been no change resulting in a Material Adverse Effect on any Borrower or Guarantor.
Section 2.5 Amendment to Section 2.7. Effective as of the date hereof, Section 2.7 of the Agreement is amended to read in its entirety as follows:
Section 2.7 Appraisal/Mandatory Prepayment. If on the twenty-fifth (25th) month after the date of an Advance, there is a Lease Default or Termination with respect to a Model Home acquired by any Borrower with the proceeds of such Advance, the applicable Borrower shall obtain a new appraisal of such Model Home acquired with the proceeds of such Advance acceptable to Lender, and if the loan to value ratio reflected by such appraisal is less than seventy percent (70%), Borrower shall prepay the Advance which funded the acquisition of such Model Home in an amount which would cause such loan to value ratio not to exceed seventy percent (70%).
Section 2.6 Amendment to Section 8.10. Effective as of the date hereof, Section 2.7 of the Agreement is amended to read in its entirety as follows:
Section 8.10 Debt Service Coverage Ratio. Borrowers shall not permit the Debt Service Coverage Ratio in the aggregate to be less than 1.10 to 1.00. The Debt Service Coverage Ratio shall be tested at the end of each fiscal quarter of Borrowers.
Section 2.7 Amendment to Exhibits. Effective as of the date hereof, (a) Exhibit “B” (Advance Request Form) to the Amendment is amended to conform with Annex “A” to this Amendment and (b).
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ARTICLE
III.
Conditions Precedent
Section 3.1 Conditions. The effectiveness of this Amendment is subject to the receipt by Lender of the following in form and substance satisfactory to Lender:
(a) Certificate - NMH. A certificate of the Secretary or another officer of NMH acceptable to Lender certifying (i) resolutions of the directors or consent of the sole stockholder of NMH which authorize the execution, delivery and performance by NMH of this Agreement and the other Loan Documents to which NMH is or is to be a party and (ii) the names of the officers of NMH authorized to sign this Agreement and each of the other Loan Documents to which NMH is or is to be a party together with specimen signatures of such Persons.
(b) Governmental Certificates - NMH. A certificate issued by the appropriate government official of the state of organization of NMH as to the existence and good standing of NMH.
(c) Certificate - General Partner- Dubose #202, #203, #204, #205 and #206. A certificate of the Secretary or another officer of General Partner-Dubose #202, #203, #204, #205 and #206 acceptable to Lender certifying (i) resolutions of the directors or consent of General Partner-Dubose #202, #203, #204, #205 and #206 which authorize the execution, delivery and performance by Dubose #202, #203, #204, #205 and #206 of this Agreement and the other Loan Documents to which Dubose #202, #203, #204, #205 and #206 is or is to be a party and (ii) the names of the officers of General Partner-Dubose #202, #203, #204, #205 and #206 authorized to sign this Agreement and each of the other Loan Documents to which Dubose #202, #203, #204, #205 and #206 is or is to be a party together with specimen signatures of such Persons.
(d) Governmental Certificates - Dubose #202. A certificate issued by the appropriate government official of the state of organization of Dubose #202 as to the existence and good standing of Dubose #202.
(e) Governmental Certificates - Dubose #203. A certificate issued by the appropriate government official of the state of organization of Dubose #203 as to the existence and good standing of Dubose #203.
(f) Governmental Certificates - Dubose #204. A certificate issued by the appropriate government official of the state of organization of Dubose #204 as to the existence and good standing of Dubose #204.
(g) Governmental Certificates - Dubose #205. A certificate issued by the appropriate government official of the state of organization of Dubose #205 as to the existence and good standing of Dubose #205.
(h) Governmental Certificates - Dubose #206. A certificate issued by the appropriate government official of the state of organization of Dubose #206 as to the existence and good standing of Dubose #206.
(i) Governmental Certificates - General Partner-Dubose #202, #203, #204, #205 and #206. A certificate issued by the appropriate government official of the state of organization of General Partner-Dubose #202, #203, #204, #205 and #206 as to the existence and good standing of General Partner-Dubose #202, #203, #204, #205 and #206.
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(j) Certificate - Guarantor. A certificate of the Secretary or another officer of Guarantor acceptable to Lender certifying (i) resolutions of the directors of Guarantor which authorize the execution, delivery and performance by Guarantor of this Agreement and the other Loan Documents to which Guarantor is or is to be a party and (ii) the names of the officers of Guarantor authorized to sign this Agreement and each of the other Loan Documents to which Guarantor is or is to be a party together with specimen signatures of such Persons.
(k) Governmental Certificates - Guarantor. A certificate issued by the appropriate government official of the state of organization of Guarantor as to the existence and good standing of Guarantor.
(l) Guaranty Agreement. The Guaranty Agreement executed by Guarantor.
(m) Additional Information. Such additional documents, instruments and information as Lender may request.
Section 3.2 Additional Conditions. The effectiveness of this Amendment is also subject to the satisfaction of the additional conditions precedent that (a) the representations and warranties contained herein and in all other Loan Documents, as amended hereby, shall be true and correct as of the date hereof as if made on the date hereof, (b) all proceedings, corporate or otherwise, taken in connection with the transactions contemplated by this Amendment and all documents, instruments and other legal matters incident thereto shall be satisfactory to Lender, and (c) no Event of Default or Unmatured Event of Default shall have occurred and be continuing.
ARTICLE
IV.
Ratifications, Representations, and Warranties
Section 4.1 Ratifications. The terms and provisions set forth in this Amendment shall modify and supersede all inconsistent terms and provisions set forth in the Agreement and except as expressly modified and superseded by this Amendment, the terms and provisions of the Agreement are ratified and confirmed and shall continue in full force and effect. Borrowers and Lender agree that the Agreement as amended hereby shall continue to be the legal, valid and binding obligation of such Persons enforceable against such Persons in accordance with its terms.
Section 4.2 Representations, Warranties and Agreements. Borrowers hereby represent and warrant to Lender that (a) the execution, delivery, and performance of this Amendment and any and all other Loan Documents executed or delivered in connection herewith have been authorized by all requisite corporate action on the part of Borrowers and will not violate the Organizational Documents of Borrowers, (b) the representations and warranties contained in the Agreement as amended hereby, and all other Loan Documents are true and correct on and as of the date hereof as though made on and as of the date hereof, (c) no Event of Default or Unmatured Event of Default has occurred and is continuing, (d) except as disclosed in writing to Lender, Borrowers are in full compliance with all covenants and agreements contained in the Agreement as amended hereby, (e) Borrowers are indebted to Lender pursuant to the terms of the Notes, as the same may have been renewed, modified, extended or rearranged, including, without limitation, any renewals, modifications and extensions made pursuant to this Amendment, (f) the liens, security interests, encumbrances and assignments created and evidenced by the Loan Documents are, respectively, valid and subsisting liens, security interests, encumbrances and assignments and secure the Notes as the same may have been renewed, modified or rearranged, including, without limitation, any renewals, modifications and extensions made pursuant to this Amendment, and (g) Borrowers have no claims, credits, offsets, defenses or counterclaims arising from the Loan Documents or Lender’s performance under the Loan Documents.
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ARTICLE
V.
Miscellaneous
Section 5.1 Survival of Representations and Warranties. All representations and warranties made in this Amendment or any other Loan Documents including any Loan Document furnished in connection with this Amendment shall fully survive the execution and delivery of this Amendment and the other Loan Documents, and no investigation by Lender or any closing shall affect the representations and warranties or the right of Lender to rely on them.
Section 5.2 Reference to Agreement. Each of the Loan Documents, including the Agreement and any and all other agreements, documents, or instruments now or hereafter executed and delivered pursuant to the terms hereof or pursuant to the terms of the Agreement, as amended hereby, are hereby amended so that any reference in such Loan Documents to the Agreement shall mean a reference to the Agreement, as amended hereby.
Section 5.3 Expenses of Lender. As provided in the Agreement, Borrowers agree to pay on demand all costs and expenses incurred by Lender in connection with the preparation, negotiation and execution of this Amendment and the other documents and instruments executed pursuant hereto and any and all amendments, modifications and supplements thereto, including, without limitation, the costs and fees of Lender’s legal counsel, and all costs and expenses incurred by Lender in connection with the enforcement or preservation of any rights under the Agreement, as amended hereby, or any other Loan Document, including, without limitation, the costs and fees of Lender’s legal counsel.
Section 5.4 Severability. Any provision of this Amendment held by a court of competent jurisdiction to be invalid or unenforceable shall not impair or invalidate the remainder of this Amendment and the effect thereof shall be confined to the provision so held to be invalid or unenforceable.
Section 5.5 APPLICABLE LAW. THIS AMENDMENT AND ALL OTHER LOAN DOCUMENTS EXECUTED PURSUANT HERETO SHALL BE DEEMED TO HAVE BEEN MADE AND TO BE PERFORMABLE IN HOUSTON, HARRIS COUNTY, TEXAS AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.
Section 5.6 Successors and Assigns. This Amendment is binding upon and shall inure to the benefit of Lender and Borrowers and their respective successors and assigns, except Borrowers may not assign or transfer any of their respective rights or obligations hereunder without the prior written consent of Lender.
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Section 5.7 Counterparts. This Amendment and the other Loan Documents may be executed in one or more counterparts, each of which when so executed shall be deemed to be an original, but all of which when taken together shall constitute one and the same instrument. Delivery of an executed signature page of this Amendment and/or any other Loan Document by a scanned PDF attached to an e-mail or facsimile transmission shall be effective as delivery of a manually executed counterpart hereof.
Section 5.8 Effect of Waiver. No consent or waiver, express or implied, by Lender to or for any breach of or deviation from any covenant, condition or duty by Borrowers shall be deemed a consent or waiver to or of any other breach of the same or any other covenant, condition or duty.
Section 5.9 Headings. The headings, captions, and arrangements used in this Amendment are for convenience only and shall not affect the interpretation of this Amendment.
Section 5.10 RELEASE. IN CONSIDERATION OF LENDER’S AGREEMENTS CONTAINED HEREIN, EACH OF BORROWERS AND GUARANTOR (FOR THEMSELVES AND ON BEHALF OF THEIR DIRECTORS, MEMBERS, SHAREHOLDERS, MANAGERS, OFFICERS, EMPLOYEES, AGENTS, PRINCIPALS, AFFILIATES, PREDECESSORS, HEIRS, LEGAL REPRESENTATIVES, SUCCESSORS AND ASSIGNS) HEREBY WAIVES, AND RELEASES LENDER AND ITS OFFICERS, EMPLOYEES, AGENTS, DIRECTORS, SHAREHOLDERS, SUBSIDIARIES, PREDECESSORS, SUCCESSORS AND ASSIGNS FROM, ANY AND ALL CLAIMS, LOSSES, LIABILITIES, DAMAGES, COSTS AND EXPENSES (INCLUDING ATTORNEYS’ FEES) , WHETHER KNOWN OR UNKNOWN, ASSERTED OR UNASSERTED, THAT DIRECTLY OR INDIRECTLY ARISE FROM OR RELATE TO (A) THE NEGOTIATION, EXECUTION, PERFORMANCE, ADMINISTRATION OR ENFORCEMENT OF THE AGREEMENT, ANY OTHER RELATED DOCUMENT OR THIS AMENDMENT, (B) ANY OF THE TRANSACTIONS CONTEMPLATED BY THE AGREEMENT, ANY OTHER RELATED DOCUMENT OR THIS AMENDMENT OR (C) ANY BREACH BY BORROWERS OR ANY GUARANTOR OF ANY COVENANT, AGREEMENT OR REPRESENTATION CONTAINED IN THE AGREEMENT, ANY OTHER RELATED DOCUMENT OR THIS AMENDMENT.
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Section 5.11 INDEMNIFICATION. EACH OF BORROWERS AND GUARANTOR, INDIVIDUALLY AND ON BEHALF OF ITS DIRECTORS, MEMBERS, SHAREHOLDERS, MANAGERS, OFFICERS, EMPLOYEES, AGENTS, PRINCIPALS, AFFILIATES, PREDECESSORS, HEIRS, LEGAL REPRESENTATIVES, SUCCESSORS AND ASSIGNS (COLLECTIVELY, THE “INDEMNIFYING PARTIES”), HEREBY UNCONDITIONALLY AND IRREVOCABLY INDEMNIFIES AND HOLDS HARMLESS LENDER AND ITS OFFICERS, EMPLOYEES, ATTORNEYS, AGENTS, DIRECTORS, SHAREHOLDERS, SUBSIDIARIES, PREDECESSORS, SUCCESSORS AND ASSIGNS (COLLECTIVELY, THE “INDEMNIFIED PARTIES”) FROM AND AGAINST ANY AND ALL COSTS, EXPENSES, CLAIMS, DEMANDS, DAMAGES, ACTIONS, CAUSES OF ACTION, LIABILITY OR SUITS AT LAW OR IN EQUITY, OF WHATEVER KIND OR NATURE, WHETHER ARISING UNDER STATE OR FEDERAL LAW, RULE OR REGULATION, WHETHER NOW EXISTING OR HEREAFTER ARISING, WHETHER KNOWN OR UNKNOWN OR ASSERTED OR UNASSERTED, THAT DIRECTLY OR INDIRECTLY IN ANY WAY RELATE TO, ARE BASED UPON, OR ARISE OUT OF ANY CIRCUMSTANCE, EVENT, MATTER, OCCURRENCE, COURSE OF DEALING, TRANSACTION, FACT, ACT, OMISSION, OBLIGATION, DUTY, RESPONSIBILITY, WARRANTY, STATEMENT OR REPRESENTATION WHATSOEVER RELATED IN ANY WAY TO (A) THE AGREEMENT, (B) THIS AMENDMENT, (C) ANY OTHER RELATED DOCUMENT OR (D) ANY DOCUMENTS OR INSTRUMENTS EXECUTED IN CONNECTION WITH OR IN EVIDENCE OF ANY INDEBTEDNESS BETWEEN BORROWERS AND ANY GUARANTOR AND LENDER (ALL OF WHICH CLAIMS ARE REFERRED TO COLLECTIVELY AS THE “INDEMNIFIED CLAIMS”), INCLUDING, WITH RESPECT TO ALL OF THE ABOVE, INDEMNIFIED CLAIMS WHICH AROSE FROM THE NEGLIGENCE OF AN INDEMNIFIED PARTY, PROVIDED THAT THE OBLIGATIONS OF THE INDEMNIFYING PARTIES UNDER THIS SECTION SHALL NOT APPLY TO THE EXTENT AN INDEMNIFIED CLAIM AROSE FROM AN INDEMNIFIED PARTY’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. EACH INDEMNIFYING PARTY HEREBY COVENANTS AND AGREES NOT TO IN ANY MANNER WHATSOEVER SUE ANY INDEMNIFIED PARTY IN ANY COURT OR TRIBUNAL OR BRING ANY ACTION, LAWSUIT OR CAUSE OF ACTION (WHETHER BY WAY OF DIRECT ACTION, COUNTERCLAIM, CROSSCLAIM OR INTERPLEADER) AGAINST ANY INDEMNIFIED PARTY IN ANY MANNER WHATSOEVER BASED UPON ANY MATTER DIRECTLY OR INDIRECTLY RELATED TO ANY INDEMNIFIED CLAIM.
Section 5.12 BINDING ARBITRATION. (a) AS DETAILED IN THE FOLLOWING PARAGRAPHS, UNDER THIS PROVISION, BORROWERS AND LENDER EXPRESSLY WAIVE RIGHTS TO PURSUE OR RESOLVE DISPUTES BETWEEN THEM IN COURT OR IN A CLASS ACTION (REGARDLESS OF WHETHER THAT CLASS ACTION IS BROUGHT IN COURT OR IN ARBITRATION).
(b) DISPUTES, CLAIMS, OR CONTROVERSIES (HEREINAFTER “DISPUTES”) BETWEEN OR AMONG BORROWERS AND LENDER ARISING OUT OF OR RELATED TO THIS AMENDMENT, THE AGREEMENT AND/OR ANY OTHER LOAN DOCUMENT TO WHICH BORROWERS ARE A PARTY SHALL BE RESOLVED BY BINDING ARBITRATION. DISPUTES SHALL INCLUDE ALL CLAIMS, COUNTERCLAIMS, CROSS-CLAIMS, THIRD PARTY CLAIMS, INTERPLEADERS, OR CONTROVERSIES ARISING OUT OF OR RELATING TO THIS AMENDMENT, THE AGREEMENT, ANY OTHER LOAN DOCUMENT AND/OR ANY ACTION TAKEN (OR ANY OMISSION TO TAKE ANY ACTION) IN CONNECTION WITH THE FOREGOING. DISPUTES SHALL BE SUBJECT TO BINDING ARBITRATION REGARDLESS OF THE NATURE OF THE CAUSES OF ACTION ASSERTED OR THE RELIEF OR REMEDY SOUGHT. DISPUTES HEREUNDER INCLUDE NOT ONLY DISPUTES THAT BORROWERS AND LENDER MAY HAVE AGAINST EACH OTHER, BUT ALSO DISPUTES THAT BORROWERS AND LENDER MAY HAVE AGAINST EACH OTHER’S AFFILIATES, PREDECESSORS, SUCCESSORS, ASSIGNS, DIRECTORS, OFFICERS, EMPLOYEES, AGENTS AND REPRESENTATIVES.
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(c) BORROWERS AND LENDER AGREE THAT ARBITRATION REPLACES THE RIGHT TO GO TO COURT, AND THUS THE PARTIES WAIVE ANY RIGHT TO HAVE DISPUTES TRIED BEFORE A JUDGE OR A JURY.
(d) BORROWERS AND LENDER ALSO AGREE THAT NEITHER PARTY WILL BE ABLE TO PURSUE DISPUTES AS A CLASS ACTION OR OTHER REPRESENTATIVE ACTION (SUCH AS AN ACTION IN THE FORM OF A PRIVATE ATTORNEY GENERAL) IN COURT OR IN ARBITRATION, AND THE PARTIES WAIVE THE RIGHT TO DO SO. IF THE PRECEDING SENTENCE IS HELD TO BE INVALID BY A COURT OF LAW, THEN ANY CLASS OR REPRESENTATIVE ACTION WILL NOT BE RESOLVED THROUGH ARBITRATION AND WILL BE RESOLVED IN COURT.
(e) Because this arbitration provision is made pursuant to transactions involving interstate commerce, the parties acknowledge and agree that it shall be governed by the Federal Arbitration Act, 9 U.S.C. §§ 1, et seq., as the same may be amended from time to time.
(f) The party pursuing Disputes in arbitration must pursue the Disputes before the American Arbitration Association (“AAA”) under the AAA Commercial Finance rules (the “Commercial Finance Rules”). The Commercial Finance Rules and related forms may be obtained from and Disputes may be filed at American Arbitration Association, 335 Madison Avenue, Floor 10, New York, NY 10017-4605, 800-778-7879, www.adr.org. Any arbitration hearing shall be held at a place chosen by the arbitrator(s) or AAA within the federal district in which Borrowers’ principal place of business is located, or at some other place to which Lender and Borrowers agree in writing. Judgment upon any arbitration award may be entered in any court having jurisdiction.
(g) In arbitration, resolution of Disputes shall be based solely upon the law of the State of Texas and, where applicable, the United States of America. The arbitrator or arbitrators may not add to, modify, invalidate, or ignore any provision of this agreement or the controlling law. Defenses based on statutes of limitation, estoppel, waiver, laches and similar doctrines, that would otherwise be applicable to an action brought by a party, shall be applicable in any such arbitration proceeding. In the event of any conflict between the Commercial Finance Rules and this arbitration provision, the terms of this arbitration provision control.
(h) This arbitration provision shall survive termination of the Agreement. If any portion of this provision is deemed invalid or unenforceable, the remaining portions shall nevertheless remain in force.
Section 5.13 WAIVER OF JURY TRIAL. IN THE EVENT THAT THE FOREGOING BINDING ARBITRATION PROVISION IS DEEMED UNENFORCEABLE, AND THUS LENDER AND BORROWERS ARE REQUIRED TO LITIGATE IN COURT, LENDER AND BORROWERS HEREBY WAIVE THE RIGHT TO ANY JURY TRIAL IN ANY ACTION OR PROCEEDING BETWEEN THE PARTIES, WHETHER ARISING OUT OF OR RELATING TO THIS AMENDMENT, THE AGREEMENT OR ANY OTHER LOAN DOCUMENT BROUGHT BY EITHER PARTY AGAINST THE OTHER.
Section 5.14 ENTIRE AGREEMENT. THIS AMENDMENT AND ALL OTHER INSTRUMENTS, DOCUMENTS, AND AGREEMENTS EXECUTED AND DELIVERED IN CONNECTION WITH THIS AMENDMENT EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF AND THEREOF AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THIS AMENDMENT AND THE OTHER INSTRUMENTS, DOCUMENTS AND AGREEMENTS EXECUTED AND DELIVERED IN CONNECTION WITH THIS AMENDMENT, AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES HERETO.
[REMAINDER OF PAGE INTENTIONALLY OMITTED]
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Executed as of the date first written above.
| BORROWERS: | |
| NETREIT DUBOSE MODEL HOME REIT, LP | |
| (executing solely to confirm it is no longer a | |
| “Borrower” or a party to the Loan Agreement) |
| By: | NetREIT Dubose Model Home REIT, | |
| Inc., its general partner |
| By: | ||
| Steve Hightower | ||
| Executive Vice President |
| NETREIT MODEL HOMES, INC. | ||
| By: | ||
| Steve Hightower | ||
| Executive Vice President | ||
| DUBOSE MODEL HOME INVESTORS #202 LP | ||
| By: | Dubose Advisors, LLC, | |
| its general partner | ||
| By: | ||
| Steve Hightower | ||
| Executive Vice President |
| DUBOSE MODEL HOME INVESTORS #203 LP | ||
| By: | Dubose Advisors, LLC, | |
| its general partner | ||
| By: | ||
| Steve Hightower | ||
| Executive Vice President |
[Signature Page to Tenth Amendment to Loan Agreement]
| DUBOSE MODEL HOME INVESTORS #204, LP | ||
| By: | Dubose Advisors, LLC, | |
| its general partner | ||
| By: | ||
| Steve Hightower | ||
| Executive Vice President |
| DUBOSE MODEL HOME INVESTORS #205, LP | ||
| By: | Dubose Advisors, LLC, | |
| its general partner | ||
| By: | ||
| Steve Hightower | ||
| Executive Vice President |
| DUBOSE MODEL HOME INVESTORS #206, LP | ||
| By: | Dubose Advisors, LLC, | |
| its general partner | ||
| By: | ||
| Steve Hightower | ||
| Executive Vice President |
| LENDER: | ||
| FIRST HORIZON BANK | ||
| By: | ||
| Beau Warren | ||
| Vice President | ||
[Signature Page to Tenth Amendment to Loan Agreement]
LIST OF ANNEXES
| Annex | Document | |
| A | Advance Request Form |
Annex A
Advance Request Form
| Annex A - i |
Exhibit 10.2
GUARANTY AGREEMENT
WHEREAS, the execution of this Guaranty Agreement is a condition to FIRST HORIZON BANK (“Lender”) making certain loans to NETREIT MODEL HOMES, INC., a Delaware corporation, formerly NETREIT MODEL HOMES, LLC (“NMH”), DUBOSE MODEL HOME INVESTORS #202 LP, a California limited partnership (“Dubose #202”), DUBOSE MODEL HOME INVESTORS #203 LP, a California limited partnership (“Dubose #203”), DUBOSE MODEL HOME INVESTORS 204, LP, a California limited partnership (“Dubose #204”), DUBOSE MODEL HOME INVESTORS #205, LP, a California limited partnership (“Dubose #205”) and DUBOSE MODEL HOME INVESTORS #206, LP, a California limited partnership (“Dubose #206”, and together with NMH, Dubose #202, Dubose #203, Dubose #204 and Dubose #205, collectively, “Borrowers” and each a “Borrower”), pursuant to that certain Loan Agreement dated as of February 26, 2016, between Borrowers and Lender as amended by that certain First Amendment to Loan Agreement dated as of March 14, 2016, Second Amendment to Loan Agreement dated as of June 29, 2016, Third Amendment to Loan Agreement dated as of April 11, 2017, Joinder and Fourth Amendment to Loan Agreement dated as of February 20, 2018, Fifth Amendment to Loan Agreement dated as of April 11, 2018, Joinder and Sixth Amendment to Loan Agreement dated as of April 11, 2019, Joinder and Seventh Amendment to Loan Agreement dated as of May 22, 2020, Eighth Amendment Loan Agreement dated as of June 26, 2020, Ninth Amendment to Loan Agreement dated as of April 11, 2021 and Tenth Amendment to Loan Agreement dated as of August 17, 2022 (such Loan Agreement as amended and as may hereafter be amended or modified from time to time, is hereinafter referred to as the “Loan Agreement”);
NOW, THEREFORE, for valuable consideration, the receipt and adequacy of which are hereby acknowledged, the undersigned, PRESIDIO PROPERTY TRUST, INC., a Maryland corporation, formerly NETREIT, INC. (the “Guarantor”), hereby irrevocably and unconditionally guarantees to Lender the full and prompt payment and performance of the Guaranteed Indebtedness (hereinafter defined); provided, however, that notwithstanding any provision of this Guaranty Agreement to the contrary, the obligation of the Guarantor to pay the Guaranteed Indebtedness pursuant to this Guaranty Agreement, shall be limited to an amount equal to fifteen percent (15%) of the Total Guaranteed Indebtedness (hereinafter defined). This Guaranty Agreement shall be upon the following terms:
1. The term “Guaranteed Indebtedness”, as used herein means all of the “Obligations”, as defined in the Loan Agreement. The term “Guaranteed Indebtedness” shall include any and all post-petition interest and expenses (including attorneys’ fees) whether or not allowed under any bankruptcy, insolvency, or other similar law. As of the date of this Guaranty Agreement, the Obligations include, but are not limited to, the indebtedness evidenced by the Notes (as defined in the Loan Agreement). The term “Total Guaranteed Indebtedness”, as used herein, means an amount equal to the sum of (a) the total outstanding principal balance of the Notes at the time demand is made on Guarantor, plus (b) accrued interest on the Notes determined at the time of demand on Guarantor and adjusted through the date of actual collection, plus (c) costs of collection determined at the time of demand on Guarantor and adjusted through the date of actual collection, plus (d) any other Obligations outstanding at the time demand is made on Guarantor.
2. This instrument shall be an absolute, continuing, irrevocable, and unconditional guaranty of payment and performance, and not a guaranty of collection, and Guarantor shall remain liable on its obligations hereunder until the payment and performance in full of the Guaranteed Indebtedness. No set-off, counterclaim, recoupment, reduction, or diminution of any obligation, or any defense of any kind or nature which Borrowers, or any of them, may have against Lender or any other party, or which Guarantor may have against Borrowers, or any of them, Lender, or any other party, shall be available to, or shall be asserted by, Guarantor against Lender or any subsequent holder of the Guaranteed Indebtedness or any part thereof or against payment of the Guaranteed Indebtedness or any part thereof.
3. If Guarantor becomes liable for any indebtedness owing by Borrowers, or any of them, to Lender by endorsement or otherwise, other than under this Guaranty Agreement, such liability shall not be in any manner impaired or affected hereby, and the rights of Lender hereunder shall be cumulative of any and all other rights that Lender may ever have against Guarantor. The exercise by Lender of any right or remedy hereunder or under any other instrument, or at law or in equity, shall not preclude the concurrent or subsequent exercise of any other right or remedy.
4. In the event of default by any Borrower in payment or performance of the Guaranteed Indebtedness, or any part thereof, when such Guaranteed Indebtedness becomes due, whether by its terms, by acceleration, or otherwise, Guarantor shall promptly pay the amount due thereon to Lender without notice or demand in lawful currency of the United States of America and it shall not be necessary for Lender, in order to enforce such payment by Guarantor, first to institute suit or exhaust its remedies against any Borrower or others liable on such Guaranteed Indebtedness, or to enforce any rights against any collateral which shall ever have been given to secure such Guaranteed Indebtedness. Until the Guaranteed Indebtedness is paid in full and a period of ninety (90) days has passed following such payment, Guarantor waives any and all rights it may now or hereafter have under any agreement or at law or in equity (including, without limitation, any law subrogating the Guarantor to the rights of Lender) to assert any claim against or seek contribution, indemnification or any other form of reimbursement from any Borrower or any other party liable for payment of any or all of the Guaranteed Indebtedness for any payment made by Guarantor under or in connection with this Guaranty Agreement or otherwise.
5. If acceleration of the time for payment of any amount payable by any Borrower under the Guaranteed Indebtedness is stayed upon the insolvency, bankruptcy, or reorganization of any Borrower, all such amounts otherwise subject to acceleration under the terms of the Guaranteed Indebtedness shall nonetheless be payable by Guarantor hereunder forthwith on demand by Lender.
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6. Guarantor hereby agrees that its obligations under this Guaranty Agreement shall not be released, discharged, diminished, impaired, reduced, or affected for any reason or by the occurrence of any event, including, without limitation, one or more of the following events, whether or not with notice to or the consent of Guarantor: (a) the taking or accepting of collateral as security for any or all of the Guaranteed Indebtedness or the release, surrender, exchange, or subordination of any collateral now or hereafter securing any or all of the Guaranteed Indebtedness; (b) any partial release of the liability of Guarantor hereunder, or the full or partial release of any other guarantor or obligor from liability for any or all of the Guaranteed Indebtedness; (c) any disability of any Borrower, or the dissolution, insolvency, or bankruptcy of any Borrower, Guarantor, or any other party at any time liable for the payment of any or all of the Guaranteed Indebtedness; (d) any renewal, extension, modification, waiver, amendment, or rearrangement of any or all of the Guaranteed Indebtedness or any instrument, document, or agreement evidencing, securing, or otherwise relating to any or all of the Guaranteed Indebtedness; (e) any adjustment, indulgence, forbearance, waiver, or compromise that may be granted or given by Lender to any Borrower, Guarantor, or any other party ever liable for any or all of the Guaranteed Indebtedness; (f) any neglect, delay, omission, failure, or refusal of Lender to take or prosecute any action for the collection of any of the Guaranteed Indebtedness or to foreclose or take or prosecute any action in connection with any instrument, document, or agreement evidencing, securing, or otherwise relating to any or all of the Guaranteed Indebtedness; (g) the unenforceability or invalidity of any or all of the Guaranteed Indebtedness or of any instrument, document, or agreement evidencing, securing, or otherwise relating to any or all of the Guaranteed Indebtedness; (h) any payment by any Borrower or any other party to Lender is held to constitute a preference under applicable bankruptcy or insolvency law or if for any other reason Lender is required to refund any payment or pay the amount thereof to someone else; (i) the settlement or compromise of any of the Guaranteed Indebtedness; (j) the non-perfection of any security interest or lien securing any or all of the Guaranteed Indebtedness; (k) any impairment of any collateral securing any or all of the Guaranteed Indebtedness; (l) the failure of Lender to sell any collateral securing any or all of the Guaranteed Indebtedness in a commercially reasonable manner or as otherwise required by law; (m) any material change in the corporate existence, structure, or ownership of any Borrower; or (n) any other circumstance which might otherwise constitute a defense available to, or discharge of, any Borrower or Guarantor.
7. Guarantor represents and warrants to Lender set forth below:
(1) Guarantor is a corporation duly organized, validly existing and in good standing under the laws of the state of its incorporation, is qualified to do business in all jurisdictions in which the nature of the business conducted by it makes such qualification necessary and where failure to so qualify would have a material adverse effect on its business, financial condition, or operations.
(2) Guarantor has the corporate power, authority and legal right to execute, deliver, and perform its obligations under this Guaranty Agreement and this Guaranty Agreement constitutes the legal, valid, and binding obligation of Guarantor, enforceable against Guarantor in accordance with its respective terms, except as enforceability thereof may be limited by bankruptcy, insolvency, or other laws of general application relating to the enforcement of creditor’s rights.
(3) The execution, delivery, and performance by Guarantor of this Guaranty Agreement have been duly authorized by all requisite action on the part of Guarantor and do not and will not violate or conflict with the Organizational Documents (as defined in the Loan Agreement) of Guarantor or any law, rule, or regulation or any order, writ, injunction or decree of any court, governmental authority, or arbitrator, and do not and will not conflict with, result in a breach of, or constitute a default under, or result in the imposition of any lien upon any of the revenues or assets of Guarantor pursuant to the provisions of any indenture, mortgage, deed of trust, security agreement, franchise, permit, license, or other instrument or agreement by which Guarantor or its properties is bound.
| - 3 - |
(4) No authorization, approval, or consent of, and no filing or registration with, any court, governmental authority, or third party is necessary for the execution, delivery or performance by Guarantor of this Guaranty Agreement or the validity or enforceability thereof.
(5) The value of the consideration received and to be received by Guarantor as a result of Borrowers and Lender entering into the Loan Agreement and Guarantor executing and delivering this Guaranty Agreement is reasonably worth at least as much as the liability and obligation of Guarantor hereunder, and such liability and obligation and the Loan Agreement have benefitted and may reasonably be expected to benefit Guarantor directly or indirectly.
(6) Guarantor represents and warrants to Lender that Guarantor is not insolvent, Guarantor’s liabilities do not exceed its assets, and Guarantor will not be rendered insolvent by the execution and performance of this Guaranty Agreement and the Loan Documents (as defined in the Loan Agreement).
8. Guarantor covenants and agrees that, as long as the Guaranteed Indebtedness or any part thereof is outstanding or Lender has any commitment under the Loan Agreement, Guarantor will observe the covenants set forth below:
(1) Guarantor will deliver to Lender the financial statements of Guarantor described in the Loan Agreement at the times required by the Loan Agreement.
(2) Guarantor will furnish promptly to Lender written notice of the occurrence of any default under this Guaranty Agreement or an Event of Default as defined in the Loan Agreement of which Guarantor has knowledge.
(3) Guarantor will furnish promptly to Lender such additional information concerning Guarantor as Lender may reasonably request.
(4) Guarantor will not dissolve or liquidate.
9. Upon the occurrence of an Event of Default Lender shall have the right to set off and apply against this Guaranty Agreement or the Guaranteed Indebtedness or both, at any time and without notice to Guarantor, any and all deposits (general or special, time or demand, provisional or final) or other sums at any time credited by or owing from Lender to Guarantor whether or not the Guaranteed Indebtedness is then due and irrespective of whether or not Lender shall have made any demand under this Guaranty Agreement. In addition to Lender’s right of setoff and as further security for this Guaranty Agreement and the Guaranteed Indebtedness, Guarantor hereby grants Lender a security interest in all deposits (general or special, time or demand, provisional or final) and all other accounts of Guarantor now or hereafter on deposit with or held by Lender and all other sums at any time credited by or owing from Lender to Guarantor. The rights and remedies of Lender hereunder are in addition to other rights and remedies (including, without limitation, other rights of setoff) which Lender may have. The provisions of this Section 9 are limited to accounts of Guarantor maintained with Lender.
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10. Guarantor hereby agrees that the Subordinated Indebtedness shall be subordinate and junior in right of payment to the prior payment in full of all Guaranteed Indebtedness, and Guarantor hereby assigns the Subordinated Indebtedness to Lender as security for the Guaranteed Indebtedness. If any sums shall be paid to Guarantor by any Borrower or any other person or entity on account of the Subordinated Indebtedness, such sums shall be held in trust by Guarantor for the benefit of Lender and shall forthwith be paid to Lender without affecting the liability of Guarantor under this Guaranty Agreement. For purposes of this Guaranty Agreement, the term “Subordinated Indebtedness” means all indebtedness, liabilities, and obligations of Borrowers, or any of them, to Guarantor, whether such indebtedness, liabilities, and obligations now exist or are hereafter incurred or arise, or whether the obligations of Borrowers, or any of them, thereon are direct, indirect, contingent, primary, secondary, several, joint and several, or otherwise, and irrespective of the person or persons in whose favor such indebtedness, obligations, or liabilities may, at their inception, have been, or may hereafter be created, or the manner in which they have been or may hereafter be acquired by Guarantor.
11. No amendment or waiver of any provision of this Guaranty Agreement or consent to any departure by the Guarantor therefrom shall in any event be effective unless the same shall be in writing and signed by Lender, Borrowers and Guarantor. No failure on the part of Lender to exercise and no delay in exercising, and no course of dealing with respect to, any right, power, or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power, or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, power, or privilege. The rights and remedies herein provided are cumulative and not exclusive of any rights and remedies provided by law.
12. This Guaranty Agreement is for the benefit of Lender and its successors and assigns, and in the event of an assignment of the Guaranteed Indebtedness, or any part thereof, the rights and benefits hereunder, to the extent applicable to the indebtedness so assigned, may be transferred with such indebtedness. This Guaranty Agreement is binding not only on Guarantor, but on Guarantor’s successors and assigns.
13. Guarantor recognizes that Lender is relying upon this Guaranty Agreement and the undertakings of Guarantor hereunder in making extensions of credit to Borrowers under the Loan Agreement and further recognizes that the execution and delivery of this Guaranty Agreement is a material inducement to Lender in entering into the Loan Agreement. Guarantor hereby acknowledges that there are no conditions to the full effectiveness of this Guaranty Agreement.
14. This Guaranty Agreement is executed and delivered as an incident to a lending transaction negotiated, consummated, and performable in Harris County, Texas, and shall be governed by and construed in accordance with the laws of the State of Texas. Any action or proceeding against Guarantor under or in connection with this Guaranty Agreement may be brought in any state or federal court in Harris County, Texas, and Guarantor hereby irrevocably submits to the nonexclusive jurisdiction of such courts, and waives any objection it may now or hereafter have as to the venue of any such action or proceeding brought in such court. Guarantor agrees that service of process upon it may be made by certified or registered mail, return receipt requested, at its address specified in the Loan Agreement. Nothing herein shall affect the right of Lender to serve process in any other manner permitted by law or shall limit the right of Lender to bring any action or proceeding against Guarantor or with respect to any of Guarantor’s property in courts in other jurisdictions. Any action or proceeding by Guarantor against Lender shall be brought only in a court located in Harris County, Texas.
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15. Guarantor shall pay on demand all attorneys’ fees and all other costs and expenses incurred by Lender in connection with the preparation, administration, enforcement, or collection of this Guaranty Agreement.
16. Guarantor hereby waives promptness, diligence, notice of any default under the Guaranteed Indebtedness, demand of payment, notice of acceptance of this Guaranty Agreement, presentment, notice of protest, notice of dishonor, notice of the incurring by any Borrower of additional indebtedness, and all other notices and demands with respect to the Guaranteed Indebtedness and this Guaranty Agreement.
17. The Loan Agreement, and all of the terms thereof, are incorporated herein by reference, the same as if stated verbatim herein, and Guarantor agrees that Lender may exercise any and all rights granted to it under the Loan Agreement and the other Loan Documents without affecting the validity or enforceability of this Guaranty Agreement. Any notices given hereunder shall be given in the manner provided by and to the addresses set forth in the Loan Agreement.
18. Guarantor hereby represents and warrants to Lender that Guarantor has adequate means to obtain from Borrowers on a continuing basis information concerning the financial condition and assets of Borrowers and that Guarantor is not relying upon Lender to provide (and Lender shall have no duty to provide) any such information to Guarantor either now or in the future.
19. Guarantor understands and agrees that (a) Lender’s document retention policy involves the imaging of executed loan documents and the destruction of the paper originals, and (b) Guarantor waives any right that it may have to claim that the imaged copies of the Loan Documents are not originals.
20. This paragraph contains a jury waiver, arbitration clause and a class action waiver. This paragraph should be carefully read.
(1) JURY TRIAL WAIVER. AS PERMITTED BY APPLICABLE LAW, EACH OF GUARANTOR AND LENDER (BY ITS ACCEPTANCE HEREOF) (EACH A “PARTY” AND TOGETHER THE “PARTIES”) WAIVES ITS RESPECTIVE RIGHTS TO A TRIAL BEFORE A JURY IN CONNECTION WITH ANY DISPUTE (HEREINAFTER DEFINED), AND DISPUTES SHALL BE RESOLVED BY A JUDGE SITTING WITHOUT A JURY. IF A COURT DETERMINES THAT THIS PROVISION IS NOT ENFORCEABLE FOR ANY REASON, THEN AT ANY TIME PRIOR TO TRIAL OF THE DISPUTE, BUT NOT LATER THAN THIRTY (30) DAYS AFTER ENTRY OF THE ORDER DETERMINING THIS PROVISION IS UNENFORCEABLE, EITHER PARTY SHALL BE ENTITLED TO MOVE THE COURT FOR AN ORDER COMPELLING ARBITRATION AND STAYING OR DISMISSING SUCH LITIGATION PENDING ARBITRATION (“ARBITRATION ORDER”).
(2) ARBITRATION. If a claim, dispute, or controversy arises between the parties hereto with respect to this Guaranty Agreement, related agreements, or any other agreement or business relationship between the parties hereto whether or not related to the subject matter of this Guaranty Agreement (all of the foregoing, a “Dispute”), and only if a jury trial waiver is not permitted by applicable law or ruling by a court, either party may require that the Dispute be resolved by binding arbitration before a single arbitrator at the request of any party. By agreeing to arbitrate a Dispute, each party gives up any right such party may have to a jury trial, as well as other rights such party would have in court that are not available or are more limited in arbitration, such as the rights to discovery and to appeal.
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Arbitration shall be commenced by filing a petition with, and in accordance with the applicable arbitration rules of, JAMS or National Arbitration Forum (“Administrator”) as selected by the initiating party. If the parties agree, arbitration may be commenced by appointment of a licensed attorney who is selected by the parties and who agrees to conduct the arbitration without an Administrator. Disputes include matters (i) relating to a deposit account, application for or denial of credit, enforcement of any of the obligations either party has to the other party, compliance with applicable laws and/or regulations, performance or services provided under any agreement by any party, (ii) based on or arising from an alleged tort, or (iii) involving either party’s employees, agents, affiliates, or assigns. However, Disputes do not include the validity, enforceability, meaning, or scope of this arbitration provision and such matters may be determined only by a court. If a third party is a party to a Dispute, each party will consent to including the third party in the arbitration proceeding for resolving the Dispute with the third party. Venue for the arbitration proceeding shall be at a location determined by mutual agreement of the parties or, if no agreement, in the city and state where lender or bank is headquartered.
After entry of an Arbitration Order, the non-moving party shall commence arbitration. The moving party shall, at its discretion, also be entitled to commence arbitration but is under no obligation to do so, and the moving party shall not in any way be adversely prejudiced by electing not to commence arbitration. The arbitrator: (i) will hear and rule on appropriate dispositive motions for judgment on the pleadings, for failure to state a claim, or for full or partial summary judgment; (ii) will render a decision and any award applying applicable law; (iii) will give effect to any limitations period in determining any Dispute or defense; (iv) shall enforce the doctrines of compulsory counterclaim, res judicata, and collateral estoppel, if applicable; (v) with regard to motions and the arbitration hearing, shall apply rules of evidence governing civil cases; and (vi) will apply the law of the state specified in the agreement giving rise to the Dispute. Filing of a petition for arbitration shall not prevent any party from (i) seeking and obtaining from a court of competent jurisdiction (notwithstanding ongoing arbitration) provisional or ancillary remedies including but not limited to injunctive relief, property preservation orders, foreclosure, eviction, attachment, replevin, garnishment, and/or the appointment of a receiver, (ii) pursuing non-judicial foreclosure, or (iii) availing itself of any self-help remedies such as setoff and repossession. The exercise of such rights shall not constitute a waiver of the right to submit any Dispute to arbitration.
Judgment upon an arbitration award may be entered in any court having jurisdiction except that, if the arbitration award exceeds $4,000,000.00, any party shall be entitled to a de novo appeal of the award before a panel of three arbitrators. To allow for such appeal, if the award (including Administrator, arbitrator, and attorney’s fees and costs) exceeds $4,000,000.00, the arbitrator will issue a written, reasoned decision supporting the award, including a statement of authority and its application to the Dispute. A request for de novo appeal must be filed with the arbitrator within thirty (30) days following the date of the arbitration award; if such a request is not made within that time period, the arbitration decision shall become final and binding. On appeal, the arbitrators shall review the award de novo, meaning that they shall reach their own findings of fact and conclusions of law rather than deferring in any manner to the original arbitrator. Appeal of an arbitration award shall be pursuant to the rules of the Administrator or, if the Administrator has no such rules, then the JAMS arbitration appellate rules shall apply.
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Arbitration under this provision concerns a transaction involving interstate commerce and shall be governed by the Federal Arbitration Act, 9 U.S.C. § 1 et seq. This arbitration provision shall survive any termination, amendment, or expiration of this Guaranty Agreement. If the terms of this provision vary from the Administrator’s rules, this arbitration provision shall control.
(3) CLASS ACTION WAIVER. EACH PARTY WAIVES THE RIGHT TO LITIGATE IN COURT OR ARBITRATE ANY CLAIM OR DISPUTE AS A CLASS ACTION, EITHER AS A MEMBER OF A CLASS OR AS A REPRESENTATIVE, OR TO ACT AS A PRIVATE ATTORNEY GENERAL.
(4) RELIANCE. Each party (i) certifies that no one has represented to such party that the other party would not seek to enforce jury and class action waivers in the event of suit, and (ii) acknowledges that it and the other party have been induced to enter into this Guaranty Agreement by, among other things, the mutual waivers, agreements, and certifications in this paragraph.
21. (A) AS DETAILED IN THE FOLLOWING PARAGRAPHS, UNDER THIS PROVISION, BOTH GUARANTOR AND LENDER (BY ITS ACCEPTANCE HEREOF) EXPRESSLY WAIVE RIGHTS TO PURSUE OR RESOLVE DISPUTES BETWEEN THEM IN COURT OR IN A CLASS ACTION (REGARDLESS OF WHETHER THAT CLASS ACTION IS BROUGHT IN COURT OR IN ARBITRATION).
(B) DISPUTES, CLAIMS, OR CONTROVERSIES (HEREINAFTER “DISPUTES”) BETWEEN OR AMONG GUARANTOR AND LENDER ARISING OUT OF OR RELATED TO THIS GUARANTY AGREEMENT AND/OR ANY OTHER LOAN DOCUMENT TO WHICH GUARANTOR IS A PARTY SHALL BE RESOLVED BY BINDING ARBITRATION. DISPUTES SHALL INCLUDE ALL CLAIMS, COUNTERCLAIMS, CROSS-CLAIMS, THIRD PARTY CLAIMS, INTERPLEADERS, OR CONTROVERSIES ARISING OUT OF OR RELATING TO THIS GUARANTY AGREEMENT, ANY OTHER LOAN DOCUMENT AND/OR ANY ACTION TAKEN (OR ANY OMISSION TO TAKE ANY ACTION) IN CONNECTION WITH THE FOREGOING. DISPUTES SHALL BE SUBJECT TO BINDING ARBITRATION REGARDLESS OF THE NATURE OF THE CAUSES OF ACTION ASSERTED OR THE RELIEF OR REMEDY SOUGHT. DISPUTES HEREUNDER INCLUDE NOT ONLY DISPUTES THAT GUARANTOR AND LENDER MAY HAVE AGAINST EACH OTHER, BUT ALSO DISPUTES THAT GUARANTOR AND LENDER MAY HAVE AGAINST EACH OTHER’S AFFILIATES, PREDECESSORS, SUCCESSORS, ASSIGNS, DIRECTORS, OFFICERS, EMPLOYEES, AGENTS AND REPRESENTATIVES.
(C) GUARANTOR AND LENDER (BY ITS ACCEPTANCE HEREOF) AGREE THAT ARBITRATION REPLACES THE RIGHT TO GO TO COURT, AND THUS THE PARTIES WAIVE ANY RIGHT TO HAVE DISPUTES TRIED BEFORE A JUDGE OR A JURY.
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(D) GUARANTOR AND LENDER (BY ITS ACCEPTANCE HEREOF) ALSO AGREE THAT NEITHER PARTY WILL BE ABLE TO PURSUE DISPUTES AS A CLASS ACTION OR OTHER REPRESENTATIVE ACTION (SUCH AS AN ACTION IN THE FORM OF A PRIVATE ATTORNEY GENERAL) IN COURT OR IN ARBITRATION, AND THE PARTIES WAIVE THE RIGHT TO DO SO. IF THE PRECEDING SENTENCE IS HELD TO BE INVALID BY A COURT OF LAW, THEN ANY CLASS OR REPRESENTATIVE ACTION WILL NOT BE RESOLVED THROUGH ARBITRATION AND WILL BE RESOLVED IN COURT.
(E) Because this arbitration provision is made pursuant to transactions involving interstate commerce, the parties acknowledge and agree that it shall be governed by the Federal Arbitration Act, 9 U.S.C. §§ 1, et seq., as the same may be amended from time to time.
(F) The party pursuing Disputes in arbitration must pursue the Disputes before the American Arbitration Association (“AAA”) under the AAA Commercial Finance rules (the “Commercial Finance Rules”). The Commercial Finance Rules and related forms may be obtained from and Disputes may be filed at American Arbitration Association, 335 Madison Avenue, Floor 10, New York, NY 10017-4605, 800-778-7879, www.adr.org. Any arbitration hearing shall be held at a place chosen by the arbitrator(s) or AAA within the federal district in which Guarantor’s principal place of business is located, or at some other place to which Lender and Guarantor agree in writing. Judgment upon any arbitration award may be entered in any court having jurisdiction.
(G) In arbitration, resolution of Disputes shall be based solely upon the law of the State of Texas and, where applicable, the United States of America. The arbitrator or arbitrators may not add to, modify, invalidate, or ignore any provision of this agreement or the controlling law. Defenses based on statutes of limitation, estoppel, waiver, laches and similar doctrines, that would otherwise be applicable to an action brought by a party, shall be applicable in any such arbitration proceeding. In the event of any conflict between the Commercial Finance Rules and this arbitration provision, the terms of this arbitration provision control.
(H) This arbitration provision shall survive termination of this Guaranty Agreement. If any portion of this provision is deemed invalid or unenforceable, the remaining portions shall nevertheless remain in force.
22. IN THE EVENT THAT THE FOREGOING BINDING ARBITRATION PROVISION IS DEEMED UNENFORCEABLE, AND THUS LENDER AND GUARANTOR ARE REQUIRED TO LITIGATE IN COURT, LENDER (BY ITS ACCEPTANCE HEREOF) AND GUARANTOR HEREBY WAIVE THE RIGHT TO ANY JURY TRIAL IN ANY ACTION OR PROCEEDING BETWEEN THE PARTIES, WHETHER ARISING OUT OF OR RELATING TO THIS GUARANTY AGREEMENT OR ANY OTHER LOAN DOCUMENT BROUGHT BY EITHER PARTY AGAINST THE OTHER.
23. THIS GUARANTY AGREEMENT EMBODIES THE FINAL, ENTIRE AGREEMENT OF GUARANTOR AND LENDER WITH RESPECT TO GUARANTOR’S GUARANTY OF THE GUARANTEED INDEBTEDNESS AND SUPERSEDES ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OR OTHER EXTRINSIC EVIDENCE OF ANY NATURE. THERE ARE NO ORAL AGREEMENTS BETWEEN GUARANTOR AND LENDER. THIS GUARANTY AGREEMENT MAY NOT BE AMENDED EXCEPT IN WRITING BY GUARANTOR AND LENDER.
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EXECUTED as of August 17, 2022.
| GUARANTOR: | ||
| PRESIDIO PROPERTY TRUST, INC. | ||
| By: | ||
| Name: | ||
| Title: | ||
[Signature Page to Guaranty Agreement – Tenth Amendment]
Exhibit 99.1
Presidio Property Trust Completes Extension of Line of Credit
San Diego, CA – October 14, 2022 – (NASDAQ: SQFT; SQFTP; SQFTW) Presidio Property Trust, Inc. (“Presidio” or the “Company”), an internally managed, diversified real estate investment trust (“REIT”), today announced that it has closed on an amendment to its guidance line of credit (as amended, “the facility”).
The amendment extends the facility through October 12, 2023. The facility provides for up to $30 million in funding for model home acquisitions, subject to various lender terms and conditions.
“As real estate and capital markets are increasingly challenging to navigate, we are pleased to have our model home segment’s facility renewed,” said Jack Heilbron, President and Chief Executive Officer of Presidio Property Trust. “We believe that our model home business will continue to thrive, and look forward to taking advantage of market opportunities,” he added.
First Horizon Bank is acting as the sole lender for the facility.
About Presidio Property Trust
Presidio is an internally managed, diversified REIT with holdings in model home properties which are triple-net leased to homebuilders, office, industrial, and retail properties. Presidio’s model homes are leased to homebuilders located primarily in Texas and Florida. Our office, industrial and retail properties are located primarily in Colorado, with properties also located in Maryland, North Dakota, Texas, and Southern California. While geographical clustering of real estate enables us to reduce our operating costs through economies of scale by servicing a number of properties with less staff, it makes us susceptible to changing market conditions in these discrete geographic areas, including those that have developed as a result of COVID-19. Presidio is also the sponsor of the Special Purpose Acquisition Company (SPAC) Murphy Canyon Acquisition Corp. (NASDAQ: MURF), which currently holds approximately $140 million in trust. Murphy Canyon Acquisition Corp. is a blank check company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. For more information on Presidio, please visit the Company’s website at https://www.PresidioPT.com.
Cautionary Note Regarding Forward-Looking Statements
This press release contains statements that are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and other federal securities laws. Forward-looking statements are statements that are not historical, including statements regarding management’s intentions, beliefs, expectations, representations, plans or predictions of the future, and are typically identified by such words as “believe,” “expect,” “anticipate,” “intend,” “estimate,” “may,” “will,” “should” and “could.” Because such statements include risks, uncertainties and contingencies, actual results may differ materially from those expressed or implied by such forward-looking statements. These forward-looking statements are based upon the Company’s present expectations, but these statements are not guaranteed to occur. Except as required by law, the Company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes. 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 documents filed with the SEC, copies of which are available on the SEC’s website, www.sec.gov.
Investor Relations Contact:
Presidio Property Trust, Inc.
Lowell Hartkorn, Investor Relations
LHartkorn@presidiopt.com
Telephone: (760) 471-8536 x1244