Item 1.01 Entry into a Material Definitive Agreement.
Warrenville Signing and Closing
On November 11, 2021, MHP Pursuits LLC, a North
Carolina limited liability company (“MHP Pursuits”) and wholly owned subsidiary of Manufactured Housing Properties
Inc. (the “Company”), entered into a purchase and sale agreement (the “Purchase Agreement”) with
R&S Properties, LLC and Piney Heights LLC for the purchase of two manufactured housing communities located in Warrenville, South Carolina
consisting of 85 lots and 61 homes on approximately 45 acres (the “Property”) for a total purchase price of $3,050,000.
On March 9, 2022, the Purchase Agreement was amended to extend the closing date to March 31, 2022.
On March 31, 2022, MHP Pursuits assigned its rights
and obligations in the Purchase Agreement to (a) the Company’s newly formed wholly owned subsidiary Warrenville MHP LLC, a South
Carolina limited liability company (“Warrenville MHP”); and to (b) Gvest Warrenville Homes LLC, a Delaware limited
liability company (“Gvest Warrenville”), which is a wholly owned subsidiary of the Company’s variable interest
entity Gvest Finance LLC, pursuant to an assignment of purchase and sale agreement (the “Assignment”). On March 31,
2022, closing of the Purchase Agreement was completed and Warrenville MHP purchased the land and land improvements, and Gvest Warrenville
purchased the buildings. The Purchase Agreement also contains additional covenants, representations, and warranties that are customary
of real estate purchase and sale agreements.
In connection with the closing of the Property,
on March 31, 2022, Warrenville MHP and Gvest Warrenville entered into a loan agreement with Vanderbilt Mortgage and Finance Inc. for a
loan in the principal amount of $2,440,000 (the “Loan Agreement”) and Warrenville MHP and Gvest Warrenville issued
a promissory note to the lender for the same amount (the “Note”).
Interest on the disbursed and unpaid principal
balance accrues from the date funds are first disbursed at a rate of 5.59% per annum and is calculated on the basis of a 360-day year
and the actual number of calendar days elapsed. Monthly payments began on April 10, 2022 and are interest only for the first thirty-six
months. The outstanding principal balance begins amortizing on March 10, 2025 through the maturity date of March 10, 2027. Warrenville
MHP may prepay the Note in part or in full at any time if it pays a prepayment premium calculated in accordance with the Loan Agreement.
The Note is secured by a first priority security
interest in the Property pursuant to a mortgage, assignment of leases and rents, security agreement, and fixture filing (the “Mortgage”),
a security agreement and assignment of rents (the “Security Agreement”), as well as collateral assignment of the Company’s
ownership interests in Warrenville MHP (the “Ownership Assignment”). The Note is guaranteed by Raymond M. Gee, the
Company’s Chief Executive Officer.
The Loan Agreement and Note contain 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 Purchase Agreement, the Assignment, the Loan Agreement, the Note, the Mortgage, the Security Agreement, and the 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.