Item 1.01 Entry into a Material Definitive Agreement.

On November 9, 2021, Seven Hills BH Lender LLC, or Borrower, our wholly owned subsidiary, entered into a facility loan program agreement and security agreement, or the Loan Program Agreement, with BMO Harris Bank N.A., as administrative agent for the lenders named as party to the Loan Program Agreement thereto from time to time, or Lenders, for an uncommitted credit facility in the maximum principal amount of $100 million, or the Facility. Loans issued under the Facility may be used to fund new mortgage loan originations and/or fund future funding obligations under existing and new mortgage loans pursuant to separate facility loan agreements, a form of which is attached as an exhibit to the Loan Program Agreement, or the Facility Loan Agreements. Loans issued under the Facility will be coterminus with the pledged mortgage loan investments, are not subject to margin calls and allow for up to an 80% advance rate, subject to certain loan to cost and loan to value limits. Interest on advancements under the Facility will be calculated at the Secured Overnight Financing Rate plus a premium.

In connection with the Loan Program Agreement, we have agreed to guarantee certain of the obligations of Borrower under the Loan Program Agreement and the Facility Loan Agreements pursuant to a limited guaranty from us to and for the benefit of the administrative agent for itself and such other Lenders, or the Guaranty. Specifically, the Guaranty requires us to guarantee 25% of the then current outstanding principal balance of the facility loans and 100% of losses or the entire indebtedness in the event of certain bad acts as well as any costs and expenses of the administrative agent or Lenders related to the Loan Program Agreement. In addition, the Guaranty contains customary financial covenants that require us to maintain a minimum tangible net worth and a minimum cash liquidity and satisfy a total indebtedness to stockholders' equity ratio.

The Loan Program Agreement and Guaranty contain representations, warranties, covenants, conditions precedent to funding, events of default and indemnities that are customary for agreements of these types.

BMO Harris Bank N.A. and/or its affiliates have engaged in, and may in the future engage in, investment banking, commercial banking, advisory and other commercial dealings in the ordinary course of business with us and our affiliates. They have received, and may in the future receive, customary fees and commissions for these engagements.

The foregoing descriptions of the Loan Program Agreement and the Guaranty are not complete and are qualified in their entirety by reference to the full text of those agreements, copies of which are attached hereto as Exhibits 10.1 and 10.2, respectively, 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 contained in Item 1.01 of this Current Report on Form 8-K is incorporated into this Item 2.03 by reference.

Item 9.01. Financial Statements and Exhibits.






(d) Exhibits



Exhibit
 Number    Description

  10.1       Facility Loan Program Agreement and Security Agreement, dated November
           9, 2021, by and between Seven Hills BH Lender LLC and BMO Harris Bank
           N.A.
  10.2       Guaranty, dated November 9, 2021, by Seven Hills Realty Trust, to and
           for the benefit of BMO Harris Bank N.A.
104        Cover Page Interactive Data File. (Embedded within the Inline XBRL
           document.)




                                       2

© Edgar Online, source Glimpses