ARTICLE 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
At November 8, 2021, a wholly owned subsidiary of the operating company of
Diversified REIT, Inc. medalist (the “Company”), completed the refinancing of its existing mortgage loan guaranteed by the stores at Franklin Square, a 134,239 square foot commercial building located at Gastonia, North Carolina (the “Franklin Square Property”). The Company has entered into a new mortgage secured by the Franklin Square Property (the “Franklin Square Loan”) pursuant to a Loan Agreement (the “Loan Agreement” between the Buyers and DBR Investments Co. Limited, a Cayman Islands company (the “Lender”). The Franklin Square Loan has a principal balance of $ 13,250,000 which matures on December 6, 2031 and bears interest at the annual rate of 3.808%. The Franklin Square Loan is evidenced by a promissory note issued by the Company for the benefit of the Franklin Square Lender (the “Note”). The Franklin Square Loan may not be prepaid prior to maturity, but the Company has the right to initiate defeasance under the terms of the Loan Agreement. The Company has agreed to guarantee all amounts due under the Franklin Square Loan. The loan agreement contains provisions, representations, guarantees, covenants, including a commitment to maintain a debt service coverage ratio of 1.25 to 1.0 for the property, and customary and standard indemnities for secured debt on commercial property.
The foregoing descriptions of the Loan Agreement and Note are qualified in their entirety by reference to the Loan Agreement and Note, copies of which are filed as Exhibits 10.1 and 10.2 of this current report on the Form 8-K and are incorporated by reference in this topic. 1.01.
ITEM 2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN
OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT.
The information relating to the Franklin Square Loan in Item 1.01 above is incorporated by reference in this Item 2.03.
ITEM 9.01 FINANCIAL STATEMENTS AND PARTS.
Exhibit No. Description
10.1 Loan Agreement, made as of November 8, 2021
10.2 Note, dated as of November 8, 2021
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