Item
1.01 Entry into a Material Definitive Agreement.
On
August 19, 2021, 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 IBERIABANK, a division of First Horizon Bank (“Lender”) entered into the ninth
amendment (“Amendment”) to their loan agreement, dated as of February 26, 2016, which was previously amended by the first
eight amendments dated March 14, 2016, June 29, 2016, April 11, 2017, February 20, 2018, April 11, 2018, April 11, 2019, May 22, 2020
and June 26, 2020 (as amended, the “Loan Agreement”).
In
connection with the Loan Agreement, PRESIDIO PROPERTY TRUST, INC., a Maryland corporation, formerly NETREIT, INC. (the “Company”)
executed a Guaranty Agreement dated as of February 26, 2016 (the “Guaranty Agreement”) pursuant to which it guaranteed to
Lender the payment and performance of the obligations under the Loan Agreement.
The
Amendment provides for a $30 million loan, less the outstanding principal amount under that certain separate Loan Agreement dated as
of February 15, 2021 between Lender and NMH. The Loan calls for 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 permitted under Texas law, or (b) the greater of (i)
three percent (3.00%) per annum and (ii) 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%); 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. The Amendment provides for a termination date of August 17, 2022.
Under
the terms of the Loan Agreement, Lender agrees to make to Borrower periodic advances, from time to time, with the proceeds from such
advances used for purchase by Borrower of model homes approved by Lender in its reasonable discretion. Principal amounts under the Loan
Agreement will be amortized over a 20-year period. Each advance made by Lender to Borrower will be equal to or lesser than: (a) 70% of
the lesser of the appraisal or the purchase price of the model home purchased by Borrower with the proceeds of such advance, and (b)
the amount which would cause the Lease Payment Coverage Ratio (as defined in the Loan Agreement) for such advance to equal (but not be
less than) 1.25 to 1.00. For each advance made by Lender to Borrower, Borrower will pay an origination fee of 1.0% of the amount of such
Advance. Borrower shall grant to Lender a first priority lien on each model home or on the lease of each model home in connection with
the advance to Borrower to acquire such model home.
If
an event of default occurs, the Lender will be entitled to take various actions, including a default interest rate, acceleration of amounts
due under the loan and foreclosure of any lien granted to Lender to secure payment and performance of the obligations under the Loan
Agreement.
The
foregoing summary of the Loan Agreement and Amendment is qualified in its entirety by reference to the Loan Agreement and Amendment,
copies of which are attached hereto as Exhibits 1.1 and 1.2 and incorporated herein by reference.