DPW Ault Global Holdings Inc

On December 22, 2021 (the “Closing Date”), 1801 Deming, LLC (“1801 Deming”), 2226 Deming, LLC (“2226 Deming”), 8400 Market, LLC (“8400 Market”) and 7605 Walton, LLC (“7605 Walton”, and together with 1801 Deming, 2226 Deming and 8400 Market, the “Property Owners”), which are wholly owned subsidiaries of AGREE Madison, LLC, which is a wholly owned subsidiary of Ault Global Real Estate Equities, Inc., which is a wholly owned subsidiary of Ault Alliance, Inc. (“Ault Alliance”), which is a wholly owned subsidiary of BitNile Holdings, Inc. (the “Company”), entered into construction loan agreements (the “Loan Agreements”) in the aggregate amount of $68,750,000 (the “Loans”) in connection with the acquisition of four hotel properties (the “Properties”), as follows:

The Properties were acquired on the Closing Date for an aggregate purchase price of $69,200,000, of which $2,500,000 was previously funded on deposit, $21,378,000 was paid by the Company on the Closing Date, and the remaining amounts were funded from the Loans. The remaining $23,428,000 of the Loans are available to be drawn upon by the Property Owners towards the completion of the $13,700,000 in property improvement plans (“PIPs”) the Property Owners agreed to undertake, as well as to fund working capital, interest reserves, franchise fees and other costs and expenses related to the acquisition.

The Loans are due on January 1, 2025 (the “Maturity Date”), but may be extended by the Property Owners for two additional 12-month terms, subject to certain terms and conditions as set forth in the Loan Agreements. The Loans accrue interest at a rate equal to the greater of (i) the LIBOR Rate plus 675 basis points or (ii) 7% per annum. The Property Owners will make monthly installment payments of interest only, starting January 1, 2022.

The Property Owners paid a loan commitment fee of 1% of the total amount of the Loans on the Closing Date, and will pay an exit fee of 0.5% of the total amount of the Loans, which is fully earned on the Closing Date but payable on the earlier of the Maturity Date or the date of payment in full of the Loans. The Loans have maximum loan-to-value and loan-to-cost ratios that cannot exceed 75%. The Loans contain customary representations, warranties and covenants for transactions of this nature.

The Loans are secured by a mortgage, assignment of rents and leases, security agreement and fixture filing (the “Mortgage”). In addition, the Property Owners entered into an assignment of leases, rents and profits (the “Assignment”) to secure the obligations due under the Loans. Ault Alliance also provided a completion guaranty (the “Guaranty”) to the lenders for the completion of the PIPs.

The foregoing descriptions of the Loan Agreement, Mortgage, Assignment and Guaranty do not purport to be complete and are qualified in their entirety by reference to their respective forms which are annexed hereto as Exhibits 10.1, 10.2, 10.3 and 10.4, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.  The foregoing does not purport to be a complete description of the rights and obligations of the parties thereunder and such descriptions are qualified in their entirety by reference to such exhibits.