Sachem Capital(SACH)2025-03-27 20:31Loan Agreement Details - The Borrower, SN Holdings, LLC, has entered into a revolving line of credit agreement to support its mortgage finance activities and working capital needs[11]. - The agreement is dated March 20, 2025, and involves multiple parties including Sachem Capital Corp. as the Guarantor and Needham Bank as the Administrative Agent[9]. - The agreement includes provisions for interest charges, borrowing procedures, and optional loan prepayments[2]. - The agreement outlines conditions precedent for the revolving loans, ensuring that the Borrower meets specific requirements before funds are disbursed[4]. - The agreement includes confidentiality provisions to protect sensitive information shared among the parties[13]. - The Maximum Revolving Loan Commitment is set at $50 million[73]. - The initial Expiration Date for the loan is March 2, 2026, with a possible extension to March 2, 2027, subject to conditions[53]. - The Facility Unused Fee is 0.25% per annum on the average daily amount exceeding the principal balance under the Revolving Line of Credit[54]. - The Borrowing Request must be submitted to the Administrative Agent for a Revolving Loan[26]. - Each Revolving Loan will accrue interest at the greater of the Prime Rate or the Floor, calculated on a 360-day basis[107]. - The Borrower can borrow, repay, and re-borrow amounts under the Revolving Line of Credit without penalty prior to the Expiration Date[111]. Financial Definitions and Metrics - The Borrower's Adjusted EBITDA is defined as consolidated net income plus interest expense, tax expense, depreciation, and other specified non-cash expenses[15]. - Asset Coverage is defined as the ratio of the Borrower's total assets to total Debt, expressed as a percentage, excluding certain liabilities[20]. - The Borrowing Base is defined as fifty percent (50%) of the outstanding principal balance of the Eligible Mortgage Loans[25]. - The definition of Debt includes all indebtedness for borrowed money and obligations evidenced by notes, bonds, or similar instruments[39]. - The term "Change in Control" refers to the Guarantor no longer being subject to reporting requirements under the Securities Exchange Act of 1934[28]. - The term "Event of Default" is defined in Section 8 of the agreement[50]. - The Default Rate is set at five percent (5.0%) per annum, in addition to the applicable interest rate[41]. - The definition of "Material Adverse Effect" includes significant impacts on financial condition, business prospects, and legal enforceability[72]. - The definition of "Obligations" includes all debts and liabilities arising under Loan Documents, including Hedging Obligations[81]. - The term "Hedging Obligations" encompasses all liabilities under any Hedging Contract entered into by the Borrower[62]. Compliance and Reporting Requirements - The Loan Parties are collectively responsible for compliance with various financial covenants, including minimum liquidity and debt service coverage ratios[7]. - The Loan Parties must provide regular financial statements and reports to the lenders as part of their affirmative covenants[5]. - The Borrower must comply with financial covenants for any unsecured debt incurred, ensuring no Event of Default exists[85]. - The Borrower is required to maintain compliance with the financial covenants for the most recently completed Fiscal Quarter[85]. - Each Loan Party must be in material compliance with all covenants and agreements set forth in the Loan Documents[199]. - Each Loan Party has filed all required tax returns and paid all taxes due, with adequate reserves for accrued but not yet payable taxes[170]. - Each Loan Party possesses all necessary permits and licenses for its business operations, with no material adverse effects from any non-compliance[171]. - Each Loan Party is in compliance with all applicable laws, with no events of default or material judgments against them[169][173]. Borrower Obligations - The Borrower must provide an appraisal and environmental due diligence for Mortgage Loans exceeding $350,000[44]. - The Borrower must maintain a title insurance policy that reflects a first priority lien on the related Mortgaged Property[44]. - The Borrower must ensure that no Event of Default exists at the time of submitting a Borrowing Request[106]. - The Borrower is required to deliver Collateral Assignment Documents if the Assigned Loans balance falls below the required threshold[113]. - The Borrower must execute and deliver Notes to evidence the Lender's Share of the Revolving Loans[146]. - The Borrower must deliver an executed Borrowing Base Certificate dated no more than 31 days prior to the Borrowing Request[198]. - The Borrower will use proceeds from the Revolving Loan for the origination or acquisition of Mortgage Loans[182]. - The Borrower must prepay any excess principal balance over the Maximum Revolving Loan Amount within two business days[109]. - The Borrower is required to reimburse the Administrative Agent for legal fees and expenses incurred, with a cap of $20,000[134]. - All payments made by the Borrower must be free of any deductions for taxes, and the Borrower agrees to indemnify the Lenders for any taxes levied[135]. - The Borrower is obligated to maintain records of Collateral at specified locations or notify the Administrative Agent of any changes[115]. Guarantor Responsibilities - The Guarantor unconditionally guarantees the punctual payment of all Obligations, including principal and interest[121]. - The Guarantor guarantees that the Guaranteed Obligations will be paid in accordance with the terms of the Agreement, with liability being unlimited, irrevocable, absolute, and unconditional[122]. - The Guarantor waives any defenses related to the validity or enforceability of the Agreement, including any changes in payment terms or amendments[123]. - The Guarantor will not exercise subrogation rights until Payment in Full is achieved, and any amounts received prior to that must be held in trust for the Lender[127]. - The Guaranty is a continuing guaranty and remains in effect until Payment in Full[129]. Administrative Agent Functions - The Administrative Agent has the authority to file proofs of claim and manage the loan agreements among lenders[10]. - The Administrative Agent has the authority to file UCC financing statements to perfect the security interests granted[116]. - The Administrative Agent reviews and reconciles all activities under the Revolving Line of Credit weekly, notifying lenders of any discrepancies by noon on each Settlement Date[148]. - Monthly interest payments to lenders are made around the fifth day of each month, based on their respective shares of the aggregate interest received[149]. - During a Continuing Event of Default, funds are allocated first to fees and expenses incurred by the Administrative Agent, then to lenders based on their shares of obligations[150]. - If a lender fails to fund its share of a Revolving Loan, the Administrative Agent may assume the lender has made the funds available unless notified otherwise by noon on the funding date[152]. - In the event of insufficient funds, payments are applied first to interest and fees, then to principal on Revolving Loans, ratably among lenders[157]. - Defaulting lenders have restricted rights regarding amendments and will not receive their share of Facility Unused Fees during the default period[159]. - The obligations of lenders to make Revolving Loans are several, meaning the failure of one lender does not relieve others of their obligations[155].