MDRR 8-K
Medalist Diversified, Inc. (MDRR)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 12, 2025 (
(Exact Name of Registrant as Specified in Its Charter)
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(Registrant’s telephone number, including area code)
None
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class |
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging Growth Company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
ITEM 1.01 | Entry Into a Material Definitive Agreement. |
Contribution Agreement
On November 7, 2025, MDRR XXV Depositor 1, LLC (the “Depositor”), a Delaware limited liability company and a wholly-owned subsidiary of Medalist Diversified REIT, Inc., a Maryland corporation (the “Company”), entered into a Contribution Agreement (the “Contribution Agreement”) with MDRR XXV DST 1, a Delaware statutory trust (the “DST”), a wholly owned subsidiary of the Company.
Pursuant to the Contribution Agreement, the Depositor agreed to contribute its ownership interest (the “Contribution”) in a Tesla sales, service and delivery facility consisting of a 45,461 square foot, single story building on 3.498 acres of land located at 312 E. 9 Mile Road, Pensacola, Florida (the “Tesla Property”) to the DST in exchange for total consideration of $14,554,504, as described in more detail below, which was based on the price paid by the Company to acquire the Property on July 18, 2025. The Contribution Agreement contains representations, warranties, covenants, and indemnification obligations customary for transactions of this nature. On November 7, 2025, the Depositor completed the Contribution. Upon closing of the Contribution, the Company received cash of $6,932,061 and beneficial interests in the DST having an approximate aggregate net value of $7,622,443.
The DST was formed by MDR XXV Sponsor, TRS, a wholly owned subsidiary of the Company, to hold title to the Tesla Property and expects to offer beneficial interests in the DST to accredited investors in a private placement under Regulation D. The DST intends to offer beneficial interests to third-party investors in a private placement, the proceeds of which will be used to redeem the Depositor’s beneficial interests for cash. Upon completion of such offering, the Company expects to no longer retain an ownership interest in the DST but will continue to control the Tesla Property’s operations as the Trust Manager of the DST under the Amended and Restated Trust Agreement dated November 7, 2025 (the “Trust Agreement”).The Company expects to continue consolidating the DST in its financial statements under applicable accounting guidance until it has sold greater than 50% of the beneficial interests in the DST, at which time the Company will account for its ownership of any remaining beneficial interests in the DST under the equity method of accounting.
Under the terms of the Contribution Agreement and related trust documents:
| ● | The Company will serve as trust manager for the DST under the Amended and Restated Trust Agreement. |
| ● | The Company’s receipt of beneficial interests in the DST is subject to transfer restrictions customary for private placements. |
The foregoing description of the Contribution Agreement is qualified in its entirety by reference to the Contribution Agreement, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated by reference in this Item 1.01.
Guaranty
On November 7, 2025, in connection with the completion of the Contribution, the DST entered into a Loan Agreement (the “Loan Agreement”) with Pinnacle Bank (the “Lender”), for a loan in the amount of $7,710,000.00 (the “Loan”).
In connection with the Loan Agreement, Medalist Diversified Holdings, LP, a Delaware limited partnership and the Company’s operating partnership (the “Operating Partnership”), has agreed to provide a limited guaranty (the “Guaranty”) with respect to certain potential costs, expenses, losses, damages and other sums for which the DST is directly liable under the Loan Agreement, including losses or damages that may result from certain intentional actions committed by the DST in violation of the Loan Agreement. The Operating Partnership is also providing a guaranty of the principal balance and any interest or other sums outstanding under the Loan Agreement or any other Loan Document (as defined in the Loan Agreement) in the event of certain bankruptcy or insolvency proceedings involving the DST.
The foregoing description of the Loan Agreement and the Guaranty is qualified in its entirety by reference to the Loan Agreement and the Guaranty, copies of which are filed as Exhibit 10.2 and Exhibit 10.3, respectively, to this Current Report on Form 8-K and incorporated by reference in this Item 1.01.
ITEM 2.01 | Completion of Acquisition or Disposition of Assets |
The disclosure pertaining to the Contribution set forth under “Item 1.01. Entry into a Material Definitive Agreement” is 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 disclosure pertaining to the Guaranty set forth under “Item 1.01. Entry into a Material Definitive Agreement” is incorporated herein by reference.
ITEM 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
Exhibit No. | Description | |
10.1 | ||
10.2 | Loan Agreement, dated as of November 7, 2025, by and between MDRR XXV DST 1 and Pinnacle Bank | |
10.3 | ||
104 | Cover Page Interactive Data File – the cover page XBRL tags are embedded within the Inline XBRL Document |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| MEDALIST DIVERSIFIED REIT, INC. | |
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Dated: November 12, 2025 | By: | /s/ C. Brent Winn, Jr. |
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| C. Brent Winn, Jr. |
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| Chief Financial Officer |
EXHIBIT 10.1
CONTRIBUTION AGREEMENT
THIS CONTRIBUTION AGREEMENT (this “Agreement”) is made and entered into as of November 7, 2025 (“Contract Date”), by and between MDRR XXV Depositor 1, LLC, a Delaware limited liability company (the “Contributor”) and MDRR XXV DST 1, a Delaware statutory trust, or its designee (the “Contributee”).
RECITALS
WHEREAS, the Contributor is the holder of a fee simple interest in that certain real property located at 312 East Nine Mile Road in the City of Pensacola, County of Escambia, State of Florida (the “Property”).
WHEREAS, the Contributor purchased the Property using proceeds from a loan in the amount of $14,700,000 made to the Contributor (the “Existing Indebtedness”) by Farmers and Merchants Bank of Long Beach, a California corporation (“Existing Lender”) which Existing Indebtedness is secured by, among other security, by the Property pursuant to a Mortgage, Assignment of Rents, Security Agreement and Fixture Filing dated as of July 10, 2025 made by Contributor in favor of Existing Lender (the “Existing Lien”).
WHEREAS, the Contributor desires to contribute all of its right, title and interest in and to the Property, free and clear of all liens, security interests, prior assignments or conveyances, conditions, reservations, restrictions, and encumbrances whatsoever and all other defects or imperfections in title, including any preexisting liabilities for operating expenses incurred by Contributor or its affiliates under any lease affecting the Property to the extent the payment thereof is necessary or appropriate to avoid any encumbrances with respect to the Property, to maintain critical services to the Property, or to ensure the continuing relationship with any related providers to the extent material to the Property (collectively, “Encumbrances”), to the Contributee in exchange for, and in accordance with the terms and subject to the conditions, and for the consideration, specified in this Agreement.
WHEREAS, in connection with and as of the closing of the above described contribution, the Existing Lender will release the Existing Lien upon the payment of the Cash Amount (defined below) to the Existing Lender.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties to this Agreement agree as follows:
1. Contribution of the Property; Incorporation of Recitals. All of the preceding Recitals are hereby incorporated into this Agreement as though separately set forth in the body of this Agreement. The Contributor agrees to contribute, transfer, convey and assign to the Contributee, and the Contributee agrees to accept the contribution, transfer, conveyance and assignment of the Property, free of Encumbrances, except for the Permitted Exceptions (defined below), pursuant to the terms and conditions set forth in this Agreement.
2. Real Property Description. The defined term “Real Property” as used henceforth in this Agreement shall include all of the rights, title and interest of the Property more fully described on Exhibit A together with all of the right, title and interest in and to all buildings, structures, fixtures, parking areas, easements, rights-of-way and improvements on the real property, including without limitation all (if any) of the personal and other property related to or located on the Property and used or useful in the operation of the Property, such as (i) tangible personal property (i.e., supplies, vehicles, machinery, equipment, furniture and trade fixtures,
Contribution Agreement (GK Revisions 5-11) v5Contribution Agreement REV 05092010.doc
computers and related hardware and software), (ii) agreements, contracts, subcontracts, warranties, guarantees, or other similar arrangements or rights thereunder, (iii) franchises, approvals, consents, permits, licenses, orders, registrations, certificates, certificates of occupancy, exemptions and similar rights obtained from governments or agencies or any other written authorizations necessary for the use or ownership of the Property, (iv) all right, title and interest, if any, of the Contributor in and to any land lying in the bed of any street, road or avenue opened or proposed in front of or adjoining the Property to the center line thereof, and all (if any) right, title and interest of the Contributor in and to any award or payment made, or to be made (x) for any taking in condemnation, eminent domain or agreement in lieu thereof of land adjoining all or any part of the Property; (y) for damage to the Property or any part thereof by reason of change of grade or closing of any such street, road, highway or avenue; and (z) for any taking in condemnation or eminent domain of any part of the Property, (v) leases, subleases, licenses and other occupancy agreements to which the Contributor is a party and, except as otherwise expressly provided in Section 9.E of this Agreement, the rents, profits and other rights granted thereunder, (vi) prepayments and, except as otherwise expressly provided in Section 9.E of this Agreement, deferred items, claims, deposits, refunds, causes of action and rights of recovery, (vii) except as otherwise expressly provided in Section 9.E of this Agreement, accounts, accounts receivable, reserve funds, and other receivables, (viii) telephone numbers, books, records, ledgers, files, documents, correspondence and lists, (ix) drawings and specifications, architectural plans, advertising and promotional materials, studies and reports, (x) intangibles including trade or business names, logos, trademarks, goodwill and going concern value and (xi) utilities, reservations, hereditaments, privileges, tenements, opportunities, strips, gores, easements and other rights and benefits running with the land. The term “Real Property” shall not include any current or contingent debts, liabilities or obligations of the Contributor.
3. Consideration.
A. The Consideration (defined below) shall consist of the Class 2 Beneficial Interests issued by the Contributee to the Contributor. On the Closing Date, the Class 2 Beneficial Interests shall be paid by delivery of the same to the Contributor, and be evidenced by an Amended and Restated Trust Agreement of the Contributee to be entered into on or before the Closing Date (as defined below) (the “Contributee Trust Agreement”). The parties to this Agreement shall take such additional actions and execute such additional documentation as may be required by the Contributee Trust Agreement in order to effect the transactions contemplated by this Agreement.
B. “Consideration” means the consideration for which the Contributor agrees to contribute, transfer, convey and assign the Property to the Contributee. The Consideration will be based on the Property Value (as such term is defined on Exhibit B attached hereto), and subject to customary closing adjustments and prorations (the “Contribution Value”).
C. “Cash Amount” means such amount of cash as is required to be paid to Existing Lender to cause Existing Lender to release the Existing Lien upon Closing (as defined below).
D. “Class 2 Beneficial Interests” means all of the class 2 beneficial interests of the Contributee with value as determined in accordance with Exhibit B.
4. Term of Agreement. If the Closing (as defined in Section 5.A. of this Agreement) does not occur on or before a date that is one year from the Contract Date (the “Termination Date”), this Agreement shall be deemed terminated and shall be of no further force and effect and no party hereto shall have any further obligations pursuant to this Agreement except as specifically set forth in this Agreement.
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5. Closing Date and Closing Procedures and Requirements.
A. Closing Date. The “Closing Date” or “Closing” of this Agreement and the completion of the acquisition of the Property by the Contributee shall be on a date upon which the parties mutually agree; provided, however, the conditions of Section 9 and 10 of this Agreement have been met or waived. Closing shall take place at the offices of Williams Mullen, 200 South 10th Street, Suite 1600, Richmond, Virginia, or at such other place as the parties hereto may agree upon.
B. Conveyance of Title and Delivery of Closing Documents.
C. Payment of Consideration at Closing. On the Closing Date, the Contributee shall transfer the Consideration to the Contributor, pursuant to Section 3 of this Agreement. Simultaneously with the delivery of the Consideration, the Contributor will contribute, transfer, convey, assign and deliver to the Contributee its respective right, title and interest in and to the Property, free and clear of all Encumbrances.
D. Closing Costs. Contributee shall pay the escrow fee charged by the Escrow Agent, the basic premium for the Standard Owner Title Policy, the recording and any transfer taxes for the Special Warranty Deed, any documentary stamp fees or similar transfer taxes assessed on the transaction. The Contributee shall be responsible for the cost of any third party inspection reports, the cost of any Updated Survey obtained by the Contributee, any mortgagee’s or loan policy of title insurance, the cost of endorsements to the Title Policy or the cost of an extended Owner’s Title Policy if requested by the Contributee or its lender, the cost of preparing any documentation associated with the loan for the acquisition of the Property, any appraisals that may be required by the lender, the recording fees for the grant deed, and any documentary stamp fees or similar transfer taxes assessed on the transaction. The Contributee shall pay all other closing costs which are normally assessed by the Title Company against a contributor or contributee in a transaction in the county where the property is located. The allocation of the Consideration between the Contributor and the Contributee shall be determined solely between said entities.
E. Real Estate Prorations and Payments: Closing and Post Closing. Rents, interest if required on any security deposits, operating expenses and ad valorem taxes for the then current year shall be prorated at the Closing effective as of the date of Closing. Any cash security deposits held by Contributor shall be credited to Contributee. In the event that the Contributee incurs the cost to remove any Encumbrances in order to obtain title to the Property free and clear of any such Encumbrances, the Contributee shall be
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entitled to a credit against the Consideration to be reflected on the Closing Statement. If the Closing shall occur before the ad valorem tax rate or assessment is fixed for the then year, the apportionment of the taxes shall be upon the basis of the tax rate and/or assessment for the preceding year applied to the latest assessed valuation, but any difference in actual and estimated taxes for the year of contribution actually paid by Contributor shall be adjusted between the parties upon receipt of written evidence of the payment thereof. Prior to Closing, Contributor and Contributee shall mutually agree upon all of the proposed adjustments and prorations. Ninety (90) days following the Closing Date, a post-closing “true-up” shall take place to adjust prorations of items necessary and/or incidental to the operation of the Property including any rents, fees, security deposits, service contracts, and other revenues and expenses therefrom as of the Closing Date in a manner customary in the respective jurisdiction; provided, however, that any such post-closing true-up shall be for informational purposes and shall not serve to adjust, whether upward or downward, the Consideration delivered to the Contributor hereunder.
F. Risk of Loss.
(i)If all or any portion of the Real Property is taken, or becomes subject to a pending taking, by eminent domain, or is conveyed in lieu thereof, and such taking or conveyance has a material, adverse effect on the continuing use and operation of the Property, as the Property is operated as of the Contract Date, or if the Contributor receives written notice of any rezoning of all or any portion of the Real Property, then, as of the Closing, the Contributor shall deliver to the Contributee the amount of any award or other proceeds on account of such taking, conveyance or casualty which have been actually paid to the Contributor prior to the Closing Date as a result of such taking, conveyance or casualty (less all costs and expenses, including, without limitation, attorneys’ fees and costs, incurred by the Contributor as of the Closing Date in obtaining payment of such proceeds or in repairing or restoring the Real Property) and, to the extent such award or proceeds have not been delivered to the Contributor, the Contributor shall assign to the Contributee at Closing (without recourse to the Contributor) any rights of the Contributor to, and the Contributee shall be entitled to receive and retain, all awards for the taking of the Real Property or any portion thereof or conveyance in lieu thereof or insurance proceed payable with respect to any damage, as the case may be (less the costs and expenses described above in this Section 5 to the extent not previously paid to the Contributor out of the award or proceeds for the applicable taking, conveyance in lieu thereof or casualty).
(ii)In the event of any casualty at any Property prior to Closing, the Contributor shall use reasonable and good faith efforts (subject to receipt of insurance proceeds) to repair and restore the Property prior to Closing. If, however, the repair or restoration is not completed prior to Closing, then the parties shall proceed to consummate the Closing and at Closing, the Contributor shall deliver to the Contributee the amount of any insurance proceeds on account of such casualty which have been actually paid to the Contributor prior to the Closing Date as a result of such casualty (less all costs and expenses, including, without limitation, attorneys’ fees and costs, incurred by the Contributor as of the Closing Date in obtaining payment of such proceeds or in repairing or restoring the Real Property) and, to the extent such proceeds have not been delivered to the Contributor, the Contributor shall assign to the Contributee at Closing (without recourse to the Contributor) any rights of the Contributor to, and the Contributee shall be entitled to receive and retain, all insurance proceed payable with respect to any damage (less the costs and expenses described above in this Section 5 to the extent not previously paid to the Contributor out of the proceeds for the casualty).
6. Representations, Warranties and Covenants of the Contributor. Contributor hereby makes the following representations, warranties and covenants, each of which is material and being relied upon by the Contributee, each and every one of which is true, correct, and complete, as of the date of this Agreement (unless they expressly provide for a future date), and will be true, correct, and complete as of the Closing Date.
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A. Organization and Authority. The Contributor is a Delaware limited liability company, duly organized or formed, validly existing and in good standing under the laws of the state of its organization or formation. The Contributor has full limited liability company right, power and authority to execute and deliver this Agreement and to perform all of its obligations under this Agreement and to consummate the transactions contemplated by this Agreement. This Agreement constitutes the legal, valid and binding obligation of the Contributor, enforceable against it in accordance with its terms, subject to bankruptcy, reorganization, insolvency and other similar laws affecting the enforcement of creditors’ rights generally and to general principles of equity.
B. Ownership.
(i) The Contributor owns a fee simple interest in the Property, beneficially and of record, free and clear of any and all Encumbrances except for the Existing Lien. At Closing, upon consummation of the transactions contemplated hereby, the Contributee and agreed upon hereunder, will acquire the interest in the Property free and clear of any and all Encumbrances.
(ii) The Contributor has not granted to any other person or entity an option to purchase or a right of first refusal in connection with the Property, or any portion thereof or any direct or indirect interest therein nor are there any agreements or understandings between the Contributor and any other person or entity with respect to the disposition of the Property or any portion thereof and no other person or entity holds any economic or other beneficial interest in the Property;
(iii) except as otherwise disclosed in writing by or on behalf of the Contributor to the Contributee, or in the Title Commitment, and except with respect to Permitted Exceptions, the Contributor has not received any written notice, nor has any actual knowledge, that the Real Property or any portion or portions thereof is or will be subject to or affected by any special assessments, whether or not presently a lien thereon;
(iv) except as otherwise disclosed in writing by or on behalf of the Contributor to the Contributee, or in the Title Commitment, and except with respect to Permitted Exceptions, the Contributor has not assigned, transferred, conveyed, mortgaged, deeded in trust, or encumbered any interest in the Real Property; and
(v) the Contributor has no actual knowledge and has not received any written notice that any present default or breach exists under (A) any Encumbrance encumbering the Real Property or (B) any covenants, conditions, restrictions, rights-of-way or easements which may affect the Real Property or any portion or portions thereof. Except as otherwise disclosed in writing to the Contributee, or in the Title Commitment, the Contributor has not received any written notices from any Governmental Entity (as defined below), and alleging the existence of any violation of law or governmental regulations with respect to the Real Property.
C. Noncontravention. Neither the entry into nor the performance of, or compliance with, this Agreement by the Contributor has resulted, or will result, in any violation of, or default under, or result in the acceleration of, any obligation under any limited liability company agreement, partnership agreement, regulations, mortgage indenture, lien agreement, note, contract, permit, judgment, decree, order, restrictive covenant, statute, rule, or regulation (i) to which the Contributor is a party or by which the Contributor is bound and (ii) that is applicable to the Contributor or the Property. The execution and delivery of this Agreement and the performance by the Contributor of its obligations hereunder require no further action or approval of any other individuals or entities in order to constitute this Agreement as a binding and enforceable obligation of the Contributor in accordance with its terms subject, as to enforcement, to the bankruptcy,
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reorganization, insolvency and other similar laws of general applicability relating to or affecting creditors’ rights and to general principles of equity.
D. Litigation. There is no action, suit, or proceeding pending against Contributor nor to the knowledge of Contributor, is there any threatened before any arbitrator or before any Governmental Entity which (i) in any manner raises any question affecting the validity or enforceability of this Agreement; (ii) could materially and adversely affect the business, financial position, or results of operations of Contributor; (iii) could materially and adversely affect the ability of Contributor to perform its obligations hereunder, or under any document to be delivered pursuant hereto; (iv) could create a lien on the Real Property, any part thereof, or any interest therein; or (v) could materially and adversely affect the Real Property, any part thereof, or any interest therein (any such matter, “Litigation”).
E. No Consents. Except as may otherwise be set forth in this Agreement, each consent, approval, authorization, order, license, certificate, permit, registration, designation, or filing by or with any governmental agency or body necessary for the execution, delivery, and performance of this Agreement or the transactions contemplated hereby by such Contributor has been obtained or will be obtained on or before the Closing Date.
F. [Reserved]
G. Tax Matters. The Contributor represents and warrants that it has obtained from its own counsel advice regarding the tax consequences of (i) the transfer of the Property to the Contributee and the receipt of the Consideration, as consideration therefor, (ii) the receipt of the Class 2 Beneficial Interests; and (iii) any other transaction contemplated by this Agreement. The Contributor further represents and warrants that it has not relied on the Contributee, any other contributor or any such party’s respective affiliates, representatives, counsel or other advisors and their respective representatives for such tax advice.
H. Bankruptcy with Respect to the Contributor. No Act of Bankruptcy has occurred with respect to the Contributor. As used herein, “Act of Bankruptcy” shall mean if the Contributor shall (i) apply for or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee or liquidator of itself or of all or a substantial part of its property, (ii) admit in writing its inability to pay its debts as they become due, (iii) make a general assignment for the benefit of its creditors, (iv) file a voluntary petition or commence a voluntary case or proceeding under the Federal Bankruptcy Code (as now or hereafter in effect), (v) be adjudicated bankrupt or insolvent, (vi) file a petition seeking to take advantage of any other law relating to bankruptcy, insolvency, reorganization, receivership, dissolution, winding-up or composition or adjustment of debts, (vii) fail to controvert in a timely and appropriate manner, or acquiesce in writing to, any petition filed against it in an involuntary case or proceeding under the Federal Bankruptcy Code (as now or hereafter in effect), or (viii) take any entity action for the purpose of effecting any of the foregoing.
I. Brokerage Commission. The Contributor has not engaged the services of, any real estate agent, broker, finder or any other person or entity for any brokerage or finder’s fee, commission or other amount with respect to the transactions described herein on account of any action by the Contributor. The Contributor hereby agrees to indemnify and hold the Contributee and its respective employees, directors, partners, affiliates and agents harmless against any claims, liabilities, damages or expenses actually suffered or incurred by any of the indemnified parties and directly arising out of a breach of the foregoing provisions of this Subsection I. This indemnification shall survive Closing or any termination of this Agreement for a period of one (1) year.
J. Further Representations and Warranties. Each of the following statements is true, correct and complete as of the date of this Agreement (unless they expressly provide for a future date), and will be true, correct and complete as of the Closing Date:
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(i) Liabilities; Indebtedness. Except with respect to the Permitted Exceptions and Existing Indebtedness, the Contributor has not incurred any indebtedness related to the Property.
(ii) Environmental Conditions. The Contributor has not received any written notice from the United States Environmental Protection Agency or any other Governmental Entity that regulates Hazardous Substances or public health risks or other environmental matters or any other private party or Person alleging (1) the presence or Release, at the Property, of (x) any Hazardous Substance and (y) which Hazardous Substance would cause the Real Property to be in violation of any applicable Environmental Laws, or (2) that the Property is not in compliance with applicable Environmental Laws. The Contributor has not been served with any summons and complaint with respect to any litigation, nor has the Contributor received any written notice, from any Governmental Entity, of any pending investigation, where such litigation or investigation concerns the alleged presence of any Hazardous Substances located in, on or under or upon the Property, nor to the actual knowledge of the Contributor, has any such litigation been threatened, in writing delivered to the Contributor, in the last twelve (12) months by any Governmental Entity of any third party.
(iii) No Continuing Obligations. The Contributor is not a party to any written contract with any Governmental Entity or any person pursuant to which the Contributor has any indemnity or other continuing obligation with respect to (i) the remediation or investigation of any condition resulting from the treatment, storage, or release of Hazardous Substances; or (ii) any actual or potential non-compliance with Environmental Laws.
(iv) Compliance With Laws. The Contributor has not received any written notice from any Governmental Entity of the institution of any proceedings relating to the revocation or modification of any certificates, authorities or permits issued by any state or federal agencies or bodies necessary to conduct the business to be conducted by the Contributor which, singly or in the aggregate, if the subject of an unfavorable decision, ruling, or finding, would materially and adversely affect the condition, financial or otherwise, or the earnings, business affairs or business prospects of the Real Property. To the knowledge of the Contributor, the Contributor has not received any written notice from any Governmental Entity alleging the existence of any violation of any applicable zoning, building or safety code, rule, regulation or ordinance, or of any employment, wetlands or other regulatory law, order, regulation or other requirement, including without limitation the Americans With Disabilities Act or any restrictive covenants or other easements, encumbrances or agreements, relating to the Real Property, which remains uncured and would materially and adversely affect the condition, financial or otherwise, or the earnings, business affairs or business prospects of the Real Property. The Contributor has not received any written notice from any Governmental Entity indicating that any inquiry, complaint, proceeding or investigation (excluding routine, non-violative matters or routine periodic inspections) is contemplated or, to the actual knowledge of the Contributor, is pending regarding compliance of the Property with any laws.
(v) Condemnation and Moratoria. The Contributor has not received any written notice from any Governmental Entity, of any (i) pending or threatened condemnation or eminent domain proceedings, or negotiations for purchase in lieu of condemnation, which affect or would affect any material portion of the Real Property; (ii) pending or threatened moratoria on utility or public water or sewer hook-ups or the issuance of permits, licenses or other inspections or approvals necessary in connection with the construction or reconstruction of improvements which affect or would affect any portion of the Real Property; or (iii) pending or threatened proceeding to change adversely the existing zoning classification as to any portion of the Real Property.
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(vi) Defaults. The Contributor has not given or received any written notice of any uncured default with respect to any agreement to which the Contributor is a party and that affects the Property, and, to the Contributor’s knowledge, no event has occurred or is threatened, which through the passage of time or the giving of notice, or both, would constitute a material default thereunder or would cause the acceleration of any obligation of any party thereto or the creation of a Lien upon the Property, except for Permitted Exceptions.
(vii) Permits. No written notice has been received by the Contributor from any Governmental Entity that the Property is in material violation of the terms and conditions of any Permit applicable thereto or that any Permit not in effect is required for the lawful operation of the Property as currently conducted. True, complete and correct copies of all Permits and all amendments and supplements thereto have been delivered to the Contributee prior to the date hereof.
As used in this Subsection J, the following terms shall have the following meanings:
(a) “Environmental Laws” means all applicable statutes, regulations, rules, ordinances, codes, licenses, permits, orders, demands, approvals, authorizations and similar items of any Governmental Entity and all applicable judicial, administrative and regulatory decrees, judgments and orders relating to the protection of human health or the environment as in effect on the date of hereof, including but not limited to those pertaining to reporting, licensing, permitting, investigation, removal and remediation of Hazardous Substances, including without limitation: (x) the Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C. Section 9601 et seq.), the Resource Conservation and Recovery Act (42 U.S.C. Section 6901 et seq.), the Clean Air Act (42 U.S.C. Section 7401 et seq.), the Federal Water Pollution Control Act (33 U.S.C. Section 1251), the Safe Drinking Water Act (42 U.S.C. 300f et seq.), the Toxic Substances Control Act (15 U.S.C. 2601 et seq.), the Endangered Species Act (16 U.S.C. 1531 et seq.), the Emergency Planning and Community Right-to-Know Act of 1986 (42 U.S.C. 11001 et seq.), and (y) applicable state and local statutory and regulatory laws, statutes and regulations pertaining to Hazardous Substances.
(b) “Hazardous Substance” means any substance which is controlled, regulated or prohibited under any Environmental Law as in effect as of the date hereof.
(c) “Release” shall have the same meaning as the definition of “release” in the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”) at 42 U.S.C. Section 9601(22).
(d) “Liens” means any mortgages, pledges, liens, options, charges, security interests, mortgage deed, restrictions, prior assignments, encumbrances, covenants, encroachments, assessments, purchase rights, rights of others, licenses, easements, voting agreements, liabilities or claims of any kind or nature whatsoever, direct or indirect, including, without limitation, interests in or claims to revenues generated by such property.
(e) “Permits” means all licenses, permits, variances, and certificates issued by a Governmental Entity and used in connection with the ownership, operation, use, or occupancy of the Property (including certificates of occupancy, business licenses, state health department licenses, licenses to conduct business and all such other permits, licenses and rights, obtained from any Governmental Entity concerning ownership, operation, use, or occupancy of the Property).
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(j) “Person” means any individual, corporation, limited liability company, partnership, joint venture, association, joint-stock company, trust, unincorporated organization or governmental entity.
K. Taxes. (x) All returns, reports and forms (including elections, declarations, amendments, schedules, information returns or attachments thereto) required to be filed with a governmental authority with respect to taxes (“Tax Returns”) with respect to the Contributor and its assets that are required to have been filed in any jurisdiction, and all taxes shown to have been due and payable on such Tax Returns have been paid or set aside in accounts for payment, or accrued or reserved in cash for such payments on its books and records, and the Contributor is not presently under audit by any governmental authority with respect to any such taxes. (y) Such Tax Returns (if any) have been accurately prepared and the Contributor is treated as a partnership for federal income tax purposes and has not elected to be treated as a corporation for federal tax purposes. (aa) There are no liens for taxes upon, pending against or, to the Contributor’s knowledge, threatened against, any asset of the Contributor, and the Contributor is not subject to any tax allocation or sharing contract. (bb) The Contributor is a United States persons not subject to withholding under Section 1446 of the Code. (cc) The Contributor has not been a party to any “listed transaction” or “transaction of interest” as defined in Code Section 6706(A)(c)(2) and the regulations promulgated thereunder.
L. Representations True and Correct. The Contributor hereby represents and warrants that this Agreement does not, and on the Closing Date will not, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements herein not misleading. In the event that changes occur as to any material information, documents or exhibits referred to in this Agreement, of which the Contributor has knowledge and such change shall cause any of the preceding representations and warranties to be rendered untrue, in any material respect, the Contributor will promptly disclose the same to the Contributee; and, in the event of any such material change, the Contributee may, at its election and in its reasonable discretion, terminate this Agreement in writing, on or before the Closing Date, in the event that the Contributor fails, for any reason, to cure the resulting breach of such warranty or representation on or before the Closing Date and to the reasonable satisfaction of the Contributee.
M. AS-IS, WHERE-IS. Except as expressly set forth in this Section 6, Contributor makes no express or implied warranty of any kind whatsoever. ALL IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE ARE EXPRESSLY EXCLUDED AND EXCEPT TO THE LIMITED AND SPECIFIC EXTENT PROVIDED HEREIN TO THE CONTRARY, THE CONTRIBUTION OF THE PROPERTY SHALL OCCUR ON A STRICT AND ABSOLUTE “AS-IS,” “WHERE-IS” BASIS.
N. Knowledge. All references in this Agreement to “Contributor’s knowledge,” “Contributor’s actual knowledge,” or words of similar import shall refer only to the actual (as opposed to deemed, imputed or constructive) knowledge of Brent Winn, after reasonable inquiry and, notwithstanding any fact or circumstance to the contrary, shall not be construed to refer to the knowledge of any other person or entity. All references to “Contributee’s knowledge” or words of similar import shall refer to the actual (as opposed to deemed, imputed or constructive) knowledge, after reasonable inquiry, of the senior officers of the Contributee.
7. Representations and Warranties of the Contributee. The Contributee hereby makes the following representations and warranties, each of which is (x) material and being relied upon by the Contributor, (y) true, correct, and complete as of the date of this Agreement (unless they expressly provide for a future date) and (z) will be true, correct, and complete as of the Closing Date:
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A. Organization and Authority. The Contributee is a Delaware statutory trust duly organized, validly existing, and in good standing under the laws of the State of Delaware, and has full right, power, and authority to execute and deliver this Agreement and to perform all of its obligations under this Agreement and to consummate the transactions contemplated by this Agreement. The execution and delivery of this Agreement and the performance by the Contributor of its obligations hereunder have been duly authorized by all requisite action and require no further action or approval of the Contributee’s trustees, or of any other individuals or entities in order to constitute this Agreement as a binding and enforceable obligation of such entity in accordance with its terms subject, as to enforcement, to the bankruptcy, reorganization, insolvency and other similar laws of general applicability relating to or affecting creditors’ rights and to general principles of equity. This Agreement constitutes the legal, valid and binding obligation of the Contributee, enforceable against it in accordance with its terms, subject to bankruptcy, reorganization, insolvency and other similar laws affecting the enforcement of creditors’ rights generally and to general principles of equity.
B. Noncontravention. Neither the entry into nor the performance of, or compliance with, this Agreement by the Contributee has resulted, or will result, in any violation of, or default under, or result in the acceleration of, any obligation under its operating agreement, or any material mortgage, indenture, lien agreement, note, contract, permit, judgment, decree, order, restrictive covenant, statute, rule, or regulation applicable to the Contributee.
C. Litigation. There is no action, suit, or proceeding, pending or, to the knowledge of the Contributee, threatened, against or affecting the Contributee in any court or before any arbitrator or before any federal, state, municipal, or other governmental department, commission, board, bureau, agency or instrumentality which in any manner raises any question affecting the validity or enforceability of this Agreement or could materially and adversely affect the ability of the Contributee to perform its obligations under this Agreement, or under any document to be delivered pursuant to this Agreement.
D. Contributee Class 2 Beneficial Interests Validly Issued. The Contributee Class 2 Beneficial Interests to be issued to the Contributor hereunder shall be duly and validly authorized and issued, free of any preemptive or similar rights or any encumbrances, other than encumbrances arising under applicable securities laws, or any lockup agreement to which the Contributor becomes a party.
E. Consents. Except as may otherwise be set forth in this Agreement, each consent, approval, authorization, order, license, certificate, permit, registration, designation, or filing by or with any governmental agency or body necessary for the execution, delivery, and performance of this Agreement or the transactions contemplated hereby by the Contributor has been obtained or will be obtained on or before the Closing Date.
F. Brokerage Commission. The Contributee has not engaged the services of any real estate agent, broker, finder or any other person or entity for any brokerage or finder’s fee, commission or other amount with respect to the transactions described herein on account of any action by the Contributee. The Contributee hereby agrees to indemnify and hold each Contributor harmless against any claims, liabilities, damages or expenses arising out of a breach of the foregoing. This indemnification shall survive Closing or any termination of this Agreement.
G. Representations True and Correct. In the event that changes occur as to any material information, documents or exhibits referred to in this Agreement, of which the Contributee has knowledge and such change shall cause any of the preceding representations and warranties to be rendered untrue, in any material respect, such entity will promptly disclose the same to the Contributor; and, in the event of any such material change, the Contributor may, at its election, terminate this Agreement in writing, on or before the Closing Date, in the event that the Contributee fails, for any reason, to cure (on or before the
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Closing Date) the resulting breach of such warranty or representation to the reasonable satisfaction of the Contributor.
8. Tax Covenants. The Contributor shall provide (but at no out-of-pocket expense to the Contributor) the Contributee with such cooperation and information with respect to taxes relating to the Real Property as is reasonably requested by the Contributee and as is reasonably in the control or possession of the Contributor; and shall cooperate (but, again, at no out-of-pocket expense to the Contributor or its beneficial owners) with the Contributee with respect to its filing of tax returns. The Contributee shall promptly notify the Contributor in writing upon receipt by the Contributee or any of its affiliates of notice of (i) any pending or threatened tax audits or assessments relating to the Contributor or the Real Property and (ii) any pending or threatened federal, state, local or foreign tax audits or assessments of the Contributee or any of its affiliates, in each case which may affect the liabilities for taxes of the Contributor with respect to any tax period ending on or before the Closing Date. The Contributor shall promptly notify the Contributee in writing upon receipt by the Contributor of written notice of any pending or threatened federal, state, local or foreign tax audits or assessments relating to the Real Property. The Contributee and the Contributor, may participate, each at its own expense, in the prosecution of any claim or audit with respect to taxes attributable to any taxable period ending on or before the Closing Date, provided, that the Contributor shall have the right to control the conduct of any such audit or proceeding or portion thereof and the Contributor shall have potential liability for the payment of any additional taxes attributable to any taxable period ending on or before the Closing Date, and the Contributee shall have the right to control any other audits and proceedings. Notwithstanding the foregoing, neither the Contributee nor the Contributor may settle or otherwise resolve any such claim, suit or proceeding which could have an adverse tax effect on the other party or its owners without the consent of the other party, such consent not to be unreasonably withheld or delayed. The Contributor shall retain all tax returns, schedules and work papers, and all material records and other documents relating thereto, until the expiration of the statute of limitations (and, to the extent notified by any party, any extensions thereof) of the taxable years to which such tax returns and other documents relate and until the final determination of any tax in respect of such years.
9. Conditions Precedent to the Obligations of the Contributee. The Contributee’s obligation to perform any obligation provided for in this Agreement is conditioned upon the occurrence of the following conditions on or before the Closing Date:
A. The obligations of the Contributor contained in this Agreement to be performed by it shall have been duly performed by it on or before the Closing Date and the Contributor shall not have breached, in any material respect, any of its covenants or agreements contained herein and failed to cure such breach.
B. Concurrently with the Closing, the Contributor shall have executed and delivered to the Contributee the documents required to be delivered pursuant to Section 5.B. and Section 5.C. of this Agreement.
C. The Contributor shall have obtained and delivered to the Contributee any consents or approvals of any Governmental Entity or third parties (including, without limitation, any lenders and lessors) required to consummate the transactions contemplated by this Agreement. As used herein, the term “Governmental Entity” means any governmental agency or quasi-governmental agency, bureau, board, commission, court, department, official, political subdivision, tribunal or other instrumentality of any government, whether federal, state or local, domestic or foreign.
D. No order, statute, rule, regulation, executive order, injunction, stay, decree or restraining order shall have been enacted, entered, promulgated or enforced by any court of competent jurisdiction or Governmental Entity that prohibits the consummation of the transactions contemplated hereby, and no litigation or governmental proceeding seeking such an order shall be pending or threatened.
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E. The Title Company shall be irrevocably committed to issuing a Title Policy upon Closing insuring ownership of the Real Property in the name of the Successor Assignee, as nominated by the Contributee hereunder, in the amount equal to that portion of the Consideration respectively allocable to the Property, or such other amount as determined by the Contributee, subject only to Permitted Exceptions.
F. There shall be no pending actions, suits or proceedings of any kind or nature whatsoever, legal or equitable, affecting the Real Property or any portion thereof in any material way, or relating to or arising out of the ownership of the Real Property, in any court or before or by a federal, state, county, municipal department, commission, board, bureau, or agency or other governmental instrumentality having jurisdiction over the Property.
Any or all of the foregoing conditions may be waived by the Contributee in its sole and absolute discretion.
10. Conditions to the Contributor’s Obligations. The Contributor’s obligation to perform any obligations provided for in this Agreement is conditioned upon the occurrence of the following conditions on or before the Closing Date:
A. The representations, warranties and covenants of the Contributee contained in this Agreement shall be true and correct as of the Closing Date.
B. The obligations contained in this Agreement to be performed by the Contributee shall have been duly performed on or before the Closing Date and the Contributee shall not have breached any of its covenants or agreements contained herein.
C. The Contributee shall deliver to the Contributor a written confirmation from the transfer agent (which may be a third party transfer agent), attesting to the registration of the Contributee Class 2 Beneficial Interests on the books and records of the Contributee.
D. Such other documents and instruments as may reasonably be required by Contributor and its respective counsel or the Title Company and that are necessary to consummate the transaction which is the subject of this Agreement and to otherwise effect the agreements of the parties hereto.
E. No order, statute, rule, regulation, executive order, injunction, stay, decree or restraining order shall have been enacted, entered, promulgated or enforced by any court of competent jurisdiction or Governmental Entity that prohibits the consummation of the transactions contemplated hereby, and no litigations or governmental proceeding seeking such an order shall be pending or threatened.
Any or all of the foregoing conditions may be waived by the Contributor in its sole and absolute discretion.
11. Survival of Representations and Warranties; Indemnity for Breach by Contributor.
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12. Indemnity by Contributee.
A. The Contributee hereby agrees to indemnify and hold the Contributor and its respective employees, directors, partners, members, trustees, affiliates and agents (collectively, the “Contributor Indemnified Parties”) harmless of and from (i) all Losses which it actually suffers or incurs as a direct result of, or by direct reason of, any breach of the Contributee’s representations or warranties contained in and/or all of this Agreement and any exhibit or attachment to this Agreement or breach of any covenant or agreement made or to be performed by the Contributee pursuant to this Agreement, including any Exhibit hereto, and (ii) any fees, expenses and costs to be paid by the Contributee pursuant to Section 5(D) hereof.
B. Any claim for indemnification under this Section 12 must be asserted in writing, stating the nature of such claim and the basis for indemnification therefor. Any claim for indemnification arising only from a breach of any representation or warranty made by the Contributee under this Agreement (“Rep/Warranty Claims”) must be asserted within one year after the Closing. If so asserted in writing within one year after the Closing, all Rep/Warranty Claims for indemnification shall survive until resolved by mutual agreement between the Contributor and the Contributee or by judicial determination, but the foregoing shall apply to Rep/Warranty Claims only if they were timely made pursuant to the second sentence of this Section 12. Notwithstanding the foregoing, any claim for breach of Section 4 hereof must be so asserted prior to expiration of the applicable statute of limitations (in lieu of the one-year period set forth above).
| C. | The provisions of this Section 12 shall survive the Closing. |
13. Assignment. Notwithstanding the terms agreed to hereunder, neither this Agreement nor any right, interest or obligation hereunder may be further assigned by any party hereto without the prior written consent of the other party hereto and any attempt to do so will be void; provided that the Contributee may assign all of its rights and duties under this Agreement to an “affiliated company” (as hereafter defined) without the written consent of the Contributor. An “affiliated company” shall mean an entity that controls, is controlled by, or is under common control with, the Contributee.
14. Successors and Assigns. The rights and obligations created by this Agreement shall be binding upon and inure to the benefit of the parties hereto, their heirs, executors, receivers, trustees, successors and permitted assigns.
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15. Governing Law. This Agreement and all transactions contemplated hereby shall be governed by, construed and enforced in accordance with the laws of the State of Delaware.
16. Third Party Beneficiary. Except as specifically set forth in this Agreement, no provision of this Agreement is intended, nor shall it be interpreted, to provide or create any third party beneficiary rights or other rights of any kind in any customer, affiliate, stockholder, partner, member, director, officer, or employee of any party to this Agreement or any other person or entity.
17. Severability. If any provision of this Agreement, or the application thereof, is for any reason held to any extent to be invalid or unenforceable, the remainder of this Agreement and application of such provision to other persons or circumstances will be interpreted so as reasonably to effect the intent of the parties hereto. The parties further agree to replace such void or unenforceable provision of this Agreement with a valid and enforceable provision that will achieve, to the extent possible, the economic, business, and other purposes of the void or unenforceable provision and to execute any amendment, consent, or agreement deemed necessary or desirable by the Contributee to effect such replacement.
18. Reliance. Each party to this Agreement acknowledges and agrees that it is not relying on tax advice or other advice from the other party to this Agreement and that it has or will consult with its own advisors.
19. Certain Securities Matters. No sale of the Contributee Class 2 Beneficial Interests is intended by the parties by virtue of their execution of this Agreement. Any sale of the Contributee Class 2 Beneficial Interests contemplated under this Agreement will occur, if at all, upon the Closing.
20. Notices. All notices, requests and other communications hereunder must be in writing and will be deemed to have been duly given only if delivered personally or by electronic mail (to the email address set forth below as may be changed by notice to the other party) or mailed (first class postage prepaid) to the parties at the following addresses or facsimile numbers:
If to the Contributor:
MDRR XXV Depositor 1, LLC
P. O. Box 8436
Richmond, VA 23226
Attention: Brent Winn
Email: [email protected]
With a copy to:
T. Rhys James, Esq.
Williams Mullen
222 Central Park Avenue
Suite 1700
Virginia Beach, VA 23462-3035
If to the Contributee, to:
MDRR XXV DST 1, LLC
P.O. Box 8436
Richmond, VA 23226
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Attention: Brent Winn
Email: [email protected]
With a copy to:
T. Rhys James, Esq.
Williams Mullen
222 Central Park Avenue
Suite 1700
Virginia Beach, VA 23462-3035
All such notices, requests and other communications will (i) if delivered personally to the address as provided in this Section 20, be deemed given upon delivery, (ii) if delivered by mail in the manner described above to the address as provided in this Section 20, be deemed given upon receipt (in each case regardless of whether such notice, request or other communication is received by any other Person to whom a copy of such notice is to be delivered pursuant to this Section 20). Any party from time to time may change its address, facsimile number or other information for the purpose of notices to that party by giving notice specifying such change to the other parties hereto in accordance with this Section 20.
21. Time of the Essence. Time is of the essence of this Agreement.
22. Construction. This Agreement shall not be construed more strictly against one party than against the other merely by virtue of the fact that it may have been prepared by counsel for one of the parties, it being recognized that the Contributor and the Contributee have contributed substantially and materially to the preparation of this Agreement. The headings of various Sections in this Agreement are for convenience only, and are not to be utilized in construing the content or meaning of the substantive provisions hereof.
23. Partial Invalidity. The provisions hereof shall be deemed independent and severable, and the invalidity or partial invalidity or enforceability of any one provision shall not affect the validity of enforceability of any other provision hereof.
24. Weekends, Holidays, Etc. If the time period by which any right, option or election provided for under this Agreement must be exercised, or by which any act required hereunder must be performed, or by which Closing must be held, expires on a day which is a Saturday, Sunday, or official federal or a state holiday for the State of Delaware, then such time period shall be automatically extended through the close of business on the next business day.
25. Further Assurances. From time to time, at either party’s request, whether on or after Closing, and without further consideration, the other party shall execute and deliver any further instruments of conveyance and take such other actions as the requesting party may reasonably require to complete more effectively the transfer of the Real Property to the Contributee. Contributor shall not, however, be required to incur any out-of-pocket expense in order to satisfy or comply with a request from the Contributee.
26. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
27. Entire Agreement and Amendments. This Agreement, together with all exhibits attached hereto or referred to herein, contain all representations and the entire understanding between the parties hereto with respect to the subject matter hereof. Any prior correspondence, memoranda or agreements are replaced in total
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by this Agreement and exhibits hereto. This Agreement may only be modified or amended upon the written consent of each party hereto.
[Signature pages follow.]
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IN WITNESS WHEREOF, the parties have executed this Contribution Agreement effective as of the date first written above.
CONTRIBUTOR:
MDRR XXV DEPOSITOR 1, LLC,
a Delaware limited liability company
By: MDRR Sponsor TRS, LLC, a Delaware limited liability company
Its: Sole Member
By: Medalist Diversified Holdings, L.P.
Its: Sole Member
By: Medalist Diversified REIT, Inc.
Its: General Partner
By: | /s/ C. Brent Winn, Jr. |
Name: | C. Brent Winn, Jr. |
Its: | Chief Financial Officer |
[Signature Page to Contribution Agreement – Signatures Continue]
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CONTRIBUTEE:
MDRR XXV DST 1,
a Delaware statutory trust
By: MDRR XXV Depositor 1, LLC,
Its: Manager
By: MDRR Sponsor TRS, LLC,
Its: Sole Member
By: Medalist Diversified Holdings, L.P.
Its: Sole Member
By: Medalist Diversified REIT, Inc.
Its: General Partner
By: | /s/ C. Brent Winn, Jr. |
Name: | C. Brent Winn, Jr. |
Its: | Chief Financial Officer |
Date:November 7, 2025
[Signature Page to Contribution Agreement]
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EXHIBITS AND SCHEDULES
Exhibit A-Property Description
Exhibit B-Class 2 Beneficial Interests
Contribution Agreement (GK Revisions 5-11) v5Contribution Agreement REV 05092010.doc
Exhibit A
Legal Description of Property
EXHIBIT A
Legal Description
COMMENCE AT THE SOUTHWEST CORNER OF SECTION 7 TOWNSHIP 1 SOUTH, RANGE 30 WEST ESCAMBIA COUNTY FLORIDA, THENCE GO NORTH 01 DEGREES 13 MINUTES 41 SECONDS EAST ALONG THE WEST LINE OF THE AFOREMENTIONED SECTION 7, A DISTANCE OF 98.36 FEET TO THE NORTHERLY RIGHT OF WAY LINE OF U.S HIGHWAY 90 (NINE MILE ROAD, 200 FT R/W) THENCE GO SOUTH 88 DEGREES 17 MINUTES 00 SECONDS EAST ALONG THE NORTHERLY RIGHT OF WAY LINE OF SAID U.S. HIGHWAY 90 A DISTANCE OF 191.71 FEET TO THE SOUTHWEST CORNER OF THAT CERTAIN PARCEL OF LAND AS DESCRIBED IN OFFICIAL RECORDS BOOK 6626, PAGE 1617 OF THE PUBLIC RECORDS OF SAID COUNTY THENCE CONTINUE SOUTH 88 DEGREES I7 MINUTES 00 SECONDS EAST ALONG SAID NORTH RIGHT OF WAY LINE A DISTANCE OF 742.71 FEET TO THE POINT OF BEGINNING THENCE DEPARTING SAID NORTH RIGHT OF WAY LINE GO NORTH 01 DEGREES 43 MINUTES 00 SECONDS EAST A DISTANCE OF 324.79 FEET THENCE GO NORTH 88 DEGREES 17 MINUTES 24 SECONDS WEST A DISTANCE OF 3.53 FEET THENCE GO NORTH 01 DEGREES 48 MINUTES 11 SECONDS EAST A DISTANCE OF 201.86 FEET THENCE GO SOUTH 88 DEGREES 18 MINUTES 01 SECONDS EAST A DISTANCE OF 3.22 FEET THENCE GO NORTH 01 DEGREES 43 MINUTES 00 SECONDS EAST 40.33 FEET TO A POINT ON THE SOUTH LINE OF WHISPERING PINES SUBDIVISION AS RECORDED IN PLAT BOOK 4 AT PAGE 26 OF THE PUBLIC RECORDS OF ESCAMBIA COUNTY FLORIDA THENCE GO SOUTH 88 DEGREES 19 MINUTES 24 SECONDS EAST ALONG THE SOUTH LINE OF AFORESAID WHISPERING PINES SUBDIVISION A DISTANCE OF 171.59 FEET THENCE DEPARTING SAID SOUTH LINE SOUTH 01 DEGREES 10 MINUTES 23 SECONDS WEST A DISTANCE OF 17.57 FEET THENCE GO SOUTH 88 DEGREES 19 MINUTES 24 SECONDS EAST A DISTANCE OF 181.31 FEET TO THE WESTERLY RIGHT OF WAY LINE OF MUSIC LANE (66 FT R/W) THENCE GO SOUTH 01 DEGREES 10 MINUTES 23 SECONDS WEST ALONG THE AFORESAID WESTERLY RIGHT OF WAY LINE OF MUSIC LANE. A DISTANCE OF 249.67 FEET THENCE DEPARTING SAID WESTERLY RIGHT OF WAY LINE GO NORTH 88 DEGREES 49 MINUTES 37 SECONDS WEST A DISTANCE OF 160.00 FEET THENCE GO SOUTH 01 DEGREES 10 MINUTES 23 SECONDS WEST A DISTANCE OF 298.48 FEET TO A POINT ON THE NORTH RIGHT OF WAY LINE OF SAID U.S. HIGHWAY 90 THENCE GO NORTH 88 DEGREES 17 MINUTES 00 SECONDS WEST ALONG SAID NORTH RIGHT OF WAY LINE A DISTANCE OF 198.27 FEET TO THE POINT OF BEGINNING.
Together with those certain easements for ingress, egress, parking, and to use of the Common Areas as set forth in that certain Declaration of Easements, Covenants and Restrictions for Nine Mile Plaza Shopping Center Pensacola, Escambia County, Florida, recorded July 17, 2014 in Official Records Book 7198, Page 274, as amended in that First Amendment to the Declaration of Easements, Covenants and Restrictions recorded 7/15/2015 in Official Records Book 7375, Page 992, as further affected by that Second Amendment to the Declaration of Easements, Covenants and Restrictions recorded 8/26/2024, in Official Records Book 9194, Page 871, of the public records of Escambia County, Florida.
Exhibit B
Class 2 Beneficial Interests
The value of the Class 2 Beneficial Interests constituting the Class 2 Beneficial Interests shall mean the Property Value, less: (i) the Cash Amount, and (ii) the value of any assumed Encumbrances, further subject to adjustment in accordance with the Contribution Agreement.
“Property Value” means $14,554,504.
EXHIBIT 10.2
LOAN AGREEMENT
Dated as of November 7, 2025
By and between
MDRR XXV DST 1,
a Delaware statutory trust,
as Borrower,
and
PINNACLE BANK,
a Tennessee bank,
as Lender
Property:
312 East Nine Mile Road, Unit 34
Pensacola, Florida 32514,
Loan Amount: $7,710,000.00
TABLE OF CONTENTS
Page
ii
iii
iv
Schedules and Exhibits
Schedule 3.22 – Material Agreements
Schedule 3.34 – REAs
Exhibit A – Rent Roll
Exhibit B – Organizational Chart
Exhibit C – Annual Budget
v
LOAN AGREEMENT
THIS LOAN AGREEMENT (as amended, restated, replaced, supplemented or otherwise modified from time to time, this “Agreement”), dated as of November 7, 2025 (the “Execution Date”), by and between PINNACLE BANK, a Tennessee bank, having an address at 21 Platform Way S., Suite 2300, Nashville, TN 37203 (together with its successors and assigns, “Lender”), and MDRR XXV DST 1, a Delaware statutory trust, having an address at 6614 Three Chopt Road, Richmond, VA 23226 (“Borrower”).
All capitalized terms used herein shall have the respective meanings set forth in Article I hereof.
WITNESSETH:
WHEREAS, Borrower desires to obtain the Loan from Lender; and
WHEREAS, Lender is willing to make the Loan to Borrower, subject to and in accordance with the conditions and terms of this Agreement and the other Loan Documents.
NOW, THEREFORE, in consideration of the covenants set forth in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree, represent and warrant as follows:
For all purposes of this Agreement, except as otherwise expressly provided:
“Acceptable LLC” shall mean a limited liability company formed under Delaware law.
“Accredited Investor” shall mean any investor that meets the definition of “accredited investor” in Rule 501 of Regulation D of Title 17 of the Code of Federal Regulations, part 230, Sections 501 through 508 (17 C.F.R. §230.501 et seq).
“Accrual Period” shall mean the period commencing on the first (1st) day of a calendar month and ending on the last day of such calendar month; provided that if this Agreement is dated as of any date other than the first (1st) day of a month, the first Accrual Period shall (i) consist of only the Closing Date, if the Closing Date is the last day of a month, and (ii) otherwise commence on the Closing Date and end on the last day of the calendar month in which Closing Date occurs.
“Act” shall have the meaning set forth in Section 4.21(b) hereof.
“Affiliate” shall mean, with respect to any Person, (i) in the case of any such Person which is a partnership or limited liability company, any general partner or managing member in such partnership or limited liability company, respectively, and (ii) any other Person which is directly or indirectly Controlled by, Controls or is under common Control (as each is hereinafter defined)
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with such Person or one or more of the Persons referred to in the preceding clause (i),; provided, however, in no event shall the Lender or any of its Affiliates be an Affiliate of Borrower.
“Affiliated Manager” shall mean any managing agent of the Property in which Borrower, Guarantor, any SPE Component Entity (if any) or any Affiliate of such entities has, directly or indirectly, any legal, beneficial or economic interest.
“Agreement” shall have the meaning set forth in the Introductory paragraph.
“ALTA” shall mean American Land Title Association, or any successor thereto.
“Annual Budget” shall have the meaning set forth in Section 4.11(c).
“Applicable Rate” means, for any day, Term SOFR (or, if applicable, the Benchmark Replacement) as in effect on such day plus 2.50%, but in no event to exceed the maximum rate of interest permitted by applicable law. Any change in Term SOFR or the Benchmark Replacement shall be effective from and including the effective date of such change in Term SOFR or the Benchmark Replacement.
“Application” shall mean that certain Term Sheet dated August 4, 2025 between Lender (or an Affiliate thereof) and Borrower, with respect to the Loan.
“Approved Accounting Method” shall mean GAAP, federal tax basis accounting (consistently applied), cash basis accounting (consistently applied), or such other method of accounting, consistently applied, as may be reasonably acceptable to Lender.
“Approved Annual Budget” shall have the meaning set forth in Section 4.11(c).
“Available Tenor” shall mean, as of any date of determination and with respect to the then-current Benchmark, as applicable, (x) if such Benchmark is a term rate, any tenor for such Benchmark (or component thereof) that is or may be used for determining the length of an interest period pursuant to this Agreement or (y) otherwise, any payment period for interest calculated with reference to such Benchmark (or component thereof) that is or may be used for determining any frequency of making payments of interest calculated with reference to such Benchmark, in each case, as of such date. On the date of this Agreement, the only Available Tenor for the Term SOFR Reference Rate is one month.
“Award” shall mean any compensation paid by any Governmental Authority in connection with a Condemnation in respect of all or any part of the Property.
“Bankruptcy Code” shall mean Title 11 of the United States Code entitled “Bankruptcy”, as amended from time to time, and any successor statute or statutes and all rules and regulations from time to time promulgated thereunder, any other federal, state or foreign bankruptcy or insolvency law and any comparable foreign laws relating to bankruptcy, insolvency or creditors’ rights.
“Benchmark” shall mean, initially, the Term SOFR Reference Rate; provided that if a Benchmark Transition Event has occurred with respect to the Term SOFR Reference Rate or the
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then-current Benchmark, then “Benchmark” means the applicable Benchmark Replacement to the extent that such Benchmark Replacement has replaced such prior Benchmark pursuant to Section 1.03(a).
“Benchmark Replacement” shall mean with respect to any Benchmark Transition Event, the sum of: (a) the alternate benchmark rate that has been selected by the Lender giving due consideration to (i) any selection or recommendation of a replacement benchmark rate or the mechanism for determining such a rate by the Relevant Governmental Body or (ii) any evolving or then-prevailing market convention for determining a benchmark rate as a replacement for the then-current Benchmark for Dollar-denominated syndicated credit facilities and (b) the related Benchmark Replacement Adjustment; provided that, if such Benchmark Replacement as so determined would be less than the Floor, such Benchmark Replacement will be deemed to be the Floor for the purposes of this Agreement and the other Loan Documents.
“Benchmark Replacement Adjustment” shall mean, with respect to any replacement of the then-current Benchmark with an Unadjusted Benchmark Replacement, the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by the Lender giving due consideration to (a) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body or (b) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for Dollar-denominated syndicated credit facilities.
“Benchmark Replacement Date” shall mean the earliest to occur of the following events with respect to the then-current Benchmark:
(a) | in the case of clause (a) or (b) of the definition of “Benchmark Transition Event”, the later of (i) the date of the public statement or publication of information referenced therein and (ii) the date on which the administrator of such Benchmark (or the published component used in the calculation thereof) permanently or indefinitely ceases to provide all Available Tenors of such Benchmark (or such component thereof); or |
(b) | in the case of clause (c) of the definition of “Benchmark Transition Event”, the first date on which such Benchmark (or the published component used in the calculation thereof) has been determined and announced by or on behalf of the administrator of such Benchmark (or such component thereof) or the regulatory supervisor for the administrator of such Benchmark (or such component thereof) to be non-representative or non-compliant with or non-aligned with the International Organization of Securities Commissions (IOSCO) Principles for Financial Benchmarks; provided that such non-representativeness, non-compliance or non-alignment will be determined by reference to the most recent statement or publication referenced in such clause (c) and even if any Available Tenor of such Benchmark (or such component thereof) continues to be provided on such date. |
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For the avoidance of doubt, the “Benchmark Replacement Date” will be deemed to have occurred in the case of clause (a) or (b) with respect to any Benchmark upon the occurrence of the applicable event or events set forth therein with respect to all then-current Available Tenors of such Benchmark (or the published component used in the calculation thereof).
“Benchmark Transition Start Date” shall mean, in the case of a Benchmark Transition Event, the earlier of (a) the applicable Benchmark Replacement Date and (b) if such Benchmark Transition Event is a public statement or publication of information of a prospective event, the 90th day prior to the expected date of such event as of such public statement or publication of information (or if the expected date of such prospective event is fewer than 90 days after such statement or publication, the date of such statement or publication).
“Benchmark Transition Event” shall mean the occurrence of one or more of the following events with respect to the then-current Benchmark:
(a) | a public statement or publication of information by or on behalf of the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that such administrator has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof), permanently or indefinitely; provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide the Available Tenor(s) of such Benchmark (or such component thereof); |
(b) | a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof), the Federal Reserve Board, the Federal Reserve Bank of New York, an insolvency official with jurisdiction over the administrator for such Benchmark (or such component), a resolution authority with jurisdiction over the administrator for such Benchmark (or such component) or a court or an entity with similar insolvency or resolution authority over the administrator for such Benchmark (or such component) that states that the administrator of such Benchmark (or such component) has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof) permanently or indefinitely; provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide the Available Tenor(s) of such Benchmark (or such component thereof); or |
(c) | a public statement or publication of information by or on behalf of the administrator of such Benchmark (or the published component used in the calculation thereof) or the regulatory supervisor for the administrator of such Benchmark (or such component thereof) announcing that all Available Tenors of such Benchmark (or such component thereof) are not, or as of a specified future date will not be, representative or in compliance with or aligned with the International Organization of Securities Commissions (IOSCO) Principles for Financial Benchmarks. |
For the avoidance of doubt, a “Benchmark Transition Event” will be deemed to have occurred with respect to any Benchmark if a public statement or publication of information set forth above has occurred with respect to each then-current Available Tenor of such Benchmark (or the published component used in the calculation thereof).
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“Beneficial Interest” means a “Beneficial Interest” as such term is defined in the Trust Agreement.
“Beneficial Interest Owner Transferee” shall have the meaning set for in Section 7.1(f) hereof.
“Beneficial Owner” means a Person in whose name a Beneficial Interest is registered in the Ownership Records or to whom a beneficial ownership certificate is issued pursuant to the terms of the Trust Agreement; any such Person shall be deemed to be a “beneficial owner” within the meaning of the Delaware Statutory Trust Act.
“Borrower” shall have the meaning set forth in the Introductory paragraph hereof.
“Borrower’s Account” shall mean an account with Lender, having account number xxxxxxx, in the name of Borrower.
“Borrower’s Constituents” shall mean the Persons who hold any direct or indirect interest in Borrower, irrespective of the number of tiers through which such interests are held, including without limitation the partners, members, shareholders, trustees and beneficiaries of Borrower, and each of their respective direct and indirect constituents (provided however, that unless otherwise expressly stated herein, representations and covenants herein pertaining to Borrower’s Constituents do not apply with respect to Persons who both (i) hold no managerial or controlling position or interest in Borrower or in any entity that directly or indirectly Controls Borrower, and (ii) whose only direct and indirect interests in Borrower are as holders of publicly traded shares, limited partnership interests and/or limited liability company interests aggregating less than twenty percent (20%) of the direct or indirect equity in Borrower).
“Borrower Party” or “Borrower Parties” shall mean, individually and collectively, as the context may require, Borrower, Trust Manager, any SPE Component Entity, any Affiliated Manager and Guarantor.
“Business Day” shall mean any day of the year other than (a) Saturday, Sunday, (b) a day which is a legal holiday under the laws of the State of New York or is a day on which banking institutions in such state are authorized or required by law to close.
“Capital Expenditure Advance” shall have the meaning set forth in Section 5.5 hereof.
“Capital Expenditure Requisition” shall have the meaning set forth in Section 5.5 hereof.
“Capital Expenditure Reserve Account” shall have the meaning set forth in Section 5.5 hereof.
“Capital Expenditure Reserve Fund” shall have the meaning set forth in Section 5.5 hereof.
“Cash Management Account” shall have the meaning set forth in Section 11.2(a) hereof.
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“Cash Management Activation Notice” shall mean a written notice from Lender or its servicer to Clearing Bank stating that a Trigger Period has commenced and instructing Clearing Bank to transfer all available funds in the Clearing Account to the Cash Management Account in accordance with the Clearing Account Agreement.
“Cash Management Bank” shall have the meaning set forth in Section 11.2(a) hereof.
“Cash Management Bank Fees” shall have the meaning set forth in Section 11.2 hereof.
“Cash Management Deactivation Notice” shall mean a written notice from Lender or its servicer to Clearing Bank stating that a Trigger Period no longer exists and instructing Clearing Bank to transfer all available funds in the Clearing Account to an account designated by Borrower in accordance with the Clearing Account Agreement.
“Cash Management Provisions” shall mean the representations, covenants and other terms and conditions of this Agreement and the other Loan Documents (including, without limitation, the Clearing Account Agreement) related to, in each case, cash management and/or other related matters (including, without limitation, Article XI hereof).
“Casualty” shall have the meaning set forth in Section 6.2.1 hereof.
“Casualty Consultant” shall have the meaning set forth in Section 6.3 hereof.
“Casualty Retainage” shall have the meaning set forth in Section 6.3 hereof.
“Clearing Account” shall have the meaning set forth in Section 11.1(a) hereof.
“Clearing Account Agreement” shall have the meaning set forth in Section 11.1(a) hereof.
“Clearing Bank” shall have the meaning set forth in Section 11.1(a) hereof.
“Closing Date” shall mean the date of the funding of the Loan.
“Code” shall have the meaning set forth in Section 3.6(a) hereof.
“Condemnation” shall mean a temporary or permanent taking by reason of any condemnation or similar eminent domain proceeding or by grant or conveyance in lieu of condemnation or eminent domain.
“Condemnation Proceeds” shall have the meaning set forth in Section 6.3 hereof.
“Conforming Changes” shall mean, with respect to either the use or administration of Term SOFR or the use, administration, adoption or implementation of any Benchmark Replacement, any technical, administrative or operational changes (including changes to the definition of “Business Day,” the definition of “U.S. Government Securities Business Day,” the definition of “Interest Rate Change Date” or any similar or analogous definition (or the addition of a concept of an “interest period”), timing and frequency of determining rates and making
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payments of interest, timing of borrowing requests or prepayment, conversion or continuation notices, the applicability and length of lookback periods, and other technical, administrative or operational matters) that the Lender decides may be appropriate to reflect the adoption and implementation of any such rate or to permit the use and administration thereof by the Lender in a manner substantially consistent with market practice (or, if the Lender decides that adoption of any portion of such market practice is not administratively feasible or if the Lender determines that no market practice for the administration of any such rate exists, in such other manner of administration as the Lender decides is reasonably necessary in connection with the administration of this Agreement and the other Loan Documents).
“Constituent Members” shall have the meaning set forth in Section 4.21(d) hereof.
“Control” and the correlative terms “controlled by” and “controlling” shall mean the possession, directly or indirectly, of the power to direct or cause the direction of management and policies of the business and affairs of the entity in question by reason of the ownership of beneficial interests, by contract or otherwise.
“Conversion” shall have the meaning set for in Section 4.27.
“Conversion Trigger Event” shall have the meaning set forth in Section 4.27.
“Creditors Rights Laws” shall mean any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization, conservatorship, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to its debts or debtors.
“Debt” shall mean the outstanding principal amount set forth in, and evidenced by, this Agreement and the Note together with all interest accrued and unpaid thereon and all other sums due to Lender in respect of the Loan under the Note, this Agreement, the Security Instrument or any other Loan Document, including, without limitation, all amounts required to be deposited into the Reserve Accounts.
“Debt Service” shall mean, with respect to any particular period of time, an assumed annual debt service on the Loan calculated based on the amount of principal and interest that would be due and payable under this Agreement and the Note assuming an amortization of twenty-two (22) years.
“Debt Service Coverage Ratio” shall mean a ratio in which as of any date of determination by Lender: (A) the numerator is the Underwritten Net Operating Income of the Property, and (B) the denominator is the Debt Service during the preceding twelve (12) month period. The Debt Service Coverage Ratio shall be calculated by Borrower in good faith and approved by Lender.
“Default” shall mean the occurrence of any event hereunder or under any other Loan Document which, but for the giving of notice or passage of time, or both, would be an Event of Default.
“Default Rate” shall mean a per annum interest rate equal to the lesser of (i) five percent (5%) per annum above the Applicable Rate and (ii) the Maximum Legal Rate.
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“Delaware Statutory Trust” is a trust formed under the Delaware Statutory Trust Act.
“Delaware Statutory Trust Act” means Chapter 38 of Title 12 of the Delaware Code, 12 Del. Code § 3801 et. seq., or any successor statute thereto, in each case as amended from time to time.
“Delaware Statutory Trust Requirements” shall mean a Delaware Statutory Trust: (a) that meets the requirements of a Special Purpose Entity; (b) intentionally deleted; (c) that is subject to a trust agreement that may not be terminated so long as the Debt remains outstanding except upon the same terms as contained in Sections 9.1 and 9.2 of the Trust Agreement; (d) whose Beneficial Owners (and their respective creditors) have no direct interest in the Property, except as determined for purposes of Section 1031 of the Code; and (e) that is qualified to do business in the state in which the Property is located; provided, that, if Delaware Statutory Trusts cannot qualify to do business in such state, then the Trust Manager for such Delaware Statutory Trust shall be qualified to do business in each state.
“Delaware Trustee” shall mean Sorensen Entity Services LLC, or any subsequent trustee of Borrower that satisfies the requirements of the Delaware Statutory Trust Act.
“Depository” shall mean, collectively, Lender, or any Servicer, or financial institution (that is an Eligible Institution) that Lender may from time to time designate.
“Dollar” and “$” shall mean the lawful money of the United State of America.
“Eligible Institution” shall mean a depository institution or trust company insured by the Federal Deposit Insurance Corporation (i) in the case of accounts in which funds are held for thirty (30) days or less, the short term unsecured debt obligations or commercial paper of which are rated at least “A-1” (or its equivalent) from applicable rating agencies (as reasonably determined by Lender) and (ii) in the case of accounts in which funds are held for more than thirty (30) days, the long term unsecured debt obligations of which are rated at least “A” (or its equivalent) from the applicable rating agencies (as reasonably determined by Lender).
“Environmental Condition” shall mean (A) any presence of Hazardous Substances in violation of any applicable Governmental Regulations relating to Hazardous Substances on the Property not expressly disclosed in the Environmental Reports or (B) any disposal, escape, seepage, leakage, spillage, discharge, emission or release of any Hazardous Substance at, from or affecting the Property in violation of any Governmental Regulations.
“Environmental Indemnity” shall mean that certain Environmental Indemnity Agreement given by Borrower and Guarantor to Lender and dated as of the date hereof.
“Environmental Law” shall mean any present and future federal, state and local laws, statutes, ordinances, rules, regulations and the like, as well as common law, relating to protection of human health or the environment, relating to Hazardous Substances, relating to liability for or costs of other actual or threatened danger to human health or the environment. The term “Environmental Law” includes, but is not limited to, the following statutes, as amended, any successor thereto, and any regulations promulgated pursuant thereto, and any state or local statutes, ordinances, rules, regulations and the like addressing similar issues: the Comprehensive
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Environmental Response, Compensation and Liability Act; the Emergency Planning and Community Right-to-Know Act; the Hazardous Substances Transportation Act; the Resource Conservation and Recovery Act (including but not limited to Subtitle I relating to underground storage tanks); the Solid Waste Disposal Act; the Clean Water Act; the Clean Air Act; the Toxic Substances Control Act; the Safe Drinking Water Act; the Occupational Safety and Health Act; the Federal Water Pollution Control Act; the Federal Insecticide, Fungicide and Rodenticide Act; the Endangered Species Act; the National Environmental Policy Act; and the River and Harbors Appropriation Act. The term “Environmental Law” also includes, but is not limited to, any present and future federal, state and local laws, statutes ordinances, rules, regulations and the like, as well as common law: conditioning transfer of property upon a negative declaration or other approval of a governmental authority of the environmental condition of the Property; requiring notification or disclosure of releases of Hazardous Substances or other environmental condition of the Property to any Governmental Authority or other Person, whether or not in connection with transfer of title to or interest in property; imposing conditions or requirements in connection with permits or other authorization for lawful activity; relating to nuisance, trespass or other causes of action related to the Property; and relating to wrongful death, personal injury, or property or other damage in connection with any physical condition or use of the Property.
“Environmental Liens” shall have the meaning set forth in Section 4.25(a) hereof.
“Environmental Report” shall have the meaning set forth in Section 3.35 hereof.
“ERISA” shall have the meaning set forth in Section 3.6(a) hereof.
“Event of Default” shall have the meaning set forth in Section 8.1 hereof.
“Excess Cash Flow” shall have the meaning set forth in Section 11.2(b) hereof.
“Excess Cash Flow Account” shall have the meaning set forth in Section 5.4 hereof.
“Execution Date” shall have the meaning set forth in the Introductory paragraph hereof.
“Existing Leases” shall have the meaning set forth in Section 3.17(a) hereof.
“Federal Reserve Board” shall mean the Board of Governors of the Federal Reserve System of the United States.
“Floor” shall mean a rate of interest equal to 0.00%.
“GAAP” shall mean generally accepted accounting principles in the United States of America as of the date of the applicable financial report.
“Governmental Authority” shall mean any national, state or local government (whether domestic or foreign), any political subdivision thereof or any other governmental, quasi-governmental, judicial, administrative, public or statutory instrumentality, authority, body, agency, bureau, commission, board, department or other entity (including, without limitation, the Federal Deposit Insurance Corporation, the Comptroller of the Currency or the Federal Reserve
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Board, any central bank or any comparable authority) or any arbitrator with authority to bind a party at law.
“Governmental Regulations” shall mean, collectively, the provisions of all permits and licenses and all statutes, laws (including any health or safety law governing Borrower, its business, operations, property, assets or equipment, or the Property), ordinances, rules, requirements, resolutions, policy statements, orders and regulations of any Governmental Authority having jurisdiction over Borrower or the Property or any part thereof and interpretations thereof now or hereafter applicable to, or bearing on, the construction, development, maintenance, use, operation, sale, financing or leasing of the Property or any part thereof, or any adjoining vaults, sidewalks, streets, ways, parking areas or driveways, or the formation, existence, business or good standing of Borrower, including, without limitation, those relating to land use, subdivision, zoning, occupational health and safety, earthquake hazard reduction, if any, building and fire codes, pollution or protection of the environment, including, without limitation, laws relating to the Americans with Disabilities Act of 1990, the Fair Housing Amendments Act of 1988, all state and local laws and ordinances related to handicapped access and all rules, regulations, and orders issued pursuant thereto including, without limitation, the ADA Accessibility Guidelines for Buildings and Facilities, the Interstate Land Sales Full Disclosure Act 15 U.S.C. Section 1701, et seq., laws relating to emissions, discharges, releases or threatened releases of Hazardous Substances into the environment (including, ambient air, surface water, groundwater, land surface or subsurface strata) or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Substances.
“Guarantor” shall mean Medalist Diversified Holdings, L.P., a Delaware limited partnership, and any successor to and/or replacement of any of the foregoing Person, in each case, pursuant to and in accordance with the applicable terms and conditions of the Loan Documents.
“Guaranty” shall mean that certain Limited Guaranty of Recourse Obligations executed by Guarantor and dated as of the date hereof.
“Hazardous Substances” shall mean all materials and substances now or hereafter subject to any Governmental Regulations that pertain to hazardous substances or hazardous materials, including, without limitation, (i) all substances which are designated pursuant to Section 311(b)(2)(A) of the Federal Water Pollution Control Act (“FWPCA”), 33 U.S.C. § 1251 et seq., (ii) any element, compound, mixture, solution, or substance which is designated pursuant to Section 102 of the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), 42 U.S.C. § 9601 et seq., (iii) any hazardous waste having the characteristics which are identified under or listed pursuant to Section 3001 of the Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq., (iv) any toxic pollutant listed under Section 307(a) of FWPCA, (v) any hazardous air pollutant which is listed under Section 112 of the Clean Air Act, 42 U.S.C. § 7401 et seq., (vi) any imminently hazardous chemical substance or mixture with respect to which action has been taken pursuant to Section 7 of the Toxic Substances Control Act, 15 U.S.C. § 2601 et seq., (vii) “hazardous materials” within the meaning of the Hazardous Materials Transportation Act, 49 U.S.C. § 1802 et seq., (viii) petroleum or petroleum by-products, (ix) asbestos and any asbestos containing materials, (x) any radioactive material or substance, (xi) all toxic wastes, hazardous wastes and hazardous substances as defined by, used in, controlled by, or subject to all implementing regulations adopted and publications promulgated pursuant to the foregoing
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statutes, (xii) bacteria, mold or fungus, and (xiii) any other hazardous or toxic substance or pollutant identified in or regulated under any other applicable federal, state or local Governmental Regulations (including, without limitation, all applicable state, regional, county, municipal and local environmental, sanitation and health, conservation and pollution, waste disposal and control, clean air and water laws, codes, rules and regulations, to the extent applicable to the Property). Notwithstanding the foregoing, Hazardous Substances shall not include cleaning and similar supplies used in the ordinary maintenance and repair of the Property and used, stored or disposed of in compliance with all Governmental Regulations.
“Impositions” shall mean (i) all taxes, assessments, vault, water and sewer rents, rates, charges and assessments, levies, inspection and license fees and other governmental and quasi-governmental charges, general and special, ordinary and extraordinary, foreseen and unforeseen, heretofore or hereafter assessed, levied or otherwise imposed against or upon, or which may become a Lien upon, the Property, or any portion thereof, including, without limitation, any taxes with respect to the Rents and Profits or arising in respect of the occupancy, use or possession of the Real Estate and Improvements, (ii) income taxes, franchise taxes, and other taxes owing by Borrower the non-payment of which would result in a Lien against the Property or otherwise diminish or impair the security of the Security Instrument and (iii) all taxes, charges, filing, registration, and recording fees, excises and levies imposed upon Lender by reason of or in connection with the execution, delivery and/or recording of the Loan Documents or the ownership of the Security Instrument or any Security Instrument supplemental thereto, any security instrument with respect to any equipment or any instrument of further assurance, and all corporate, stamp and other taxes required to be paid in connection with the Obligations (excluding, however, income taxes of Lender).
“Improvements” shall have the meaning ascribed to such term in the Security Instrument.
“Indebtedness” shall mean, for any Person, any indebtedness or other similar obligation for which such Person is obligated (directly or indirectly, by contract, operation of law or otherwise), including, without limitation, (i) all indebtedness of such Person for borrowed money, for amounts drawn under a letter of credit, or for the deferred purchase price of property for which such Person or its assets is liable, (ii) all unfunded amounts under a loan agreement, letter of credit, or other credit facility for which such Person would be liable if such amounts were advanced thereunder, (iii) all amounts required to be paid by such Person by contract and/or as a guaranteed payment (including, without limitation, any such amounts required to be paid to partners and/or as a preferred or special dividend, including any mandatory redemption of shares or interests), (iv) all indebtedness incurred and/or guaranteed by such Person, directly or indirectly (including, without limitation, contractual obligations of such Person), (v) all obligations under leases that constitute capital leases for which such Person is liable, (vi) all obligations of such Person under interest rate swaps, caps, floors, collars and other interest hedge agreements, in each case whether such Person is liable contingently or otherwise, as obligor, guarantor or otherwise, or in respect of which obligations such Person otherwise assures a creditor against loss and (vii) any property-assessed clean energy loans or similar indebtedness, including, without limitation, if such loans or indebtedness are made or otherwise provided by any Governmental Authority and/or secured or repaid (directly or indirectly) by any taxes or similar assessments.
“Insurance Exception Conditions” shall have the meaning set forth in Section 6.1 hereof.
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“Insurance Exception Provision” shall have the meaning set forth in Section 6.1 hereof.
“Insurance Premiums” shall have the meaning set forth in Section 6.1(e) hereof.
“Insurance Proceeds” shall have the meaning set forth in Section 6.3(b) hereof.
“Interest Rate Change Date" shall mean the date of the Note and each succeeding first (1st) day of a calendar month commencing on [___________ 1, 2025], or, at Lender's option while a Benchmark Replacement is in effect, such other dates as are determined by Lender to be appropriate to reflect the tenor of the Benchmark Replacement.
“Late Charge” shall have the meaning set forth in Section 2.4 hereof.
“Lease” shall mean all leases (including, but not limited to, the Sole Tenant Lease) and all other agreements for possession of all or any portion of the Property, including all of the same now or hereafter existing, and all extensions, modifications, amendments, expansions and renewals of any of the same and all Lease Guaranties.
“Lease Guaranty” shall mean every guarantee of any obligation under any Lease, including all modifications and amendments to such guaranties.
“Leasing Activity” shall have the meaning set forth in Section 4.15(b) hereof.
“Legal Requirements” shall mean all federal, state, county, municipal and other governmental statutes, laws, rules, orders, regulations, ordinances, judgments, decrees and injunctions of Governmental Authorities affecting Borrower, Guarantor or the Property or any part thereof, or the construction, use, alteration or operation thereof, or any part thereof, whether now or hereafter enacted and in force, including, without limitation, the Americans with Disabilities Act of 1990, and all Permits, authorizations and regulations relating thereto, and all covenants, agreements, restrictions and encumbrances contained in any instruments, either of record or known to Borrower, at any time in force affecting Borrower, Guarantor or the Property or any part thereof, including, without limitation, any which may (i) require repairs, modifications or alterations in or to the Property or any part thereof, or (ii) in any way limit the use and enjoyment thereof.
“Lender” shall have the meaning set forth in the Introductory paragraph hereof.
“Lien” shall mean, with respect to the Property, any mortgage, deed of trust, lien, pledge, hypothecation, assignment, security interest, or any other encumbrance, charge or transfer of, on or affecting Borrower, the Property, any portion thereof or any interest therein, including, without limitation, any conditional sale or other title retention agreement, any financing lease having substantially the same economic effect as any of the foregoing, the filing of any financing statement, and mechanic’s, materialmen’s and other similar liens and encumbrances.
“Loan” shall mean the loan made by Lender to Borrower pursuant to this Agreement.
“Loan Documents” shall mean, collectively, this Agreement, the Note, the Security Instrument, the Guaranty, the Swap Documents Agreement, and all other documents executed
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and/or delivered in connection with the Loan, as each of the same may be amended, restated, replaced, extended, renewed, supplemented or otherwise modified from time to time.
“Losses” shall mean any and all losses, damages, costs, fees, expenses, claims, suits, judgments, awards, liabilities (including but not limited to strict liabilities), obligations, debts, diminutions in value, fines, penalties, charges, amounts paid in settlement, foreseeable and unforeseeable consequential damages, litigation costs and attorneys’ fees, in the case of each of the foregoing, of whatever kind or nature and whether or not incurred in connection with any judicial or administrative proceedings, actions, claims, suits, judgments or awards.
“Material Action” shall mean, with respect to any Person, to institute proceedings to have such Person be adjudicated bankrupt or insolvent, or consent to the institution of bankruptcy or insolvency proceedings against such Person or file a petition seeking, or consent to, reorganization or relief with respect to such Person under any applicable federal, state, local or foreign law relating to bankruptcy, or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of such Person or a substantial part of its property, or take any action to consolidate or merge such Person with or into any other Person, or take any action to divide, dissolve or liquidate such Person, or make any assignment for the benefit of creditors of such Person, or sell all or substantially all of such Person’s assets, or admit in writing such Person’s inability to pay its debts generally as they become due, or declare or effectuate a moratorium on the payment of any obligation, or take action in furtherance of any such action.
“Material Adverse Effect” shall mean a material adverse effect on (i) the Property, (ii) the business, profits, prospects, management, operations or condition (financial or otherwise) of Borrower, Guarantor or the Property, (iii) the enforceability, validity, perfection or priority of the lien of this Agreement, the Note, the Security Instrument, the other Loan Documents or the Environmental Indemnity, or (iv) the ability of Borrower and/or Guarantor to perform its obligations under this Agreement, the Note, the Security Instrument, the other Loan Documents or the Environmental Indemnity.
“Material Agreements” shall mean each contract and agreement relating to the ownership, management, development, use, operation, leasing, maintenance, repair or improvement of the Property (other than the Asset Management Agreement and the Leases), (i) under which there is an obligation of Borrower to pay more than $200,000 per annum, (ii) the termination of which would materially adversely affect the Property or the operation thereof, or (iii) which is not terminable by the owner of the Property upon thirty (30) days’ or less notice without payment of a termination fee.
“Maturity Date” shall mean the earliest to occur of (i) the Scheduled Maturity Date and (ii) the date the Debt is accelerated and becomes due and payable pursuant to the terms of the Loan Documents.
“Maximum Legal Rate” shall mean the maximum non-usurious interest rate, if any, that at any time or from time to time may be contracted for, taken, reserved, charged or received on the indebtedness evidenced by the Note and as provided for herein or the other Loan Documents, under the laws of such state or states whose laws are held by any court of competent jurisdiction to govern the interest rate provisions of the Loan, whether or not an action against Borrower shall
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have been commenced, and if commenced, whether or not a judgment against Borrower shall have been obtained.
“Member” shall have the meaning set forth in Section 4.21(b) hereof.
“Monthly Capital Expenditure Deposit” shall have the meaning set forth in Section 5.5(a) hereof.
“Monthly Debt Service Payment Amount” shall mean, for each applicable Monthly Payment Date, a payment equal to the amount of interest which has accrued on the Principal Amount during the preceding Accrual Period computed at the Applicable Rate.
“Monthly Operating Expense Deposit” shall have the meaning set forth in Section 5.3(a) hereof.
“Monthly Payment Date” shall mean the first (1st) day of each calendar month prior to the Maturity Date commencing on January 1, 2026 and continuing through and including the Scheduled Maturity Date.
“Net Proceeds” shall have the meaning set forth in Section 6.3(b) hereof.
“Net Proceeds Deficiency” shall have the meaning set forth in Section 6.3 hereof.
“Note” shall mean that certain Promissory Note dated as of the date hereof in the principal amount of $7,710,000.00, made by Borrower in favor of Lender, as the same may be amended, restated, replaced, extended, renewed, supplemented, severed, split, or otherwise modified from time to time.
“Obligations” shall have the meaning ascribed to such term in the Security Instrument.
“OFAC” shall have the meaning set forth in Section 3.7 hereof.
“Officer’s Certificate” shall mean a certificate delivered to Lender by Borrower which is signed by Responsible Officer of Borrower.
“Operating Expense Advance” shall have the meaning set forth in Section 5.3(c) hereof.
“Operating Expense Reserve Account” shall have the meaning set forth in Section 5.3(a) hereof.
“Operating Expense Reserve Fund” shall have the meaning set forth in Section 5.3(a) hereof.
“OpEx Reserve Account” shall have the meaning set forth in Section 5.6 hereof.
“Ownership Records” shall mean the records maintained by the Trust Manager, substantially in the form of Exhibit D to the Trust Agreement, indicating from time to time the name, mailing address, and Percentage Share (as defined in the Trust Agreement) of each Beneficial Owner.
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“PACE Loan” shall mean any assessment, bond, loan, financing, or other debt incurred pursuant to “property assessed clean energy, “special energy financing district,” or similar provisions of applicable laws.
“Periodic Term SOFR Determination Day” has the meaning specified in the definition of “Term SOFR”.
“Permits” shall mean all necessary certificates, licenses, permits, franchises, trade names, certificates of occupancy, consents, and other approvals (governmental and otherwise) required under applicable Legal Requirements for the operation of the Property and the conduct of Borrower’s business (including, without limitation, all required zoning, building code, land use, environmental, public assembly and other similar permits or approvals).
“Permitted Beneficial Interest Transfer” shall mean any Transfer of less than twenty-five percent (25%) of the non-Controlling Beneficial Interests in Borrower, but only if such Transfer would not result in a Person owning a twenty-five percent (25%) or greater equity interest (directly or indirectly) in Borrower (to the extent such Person did not own a twenty-five percent (25%) or greater equity interest (directly or indirectly) in Borrower immediately prior to such Transfer).
“Permitted Encumbrances” shall mean, collectively, (a) the Liens and security interests created by the Loan Documents, (b) all Liens, encumbrances and other matters disclosed in the Title Insurance Policy relating to the Property or any part thereof, (c) Liens, if any, for taxes imposed by any Governmental Authority not yet delinquent, other than Liens securing a PACE Loan, and (d) such other title and survey exceptions as Lender has approved or may approve in writing in Lender’s sole discretion.
“Permitted Equipment Leases” shall mean equipment leases or other similar instruments or agreements entered into with respect to the Personal Property; provided, that, in each case, such equipment leases or similar instruments or agreements (i) are entered into on commercially reasonable terms and conditions in the ordinary course of Borrower’s business and (ii) relate to Personal Property which is (A) used in connection with the operation and maintenance of the Property in the ordinary course of Borrower’s business and (B) readily replaceable without material interference or interruption to the operation of the Property.
“Permitted Transfer” shall mean any of the following: (a) any transfer, directly as a result of the death of a natural person, of stock, membership interests, partnership interests or other ownership interests previously held by the decedent in question to the Person or Persons lawfully entitled thereto and (b) any transfer, directly as a result of the legal incapacity of a natural person, of the beneficial interests, stock, membership interests, partnership interests or other ownership interests previously held by such natural person to the Person or Persons lawfully entitled thereto; provided in each case the Transfer Conditions (defined herein) are satisfied.
“Person” shall mean any natural person, corporation, limited partnership, general partnership, joint stock company, limited liability company, limited liability partnership, joint venture, association, company, trust, bank, trust company, land trust, business trust or other
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organization, whether or not a legal entity, or any nongovernmental entity or Governmental Authority.
“Personal Property” shall have the meaning ascribed to such term in the Security Instrument.
“Policies” and “Policy” shall have the meaning set forth in Section 6.1(c) hereof.
“Prepayment Date” shall mean the actual date of prepayment of the Loan to the extent permitted by, and in accordance with, the terms of this Agreement.
“Prepayment Notice” shall have the meaning set forth in Section 2.6(a) hereof.
“Principal Amount” shall mean as of the date of determination by Lender, the principal amount of the Loan outstanding.
“Prohibited Person” shall mean any person or entity:
(a)listed in the Annex to, or otherwise subject to the provisions of, the Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001, and relating to Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism (the “Executive Order”);
(b)that is owned or controlled by, or acting for or on behalf of, any Person or entity that is listed to the Annex to, or is otherwise subject to the provisions of, the Executive Order;
(c)with whom Lender is prohibited from dealing or otherwise engaging in any transaction by any terrorism or money laundering law, including the Executive Order;
(d)who commits, threatens or conspires to commit or supports “Terrorism” as defined in the Executive Order; or
(e)that is named as a “Specially Designated National and Blocked Person” on the most current list published by the U.S. Treasury Department Office of Foreign Assets Control at its official website, www.ustreas.gov/offices/enforcement/ofac or at any replacement website or other replacement official publication of such list; or who is an Affiliate of or affiliated with a Person or entity listed above.
“Property” shall mean, each parcel of real property, the Improvements thereon and all Personal Property owned by Borrower and encumbered by the Security Instrument, together with all rights pertaining to the Property and Improvements, as more particularly described in Article I of the Security Instrument and referred to therein as the “Property”.
“Qualified Delaware Statutory Trust” is a Delaware Statutory Trust meeting the Delaware Statutory Trust Requirements.
“Qualified Insurer” shall have the meaning set forth in Section 6.1(c) hereof.
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“REA” shall mean, individually or collectively (as the context requires), each reciprocal easement or similar agreement affecting the Property as more particularly described on Schedule 3.34 hereto (if any), any amendment, restatement, replacement or other modification thereof, any future reciprocal easement or similar agreement affecting the Property entered into in accordance with the applicable terms and conditions hereof and any amendment, restatement, replacement or other modification thereof.
“Real Estate” shall have the meaning ascribed to such term in the Security Instrument.
“Relevant Governmental Body” shall mean the Federal Reserve Board or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Federal Reserve Board or the Federal Reserve Bank of New York, or any successor thereto.
“Rent Roll” shall have the meaning set forth in Section 3.17(a) hereof.
“Rents and Profits” shall have the meaning ascribed to such term in the Security Instrument.
“Required Insurance” shall have the meaning set forth in Section 6.1 hereof.
“Reserve Accounts” shall mean the Clearing Account, the Tax and Insurance Reserve Account, the Capital Expenditure Reserve Account, the Excess Cash Flow Account, the Operating Expense Reserve Account and any other account established by this Agreement or the other Loan Documents.
“Responsible Officer” shall mean with respect to a Person, the chairman of the board, president, chief operating officer, chief financial officer, treasurer or vice president of such Person or such other similar officer of such Person reasonably acceptable to Lender.
“Restoration” shall mean, following the occurrence of a Casualty or a Condemnation which is of a type necessitating the repair of the Property (or any portion thereof), the completion of the repair and restoration of the Property (or applicable portion thereof) as nearly as possible to the condition the Property (or applicable portion thereof) was in immediately prior to such Casualty or Condemnation, with such alterations as may be reasonably approved by Lender.
“Restoration Threshold” shall mean an amount equal to $250,000.00.
“Restricted Party” shall mean Borrower, Trust Manager, Guarantor, any SPE Component Entity, any Affiliated Manager, or any shareholder, partner, member or non-member manager, or any direct or indirect legal or beneficial owner of Borrower, Trust Manager, Guarantor, any SPE Component Entity, any Affiliated Manager, or any non-member manager of any of the foregoing.
“Sale or Pledge” shall mean a voluntary or involuntary sale, conveyance, assignment, transfer, encumbrance, pledge, grant of option or other transfer or disposal of a legal or beneficial interest, whether direct or indirect.
“Satisfactory Search Results” shall mean the results of Lender’s customary credit history check, litigation, lien, bankruptcy, judgment and other similar searches with respect to the
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applicable transferee and its applicable affiliates, in each case, (i) revealing no matters which would have a Material Adverse Effect and (ii) yielding results which are otherwise acceptable to Lender in its reasonable discretion. Borrower shall pay all of Lender’s costs, fees and expenses in connection with the foregoing and, notwithstanding the forgoing, no such search results shall constitute “Satisfactory Search Results” until such costs, fees and expenses are paid in full.
“Scheduled Maturity Date” shall mean November __, 2030.
“Security Instrument” shall mean the Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing dated the date hereof in the principal amount of $7,710,000.00, given by Borrower (or Trust Manager in its capacity as trustee of Borrower), as trustor, to the trustee named therein, as trustee, for the benefit of Lender, as beneficiary, covering the fee estate of Borrower in the Property.
“SFHA” shall have the meaning set forth in Section 6.1(a) hereof.
“SOFR” shall mean a rate equal to the secured overnight financing rate as administered by the SOFR Administrator.
“SOFR Administrator” shall mean the Federal Reserve Bank of New York (or a successor administrator of the secured overnight financing rate).
“Sole Tenant” shall mean Tesla, Inc., a Texas corporation, together with its successors and/or assigns.
“Sole Tenant Lease” shall mean, individually and collectively, (i) that certain Lease dated September 21, 2024, by and between Borrower, as successor landlord, and Sole Tenant, as tenant, together with all amendments and modifications thereto, and (ii) each and every Lease Guaranty executed in connection therewith, together with all amendments and modifications thereto.
“SPE Component Entity” shall have the meaning set forth in the definition of “Special Purpose Entity”.
“Special Purpose Entity” a Person, other than a natural person, which:
(A)since the date of its formation and at all times prior to, on and after the date thereof, has not and shall not:
(i)engage in any business or activity other than the ownership, operation and maintenance of the Property, and activities incidental thereto;
(ii)acquire or own any assets other than (A) the Property, and (B) such incidental Personal Property as may be necessary for the ownership, leasing, maintenance and operation of the Property;
(iii)merge into or consolidate with any Person, or divide, dissolve, terminate, liquidate in whole or in part, transfer or otherwise dispose of all or substantially all of its assets or change its legal structure;
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(iv)fail to observe all organizational formalities, or fail to preserve its existence as an entity duly organized, validly existing and in good standing (if applicable) under the applicable Legal Requirements of the jurisdiction of its organization or formation, or amend, modify, terminate or fail to comply with the provisions of its organizational documents (provided, that, such organizational documents may be amended or modified to the extent that, in addition to the satisfaction of the requirements related thereto set forth therein, Lender’s prior written consent is first obtained);
(v)own any subsidiary, or make any investment in, any Person (other than, with respect to any SPE Component Entity, in Borrower);
(vi)commingle its funds or assets with the funds or assets of any other Person;
(vii)incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than (A) the Debt, (B) trade and operational indebtedness incurred in the ordinary course of business with trade creditors, provided such indebtedness is (1) unsecured, (2) not evidenced by a note, (3) on commercially reasonable terms and conditions, and (4) due not more than sixty (60) days past the date incurred and paid on or prior to such date, and/or (C) Permitted Equipment Leases; provided however, the aggregate amount of the indebtedness described in (B) and (C) shall not exceed at any time two percent (2%) of the outstanding principal amount of the Debt. No Indebtedness other than the Debt may be secured (senior, subordinate or pari passu) by the Property;
(viii)fail to maintain all of its books, records, financial statements and bank accounts separate from those of any other Person (including, without limitation, any Affiliates). Borrower’s assets have not and will not be listed as assets on the financial statement of any other Person; provided, however, that Borrower’s assets may be included in a consolidated financial statement of its Affiliates provided that (i) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of Borrower and such Affiliates and to indicate that Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliates or any other Person and (ii) such assets shall be listed on Borrower’s own separate balance sheet. Borrower has maintained and will maintain its books, records, resolutions and agreements as official records;
(ix)enter into any contract or agreement with any partner, member, shareholder, principal or Affiliate, except, in each case, upon terms and conditions that are intrinsically fair and substantially similar to those that would be available on an arm’s-length basis with unaffiliated third parties;
(x)maintain its assets in such a manner that it will be costly or difficult to segregate, ascertain or identify its individual assets from those of any other Person;
(xi)assume or guaranty the debts of any other Person, hold itself out to be responsible for the debts of any other Person, or otherwise pledge its assets for the benefit of any other Person or hold out its credit as being available to satisfy the obligations of any other Person;
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(xii)make any loans or advances to any Person;
(xiii)fail to file its own tax returns (unless prohibited by applicable Legal Requirements from doing so);
(xiv)fail to (A) hold itself out to the public and identify itself, in each case, as a legal entity separate and distinct from any other Person and not as a division or part of any other Person, (B) conduct its business solely in its own name, (C) hold its assets in its own name or (D) correct any known misunderstanding regarding its separate identity;
(xv)fail to maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations (to the extent there exists sufficient cash flow from the Property to do so);
(xvi)without the prior unanimous written consent of all of its partners, shareholders or members, as applicable, the prior unanimous written consent of its board of directors or managers, as applicable, (a) file or consent to the filing of any petition, either voluntary or involuntary, to take advantage of any Creditors Rights Laws, (b) seek or consent to the appointment of a receiver, liquidator or any similar official, (c) take any action that might cause such entity to become insolvent, (d) make an assignment for the benefit of creditors or (e) take any Material Action with respect to Borrower or any SPE Component Entity (provided, that, none of any member, shareholder or partner (as applicable) of Borrower or any SPE Component Entity or any board of directors or managers (as applicable) of Borrower or any SPE Component Entity may vote on or otherwise authorize the taking of any of the foregoing actions unless, in each case, the Lender has consented to such foregoing action);
(xvii)fail to allocate shared expenses (including, without limitation, shared office space) or fail to use separate stationery, invoices and checks;
(xviii)fail to pay its own liabilities (including, without limitation, salaries of its own employees) from its own funds or fail to maintain a sufficient number of employees in light of its contemplated business operations (in each case to the extent there exists sufficient cash flow from the Property to do so);
(xix)acquire obligations or securities of its partners, members, shareholders or other Affiliates, as applicable; or
(xx)identify its partners, members, shareholders or other Affiliates, as applicable, as a division or part of it.
(B)if such Special Purpose Entity is a partnership or limited liability company (other than an Acceptable LLC) or Qualified Delaware Statutory Trust, has each of its general partner (in the case of a partnership), at least one of its members (in the case of a limited liability company) and one trustee (in the case of a Qualified Delaware Statutory Trust) of such Borrower, as applicable, shall be a corporation or an Acceptable LLC (each, an “SPE Component Entity”) whose sole asset is its interest in such Special Purpose Entity (other than in the case of a trustee of a Qualified Delaware Statutory Trust), and such SPE Component Entity (i) will at all times comply
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with each of the representations, covenants, terms and provisions contained in sub-clauses (iii) - (vi) (inclusive) and (viii) – (xx) (inclusive) of clause A above as if such representation, warranty or covenant was made directly by such SPE Component Entity; (ii) will not engage in any business or activity other than owning an interest in such Special Purpose Entity (or in the case of a trustee of a Qualified Delaware Statutory Trust, serving as such trustee and/or holding title to property for the benefit of the Qualified Delaware Statutory Trust); (iii) other than in the case of a trustee of a Qualified Delaware Statutory Trust, will not acquire or own any assets other than its partnership, membership, or other equity ownership interest in such Special Purpose Entity; (iv) other than in the case of a trustee of a Qualified Delaware Statutory Trust, will at all times continue to own no less than a 0.5% direct equity ownership interest in such Special Purpose Entity; (v) will not incur any debt, secured or unsecured, direct or contingent (including guaranteeing any obligation); and (vi) will cause such Special Purpose Entity to maintain its status as a Special Purpose Entity.
“State” shall mean the state when the Property is located.
“Tax and Insurance Reserve Account” shall have the meaning set forth in Section 5.1(a) hereof.
“Tenant” shall mean any Person leasing, subleasing or otherwise occupying any portion of the Property under a Lease or other occupancy agreement, including, but not limited to, Sole Tenant.
“Term SOFR” shall mean, for any day on or after the then most recent Interest Rate Change Date, the Term SOFR Reference Rate for a tenor of one month determined on the day (such day, the “Periodic Term SOFR Determination Day”) that is two (2) U.S. Government Securities Business Days prior to such Interest Rate Change Date, as such rate is published by the Term SOFR Administrator on such Periodic Term SOFR Determination Day; provided, however, that if as of 5:00 p.m. (New York City time) on any Periodic Term SOFR Determination Day the Term SOFR Reference Rate for a one-month tenor has not been published by the Term SOFR Administrator and a Benchmark Replacement Date with respect to the Term SOFR Reference Rate has not occurred, then Term SOFR will be the Term SOFR Reference Rate for a one-month tenor as published by the Term SOFR Administrator on the first preceding U.S. Government Securities Business Day for which such Term SOFR Reference Rate was published by the Term SOFR Administrator so long as such first preceding U.S. Government Securities Business Day is not more than three (3) U.S. Government Securities Business Days prior to such Periodic Term SOFR Determination Day. For the purposes hereof, Term SOFR in no event shall ever be less than the Floor.
“Term SOFR Administrator” shall mean CME Group Benchmark Administration Limited (CBA) (or a successor administrator of the Term SOFR Reference Rate selected by Lender in its reasonable discretion).
“Term SOFR Reference Rate” shall mean the forward-looking term rate based on SOFR.
“Title Insurance Policy” shall mean an ALTA mortgagee title insurance policy or policies in the form acceptable to Lender issued with respect to the Property and insuring the lien of the
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Security Instrument, together with such endorsements and affirmative coverage as Lender may require.
“Transfer” shall have the meaning set forth in Section 7.1(b) hereof.
“Treasury Yield” shall mean a yield determined by Lender by reference to the most recent Federal Reserve Statistical Release H.15 (519) (or any successor or substitute publication of the Federal Reserve Board) that has become publicly available at least two (2) Business Days prior to the Prepayment Date, and shall be the most recent weekly average yield to maturity (expressed as a rate per annum) under the caption “Treasury Constant Maturities” for the year corresponding to the remaining average life of the Loan, as determined by Lender, through the ninetieth (90th) day preceding the Scheduled Maturity Date had the Loan not been prepaid, converted to a mortgage equivalent yield. If no such “Treasury Constant Maturities” shall exactly correspond to such remaining average life of the Loan, as determined by Lender, yields for the two most closely corresponding published “Treasury Constant Maturities” shall be used to interpolate a single yield on a straight-line basis (rounding, in the case of relevant periods, to the nearest month). The Treasury Yield shall be computed to the fifth decimal place and then rounded to the fourth decimal point.
“Trigger Event” shall mean the occurrence of any of the following:
(a)an Event of Default; or
(b)any time on or after December 1, 2026, the Debt Service Coverage Ratio for one calendar quarter falls below 1.25x calculated using the then Underwritten Net Operating Income.
“Trigger Period” shall mean a period commencing upon the occurrence of a Trigger Event and ending upon the occurrence of the applicable Trigger Termination Event. Notwithstanding the foregoing, a Trigger Period shall not be deemed to expire in the event that a Trigger Period then exists for any other reason.
“Trigger Termination Event” shall mean the occurrence of any of the following as it relates to the applicable Trigger Event:
(a)if the Trigger Event is caused by the events described in clause (a) of the definition of Trigger Event, the acceptance by Lender of a cure of all then-outstanding Events of Default or the waiver thereof by Lender (which (x) cure Lender is not obligated to accept and may reject or accept in its sole and absolute discretion and (y) waiver Lender is not obligated to grant and may choose to not so grant in its sole and absolute discretion); or
(b)if the Trigger Event is caused by the events described in clause (b) of the definition of Trigger Event, the Debt Service Coverage Ratio remaining at or above 1.25x for two full calendar quarters calculated using the then Underwritten Net Operating Income.
“TRIPRA” shall mean the Terrorism Risk Insurance Program Reauthorization Act of 2015 (Pub. L. 114-1, 129 Stat. 3).
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“Trust Manager” shall mean MDRR XXV Trust Manager 1, LLC, a Delaware limited liability company.
“Trust Agreement” shall mean the Trust Agreement of Borrower as the same has been delivered to Lender in connection with the closing of the Loan, and as the same may be hereafter amended, restated, replaced, supplemented or otherwise modified from time to time.
“Underwritten Net Operating Income” shall mean as determined by Lender in its sole discretion:
(A)the sum of the annualized sum of all rents received by Borrower from third-party Tenants at the Property, minus
(B)actual operating expenses with respect to the Property for the immediately preceding twelve (12) month period, subject to Lender’s standard adjustments, including, but not limited to, for non-reoccurring expenses, imminent increases in operating expenses (if applicable), real estate tax reassessments (if applicable), replacement reserves equal to $0.15 per square foot, and management fees equal to the greater of actual or three percent (3%) of annual gross revenue from the Property.
The Underwritten Net Operating Income shall be calculated by Lender in good faith and shall be final absent manifest error.
“U.S. Government Securities Business Day” shall mean any day except for (a) a Saturday, (b) a Sunday or (c) a day on which the Securities Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in United States government securities.
“Work Charge” shall have the meaning set forth in Section 4.17(a) hereof.
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Borrower represents and warrants as of the date hereof that:
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unlawful activity, including money laundering, terrorism or terrorism activities, with the result that the investment in Borrower or Guarantor, as applicable (whether directly or indirectly), is prohibited by law or the Loan is in violation of law, or may cause the Property to be subject to forfeiture or seizure.
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and no Person, including Borrower, has done, by act or omission, anything which would impair the coverage of any of the Policies.
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set forth in this Agreement which will not result in an environmental condition in, on or under the Property and which are otherwise permitted under and used in compliance with Environmental Law and (iii) fully disclosed to Lender in writing pursuant the Environmental Report; (b) there are no past, present or threatened releases of Hazardous Substances in, on, under or from the Property which have not been fully remediated in accordance with Environmental Law; (c) there is no threat of any release of Hazardous Substances migrating to the Property; (d) there is no past or present non-compliance with Environmental Laws, or with permits issued pursuant thereto, in connection with the Property which has not been fully remediated in accordance with Environmental Law; (e) Borrower does not know of, and has not received, any written or oral notice or other communication from any Person (including but not limited to a Governmental Authority) relating to Hazardous Substances or Remediation thereof, of possible liability of any Person pursuant to any Environmental Law, other environmental conditions in connection with the Property, or any actual or potential administrative or judicial proceedings in connection with any of the foregoing; and (f) Borrower has truthfully and fully disclosed to Lender, in writing, any and all information relating to environmental conditions in, on, under or from the Property that is known to Borrower and has provided to Lender all information that is contained in Borrower’s files and records, including, but not limited to, any reports relating to Hazardous Substances in, on, under or from the Property and/or to the environmental condition of the Property.
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that Borrower or the applicable SPE Component Entity does business under no other trade name with respect to the Property.
From the date hereof and until payment and performance in full of all obligations of Borrower under this Agreement, the Security Instrument, the Note and the other Loan Documents or the earlier release of the lien of the Security Instrument (and all related obligations) in accordance with the terms of this Agreement, the Security Instrument, the Note and the other Loan Documents, Borrower hereby covenants and agrees with Lender that:
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any way affect the rights of Lender hereunder or any rights obtained by Lender under any of the Note, the Security Instrument or the other Loan Documents and, in connection therewith, permit Lender, at its election, to participate in any such proceedings.
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Upon the failure of any of the foregoing conditions, the requirement for Borrower to make the required monthly deposits into the Tax and Insurance Reserve Account will be reinstated, as applicable, and Borrower will be required to make such monthly deposits commencing on the next Monthly Payment Date to occur. Nothing contained herein shall diminish Lender’s rights (all of which are expressly reserved) arising under Section 5.1.1(f) hereof
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Notwithstanding the foregoing, Lender shall cause all amounts held in the Operating Expense Reserve Account, including interest (if any), to be released to Borrower within ten (10) Business Days of the termination of the Trigger Period.
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The following provisions shall apply in connection with the Restoration of the Property:
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Notwithstanding any other provision to the contrary, transfers or issuances of beneficial interests in Borrower are permitted, provided each of the following conditions to such transfer or issuance of beneficial interests set forth below have been satisfied:
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| (A) | the Transfer or issuance of beneficial interests in Borrower does not cause there to be more than one thousand nine hundred ninety-nine (1,999) holders of beneficial interests in Borrower; |
| (B) | (i) no person owns more than twenty-five percent (25%) of the beneficial interests in Borrower following any transfer or series of transfers that did not hold greater than twenty-five percent (25%) as of the date of Transfer, or (ii) if a person owns more than twenty-five percent (25%) of the beneficial interests in Borrower following any transfer or series of transfers that did not hold greater than twenty-five percent (25%) as of the Effective Date, then such person will have been approved by Lender pursuant to Lender’s underwriting approval standards and such person shall not be a prohibited person; |
| (C) | each beneficial interest owner transferee (i) shall be an "Accredited Investor" (as defined in the regulations promulgated by the Securities and Exchange Commission), other than as specifically permitted pursuant to Rule 506{b) of Regulation D or Regulation A+, (ii) shall comply with applicable laws, including applicable securities laws and regulations; |
| (D) | each Transfer is in compliance with the Trust Agreement, including the Ownership Records of Borrower being revised to reflect such Transfer; |
| (E) | the Transfer does not cause a change in Control of Borrower; and |
| (F) | Borrower provides notice of such Transfer within thirty (30) days following the Transfer. |
Additional Permitted Transfers.
(1) Notwithstanding the foregoing, Borrower may affect a Conversion provided that:
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(G) no later than ten (10) days subsequent to such Conversion, Borrower shall provide Lender (i) the documentation filed with the appropriate office in Borrower’s state of formation evidencing such Conversion, (ii) copies of the organizational documents of Borrower including any amendments, filed with the appropriate office in Borrower’s state of formation reflecting the post-Conversion Borrower name, form of organization, and structure, and (iii) if available, new certificates of good standing or valid formation for Borrower.
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determination shall (except as is otherwise expressly herein provided) be in the sole discretion of Lender and shall be final and conclusive absent manifest error. The use of the phrase “in Lender’s sole discretion”, “in the sole discretion of Lender” and words of similar import, when used in this Agreement or any other Loan Document (as well as the absence thereof) with respect to a particular matter shall not be deemed in any way to limit or modify the provisions of the preceding sentence with respect to such matter.
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NULLIFY ITS EFFECT. BORROWER FURTHER ACKNOWLEDGES THAT IT HAS BEEN REPRESENTED IN THE SIGNING OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, SELECTED OF ITS OWN FREE WILL, AND THAT IT HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL. BORROWER FURTHER ACKNOWLEDGES THAT IT HAS READ AND UNDERSTANDS THE MEANING AND RAMIFICATIONS OF THIS WAIVER PROVISION AND AS EVIDENCE OF THIS FACT HAS EXECUTED THIS AGREEMENT BELOW. BORROWER SHALL NOT SEEK TO CONSOLIDATE, BY COUNTERCLAIM OR OTHERWISE, ANY SUCH ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. THESE PROVISIONS SHALL NOT BE DEEMED TO HAVE BEEN MODIFIED IN ANY RESPECT OR RELINQUISHED BY LENDER EXCEPT BY A WRITTEN INSTRUMENT EXECUTED BY LENDER.
If to Lender:
Pinnacle Bank
21 Platform Way S., Suite 2300
Nashville, TN 37203
Attention: Kacy Hunt
with a copy to
Sands Anderson PC
919 East Main Street, Suite 2300
Richmond, VA 23219
Attention: Robin Walker, Esq.
If to Borrower:
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MDRR XXV DST 1
6614 Three Chopt Road
Richmond, VA 23226
Attention: C. Brent Winn
With a copy to:
Williams Mullen
200 S. 10th Street
Richmond, VA 23219
Attention: Cindy J. Heidel
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charges, points or otherwise) contracted for, chargeable, or receivable under the Note, this Agreement, or any other Loan Document shall under no circumstances exceed the Maximum Legal Rate upon the unpaid principal balance of the Note remaining from time to time. In the event such interest does exceed the Maximum Legal Rate, it shall be deemed a mistake and such excess shall be canceled automatically and if theretofore paid, rebated to Borrower or credited on the principal amount of the Note, or if the Note has been repaid, then such excess shall be rebated to Borrower.
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of all commissions, finder’s fees or similar amounts due and payable, if any, to any financial advisor, broker, underwriter, placement agent, agent or finder on the Execution Date. Borrower shall indemnify, defend and hold Lender harmless from and against any and all claims, liabilities, costs and expenses of any kind (including Lender’s reasonable attorneys’ fees and disbursements) in any way relating to or arising from a claim by any Person that such Person acted on behalf of Borrower or Lender in connection with the transactions contemplated herein. The provisions of this Section 13.21 shall survive the expiration and termination of this Agreement and the payment of the Debt.
[Signatures Appear on the Following Page]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their duly authorized representatives, all as of the date of this Agreement.
LENDER:
PINNACLE BANK
a Tennessee bank
By: | /s/ Suzanne Gardner |
Name: | Suzanne Gardner |
Its: | Senior Vice President |
Loan Agreement – Signature Page
BORROWER:
MDRR XXV DST 1
a Delaware statutory trust
By:MDRR XXV Trust Manager 1, LLC
a Delaware limited liability company
Its:Manager
By: | /s/ C. Brent Winn, Jr. |
Name: | C. Brent Winn, Jr. |
Its: | Chief Financial Officer |
Loan Agreement – Signature Page
SCHEDULE 3.22
MATERIAL AGREEMENTS
| 1. | None |
Schedule 3.22 to Loan Agreement
SCHEDULE 3.34
REAs
| 1. | Declaration of Easements, Covenants and Restrictions for Nine Mile Plaza Shopping Center Pensacola, Escambia, County, Florida, recorded July 17, 2014 in Official Records Book 7198, Page 274, as amended in that First Amendment to the Declaration of Easements, Covenants and Restrictions recorded in Official Records Book 7375, Page 992, as further affected by that Second Amendment to the Declaration of Easements, Covenants and Restrictions recorded in the Official Records Book 9194, Page 871m, of the Public Records of Escambia County, Florida. |
Schedule 3.34 to Loan Agreement
EXHIBIT A
RENT ROLL
Lease dated September 21, 2024, by and between Borrower, as successor landlord, and Tesla, Inc., a Texas corporation, as tenant, as modified by that certain First Amendment to Lease dated June 30, 2025.
Exhibit A to Loan Agreement
EXHIBIT 10.3
LIMITED GUARANTY OF RECOURSE OBLIGATIONS
THIS LIMITED GUARANTY OF RECOURSE OBLIGATIONS (as amended, restated, replaced, supplemented or otherwise modified from time to time, this “Guaranty”) is entered into as of November 7, 2025, by medalist diversified holdings, l.p., a Delaware limited partnership, having an address of 6614 Three Chopt Road, Richmond, VA 23226 (together with its successors and permitted assigns, “Guarantor”), for the benefit of PINNACLE BANK, a Tennessee bank, having an address of 21 Platform Way S., Suite 2300, Nashville, TN 37203 (together with its successors and assigns, “Lender”).
RECITALS
NOW, THEREFORE, as an inducement to Lender to make the Loan to Borrower, and for other good and valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged, the parties do hereby agree as follows:
NATURE AND SCOPE OF GUARANTY
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EVENTS AND CIRCUMSTANCES NOT REDUCING
OR DISCHARGING GUARANTOR’S OBLIGATIONS
Subject to applicable law and subject to Section 1.13 above, Guarantor hereby consents and agrees to each of the following and agrees that Guarantor’s obligations under this Guaranty shall not be released, diminished, impaired, reduced or adversely affected by any of the following and waives any common law, equitable, statutory or other rights (including without limitation rights to notice) which Guarantor might otherwise have as a result of or in connection with any of the following:
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REPRESENTATIONS AND WARRANTIES
To induce Lender to enter into the Loan Documents and to extend credit to Borrower, Guarantor represents and warrants to Lender on and as of the date hereof as follows:
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SUBORDINATION OF CERTAIN INDEBTEDNESS
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MISCELLANEOUS
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[Signatures Appear on the Following Page]
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IN WITNESS WHEREOF, this Guaranty has been duly executed by Guarantor as of the date first above written.
GUARANTOR: MEDALIST DIVERSIFIED HOLDINGS, L.P., a Delaware limited partnership By: /s/ C. Brent Winn, Jr. Name: C. Brent Winn, Jr. Its: Chief Financial Officer |
Limited Guaranty – Signature Page