Item 1.01 Entry into a Material Definitive Agreement.
Charlotte 3 Properties Signing and Closing
On October 19, 2021, MHP Pursuits LLC (“MHP
Pursuits”), a wholly owned subsidiary of Manufactured Housing Properties Inc. (the “Company”), entered into
a purchase and sale agreement with CHR VIII-PCP MHC Charlotte Dixie, L.L.C., CHR VIII-PCP MHC Charlotte Meadowbrook, L.L.C., and CHR VIII-PCP
MHC Charlotte Driftwood, L.L.C. for the purchase of three manufactured housing communities located in Charlotte, North Carolina (“Driftwood”)
and nearby cities of Kings Mountain, North Carolina (“Dixie”) and York, South Carolina (“Meadowbrook”),
(collectively the “Charlotte 3 Properties”) consisting of 156 sites on approximately 78.45 acres.
On November 19, 2021, MHP Pursuits terminated
the purchase and sale agreement in accordance with its terms.
On December 7, 2021, MHP Pursuits entered into
a reinstatement and first amendment to purchase and sale agreement with CHR VIII-PCP MHC Charlotte Dixie. L.L.C., CHR VIII-PCP MHC Charlotte
Dixie Owner, L.L.C., CHR VIII-PCP MHC Charlotte Driftwood, L.L.C., CHR VIII-PCP MHC Charlotte Driftwood Owner, L.L.C., CHR VIII-PCP MHC
Charlotte Meadowbrook, L.L.C. and CHR VIII-PCP MHC Charlotte Meadowbrook Owner, L.L.C., which was amended by a second amendment to purchase
and sale agreement on December 16, 2021 (as amended, the “Charlotte 3 Purchase Agreement”), whereby, among other things,
MHP Pursuits assigned its rights to the Company’s newly formed wholly owned subsidiary, Charlotte 3 Park MHP LLC (“Charlotte
Parks MHP”). On December 21, 2021, closing of the Charlotte 3 Purchase Agreement was completed and Charlotte Parks MHP purchased
the Charlotte 3 Properties.
Pursuant to the Charlotte 3 Purchase Agreement, Charlotte Parks MHP
purchased the Charlotte 3 Properties for a purchase price of $2,500,000. The Charlotte 3 Purchase Agreement contains covenants, representations
and warranties that are customary of real estate purchase and sale agreements.
In connection with the closing, on December 21,
2021, Charlotte Parks MHP issued a promissory note (the “Pacific Note”) to Pacific Current Partners LLC for a loan
in the principal amount of $1,500,000. The remainder of the purchase price, or $1,000,000, was paid in cash.
The Pacific Note bears interest at a rate of 5.00%
per annum with interest-only payments beginning February 1, 2022 and continuing on the first day of each month until the March 1, 2022
maturity date. Charlotte Parks MHP has five extension options of sixty days each whereby the maturity date will be extended for such additional
period for an extension fee of $15,000 for each extension as long as there are no events of default and if prompt written notice is provided
to the lender as described in the Pacific Note.
The Pacific Note is secured by a first priority
security interest in the Charlotte 3 Properties pursuant to a deed of trust, assignment of leases and rents, fixture filing and security
agreement concerning the Driftwood community (the “Driftwood Security Instrument”), a deed of trust, assignment of
leases and rents, fixture filing and security agreement concerning the Dixie community (the “Dixie Security Instrument”),
and a mortgage and security agreement concerning the Meadowbrook community (the “Meadowbrook Mortgage”) that Charlotte
Parks MHP entered into with the lender.
The Pacific Note contains customary closing conditions,
representations and warranties, financial and other covenants and events of default for a loan of its type.
The foregoing summary of the terms and conditions
of the Charlotte 3 Purchase Agreement, the Pacific Note, the Driftwood Security Agreement, the Dixie Security Agreement, and the Meadowbook
Mortgage does not purport to be complete and is qualified in its entirety by reference to the full text of the agreements attached as
exhibits hereto, which are incorporated herein by reference.
Morganton and Asheboro Signing and Closing
On October 20, 2021, MHP Pursuits entered into
a purchase and sale agreement (the “Idlewild Acres Purchase Agreement”) with Gary Coffey for the purchase of a manufactured
housing community located in Morganton, North Carolina consisting of 61 sites on approximately 31.29 acres (the “Morganton Property”)
for a total purchase price of $2,750,000.
On December 22, 2021, MHP Pursuits assigned its
rights and obligations in the Idlewild Acres Purchase Agreement to (a) the Company’s newly formed wholly owned subsidiary Carolinas
4 MHP LLC, a South Carolina limited liability company (“Carolinas 4 MHP”); and to (b) Gvest Carolinas 4 Homes LLC,
a Delaware limited liability company (“Carolinas 4 Gvest”), which is a wholly owned subsidiary of the Company’s
variable interest entity Gvest Finance LLC, pursuant to assignment of purchase and sale agreement (the “Morganton Assignment”).
On December 29, 2021, closing of the Idlewild Acres Purchase Agreement was completed and Carolinas 4 MHP purchased the land and land improvements,
and Carolinas 4 Gvest purchased the buildings on the Morganton Property. The Idlewild Acres Purchase Agreement also contains additional
covenants, representations and warranties that are customary of real estate purchase and sale agreements.
On October 22, 2021, MHP Pursuits entered into
a purchase and sale agreement, which was amended on December 9, 2021 and December 20, 2021 (as amended, the “Alterri Purchase
Agreement”) with Alterri Properties LLC for the purchase of two manufactured housing communities located in Asheboro, North
Carolina consisting of 84 sites on approximately 45.4 acres (together the "Asheboro Properties”) for a total purchase
price of $2,750,000.
On December 22, 2021, MHP Pursuits assigned its
rights and obligations in the Alterri Purchase Agreement to Carolinas 4 MHP and Carolinas 4 Gvest pursuant to an assignment of purchase
and sale agreement (the “Asheboro Assignment”). On December 29, 2021, closing of the Alterri Purchase Agreement was
completed and Carolinas 4 MHP purchased the land and land improvements, and Carolinas 4 Gvest purchased the buildings on the Asheboro
Properties. The Alterri Purchase Agreement also contains additional covenants, representations and warranties that are customary of real
estate purchase and sale agreements.
In connection with the closings of the Morganton
Property and Asheboro Properties, on December 29, 2021, Carolinas 4 MHP entered into a loan agreement with Vanderbilt Mortgage and Finance
Inc for a loan in the principal amount of $4,400,000 (the “Vanderbilt Loan Agreement”) and Carolinas 4 MHP issued a
promissory note to the lender for the same amount (the “Vanderbilt Note”).
The Vanderbilt Note bears interest at a rate of
5.30% per annum, interest-only for the first thirty-six months, with payments to begin February 10, 2022. Beginning on January 10, 2025,
the loan will amortize at an interest rate of 5.17% per annum based on a thirty-year amortization schedule with payments of interest and
principal due the 15th of every month until maturity on January 10, 2027. Carolinas 4 MHP may prepay the Vanderbilt Note in
part or in full at any time if it pays a prepayment premium calculated in accordance with the Vanderbilt Loan Agreement.
The Vanderbilt Note is secured by a first priority
security interest in the Morganton Property and Asheboro Properties pursuant to a deed of trust (the “Vanderbilt Deed”),
a security agreement and assignment of rents (the “Vanderbilt Security Agreement”), as well as collateral assignment
of the Company’s ownership interests in Carolinas 4 MHP (the “Vanderbilt Ownership Assignment”). The Vanderbilt
Note is guaranteed by Raymond M. Gee, the Company’s chief executive officer.
The Vanderbilt Note contains customary closing
conditions, representations and warranties, financial and other covenants and events of default for a loan of its type.
The foregoing summary of the terms and conditions
of the Idlewild Acres Purchase Agreement, the Morganton Assignment, the Alterri Purchase Agreement, the Asheboro Assignment, the Vanderbilt
Loan Agreement, the Vanderbilt Note, the Vanderbilt Deed, the Vanderbilt Security Agreement, and the Vanderbilt Ownership Assignment does
not purport to be complete and is qualified in its entirety by reference to the full text of the agreements attached as exhibits hereto,
which are incorporated herein by reference.