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):
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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:
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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 |
Entry into Exchange Agreement
On August 8, 2025, Medalist Diversified REIT, Inc. (the “Company”) and Medalist Diversified Holdings, LP, a Maryland limited partnership and the operating partnership (the “Operating Partnership”) entered into an exchange agreement (the “Exchange Agreement”) with Francis P. Kavanaugh, the Company’s Chief Executive Officer, President, Treasurer and Secretary, pursuant to which Mr. Kavanaugh will exchange an aggregate of 240,004 shares of the Company’s common stock, par value $0.01 per share (the “Common Stock”), on a one-for-one basis for an aggregate of 240,004 units of limited partnership interest (the “OP Units”) in the Operating Partnership (the “Exchange”). Following the Exchange, Mr. Kavanaugh intends to purchase additional shares of Common Stock.
The Exchange will help to ensure the Company’s continued compliance with real estate investment trust qualifications, including the requirement that no more than 50% in value of the Company’s outstanding capital stock may be owned, directly or indirectly, by five or fewer individuals.
Pursuant to the Agreement of Limited Partnership of the Operating Partnership, as amended, the OP Units are redeemable for cash or, at the Operating Partnership’s option, shares of the Company’s common stock on a one-for-one basis after a holding period of one-year from the date of the Exchange Agreement, pursuant to the terms of the Limited Partnership Agreement.
Pursuant to the Company’s Code of Business Conduct and Ethics, Audit Committee Charter and Related Person Transaction Policy, the Exchange was reviewed and approved by a majority of the Audit Committee of the Company’s Board of Directors (the “Board”) in addition to the approval by a majority of the Board.
The foregoing description is only a summary of the material provisions of the Exchange Agreement and is qualified in its entirety by reference to the full text of the Exchange Agreement, which is filed as Exhibit 10.1 hereto and incorporated by reference herein.
Entry into Purchase and Sale Agreement
On August 8, 2025, (the “Effective Date”), MDR Salisbury, LLC, a Delaware limited liability company (the “Seller”), a wholly-owned subsidiary of the Company, entered into a Purchase and Sale Agreement (the “Agreement”), a copy of which is filed as Exhibit 10.2 hereto, with Salisbury SC LLC, a Delaware limited liability company (the “Purchaser”), whereby the Purchaser agreed to acquire (the “Acquisition”) the property located at 2092 Statesville Blvd., Salisbury, NC, commonly known as Salisbury Marketplace Shopping Center (the “Property”). The total consideration for the Property is $10,000,000 (the “Consideration”), subject to the prorations and adjustments described in the Agreement. The Consideration is to be paid by the Purchaser to the Seller at Closing (as that term is defined in the Agreement). The Purchaser is required to make an earnest money deposit of $150,000 (“Deposit”) within three business days of the Effective Date.
The Agreement contains provisions, representations, warranties, covenants, conditions and indemnities that are customary and standard for the real estate industry and the sale of commercial real property. The Acquisition is expected to close within 60 days. Several conditions to closing on the Acquisition remain to be satisfied, and there can be no assurance that the Purchaser will complete the transaction on the general terms described above or at all.
The foregoing description is only a summary of the material provisions of the Agreement and is qualified in its entirety by reference to the full text of the Agreement, which is filed as Exhibit 10.2 hereto and incorporated by reference herein.
ITEM 3.02 | UNREGISTERED SALE OF EQUITY SECURITIES |
In connection with the Exchange, the Company issued 240,004 OP Units in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended.
Cautionary Statements Regarding Forward-Looking Statements
This Current Report on Form 8-K contains statements that are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. Forward looking statements are not historical and are typically identified by such words as “believe,” “expect,” “anticipate,” “intend,” “estimate, “may,” “will,” “should” and “could” and include statements about the Exchange, future common stock purchases and the closing of the Acquisition. Forward-looking statements are based upon the Company’s present expectations but are not guarantees or assurances as to future developments or results. Factors that may cause actual developments or results to differ from those reflected in forward-looking statements include, without limitation, adverse changes in the pricing of the Company’s assets, disruptions associated with management internalizations, increased costs of, and reduced availability of, capital and those included in the Company’s most recent Annual Report on Form 10-K and in the Company’s other filings with the Securities and Exchange Commission. Investors should not place undue reliance upon forward-looking statements. The Company disclaims any obligation to publicly update or revise any forward-looking statements to reflect changes and new developments except as required by law or regulation.
ITEM 9.01 | FINANCIAL STATEMENTS AND EXHIBITS |
(d) Exhibits
Exhibit No. | Description | |
10.1 | ||
10.2 | ||
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: August 11, 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
EXCHANGE AGREEMENT
This Exchange Agreement (this “Agreement”) is made as of August 8, 2025, by and among MEDALIST DIVERSIFIED HOLDINGS, L.P., a Delaware limited partnership (the “Company”), MEDALIST DIVERSIFIED REIT, Inc., a Maryland corporation and the general partner of the Company (the “General Partner”), and FRANCIS P. KAVANAUGH (the “Subscriber”) on the terms and conditions set forth in this Agreement and in the Agreement of Limited Partnership of the Company, dated as of September 29, 2015, by and among the General Partner and the Limited Partners set forth on Exhibit A thereto, as amended (the “Limited Partnership Agreement”). Capitalized terms used but not defined in this Agreement have the meanings assigned to them in the Limited Partnership Agreement.
BACKGROUND
In order to facilitate the General Partner’s continued compliance with real estate investment trust qualifications, including the requirement that no more than 50% in value of the Company’s outstanding capital stock may be owned, directly or indirectly, by five or fewer individuals, the General Partner, acting on its own behalf and as general partner of the Company, has authorized the issuance to the Subscriber of 240,000 units of partnership interest in the Company (the “Units”), in exchange for 240,000 shares (the “Shares”) of common stock, $0.01 par value per share (the “Common Stock”), of the General Partner, subject to the terms and conditions set forth herein.
TERMS
In consideration of the foregoing and the mutual covenants contained in this Agreement, the parties hereto, intending to be legally bound hereby, do agree as follows:
1.Exchange.
(a) Upon execution of this Agreement, the Subscriber hereby surrenders to the General Partner the Shares held by the Subscriber and simultaneously with such surrender, the Company hereby issues to the Subscriber the Units set forth opposite the Subscriber’s name on Schedule A under the heading “Units” (the “Exchange”).
2.Company Representations and Warranties. The Company hereby represents and warrants to the Subscriber as follows:
(a)This Agreement constitutes the legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its respective terms.
(b)The Units have been duly authorized and, when issued in accordance with this Agreement, will be validly issued.
(c)No Additional Representations or Warranties. Except as provided in this Section 2, neither the Company nor any of its affiliates, nor any of their respective directors, managers, officers, employees, shareholders, partners, members or representatives has made, or is making, any representation or warranty whatsoever to the Subscriber. Without limiting the foregoing, the Subscriber acknowledges that the Subscriber, together with the Subscriber’s advisors, has made the Subscriber’s own investigation of the General Partner and the Company and its subsidiaries and is not relying on any implied warranties
or upon any representation or warranty whatsoever as to the prospects (financial or otherwise) or the viability or likelihood of success of the business of the General Partner or the Company or its subsidiaries as conducted after the closing of the transactions contemplated hereby, and contained in any materials (other than this Agreement and the Limited Partnership Agreement) provided to the Subscriber by the General Partner or the Company or any of its subsidiaries or any of their respective directors, officers, employees, shareholders, partners, members or representatives or otherwise.
3.Subscriber Representations and Warranties. The Subscriber hereby represents, warrants, acknowledges and/or agrees as follows:
(a)The Subscriber has the capacity and legal right to enter into and perform this Agreement. This Agreement constitutes the legal, valid and binding obligation of the Subscriber, enforceable against the Subscriber in accordance with its terms.
(b) The Subscriber is the record and beneficial owner of the Shares, free and clear of any and all pledges, claims, liens, charges, preemptive rights, options, pledges, encumbrances, security interests of any kind or nature whatsoever and all agreements, assignments, charges, preferences, or any other adverse claim or restriction on title or transfer of any nature whatsoever.
(c) This Agreement has been duly executed and delivered by or on behalf of the Subscriber and constitutes a valid and binding agreement of the Subscriber, enforceable against the Subscriber in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors' rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law).
(d)The Subscriber has full knowledge of the General Partner’s and the Company’s and its subsidiaries’ business, financial condition, operations and prospects and the Subscriber is acquiring the Units without being furnished any sales literature or prospectus concerning the General Partner or the Company or its subsidiaries.
(e)The Subscriber is acquiring the Units solely for his own account for investment purposes and not with a view to resale or distribution of all or any part thereof. The Subscriber has no present arrangement, understanding or agreement for transferring or disposing of all or any portion of the Units.
(f)The Subscriber is an “accredited investor” within the meaning of Regulation D promulgated under the Securities Act of 1933, as amended (the “Securities Act”). Immediately prior to the exchange of the Shares for the Units, the Subscriber has such knowledge and experience in financial and business matters that the Subscriber is capable of evaluating the merits and risks of an investment in the Units and to form an investment decision with respect thereto.
(g)The Subscriber acknowledges that all material documents, records, books and diligence materials pertaining to this investment, the Company and its affiliates have been made available to the Subscriber, and that the Company has made available to the Subscriber and the Subscriber’s representatives, the opportunity to ask questions of, and receive answers from, the Company, concerning the Company, its subsidiaries and the terms and conditions of the investment.
(h)In considering the exchange of the Shares for the Units, the Subscriber has evaluated for himself the risks and merits of such investment, and is able to bear the economic risk of such
investment, including a complete loss of capital, and in addition has not relied upon any representations or warranties made by, or other information (whether oral or written) furnished by or on behalf of, the Company, the General Partner, or any director, officer, employee, agent or affiliate of such persons, other than as set forth in this Agreement and the Limited Partnership Agreement.
(i)The Subscriber acknowledges that he has not requested from, and is not relying on, the Company, the General Partner or any of their partners, members, officers, counsel, agents or representatives for any legal, investment or tax advice. The Subscriber has carefully considered and has, to the extent he believes necessary, discussed with his own legal, tax, accounting and financial advisers the suitability of an investment in the Company in light of its particular tax and financial situation, and has determined that the Units being subscribed for hereunder is a suitable investment for the Subscriber.
(j)The Subscriber understands that the Units are being exchanged for the Shares in reliance on specific exemptions from the registration requirements of federal and state law and that the Company is relying upon the truth and accuracy of the representations, warranties, agreements, acknowledgments and understandings set forth herein in order to determine the applicability of such exemptions and the suitability of the Subscriber to acquire the Units.
(k)The Subscriber understands that the Subscriber is not entitled to cancel, terminate or revoke this Agreement.
(l)The Subscriber understands that (i) the Units have not been registered under the Securities Act or any state securities or “Blue Sky” laws pursuant to exemptions therefrom; (ii) the Company has no obligation or intention to register the Units for resale under any federal or state securities laws, or to take any action (including the filing of reports or the publication of information required by Rule 144 under the Securities Act) which would make available any exemption from the registration requirements of such laws, and (iii) it is likely that the Subscriber, therefore, may be precluded from selling or otherwise transferring or disposing of the Units or any portion thereof and may therefore have to bear the economic risk of investment in the Units for an indefinite period.
(m)No broker or finder has acted for or on behalf of the Subscriber in connection with his exchange of Shares for Units and no broker or finder is entitled to any broker’s or finder’s fees or other commissions in connection therewith based on agreements between the Subscriber and any broker or finder.
(n)Neither the Subscriber nor, to the extent he has them, any of his shareholders, members, managers, general or limited partners, directors, affiliates or executive officers, are subject to any of the “Bad Actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities Act (a “Disqualification Event”), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3). The exchange of the Shares for Units by the Subscriber will not subject the Company to any Disqualification Event.
(o)The Subscriber agrees that the foregoing representations and warranties shall survive the Closing applicable to the Subscriber and will be deemed to be reaffirmed by the Subscriber at any time the Subscriber acquires additional Units of the Company, contributes capital to the Company or receives distributions from the Company and such purchase, acquisition, contribution or distribution will be evidence of such reaffirmation.
(p)The Subscriber shall notify the Company immediately if any of the foregoing representations or warranties cease to be true or accurate, or if they become misleading.
4.Subscriber Acknowledgments and Covenants. The Subscriber acknowledges and covenants that:
(a)No federal or state agency has passed on, has recommended or has endorsed the merits of the Units or this exchange transaction.
(b)All tax forms provided in connection with this Agreement are accurately completed and properly executed and may be relied upon by the Company and its advisors and agents and affiliates.
(c)The Units are speculative investments and involve a high degree of risk. There is no public market for the Units, and no such public or other market is expected to develop. The transferability of the Units is substantially restricted both by the terms of the Limited Partnership Agreement and applicable law. This Agreement is not transferable or assignable by the Subscriber without the prior written consent of the General Partner.
(e)As a reporting issuer on The Nasdaq Capital Market (“Nasdaq”) where Common Stock is registered for trading, the General Partner is required to make certain filings related to the issuance of the Units. At the request of the General Partner or the Company, the Subscriber shall cooperate with the General Partner and the Company in making such filings and ensuring compliance with all applicable listing requirements of Nasdaq.
(f)The Subscriber understands and acknowledges that Hunton Andrews Kurth LLP represents only the General Partner and the Company, and not the Subscriber or the limited partners as a group, in connection with the offer and sale of the Units.
5.Reliance on Representations; Indemnification. The Subscriber acknowledges and agrees that that the Company and its counsel are relying upon the representations, warranties, acknowledgments and covenants in this Agreement (collectively, the “Investor Information”). The Subscriber agrees to indemnify and hold harmless the Company, its directors, officers, members, representatives and agents, and any person who controls any of the foregoing, against any and all loss, liability, claim, damage and expense (including reasonable attorneys' fees) arising out of or based upon any misstatement or omission in the Investor Information or any failure by the Subscriber to comply with any covenant or agreement made by the Subscriber in the Investor Information.
6.Tax Forms. Subscriber is a “United States Person” as defined in Section 7701(a)(30) of the Code and shall immediately provide the Company with an executed IRS Form W-9. The Subscriber agrees that promptly (and in any event within ten calendar days) after receipt of a request from the Company, the Subscriber shall provide such additional information and deliver such additional documents as shall be reasonably necessary to comply with any federal, state, local or non-U.S. securities, tax or anti-money laundering laws, rules or regulations to which the Company is subject. Without limiting the generality of the foregoing, the Subscriber hereby agrees to immediately deliver to the Company any applicable withholding tax forms and/or certificates requested by the Company.
7.Publicly Traded Partnership. The Subscriber is not a partnership, grantor trust, or Subchapter S corporation for U.S. federal income tax purposes.
8.FATCA Compliance/Reliance; Additional Information/FATCA Withholding. The Subscriber understands and agrees that:
(a)the representations, warranties, agreements, understandings and acknowledgements made by the Subscriber in this Agreement, including but not limited to its Annexes and any tax forms provided in connection with this Agreement, are made with the intent that they are relied upon the Company and its affiliates in determining the Subscriber's suitability as a holder of the Units; and
(b)the Company may request from the Subscriber such additional information as it may deem necessary or appropriate to evaluate the eligibility of the Subscriber to exchange the Shares for the Units, and may request from time to time such information as the Company may deem appropriate to determine a Subscriber’s suitability to hold the Units, or to enable the Company to determine the Company’s compliance with applicable regulatory requirements, or pre-determine or verify tax status, to fulfill any tax withholding or other obligation relating to the Subscriber, including but not limited to, any documentation necessary or reasonably requested to establish the Subscriber’s eligibility for benefits under any applicable tax treaty or to establish the Subscriber’s compliance with Section 1471 through Section 1474 of the Code (“FATCA”), or for any other reasonable purpose relating to the Company, and the Subscriber shall provide such information as may be so requested. The Subscriber undertakes to promptly notify the Company in writing if (i) the US Internal Revenue Service terminates any agreement entered into with the Subscriber relating to withholding, or (ii) there is any change in any information provided to the Company pursuant to this Section 9(b).
(c)The Subscriber acknowledges that the Company is obligated to withhold on all payments made by the Company to the Subscriber unless and until the Company is satisfied that the Subscriber has fully complied with the requirements under FATCA, as applicable to the Subscriber. The Company shall reasonably cooperate with the Subscriber in obtaining a refund of amounts withheld pursuant to this clause (ii), to the extent such refund may be available to the Subscriber.
9.Miscellaneous.
(a)Entire Agreement; Governing Law. This Agreement and the Limited Partnership Agreement constitute the entire understanding between the Subscriber and the Company with respect to the subject matter hereof and supersede any prior understanding and/or written or oral agreements between them with respect to such subject matter. This Agreement shall be governed by the laws of the State of Delaware, without regard to the principles of conflicts of laws of the State of Delaware or any other jurisdiction.
(b)Severability. In case any provision of this Agreement shall be invalid, illegal, or unenforceable, it shall to the extent practicable be modified so as to make it valid, legal and enforceable and to retain as nearly as practicable the intent of the parties, and the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
(c)Amendment; Waiver. Any provision of this Agreement and the obligations of the Company or rights of the Subscriber hereunder may be amended or waived if, but only if, such amendment or waiver is in writing and is approved in writing by the Company and the Subscriber, whereupon such amendment or waiver shall be binding on the Company and the Subscriber.
(d)Notices. All notices and other communications required or permitted hereunder shall be in writing and shall be deemed effectively given upon personal delivery, on the first business day following mailing by over-night or express courier, or on the third day following mailing by registered or certified mail, return receipt requested, postage prepaid, addressed to the Company and the Subscriber at the respective addresses included herein.
(e)Counterparts; Execution by Electronic Means. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. Delivery of an executed counterpart of the signature page to this Agreement by facsimile or electronic transmission shall be effective as delivery of a manually executed counterpart of this Agreement, and any party delivering an executed counterpart of the signature page to this Agreement by facsimile or electronic transmission to any other party shall thereafter also promptly deliver a manually executed counterpart of this Agreement to such other party, but the failure to deliver such manually executed counterpart shall not affect the validity, enforceability, and binding effect of this Agreement.
(f)References and Construction. The provisions of this Agreement shall be construed according to their fair meaning and neither for nor against any party hereto irrespective of which party caused such provisions to be drafted. Each of the parties acknowledges that it has been (or has been afforded the opportunity to be) represented by an attorney in connection with the preparation and execution of this Agreement.
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SIGNATURE PAGE FOLLOWS
IN WITNESS WHEREOF, the parties have executed this Agreement on the date and year first written above.
COMPANY:
MEDALIST DIVERSIFIED HOLDINGS, L.P.
/s/ C. Brent Winn, Jr.
By: Medalist Diversified REIT, Inc., its General Partner
Name: C. Brent Winn, Jr.
Title: Chief Financial Officer
GENERAL PARTNER:
MEDALIST DIVERSIFIED REIT, INC.
/s/ C. Brent Winn, Jr.
Name: C. Brent Winn, Jr.
Title: Chief Financial Officer
SUBSCRIBER:
FRANCIS P. KAVANAUGH
/s/ Francis P. Kavanaugh
SCHEDULE A
Units Issued | Consideration |
240,000 | 240,000 shares of the General Partner’s Common Stock |
EXHIBIT 10.2
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this “Agreement”) is made and entered into as of this 8th day of August, 2025 (the “Effective Date”) by and between MDR Salisbury, LLC, a Delaware limited liability company (“Seller”), having an address of P.O. Box 8436, Richmond, VA 23226, Attn: Brent Winn, Chief Financial Officer, and Salisbury SC LLC, a Delaware limited liability company, it’s affiliates, successors or assigns (“Purchaser”), having an address of 151 Bodman Place, Suite 201, Red Bank, NJ 07701.
AGREEMENT:
Seller agrees to sell and convey to Purchaser, and Purchaser agrees to purchase from Seller, for the purchase price set forth below and on the terms and conditions set forth in this Agreement, all of the following (collectively, the “Property”):
The total purchase price to be paid to Seller by Purchaser for the Property shall be Ten Million Dollars ($10,000,000.00) (the “Purchase Price”), plus or minus prorations as hereinafter provided.
The purchase and sale contemplated herein shall be consummated at a closing (“Closing”) to take place by mail or at the offices of the Title Company (defined below). The Closing shall occur on or before thirty (30) days after the expiration of the Due Diligence Period (as hereinafter defined), or as otherwise agreed by the parties (the “Closing Date”). Notwithstanding anything to the contrary contained herein, Purchaser shall have the one-time right and option to extend the Closing Date for a period of up to fifteen (15) days upon prior written notice to Purchaser no less than three (3) business days prior to the scheduled Closing Date (the “Extension Notice”), which Extension Notice shall set forth the new Closing Date and which Extension Notice may be exchanged between attorneys for the Purchaser and Seller and which may be delivered via e-mail upon which the Extension Notice shall be deemed effective and delivered.
Not later than three (3) business days following the Effective Date, Purchaser shall deposit, as its earnest money deposit, the sum of One Hundred Fifty Thousand 00/100 Dollars ($150,000.00) (the “Initial Deposit”) in an escrow with Kensington Vanguard National Land Services, LLC (the “Title Company”), at 41 Madison Avenue, 21st Floor, New York, New York 10010, Attn: Brian Cooper, [email protected], as escrowee, pursuant to the Title Company’s escrow agreement attached hereto as Exhibit C. Seller acknowledges that, prior to the Effective Date, Purchaser, through an affiliated company, deposited with Title Company the sum of Ten Thousand and 00/100 Dollars ($10,000.00), which amount constitutes a portion of the Initial Deposit to be held by Title Company pursuant to the terms hereof. Accordingly, the amount of
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the Initial Deposit required to be paid to Title Company by Purchaser pursuant to this paragraph is One Hundred Forty Thousand 00/100 Dollars ($140,000.00).
Within two (2) business days following the expiration of the Due Diligence Period (as hereinafter defined), if this Agreement has not been terminated by Purchaser in accordance with the terms hereof, Purchaser shall pay to Title Company an additional earnest money deposit in the amount of One Hundred Fifty Thousand 00/100 Dollars ($150,000.00) (the “Additional Deposit”; the Initial Deposit and the Additional Deposit are jointly referred to herein as the “Deposit”). The Title Company shall hold the Deposit in a non-interest-bearing escrow account. Except as otherwise set forth herein, at Closing, the Purchaser shall receive a credit of the total amount of the Deposit held by the Title Company toward the Purchase Price and the Title Company shall pay the Deposit to the Seller as a credit toward the Purchase Price.
If Purchaser delivers the Due Diligence Approval Notice prior to the expiration of the Due Diligence Period, then the Initial Deposit shall become non-refundable to Purchaser except in the event of a default by Seller under this Agreement. The Additional Deposit shall be non-refundable to Purchaser when deposited by Purchaser except in the event of a default by Seller under this Agreement.
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7.1Seller represents and warrants to Purchaser that the following matters are true as of the Contract Date, in all material respects (the “Seller Representations”):
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7.2For purposes of this Agreement, Seller’s “knowledge” and similar phrases means the actual, current knowledge of Brent Winn, Chief Financial Officer of Seller, provided that this definition of knowledge is intended solely to establish the scope of facts that shall be considered known by Seller for the purposes of this Agreement and not to impose on such person any personal liability or obligation to investigate.
7.3Notwithstanding any provision in this Agreement to the contrary, no claim for a breach of any representation or warranty of Seller hereunder or in any agreement or other instrument delivered by Seller at Closing shall be actionable or payable if the breach in question results from or is based on a condition, state of facts or other matter which (a) is disclosed in this Agreement (b) is disclosed in the documents delivered by Seller at Closing, (c) is disclosed in the documents and materials provided by Seller to Purchaser or made available to Purchaser pursuant to this Agreement and/or the Access Agreement, or (d) is known by Purchaser at or prior to Closing, and Purchaser shall be estopped from claiming a breach of such representation or warranty following Closing. This Section 7.3 shall survive Closing.
7.4Change in Seller Representations.
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7.5The Seller Representations shall survive the Closing Date and the delivery of the Deed, but any action, suit or proceeding brought by Purchaser against Seller under this Agreement or under any such documents shall be commenced and served, if at all, on before the date which is nine (9) months following Closing (the “Survival Period”). A claim for a breach of any representation, warranty, covenant or other agreement of Seller shall be actionable only if: (a) the substance of such claim first occurs or first becomes known to Purchaser after Closing, and (b) the valid claims for all such breaches collectively aggregate more than $50,000, in which event the full amount of such claim shall be actionable up to the Cap, and (c) any action, suit or proceeding brought by Purchaser against Seller for any such claims shall be commenced and served prior to the expiration of the Survival Period. As used herein, the term “Cap” shall mean the total aggregate amount of $200,000.00, provided, however, Seller acknowledges and agrees that the aforementioned minimum and maximum amounts shall not apply to any liability of Seller with respect to the proration provisions or post-closing adjustment obligations set forth in this Agreement. This Section 7.5 shall survive the Closing. It shall be a condition precedent to Purchaser’s obligation to proceed to Closing that all of the Seller Representations were true and correct, in all material respects, as of the Effective Date, and remain true and correct in all material respects as of the Closing Date (the “Representation Condition”).
7.6.PROPERTY TRANSFERRED “AS IS AND WHERE IS”. Except for the representations, warranties, and covenants of Seller in this Agreement or in the documents delivered by Seller at Closing, it is understood and agreed that Seller has not made and is not making and specifically disclaims any warranties, representations or guarantees of any kind or character, express or implied, oral or written, past, present or future, with respect to the Property, its suitability for any particular purpose or use, or any information regarding the Property obtained by Purchaser from any source, including but not limited to Seller. Purchaser acknowledges that it is generally familiar with the Property and is a sophisticated buyer of real estate, and that it is relying upon its own expertise and that of its consultants in purchasing the Property and that it will conduct such inspections and investigations as it deems necessary including, but not limited to, the physical and environmental conditions thereof, and shall rely upon the same. Subject to the representations, warranties and covenants expressly contained in this Agreement and in the deed delivered at Closing, Seller shall sell and convey to Purchaser, and Purchaser shall accept the Property, “AS IS, WHERE IS, WITH ALL FAULTS.” Neither Seller nor Purchaser is liable or bound in any manner by any oral or written statements, representations or information pertaining to the Property furnished by any broker, agent, employee, servant or other person, unless the same are expressly set forth herein. Seller and Purchaser acknowledge that the provisions of this Section 7A are an integral part of the transaction contemplated in this Agreement and a material inducement to Seller to enter into this Agreement and that Seller would not enter into this Agreement but for the provisions of this Section 7A. Seller and Purchaser agree that the provisions of this Section 7A shall survive Closing or any termination of this
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Agreement. The provisions of this Section 7A shall survive indefinitely Closing or any termination of this Agreement, and shall not be merged into the Closing.
Effective as of the execution of this Agreement, Purchaser hereby covenants with Seller, and represents and warrants to Seller, as follows:
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Notwithstanding anything to the contrary herein, the obligations of Purchaser to pay the Purchase Price and to perform Purchaser’s other obligations at the Closing under this Agreement are and shall be subject to the satisfaction of each of the following conditions on or prior to the Closing Date:
| (a) | All tenants pursuant to the Leases shall be open, operating and paying in full all rental payments due under their respective leases, and shall not otherwise be in default of their lease. |
| (b) | As of the Closing Date, the representations made by Seller to Purchaser as of the Effective Date shall be true, accurate and correct as if specifically remade at that time; provided, however, that if the failure of a condition is within the control of Seller and caused by Seller’s actions in breach of this Agreement, then Purchaser shall be entitled to its remedies as provided in Section 16(a) of this Agreement. |
| (c) | At the Closing, the Title Company shall issue to Purchaser the Title Policy, provided that if the Title Company’s failure to issue to Purchaser the Title Policy is due to Purchaser’s failure to satisfy any of the Title Company’s |
18
| requirements for issuance of the Title Policy that are not obligations of Seller under this Agreement, then this condition precedent shall be deemed to have been satisfied. |
| (d) | [intentionally omitted] |
| (e) | No Major Tenant, nor any other tenant whose leased premises contain rentable square feet of over 3,000 square feet, shall have terminated, or given notice of intent to terminate, its Lease or shall have vacated, abandoned, ceased operations or filed for voluntary bankruptcy or be subject to an involuntary bankruptcy proceeding, provided that the expiration of the term of one or more Leases and vacation of the applicable tenant(s) after the Effective Date shall not constitute a failure of this condition precedent. |
| (f) | Seller shall have, in all material respects, (i) performed all covenants and obligations, and (ii) complied with all conditions, required by this Agreement to be performed or complied with by Seller on or before the Closing Date or each such covenant, obligation and condition shall be waived by Purchaser in writing and in its sole and absolute discretion prior to the Closing. |
| (g) | Seller shall have delivered to Purchaser, at or prior to the Closing Date, all of the Required Tenant Estoppel Certificates, REA Estoppels, and any required SNDAs, in accordance with Section 9 of this Agreement. |
| (h) | Seller shall have delivered at Closing (i) all the documents provided for in Section 11 of this Agreement and (ii) possession of the Property. |
At Closing (or such other times as may be specified below), Seller shall deliver or cause to be delivered to Purchaser the following:
19
20
At Closing (or at such other times as may be specified below), Purchaser shall deliver or cause to be delivered to Seller the following:
| (a) | Two (2) Closing Statements executed in counterpart by Purchaser. |
| (b) | Two (2) Assignment of Leases executed in counterpart by Purchaser. |
Prorations shall be made as of 12:01 a.m. (Eastern time) on the Closing Date, as if Purchaser were in title for the entire Closing Date provided that the Purchase Price, plus or minus the prorations and other adjustments hereunder, shall be received by the Title Company from Purchaser for disbursement to Seller by Federal Reserve wire transfer of immediately available funds to an account designated by Seller. The following shall be prorated and adjusted between Seller and Purchaser:
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22
23
24
25
The risk of loss for damage or destruction to the Property by fire or other casualty due to all causes other than the negligence or willful misconduct of the Purchaser’s Representatives is assumed by Seller until the closing of title hereunder. If, prior to Closing, all or any portion of any or all of the Land and the Improvements is damaged by fire or other natural casualty (collectively “Damage”), or is taken or made subject to condemnation, eminent domain or other governmental acquisition proceedings (collectively “Eminent Domain”), then:
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27
Purchaser may assign all of its rights, title, liability, interest and obligation pursuant to this Agreement to one or more entities affiliated with Purchaser provided that Purchaser provides Seller with a copy of a written assignment agreement between Purchaser and such assignee(s) at or prior to Closing. The terms, covenants and conditions herein contained shall be binding upon and inure to the benefit of the respective parties and their successors and permitted assigns. Any other assignment of this Agreement shall only be made with the prior written consent of Seller, in Seller’s sole discretion.
In the event either party elects to assign this Agreement to an Intermediary in connection with a tax-deferred or like-kind exchange, the other party shall reasonably cooperate with the assigning party (without incurring any additional liability or any additional third party expenses) in connection with such election and the consummation of the Exchange, including without limitation, by executing an acknowledgment of the assigning party’s assignment of this Agreement to the Intermediary.
In the event of litigation between the parties with respect to the Property, this Agreement, the performance of their respective obligations hereunder or the effect of a termination under this Agreement, the losing party shall pay all costs and expenses incurred by the prevailing party in connection with such litigation, including, but not limited to, reasonable attorneys’ fees of counsel selected by the prevailing party. Notwithstanding any provision of this Agreement to the contrary, the obligations of the parties under this Section 18 shall survive termination of this Agreement or the Closing and the delivery of any conveyance documentation.
Any notice, demand or request which may be permitted, required or desired to be given in connection therewith shall be given in writing and directed to Seller and Purchaser as follows:
Seller: | MDR Salisbury, LLC |
P.O. Box 8436
Richmond, VA 23226
Attn: Brent Winn, Chief Financial Officer
Email: [email protected]
With a copy to
its attorneys: | Moore & Van Allen PLLC |
100 North Tryon Street, Suite 4700
Charlotte, NC 28202
Attn: Paul A. Arena
Email: [email protected]
28
Purchaser: | Salisbury SC LLC |
151 Bodman Place, Suite 201
Red Bank, NJ 07701
Attn: Michael Hazinski
E-mail: [email protected]
With a copy to
First National Realty Partners
125 Half Mile Road, Suite 207
Red Bank, NJ 07701
Attn: Zain A. Naqvi, General Counsel
E-mail: [email protected]
Notices shall be deemed properly delivered and received: (i) when and if personally delivered; (ii) one (1) business day after deposit with Federal Express or other comparable commercial overnight courier, or (iii) when transmitted by electronic mail (if transmitted before 6:00 p.m. Eastern Time on the transmittal date, otherwise on the following business day). Notices may be delivered on behalf of the parties by their respective attorneys.
Upon the Closing, Purchaser shall neither assume nor undertake to pay, satisfy or discharge any liabilities, obligations or commitments of Seller other than those specifically agreed to between the parties and set forth in this Agreement. Except with respect to the foregoing obligations, Purchaser shall not assume or discharge any debts, obligations, liabilities or commitments of Seller, whether accrued now or hereafter, fixed or contingent, known or unknown.
This Agreement is for the benefit only of the parties hereto and no other person or entity shall be entitled to rely hereon, receive any benefit herefrom or enforce against any party hereto any provision hereof.
Each party hereto represents and warrants to the other that it has dealt with no brokers or finders in connection with this transaction other than JLL Capital Markets representing Seller (“Broker”). If and only to the extent the parties proceed to Closing, Seller shall pay a commission to Broker pursuant to the terms of a separate agreement between Broker and Seller. Seller and Purchaser each hereby indemnifies, protects, defends and holds the other party and its representatives, employees, directors, officers, principals, and members (the “Indemnified Parties”) harmless from and against all losses, claims, causes of actions, damages suffered or incurred by any or all of the Indemnified Parties resulting from the claims of any broker, finder or other such party in connection with the transactions contemplated by this Agreement claiming by, through or under the acts or agreements of the indemnifying party. The obligations of the parties pursuant to this Section 22 shall survive the Closing and any termination of this Agreement.
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23.SELLER SECURITY
As security for Seller’s post-Closing obligation under this Agreement, Medalist Diversified Holdings, LP (the direct parent entity of the Seller) (“Medalist”) hereby, jointly and severally guaranties the payment by Seller of all obligations of Seller pursuant to this Agreement which expressly survive Closing. In the event that Purchaser incurs any losses in connection with a breach by Seller of Seller’s Representations, subject to Section 7.4, Purchaser shall be entitled to recover such losses from Seller and Medalist, jointly and severally, in an aggregate amount and may proceed against either party or both, in Purchaser’s sole and absolute discretion; it being agreed to by the parties that the obligations of guarantor are independent of the obligations of Seller, and a separate action or actions may be brought and prosecuted against guarantor, whether or not action is brought against Seller, provided that in no event shall the aggregate liability of Seller and Medalist exceed the amount of the Cap. This guaranty shall be coterminous with Seller’s liability for post-Closing obligations under this Agreement and shall expire at the end of the Survival Period only. Subject to the foregoing, the provisions of this Section 23 shall survive the Closing.
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[Signature Page to Follow]
31
IN WITNESS WHEREOF, the parties hereto have executed this Purchase and Sale Agreement on the date first above written.
SELLER:
MDR Salisbury, LLC, a
Delaware limited liability company
By:Medalist Diversified Holdings, L.P.,
a Delaware limited partnership
Its:Sole Member
By:Medalist Diversified REIT, Inc.,
a Maryland corporation
Its:General Partner
By:/s/ C. Brent Winn, Jr.
C. Brent Winn, Jr.
Chief Financial Officer
PURCHASER:
Salisbury SC LLC
By: FNRP Realty Advisors LLC, its Manager
By: /s/ Michael Hazinski
Name: Michael Hazinski
Its: Authorized Signatory
S-1
SCHEDULE OF EXHIBITS
ALegal Description of the Land
BList of Lease Documents
CEscrow Agreement
Dintentionally omitted
E List of Service Contracts
FCertified Rent Roll
GTenant Estoppel Certificate
HAssignment and Assumption of Leases
IForm of North Carolina Special Warranty Deed
JForm of Bill of Sale
KAssignment and Assumption of Contracts and Intangibles
LAccounts Receivable Schedule
EXHIBIT A
LEGAL DESCRIPTION
All of the real property described in deed recorded in Book 1404, Page 10, Rowan County, North Carolina Register of Deeds.
A-1
EXHIBIT B
LIST OF LEASE DOCUMENTS
| 1. | Adoration Home Health Care of Virginia |
| a. | Lease dated September 21, 2020 |
| b. | Delivery of Possession and Rent Commencement Date Certificate dated January 27, 2021 |
| 2. | Better World Recycling |
| a. | Temporary License Agreement dated February 17, 2025 |
| 3. | Best Wireless 1, Inc. dba Cricket Wireless |
| a. | Shopping Center Lease dated June 20, 2019 |
| b. | Delivery and Possession of Rent Commencement Date Certificate dated July 22, 2019 |
| c. | Confirmation of Tenant Exercising Option to Renew letter dated December 14, 2022 |
| d. | First Lease Amendment dated August 1, 2025 |
| 4. | Citi Trends |
| a. | Lease dated June 5, 2017 |
| b. | Guaranty dated June 5, 2017 |
| c. | Memorandum of Lease dated June 5, 2017 |
| d. | Possession Date Letter dated June 29, 2017 |
| e. | Confirmation Commencement dated September 29, 2017 |
| f. | First Amendment to Lease dated December 14, 2020 |
| g. | Second Amendment to Lease dated March 3, 2022 |
| 5. | Coggins Financial Services |
| a. | Lease dated September 30, 2010 |
| b. | Tenant Delivery/Possession Letter dated October 11, 2010 |
| c. | Lease Extension Agreement dated February 26, 2013 |
| d. | Lease Extension Agreement No. 2 dated May 31, 2016 |
| e. | Lease Extension Agreement No. 3 dated November 10, 2020 |
| f. | Lease Extension Agreement No. 4 dated July 19, 2023 |
| 6. | Family Dollar |
| a. | Lease Agreement dated December 17, 2007 |
| b. | Short Form Lease (for recording) dated December 17, 2007 |
| c. | SNDA dated December 17, 2007 |
| d. | Food Lion Agreement dated January 22, 2008 |
B-1
| e. | Revised Possession Notice dated April 18, 2008 |
| f. | Supplement to Lease Agreement (Delivery Notice) dated April 22, 2008 |
| g. | Space Open / Close Form dated July 17, 2008 |
| h. | First Amendment to Lease Agreement dated January 18, 2018 |
| i. | Ice Storage Permission Letter dated March 15, 2018 |
| j. | Notice Address Change dated April 3, 2019 |
| k. | Email containing Tenant Contact dated October 28, 2020 |
| l. | SNDA dated December 28, 2017 |
| m. | Amended and Restated Short Form Lease (for recording) dated November 7, 2022 |
| n. | Second Amended and Restated Short Form Lease (for recording) dated July 28, 2023 |
| o. | Second Amendment to Lease Agreement dated July 28, 2023 |
| p. | Notice Change letter dated July 10, 2025 |
| q. | Letter dated February 11, 2016 – Tenant election to use own trash and recycle dumpsters |
| 7. | Food Lion |
| a. | Lease Agreement dated January 20, 1986 |
| b. | Addendum to Lease – Parking and Common Areas – dated January 20, 1986 |
| c. | Addendum to Lease – Tax Addendum – dated January 20, 1986 |
| d. | Letter Agreement – Modification of Completion Date – dated June 9, 1986 |
| e. | First Lease Modification Agreement dated September 1, 1986 |
| f. | Letter Agreement – Square Footage – dated September 4, 1986 |
| g. | Letter Agreement – Modification of Completion Date – dated September 22, 1986 |
| h. | Consent Letter – free standing pedestal phone – dated January 20, 1987 |
| i. | Letter Agreement – parking space count adjustments – dated February 3, 1987 |
| j. | Letter Agreement – parking space count adjustments – dated February 24, 1987 |
| k. | Letter Agreement – restaurant approval – dated March 3, 1987 |
| l. | Second Lease Modification Agreement dated August 27, 1987 |
| m. | Memorandum of Lease dated December 28, 1987 |
| n. | Tenant Correspondence dated January 5, 1993 |
| o. | Tenant Correspondence dated February 19, 1993 |
| p. | Tenant Letter approving outparcel development dated June 16, 1993 |
| q. | Tenant Correspondence dated June 28, 1993, Rack Room parking |
| r. | Tenant Letter approving restaurant lease dated May 16, 1994 |
| s. | Tenant Letter approving restaurant lease dated August 31, 1994 |
| t. | Tenant Letter regarding lighting installation dated April 10, 1995 |
| u. | Tenant Letter approving restaurant lease dated October 20, 1995 |
| v. | Food Lion Consent dated June 28, 1996 |
| w. | Letter Agreeing to Lease Modifications dated August 6, 1996 |
| x. | Assignment and Assumption of Lease Agreement dated July 1, 2000 |
| y. | Third Lease Modification Agreement dated January 3, 2003 |
B-2
| z. | Consent for Kimono Express restaurant dated February 26, 2003 |
| aa. | Consent for Dollar Smart tenant dated March 21, 2003 |
| bb. | Letter Agreement for temporary space dated November 13, 2003 |
| cc. | Fourth Lease Modification Agreement dated November 4, 2004 |
| dd. | Food Lion Agreement re: Family Dollar, dated January 22, 2009 |
| ee. | Lease Consent re: Ace Arcade dated November 7, 2018 |
| ff. | Fifth Lease Modification Agreement |
| 8. | Khaled Abdullah Almanighei dba HWY 70 Tobacco & Vape |
| a. | Shopping Center Lease dated April 12, 2021 |
| b. | Delivery of Possession Agreement dated June 24, 2021 |
| c. | First Lease Amendment dated December 14, 2023 (Relocation) |
| d. | First Lease Amendment dated December 14, 2023 (Relocation) - corrected |
| e. | Notice of Lease Term Dates (unsigned) dated February 6, 2024 (Relocation) |
| 9. | Insight Human Services |
| a. | Commercial Lease dated June 13, 2025 |
| b. | Acceptance of Premises and Commencement Agreement dated February 7, 2025 |
| 10. | Miracle Ear |
| a. | Short Term Shopping Center Lease Agreement dated August 3, 2010 |
| b. | Tenant Delivery/Possession Letter dated August 25, 2010 |
| c. | Opening Notice dated September 1, 2010 |
| d. | Commencement Date Letter dated September 9, 2010 |
| e. | Email exercising First Option dated June 14, 2011 |
| f. | Letter exercising Second Option Term dated April 5, 2012 |
| g. | Confirmation of Option exercise dated September 29, 2012 |
| h. | Lease Amendment Agreement dated December 12, 2014 |
| i. | Pylon Agreement dated December 12, 2014 |
| j. | Turnover Letter dated December 12, 2014 |
| k. | First Amendment to Lease Amendment Agreement dated February 13, 2019 |
| l. | Second Lease Amendment dated July 12, 2014 |
| 11. | New China One |
| a. | Shopping Center Lease Agreement dated March 13, 2009 |
| b. | Supplement to Shopping Center Lease Agreement Possession Letter dated March 11, 2009 |
| c. | Space Open/Close Form dated March 16, 2009 |
| d. | Rental Schedule Notification dated June 14, 2009 |
| e. | Space Open/Close Form dated August 6, 2009 |
| f. | Assignment and Assumption of Lease dated March 16, 2011 |
| g. | Lease Extension Agreement dated February 18, 2014 |
| h. | Second Lease Extension Agreement dated July 1, 2019 |
B-3
| i. | Email with updated contact information dated July 17, 2020 |
| 12. | Stepping Stone Medical |
| a. | Lease dated January 6, 2025 |
| b. | Acceptance of Premises and Commencement Agreement dated February 13, 2025 |
| 13. | U.S. Nails and Spa |
| a. | Lease Agreement dated April 29, 2013 |
| b. | Pylon Agreement dated April 29, 2013 |
| c. | Turnover Letter dated April 29, 2013 |
| d. | Opening Notice dated June 6, 2013 |
| e. | Rent Commencement Letter dated June 14, 2013 |
| f. | Lease Extension Agreement dated July 12, 2016 |
| g. | Amendment of Lease No. 2 dated April 27, 2017 |
| h. | Rent Deferral Letter dated April 8, 2020 |
| i. | Email with Tenant Contacts dated August 7, 2020 |
| j. | Email with Tenant Contacts dated October 26, 2020 |
| k. | Third Amendment to Lease Agreement dated November 20, 2020 |
| l. | Fourth Lease Amendment dated February 28, 2024 |
| 14. | Village Inn of Salisbury |
| a. | Lease Agreement dated March 12, 1987 |
| b. | Amendment to Lease Agreement dated June 1, 1992 |
| c. | Amendment to Lease Agreement dated August 1, 1996 |
| d. | Third Lease Amendment Agreement dated March 17, 1997 |
| e. | Fourth Lease Amendment Agreement dated November 18, 2002 |
| f. | Fifth Lease Amendment Agreement dated July 25, 2005 |
| g. | Sixth Lease Amendment Agreement dated April 19, 2010 |
| h. | Assignment and Assumption of Lease dated May 1, 2010 |
| i. | Seventh Lease Amendment Agreement dated August 4, 2011 |
| j. | Expansion, Renewal and Amendment of Lease No. 8 dated October 30, 2015 |
| k. | Turnover Letter dated October 30, 2015 |
| l. | Ninth Amendment to Lease Agreement dated September 25, 2020 |
| m. | Tenth Amendment to Lease Agreement dated September 10, 2024, including new guaranties |
B-4
EXHIBIT C
ESCROW AGREEMENT
ESCROW AGREEMENT
ESCROW AGREEMENT made as of this _____ day of _________ , 20_, by and among MDR Salisbury, LLC, a Delaware limited liability company (“Seller”), having an address of P.O. Box 8436, Richmond, VA 23226, Salisbury SC LLC, a Delaware limited liability company, it’s affiliates, successors or assigns (“Purchaser”), having an address at 151 Bodman Place, Suite 201, Red Bank, NJ 07701, (“Purchaser and Seller, collectively, the “Parties”), and Kensington Vanguard National Land Services, LLC, having an address at 41 Madison Avenue, 21st Floor, New York, New York 10010 (“Escrow Agent”).
RECITALS
A. | The Parties wish to deposit funds in the amount of $150,000.00 (such funds together with the interest thereon, if any, the “Deposit”) with Escrow Agent and additional deposits pursuant to the Purchase and Sale Agreement between the Purchaser and Seller; |
B. | Escrow Agent is willing to hold the Deposit, on the terms and conditions hereinafter set forth. |
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is duly acknowledged, the parties hereto agree as follows:
1) | Purchaser agrees to cause the Deposit to be wired to Escrow Agent. |
2) | The Parties agree that Escrow Agent shall cause the Deposit to be deposited in an non-interest bearing account at _______________, as selected by Escrow Agent, in New York, New York, provided the Parties provide Escrow Agent a completed W-9 form. |
i) Escrow Agent is not responsible for levies by taxing authorities based upon the taxpayer identification number used to establish this interest-bearing account.
ii) Escrow Agent has no liability in the event of failure, insolvency, or inability of the depositary to pay said funds, or accrued interest upon demand for withdrawal.
3) | The Parties agree to provide Escrow Agent a joint written instruction for the disbursement of the Deposit, including wiring instructions. |
4) | The Parties understand, acknowledge and agree as follows: |
a. | Escrow Agent shall have no duties or responsibilities except those set forth herein, which the parties hereto agree are ministerial in nature. |
C-1
b. | Escrow Agent is serving without compensation, solely as an accommodation to the parties hereto, and except for the gross negligence or willful misconduct of the Escrow Agent, Escrow Agent shall have no liability of any kind whatsoever arising out of or in connection with its activity as Escrow Agent. |
c. | The Parties jointly and severally agree to and do hereby indemnify and hold harmless Escrow Agent from all suits, actions, loss, costs, claims, damages, liabilities, and expenses which may be incurred by reason of its acting as Escrow Agent other than caused by their gross negligence or willful misconduct of the Escrow Agent. Escrow Agent may charge against the Deposit any amounts owed to it under the foregoing indemnity. |
d. | In the event of any litigation between Seller and Purchaser, Escrow Agent may deposit the Escrow with the clerk of the court in which such litigation is pending. Upon the making of such deposit, Escrow Agent shall be relieved of its duties hereunder and shall have no liability thereafter to any party whatsoever. |
5) | It is expressly agreed that this Agreement is for the sole benefit of the parties hereto and shall not be construed or deemed to have been made for the benefit of any third party or parties. |
6) | This Agreement and the obligations of the parties hereunder shall be interpreted, construed and enforced in accordance with the laws of the State of New York applicable to contracts executed, delivered and to be fully performed in New York. |
7) | This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which, together, shall be deemed one agreement. |
IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the date first above written.
SELLER:
MDR Salisbury, LLC, a
Delaware limited liability company
By: | Medalist Diversified Holdings, L.P., |
a Delaware limited partnership
Its: | Sole Member |
By: | Medalist Diversified REIT, Inc., |
a Maryland corporation
Its:General Partner
By:__________________________
C. Brent Winn, Jr.
Chief Financial Officer
C-2
PURCHASER:
Salisbury SC LLC
By: FNRP Realty Advisors LLC, its Manager
By: _______________________
Name: Michael Hazinski
Its: Authorized Signatory
ESCROW AGENT
Kensington Vanguard National Land Services, LLC
By: ______________________
Name:
Title:
C-3
EXHIBIT D
[intentionally omitted]
EXHIBIT E
LIST OF SERVICE CONTRACTS
Orkin, LLC
Suland Fire Protection
The Wright Group, LLC
All contracts will be terminated at closing by Seller
EXHIBIT F
rent roll
Certified Rent Roll as of August 8, 2025
Tenant | Lease From | Lease To | Units | Area (Gross) | Monthly Rent | Yearly Rent |
Adoration Home Health Care Virginia, LLC (t0002349) | 1/27/2021 | 4/30/2026 | 09 | 3,200.00 | 4,179.75 | 50,157.00 |
Best Wireless 1, Inc. dba Cricket Wireless (t0002365) | 7/22/2019 | 10/31/2028 | 13 | 1,200.00 | 1,271.25 | 15,255.00 |
Better World Recycling Inc (t0002369) | 3/1/2020 | 1/31/2026 | PARK2 | 0.00 | 300.00 | 3,600.00 |
Citi Trends (t0002368) | 9/28/2017 | 9/30/2027 | 17 | 12,500.00 | 9,487.50 | 113,850.00 |
Coggins Financial Services (t0002364) | 10/11/2010 | 2/28/2029 | 12 | 1,200.00 | 1,250.64 | 15,007.68 |
Family Dollar (t0002367) | 4/21/2008 | 12/31/2033 | 16 | 8,470.00 | 7,411.25 | 88,935.00 |
Food Lion, LLC #435 (t0002366) | 9/8/1987 | 12/31/2032 | 15 | 31,762.00 | 27,008.00 | 324,096.00 |
Insight Human Services, Inc. (t0002804) | 1/1/2025 | 3/31/2030 | 20 | 2,500.00 | 3,333.00 | 39,996.00 |
Khaled Abdullah Almanighei (dba HWY 70 Tobacco & Vape) (t0002434) | 6/24/2021 | 8/31/2026 | 04 | 1,500.00 | 1,912.50 | 22,950.00 |
South Atlantic Hearing, LLC dba Miracle Ear (t0002425) | 8/1/2014 | 7/31/2027 | 14 | 1,500.00 | 1,091.25 | 13,095.00 |
Stepping Stone Medical (t0002786) | 1/6/2025 | 5/31/2030 | 10 | 1,050.00 | 1,400.00 | 16,800.00 |
US Nails & Spa (t0002363) | 6/3/2013 | 6/30/2029 | 11 | 1,050.00 | 2,246.42 | 26,957.04 |
Village Inn of Salisbury, Inc (t0002400) | 9/1/1987 | 1/31/2036 | 01 | 3,300.00 | 3,712.50 | 44,550.00 |
Zhen Kai Li and Wen Lan Zhang dba New China One (t0002412) | 3/16/2009 | 6/30/2029 | 03 | 1,200.00 | 1,732.00 | 20,784.00 |
Vacant | 05 | 2,450.00 | ||||
Vacant | 06 | 1,550.00 | ||||
Vacant | 07 | 2,250.00 | ||||
Vacant | 08 | 3,050.00 | ||||
79,732.00 |
EXHIBIT G
FORM OF ESTOPPEL CERTIFICATE
[________________], 20[___]
________________________ (Purchaser)
________________________ (Lender)
________________________ (Landlord)
Re: | Lease dated __________, ______, between ______________________, as Landlord, and _______________________, as Tenant, for the property known as _____________________________________ (the “Property”). |
Ladies and Gentlemen:
The undersigned hereby certifies to Landlord, Purchaser and Lender as follows:
The undersigned individual hereby certifies that he or she is duly authorized to sign, acknowledge and deliver this letter on behalf of Tenant.
Tenant acknowledges that Lender will rely on this letter in making a loan or otherwise extending credit to Landlord. The information contained in this letter shall be for the benefit of Lender.
[_________________________________]
By:_______________________________
Name:
Title:
[Signature Page to Tenant Estoppel]
EXHIBIT H
ASSIGNMENT AND ASSUMPTION OF LEASES
THIS ASSIGNMENT AND ASSUMPTION OF LEASES AND SECURITY DEPOSITS (the “Assignment”) is made and entered into this ____ day of __________, 20__ (the “Effective Date”) by and between _________________________., a _____________________ (“Assignor”), and ____________________________________ (“Assignee”).
R E C I T A L S:
WHEREAS, Assignor and Assignee entered into that certain Purchase and Sale Agreement, dated ____________________, and as amended from time to time (as amended, the “Agreement”), for the purchase and sale of the property commonly known as ____________________________ (the “Property”); and
WHEREAS, in connection with the consummation of the transaction contemplated under the Agreement, Assignor and Assignee desire to execute this Assignment.
NOW, THEREFORE, in consideration of good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:
H-1
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
H-2
IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment on the date first above written.
ASSIGNOR: | |
| |
| |
By: | |
Name: | |
Its: | |
| |
ASSIGNEE: | |
| |
By: | |
Name: | |
Its: | |
H-3
EXHIBIT I
form of warranty deed
SPECIAL WARRANTY DEED
NORTH CAROLINA)
)
ROWAN COUNTY)
Drafted by:
Return to:Grantee
Excise Tax: $20,000.00
Tax Parcel ID: 331C023
THIS SPECIAL WARRANTY DEED made this ____ day of _______ 2025, by and between:
MDR Salisbury, LLC,
a Delaware limited liability company, (hereinafter “Grantor”),
having an address of P.O. Box 8436, Richmond, VA 23226,
and
Salisbury SC LLC,
a Delaware limited liability company, (hereinafter “Grantee”),
having an address of 151 Bodman Place, Suite 201, Red Bank, NJ 07701
W I T N E S S E T H:
That the Grantor, for a valuable consideration paid by the Grantee, the receipt of which is hereby acknowledged, has and by these presents does grant, bargain, sell, and convey unto the Grantee in fee simple, all those certain lot(s) or parcel(s) of land situated in Rowan County, North Carolina, and more particularly described as follows:
See Exhibit A attached hereto and incorporated herein by reference
This instrument prepared by: _________, a licensed North Carolina attorney. Delinquent taxes, if any, to be paid by the closing attorney to the county tax collector upon disbursement of closing proceeds.
The property herein conveyed does not include the primary residence of the Grantor.
The property hereinabove described was acquired by Grantor by instrument recorded in Book 1404, Page 10.
TO HAVE AND TO HOLD the aforesaid lot or parcel of land and all privileges and appurtenances thereto belonging, to the Grantee in fee simple.
And the Grantor covenants with the Grantee, that Grantor has done nothing to impair such title as Grantor received, and Grantor will warrant and defend the title against the lawful claims of all persons claiming by, under or through Grantor, but no further, and subject to the exceptions hereinafter stated.
Title to the property hereinabove described is subject to the exceptions set forth on Exhibit B attached hereto and incorporated herein by reference.
[Signature and acknowledgement follow]
Signature Page to
Special Warranty Deed
IN WITNESS WHEREOF, the Grantor has caused this instrument to be executed on the day and year first above written.
MDR Salisbury, LLC,
a Delaware limited liability company
By: ___________________________________(SEAL)
Name:
Title:
STATE/COMMONWEALTH OF ____________________
CITY/COUNTY OF _____________________
I certify that the following person(s) personally appeared before me this day, acknowledging to me that he/she voluntarily signed the foregoing document for the purpose stated therein and in the capacity indicated: ___________________________.
Date: | | | | Notary Pulic |
| | | | Printed Name |
My commission expires: ________________________________
Exhibit A
Legal Description
Exhibit B
Exceptions to Title
1.Ad valorem property taxes for 2025 and all subsequent years.
EXHIBIT J
FORM OF BILL OF SALE
GENERAL ASSIGNMENT AND BILL OF SALE
This General Assignment and Bill of Sale ("Bill of Sale") is executed and delivered pursuant to that certain Purchase and Sale Agreement dated _____________, 2025 ("Purchase Agreement") between MDR Salisbury, LLC, a Delaware limited liability company ("Seller") and Salisbury SC LLC, a Delaware limited liability company (“Buyer”), covering the real property described in Schedule 1 attached hereto ("Property"). All capitalized terms that are used but not defined herein shall have the same meanings ascribed to such terms in the Purchase Agreement.
For good and valuable consideration, Seller assigns, transfers and conveys to Purchaser all right, title and interest of Seller in and to all tangible personal property upon the Land or within the Improvements, including, without limitation, all machinery and mechanical systems, heating, ventilation and air conditioning systems and equipment, appliances, plumbing systems, electrical systems, furniture, tools and supplies, and all other items of tangible personal property owned by Seller, located on or in and specifically used by Seller in connection with the ownership and operation of the Land and the Improvements (the “Personal Property”), but excluding any and all items of tangible personal property owned by the tenants under the Leases. The assignment, transfer and conveyance of the Personal Property is hereby made without any representation or warranty of any kind or nature, express or implied.
Seller makes the foregoing assignments, conveyances and transfers on an “AS-IS” basis, without representation or warranty of any kind, either express or implied, with respect to any such rights or property, the effectiveness or validity thereof, or Buyer’s rights to utilize and rely upon same. Seller shall, at no cost or liability to Seller, execute such other instruments as Buyer may hereafter reasonably request in order to confirm the foregoing assignments.
SIGNATURE PAGE FOLLOWS
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Schedule 1 TO GENERAL ASSIGNMENT AND BILL OF SALE
LEGAL DESCRIPTION OF REAL PROPERTY
EXHIBIT K
FORM OF ASSIGNMENT AND ASSUMPTION OF CONTRACTS AND INTANGIBLES
ASSIGNMENT AND ASSUMPTION OF CONTRACTS AND INTANGIBLES
THIS ASSIGNMENT AND ASSUMPTION OF LEASES AND SECURITY DEPOSITS (the “Assignment”) is made and entered into this ____ day of __________, 20__ (the “Effective Date”) by and between _________________________., a _____________________ (“Assignor”), and ____________________________________ (“Assignee”).
R E C I T A L S:
WHEREAS, Assignor and Assignee entered into that certain Purchase and Sale Agreement, dated ____________________, and as amended from time to time (as amended, the “Agreement”), for the purchase and sale of the property commonly known as ____________________________ (the “Property”); and
WHEREAS, in connection with the consummation of the transactions contemplated under the Agreement, Assignor and Assignee desire to execute this Assignment.
NOW, THEREFORE, in consideration of good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:
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[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment on the date first above written.
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EXHIBIT L
ACCOUNTS RECEIVABLE SCHEDULE
Tenant | Current | 0 - 45 owed | 46 - 90 owed | 91 - 135 owed |
United Providers of Health | 364.88 | 0.00 | 0.00 | 364.88 |
US Nails & Spa | 44.04 | 44.04 | 0.00 | 0.00 |
Food Lion, LLC #435 | 987.93 | 0.00 | 987.93 | 0.00 |
Family Dollar | 3,387.35 | 0.00 | 0.00 | 3,387.35 |
Citi Trends | 1,435.98 | 798.51 | 637.47 | 0.00 |
Better World Recycling Inc | 300.00 | 300.00 | 0.00 | 0.00 |
Zhen Kai Li and Wen Lan Zhang dba New China One | 595.66 | 0.00 | 137.93 | 457.73 |
South Atlantic Hearing, LLC dba Miracle Ear | 1,452.00 | 1,499.31 | 1,499.31 | -1,546.62 |
Khaled Abdullah Almanighei (dba HWY 70 Tobacco & Vape) | 0 | 0 | 0 | 0 |
Grand Total | 8,567.84 | 2,641.86 | 3,262.64 | 2,663.34 |