Item 1.01 Entry into a Material Definitive Agreement.
KeyBank Refinance
On September 1, 2022, Manufactured Housing Properties
Inc. (the “Company”), through its wholly owned subsidiaries, Anderson MHP LLC, ARC MHP LLC, Carolinas 4 MHP LLC, Azalea
MHP LLC, B&D MHP LLC, Capital View MHP LLC, Chatham Pines MHP LLC, Countryside MHP LLC, Crestview MHP LLC, Charlotte 3 Park MHP LLC,
Evergreen MHP LLC, Golden Isles MHP LLC, Hidden Oaks MHP LLC, Holly Faye MHP LLC, Hunt Club MHP LLC, Lakeview MHP LLC, Maple Hills MHP,
North Raleigh MHP LLC, Pecan Grove MHP LLC, Springlake MHP LLC and Sunnyland MHP LLC (the “Subsidiaries”), entered
into twenty-three loan agreements (the “KeyBank Loans”) with KeyBank National Association (“KeyBank”)
for a total principal amount of $62,000,000 and issued promissory notes (the “KeyBank Notes”) to KeyBank in the same
amount. The loan proceeds were primarily used to pay off third party notes and line of credit with various other lenders totaling approximately
$54,000,000, a related party note due to Metrolina Loan Holdings, LLC of $1,500,000, and
a related party line of credit due to Gvest Real Estate Capital LLC of $2,000,000.
The KeyBank Notes bear a fixed interest rate at
4.87% per annum with payments which began October 1, 2022 and maturity date of September 1, 2032. Payment for the first sixty (60) months
of the term of the KeyBank Notes shall be interest-only based on the principal outstanding, days in the period, and daily interest rate.
Thereafter, principal and interest shall be due and payable based on a thirty (30) year amortization schedule. The Subsidiaries may prepay
the KeyBank Notes in part or in full subject to prepayment penalties set out in each of the KeyBank Loans if repaid before May 31, 2032
and without penalty if repaid on or subsequent to that date.
The KeyBank Loans are secured
by first-priority security interests in the land and lot rent due under all leases associated with manufactured housing communities
owned by each of the Subsidiaries pursuant to each deed of trust, deed to secure debt, or mortgage, as applicable by state, assignment
of leases and rents, and fixture filings (collectively, the “KeyBank Security Agreements”). The KeyBank Loans are guaranteed
by the Company (“the KeyBank Corporate Guaranties”) and Raymond M. Gee, the Company’s Chief Executive
Officer.
The KeyBank Loans and the KeyBank Notes contain
customary financial and other covenants and events of default for loans of their type.
The foregoing summary of the terms and conditions
of the KeyBank Loans, KeyBank Notes, KeyBank Security Agreements, and KeyBank Corporate Guaranties 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.
3-Park Statesville Portfolio Acquisition
On May 17,
2022, MHP Pursuits LLC, a North Carolina limited liability company (“MHP Pursuits”) and wholly owned subsidiary
of the Company, entered into a purchase and sale agreement with Statesville Estates MHC LLC, North
Side MHC LLC, and Timber View LLC for the purchase of three manufactured housing communities located in Statesville, North Carolina (the
“Statesville Property”), Thomasville, North Carolina (the “Northview Property”) and Trinity, North
Carolina (the “Timberview Property”), consisting of 122 mobile home sites and 43 homes on approximately 74 acres
for a total purchase price of $5,350,000.
The purchase agreement was amended by a first
amendment to purchase and sale agreement on August 26, 2022, whereby the examination period and closing date were extended, and an additional
non-refundable $20,000 earnest money deposit was paid (as amended, the “3-Park Statesville Purchase Agreement”). The
3-Park Statesville Purchase Agreement contains additional covenants, representations, and warranties that are customary of real estate
purchase and sale agreements.
On August
31, 2022, MHP Pursuits assigned its rights and obligations in the 3-Park Statesville Purchase Agreement to the Company’s newly formed
wholly owned subsidiaries, (i) Statesville MHP LLC, a North Carolina limited liability company (“Statesville MHP”)
(ii) Northview MHP LLC, a North Carolina limited liability company (“Northview MHP”) and (iii) Timberview MHP LLC,
a North Carolina limited liability company (“Timberview MHP”) (the “3-Park Statesville Assignment”).
On September 14, 2022, closing of the 3-Park Statesville Purchase Agreement was completed and Statesville MHP, Northview MHP, and Timberview
MHP purchased the land, land improvement, and buildings. On the same date, Statesville MHP and Timberview MHP entered into agreements
with respect to home and homesite rents (collectively, the “Home Ownership Agreements”) with the Company’s wholly
owned subsidiary, MHP Home Holdings LLC (the “Home Owner”), whereby the parties agreed that Statesville MHP and Timberview
MHP are owners of the land and land improvements and the Home Owner owns the buildings located at the Statesville Property and Timberview
Property.
In connection
with the acquisition of the Statesville Property and Timberview Property, on September 14, 2022, Statesville MHP and Timberview MHP entered
into a loan agreement (the “Statesville Loan”) with KeyBank for a loan in the principal amount of $2,938,000 and issued
a promissory note (the “Statesville Note”) to KeyBank for the same amount.
The Statesville
Note bears interest based on the sum of (1) Daily Simple SOFR as published by the SOFR Administration (each as defined in the Statesville
Note) plus 0.1% and (2) margin of 2.25% per annum on the outstanding principal balance with payments that commenced on October 10, 2022,
and a maturity date of September 13, 2025 (the “Original Term”). The Statesville Loan Agreement provides for a right
to extend the maturity date for an additional twelve (12) month term, subject to satisfaction of certain conditions and an extension fee
in the amount of $7,345. Payment for the Original Term of the Statesville Note shall be interest-only based on the principal outstanding
and if an extension option is exercised, monthly payments of principal plus interest commence on October 10, 2025, continuing on the tenth
(10th) day of every calendar month thereafter. Subject to payment of an exit fee, Statesville MHP and Timberview MHP may prepay
the Statesville Note in part or in full without prepayment penalty as set out in the Statesville Loan Agreement with no less than a seven
(7) days’ prior written notice to KeyBank.
The Statesville
Note is secured by a first priority security interest in the real property at the Statesville Property and Timberview Property, pursuant
to a deed of trust, assignment of leases and rents, assignment of contracts, security agreement, and fixture filing (the “Statesville
Security Agreement”) and a second deed of trust, assignment of leases and rents, assignment of contracts, security agreement,
and fixture filing (the “Timberview Security Agreement”). The Statesville Loan and Statesville Note are guaranteed
by the Company (the “Statesville Corporate Guaranty”) and personally by Raymond M. Gee.
Additionally,
on September 14, 2022, Northview MHP issued a promissory note (the “Northview Note”) to North Side MHC LLC for $1,200,000.
The Northview Note accrues interest at 6% per annum payable over sixty (60) months in interest-only payments in the amount of $6,000 beginning
October 15, 2022 and continuing until maturity with final installment of principal and interest payable on September 15, 2027.
The Northview
Note is secured by a first priority security interest in real property at the Northview Property pursuant to a deed of trust (the “Northview
Deed”) and first priority security interest in the mobile homes located at the Northview Property, Statesville Property, and
Timberview Property pursuant to a security agreement between the Home Owner and North Side MHC LLC (the “Northview Security Agreement”).
The Northview Note is guaranteed by the Company (the “Northview Corporate Guaranty”).
The Statesville
Loan, Statesville Note and Northview Note contain customary financial and other covenants and events of default for loans of their type.
The foregoing summary of the terms and conditions
of the 3-Park Statesville Purchase Agreement, 3-Park Statesville Assignment, Home
Ownership Agreements, Statesville Loan, Statesville Note, Statesville
Security Agreement, Timberview Security Agreement, Statesville Corporate Guaranty, Northview Note, Northview Deed, Northview Security
Agreement, and Northview Corporate Guaranty 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.
Glynn Acres Acquisition
On July
12, 2022, MHP Pursuits entered into a purchase and sale agreement with Richard and Annette Smith (the “Seller”) for
the purchase of a manufactured housing community located in Brunswick, Georgia, consisting of 21 sites and homes on approximately 2.9 acres
(the “Glynn Acres Property”) for a total purchase price of $1,125,000 (the “Glynn Acres Purchase Agreement”).
The Glynn Acres Purchase Agreement also contains additional covenants, representations, and warranties that are customary of real estate
purchase and sale agreements.
On September
27, 2022, MHP Pursuits assigned its rights and obligations in the Glynn Acres Purchase Agreement (the “Glynn Acres Assignment”)
to the Company’s newly formed wholly owned subsidiaries Glynn Acres MHP LLC, a Georgia limited liability company (“Glynn
Acres MHP”). On October 7, 2022, closing of the Glynn Acres Purchase Agreement was completed and Glynn Acres MHP purchased the
land, land improvement, and buildings.
In connection
with the acquisition, on October 7, 2022, Glynn Acres MHP issued a promissory note to the Seller for a loan in the principal amount of
$900,000 (the “Glynn Acres Note”). The Glynn Acres Note bears interest at 6% per annum for a term of twenty (20) years
of equal installments of principal and interest of $6,447.88 commencing on December 1, 2022, with final payment of all principal and interest
due on November 1, 2042. The Glynn Acres Note provides for an ability to repay in year ten (10) with a penalty of 3% of the principal
and interest balance due at the time of the pre-payment. The pre-payment penalty shall last through the end of year nine (9) of the twenty
(20) year term.
The Glynn
Acres Note is secured by a first priority security interest in the Glynn Acres Property pursuant to a deed to secure debt and security
agreement (the “Glynn Acres Deed”) and an assignment of rents (the “Glynn Acres Assignment of Rents”).
The Glynn
Acres Note contain customary financial and other covenants and events of default for a loan of its type.
The foregoing
summary of the terms and conditions of the Glynn Acres Purchase Agreement, Glynn Acres Assignment, Glynn Acres Note, Glynn Acres Deed,
and Glynn Acres Assignment of Rents 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.