Document:

Exhibit 10.3

 

TERM LOAN AGREEMENT 

 

This Term Loan Agreement
(“Agreement”) is entered into as of this 17th day of August, 2018, by and between STORAGE BUILDERS II LLC, a
Delaware limited liability company (“Borrower”), whose address is 6410 Poplar Avenue, Suite 650, Memphis, Tennessee
38119, and FIRSTBANK, a Tennessee state bank, (“Lender”), whose address, for purposes of this Agreement, is
1661 International Drive, Suite 350, Memphis, Tennessee 38120.

 

PRELIMINARY STATEMENTS

 

Lender has agreed to
loan to Borrower amounts not to exceed Nine Million One Hundred Fifty Thousand and No/100ths Dollars ($9,150,000.00) (the “Loan”)
in connection with the refinancing of certain existing indebtedness encumbering a property known as 11920 West Colonial Drive,
Ocoee, Florida.

 

In connection with
the funding and administration of the Loan, the parties hereto agree as follows:

 

ARTICLE 1. DEFINITIONS

 

The following terms
as used in this Agreement or in the other Loan Documents shall have the following meanings:

 

1.1.          Assignment
of Leases. The Assignment of Rents and Leases of even date herewith, executed by Borrower in favor of Lender.

 

1.2.          Business
Day. Any day that is not a Saturday, Sunday or banking holiday in the State of Tennessee.

 

1.3.          Costs.
All fees, charges, costs and expenses of any nature whatsoever incurred at any time and from time to time (whether before or after
a Default) by Lender, in making, funding, administering or modifying the Loan, in negotiating or entering into any “workout”
of the Loan, or in exercising or enforcing any rights, powers and remedies provided in the Security Documents or any of the other
Loan Documents, including reasonable attorneys’ fees, court costs, receiver’s fees, management fees and costs incurred
in the repair, maintenance and operation of, or taking possession of, or selling, the Project. In addition to, and not in limitation
of, the above, Costs shall include the cost of any appraisal of the Property (subject to the limitations set forth in Section 7.11
herein), any property condition report for the Property, any Environmental Due Diligence, and pre-closing site visit expenses of
the Lender.

 

1.4.          Deed
to Secure Debt. The Deed to Secure Debt, Assignment of Rents and Leases, Security Agreement and Fixture Filing of even date
herewith, from Borrower to Lender encumbering the Premises and securing repayment of the Obligations.

 

1.5.          Default.
The occurrence of any of the events described in Section 8 of this Agreement, including expiration of any applicable notice and
cure period set forth therein.

 

     

     

    

 

1.6.          Default
Rate. A rate equal to the lesser of (a) the interest rate payable under the Note at the time a Default occurs, plus four
percent (4.00%) per annum, and (b) the highest rate of interest allowed by Law.

 

1.7.          Environmental
Due Diligence. Environmental due diligence for the Project acceptable to Lender, which may include, at Lender’s discretion,
a phase I environmental site assessment.

 

1.8.          Governmental
Authority. Any governmental or quasi-governmental entity, including any court, department, commission, board, bureau, agency,
administration, service, district or other instrumentality of any governmental entity.

 

1.9.          Guarantor.
Jernigan Capital Operating Company, LLC, a Delaware limited liability company ("Guarantor").

 

1.10.         Guaranty
or Guaranty Agreement. The Guaranty Agreement of even date herewith guaranteeing all the Obligations of Borrower under the
Loan Documents, executed by the Guarantor in favor of Lender.

 

1.11.         Improvements.
The existing improvements on the Land consisting of a 113,817 sq. ft. self-storage facility and the related parking facilities,
together with any future improvements made to the Project.

 

1.12.         Indemnity
Agreement. The Environmental Indemnity Agreement of even date herewith, signed by Borrower and the Guarantor in favor of Lender.

 

1.13.         Interest
Rate Swap. Any agreement, whether or not in writing, relating to any rate swap, forward rate transaction, commodity swap, equity
index swap or option, interest rate option, cap or collar transaction, or any other similar transaction, including, unless the
context otherwise clearly requires, any form of master agreement published by the International Swaps and Derivatives Association,
Inc., or any other master agreement, entered into by Borrower (or its affiliate), in connection with the Loan, together with any
related schedule and confirmation, as amended, supplemented, superseded or replaced from time to time.

 

1.14.         Land.
The real property described in Exhibit A attached hereto.

 

1.15.         Laws.
All federal, state and local laws, statutes, rules, ordinances, regulations, codes, licenses, authorizations, decisions, injunctions,
interpretations, orders or decrees of any court or other Governmental Authority having jurisdiction over the Project, as may be
in effect from time to time.

 

1.16.         Leases.
All leases and other similar agreements, whether now existing or hereafter entered into, for space at the Premises, including all
lease guaranties related thereto, as the same may be amended or modified from time to time.

 

1.17.         Loan.
The real estate loan in the amount of up to Nine Million One Hundred Fifty Thousand and No/100ths Dollars ($9,150,000.00), as evidenced
by the Note, The terms of the Loan are provided for herein and in the Note and the other Loan Documents.

 

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1.18.         Loan
Documents. The Note, the Security Documents, the Indemnity Agreement, the Guaranty, any Interest Rate Swap entered into in
connection with the Loan, this Agreement and any other documents or instruments evidencing or securing the Loan.

 

1.19.         Loan
Proceeds. Funds disbursed or to be disbursed under the Note pursuant to this Agreement.

 

1.20.         Note.
The Promissory Note of even date herewith, from Borrower to Lender in the principal amount of Nine Million One Hundred Fifty Thousand
and No/100ths Dollars ($9,150,000.00).

 

1.21.         Obligations.
All present and future debts, obligations and liabilities of Borrower to Lender arising pursuant to, or on account of, the provisions
of this Agreement, the Note or any of the other Loan Documents, including the obligations: (a) to pay all principal, interest,
late charges, prepayment premiums (if any) and other amounts due at any time under the Note; (b) to pay all expenses, indemnification
payments, fees and other amounts due at any time under the Security Documents or any of the other Loan Documents, together with
interest as provided in the Loan Documents; (c) to pay and perform all obligations of Borrower (or its affiliate) under any Interest
Rate Swap; and (d) to perform, observe and comply with all of the terms, covenants and conditions, expressed or implied, which
Borrower is required to perform, observe or comply with pursuant to the terms of the Loan Documents.

 

1.22.         Person.
An individual, a corporation, a partnership, a joint venture, a limited liability company, a trust, an unincorporated association,
any Governmental Authority or any other entity.

 

1.23.         Premises
or Property. The Land, and all of the estate, right, title and interest of Borrower at law or in equity in and to the Land,
and all of the buildings, structures and improvements of every nature whatsoever now or hereafter situated on the Land and all
fixtures, machinery, appliances, equipment, furniture and personal property of every kind whatsoever now or hereafter owned by
Borrower and located in or on, or attached to, and used or intended to be used in connection with the Land.

 

1.24.         Project.
The acquisition and operation of the Improvements on the Land, as contemplated by this Agreement.

 

1.25.         Security
Deed. The Deed to Secure Debt.

 

1.26.         Security
Documents. The Deed to Secure Debt, the Assignment of Leases, any UCC financing statements registered in connection with the
Loan, and any and all other Loan Documents which secure the Obligations.

 

1.27.         State.
The State of Georgia.

 

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1.28.         Title
Insurance Agent. First American Title Insurance Company

 

  Contact Information:                     6363
Poplar Avenue; Suite 434

Memphis,
TN 38119

Attn: Carol
Slone

Telephone:
901-828-6597

Fax: 901-680-9158

Email: cslone@firstam.com

 

1.29.         Title
Insurance Commitment. An American Land Title Association (“ALTA”) mortgagee’s title insurance commitment
to be issued by the Title Insurance Company in such form as is acceptable to Lender.

 

1.30.         Title
Insurance Company. First American Title Insurance Company.

 

1.31.         Title
Insurance Policy. An ALTA mortgagee’s title insurance policy to be issued by the Title Insurance Company in the amount
of the Note showing fee simple title to the Premises to be vested in Borrower and insuring the Deed to Secure Debt as a first lien
on the Premises, subject only to exceptions permitted by Lender, and otherwise in form and substance acceptable to Lender.

 

ARTICLE 2. WARRANTIES
AND REPRESENTATIONS

 

In consideration for
Lender committing to fund the Loan, Borrower hereby represents and warrants to Lender that, to Borrower’s knowledge, each
of the following statements is true and correct as of the date hereof:

 

2.1.          Purpose
of Loan. The Loan shall be used for general corporate purposes, payment of certain approved transaction costs, and for no other
purpose. The Loan is for commercial purposes.

 

2.2.          Pending
Suits. There are no suits, judgments, bankruptcies or executions pending or threatened in writing against the Premises.

 

2.3.          Financial
Statements. The Financial Statements delivered by Borrower and any Guarantor to Lender are true and correct in all material
respects, fairly present the respective financial condition of the subject thereof as of the respective dates thereof, no material
adverse change has occurred in the financial condition reflected therein since the respective dates thereof and no additional borrowings
have been made by Borrower since the date thereof other than the borrowing contemplated hereby or other borrowing approved by Lender..

 

2.4.          No
Mechanic’s or Materialmen’s Liens. Except for such liens disclosed in the Title Insurance Policy (if any), there
are no liens or claims outstanding for work, labor or materials affecting the Property as of the date hereof.

 

2.5.          No
Violation of Other Agreements. The consummation of the transactions contemplated by this Agreement and the performance of this
Agreement and the other Loan Documents will not result in any breach of, or constitute a Default under, the Borrower’s organizational
documents or any other instrument or agreement to which Borrower is a party or by which it is bound.

 

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2.6.          Zoning/Land
Use. The Land is zoned to permit the ownership and operation of the Improvements for the intended purpose, and Borrower has
all zoning approvals necessary for the ownership and operation of the Project.

 

2.7.          Access.
The Land has access to publicly dedicated rights of way, as necessary, for the construction and intended use and operation of the
Project.

 

2.8.          Leases.
Borrower has provided Lender with a current rent roll and a copy of all existing Leases. All existing Leases are in full force
and effect and no default exists under the Leases as at the date hereof that would have a material adverse effect on the Project.

 

2.9.          Organization.
Borrower (i) is a duly organized or formed and validly existing limited liability company, in good standing under the laws of the
jurisdiction of its formation and has the limited liability company power and authority to own its property and assets and to transact
the business in which it is engaged and presently proposes to engage and (ii) has duly qualified and is authorized to do business
in all jurisdictions where it is required to be so qualified, except where the failure to be so qualified would not have a material
adverse effect on the business, operations, prospects, property, assets, liabilities or financial condition of, such entity and
its subsidiaries, taken as a whole, or on the ability of Borrower to perform its obligations under the Loan Documents. Borrower
is an entity disregarded from its owner for U.S. federal income tax purposes. All organizational and authority documents of the
Borrower, its by or on behalf of the Borrower are true, correct and complete, and are and remain in full force and effect.

 

2.10.         Authority.
Borrower has full power and authority to execute and deliver the Note, this Agreement and all other Loan Documents.

 

2.11.         Sole
Business. Until the Loan has been paid in full, Borrower (i) shall not engage in any business or activity other than the acquisition,
development, ownership, operation, leasing, managing and maintenance of the Project, entering into the Loan and activities incidental
thereto; and (ii) shall not acquire or own any assets other than the Project and such incidental personal property as may be necessary
or desirable for the operation of the Project.

 

2.12.         Real
Property. Borrower is the fee simple owner of the Project.

 

2.13.         Enforceability.
This Agreement and all other Loan Documents will be valid and enforceable against Borrower and each Guarantor.

 

2.14.         Environmental.
Borrower has complied with all environmental requirements affecting the Premises imposed by any Governmental Authority having jurisdiction
over the Premises, including, without limitation, the acquisition of environmental permits and licenses for the Project, and the
Premises have not been used for the dumping or storage of hazardous or toxic chemicals or substances which could pose a health
or safety hazard to persons on or adjacent to the Premises.

 

2.15.         Litigation.
There is not now pending or threatened in writing any litigation or claims against Borrower or any Guarantor, respectively, which
would interfere with its ability to perform in accordance with the Loan Documents or which would in any way materially adversely
affect the credit worthiness of Borrower or any Guarantor.

 

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ARTICLE 3. THE LOAN

 

3.1.          Use
and Purposes. Borrower agrees to borrow from Lender and Lender agrees to lend to Borrower the Loan Proceeds, such Loan Proceeds
to be used for the purposes and subject to all of the terms, provisions and conditions of this Agreement.

 

3.2.          Advances
Secured by Security Documents. The parties hereto agree that the entire principal balance of the Loan shall be disbursed at
the closing of the Loan. All disbursements, advances or payments made by Lender hereunder, from time to time, and any amounts expended
by Lender under this Agreement or the other Loan Documents, including both the principal of the Loan and other disbursements, advances,
or payments and all other loan expenses, including reasonable attorneys fees, as and when advanced or incurred, will be deemed
to be a part of the Obligations and as such will be secured by the Security Documents to the same extent and effect as if the terms
and provisions of this Agreement were set forth therein.

 

ARTICLE 4. CONDITIONS
TO DISBURSEMENT OF LOAN PROCEEDS

 

Unless otherwise agreed
by Lender in writing, Lender will not be obligated to close the Loan and disburse any Loan Proceeds unless and until the following
conditions have been satisfied (all in a manner acceptable to Lender):

 

4.1.          Loan
Documents. Borrower shall have furnished or delivered to Lender, in form and substance acceptable to Lender, the Loan Documents
executed by Borrower and each Guarantor, as applicable.

 

4.2.          Closing
Costs. Borrower shall have paid all reasonable, out-of-pocket, Costs incurred by Lender in connection with the Loan, including
the reasonable fees of outside counsel for the Lender.

 

4.3.          Financial
Statements. Borrower and each Guarantor shall have delivered to Lender current financial statements for Borrower and each Guarantor
certified to be true, correct and complete. Said financial statements must be current within the last twelve (12) months.

 

4.4.          Title
Policy. Borrower shall have procured a commitment for the issuance of the Title Insurance Policy, in a form acceptable to Lender.

 

4.5.          Survey.
Borrower shall have provided Lender with a current or otherwise acceptable ALTA as-built survey of the Land, prepared by a licensed
surveyor satisfactory to the Lender, which survey shall be certified to Lender and the Title Insurance Company, and shall be in
form and substance acceptable to Lender. Borrower shall have provided Lender and the Title Company with a “no-change”
affidavit which is acceptable to the Title Company.

 

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4.6.          Insurance.
Borrower shall have furnished to Lender evidence, either in the form of duplicate policies, binders or certificates, acceptable
to Lender (identifying each insurance policy, name of insurer, amount of coverage, deductible provisions and expiration date) that
Borrower has purchased, and has in full force and effect, policies of insurance, as required by Lender and the Security Documents.

 

4.7.          Intentionally
Omitted. 

 

4.8.          Evidence
of Compliance. Borrower shall have furnished to Lender evidence satisfactory to Lender that the Improvements are in compliance
with all Laws and all rules and regulations promulgated thereunder.

 

4.9.          Appraisal.
Lender shall have obtained a narrative appraisal of the Premises and Improvements, on a completed basis, which is satisfactory
to Lender in amount, form and substance. Borrower shall pay for the cost of the appraisal.

 

4.10.         Organizational
Documents. Lender shall be provided with a copy of Borrower’s organizational documents and evidence of authority to sign
this Agreement and the other Loan Documents.

 

4.11.         Environmental
Due Diligence. Lender shall be provided with such Environmental Due Diligence for the Property as Lender may require, to be
in form and content acceptable to Lender. All reports shall be addressed to Lender. Borrower shall pay for the cost of the Environmental
Due Diligence.

 

4.12.         Opinion
of Counsel. Borrower shall provide Lender with an opinion from counsel to Borrower and the Guarantor, in such form and content
as reasonably required by Lender.

 

4.13.         Leases.
Lender shall have received executed copies of Leases, other than Leases for a self-storage unit, with a term of less than 12 months,
and covering less than 5% of the rentable area of the Premises (a “Non-Storage Lease”). If required by Lender
each Non-Storage Lease shall be accompanied by an executed subordination, estoppel and attornment agreement, in a form acceptable
to Lender.

 

4.14.         Commitment
Fee. Payment of the commitment fee to Lender in the amount of Forty Five Thousand Seven Hundred Fifty Dollars and No/100ths
($45,750.00).

 

4.15.         Third
Party Agreements. Lender shall have received and approved an executed copy of the Facility Management Agreement dated as of
March 3, 2018 by and between Cubesmart Asset Management, LLC (the “Manager”) and Storage Builders II LLC (the
 “Management Agreement”), which shall be in form and substance acceptable to Lender. Lender shall have received
an Assignment of Management Agreement and Subordination of Management Fees executed by Borrower, Lender, and Manager with regard
to the Management Agreement in a form acceptable to the Lender.

 

4.16.         Intentionally
Omitted.

 

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4.17.         Payoff
of Existing Debt. Lender shall have received and approved a payoff letter for the existing debt, which shall be in form and
substance acceptable to Lender.

 

4.18.         Intentionally
Omitted.

 

4.19.         Key
Bank Waiver. Lender shall have received a fully executed copy of the Second Amendment to Credit Agreement amending that certain
Credit Agreement dated as of July 25, 2017 by and among Guarantor, Jernigan Capital, Inc., KeyBank National Association, Raymond
James Bank, N.A., Trustmark National Bank, FirstBank, Triumph Bank, and Renasant Bank, as amended by that certain First Amendment
to Credit Agreement dated as of January 16, 2018 (collectively the “Credit Agreement”), authorizing Guarantor
to enter into the Guaranty. .

 

ARTICLE 5. COLLATERAL
FOR THE LOAN

 

The Obligations shall
be secured by a first priority lien on the Premises and Rents and Leases associated with the Premises and all materials and other
personal property related to the operation of the Project, as evidenced by the Security Documents.

 

ARTICLE 6. LOAN

 

The loan shall be fully
funded upon the Closing of the Loan.

 

ARTICLE 7. COVENANTS
AND AGREEMENTS

 

Borrower covenants
and agrees with Lender as follows:

 

7.1.          Costs.
Borrower will pay all reasonable, out-of-pocket Costs required to satisfy the conditions of this Agreement, including, but not
limited to, all taxes and recording expenses, Lender’s attorneys fees, surveys, appraisals, title insurance, title updates,
real estate taxes, and insurance policies.

 

7.2.          Inspections.
Borrower will permit Lender and its representatives, upon commercially reasonable prior notice to Borrower and subject to the rights
of tenants, to enter upon the Premises at all reasonable times to inspect the Improvements and to examine all records which relate
to the ownership and operation of the Improvements and will cooperate, and use reasonable efforts to cause Borrower’s manager,
if applicable, to cooperate with Lender in such inspections.

 

7.3.          Brokers.
Borrower will indemnify and hold harmless Lender from and against all claims of brokers and agents arising by reason of the execution
of this Agreement or the consummation of the transactions contemplated hereby.

 

7.4.          Advances
to Cure Default. In the event that Borrower fails to perform any of Borrower’s covenants or agreements under this Agreement
or any other Agreement, and fails to commence a cure of such failure within ten (10) days after written notice from Lender specifying
the failure and the action required to cure same, Lender may, but shall not be required to, perform any or all of such covenants
and agreements, and any amounts expended by Lender in so doing will be deemed to be a part of the Obligations under this Agreement
and under the Security Documents.

 

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7.5.          Operating
Account. The operating account for the Borrower (if any) shall be maintained with the Lender during the term of the Loan (provided,
that Lender hereby acknowledges and agrees that the foregoing requirement shall not apply to any operating account maintained by
any property manager).

 

7.6.          Compliance
with Laws. The Improvements shall be owned and operated in accordance with all material applicable Laws, including, without
limitation, all zoning, land use, code, setback and other applicable regulations and restrictions.

 

7.7.          Books
and Records; Financial Statements; Tax Returns. Borrower will keep and maintain full and accurate books and records administered
in accordance with sound accounting principles, consistently applied, showing in detail the earnings and expenses of the Property
and Borrower shall permit Lender and Lender’s representatives, to examine such books and records (regardless of where maintained)
and all supporting data and to make copies therefrom at all reasonable times and as often as may be requested by Lender. In addition,
Borrower will furnish or cause to be furnished to Lender (i) within forty-five (45) days of each fiscal quarter, company prepared
unaudited financial statements of Guarantor, setting forth the balance sheet of Guarantor as of the end of each fiscal quarter,
and statement of income, statement of cash flows, and statement of retained earnings of Guarantor for each fiscal quarter, certified
by Guarantor as being true and accurate in all material respects, (ii) within ninety (90) days of each fiscal year-end, company
prepared unaudited financial statements of Guarantor, setting forth the balance sheet of Guarantor as of the end of each fiscal
year, and statement of income, statement of cash flows, and statement of retained earnings of Guarantor for each fiscal year, certified
by Guarantor as being true and accurate in all material respects as being true and accurate in all material respects, (iii) monthly,
within ten (10) days of availability, management reports from the Manager with regard to the Premises and (iv) such other financial
statements and information as Lender may reasonably request from time to time. All financial statements shall be in form satisfactory
to Lender.

 

7.8.          Estoppel
Certificates. Within ten (10) days after any request by Lender (which request shall not be made more than once in any twelve
(12) month period absent the existence of a Default), Borrower shall certify in writing to Lender, the then unpaid balance of the
Loan and whether Borrower claims any right of defense or setoff to the payment or performance of any of the Obligations, and if
Borrower claims any such right of defense or setoff, Borrower shall give a detailed written description of such claimed right.

 

7.9.          Notification
by Borrower. Borrower will promptly give written notice to Lender of any written claim by Borrower to a lessee or a lessee
to Borrower of a default beyond applicable notice and/or cure periods by any other party under any Lease. Notwithstanding anything
in this Section 7.9 to the contrary, such written notice shall only be required for written claims which are made outside of the
ordinary course for self-storage facilities or if written claims are, at any time, currently outstanding and unresolved for more
than fifteen percent (15%) of the self-storage units.

 

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7.10.       Indemnification
by Borrower. Borrower agrees to indemnify Lender and to hold Lender harmless from and against, and to defend Lender by counsel
approved by Lender against, any and all claims directly or indirectly arising out of or resulting from any transaction, act, omission,
event or circumstance in any way connected with the Property or the Obligations (a “Claim”), including any Claim arising
out of or resulting from (a) construction of the Improvements, including any defective workmanship or materials; (b) any failure
by Borrower to comply with the requirements of any Laws or to comply with any agreement that applies to the Property; (c) any failure
by Borrower to observe and perform any of the obligations imposed upon the landlord under the Leases; (d) any other Default hereunder
or under any of the other Loan Documents; or (e) any assertion or allegation that Lender is liable for any act or omission of Borrower
or any other Person in connection with the ownership, development, financing, leasing, operation or sale of the Property (other
than Claims arising from Lender’s gross negligence or willful misconduct). Notwithstanding anything herein to the contrary,
if the law of the State requires the payment of any tax, fee, or other monetary obligation in connection with the delivery and/or
recording of any of the Loan Documents, the payment of said tax, fee or other monetary obligation shall be the responsibility of
the Borrower and if said tax, fee, or monetary obligation is unpaid and becomes due at any time, Borrower shall pay said tax, fee,
or monetary obligation, or any penalty or interest associated with the non-payment of said tax, fee, or monetary obligation on
demand and shall indemnify Lender for any tax, fee, or monetary obligation or any penalties or interest associated with the non-payment
of said tax, fee, or monetary obligation. The agreements and indemnifications contained in this Section shall apply to Claims arising
both before and after the repayment of the Loan and shall survive the repayment of the Loan, any foreclosure or deed, assignment
or conveyance in lieu thereof and any other action by Lender to enforce the rights and remedies of Lender hereunder or under the
other Loan Documents.

 

7.11.       Appraisals.
Lender may obtain from time to time an appraisal of all or any part of the Property, prepared in accordance with written instructions
from Lender, from a third-party appraiser satisfactory to, and engaged directly by, Lender. The cost of one such appraisal obtained
by Lender in each calendar year and the cost of each such appraisal obtained by Lender following the occurrence of a Default shall
be paid by Borrower on demand.

 

7.12.       Leasing
Matters.

 

(a)          Borrower
represents and warrants that Borrower has delivered to Lender Borrower’s standard form of tenant lease and a true and correct
copy of all Leases, including all amendments and exhibits, and any guaranty(ies) thereof, affecting any part of the Improvements,
together with an accurate and complete rent roll for the Property

 

(b)          Borrower
shall provide Lender written notice within thirty (30) days of entering into any Non-Storage Lease of space in the Improvements.

 

(c)          Delivery
of Leasing Information and Documents. From time to time upon Lender’s request, Borrower shall promptly deliver to Lender
(i) complete executed originals of each Lease, (ii) a complete rent roll of the Property in such detail as Lender may require,
together with such operating statements and leasing schedules and reports as Lender may require, and (iii) any and all financial
statements of the tenants, subtenants and any lease guarantors to the extent available to Borrower.

 

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7.13.         Required
Loan to Value. The outstanding balance of the Loan shall not exceed, at any time, an amount which causes the ratio (the “LTV
Ratio”), with (i) a numerator of the then outstanding balance of the Loan and (ii) a denominator of the approved stabilized
appraised value of the Project, as determined by Lender based upon a current appraisal provided to Lender, to be greater than the
LTV Ratio as of the Closing Date. If the Lender determines, based on the Lender’s review of updated appraisal information,
that the then current LTV Ratio exceeds the LTV Ratio as of the Closing Date, Lender shall give written notice to Borrower, and
Borrower shall pay down the Loan to an amount necessary to cause the LTV Ratio to be less than or equal to the LTV Ratio as of
the Closing Date. Failure of Borrower to pay down the Loan as required within ten (10) days from the date of such notice shall
be deemed to be a Default under the Loan Documents. The Lender reserves the right to test this covenant annually and require a
new appraisal if deemed necessary by Lender. Each required appraisal shall be ordered, reviewed, and approved by the Lender, at
Borrower’s expense.

 

7.14.         Adjusted
Consolidated EBITDA to Debt Service. Guarantor will not at any time have a ratio of Adjusted Consolidated EBITDA determined
for the most recently ended calendar quarter, annualized, to Debt Service determined for the most recently ended calendar quarter,
annualized, of less than 1.35 to 1. Adjusted Consolidated EBITDA to Debt Service under this Section 7.14 shall be calculated pursuant
to the terms of Section 9.7 of the Credit Agreement, notwithstanding any further amendments, modifications or termination of the
Credit Agreement. The Credit Agreement hereby is incorporated herein by reference for the purpose calculating the Adjusted Consolidated
EBITDA to Debt Service under this Section 7.14.

 

7.15.         Management
of Premises. Borrower shall not enter into any agreement providing for the management of the Premises; provided however, Lender
hereby acknowledges and covenants that: (i) Borrower may engage and/or change such property management to, without Lender’s
consent but with notice to Lender, a professional management company of a self-storage project if (A) the management company is
consistently on the first page of a Google search in the market in which such project exists, (B) the management company maintains
a professional call center, and (C) the management company maintains a revenue and management staff and revenue management information
processing systems (together with its successors and assigns, collectively, the “Permitted Managers”); and (ii) it
shall not unreasonably withhold, condition or delay its approval to a change in any such other manager.

 

7.16.         Mergers;
Disposition of Assets; Dividends and Other Shareholder Distributions; Etc. Borrower shall not merge or consolidate with or
into, or sell, assign, lease, or otherwise dispose of substantially all of its assets (except for obsolete, damaged or unusable
assets), other than in the ordinary course of Borrower's business. For avoidance of doubt, the declaration or making of any distribution
or dividend by Borrower to its direct and indirect owners at any time shall not be included within the prohibition against disposition
of assets contained herein, and such distribution by Borrower shall be expressly permitted unless such distribution shall directly
cause an Event of Default.

 

    	 	11	 

     

    

 

ARTICLE 8. DEFAULT

 

8.1.        Default
by Borrower. The occurrence of any one or more of the following shall constitute a “Default” as such term is used
herein:

 

(a)          A
failure to pay amounts due under the Note or the other Loan Documents, within ten (10) days of the date when due;

 

(b)          Any
representation, warranty or statement made by Borrower in this Agreement, the other Loan Documents or any other instrument now
or hereafter evidencing, securing or in any manner relating to the Loan proves untrue in any material respect at the time when
made and, to the extent such materially false representation or warranty is susceptible of being cured and does not result in a
continuing breach of any material covenant hereunder, such failure is not cured within thirty (30) days after written notice from
Lender;

 

(c)          Failure
of Borrower to comply in all material respects with any of the terms and conditions of this Agreement, or the other Loan Documents
and, to the extent such failure is susceptible of being cured, such failure continues for thirty (30) days after written notice
thereof from Lender;

 

(d)          Failure
of Guarantor to comply in all material respects with any of the terms and conditions of the Guaranty, and, to the extent such failure
is susceptible of being cured, such failure continues for thirty (30) days after written notice thereof from Lender;

 

(e)          A
lien for the performance of work or the supply of materials filed against the Property, remains unsatisfied or unbonded for a period
of thirty (30) days after the date Borrower receives notice of the filing or service of such lien;

 

(f)          Any
Guarantor fails to pay any indebtedness or other obligation owned by such Guarantor to Lender when and as due and payable (whether
by acceleration or otherwise);

 

(g)          A
default under the Key Bank Line results in an acceleration of the outstanding obligations of the Guarantor as borrower under the
Key Bank Line;

 

(h)          Without
the prior written consent of Lender (which consent may be conditioned, among other matters, on the issuance of a satisfactory endorsement
to the title insurance policy insuring Lender’s interest under the Security Documents), the controlling interest in Borrower
ceases to be owned by the Guarantor;

 

(i)          Intentionally
Omitted;

 

(j)          If
Borrower or any Guarantor files a voluntary petition in bankruptcy or is adjudicated a bankrupt or insolvent, or files any petition
or answer seeking any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under
the present or any future federal bankruptcy act or any other present or future applicable federal, state or other statute or Law,
makes an assignment for the benefit of creditors, or seeks or consents to or acquiesces in the appointment of any trustee, receiver
or liquidator for Borrower or any Guarantor for all or any substantial part of their properties or of the Premises;

 

    	 	12	 

     

    

 

(k)          If
within ninety (90) days after the commencement of any proceeding against Borrower or any Guarantor seeking any reorganization,
arrangement, readjustment, liquidation, dissolution or similar relief under the present or any future federal bankruptcy act or
any other present or future applicable federal, state or other statute or Law, such proceeding is not dismissed, or if, within
ninety (90) days after the appointment, without the consent or acquiescence of Borrower of any trustee, receiver or liquidator
for Borrower or any Guarantor for all or any substantial part of their properties or of the Premises; or

 

(l)          If
a third party obtains a judgment against Borrower, a Guarantor or the Project, which (a) materially and adversely impacts the ability
of the Borrower or a Guarantor to perform its obligations under the Loan, and (b) is not vacated and released within ninety (90)
days at the date of such judgment.

 

The occurrence of a
Default (in each case, beyond any applicable notice and/or cure periods) under any other Loan Document shall be deemed a Default
under all other Loan Documents.

 

8.2.        Lender’s
Remedies in the Default. Upon the occurrence of any Default, Lender, in addition to all remedies conferred upon Lender by Law
or equity, and by the terms of the Loan Documents, may, in its sole discretion, pursue any one or more of the following remedies
concurrently or successively, it being the intent hereof that none of such remedies shall be to the exclusion of any other:

 

(a)          Upon
five (5) days’ prior written notice to Borrower, take possession of the Premises and operate the Improvements and do anything
in its sole judgment to fulfill the obligations of Borrower hereunder, any expense incurred by Lender being deemed to be part of
the Obligations, including either the right to avail itself of or procure performance of existing contracts or Leases, under the
assignment to Lender or otherwise, or let any contracts with the same vendors or others. Without restricting the generality of
the foregoing and for purposes aforesaid, upon the occurrence of an Event of Default hereunder, Borrower hereby appoints and constitutes
Lender its lawful attorney-in-fact with full power of substitution in the Project to operate the Improvements in the name of Borrower;
to use funds remaining under this Agreement or which may be reserved, or escrowed or set aside for any purpose hereunder at any
time to operate the Improvements; it being understood and agreed that this power of attorney shall be a power coupled with an interest
and cannot be revoked;

 

(b)          Lender
may apply to any court of competent jurisdiction for, and obtain appointment of, a receiver for the Property;

 

(c)          Lender
may set off the amounts due Lender under the Loan Documents against any and all accounts, credits, money, securities or other property
of Borrower now or hereafter on deposit with, held by or in the possession of Lender to the credit or for the account of Borrower,
without notice to or the consent of Borrower;

 

    	 	13	 

     

    

 

(d)          Borrower
shall not be relieved of any of the Obligations by reason of the failure of Lender to comply with any request of Borrower or of
any other Person to take action to foreclose on the Property under the Security Documents or otherwise to enforce any provision
of the Loan Documents, or by reason of the release, regardless of consideration, of all or any part of the Property. No delay or
omission of Lender to exercise any right, power or remedy accruing upon the happening of a Default shall impair any such right,
power or remedy or shall be construed to be a waiver of any such Default or any acquiescence therein. No remedy available to Lender
under the Loan Documents or otherwise, is intended to be exclusive of any other remedies provided for in the Loan Documents, and
each and every such remedy shall be cumulative, and shall be in addition to every other remedy given hereunder, or under the Loan
Documents, or now or hereafter existing at Law or in equity. Every right, power and remedy given by the Loan Documents to Lender
shall be concurrent and may be pursued separately, successively or together against Borrower or the Property or any part thereof,
and every right, power and remedy given by the Loan Documents may be exercised from time to time as often as may be deemed expedient
by Lender;

 

(e)          Withhold
further disbursement of the Loan Proceeds, if applicable;

 

(f)          Declare
the entire balance of the Obligations, without demand or notice of any kind (which are hereby expressly waived) to be due and payable
at once and, in such event, such Obligations shall become immediately due and payable;

 

(g)          Pursue
such other remedies as may be available to Lender at Law or equity.

 

ARTICLE 9. GENERAL
COVENANTS

 

9.1.        No
Assignments by Borrower. This Agreement may not be assigned by Borrower without the prior written consent of Lender. Borrower
will remain liable for payment of all sums advanced hereunder before and after such assignment.

 

9.2.       
Intentionally Omitted.

 

9.3.        Interest
Not to Exceed Maximum Allowed by Law. If from any circumstances whatsoever, by reason of acceleration or otherwise, the fulfillment
of any provision of this Agreement or any other Loan Document involves transcending the limit of validity prescribed by any applicable
usury statute or any other applicable Law, with regard to obligations of like character and amount, then the obligations to be
fulfilled will be reduced to the limit of such validity as provided in such statute or Law, so that in no event shall any payment
of interest or other like charges be possible under this Agreement or the other Loan Documents in excess of the limit of such validity.

 

9.4.        Time
of the Essence. Time is of the essence of this Agreement.

 

9.5.        No
Agency. Lender is not the agent or representative of Borrower, and Borrower is not the agent or representative of Lender, and
nothing in this Agreement will be construed to make Lender liable to anyone for goods delivered or services performed upon the
Premises or for debts or claims accruing against Borrower.

 

    	 	14	 

     

    

 

9.6.          No
Partnership or Joint Venture. Neither anything contained herein nor the acts of the parties hereto will be construed to create
a partnership or joint venture between Borrower and Lender.

 

9.7.          No
Third Party Beneficiaries. All conditions to the obligations of Lender to make advances hereunder are imposed solely and exclusively
for the benefit of Lender and its assigns and no other person will have standing to require satisfaction of such conditions or
be entitled to assume that Lender will not make disbursements in the absence of strict compliance with any or all thereof and no
other person, under any circumstances, will be deemed to be beneficiary of such conditions, any or all of which may be waived in
whole or in part by Lender at any time if Lender in its sole discretion deems it advisable to do so.

 

9.8.          Waiver.
No delay or omission by Lender to exercise any right or power arising from any Default will impair any such right or power or be
considered to be a waiver of any such Default or any acquiescence therein nor shall the action or nonaction of Lender in case of
Default on the part of Borrower impair any right or power arising therefrom. No disbursement of the Loan hereunder shall constitute
a waiver of any of the conditions to Lender’s obligation to make further disbursements nor, in the event Borrower is unable
to satisfy any such condition, shall any such disbursement have the effect of precluding Lender from thereafter declaring such
inability to be a Default as hereinabove provided.

 

9.9.          Notices.
All notices, requests, demands and other communications required or permitted to be given hereunder will be sufficiently given
if in writing and delivered in person or sent by United States certified mail, return receipt requested, postage prepaid, to the
party being given such notice at the appropriate address set forth in the first paragraph of this Agreement, or to such other address
as either party may give to the other in writing for such purpose. All such notices, requests, demands and other communications,
if so mailed, will be deemed to be given when so mailed. A copy of all notices to Borrower shall be sent to (i) Guarantor at 6410
Poplar Avenue, Suite 650, Memphis, Tennessee 38119 and to (ii) Borrower’s counsel at Morrison & Foerster LLP, 250 West
55th Street, New York, New York 10019, Attention: Jeffrey J. Temple, Esq.

 

9.10.         Partial
Invalidity. In the event any one or more of the provisions contained in this Agreement shall be for any reason be held to be
invalid, illegal or unenforceable in any respect, such validity, illegality or unenforceability shall not affect any other provision
of this Agreement, but this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been
set forth herein.

 

9.11.         Entire
Agreement. This Agreement, the Loan Documents and the other contracts, agreements and instruments described herein contain
all of the terms and conditions related to the disbursement of the Loan by Lender and the use of the Loan by Borrower. This Agreement
may not be modified or amended except in writing signed by Borrower and Lender.

 

9.12.         Publicity.
Lender shall not release articles concerning financing of the Premises without Borrower’s consent.

 

    	 	15	 

     

    

 

9.13.         WAIVER
OF JURY TRIAL. BORROWER AND LENDER HEREBY JOINTLY AND SEVERALLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING
RELATING TO THIS INSTRUMENT AND TO ANY OF THE LOAN DOCUMENTS, THE OBLIGATIONS HEREUNDER OR THEREUNDER, ANY COLLATERAL SECURING
THE OBLIGATIONS, OR ANY TRANSACTION ARISING THEREFROM OR CONNECTED THERETO. BORROWER AND LENDER EACH REPRESENT TO THE OTHER THAT
THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY GIVEN.

 

9.14.         Further
Assurances. Borrower agrees that at any time, and from time to time, after execution and delivery of this Agreement, it shall,
upon the request of Lender, execute and deliver such further documents and do such further things as Lender may reasonably request
in order to more fully effectuate the purposes of this Agreement; provided, that none of the foregoing shall decrease any rights
or increase any obligations of Borrower or Guarantor under the Loan Documents other than to a de minimis extent.

 

9.15.         Governing
Law. The creation, perfection, and enforcement of the lien, security interest and conveyance of the security title of the Security
Documents shall be governed by the law of the State, except to the extent that the Uniform Commercial Code provides for the application
of the law of another state. Subject to the foregoing, in all other respects, this Agreement and the other Loan Documents shall
be governed by the substantive laws of the State of Tennessee.

 

9.16.         Intentionally
Omitted. 

 

9.17.         Assignments
and Participations. Lender may sell or offer to sell the Loan or interests therein to one or more assignees or participants
(“Lender’s Sale Right”). Provided no Default then exists beyond any applicable cure period, Lender’s
Sale Right shall be subject to the consent of the Borrower, which consent shall not be unreasonably withheld, conditioned, or delayed
(“Borrower’s Sale Approval”). Notwithstanding the preceding sentence (i) by execution of this Agreement,
Borrower consents to the Lender’s sale of interests in the Loan to two participants at the closing of the Loan and (ii) any
assignees or participants of the Lender (“Lender’s Assignee”) shall not be subject to the Borrower’s
Sale Approval. If the Borrower shall execute, acknowledge and deliver any and all instruments reasonably requested by Lender in
connection therewith, and to the extent, if any, specified in any such assignment or participation, such assignee(s) or participant(s)
shall have the same rights and benefits with respect to the Loan Documents as such Person(s) would have if such Person(s) were
Lender hereunder; provided, that none of the foregoing shall decrease any rights or increase any obligations of Borrower or Guarantor
under the Loan Documents other than to a de minimis extent. Lender may disseminate any information it now has or hereafter obtains
pertaining to the Loan, including any security for the Loan, any credit or other information on the Property (including environmental
reports and assessments), Borrower, any of Borrower’s principals or any Guarantor, to any actual or prospective assignee
or participant, to Lender’s affiliates, to any regulatory body having jurisdiction over Lender, to any actual or prospective
counterparty (or its advisors) to any swap or derivative transaction relating to Borrower and the Loan, provided such persons shall
be notified of the confidential nature of such information. Borrower shall not be responsible for any Costs incurred by Lender
in connection with any transfer (via assignment or participation) of its interest in the Loan.

 

    	 	16	 

     

    

 

9.18.         Electronic
Transmission of Data. Lender and Borrower agree that certain data related to the Loan (including confidential information,
documents, applications and reports) may be transmitted electronically, including transmission over the Internet to the parties,
the parties affiliates, agents and representatives, and other Persons involved with the subject matter of this Agreement. Borrower
and Lender acknowledge and agree that (i) there are risks associated with the use of electronic transmission and that Lender does
not control the method of transmittal or service providers, (ii) Lender shall use reasonable efforts to protect the electronically
transmitted information, and (iii) subject to Section 9.18(ii) of this Agreement, Borrower will release, hold harmless and indemnify
Lender from any claim, damage or loss, including or arising in whole or part from Lender’s strict liability or sole, comparative
or contributory negligence, which is related to the electronic transmission of data.

 

9.19.         Forum.
Borrower hereby irrevocably submits generally and unconditionally for itself and in respect of its property to the jurisdiction
of any state court or any United States federal court sitting in Memphis, Tennessee with respect to any matter or dispute (a “Dispute”)
arising in connection with the Loan, the Project or Premises. Borrower hereby irrevocably waives, to the fullest extent permitted
by Law, any objection that Borrower may now or hereafter have to the laying of venue in any such court and any claim that any such
court is an inconvenient forum. Borrower hereby agrees and consents that, in addition to any methods of service of process provided
for under applicable Law, all service of process in any such Dispute may be made by certified or registered mail, return receipt
requested, directed to Borrower at its address for notice set forth in this Agreement, and service so made shall be complete five
(5) days after the same shall have been so mailed. Nothing herein shall affect the right of Lender to serve process in any manner
permitted by Law or limit the right of Lender to bring proceedings against Borrower in any other court or jurisdiction.

 

9.20.         USA
Patriot Act Notice. Lender hereby notifies Borrower that pursuant to the requirements of the USA Patriot Act (Title III of
Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), Lender is required to obtain, verify and record information
that identifies Borrower, which information includes the name and address of Borrower and other information that will allow Lender
to identify Borrower in accordance with the Act.

 

(Remainder of Page Intentionally Left Blank)

 

    	 	17	 

     

    

 

EXECUTED ON THE DAY
AND YEAR FIRST ABOVE WRITTEN.

 

	 	BORROWER:
	 	 
	 	STORAGE BUILDERS II LLC, a Delaware limited liability company

 

	 	By:	 JERNIGAN CAPITAL OPERATING COMPANY, LLC, a Delaware limited liability company, its sole member and managing member

 

	 	By:	 JERNIGAN CAPITAL, INC., a Maryland corporation, its managing member

 

	 	By:	 /s/ Kelly Luttrell
	 	Name: Kelly Luttrell
	 	Title: CFO, SVP, Treasurer

                                              

    	 	18	 

     

    

 

EXECUTED ON THE DAY
AND YEAR FIRST ABOVE WRITTEN.

 

	 	LENDER:
	 	 
	 	FIRSTBANK, a Tennessee state bank
	 	 	 
	 	By:	/s/ Bill Harter
	 	Name: Bill Harter
	 	Title: Senior Vice President

 

    	 	19	 

     

    

 

EXHIBIT A - REAL ESTATE

 

THE LAND REFERRED TO HEREIN BELOW
IS SITUATED IN THE COUNTY OF ORANGE, STATE OF FLORIDA, AND DESCRIBED AS FOLLOWS:

 

PARCEL I:

 

TRACT A:

 

LOT 1, WEST 50 COMMERCIAL SUBDIVISION,
ACCORDING TO THE PLAT THEREOF, AS RECORDED IN PLAT BOOK 70, PAGE 84, OF THE PUBLIC RECORDS OF ORANGE COUNTY, FLORIDA.

 

TRACT B:

 

TOGETHER WITH NON-EXCLUSIVE
APPURTENANT EASEMENTS, AS CREATED BY THAT DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS FOR WEST 50 COMMERCIAL SUBDIVISION,
AS RECORDED IN OFFICIAL RECORDS BOOK 9477, PAGE 2461, OF THE PUBLIC RECORDS OF ORANGE COUNTY, FLORIDA.

 

TRACT C:

 

TOGETHER WITH NON-EXCLUSIVE APPURTENANT
EASEMENTS, AS CREATED BY THAT CERTAIN DECLARATION OF RESTRICTIVE COVENANTS, AS RECORDED IN OFFICIAL RECORDS INSTRUMENT NUMBER 20160604598,
AND AMENDED BY FIRST AMENDMENT TO DECLARATION OF RESTRICTIVE COVENANTS RECORDED IN OFFICIAL RECORDS INSTRUMENT NUMBER 20170273743,
OF THE PUBLIC RECORDS OF ORANGE COUNTY, FLORIDA.

 

PARCEL II:

 

TRACT A:

 

LOT 4, WEST 50 COMMERCIAL SUBDIVISION,
ACCORDING TO THE PLAT THEREOF, AS RECORDED IN PLAT BOOK 70, PAGE 34, OF THE PUBLIC RECORDS OF ORANGE COUNTY, FLORIDA.

 

TRACT B:

 

TOGETHER WITH NON-EXCLUSIVE
APPURTENANT EASEMENTS, AS CREATED BY THAT DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS FOR WEST 50 COMMERCIAL SUBDIVISION,
AS RECORDED IN OFFICIAL RECORDS BOOK 9477, PAGE 2461, OF THE PUBLIC RECORDS OF ORANGE COUNTY, FLORIDA.

 

TRACT C

 

TOGETHER WITH NON-EXCLUSIVE APPURTENANT
EASEMENTS, AS CREATED BY THAT CERTAIN DECLARATION OF RESTRICTIVE COVENANTS, AS RECORDED IN OFFICIAL RECORDS INSTRUMENT NUMBER
20160604598, AND AMENDED BY FIRST AMENDMENT TO DECLARATION OF RESTRICTIVE COVENANTS RECORDED IN OFFICIAL RECORDS INSTRUMENT NUMBER
20170273743, OF THE PUBLIC RECORDS OF ORANGE COUNTY, FLORIDA.Exhibit 10.4

 

GUARANTY AGREEMENT

 

FOR VALUE RECEIVED,
and in consideration of credit given or to be given, advances made or to be made, or other financial accommodation from time to
time afforded or to be afforded to MCGINNIS FERRY OWNER, LLC, a Georgia limited liability company (hereinafter called the
 "Borrower"), by FIRSTBANK, a Tennessee state bank, a national banking association organized and existing under
the laws of the United States, and having a place of business in Memphis, Tennessee (hereinafter called the "Lender"),
the undersigned JERNIGAN CAPITAL OPERATING COMPANY, LLC, a Delaware limited liability company (hereinafter called the "Guarantor"),
for itself, its assigns, executors, administrators and successors absolutely and unconditionally guarantee(s) the full and prompt
payment to the Lender, of any and all indebtedness, obligations and liabilities of every kind and nature, however created, arising
or evidenced, of the Borrower to the Lender, as the same shall become due and payable under the Loan Documents (whether at stated
maturity, upon acceleration, or otherwise), whether now existing or hereafter created or arising, together with any Enforcement
Costs (as hereinafter defined) with respect thereto (all of which is collectively referred to as the "Indebtedness").

 

THIS AGREEMENT SHALL
BE A CONTINUING, ABSOLUTE AND UNCONDITIONAL GUARANTY, and shall remain in full force and effect until the Indebtedness (and interest
thereon and expenses in connection therewith), and all renewals, modifications, or extensions thereof, in whole or in part, shall
have been fully paid and satisfied. The death or dissolution of the Guarantor (or any of them, if more than one) shall not terminate
this Agreement.

 

The Guarantor acknowledges
that this Agreement is necessary to induce the Lender to make and/or maintain the Indebtedness and Guarantor will receive direct
and material benefit from the Lender’s extension of credit to Borrower and providing other financial accommodations to the
Borrower.

 

The Lender is hereby
expressly authorized to make from time to time, without notice to anyone: any renewals, modifications or extensions, whether such
renewals, modifications or extensions be in whole or in part and without limit as to the number of such extensions or of the renewal
periods thereof, and without notice to or further assent from the undersigned, sales, pledges, surrenders, compromises, settlements,
releases, indulgences, alterations, substitutions, exchanges, changes in, modifications, or other dispositions including, without
limitation, cancellations, of all or any part of the collateral pledged to secure the Indebtedness or any part of said Indebtedness,
either express or implied, or of any contracts or instruments evidencing any thereof, or of any security or collateral therefor,
and/or to take any security for or other guaranties upon any of said Indebtedness; and the liability of the Guarantor (or any of
them, if more than one) shall not be in any manner affected, diminished or impaired thereby, or by any lack of diligence, failure,
neglect or omission on the part of the Lender to make any demand or protest, or give any notice of dishonor or default, or to realize
upon or protect any of said Indebtedness, or any collateral or security therefor, or to exercise any lien upon or right of appropriation
or setoff of any moneys, accounts, credits, or property of said Borrower, possessed by the Lender, towards the liquidation of said
Indebtedness, or by any application of payments or credits thereon. Following the occurrence and during the continuance of an Event
of Default, the Lender shall have the exclusive right to determine how, when and what application of payments and credits, if any,
shall be made on said Indebtedness, or any part thereof, and shall be under no obligation, at any time, to file a claim against,
or exhaust its remedies against the Borrower, or any one or more of the Guarantors, or other persons or corporations, their properties
or estates, or to resort to or exhaust its remedies against, any collateral, security, property, liens or other rights whatsoever.
It is expressly agreed that any claims against Borrower, against any other guarantor, or against any collateral, accruing to the
Guarantor (or any of them, if more than one) by reason of payments made hereunder shall be in all respects junior and subordinate
to any obligation then or subsequently owed by the Borrower or by such other guarantor to the Lender. No set-off, claim, reduction,
or diminution of any obligation or defense of any kind or nature, which Guarantor or any Borrower has or may have against Lender,
shall be available hereunder to Guarantor against Lender.

 

     

     

    

 

In addition, the liability
of the Guarantor (or each of them, if more than one) under this Agreement shall be continuing, absolute and unconditional and shall
remain in full force and effect without regard to, and shall not be released, discharged or in any way affected by (a) any lack
of validity or enforceability of the Indebtedness; (b) any failure or omission of Lender to realize upon or protect any of the
collateral securing the Indebtedness, to exercise or enforce any lien upon the collateral securing the Indebtedness, or to exercise
any right of set-off (except to the extent any such failure to protect the collateral amounts to gross negligence or willful misconduct
by the Lender); (c) any bankruptcy, insolvency, arrangement, composition, assignment for the benefit of creditors, or similar
proceeding commenced by or against either Borrower or Guarantor; (d) any failure to perfect or continue perfection of, or
any release or waiver of, any rights given to Lender with respect to any property as security for the performance of the Indebtedness
by Borrower, or Guarantor’s obligations hereunder; (e) dissolution (voluntarily or involuntarily) of Guarantor; (f) any
defense that may arise by reason of the failure of Lender to file or enforce a claim against any Borrower or Guarantor in any bankruptcy
or other proceeding; (g) the voluntary or involuntary liquidation, dissolution, sale of all or substantially all of the property
of Borrower or Guarantor, the marshalling of assets and liabilities, or other similar proceeding affecting Borrower, Guarantor,
or any of their respective assets; (h) intentionally omitted; (i) the genuineness, validity, or enforceability of the Loan
Documents; (j) the release of Borrower or Guarantor from the performance or observance of any of the agreements, covenants, terms,
or conditions contained in the Loan Documents by operation of law, except upon full payment of the Indebtedness; or (k) any
other circumstances which might otherwise constitute a legal or equitable discharge of, or defense available to, a guarantor or
surety.

 

    	 	2	 

     

    

 

Guarantor further waives
(a) any right to notice of advances made to Borrower from time to time under the provisions of the Loan Documents; (b) any law,
statute, obligation or requirement which purports to require Lender to pursue any collateral securing the Indebtedness prior to
proceeding under this Agreement; (c) any right of Guarantor to require that an action be brought against Borrower under the provisions
of Title 47, Chapter 12, Tennessee Code Annotated, as the same may be amended from time to time; (d) any and all notice of every
kind to which Guarantor might otherwise be entitled with respect to the incurring of any further or increased obligation or liability
by Borrower to Lender, any renewal, amendment, extension or modification of any of the Indebtedness, the demand for payment or
the payment of all or any of the Indebtedness or other liabilities of Borrower or Guarantor to Lender (whether now existing or
hereafter arising) or the presentment of any instrument for payment at any time in connection with any obligation or liability
of Borrower or Guarantor or the protest or nonpayment thereof; and (e) any and all defenses, claims and discharges of Borrower,
or any other obligor, pertaining to the Indebtedness. Without limiting the generality of the foregoing, the Guarantor will not
assert, plead, or enforce against the Lender any defense of waiver, release, statute of limitations, fraud, incapacity, minority,
usury, illegality or unenforceability which may be available to the Borrower or any other person liable in respect of the indebtedness
or any setoff available against the Lender to Borrower or any such person. The Guarantor expressly agrees that it will be remain
liable, to the fullest extent permitted by applicable law, for any deficiency remaining after foreclosure of any mortgage or security
interest securing the Indebtedness, whether or not the liability of Borrower or any other obligor for such deficiency is discharged
pursuant to statute or judicial decision, and any failure to confirm judicially any deficiency. Guarantor hereby further waives,
surrenders, and agrees not to claim or enforce (i) any right to be subrogated in whole or in part of any right or claim of
Lender against Borrower or Guarantor arising under the Loan Documents or any other collateral given to Lender as security for the
payment or performance of the Indebtedness; and (ii) any right to require the marshalling of any assets of Borrower or Guarantor,
which right of subrogation or marshalling might otherwise arise from any partial payment of the Indebtedness by Guarantor.

 

As security for the
undertakings and obligations of the Guarantor hereunder, the Guarantor (or each of them, if more than one) expressly grants and
gives to the Lender a right of immediate setoff, without demand or notice, of the balance of every deposit account, now or at any
time hereafter existing, of the Guarantor (or each of them, if more than one) with the Lender, and a general lien upon, and security
interest in all money, negotiable instruments, commercial paper, notes, bonds, stocks, credits and/or choses in action, or any
interest therein, and any other property, rights, and interests of the Guarantor (or each of them, if more than one) or any evidence
thereof, which have or any time shall come into the possession, custody, or control of the Lender, and, in the event of default
hereunder, the Lender may sell or cause to be sold at public or private sale in any manner which may be lawful, for cash or credit
and upon such terms as the Lender may see fit, and (except as may be otherwise expressly provided by the Uniform Commercial Code,
or other applicable law) without demand or notice to the Guarantor (or each of them, if more than one), all or any of such security,
and the Lender (unless prohibited by the Uniform Commercial Code from so doing) or any other person may purchase such property,
rights or interests so sold and thereafter hold the same free of any claim or right of whatsoever kind, including any right or
equity or redemption, of the Guarantor (or each of them, if more than one), such demand, notice, right or equity of redemption
being hereby expressly waived and released.

 

In the event of the
death, incompetency, dissolution, liquidation, insolvency (however evidenced) of the Borrower, or institution of bankruptcy or
receivership proceedings by the Borrower, or in the event that any involuntary bankruptcy or receivership proceedings filed against
the Borrower shall not be dismissed within thirty (30) days following the institution of such proceedings, then and in any such
event all of the Indebtedness shall, for the purposes of this Agreement, and at the option of the Lender, immediately become due
and payable from the Guarantor; and, in such event, any and all sums or payments of any nature which may be or become due and payable
by the Borrower to the undersigned are hereby assigned to the Lender, and shall be collectible by the Lender, without necessity
for other authority than this instrument, until the Indebtedness shall be fully paid and discharged, but such collection by the
Lender shall not in any respect affect, impair or diminish any other rights of the Lender hereunder.

 

    	 	3	 

     

    

 

The granting of credit
from time to time by the Lender to the Borrower, in excess of the amount to which right of recovery under this Agreement is limited
and without notice to the Guarantor (or any of them, if more than one), is hereby expressly authorized and shall in no way affect
or impair this Agreement; and, in the event that the Indebtedness of the Borrower to the Lender shall so exceed the amount to which
this Agreement is limited, any payment by the Borrower or any collections or recovery by the Lender from any sources other than
this Agreement may first be applied by the Lender to any portion of the Indebtedness which exceeds the limits of this Agreement.

 

The Guarantor (or each
of them, if more than one) will not exercise any rights that Guarantor (or any of them, if more than one) may acquire by way of
subrogation under this Agreement, by any payment made hereunder or otherwise, until all of the Indebtedness shall have been paid
in full. If any amount shall be paid to the Guarantor (or any of them, if more than one) on account of such subrogation rights
at any time when all the Indebtedness shall not have been paid in full, such amount shall be held in trust for the benefit of the
Lender and shall forthwith be paid to the Lender to be credited and applied upon the Indebtedness.

 

Notwithstanding
any provision of the preceding paragraph to the contrary, if at any time the Guarantor (or any of them, if more than one) is or
becomes an "insider" (as defined from time to time in Section 101 of the Federal Bankruptcy Code) with respect to the
Borrower, the Guarantor (or each of them, if more than one) waives any and all rights of subrogation against the Borrower with
respect to this Agreement, whether such rights arise under an express or implied contract or by operation of law, it being the
intention of the parties that, if any Guarantor is an "insider" with respect to the Borrower, the Guarantor shall not
be deemed to be a "creditor" (as defined in Section 101 of the Federal Bankruptcy Code) of the Borrower, by reason of
the existence of this Agreement in the event that the Borrower becomes a debtor in any proceeding under the Federal Bankruptcy
Code.

 

Subject to applicable
law, in the event Lender is required at any time to refund or repay to any person for any reason any sums collected by it on account
of the obligations subject to this Agreement, including but not limited to sums repaid to a trustee in Bankruptcy as a result of
an avoided preferential transfer or fraudulent conveyance, Guarantor agrees that all such sums shall be subject to the terms of
this Agreement and that Lender shall be entitled to recover such sums from Guarantor notwithstanding the fact that this Agreement
previously may have been returned to Guarantor or that Guarantor previously may have been discharged from further liability under
this Agreement.

 

Notwithstanding any
other provision of this Agreement to the contrary, if the obligations of the Guarantor hereunder would otherwise be held or determined
by a court of competent jurisdiction in any action or proceeding involving any state corporate law or any state or Federal bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or other law affecting the rights of creditors generally, to be void,
invalid or unenforceable to any extent on account of the amount of the Guarantor's (or each of them, if more than one) liability
under this Agreement, then notwithstanding any other provision of this Agreement to the contrary, the amount of such liability
shall, without any further action by the Guarantor (or each of them, if more than one) or any other person, be automatically limited
and reduced to the highest amount which is valid and enforceable as determined in such action or proceeding.

 

    	 	4	 

     

    

  

Subject to the requirements
set forth in Section 9.17 of the Loan Agreement, the Lender may, sell, assign, participate, or transfer all or any part of said
Indebtedness; and in that event each and every immediate and successive assignee, transferee or holder of all or any part of said
Indebtedness shall have the right to enforce this Agreement, by suit or otherwise, for the benefit of such assignee, transferee
or holder, as fully as though such assignee, transferee or holder were herein by name given such rights, powers and benefits; but
the Lender shall have an unimpaired right, prior and superior to that of any said assignee, transferee or holder, to enforce this
Agreement for the benefit of the Lender, as to so much of said Indebtedness that has not been sold, assigned or transferred.

 

No act of commission
or omission of any kind, or at any time, on the part of the Lender in respect of any matter whatsoever shall in any way affect
or impair this Agreement (except to the extent any such act amounts to gross negligence or willful misconduct by the Lender). This
Agreement is in addition to and not in substitution for or discharge of any other guaranty held by the Lender. The Guarantor (or
each of them, if more than one) waives any rights of action Guarantor (or any of them, if more than one) might have against the
Lender because of the exercise by the Lender in any manner howsoever of any rights granted to the Lender herein.

 

Guarantor shall provide
to Lender the Guarantor financial statements set forth in Section 7.7 of the Loan Agreement.

 

Any notice, demand,
or request by Lender to Guarantor or by Guarantor to Lender shall be in writing and shall be given in accordance with the Loan
Agreement.

 

In the event Guarantor
should breach or fail to timely perform any provisions of this Guaranty, Guarantor will reimburse Lender, within ten (10) days’
of Lender’s request therefor, for all reasonable out-of-pocket expenses incurred by Lender in connection with the enforcement
of this Guaranty (including, without limitation, reasonable out-of-pocket attorneys’ fees) (collectively, the “Enforcement
Costs”).

 

Guarantor irrevocably:
(a) agrees that Lender or any other holder or holders of the Indebtedness may bring suit, action, or other legal proceedings arising
out of this Agreement or the transactions contemplated hereby in the courts of the State of Tennessee, sitting in Memphis, Shelby
County, Tennessee, or the courts of the United States for the Western District of Tennessee, sitting in Memphis, Shelby County,
Tennessee, but shall not be restricted to such courts; (b) consents to the jurisdiction of each such court in any such suit, action,
or proceeding; and (c) waives any objection which Guarantor may have to the laying of the venue of any such suit, action, or proceeding
in any of such courts.

 

This Agreement contains
the entire agreement between the parties and every part thereof shall be binding upon the Guarantor (or each of them, if more than
one), Guarantor's successors and assigns, as fully as though everywhere specifically mentioned, and shall inure to the benefit
of the Lender, and its successors and assigns, and shall be construed according to the laws of the State of Tennessee, in which
state it is accepted by the Lender.

 

    	 	5	 

     

    

  

If any provision hereof
is invalid or unenforceable, the remaining provisions hereof shall not be affected by such invalidity or unenforceability. Each
term and provision contained herein shall, however, be valid and enforceable to the fullest extent permitted by applicable law.
Each and every right, remedy, and power hereby granted to Lender or allowed it by law or other agreement shall be cumulative and
not exclusive of any other, and may be exercised by Lender at any time and from time to time. In the event that the Indebtedness
exceeds in any respect any amount by which this Agreement may be limited, any payments by Borrower, or any collections or recovery
by Lender from any sources other than this Agreement, may be applied first by Lender to any portion of the Indebtedness which exceeds
the limits of this Agreement.

 

The Guarantor (or each
of them, if more than one) acknowledges that this Agreement is and shall be effective against such Guarantor upon execution by
such Guarantor (regardless of whether any other person named herein as Guarantor shall sign), and delivery hereof to the Lender,
or its agent; and that it shall not be necessary for the Lender to execute any acceptance hereof or otherwise to signify or express
its acceptance hereof.

 

ALL OF THE PARTIES
HEREBY WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY OF THE PARTIES AGAINST THE OTHER ON ANY MATTER
WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS AGREEMENT OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT
DELIVERED (OR WHICH MAY BE DELIVERED IN THE FUTURE) IN CONNECTION HEREWITH OR ARISING FROM ANY BANKING RELATIONSHIP BETWEEN THE
PARTIES TO THIS AGREEMENT.

 

    	 	6	 

     

    

 

IN WITNESS WHEREOF,
the Guarantor has caused this Agreement to be executed by its duly authorized officers on this the 17th day of August, 2018.

 

	 	JERNIGAN CAPITAL OPERATING COMPANY, LLC, a Delaware limited liability company
	 	 	 	 	 
	 	 	By:	JERNIGAN CAPITAL, INC., a Maryland corporation, its managing member
	 	 	 	 	 
	 	 	 	By: 	/s/ Kelly Luttrell
	 	 	 	Name: Kelly Luttrell
	 	 	 	Title: CFO, SVP, Treasurer

 

    	 	7

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