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
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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. |
On December 14, 2024 (the “Dan Tibbs Road Effective Date”), Medalist Diversified Holdings, L.P. (the “Operating Partnership”), the operating partnership of Medalist Diversified REIT, Inc. (the “Company”), entered into a Contribution Agreement (the “Dan Tibbs Road Contribution Agreement”), a copy of which is filed as Exhibit 10.1 hereto, with Dionysus Investments, LLC, a California limited liability company (the “Dan Tibbs Road Contributor”), whereby the Operating Partnership agreed to acquire (the “Dan Tibbs Road Acquisition”) that certain tract of real property located at 376 Dan Tibbs Road NW, Huntsville, Madison County, Alabama 35806, and more particularly described in Exhibit A to the Dan Tibbs Road Contribution Agreement (the “Dan Tibbs Road Property”). The Dan Tibbs Road Contributor is a related party to the Company in that the Dan Tibbs Road Contributor’s manager is Frank Kavanaugh (“Mr. Kavanaugh”), the Company’s Chief Executive Officer and a member of the Company’s Board of Directors (the “Board”). The total consideration for the Dan Tibbs Road Property is $3,145,000 (the “Dan Tibbs Road Consideration”), subject to the prorations and adjustments described in the Dan Tibbs Road Contribution Agreement. The Dan Tibbs Road Consideration is to be paid by the Company to the Dan Tibbs Road Contributor at Closing (as that term is defined in the Dan Tibbs Road Contribution Agreement) in a combination of (i) Series B Preferred Units (as defined below) in the Operating Partnership valued at $25.00 per Series B Preferred Unit; and (ii) Common Units (as that term is defined in the Dan Tibbs Road Contribution Agreement) in the Operating Partnership valued at $12.50 per Common Unit. The Operating Partnership is required to make an earnest money deposit of $15,000.00 (“Dan Tibbs Road Deposit”) within 15 days of the Dan Tibbs Road Effective Date.
The Dan Tibbs Road Contribution 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. Several conditions to closing on the Dan Tibbs Road Acquisition remain to be satisfied, and there can be no assurance that the Company will complete the transaction on the general terms described above or at all. Under certain conditions the Dan Tibbs Road Deposit may not be returned to the Operating Partnership.
On December 14, 2024 (the “Scottsville Road Effective Date”), the Operating Partnership entered into a Contribution Agreement (the “Scottsville Road Contribution Agreement”), a copy of which is filed as Exhibit 10.2 hereto, with CWS BET Seattle L.P., a Delaware limited partnership (the “Scottsville Road Contributor”), whereby the Operating Partnership agreed to acquire (the “Scottsville Road Acquisition” and, together with the Dan Tibbs Road Acquisition, the “Acquisitions”) that certain tract of real property located at 2445 Scottsville Road, Bowling Green, Kentucky 42104, and more particularly described in Exhibit A to the Scottsville Road Contribution Agreement (the “Scottsville Road Property”). The Scottsville Road Contributor is a related party in that the Scottsville Road Contributor’s general partner is Fort Ashford Funds, LLC, whose manager is Mr. Kavanaugh. The total consideration for the Scottsville Road Property is $2,620,000 (the “Scottsville Road Consideration”), subject to the prorations and adjustments described in the Scottsville Road Contribution Agreement. The Scottsville Road Consideration is to be paid by the Company to the Scottsville Road Contributor at Closing (as that term is defined in the Scottsville Road Contribution Agreement) in a combination of (i) Series B Preferred Units (as defined below) in the Operating Partnership valued at $25.00 per Series B Preferred Unit; and (ii) Common Units (as that term is defined in the Scottsville Road Contribution Agreement) in the Operating Partnership valued at $12.50 per Common Unit. The Operating Partnership is required to make an earnest money deposit of $15,000.00 (“Scottsville Road Deposit”) within 15 days of the Scottsville Road Effective Date.
The Scottsville Contribution 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. Several conditions to closing on the Scottsville Road Acquisition remain to be satisfied, and there can be no assurance that we will complete the transaction on the general terms described above or at all. Under certain conditions the Scottsville Road Deposit may not be returned to the Operating Partnership.
The foregoing descriptions of the Dan Tibbs Road Contribution Agreement and the Scottsville Road Contribution Agreement are qualified in their entirety by reference to the Dan Tibbs Road Contribution Agreement and the Scottsville Road Contribution Agreement, copies of which are filed as Exhibits 10.1 and 10.2 to this Current Report on Form 8-K and are incorporated by reference in this Item 1.01.
In connection with the anticipated closings of the Acquisitions, the Company, as the sole general partner of the Operating Partnership, on its own behalf as general partner of the Operating Partnership and on behalf of the limited partners of the Operating Partnership, amended the Agreement of Limited Partnership of the Operating Partnership, as previously amended (the “Partnership Agreement”), to provide for the designation of up to 2,000,000 5.0% Series B Convertible Redeemable Preferred
Units (liquidation preference $27.50 per unit) (the “Series B Preferred Units”). The Series B Preferred Units will rank, as to distributions and upon liquidation, senior to the Common Units.
This description of the material terms of the amendment to the Partnership Agreement is qualified in its entirety by reference to the amendment to the Partnership Agreement, a copy of which is filed as Exhibit 10.3 to this Current Report on Form 8-K and is hereby incorporated by reference into this Item 1.01.
The Common Units and the Series Preferred Units to be issued pursuant to the Dan Tibbs Road Contribution Agreement and the Scottsville Road Contribution Agreement are being offered and sold in a transaction exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), in reliance on Section 4(a)(2) of the Securities Act. Pursuant to the Partnership Agreement, the Common 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; however, pursuant to each of the Dan Tibbs Road Contribution Agreement and the Scottsville Road Contribution Agreement, neither the Dan Tibbs Road Contributor nor the Scottsville Road Contributor may redeem the Common Units for shares of the Company’s common stock unless such redemption is approved by a majority of the votes cast on the matter at a meeting of the stockholders of the Company or by written consent of the stockholders of the Company in lieu of a special meeting to the extent permitted by applicable state and federal law.
The information contained in Item 3.02 of this Current Report on Form 8-K is incorporated by reference into this Item 1.01.
Item 3.01 | Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing |
On December 11, 2024, the Company received a letter (the “Nasdaq Letter”) from the Listing Qualification Department of The Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that, based on the Company’s Current Report on Form 8-K filed on October 23, 2024, its 8.0% Series A Cumulative Redeemable Preferred Stock (the “Preferred Stock”) no longer meets the minimum 100,000 publicly held shares requirement of Nasdaq Listing Rule 5555(a)(3) for continued listing on The Nasdaq Capital Market.
The Nasdaq Letter has no immediate effect on the listing of the Preferred Stock, which will continue to trade under the symbol “MDRRP,” subject to the Company’s compliance with the other continued listing requirements of Nasdaq. In accordance with Nasdaq Listing Rule 5810(c)(2)(C), the Company has been provided a period of 45 calendar days, or until January 27, 2025, to provide Nasdaq with a specific plan to achieve and sustain compliance with the foregoing listing requirement (the “Compliance Plan”). Upon a showing of good cause, Nasdaq may extend the deadline up to an additional 5 calendar days. After Nasdaq reviews the Compliance Plan, it will provide written notice to the Company as to whether it accepts the Compliance Plan. If Nasdaq does not accept the Compliance Plan, then the Company will have the opportunity to appeal that decision to a Nasdaq Hearing Panel. A hearing request will stay the suspension and delisting of the Preferred Stock pending the Nasdaq Hearing Panel’s decision.
As previously announced on December 10, 2024, the Company provided notice to the holders of the 60,000 outstanding shares of its Preferred Stock (the “Redeemed Shares”) of its intent to redeem such Redeemed Shares on January 10, 2025. Upon the completion of the redemption of the Redeemed Shares, the Preferred Stock will be fully redeemed and no shares of the Preferred Stock will remain outstanding. Accordingly, the Company expects the Preferred Stock to be suspended from Nasdaq before market open on the anticipated redemption date of January 10, 2025, and the Company expects to file a Form 25 with the Securities and Exchange Commission to effect the withdrawal of the listing of the Preferred Stock from Nasdaq.
Item 3.02 | Unregistered Sales of Equity Securities. |
On December 13, 2024, the Company entered into a series of Subscription Agreements (the “Subscription Agreements”) with certain investors, including the Company’s Chief Financial Officer, for the issuance and sale of 230,000 shares of the Company’s common stock, par value $0.01 per share (the “Common Shares”), in a private placement (the “Private Placement”), at a purchase price of $12.50 per share.
The Private Placement was exempt from the registration requirements of the Securities Act, pursuant to the exemption for transactions by an issuer not involving any public offering under Rule 506(b) under Regulation D of the Securities Act. The Common Shares were offered without any general solicitation by the Company or its representatives. The Common Shares issued and sold in the Private Placement are not registered under the Securities Act or any state securities laws and may not be offered or sold in the United States absent registration with the Securities and Exchange Commission or an applicable exemption from the registration requirements.
The foregoing description of the Subscription Agreements is qualified in its entirety by reference to the Subscription Agreements, the form of which is filed as Exhibit 10.4 to this Current Report on Form 8-K and is incorporated by reference in this Item 3.02 and Item 1.01.
The information contained in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 3.02.
Item 8.01 | Other Events |
On December 13, 2024, the Board granted a waiver of the ownership limitations in Article VI of the Company’s Articles of Incorporation to permit certain of the investors participating in the Private Placement to own up to 7.50% in the aggregate of the outstanding shares of capital stock of the Company, as set forth in, and subject to the terms and conditions in, those certain letters, dated December 13, 2024, from each such investor to the Board, the forms of which are attached to this Current Report on Form 8-K as Exhibit 10.5 and Exhibit 10.6 and incorporated herein by reference.
Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
Exhibit No. | Description | |
10.1 | ||
10.2 | ||
10.3 | Second Amendment to Agreement of Limited Partnership of Medalist Diversified Holdings, L.P. | |
10.4 | ||
10.5 | ||
10.6 | ||
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: December 17, 2024 | 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
by and between
Dionysus Investments, LLC
a California limited liability company
and
Medalist Diversified Holdings, LP,
a Delaware limited partnership
Dated as of December 14, 2024
ALegal Description of the Property
BContribution and Assumption Agreement
CTotal Consideration
DTax Basis and Depreciation Schedule
SCHEDULES
1.2Contributed Assets, Assumed Agreements and Leases; Permitted Liens
1.4Assumed Liabilities
1.5Excluded Liabilities
1.9Allocation of Total Consideration
APPENDICES
ADisclosure Schedule of Contributor
CONTRIBUTION AGREEMENT
This Contribution Agreement (this “Agreement”) is made and entered into as of December 14, 2024 (the “Effective Date”) by and between Medalist Diversified Holdings, LP, a Delaware limited partnership (the “Operating Partnership”), and Dionysus Investments, LLC, a California limited liability company (the “Contributor”). Definitions for this Agreement are set forth in Section 8.
RECITALS
NOW, THEREFORE, in consideration of the foregoing premises and the mutual undertakings set forth below, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:
Any or all of the foregoing conditions may be waived by the Operating Partnership in its sole and absolute discretion.
The Operating Partnership shall approve or disapprove in writing any of the foregoing actions to be taken by the Contributor within 5 business days after receiving a written request from the Contributor (including all information reasonably relevant to the Operating Partnership’s consideration) for such approval, which approval shall be in the Operating Partnership’s sole discretion.
To the Contributor:
Dionysus Investments, LLC
Attn: Frank Kavanaugh
To the Operating Partnership:
Medalist Diversified Holdings, LP
P. O. Box 8436
Richmond, VA 23226
Attn: C. Brent Winn, Jr.
“Actions” shall mean all actions, litigations, complaints, charges, accusations, investigations, petitions, suits, arbitrations, mediations or other proceedings, whether civil or criminal, at law or in equity, or before any arbitrator or Governmental Entity.
“Adverse Change” shall have the meaning set forth in Section 1.14.1.
“Adverse Change Review Period” shall have the meaning set forth in Section 1.14.1.
“Agreement” shall have the meaning as set forth in the Preamble.
“Amendment” shall have the meaning set forth in Section 1.7.
“Assumed Agreements” shall have the meaning set forth in Section 1.2.
“Assumed Liabilities” shall have the meaning set forth in Section 1.4.
“Basket” shall have the meaning set forth in Section 4.4.
“Closing” shall have the meaning set forth in Section 2.2.
“Closing Agent” shall have the meaning set forth in Section 1.12.
“Closing Date” shall have the meaning set forth in Section 2.2.
“Closing Documents” shall have the meaning set forth in Section 2.3.
“Code” shall mean the Internal Revenue Code of 1986, as amended, and the rules and regulations in effect thereunder.
“Common Units” shall have the meaning set forth in the Partnership Agreement.
“Company” shall mean Medalist Diversified REIT, Inc., a Maryland corporation, the general partner of the Operating Partnership.
“Contributed Assets” shall have the meaning set forth in Section 1.2.
“Contributor” shall have the meaning set forth in the Preamble.
“Contributor Breakage Fee” shall have the meaning set forth in Section 6.3.
“Contributor’s Cure Period” shall have the meaning set forth in Section 1.13.2.
“Deed” shall have the meaning set forth in Section 2.3.2.
“Disclosure Schedule” shall mean that disclosure schedule attached as Appendix A.
“Due Diligence Documents” shall have the meaning set forth in Section 1.14.1.
“Due Diligence Period” shall have the meaning set forth in Section 1.14.1.
“Due Diligence Review” shall have the meaning set forth in Section 1.14.2.
“Earnest Money” shall have the meaning set forth in Section 1.12.
“Effective Date” shall have the meaning set forth in the Preamble.
“Environmental Law” shall mean 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 Closing Date, including but not limited to those pertaining to reporting, licensing, permitting, investigation, removal and remediation of Hazardous Materials, 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 Materials.
“Environmental Permits” shall mean any and all licenses, certificates, permits, directives, requirements, registrations, government approvals, agreements, authorizations, and consents that are required under or are issued pursuant to any Environmental Laws.
“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended.
“Excluded Assets” shall have the meaning set forth in Section 1.3.
“Fixtures and Personal Property” shall mean all fixtures, furniture, furnishings, apparatus and fittings, equipment, machinery, appliances, building supplies, tools, and other items of personal property used in connection with the operation or maintenance of the Property; excluding, however, all fixtures, furniture, furnishings, apparatus and fittings, equipment, machinery, appliances, building supplies, tools, and other items of personal property owned by tenants, subtenants, guests, invitees, employees, easement holders, service contractors and other Persons who own any such property located on the Property.
“Governmental Entity” shall mean 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.
“Hazardous Material” shall mean any substance (i) the presence of which requires investigation or remediation under any Environmental Law action or policy, administrative request or civil complaint under the foregoing or under common law; (ii) which is controlled, regulated or prohibited under any Environmental Law as in effect as of the Closing Date, including the Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C. Section 9601 et seq.) and the Resource Conservation and Recovery Act (42 U.S.C. Section 6901 et seq.); (iii) which is toxic, explosive, corrosive, flammable, infectious, radioactive, carcinogenic, mutagenic or otherwise hazardous and as of the Closing Date is regulated by any Governmental Entity; (iv) the presence of which on, under or about, the Property poses a hazard to the health or safety of persons on or about the Property; (v) which contains gasoline, diesel fuel or other petroleum hydrocarbons, polychlorinated biphenyls (PCBs) or asbestos or asbestos-containing materials or urea formaldehyde foam insulation; or (vi) radon gas.
“Indemnified Contributor Parties” shall have the meaning set forth in Section 4.5.
“Indemnified Parties” shall have the meaning set forth in Section 4.2.1.
“Intangible Personal Property” shall mean all, right, title and interest relating to the Property in and to all intangible personal property now or hereafter used in connection with the operation, ownership, maintenance, management, or occupancy of the Property, including, without limitation: all trade names and trademarks associated with the ownership of the Property; the plans and specifications for the improvements; warranties; guaranties; indemnities; claims against third parties; claims against tenants for tenant improvement reimbursements; all contract rights related to the construction, operation, ownership or management of the Property; certificates of occupancy; applications, permits, approvals and licenses; insurance proceeds and condemnation awards or claims thereto to be assigned to the Operating Partnership hereunder; and all books and records relating to the Property.
“Knowledge” shall mean, with respect to any representation or warranty so indicated, the knowledge of the Contributor.
“Leases” shall have the meaning set forth in Section 3.2.20.
“Liens” shall mean, with respect to any real and personal property, all 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.
“Losses” shall have the meaning set forth in Section 4.2.1.
“Material Adverse Effect” shall have the meaning set forth in Section 3.2.3.
“Maximum Per Property Total Consideration Adjustment” shall have the meaning set forth in Section 1.11.
“Objections” shall have the meaning set forth in Section 1.13.2.
“Operating Partnership” shall have the meaning set forth in the Preamble.
“Other Taxes” shall mean Taxes other than income Taxes.
“Partnership Agreement” shall mean the Amended and Restated Limited Partnership Agreement of Medalist Diversified Holdings, LP, a Delaware limited partnership, as may be amended.
“Permitted Liens” shall mean:
(i)Liens securing taxes, the payment of which is not now due and payable or the payment of which is actively being contested in good faith by appropriate proceedings diligently pursued;
(ii)Zoning laws and ordinances applicable to the Property which are not violated by the existing structures or present uses thereof or the transfer of the Property;
(iii)Liens imposed by laws, such as carriers’, warehousemen’s and mechanics’ liens, and other similar liens arising in the ordinary course of business which secure payment of obligations arising in the ordinary course of business not more than 60 days past due or which are being contested in good faith by appropriate proceedings diligently pursued;
(iv)non-exclusive easements for public utilities and other operational purposes that do not materially interfere with the current use of the Property; and
(v)all Liens listed in Schedule 1.2 and any similar liens incurred in any refinancing of the related obligations.
“Person” shall mean any individual, corporation, limited liability company, partnership, joint venture, association, joint-stock company, trust, unincorporated organization or governmental entity.
“Preferred Units” shall have the meaning set forth in the Partnership Agreement.
“Preliminary Title Report” means the preliminary commitment for title insurance committing to insure marketable fee simple title as of the date of the Closing, subject only to the Permitted Liens.
“Property” shall have the meaning set forth in the Recitals.
“Property Deposits” shall have the meaning set forth in Section 5.2.2(a).
“Proprietary Rights” shall have the meaning set forth in Section 3.2.18(a).
“REIT Shares” shall have the meaning set forth in the Partnership Agreement.
“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), but not including the exclusions identified in that definition, at subparts (A) through (D).
“Securities Act” shall mean the Securities Act of 1933, as amended, and the rules and regulations in effect thereunder.
“Service Contracts” shall have the meaning set forth in Section 3.2.22.
“Subscription Agreement” shall mean the Subscription Agreement to be entered into by Contributor with respect to the acquisition of the Common Units and the Preferred Units.
“Survey” shall have the meaning set forth in Section 13.1.1.
“Tax” or “Taxes” shall mean any federal, state, provincial, local or foreign income, gross receipts, license, payroll, employment-related, excise, goods and services, harmonized sales, severance, stamp, occupation, premium, windfall profits, environmental, customs duties, capital stock, franchise, profits, withholding, social security, unemployment, disability, real property, personal property, sales, use, transfer, registration, value added, alternative or add-on minimum, estimated, or other tax of any kind whatsoever, including any interest, penalty, or addition thereto, whether disputed or not.
“Tax Return” shall mean any return, declaration, report, claim for refund, or information return or statement related to Taxes, including any schedule or attachment thereto, and including any amendment thereof.
“Title Company shall have the meaning set forth in Section 1.13.1.
“Title Documents” shall have the meaning set forth in Section 1.13.1.
“Title Policy: shall have the meaning set forth in Section 2.1.6.
“Total Consideration” shall have the meaning set forth in Section 1.7.
“Transfer” shall have the meaning set forth in Section 3.2.8(a).
“Updated Survey” shall have the meaning set forth in Section 1.13.1.
IN WITNESS WHEREOF, the parties have executed this Contribution Agreement as of the date first written above.
OPERATING PARTNERSHIP: | ||
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| Medalist Diversified Holdings, LP, a Delaware limited partnership | |
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| By: Medalist Diversified REIT, Inc., a Maryland corporation, its general partner | |
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| By: | /s/ C. Brent Winn, Jr. |
| Name: | C. Brent Winn, Jr. |
| Title: | Chief Financial Officer |
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| CONTRIBUTOR: | |
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| Dionysus Investments, LLC, a California limited liability company | |
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| By: | /s/ Frank Kavanaugh |
| Name: | Frank Kavanaugh |
| Title: | Manager |
EXHIBIT A
DESCRIPTION OF THE PROPERTY
All that part of the Southeast Quarter of Section 18, Township 3 South, Range 1 West of the Huntsville
Meridian, Madison County, Alabama, more particularly described as follows: (Tract 6) beginning at a point located on the South margin of Dan Tibbs, said point is located North 00 degrees 14 minutes West 310.0 feet, North 89 degrees 00 minutes East 30.0 feet, North 00 degrees 14 minutes West 2307.77 feet and North 89 degrees 18 minutes East 250.0 feet from the center of the South boundary of Section 18, Township 3 South, Range 1 West; thence from the point of beginning run North 89 degrees 18 minutes East along the South margin of Dan Tibbs Road for 250.0 feet; thence run South 00 degrees 14 minutes East for 525.0 feet; thence run South 89 degrees 18 minutes West for 250.0 feet; thence run North 00 degrees 14 minutes West for 525.0 feet to the point of beginning and containing 3.013 acres, more or less.
EXHIBIT B
CONTRIBUTION AND ASSUMPTION AGREEMENT
FOR GOOD AND VALUABLE CONSIDERATION, the receipt and sufficiency of which are hereby acknowledged, the undersigned hereby assigns, transfers and conveys to Medalist Diversified Holdings, LP, a Delaware limited partnership (the “Operating Partnership”), its entire legal and beneficial right, title and interest (other than any Excluded Assets) in, to all of the Contributed Assets and the Assumed Agreements, as listed on Schedule A attached hereto, together with all amendments, waivers, supplements and other modifications of and to such agreements, contracts, licenses and other instruments through the date hereof, in each case to the fullest extent assignment thereof is permitted by applicable law,
TO HAVE AND TO HOLD the same unto the Operating Partnership, its successors and assigns, forever.
Upon the execution and delivery hereof, the Operating Partnership absolutely and unconditionally accepts the foregoing assignment of each Contributed Asset and Assumed Agreement and assumes all Assumed Liabilities in respect of the Assumed Agreements, and agrees to be bound by the terms, conditions and covenants thereof, and to perform all duties and obligations of the Contributor thereunder from and after the date hereof.
The Contributor for itself, its successors and assigns hereby covenants and agrees that, at any time and from time to time after the date hereof upon the written request of the Operating Partnership, the Contributor will, without further consideration, do, execute, acknowledge and deliver or cause to be done, executed, acknowledged and delivered, each and all of such further acts, deeds, assignments, transfers, conveyances and assurances as may reasonably be required by the Operating Partnership in order to assign, transfer, set over, convey, assure and confirm unto and vest in the Operating Partnership, its successors and assigns, title to the Assumed Agreements (other than the Excluded Assets) granted, transferred, conveyed and delivered by this Agreement.
Capitalized terms used herein, but not defined have the meanings ascribed to them in the Contribution Agreement, dated as of December 14, 2024 between the Operating Partnership and the Contributor.
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Contribution and Assumption Agreement as of the date first above written.
| CONTRIBUTOR: | |
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| Dionysus Investments, LLC, a California limited liability company | |
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| By: | |
| Name: | Frank Kavanaugh |
| Title | |
ACKNOWLEDGEMENT
STATE OF )
) ss.:
COUNTY OF )
On ______________________, before me, the undersigned, a Notary Public in and for said State, personally appeared, personally known to me or proved to me on the basis of satisfactory evidence to be the individual whose name is subscribed to the within instrument and executed before me the same in his capacity, and that by his signature on the instrument, the individual, or the person upon behalf of which the individual acted, executed the instrument.
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EXHIBIT C
TOTAL CONSIDERATION
Total Consideration pursuant to Section 1.7 of the Agreement shall be $3,145,000, consisting of:
$2,645,000 in Common Units, equivalent to 211,600 Common Units ($12.50 per Common Unit)
$500,000 in Preferred Units, equivalent to 20,000 Preferred Units ($25.00 per Preferred Unit)
The calculation of the total consideration deliverable at closing pursuant to this Exhibit C shall be performed in good faith by the Operating Partnership and in accordance with the Contribution Agreement. Notwithstanding anything to the contrary in the Agreement, the Contributor agrees that the calculation of the Total Consideration deliverable at Closing shall be final and binding upon the Contributor, absent manifest error. The Contributor shall notify the Operating Partnership in writing of any alleged manifest error within 48 hours of receipt of the Operating Partnership’s calculation of the Total Consideration deliverable at Closing. The Contributor hereby irrevocably waives any and all claims relating to the calculation of the Total Consideration deliverable at Closing, other than as specified in such notice setting forth the alleged manifest error.
EXHIBIT D
TAX BASIS AND DEPRECIATION SCHEDULE
Please either (i) complete the tax basis and depreciation schedule attached as Attachment D-1 (following this page) in its entirety, or (ii) provide the depreciation schedule from your most recent federal income tax return as an alternative option for providing tax basis information. A sample depreciation schedule is attached as Attachment D-2.
| (1) | Depreciation schedules for partnerships and S-corporations can generally be found in the supporting detail of IRS Form 4562, used to calculate the depreciation amount which is included on IRS Form 8825. |
| (2) | Depreciation schedules for individuals and trusts can generally be found in the supporting detail of IRS Form 4562, used to calculate the depreciation amount which is included on IRS Schedule E. |
| (3) | Depreciation schedules for corporations can generally be found in the supporting detail of IRS Form 4562, used to calculate the depreciation amount which is included on page 1 of IRS Form 1120. |
| | Amounts for Regular Federal Tax | |||||
| | Land | Building | Building Improvements | Furniture, Fixtures, & Equipment | Other | |
| Date Placed in Service (day/month/year) |
|
|
|
|
| |
| Depreciation Life | NA |
|
|
|
| |
| Depreciation Method | NA | S/L |
|
|
| |
A | Initial Cost Basis |
|
|
|
|
| |
B | Sec. 179 Deductions |
|
|
|
|
| |
C | Net Sec. 168(k) Allowances (i.e., Bonus Depreciation) |
|
|
|
|
| |
D | Accumulated Depreciation at Contribution |
|
|
|
|
| |
E | Adjusted Tax Basis at Contribution |
|
|
|
|
| |
| | | | | | | |
| A minus B, C, and D should equal E | | | | | | |
| | | | | | | |
| q | Please check the box if there are multiple placed in service dates or personal property. In addition, please attach a separate schedule setting forth such information. | |||||
| | Amounts for Alternative Minimum Tax (If Different) | |||||
| | Land | Building | Building Improvements | Furniture, Fixtures, & Equipment | Other | |
| Date Placed in Service (day/month/year) |
|
|
|
|
| |
| Depreciation Life | NA |
|
|
|
| |
| Depreciation Method | NA | S/L |
|
|
| |
A | Initial Cost Basis |
|
|
|
|
| |
B | Sec. 179 Deductions |
|
|
|
|
| |
C | Net Sec. 168(k) Allowances (i.e., Bonus Depreciation) |
|
|
|
|
| |
D | Accumulated Depreciation at Contribution |
|
|
|
|
| |
E | Adjusted Tax Basis at Contribution |
|
|
|
|
| |
| | | | | | | |
| | Amounts for State Tax Purposes (If Different) | |||||
| | Land | Building | Building Improvements | Furniture, Fixtures, & Equipment | Other | |
| Date Placed in Service (day/month/year) |
|
|
|
|
| |
| Depreciation Life | NA |
|
|
|
| |
| Depreciation Method | NA | S/L |
|
|
| |
A | Initial Cost Basis |
|
|
|
|
| |
B | Sec. 179 Deductions |
|
|
|
|
| |
C | Net Sec. 168(k) Allowances (i.e., Bonus Depreciation) |
|
|
|
|
| |
D | Accumulated Depreciation at Contribution |
|
|
|
|
| |
E | Adjusted Tax Basis at Contribution |
|
|
|
|
| |
The information provided herein is as of __________________________ (date).
| 12/31/2023 | 2023 DEPRECIATION SCHEDULE | PAGE 1 | | ||||||||||||||||
| NO. | DESCRIPTION | DATE ACQUIRED | DATE SOLD | COST/BASIS | BUS PCT. | CUR 179 BONUS | SPECIAL DEPR. ALLOW. | PRIOR 179/ BONUS/ SP DEPR. | SALVAGE /BASIS REDUCT. | PRIOR DEPR. | METHOD | LIFE | RATE | CURRENT DEPR | | ||||
| SCHEDULE E | | | | | | | | | | | | | | | | | |||
| 1 | LAND | 7/27/2008 | | 106,276 | | | | | | | 106,276 | | | | | | | ||
| 2 | BUILDING | 7/27/2008 | | 518,878 | | | | | | | 518,878 | 46,382 | S/L MM | 27.5 | 0.03636 | 18,866 | | ||
| 3 | CAPITAL IMPROVEMENTS | 7/1/2009 | | 1,500 | | | | | | | 1,500 | 80 | S/L MM | 27.5 | 0.03636 | 55 | | ||
| 4 | CARPET/FLOORING | 7/1/2010 | | 418 | | | | 209 | | | 209 | 42 | 200DB HY | 5 | 0.32000 | 67 | | ||
| 5 | CAPITALEXPENDITURES | 7/1/2011 | | 1,273 | | | | | | | 1,273 | | 200DB HY | 5 | 0.20000 | 255 | | ||
| 6 | CAPITAL IMPROVE MENTS | 7/1/2011 | | 3,735 | | | | | | | 3,735 | | 150DB HY | 15 | 0.05000 | 187 | | ||
| 7 | EQUIPMENT | VARIOUS | | 945 | | | | | | | 945 | 337 | S/L HY | 7 | 0.14280 | 135 | | ||
| 8 | FURNITURE & APPLIANCES | VARIOUS | | 7,624 | | | | | | | 7,624 | 2,722 | S/L HY | 7 | 0.14280 | 1,089 | | ||
| 9 | IMPROVEMENTS | VARIOUS | | 27,530 | | | | | | | 27,530 | 2,961 | S/L MM | 27.5 | 0.03636 | 1,001 | | ||
| 10 | HVAC | VARIOUS | | 1,235 | | | | | | | 1,235 | 440 | S/L HY | 7 | 0.14280 | 176 | | ||
| 11 | LAND - 1031 EXCHANGE | 8/10/2008 | | 180,957 | | | | | | | 180,957 | | | | | | | ||
| 12 | BUILDING - 1031 EXCHANGE | 8/10/2008 | | 883,496 | | | | | | | 883,496 | 76,299 | S/L MM | 27.5 | 0.03636 | 32,124 | | ||
| 13 | IMPROVEMENTS | 7/1/2009 | | 44,766 | | | | | | | 44,766 | 2,374 | S/L MM | 27.5 | 0.03636 | 1,628 | | ||
| 14 | CAPITAL IMPROVEMENTS | 7/1/2010 | | 20,342 | | | | | | | 20,342 | 339 | S/L MM | 27.5 | 0.03636 | 740 | | ||
| | TOTAL | | | 1,798,975 | | - | - | 209 | - | - | 1,798,766 | 131,976 | | | | 56,323 | | ||
| | TOTAL DEPRECIATION | | | 1,798,975 | | | | | | | | | | | | 56,323 | | ||
| | | | | | | | | | | | | | | | | | | ||
SCHEDULE 1.2
CONTRIBUTED ASSETS, ASSUMED AGREEMENTS AND LEASES; PERMITTED LIENS
That certain real property and improvements known as 376 Dan Tibbs Road, Huntsville, AL 35806
Lease, as amended, between United Rentals Realty, LLC, a Delaware limited liability company and Dionysus Investments, LLC, a California limited liability company.
SCHEDULE 1.3
EXCLUDED ASSETS
None
SCHEDULE 1.4
ASSUMED LIABILITIES
None
SCHEDULE 1.9
ALLOCATION OF TOTAL CONSIDERATION
To be determined by ASC 805 (purchase price allocation) report prepared by the Operating Partnership’s independent third party consultant.
EXHIBIT 10.2
CONTRIBUTION AGREEMENT
by and between
CWS BET Seattle L.P.
a Delaware limited partnership
and
Medalist Diversified Holdings, LP,
a Delaware limited partnership
Dated as of December 14, 2024
ALegal Description of the Property
BContribution and Assumption Agreement
CTotal Consideration
DTax Basis and Depreciation Schedule
SCHEDULES
1.2Contributed Assets, Assumed Agreements and Leases; Permitted Liens
1.4Assumed Liabilities
1.5Excluded Liabilities
1.9Allocation of Total Consideration
APPENDICES
ADisclosure Schedule of Contributor
CONTRIBUTION AGREEMENT
This Contribution Agreement (this “Agreement”) is made and entered into as of December 14, 2024 (the “Effective Date”) by and between Medalist Diversified Holdings, LP, a Delaware limited partnership (the “Operating Partnership”), and CWS BET Seattle L.P., a Delaware limited partnership (the “Contributor”). Definitions for this Agreement are set forth in Section 8.
RECITALS
NOW, THEREFORE, in consideration of the foregoing premises and the mutual undertakings set forth below, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:
Any or all of the foregoing conditions may be waived by the Operating Partnership in its sole and absolute discretion.
The Operating Partnership shall approve or disapprove in writing any of the foregoing actions to be taken by the Contributor within 5 business days after receiving a written request from the Contributor (including all information reasonably relevant to the Operating Partnership’s consideration) for such approval, which approval shall be in the Operating Partnership’s sole discretion.
To the Contributor:
CWS BET Seattle L.P.
Attn: Frank Kavanaugh
To the Operating Partnership:
Medalist Diversified Holdings, LP
P. O. Box 8436
Richmond, VA 23226
Attn: C. Brent Winn, Jr.
“Actions” shall mean all actions, litigations, complaints, charges, accusations, investigations, petitions, suits, arbitrations, mediations or other proceedings, whether civil or criminal, at law or in equity, or before any arbitrator or Governmental Entity.
“Adverse Change” shall have the meaning set forth in Section 1.14.1.
“Adverse Change Review Period” shall have the meaning set forth in Section 1.14.1.
“Agreement” shall have the meaning as set forth in the Preamble.
“Amendment” shall have the meaning set forth in Section 1.7.
“Assumed Agreements” shall have the meaning set forth in Section 1.2.
“Assumed Liabilities” shall have the meaning set forth in Section 1.4.
“Basket” shall have the meaning set forth in Section 4.4.
“Closing” shall have the meaning set forth in Section 2.2.
“Closing Agent” shall have the meaning set forth in Section 1.12.
“Closing Date” shall have the meaning set forth in Section 2.2.
“Closing Documents” shall have the meaning set forth in Section 2.3.
“Code” shall mean the Internal Revenue Code of 1986, as amended, and the rules and regulations in effect thereunder.
“Common Units” shall have the meaning set forth in the Partnership Agreement.
“Company” shall mean Medalist Diversified REIT, Inc., a Maryland corporation, the general partner of the Operating Partnership.
“Contributed Assets” shall have the meaning set forth in Section 1.2.
“Contributor” shall have the meaning set forth in the Preamble.
“Contributor Breakage Fee” shall have the meaning set forth in Section 6.3.
“Contributor’s Cure Period” shall have the meaning set forth in Section 1.13.2.
“Deed” shall have the meaning set forth in Section 2.3.2.
“Disclosure Schedule” shall mean that disclosure schedule attached as Appendix A.
“Due Diligence Documents” shall have the meaning set forth in Section 1.14.1.
“Due Diligence Period” shall have the meaning set forth in Section 1.14.1.
“Due Diligence Review” shall have the meaning set forth in Section 1.14.2.
“Earnest Money” shall have the meaning set forth in Section 1.12.
“Effective Date” shall have the meaning set forth in the Preamble.
“Environmental Law” shall mean 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 Closing Date, including but not
limited to those pertaining to reporting, licensing, permitting, investigation, removal and remediation of Hazardous Materials, 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 Materials.
“Environmental Permits” shall mean any and all licenses, certificates, permits, directives, requirements, registrations, government approvals, agreements, authorizations, and consents that are required under or are issued pursuant to any Environmental Laws.
“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended.
“Excluded Assets” shall have the meaning set forth in Section 1.3.
“Fixtures and Personal Property” shall mean all fixtures, furniture, furnishings, apparatus and fittings, equipment, machinery, appliances, building supplies, tools, and other items of personal property used in connection with the operation or maintenance of the Property; excluding, however, all fixtures, furniture, furnishings, apparatus and fittings, equipment, machinery, appliances, building supplies, tools, and other items of personal property owned by tenants, subtenants, guests, invitees, employees, easement holders, service contractors and other Persons who own any such property located on the Property.
“Governmental Entity” shall mean 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.
“Hazardous Material” shall mean any substance (i) the presence of which requires investigation or remediation under any Environmental Law action or policy, administrative request or civil complaint under the foregoing or under common law; (ii) which is controlled, regulated or prohibited under any Environmental Law as in effect as of the Closing Date, including the Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C. Section 9601 et seq.) and the Resource Conservation and Recovery Act (42 U.S.C. Section 6901 et seq.); (iii) which is toxic, explosive, corrosive, flammable, infectious, radioactive, carcinogenic, mutagenic or otherwise hazardous and as of the Closing Date is regulated by any Governmental Entity; (iv) the presence of which on, under or about, the Property poses a hazard to the health or safety of persons on or about the Property; (v) which contains gasoline, diesel fuel or other petroleum hydrocarbons, polychlorinated biphenyls (PCBs) or asbestos or asbestos-containing materials or urea formaldehyde foam insulation; or (vi) radon gas.
“Indemnified Contributor Parties” shall have the meaning set forth in Section 4.5.
“Indemnified Parties” shall have the meaning set forth in Section 4.2.1.
“Intangible Personal Property” shall mean all, right, title and interest relating to the Property in and to all intangible personal property now or hereafter used in connection with the operation, ownership, maintenance, management, or occupancy of the Property, including, without limitation: all trade names and trademarks associated with the ownership of the Property; the plans and specifications for the improvements; warranties; guaranties; indemnities; claims against third parties; claims against tenants for tenant improvement reimbursements; all contract rights related to the construction, operation, ownership or management of the Property; certificates of occupancy; applications, permits, approvals and licenses;
insurance proceeds and condemnation awards or claims thereto to be assigned to the Operating Partnership hereunder; and all books and records relating to the Property.
“Knowledge” shall mean, with respect to any representation or warranty so indicated, the knowledge of the Contributor.
“Leases” shall have the meaning set forth in Section 3.2.20.
“Liens” shall mean, with respect to any real and personal property, all 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.
“Losses” shall have the meaning set forth in Section 4.2.1.
“Material Adverse Effect” shall have the meaning set forth in Section 3.2.3.
“Maximum Per Property Total Consideration Adjustment” shall have the meaning set forth in Section 1.11.
“Objections” shall have the meaning set forth in Section 1.13.2.
“Operating Partnership” shall have the meaning set forth in the Preamble.
“Other Taxes” shall mean Taxes other than income Taxes.
“Partnership Agreement” shall mean the Amended and Restated Limited Partnership Agreement of Medalist Diversified Holdings, LP, a Delaware limited partnership, as may be amended.
“Permitted Liens” shall mean:
(i)Liens securing taxes, the payment of which is not now due and payable or the payment of which is actively being contested in good faith by appropriate proceedings diligently pursued;
(ii)Zoning laws and ordinances applicable to the Property which are not violated by the existing structures or present uses thereof or the transfer of the Property;
(iii)Liens imposed by laws, such as carriers’, warehousemen’s and mechanics’ liens, and other similar liens arising in the ordinary course of business which secure payment of obligations arising in the ordinary course of business not more than 60 days past due or which are being contested in good faith by appropriate proceedings diligently pursued;
(iv)non-exclusive easements for public utilities and other operational purposes that do not materially interfere with the current use of the Property; and
(v)all Liens listed in Schedule 1.2 and any similar liens incurred in any refinancing of the related obligations.
“Person” shall mean any individual, corporation, limited liability company, partnership, joint venture, association, joint-stock company, trust, unincorporated organization or governmental entity.
“Preferred Units” shall have the meaning set forth in the Partnership Agreement.
“Preliminary Title Report” means the preliminary commitment for title insurance committing to insure marketable fee simple title as of the date of the Closing, subject only to the Permitted Liens.
“Property” shall have the meaning set forth in the Recitals.
“Property Deposits” shall have the meaning set forth in Section 5.2.2(a).
“Proprietary Rights” shall have the meaning set forth in Section 3.2.18(a).
“REIT Shares” shall have the meaning set forth in the Partnership Agreement.
“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), but not including the exclusions identified in that definition, at subparts (A) through (D).
“Securities Act” shall mean the Securities Act of 1933, as amended, and the rules and regulations in effect thereunder.
“Service Contracts” shall have the meaning set forth in Section 3.2.22.
“Subscription Agreement” shall mean the Subscription Agreement to be entered into by Contributor with respect to the acquisition of the Common Units and the Preferred Units.
“Survey” shall have the meaning set forth in Section 13.1.1.
“Tax” or “Taxes” shall mean any federal, state, provincial, local or foreign income, gross receipts, license, payroll, employment-related, excise, goods and services, harmonized sales, severance, stamp, occupation, premium, windfall profits, environmental, customs duties, capital stock, franchise, profits, withholding, social security, unemployment, disability, real property, personal property, sales, use, transfer, registration, value added, alternative or add-on minimum, estimated, or other tax of any kind whatsoever, including any interest, penalty, or addition thereto, whether disputed or not.
“Tax Return” shall mean any return, declaration, report, claim for refund, or information return or statement related to Taxes, including any schedule or attachment thereto, and including any amendment thereof.
“Title Company shall have the meaning set forth in Section 1.13.1.
“Title Documents” shall have the meaning set forth in Section 1.13.1.
“Title Policy: shall have the meaning set forth in Section 2.1.6.
“Total Consideration” shall have the meaning set forth in Section 1.7.
“Transfer” shall have the meaning set forth in Section 3.2.8(a).
“Updated Survey” shall have the meaning set forth in Section 1.13.1.
IN WITNESS WHEREOF, the parties have executed this Contribution Agreement as of the date first written above.
OPERATING PARTNERSHIP: | ||
| | |
| Medalist Diversified Holdings, LP, a Delaware limited partnership | |
| | |
| By: Medalist Diversified REIT, Inc., a Maryland corporation, its general partner | |
| | |
| By: | /s/ C. Brent Winn, Jr. |
| Name: | C. Brent Winn, Jr. |
| Title: | Chief Financial Officer |
| | |
| CONTRIBUTOR: | |
| | |
| CWS BET Seattle L.P. a Delaware limited partnership | |
| | |
| By: | /s/ Frank Kavanaugh |
| Name: | Frank Kavanaugh |
| Title | Manager |
EXHIBIT A
DESCRIPTION OF THE PROPERTY
Being Lot 7, as shown on Revision of Lot 7 of General Growth Properties, Plat of which is recorded in Plat Book 43, Page 201 and 202, in the Office of the Clerk of Warren County, Kentucky.
Being a part of the property described as Parcel 1 conveyed to CWS Bet Seattle L.P., a Delaware limited
partnership by Deed dated August 22, 2023, and of record in Deed Book D1286, Page 783, in the Office of the Clerk of Warren County Kentucky.
EXHIBIT B
CONTRIBUTION AND ASSUMPTION AGREEMENT
FOR GOOD AND VALUABLE CONSIDERATION, the receipt and sufficiency of which are hereby acknowledged, the undersigned hereby assigns, transfers and conveys to Medalist Diversified Holdings, LP, a Delaware limited partnership (the “Operating Partnership”), its entire legal and beneficial right, title and interest (other than any Excluded Assets) in, to all of the Contributed Assets and the Assumed Agreements, as listed on Schedule A attached hereto, together with all amendments, waivers, supplements and other modifications of and to such agreements, contracts, licenses and other instruments through the date hereof, in each case to the fullest extent assignment thereof is permitted by applicable law,
TO HAVE AND TO HOLD the same unto the Operating Partnership, its successors and assigns, forever.
Upon the execution and delivery hereof, the Operating Partnership absolutely and unconditionally accepts the foregoing assignment of each Contributed Asset and Assumed Agreement and assumes all Assumed Liabilities in respect of the Assumed Agreements, and agrees to be bound by the terms, conditions and covenants thereof, and to perform all duties and obligations of the Contributor thereunder from and after the date hereof.
The Contributor for itself, its successors and assigns hereby covenants and agrees that, at any time and from time to time after the date hereof upon the written request of the Operating Partnership, the Contributor will, without further consideration, do, execute, acknowledge and deliver or cause to be done, executed, acknowledged and delivered, each and all of such further acts, deeds, assignments, transfers, conveyances and assurances as may reasonably be required by the Operating Partnership in order to assign, transfer, set over, convey, assure and confirm unto and vest in the Operating Partnership, its successors and assigns, title to the Assumed Agreements (other than the Excluded Assets) granted, transferred, conveyed and delivered by this Agreement.
Capitalized terms used herein, but not defined have the meanings ascribed to them in the Contribution Agreement, dated as of December 14, 2024 between the Operating Partnership and the Contributor.
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Contribution and Assumption Agreement as of the date first above written.
| CONTRIBUTOR: | |
| | |
| CWS BET Seattle L.P. a Delaware limited partnership | |
| | |
| By: | |
| Name: | Frank Kavanaugh |
| Title | |
ACKNOWLEDGEMENT
STATE OF )
) ss.:
COUNTY OF )
On ______________________, before me, the undersigned, a Notary Public in and for said State, personally appeared, personally known to me or proved to me on the basis of satisfactory evidence to be the individual whose name is subscribed to the within instrument and executed before me the same in his capacity, and that by his signature on the instrument, the individual, or the person upon behalf of which the individual acted, executed the instrument.
| |
EXHIBIT C
TOTAL CONSIDERATION
Total Consideration pursuant to Section 1.7 of the Agreement shall be $2,620,000, consisting of:
$2,120,000 in Common Units, equivalent to 169,600 Common Units ($12.50 per Common Unit)
$500,000 in Preferred Units, equivalent to 20,000 Preferred Units ($25.00 per Preferred Unit)
The calculation of the total consideration deliverable at closing pursuant to this Exhibit C shall be performed in good faith by the Operating Partnership and in accordance with the Contribution Agreement. Notwithstanding anything to the contrary in the Agreement, the Contributor agrees that the calculation of the Total Consideration deliverable at Closing shall be final and binding upon the Contributor, absent manifest error. The Contributor shall notify the Operating Partnership in writing of any alleged manifest error within 48 hours of receipt of the Operating Partnership’s calculation of the Total Consideration deliverable at Closing. The Contributor hereby irrevocably waives any and all claims relating to the calculation of the Total Consideration deliverable at Closing, other than as specified in such notice setting forth the alleged manifest error.
EXHIBIT D
TAX BASIS AND DEPRECIATION SCHEDULE
Please either (i) complete the tax basis and depreciation schedule attached as Attachment D-1 (following this page) in its entirety, or (ii) provide the depreciation schedule from your most recent federal income tax return as an alternative option for providing tax basis information. A sample depreciation schedule is attached as Attachment D-2.
| (1) | Depreciation schedules for partnerships and S-corporations can generally be found in the supporting detail of IRS Form 4562, used to calculate the depreciation amount which is included on IRS Form 8825. |
| (2) | Depreciation schedules for individuals and trusts can generally be found in the supporting detail of IRS Form 4562, used to calculate the depreciation amount which is included on IRS Schedule E. |
| (3) | Depreciation schedules for corporations can generally be found in the supporting detail of IRS Form 4562, used to calculate the depreciation amount which is included on page 1 of IRS Form 1120. |
| | Amounts for Regular Federal Tax | |||||
| | Land | Building | Building Improvements | Furniture, Fixtures, & Equipment | Other | |
| Date Placed in Service (day/month/year) |
|
|
|
|
| |
| Depreciation Life | NA |
|
|
|
| |
| Depreciation Method | NA | S/L |
|
|
| |
A | Initial Cost Basis |
|
|
|
|
| |
B | Sec. 179 Deductions |
|
|
|
|
| |
C | Net Sec. 168(k) Allowances (i.e., Bonus Depreciation) |
|
|
|
|
| |
D | Accumulated Depreciation at Contribution |
|
|
|
|
| |
E | Adjusted Tax Basis at Contribution |
|
|
|
|
| |
| | | | | | | |
| A minus B, C, and D should equal E | | | | | | |
| | | | | | | |
| q | Please check the box if there are multiple placed in service dates or personal property. In addition, please attach a separate schedule setting forth such information. | |||||
| | Amounts for Alternative Minimum Tax (If Different) | |||||
| | Land | Building | Building Improvements | Furniture, Fixtures, & Equipment | Other | |
| Date Placed in Service (day/month/year) |
|
|
|
|
| |
| Depreciation Life | NA |
|
|
|
| |
| Depreciation Method | NA | S/L |
|
|
| |
A | Initial Cost Basis |
|
|
|
|
| |
B | Sec. 179 Deductions |
|
|
|
|
| |
C | Net Sec. 168(k) Allowances (i.e., Bonus Depreciation) |
|
|
|
|
| |
D | Accumulated Depreciation at Contribution |
|
|
|
|
| |
E | Adjusted Tax Basis at Contribution |
|
|
|
|
| |
| | | | | | | |
| | Amounts for State Tax Purposes (If Different) | |||||
| | Land | Building | Building Improvements | Furniture, Fixtures, & Equipment | Other | |
| Date Placed in Service (day/month/year) |
|
|
|
|
| |
| Depreciation Life | NA |
|
|
|
| |
| Depreciation Method | NA | S/L |
|
|
| |
A | Initial Cost Basis |
|
|
|
|
| |
B | Sec. 179 Deductions |
|
|
|
|
| |
C | Net Sec. 168(k) Allowances (i.e., Bonus Depreciation) |
|
|
|
|
| |
D | Accumulated Depreciation at Contribution |
|
|
|
|
| |
E | Adjusted Tax Basis at Contribution |
|
|
|
|
| |
The information provided herein is as of __________________________ (date).
| 12/31/2023 | 2023 DEPRECIATION SCHEDULE | PAGE 1 | | ||||||||||||||||
| NO. | DESCRIPTION | DATE ACQUIRED | DATE SOLD | COST/BASIS | BUS PCT. | CUR 179 BONUS | SPECIAL DEPR. ALLOW. | PRIOR 179/ BONUS/ SP DEPR. | SALVAGE /BASIS REDUCT. | PRIOR DEPR. | METHOD | LIFE | RATE | CURRENT DEPR | | ||||
| SCHEDULE E | | | | | | | | | | | | | | | | | |||
| 1 | LAND | 7/27/2008 | | 106,276 | | | | | | | 106,276 | | | | | | | ||
| 2 | BUILDING | 7/27/2008 | | 518,878 | | | | | | | 518,878 | 46,382 | S/L MM | 27.5 | 0.03636 | 18,866 | | ||
| 3 | CAPITAL IMPROVEMENTS | 7/1/2009 | | 1,500 | | | | | | | 1,500 | 80 | S/L MM | 27.5 | 0.03636 | 55 | | ||
| 4 | CARPET/FLOORING | 7/1/2010 | | 418 | | | | 209 | | | 209 | 42 | 200DB HY | 5 | 0.32000 | 67 | | ||
| 5 | CAPITALEXPENDITURES | 7/1/2011 | | 1,273 | | | | | | | 1,273 | | 200DB HY | 5 | 0.20000 | 255 | | ||
| 6 | CAPITAL IMPROVE MENTS | 7/1/2011 | | 3,735 | | | | | | | 3,735 | | 150DB HY | 15 | 0.05000 | 187 | | ||
| 7 | EQUIPMENT | VARIOUS | | 945 | | | | | | | 945 | 337 | S/L HY | 7 | 0.14280 | 135 | | ||
| 8 | FURNITURE & APPLIANCES | VARIOUS | | 7,624 | | | | | | | 7,624 | 2,722 | S/L HY | 7 | 0.14280 | 1,089 | | ||
| 9 | IMPROVEMENTS | VARIOUS | | 27,530 | | | | | | | 27,530 | 2,961 | S/L MM | 27.5 | 0.03636 | 1,001 | | ||
| 10 | HVAC | VARIOUS | | 1,235 | | | | | | | 1,235 | 440 | S/L HY | 7 | 0.14280 | 176 | | ||
| 11 | LAND - 1031 EXCHANGE | 8/10/2008 | | 180,957 | | | | | | | 180,957 | | | | | | | ||
| 12 | BUILDING - 1031 EXCHANGE | 8/10/2008 | | 883,496 | | | | | | | 883,496 | 76,299 | S/L MM | 27.5 | 0.03636 | 32,124 | | ||
| 13 | IMPROVEMENTS | 7/1/2009 | | 44,766 | | | | | | | 44,766 | 2,374 | S/L MM | 27.5 | 0.03636 | 1,628 | | ||
| 14 | CAPITAL IMPROVEMENTS | 7/1/2010 | | 20,342 | | | | | | | 20,342 | 339 | S/L MM | 27.5 | 0.03636 | 740 | | ||
| | TOTAL | | | 1,798,975 | | - | - | 209 | - | - | 1,798,766 | 131,976 | | | | 56,323 | | ||
| | TOTAL DEPRECIATION | | | 1,798,975 | | | | | | | | | | | | 56,323 | | ||
| | | | | | | | | | | | | | | | | | | ||
SCHEDULE 1.2
CONTRIBUTED ASSETS, ASSUMED AGREEMENTS AND LEASES; PERMITTED LIENS
The property located at 2545 Scottsville Road, Bowling Green, Kentucky.
Lease, as amended, by and between CWS BET SEATTLE L.P., a Delaware limited partnership and BLAZIN WINGS, INC., a Minnesota corporation
SCHEDULE 1.3
EXCLUDED ASSETS
None.
SCHEDULE 1.4
ASSUMED LIABILITIES
None.
SCHEDULE 1.9
ALLOCATION OF TOTAL CONSIDERATION
To be determined by ASC 805 (purchase price allocation) report prepared by the Operating Partnership’s independent third party consultant.
EXHIBIT 10.3
SECOND AMENDMENT TO THE
AGREEMENT OF LIMITED PARTNERSHIP OF
MEDALIST DIVERSIFIED HOLDINGS, L.P.
DESIGNATION OF 5.0% SERIES B
CONVERTIBLE REDEEMABLE PREFERRED UNITS
December 16, 2024
Pursuant to Section 4.02 and Article XI of the Agreement of Limited Partnership of Medalist Diversified Holdings, L.P. (as now or hereafter amended, restated, modified, supplemented or replaced, the “Partnership Agreement”), the General Partner hereby amends the Partnership Agreement as follows in order to set forth the designations, rights, powers, preferences and duties and other terms of the Series B Preferred Units (as hereinafter defined) to be issued by the Partnership (as hereinafter defined):
1. Designation and Number. A series of Preferred Units of Medalist Diversified Holdings, L.P., a Delaware limited partnership (the “Partnership”), designated the “5.0% Series B Convertible Redeemable Preferred Units” (the “Series B Preferred Units”) is hereby established. The number of authorized Series B Preferred Units shall be 2,000,000.
2. Defined Terms. Capitalized terms used herein and not otherwise defined shall have the meanings given to such terms in the Partnership Agreement. The following defined terms used herein shall have the meanings specified below:
“Business Day” shall mean any day other than a Saturday, Sunday or other day on which commercial banks in the City of New York are authorized or required to close.
“Change of Control Redemption Right” shall have the meaning provided in Section 7(b).
“Common Units” shall have the meaning provided in Section 3.
“Conversion Date” shall have the meaning provided in Section 6(d).
“Converting Holder” shall have the meaning provided in Section 6(b).
“Face Value” shall mean $25.00 per Series B Preferred Unit.
“Initial Issuance Date” shall mean the date of the first issuance of Series B Preferred Units.
“Junior Preferred Units” shall have the meaning provided in Section 3.
“Liquidating Distributions” shall have the meaning provided in Section 5(a).
“Liquidation Preference” shall have the meaning provided in Section 5(a).
“Notice of Conversion” shall have the meaning provided in Section 6(b).
“Notice of Redemption” shall have the meaning provided in Section 7(f).
“Optional Redemption Rights” shall have the meaning provided in Section 7(b).
“Parity Preferred Units” shall have the meaning provided in Section 3.
“Partnership” shall have the meaning provided in Section 1.
“Partnership Agreement” shall have the meaning provided above.
“REIT Common Shares” shall mean the common stock, $0.01 par value, of Medalist Diversified REIT, Inc.
“Redemption Date” shall have the meaning provided in Section 7(f).
“Senior Preferred Units” shall have the meaning provided in Section 3.
“Series B Preferred Unit Distribution Record Date” shall have the meaning provided in Section 4(a).
“Series B Preferred Return” shall have the meaning provided in Section 4(a).
“Series B Preferred Unit Change of Control Redemption” shall have the meaning provided in Section 7(b).
“Series B Preferred Unit Distribution Payment Date” shall have the meaning provided in
Section 5(a).
“Series B Preferred Units” shall have the meaning provided in Section 1.
“Series B Preferred Unit Conversion” shall have the meaning provided in Section 6(a).
“Series B Preferred Unit Conversion Amount” shall have the meaning provided in Section 6(a).
“Series B Preferred Unit Redemption” shall have the meaning provided in Section 7(b).
“Series B Preferred Unit VWAP Redemption” shall have the meaning provided in Section 7(a).
“VWAP” shall mean volume-weighted average price.
“VWAP Event” shall have the meaning provided in Section 7(a).
“VWAP Redemption Right” shall have the meaning provided in Section 7(a).
3. Rank. The Series B Preferred Units will, with respect to distribution rights and rights upon liquidation, dissolution or winding up of the Partnership, rank (a) senior to all classes or series of Partnership Common Units (“Common Units”) of the Partnership and any class or series of Preferred Units expressly designated as ranking junior to the Series B Preferred Units as to distribution rights and rights upon liquidation, dissolution or winding up of the Partnership (collectively, the “Junior Preferred Units”); (b) on a parity with the Series A Preferred Units and any class or series of Preferred Units issued by the Partnership expressly designated as ranking on a parity with the Series B Preferred Units as to distribution rights and rights upon liquidation, dissolution or winding up of the Partnership (the “Parity Preferred Units”); and (c) junior to any class or series of Preferred Units issued by the Partnership expressly designated as ranking senior to the Series B Preferred Units as to distribution rights and rights upon liquidation, dissolution or winding up of the Partnership (the “Senior Preferred Units”). The term “Preferred Units” does not include convertible or exchangeable debt securities of the Partnership, including convertible or exchangeable debt securities which will rank senior to the Series B Preferred Units prior to conversion or exchange. The Series B Preferred Units will also rank junior in right or payment to the Partnership’s existing and future indebtedness.
4. Distributions.
(a) Subject to the preferential rights of holders of any class or series of Preferred Units of the Partnership expressly designated as ranking senior to the Series B Preferred Units as to distribution rights, the holders of Series B Preferred Units shall be entitled to receive, when, as and if authorized by the General Partner and declared by the Partnership, out of assets of the Partnership legally available for payment of distributions, cumulative cash distributions at the rate of 5.0% per annum of the Face Value per Series B Preferred Unit (equivalent to a fixed annual amount of $1.25 per Series B Preferred Unit) (the “Series B Preferred Unit Return”). Distributions on the Series B Preferred Units shall accrue and be cumulative from (but excluding) the date of original issue of any Series B Preferred Units and shall be payable quarterly, in equal amounts, in arrears, on or about the 25th day of each January, April, July and October of each year (or, if not a Business Day, the next succeeding Business Day, each a “Series B Preferred Unit Distribution Payment Date’’) for the period ending on such Series B Preferred Unit Distribution Payment Date, commencing on January 25, 2025. The amount of any distribution payable on the Series B Preferred Units for any partial distribution period will be prorated and computed on the basis of twelve 30-day months and a 360- day year. Distributions will be payable in arrears to holders of record of the Series B Preferred Units as they appear on the records of the Partnership at the close of business on the applicable record date, which shall be the date designated by the General Partner of the Partnership for the payment of distributions that is not more than 90 nor less than ten days prior to such Series B Preferred Unit Distribution Payment Date (each, a “Series B Preferred Unit Distribution Record Date”).
(b) No distributions on the Series B Preferred Units shall be authorized by the General Partner or declared, paid or set apart for payment by the Partnership at such time as the terms and provisions of any agreement of the General Partner or the Partnership, including any agreement relating to the indebtedness of any of them, prohibits such authorization, declaration, payment or setting apart for payment or provides that such authorization, declaration, payment or setting apart for payment would constitute a breach thereof or a default thereunder, or if such authorization, declaration, payment or setting apart shall be restricted or prohibited by law.
(c) Notwithstanding anything to the contrary contained herein, distributions on the Series B Preferred Units will accrue whether or not the restrictions referred to in Section 4(b) exist, whether or not the Partnership has earnings, whether or not there are assets legally available for the payment of such distributions and whether or not such distributions are authorized or declared.
(d) Except provided in Section 4(e) below, no distributions shall be declared and paid or set apart for payment, and no other distribution of cash or other property may be declared and made, directly or indirectly, on or with respect to, any Common Units, Parity Preferred Units or Junior Preferred Units of the Partnership (other than a distribution paid in units of, or options, warrants or rights to subscribed for or purchase units of, Common Units or Junior Preferred Units) for any period, nor shall units of any class or series of Common Units, Parity Preferred Units or Junior Preferred Units be redeemed, purchased or otherwise acquired for any consideration, nor shall any assets be paid or made available for a sinking fund for the redemption of any such units by the Partnership, directly or indirectly (except by conversion into or exchange for units of, or options, warrants or rights to purchase of subscribed for units of, Common Units or Junior Preferred Units, and except for purchases or exchanges pursuant to a purchase or exchange offer made on the same terms to all holders of Series B Preferred Units and all holders of Parity Preferred Units), unless full cumulative distributions on the Series B Preferred Units for all past distribution periods shall have been or contemporaneously are declared and paid or declared and a sum sufficient for the payment thereof is set apart for such payment.
(e) When cumulative distributions are not paid in full (or a sum sufficient for such full payment is not so set apart) on the Series B Preferred Units and any Parity Preferred Units, all distributions declared on the Series B Preferred Units and any Parity Preferred Units shall be declared pro rata so that the amount of distributions declared per Series B Preferred Unit and such Parity Preferred Units shall in all cases bear to each other the same ratio that accrued distributions per Series B Preferred Unit and such Parity Preferred Units (which shall not include any accrual in respect of unpaid distributions on any Parity Preferred Units for prior distribution periods if such Parity Preferred Units do not have a cumulative distribution) bear to
each other. No interest, or sum of money in lieu of interest, shall be payable in respect of any distribution payment or payments on Series B Preferred Units which may be in arrears.
(f) Holders of Series B Preferred Units shall not be entitled to any distribution, whether payable in cash, property or units of the Partnership, in excess of full cumulative distributions on the Series B Preferred Units as provided above. Any distribution made on the Series B Preferred Units shall first be credited against the earliest accrued but unpaid distributions due with respect to such units which remain payable. Accrued but unpaid distributions on Series B Preferred Units will accumulate as of the Series B Preferred Unit Distribution Payment Date on which they first become payable or on the date of redemption, as the case may be.
(g) For the avoidance of doubt, in determining whether a distribution (other than upon voluntary or involuntary liquidation), redemption or other acquisition of the Partnership Units is permitted under Maryland law, no effect shall be given to the amounts that would be needed, if the Partnership were to be dissolved at the time of the distribution, to satisfy the preferential rights upon distribution of holders of Partnership Units whose preferential rights are superior to those receiving the distribution.
5.Liquidation Preference.
(a) Upon any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Partnership, before any distribution or payment shall be made to the holders of any Common Units or Junior Preferred Units, the holders of the Series B Preferred Units then outstanding shall be entitled to be paid, or have the Partnership declare and set apart for payment, out of the assets of the Partnership legally available for distribution to its Partners after payment or provision for payment of all debts and other liabilities of the Partnership, a liquidation preference in cash of $27.50 per Series B Preferred Unit (the “Liquidation Preference”), plus an amount equal to any accrued and unpaid distributions (whether or not declared) to, but not including, the date of payment or the date the Liquidation Preference is set apart for payment (the “Liquidating Distributions”).
(b) If upon any such voluntary or involuntary liquidation, dissolution or winding up of the Partnership, the available assets of the Partnership are insufficient to pay the full amount of the Liquidating Distributions on all outstanding Series B Preferred Units and the corresponding amounts payable on all outstanding Parity Preferred Units, then the holders of Series B Preferred Units and Parity Preferred Units shall share ratably in any such distribution of assets in proportion to the full Liquidating Distributions to which they would otherwise be respectively entitled.
(c) Upon any voluntary or involuntary liquidation, dissolution or winding up of the Partnership, after payment shall have been made in full to the holders of the Series B Preferred Units and any Parity Preferred Units, any other series or class or classes of Junior Preferred Units shall be entitled to receive any and all assets remaining to be paid or distributed, and the holders of the Series B Preferred Units and any Parity Preferred Units shall not be entitled to share therein.
(d) After payment of the full amount of the Liquidating Distributions to which they are entitled, holders of Series B Preferred Units will have no right or claim to any of the remaining assets of the Partnership.
(e) For the avoidance of doubt, the consolidation, merger or conversion of the Partnership with or into another entity, the merger of another entity with or into the Partnership, a statutory unit exchange by the Partnership or the sale, lease, transfer or conveyance of all or substantially all of the assets or business of the Partnership shall not be considered a liquidation, dissolution or winding up of the affairs of the Partnership.
6. Conversion.
(a) On or after the Initial Issuance Date and until the date which is one (1) year after the Initial Issuance Date, if the sixty (60) day VWAP of the REIT Common Shares reaches $25.00 per share, upon
mutual agreement between the Partnership and each holder of Series B Preferred Units, each Series B Preferred Unit may be converted (each, a “Series B Preferred Unit Conversion”) by the holder of such Series B Preferred Unit into 1.1 Common Unit plus payment in cash of accrued and unpaid distributions (whether or not authorized or declared), if any, to, but not including, the Conversion Date (unless the Conversion Date is after a Series B Preferred Unit Distribution Record Date and prior to the corresponding Series B Preferred Unit Distribution Payment Date, in which case no additional amount for the accrued and unpaid distribution will be included in the conversion price) (the “Series B Preferred Unit Conversion Amount”). The Series B Preferred Units are not otherwise convertible by the holder thereof.
(b) Any Series B Preferred Unit Conversion shall be exercised pursuant to a written notice of such Series B Preferred Unit Conversion (a “Notice of Conversion”) delivered to the Partnership by the applicable holder (the “Converting Holder”). The Partnership may elect to reject any such Notice of Conversion in its sole discretion by delivering written notice of such rejection to the Converting Holder within ten (10) days of its receipt of the related Notice of Conversion.
(c) If the Partnership shall so elect in its sole discretion to effect such Series B Preferred Unit Conversion then, as promptly as practicable after the receipt of the Notice of Conversion, the Partnership shall issue and shall deliver or cause to be issued and delivered to such Converting Holder (i) the number of Common Units included in the Series B Preferred Unit Conversion Amount, such Common Units to be duly authorized and validly issued in accordance with the Partnership Agreement and free of any pledge, lien, encumbrance or restriction, other than as set forth in the Partnership Agreement or under the Securities Act of 1933 and relevant state securities or “blue sky” laws, and (ii) payment of accrued and unpaid distributions (whether or not authorized or declared), if any, to, but not including, the Conversion Date (unless the Conversion Date is after a Series B Preferred Unit Distribution Record Date and prior to the corresponding Series B Preferred Unit Distribution Payment Date, in which case no additional amount for the accrued and unpaid distribution will be included in the conversion price).
(d) Each Series B Preferred Unit Conversion shall be deemed to have been made at the close of business on the date that the Partnership receives the Notice of Conversion or, if such date is not a Business Day, the close of business on the next Business Day (the “Conversion Date”), so that the rights of the Converting Holder as to the Series B Preferred Units being converted shall cease except for the right to receive the Common Units and, if applicable, payment of accrued and unpaid distributions (whether or not authorized or declared), if any, to, but not including, the Conversion Date (unless the Conversion Date is after a Series B Preferred Unit Distribution Record Date and prior to the corresponding Series B Preferred Unit Distribution Payment Date, in which case no additional amount for the accrued and unpaid distribution will be included in the conversion price), and the Converting Holder entitled to receive Common Units shall be treated for all purposes as having become the holder of those Common Units at that time. If such Converting Holder was a Limited Partner prior to such Series B Preferred Unit Conversion, then such Converting Holder shall thereafter be a Limited Partner in respect of such Common Units. If such Converting Holder was an Assignee prior to such Series B Preferred Unit Conversion, then such Assignee shall thereafter be an Assignee in respect of such Common Unit.
(e) If the Conversion Date falls after a Series B Preferred Unit Distribution Record Date and on or prior to the corresponding Series B Preferred Unit Distribution Payment Date, each holder of Series B Preferred Units on the Series B Preferred Unit Distribution Record Date shall be entitled to the distribution payable on such Series B Preferred Units on the corresponding Series B Preferred Unit Distribution Payment Date, notwithstanding such conversion of such Series B Preferred Units on or prior to the Series B Preferred Unit Distribution Payment Date, but no additional amount for accrued and unpaid distributions, if any, to, but not including the redemption date, will be included in the conversion price for each Series B Preferred Unit to be converted.
7. Redemption.
(a) At any time following the date which is one (1) year after the Initial Issuance Date, if the sixty (60) day VWAP of the REIT Common Shares reaches $25.00 per share (a “VWAP Event”), the Partnership, at its option, may redeem the Series B Preferred Units, in whole or in part, at any time or from time to time
(each a “Series B Preferred Unit VWAP Redemption”), at a redemption price of one 1.1 Common Unit at a valuation of $25.00 per Common Unit, plus an amount equal to all accrued and unpaid distributions (whether or not authorized or declared), if any, to, but not including, the Redemption Date (as hereinafter defined), on each Series B Preferred Unit to be redeemed (the “VWAP Redemption Right”).
(b) In addition, upon the occurrence of a Change of Control, the Series B Preferred Units will become immediately subject to redemption in full on, or within 120 days after, the first date on which such Change of Control occurred (each a “Series B Preferred Unit Change of Control Redemption” and, together with a Series B Preferred Unit VWAP Redemption, a “Series B Preferred Unit Redemption”), for cash at $27.50 per Series B Preferred Unit plus (subject to Section 7(h) hereof) an amount equal to accrued and unpaid distributions (whether or not authorized or declared), if any, to, but not including, the Redemption Date (“Change of Control Redemption Right” and, together with the VWAP Redemption Right, the “Optional Redemption Rights”).
(c) If not otherwise redeemed by the Partnership pursuant to this Section 7 or converted by the holders pursuant to Section 6 hereof, the Series B Preferred Units will become immediately subject to redemption in full on the date which is four (4) years after the Initial Issuance Date for $27.50 per share or, at the Partnership’s election, for one (1) Common Unit valued at the sixty (60) day VWAP of the REIT Common Shares and cash equal to the difference between the sixty (60) day VWAP of the REIT Common Shares and $27.50 per Common Unit plus an amount equal to all accrued and unpaid distributions (whether or not authorized or declared), if any, to, but not including, the Redemption Date. Notwithstanding Section 11.01(b) of the Partnership Agreement, if the General Partner so elects, the date on which the Series B Preferred Units shall be become immediately subject to redemption pursuant to this Section 7(c) may be extended beyond the date which is four (4) years after the Initial Issuance Date on such terms to be agreed upon by the Company and the holders if at least a majority of the holders of outstanding Series B Preferred Units approve such extension and an amendment to the Partnership Agreement evidencing the same.
(d) If fewer than all of the outstanding Series B Preferred Units are to be redeemed, the Series B Preferred Units to be redeemed shall be selected either (i) pro rata (as nearly as may be practicable without creating fractional units), (ii) by lot or (iii) in such other manner as the General Partner may determine to be fair and equitable. The General Partner will have the full power and authority to prescribe the terms and conditions upon which the Series B Preferred Units will be redeemed.
(f) If the Partnership exercises its Optional Redemption Rights with respect to all or any part of the Series B Preferred Units pursuant to this Section 7, it shall fix a date for redemption (the “Redemption Date”) and a written notice of such redemption (a “Notice of Redemption”) shall be mailed by the Partnership, postage prepaid, as of a date set by the Partnership not fewer than 30 nor more than 60 days prior to the Redemption Date, addressed to the holders of record of the Series B Preferred Units at their respective addresses as they appear on Exhibit A to the Partnership Agreement. Failure to give a Notice of Redemption or any defect thereto or in the mailing thereof shall not affect the sufficiency of notice or validity of the proceedings for such Series B Preferred Unit Redemption except as to a holder to whom notice was defective or not given. A Notice of Redemption which has been mailed in the manner provided herein shall be conclusively presumed to have been duly given on the date mailed whether or not such holder received such Notice of Redemption. Each Notice of Redemption shall state (i) the Redemption Date; (ii) the redemption price; (iii) the total number of Series B Preferred Units to be redeemed; (iv) the place or places where such Series B Preferred Units are to be surrendered for payment, together with the certificates, if any, representing such units (duly endorsed for transfer) and any other documents the Partnership requires in connection with such Series B Preferred Unit Redemption; (v) that the Series B Preferred Units are being redeemed pursuant to the VWAP Redemption Right or the Change of Control Redemption Right, as applicable, in connection with the occurrence of a VWAP Event or a Change of Control, as applicable, and a brief description of the transaction or transactions constituting such VWAP Event or Change of Control, as applicable; and (vii) that distributions on the Series B Preferred Units to be redeemed will cease to accrue on the Redemption Date.
(g) If (i) a Notice of Redemption has been given, (ii) the funds necessary for such Series B Preferred Unit Redemption, if any, have been set apart by the Partnership in trust for the benefit of the
holders of any Series B Preferred Units so called for redemption and (iii) irrevocable instructions have been given to either (1) issue the Common Unit and pay an amount equal to all accrued and unpaid distributions (whether or not authorized or declared), if any, to, but not including, the Redemption Date, on each Series B Preferred Unit to be redeemed, in the case of a Series B Preferred Unit VWAP Redemption, or (2) pay the redemption price of $27.50 per Series B Preferred Unit, plus (subject to Section 7(f) hereof) an amount equal to all distributions accrued and unpaid (whether or not declared) to, but not including, the applicable Redemption Date, in the case of a Series B Preferred Unit Change of Control Redemption, then from and after such Redemption Date, distributions shall cease to accrue on such Series B Preferred Units, such Series B Preferred Units shall no longer be outstanding, such shares of Series B Preferred Units shall not be transferred except with the consent of the Partnership and all other rights of the holders of such units will terminate, except the right to receive the redemption price of $27.50 per Series B Preferred Unit, plus (subject to Section 7(f) hereof) an amount equal to any distributions accrued and unpaid (whether or not declared) payable upon such redemption, without interest.
(h) If the Redemption Date falls after a Series B Preferred Unit Distribution Record Date and on or prior to the corresponding Series B Preferred Unit Distribution Payment Date, each holder of Series B Preferred Units on the Series B Preferred Unit Distribution Record Date shall be entitled to the distribution payable on such shares on the corresponding Series B Preferred Unit Distribution Payment Date, notwithstanding such redemption of such shares on or prior to the Series B Preferred Unit Distribution Payment Date, but no additional amount for accrued and unpaid distributions, if any, to, but not including the Redemption Date, will be included in the redemption price for each Series B Preferred Unit to be redeemed.
(i) For purposes of clause (g)(ii) above, funds shall be deposited in trust with a bank or trust corporation and such deposit shall be irrevocable except that any balance of monies so deposited by the Partnership and unclaimed by the holders of Series B Preferred Units entitled thereto at the expiration of two (2) years from the applicable redemption dates shall be repaid, together with any interest or other earnings thereon, to the Partnership, and after any such repayment, the holders of the Series B Preferred Units entitled to the funds so repaid to the Partnership shall look only to the Partnership for payment without interest or other earnings.
8. Voting Rights. Holders of the Series B Preferred Units will not have any voting rights, except that so long as any Series B Preferred Units remain outstanding, the Partnership will not, without the affirmative vote of the holders of a majority of the Series B Preferred Units outstanding at the time, given in person or by proxy, either in writing or at a meeting (voting separately as a class), (i) amend, alter or repeal, whether by merger, consolidation or otherwise, the provisions of the Partnership Agreement applicable to the Series B Preferred Units so as to materially and adversely affect any right, privilege or voting power of the Series B Preferred Units or the holders of the Series B Preferred Units or (ii) create or issue any partnership units of any class or series of partnership interest ranking senior to the Series B Preferred Units with respect to distributions and the distribution of assets upon liquidation, dissolution or winding up of the Partnership.
9. Allocation of Profit and Loss.
“Article V, Section 5.01(f) of the Partnership Agreement is hereby deleted in its entirety and the following new Section 5.01(f) is inserted in its place:
(f) Priority Allocations With Respect To Preferred Units. After giving effect to the allocations set forth in Sections 5.01(c), (d), and (e) hereof, but before giving effect to the allocations set forth in Sections 5.01(a) and 5.01(b), Net Operating Income shall be allocated to the General Partner until the aggregate amount of Net Operating Income allocated to the General Partner under this Section 5.01(f) for the current and all prior years equals the aggregate amount of the Series A Preferred Return paid to the General Partner for the current and all prior years; provided, however, that the General Partner may, in its discretion, allocate Net Operating Income based on accrued Series A Preferred Return with respect to the January Series A Preferred Unit Distribution Payment Date or Series B Preferred Return with respect to the January Series B Preferred Unit Distribution Date if the General Partner sets the Distribution Record Date or the Series B Preferred Unit Distribution Record Date for such Series A Preferred Unit Distribution Payment Date or Series B Preferred Unit Distribution Payment
Date, respectively, on or prior to December 31 of the previous year. For purposes of this Section 5.01(f), “Net Operating Income” means the excess, if any, of the Partnership’s gross income over its expenses (but not taking into account depreciation, amortization, or any other noncash expenses of the Partnership), calculated in accordance with the principles of Section 5.01(h) hereof.
10. Except as modified herein, all terms and conditions of the Partnership Agreement shall remain in full force and effect, which terms and conditions the General Partner hereby ratifies and confirms.
IN WITNESS WHEREOF, the undersigned has executed this Second Amendment as of the date first set forth above.
GENERAL PARTNER: | ||
|
| |
| MEDALIST DIVERSIFIED REIT, INC. | |
| a Maryland corporation | |
|
| |
| By: | /s/ C. Brent Winn, Jr. |
| Name: | C. Brent Winn, Jr. |
| Title: | Chief Financial Officer |
EXHIBIT 10.4
SUBSCRIPTION AGREEMENT
This Subscription Agreement (this “Agreement”) is made as of December 13, 2024, by and among MEDALIST DIVERSIFIED REIT, Inc., a Maryland corporation (the “Company”), and ___________ (the “Subscriber”) on the terms and conditions set forth in this Agreement.
BACKGROUND
The Subscriber desires to subscribe for and purchase shares of common stock, $0.01 par value per share (the “Common Shares”), of the Company and the Company desires to issue the Common Shares to the Subscriber, all upon the terms and subject to the conditions set forth in this Agreement.
TERMS
In consideration of the foregoing and the mutual covenants contained in this Agreement, the parties hereto, intending to be legally bound hereby, do agree as follows:
THE SHARES HEREOF HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY STATE OR FEDERAL SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED, OR ASSIGNED EXCEPT: (1) PURSUANT TO THE EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT; OR (2) IF, IN THE OPINION OF COUNSEL FOR THE REGISTERED OWNER HEREOF, WHICH OPINION IS REASONABLY SATISFACTORY TO THE COMPANY, THE PROPOSED SALE, TRANSFER OR ASSIGNMENT MAY BE EFFECTED
WITHOUT SUCH REGISTRATION AND WILL NOT BE IN VIOLATION OF APPLICABLE STATE AND/OR FEDERAL SECURITIES LAWS.
* * * * *
SIGNATURE PAGE FOLLOWS
IN WITNESS WHEREOF, the parties have executed this Agreement on the date and year first written above.
Company:
MEDALIST DIVERSIFIED REIT, Inc.
By: _____________________________________
Name: C. Brent Winn, Jr.
Title: Chief Financial Officer
Subscriber:
______________________________
_____________________
SCHEDULE A
Common Shares | Consideration |
[ ] | [$ ] |
EXHIBIT 10.5
December 13, 2024
Ladies and Gentlemen:
In connection with the grant by the Board of Directors (the “Board”) of Medalist Diversified REIT, Inc., a Maryland corporation (the “Company”), of an exemption (the “Exemption”) from the Aggregate Share Ownership Limit as defined in Article IV of the Articles of Incorporation (the “Charter”) of the Company (the “Aggregate Share Ownership Limit”) and the Common Share Ownership Limit as defined in Article IV of the Charter (the “Common Share Ownership Limit” and together with the Aggregate Share Ownership Limit, the “Ownership Limits”) to Marc Carlson and any of his affiliates (“Investor”), in connection with Investor's acquisition of up to 7.43% of the outstanding Common Shares of the Company, in excess of the Ownership Limits, Investor hereby certifies to the Board that:
(i) Investor understands that Investor may not acquire and beneficially own more than 7.43% (the “Excepted Holder Limit”) in the aggregate of the Common Shares of the Company (100,000 shares, based on 1,345,260 shares outstanding subsequent to the completion of the December 2024 private placement), except with the prior approval of the Board; and
(ii)Investor has reviewed, understands and agrees to the terms of Section 6.l.7(a)(ii) of the Charter.
Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Charter.
/s/ Marc Carlson |
Marc Carlson |
EXHIBIT 10.6
December 13, 2024
Ladies and Gentlemen:
In connection with the grant by the Board of Directors (the “Board”) of Medalist Diversified REIT, Inc., a Maryland corporation (the “Company”), of an exemption (the “Exemption”) from the Aggregate Share Ownership Limit as defined in Article IV of the Articles of Incorporation (the “Charter”) of the Company (the “Aggregate Share Ownership Limit”) and the Common Share Ownership Limit as defined in Article IV of the Charter (the “Common Share Ownership Limit” and together with the Aggregate Share Ownership Limit, the “Ownership Limits”) to Kory Kramer and any of his affiliates (“Investor”), in connection with Investor's acquisition of up to 7.43% of the outstanding Common Shares of the Company, in excess of the Ownership Limits, Investor hereby certifies to the Board that:
(i) Investor understands that Investor may not acquire and beneficially own more than 7.43% (the “Excepted Holder Limit”) in the aggregate of the Common Shares of the Company (100,000 shares, based on 1,345,260 shares outstanding subsequent to the completion of the December 2024 private placement), except with the prior approval of the Board; and
(ii)Investor has reviewed, understands and agrees to the terms of Section 6.l.7(a)(ii) of the Charter.
Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Charter.
KRAMERICA TRUST, DATED JULY 24, 2015
By: | /s/ Kory J. Kramer |
Name: | Kory, J. Kramer, Trustee |
| |
By: | /s/ Lauren C. Kramer |
Name: | Lauren C. Kramer, Trustee |