August 31, 2022
Generation Income Properties, Inc.
Attention: David Sobelman
401 E. Jackson Street, Suite 3300
Tampa, Florida 33602
RE: COMMITMENT FOR $25,000,000.00 MASTER CREDIT FACILITY
Dear Mr. Sobelman:
American Momentum Bank (hereinafter referred to as “Bank”) is pleased to offer its commitment to make a master credit facility available to Generation Income Properties, L.P., a Delaware limited partnership (“GIP”) in the amount of $25,000,000.00 (the “Facility”), subject to the terms and conditions herein. The Facility shall be utilized to fund the acquisition of income producing real estate properties (each a “Loan” and collectively the “Loans”).
This letter does not set forth all the terms and conditions of the Facility offered herein. Rather, it is only an outline, in summary format, of the major points of understanding which shall be the basis of the final loan documentation (all of which are collectively referred to as the “Loan Documents”), most of which are described below. The date upon which each Loan is consummated and the last of the Loan Documents for each Loan is executed and delivered is hereinafter referred to as a “Closing Date.” The Loan Documents will have various terms and conditions not set forth herein, including but not limited to conditions precedent, representations and warranties, affirmative covenants, negative covenants, events of default, definition of terms, and other provisions customary to financing (1) by Bank generally and (2) of the type contemplated by this letter.
Purpose. Proceeds of the Facility shall be used to fund the acquisition of income producing real estate properties (each a “Property” and collectively, the “Properties”). Each Property will be owned or ground leased by a single purpose entity, formed by GIP for the sole purpose of taking title to the Property and entering into the Loan with Bank (each a “Borrower” and collectively, the “Borrowers”). Each Borrower shall be a subsidiary of, and controlled by, the Entity Guarantor (as defined herein). Entity Guarantor, by its joinder of this Letter, hereby certifies that all Loan proceeds will be used by each respective Borrower for private commercial purposes, as described herein.
Facility Term. All Loans under the Facility shall be closed prior to December 28, 2023.
Interest Rate. Interest on each Loan shall accrue at a variable rate equal to the 30-Day CME Term SOFR Rate, plus a margin of 2.40% (the “Applicable Rate”), adjusted monthly; provided, however, each Loan will include an interest rate floor of 3.25% per annum. All interest will be computed and charged for the actual number of days elapsed on the basis of a year consisting of three hundred sixty (360) days. Interest on all past due amounts or during the occurrence of an event of default under the Loan shall accrue at the maximum rate permitted by law. The term “30-Day Term SOFR Rate” shall mean the forward-looking SOFR rate administered by CME Group, Inc. (or other successor administrator) and published on the applicable Bloomberg LP screen page (or such other commercially available source providing such quotations as may be selected by Bank) relating to quotations for one month, fixed by the administrator two business days prior to such date of determination (provided, however, that if the Term SOFR rate is not published for such business day, then the Term SOFR rate shall be determined by reference to the
immediately preceding business day on which such rate is published), rounded upwards, if necessary, to the next 1/8th of 1%, all as determined by Bank.
Fees/Costs. At each Loan closing, the applicable Borrower shall make payment of a commitment fee equal to 0.50% of the applicable Loan amount. In addition, the applicable Borrower shall pay all legal fees, recording fees, excise taxes, title insurance premiums, appraisal fees, and other costs incurred by Bank in connection with the making, documenting and closing of each Loan.
Repayment Terms. Each Loan will have an interest-only payment term of twenty-four (24) months from the applicable Loan Closing Date, based upon the Applicable Rate. For each Loan, outstanding principal and accrued outstanding interest shall be due and payable in full on the date that is two (2) years from the applicable Closing Date.
Prepayment Premium. None
Collateral. To secure payment of each Loan, each Borrower shall grant, pledge, or convey to Bank the following collateral customary for the type of loan, including but not limited to the following:
Guarantees. Each Loan shall be guaranteed by GIP (in such capacity, the “Entity Guarantor”) and David Sobelman (the “Individual Guarantor” and together with the Entity Guarantor, collectively the “Guarantors”). The guaranty provided by the Entity Guarantor shall be unlimited. The guaranty provided by the Individual Guarantor shall be non-recourse, subject to customary bad-boy carve-outs, to be negotiated during the closing of the initial Loan under the Facility.
Deposit Account(s). Each Borrower agrees to establish and maintain its primary operating account(s) with Bank as long as any part of the applicable Loan remains outstanding.
Conditions Precedent to each Loan. For each Loan, the following conditions precedent must be satisfied by the applicable Borrower prior to the respective Closing Date:
Each insurance policy shall include a provision that such policy will not be cancelled, altered or in any way limited in coverage or reduced in amount unless Bank is notified in writing at least thirty (30) days prior to such cancellation or change. Each insurance policy will be written on such forms as are reasonably acceptable to Bank by insurance companies authorized or licensed to do business in the state in which the Property is located having financial size and rating acceptable to Bank.
General Covenants. In addition to other affirmative and negative covenants as are typically required by Bank for this type of Facility and the Loan, the Loan Documents will contain the following additional covenants:
Financial Information. During the term of the Loan, each Borrower and Guarantors shall provide Bank, in form and content acceptable to Bank, the following financial information:
Loan Documents. Bank’s attorney shall prepare the necessary documentation in order to comply with all the terms and conditions of this Letter. All documentation must be satisfactory to Bank in Bank’s discretion.
Non-Assignability or Modification of Commitment. The commitment evidenced by this Letter shall not be assignable by GIP. The terms of this Letter may not be waived or modified unless such waiver or modification is expressly stated as such and specifically agreed to by the parties in writing and shall be enforceable by Bank and its successors and assigns. The Loan Documents when executed shall evidence the final commitment to each Borrower, and upon said execution, this letter shall have no further force or effect as to the closed Loan.
Confidentiality. GIP shall keep the contents of this Letter confidential and shall not use it or its contents as a representation of GIP’s credit worthiness. Third parties are cautioned against relying on the contents hereof in extending credit to GIP.
Basis of Commitment. The undersigned acknowledge that this Letter is based materially upon financial information provided to it by GIP and others, and the undersigned hereby warrant and represent that such information was true and correct in all material respects when rendered and that no material change has occurred therein through the date of the execution of this commitment. All material facts relating to the Facility or to the assets, business, profits, prospects, or conditions (financial or otherwise) of GIP have been disclosed to Bank by GIP and the Guarantors.
Voidability of Commitment. This Commitment shall be voidable at the option of Bank should any of the following events occur:
Acceptance and Closing Date. This Letter shall expire if not accepted or extended in writing by the close of business on September 9, 2022 (the “Commitment Expiration Date”). GIP acknowledges that the interest rate and other terms of the Facility outlined in this Letter are based upon acceptance of this Letter and closing of the initial Loan within the time periods set forth above and that these time periods are material factors in Bank offering this Letter. Borrower shall retain the obligation, if the Letter has been accepted, to pay any fees or expenses incurred by Bank in connection with the negotiation and preparation of this Letter, including without limitation appraisal fees, attorney’s fees, flood hazard report costs, UCC search and filing fees, environmental report costs, and title commitment costs.
Prior Letters. Pursuant to a commitment letter dated October 25, 2021 (the “Existing Commitment Letter”), the Bank extended, to GIP, a commitment for an existing facility, along in the amount of $25,000,000.00 (the “Existing $25,000,000 Facility”). GIP, Guarantors and Bank acknowledge and agree that, upon mutual execution of this commitment letter, this letter and the Facility (as defined herein) shall serve to supercede, in its entirety, the Existing Commitment Letter, and any funding to GIP, after the date of this effective date of this letter, shall be funded accordingly to the terms and conditions of this letter. Further, pursuant to a commitment letter dated May 9, 2022 (the “May 2022 Commitment Letter”), the Bank extended to GIP, a commitment for an increased facility, in the amount of $50,000,000.00 (the “Proposed $50,000,000 Facility”). Funding under the Proposed $50,000,000.00 Facility is expressly conditioned upon satisfaction of the terms and conditions in the May 2022 Commitment Letter, including but not limited to satisfaction of the 2022 Minimum Capital Raise Requirement (as such term is defined in the May 2022 Commitment Letter). Until satisfaction of the 2022 Minimum Capital Raise Requirement, and any other terms and conditions of the May 2022 Commitment Letter, funding to GIP shall be governed by the terms of this letter.
If this letter is acceptable to you, please indicate your acceptance by signing in the space provided below and returning the original letter to me.
We appreciate the opportunity to offer this letter to your company and look forward to establishing a continuing, mutually beneficial relationship.
[signature page follows]
We are pleased to have the opportunity to assist you with this Facility. If you have any questions regarding these terms, please call me at on my direct line at (813) 549-4725.
Sincerely,
AMERICAN MOMENTUM BANK
By: /s/ Porter Smith
Porter Smith
Tampa Bay Market President
Agreed to and accepted this 12 day of September, 2022.
GIP:
GENERATION INCOME PROPETIES, L.P., a Delaware limited partnership
By: GENERATION INCOME PROPERTIES, INC., a Maryland corporation, as its General Partner
By:/s/David Sobelman
David Sobelman, as President
Agreed to and accepted this 9 day of September, 2022
Guarantors:
GENERATION INCOME PROPERTIES, INC., a Maryland corporation
By:/s/ David Sobelman
David Sobelman, as President
Agreed to and accepted this 9 day of September, 2022
/s/ David Sobelman
DAVID SOBELMAN
17285744v2Agreed to and accepted this 9 day of September, 2022
17285744v2Agreed to and accepted this 9 day of September, 2022