Exhibit 2.1
AGREEMENT OF PURCHASE AND SALE
THIS AGREEMENT OF PURCHASE AND SALE (this “Agreement”) is dated as of August 10, 2023 (the “Effective Date”) between (i) Modiv Inc., a Maryland corporation (“Modiv”), (ii) each entity identified as a Seller on Schedule A attached to this Agreement (each a “Selling Entity” and jointly and severally with Modiv, “Seller”), (iii) Generation Income Properties, L.P., a Delaware limited partnership, or its assigns, and (iv) Generation Income Properties, Inc. (“GIPR” together with Generation Income Properties, L.P., collectively the “Buyer”). Modiv is the sole general partner of, and owns an approximate 71% partnership interest in, Modiv OP. Various limited partners own the remaining approximate 29% partnership interest in Modiv OP.
RECITALS
Buyer desires to purchase the Property from Seller and Seller desires to sell the Property to Buyer, all as more particularly set forth in this Agreement. Subject to the terms and conditions of this Agreement, the closing of the purchase and sale of the Property contemplated herein shall be consummated immediately following the execution of this Agreement by Seller and Buyer. As the context may indicate, references in this Agreement to “Seller” may refer only to the appropriate Selling Entity for a Site. Schedule A attached to this Agreement identifies, for each Site, the Selling Entity, the street address(es), the Allocated Purchase Price, and certain other information relating to such Site. Capitalized terms not defined elsewhere are used with the meaning given in the “Definitions” section below.
AGREEMENT
In consideration of the payments and mutual covenants and undertakings set forth in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Seller and Buyer (each a “Party” and collectively the “Parties”) agree as follows:
SUMMARY OF TERMS
Certain key terms of this Agreement are summarized below, but remain subject to the applicable detailed provisions set forth elsewhere in this Agreement.
Property: Seller’s interest in each Site listed on Schedule A.
Purchase Price: $42,000,000.00, as further described in Section 1.2(a).
Closing Date: The Effective Date.
Escrow Agent: First American Title Insurance Company
18500 Von Karman #600
Irvine, CA 92612
Attn: Brian Serikaku
Phone: 213-814-8620
Email: bmserikaku@firstam.com
Notices Addresses for the Parties:
If to Buyer: Generation Income Properties, L.P.
c/o Generation Income Properties, Inc.
401 East Jackson Street, Suite 3300
Tampa, Florida 33602
Attn: David Sobelman
Phone: (813) 448-1234
Email: ds@gipreit.com
with a copy to: Foley & Lardner LLP
100 North Tampa Street, Suite 2700
Tampa, Florida 33602
Attn: Curt Creely and Joshua Roling
Phone: (813) 225-4122
Email: CCreely@foley.com and JRoling@foley.com
and
Trenam Law
200 Central Avenue, Suite 1600
St. Petersburg, Florida 33701
Attn: Timothy Hughes
Phone: (727) 820-3965
Email: thughes@trenam.com
If to Seller: c/o Modiv Operating Partnership, L.P.
75 McCabe Drive #19626
Reno, NV 89511
Attn: John Raney and Ray Pacini
Email: jraney@modiv.com and rpacini@modiv.com
With a copy to: Morris, Manning & Martin, LLP
1600 Atlanta Financial Center
3343 Peachtree Road NE
Atlanta, Georgia 30326
Attn: Alyson Markovich, Esq.
Phone: 404-504-7648
Email: amarkovich@mmmlaw.com
Attn: Lauren Prevost, Esq.
Phone: 404-504-7744
Email: lprevost@mmmlaw.com
Notice Provisions: See Section 7.1.
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DEFINITIONS
In addition to any other terms defined elsewhere in this Agreement, the following terms, when used in this Agreement with a capital letter, have the meanings set forth below:
“Affiliate” means, with respect to a Person, any other Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with such Person.
“Allocated Purchase Price” means, for each Site, that portion of the total Purchase Price that has been allocated by the Parties to such Site, as set forth on Schedule A to this Agreement, subject to adjustment as expressly set forth in this Agreement.
“Articles Supplementary” has the meaning set forth in Section 3.13 of this Agreement.
“Broker Listing Agreement” means a written agreement entered into between a Selling Entity (or an Affiliate on behalf of such Selling Entity) and a third-party real estate broker providing for such broker to perform sale or leasing activities with respect to the Site(s) specified therein, and specifically excluding any such broker agreement related to the sale contemplated by this Agreement.
“Business Day” means any day other than a Saturday, a Sunday, or a federal holiday recognized by the Federal Reserve Bank of New York.
“Buyer Party” means Buyer, its Affiliates, any Permitted Assignee that takes an assignment of all or a portion of Buyer’s interest in this Agreement, and any of their respective officers, employees, partners, members, agents, attorneys, consultants, contractors, advisors, and other representatives advising in connection with the transactions contemplated by this Agreement, and their respective heirs, successors, personal representatives, and assigns, each being a “Buyer Party” and collectively being the “Buyer Parties.”
“CC&R Documents” means, collectively, any reciprocal easement agreements, access easements, declarations of covenants, condominium declarations and other similar documents, including any related by-laws, affecting any Site.
“Claim Notice” means a written notice delivered by one Party to the other Party setting forth a reasonably detailed description of the specific Claims being asserted, including without limitation detailed statements of (a) the amount of loss or damage being asserted, (b) the rationale for or explanation of why the Claims are alleged to be the responsibility of the Party against whom the Claims are being asserted and (c) the provisions of this Agreement alleged to have been breached or violated by such other Party.
“Claims” means any suits, actions, proceedings, investigations, demands, claims, liabilities, fines, penalties, liens, judgments, losses, injuries, damages, expenses, or costs, including without limitation reasonable and documented attorneys’ and experts’ fees and costs and investigation, remediation costs, or any other damages, losses or costs of any type or kind.
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“Closing” means the consummation of the purchase and sale of the Sites as contemplated by this Agreement.
“Closing Cash Consideration” has the meaning set forth in Section 1.2(a) of this Agreement.
“Closing Date” means the date on which the Closing occurs, as set forth or described as such in the Summary of Terms, as such date may later be changed as expressly provided in this Agreement.
“Closing Year” means the calendar year in which the Closing occurs.
“Closing Documents” means the documents, instruments (including, without limitation, any deeds or assignments), and other agreements executed and delivered by a Party at or in connection with the Closing.
“Code” means the Internal Revenue Code of 1986, as amended, or any corresponding provision(s) of any succeeding law.
“Confidentiality Agreement” means that certain letter agreement by and between GIPR and Modiv, dated as of March 2, 2023.
“Contracts” means all Work Contracts, service contracts, maintenance contracts, site equipment leases, and like contracts and agreements entered into by Seller, in Seller’s possession, relating to the day-to-day operation of the Real Property (including any amendments thereto), but as used in this Agreement the term “Contracts” excludes the Leases, any Broker Listing Agreements, Property Management Agreements, and Related Agreements.
“Control” means, with respect to any Person, the possession, directly or indirectly, of the power to direct the management and policies of such Person, whether through ownership, voting control, by contract or otherwise.
“Diligence Materials” means the documents and other materials and information regarding the Property provided by or on behalf of Seller or any Seller Party to Buyer or any Buyer Party to assist with Buyer’s evaluation and acquisition of the Property, including the Seller Deliveries.
“Environmental Laws” means any Law relating to pollution, protection of human or worker health and safety (as it relates to exposure to Hazardous Materials) or to the use, manufacture, distribution, storage, transport, reporting, disposal or release of, or exposure to, Hazardous Materials.
“Escrow Agent” means the entity specified as such in the Summary of Terms, and any successor thereto.
“Escrow Instructions” means the escrow instructions attached as Exhibit F to, and incorporated as a part of, this Agreement, as amended or otherwise modified from time to time as provided for therein.
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“Existing Leases” means, for each Site, the written lease agreements identified on the rent roll attached to this Agreement as Schedule A-1 (the “Rent Roll”), including any existing written amendments, written supplements, or written guaranties relating thereto.
“Exchange Act” means the Securities Exchange Act of 1934.
“GIPR Bylaws” means the bylaws of GIPR in effect as of the Effective Date.
“GIPR Charter” means the articles of incorporation, as amended, of GIPR in effect as of the Effective Date.
“GIPR Common Stock” means the common stock, par value $0.01 per share, of GIPR.
“GIPR Common Stock Ownership Limitation” means 19.9% of the aggregate number of outstanding shares of GIPR Common Stock.
“GIPR Preferred Stock” means the Series A Non-voting Redeemable Preferred Stock, par value of $0.01 per share, of GIPR.
“Governmental Authority” means any federal, state, county or municipal government or political subdivision; any governmental agency, authority, board, bureau, commission, department, instrumentality, or public body; any court or administrative tribunal; or any Person serving in an official or representative capacity for any of the foregoing.
“Hazardous Materials” means materials, wastes, or substances that are (a) regulated, or classified as “hazardous substances,” “hazardous materials,” “toxic substances,” “toxic pollutants,” “hazardous waste,” or like terms under federal, state or local Environmental Laws; (b) petroleum products (other than as may be present at the Property in the ordinary course of its operation or business and used in accordance with all Environmental Laws); (c) asbestos or asbestos-containing materials; (d) toxic mold in quantities harmful to human health; or (e) polychlorinated biphenyls.
“Improvements” means, for each Site, all buildings, improvements and fixtures (other than fixtures owned (or removable, in accordance with the terms of the applicable Tenant’s Lease) by a Tenant of such Site or any third party) located on the Land for such Site together with all rights of Seller in and to the rights, privileges and appurtenances pertaining thereto.
“Intangible Property” means, collectively for each Site, (i) the rents and other sums due to Seller under the Leases, and (ii) any unapplied Security Deposits, and (iii) only to the extent transferable, all of Seller’s right, title and interest in and to any intangible property owned by its Selling Entity and relating solely and specifically to such Site, including any transferable licenses, warranties and guaranties issued to Seller in connection with the Improvements and the Personal Property, Permits, certificates of occupancy, entitlements, Contracts, all Related Agreements, and all plans and drawings, if any.
“Land” means, for each Site, the fee simple parcel(s) of land described in the Seller Title Policy for such Site, together with all appurtenances, rights, privileges and easements pertaining thereto, but subject to any changes that may have occurred with respect to such parcel(s) or
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appurtenances since the time of Seller’s acquisition thereof (for example, but without limitation, a condemnation removing a portion of such parcel, a replatting, or an easement right being granted or received appurtenant thereto).
“Landlord” means, for any Site at any given point in time, the Person that owns such Site and thus is acting as the landlord or lessor under the Leases for such Site at such point in time.
“Laws” means all applicable federal, state, county or municipal statutes, codes, ordinances, laws, rules or regulations.
“Lease” means any individual Existing Lease or New Lease.
“Leases” means, collectively, all Existing Leases and all New Leases.
“Leasing Costs” means collectively, (i) any payments required under a Lease to be paid by the Landlord to or for the benefit of the applicable Tenant which are in the nature of a tenant inducement, including without limitation capital improvement and base building costs, tenant improvement costs, and any tenant allowances, payments or reimbursements, that the Landlord is required to pay or provide under the terms of a Lease or amendment thereto, including “free rent” periods or other inducements; (ii) any leasing commissions payable by the Landlord in connection with a Lease or any amendment thereto pursuant to a Broker Listing Agreement; and (iii) all costs and expenses incurred by the Landlord in connection with the negotiation, execution and delivery of such Lease, including, without limitation, space planning and design costs, legal and professional fees.
“Modiv OP” means Modiv Operating Partnership, L.P., a Delaware limited partnership.
“New Lease” means any written lease agreements encumbering any Site procured by Seller after the Effective Date in accordance with the terms of this Agreement, including without limitation any such written agreements with new Tenants and any renewal, expansion, or relocation agreements or modifications with existing Tenants on terms other than are expressly granted to the subject Tenant under its Existing Lease, and also including any written amendments, supplements, or guaranties relating to any of the foregoing as and to the extent made in accordance with the terms of this Agreement.
“Obligations Surviving Termination” means those provisions of this Agreement that either expressly require conduct or performance following, or are expressly stated to survive, a termination of this Agreement prior to the Closing.
“Ownership Waiver” has the meaning set forth in Section 5.3(b)(v) of this Agreement.
“Ownership Waiver Certificate” has the meaning set forth in Section 5.3(a)(xiii) of this Agreement.
“Permit” means, collectively, all permits, licenses, approvals and authorizations issued by any Governmental Authority to Seller in connection with any Site.
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“Permitted Assignee” means any Person that directly controls Buyer or is directly controlled by Buyer.
“Person” means any individual, partnership, joint venture, corporation, trust, limited liability company, unincorporated association, or other entity and any government or any department or agency thereof, whether acting in an individual, fiduciary or other capacity.
“Personal Property” means, for each Site, all equipment, machinery, furniture, fittings, apparatus, appliances, furnishings, and other tangible personal property owned by its Selling Entity as of the Effective Date or acquired by its Selling Entity prior to the Closing and located within or upon the Real Property, if any; provided, that for additional clarity the term “Personal Property” expressly excludes the property owned by any Tenant occupying space in the Site and any property owned by any utilities company, property management company, or other third party.
“Property” means, collectively, all right, title and interest of Seller in and to each Site.
“Property Management Agreement” means a written agreement entered into between a Selling Entity and a services provider pursuant to which such services provider performs property management activities for the Selling Entity with respect to the Site(s) specified therein.
“Purchase Price” means the purchase price for the Property specified in the Summary of Terms, subject to adjustment as expressly set forth in this Agreement.
“Real Estate Taxes” means all real estate Taxes and assessments applicable to the Real Property for the applicable period of calculation, including all installments of special Taxes or assessments.
“Real Property” means, for each Site, the Land and the Improvements.
“Registration Rights Agreement” means the registration rights agreement between GIPR and Modiv relating to the registration of the GIPR Preferred Stock comprising the Share Consideration for resale under the Securities Act substantially in the form set forth on Exhibit K hereto.
“Registration Statement” has the meaning set forth in Section 3.14(a).
“Related Agreement” means, for a Site, an agreement, in Seller’s possession, ancillary to the ownership, use or occupancy of such Site that is not recorded but is generally intended to be transferred to a new owner if the ownership of a Site changes, which term is intended to include (for example but not by way of limitation) a telecommunications license or access agreement, a billboard lease, and any other such ancillary agreement to which the Selling Entity may be a direct or successor party, but excluding any Leases, Contracts, Broker Listing Agreements, or Property Management Agreements.
“Restricted Person” means any Person, group, or nation that is (a) named by any Executive Order, the United States Treasury Department, or other Governmental Authority as a terrorist, “Prohibited Person” or “Specially Designated National and Blocked Person;” (b) named as a Person, group, or nation that is banned, blocked, prohibited, or restricted pursuant to any law
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that is enforced or administered by the Office of Foreign Assets Control; or (c) acting in violation of Executive Order No. 13224, the Patriot Act, or any other Laws relating to terrorism or money laundering.
“ROFR” means any right of first offer, right of first refusal or similar preemptive right to purchase with respect to any Site (or portion thereof), which right, if not waived (or deemed waived) by the holder thereof prior to the Closing, would be exercisable in connection with the transaction contemplated under this Agreement.
“Rule 3-14 Audit” shall have the meaning set forth in Section 7.24 of this Agreement.
“SEC” shall mean the United States Securities and Exchange Commission (including the staff thereof).
“Securities Act” means the Securities Act of 1933, as amended.
“Security Deposits” means any and all security deposits, guaranties, letters of credit and other similar credit enhancements providing additional security for any Leases and in Seller’s possession or control or for which Seller is responsible under the Leases.
“Seller Deliveries” means, for each Site, the information and documents contained in the electronic diligence “war room(s)” or website(s) or otherwise made available to the Buyer Parties listed on Schedule B attached to this Agreement as of the Effective Date, to which Buyer and the Buyer Parties have been provided access in connection with this Agreement.
“Seller Party” means Seller, its Affiliates, Seller’s property and asset managers, any lender to Seller, the partners, trustees, shareholders, members, managers, controlling persons, directors, officers, attorneys, employees and agents of each of them, and their respective heirs, successors, personal representatives, and assigns, each being a “Seller Party” and collectively being the “Seller Parties.”
“Seller Title Policy” means the policy of title insurance insuring a Selling Entity’s interest in the related Site, which policy is to be included in the Seller Deliveries applicable to such Site.
“Share Consideration” means 2,400,000 newly issued shares of GIPR Preferred Stock to be issued to Seller or its assigns.
“Site” means all right, title and interest of a Selling Entity in and to the Real Property, Personal Property and Intangible Property owned thereby, and all of such Selling Entity’s right, title and interest in, to and under the related Leases arising from and after the Closing Date.
“Solvent” has the meaning set forth in Section 4.2(r) of this Agreement.
“Survey” means, collectively, any existing survey of the Real Property of a Site that is included in the Seller Deliveries and any new or updated survey of the Real Property of a Site that is obtained by Buyer.
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“Tax” or “Taxes” means any federal, state, local or foreign real property, personal property, sales, use, room, occupancy, ad valorem or similar taxes, assessments, levies, charges or fees imposed by any governmental authority on Seller with respect to each Site (or any portion thereof), including any interest, penalty or fine with respect thereto, but expressly excluding any federal, state, local or foreign income, capital gain, gross receipts, capital stock, franchise, profits, estate, gift or generation skipping tax, transfer, documentary stamp, recording or similar tax, levy, charge or fee incurred with respect to the transactions contemplated herein.
“Tax Return” means any return, declaration, report, claim for refund, information return (including FinCEN Form 114 and any analogous or similar report under applicable Laws), estimate, designation, claim for refund, request for extension of time, schedule, notice, notification, form, election, certificate or other document, statement or information (including any related or supporting information, exhibits, supplements, schedules, notices, elections, certificates, attachments and any amendment thereto) filed, submitted, required to be filed, or submitted to any Governmental Authority in connection with the determination, assessment, collection or payment of any Tax or in connection with the administration, implementation or enforcement of or compliance with any Law relating to any Tax, whether in tangible or electronic form.
“Tenant” means a direct tenant of a portion of a Site under such Tenant’s Lease.
“Title Company” means Escrow Agent when acting or referred to in its capacity as the title insurance provider for this transaction.
“Title Policy” or “Title Policies” mean individually or collectively a 2021 ALTA Owner’s Policy of Title Insurance issued by the Title Company in the amount of the Allocated Purchase Price subject only to the pre-printed standard jacket exceptions and exclusions from coverage contained in such policy and the applicable Permitted Exceptions (as hereinafter defined).
“Trading Day” means any day on which The Nasdaq Stock Market LLC is open for trading.
“Treasury Regulations” means the U.S. Department of the Treasury regulations promulgated under the Code.
“Underlying Shares” means the shares of GIPR Common Stock issuable upon the redemption of the Share Consideration.
“Work Contracts” means each contract or agreement, in Seller’s possession, entered into by a Selling Entity with respect to completion of tenant improvement work or base building work in accordance with a Lease or with respect to completion of other construction and capital improvement projects at a Site, including, without limitation, agreements with architects, engineers and other design professionals.
PURCHASE AND SALE OF THE PROPERTY
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BUYER’S INVESTIGATIONS; AS-IS SALE.
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IF BUYER PURCHASES ANY OF THE PROPERTY, ANY REPORTS, REPAIRS OR WORK REQUIRED OF OR BY BUYER WITH RESPECT THERETO ARE THE SOLE RESPONSIBILITY OF BUYER FROM AND AFTER THE CLOSING, AND BUYER AGREES THAT THERE IS NO OBLIGATION ON THE PART OF SELLER EITHER BEFORE OR AFTER ANY CLOSING TO MAKE ANY CHANGES, ALTERATIONS OR REPAIRS TO ANY OF THE PROPERTY OR, EXCEPT AS SET FORTH IN THIS AGREEMENT OR ANY OTHER APPLICABLE CLOSING DOCUMENT TO CURE ANY VIOLATIONS OF ANY LAWS. FOLLOWING CLOSING AND SATISFACTION OF SELLER’S OBLIGATIONS HEREUNDER, BUYER IS SOLELY RESPONSIBLE FOR OBTAINING THE ISSUANCE OR RE-ISSUANCE OF ANY CERTIFICATE OF OCCUPANCY OR ANY OTHER APPROVAL OR PERMIT NECESSARY FOR TRANSFER OR OCCUPANCY OF ANY OF THE PROPERTY OR ANY PORTION THEREOF AND FOR ANY IMPROVEMENTS, REPAIRS
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OR ALTERATIONS NECESSARY TO OBTAIN THE SAME, ALL AT BUYER’S SOLE COST AND EXPENSE.
ANY INFORMATION PROVIDED OR TO BE PROVIDED WITH RESPECT TO THE PROPERTY IS SOLELY FOR BUYER’S CONVENIENCE AND WAS OR WILL BE OBTAINED FROM A VARIETY OF SOURCES AND SELLER HAS NOT MADE ANY INDEPENDENT INVESTIGATION OR VERIFICATION OF SUCH INFORMATION AND MAKES NO REPRESENTATIONS AS TO THE ACCURACY OR COMPLETENESS OF SUCH INFORMATION. EXCEPT FOR ACTS INVOLVING FRAUD OR INTENTIONAL MISREPRESENTATION BY SELLER, SELLER SHALL NOT BE LIABLE FOR ANY NEGLIGENT MISREPRESENTATION OR ANY FAILURE TO INVESTIGATE THE PROPERTY NOR SHALL SELLER BE BOUND IN ANY MANNER BY ANY VERBAL OR WRITTEN STATEMENTS, REPRESENTATIONS, APPRAISALS, ENVIRONMENTAL ASSESSMENT REPORTS, OR OTHER INFORMATION PERTAINING TO THE PROPERTY OR THE OPERATION THEREOF, FURNISHED BY SELLER OR BY ANY MANAGER, LEASING AGENT, REAL ESTATE BROKER, AGENT, REPRESENTATIVE, AFFILIATE, DIRECTOR, OFFICER, SHAREHOLDER, EMPLOYEE, SERVANT, CONSTITUENT PARTNER OR MEMBER OF SELLER, AFFILIATE OF SELLER, OR OTHER PERSON OR ENTITY ACTING ON SELLER’S BEHALF.
THE PROVISIONS OF THIS SECTION WILL SURVIVE THE CLOSING OR ANY EARLIER TERMINATION OF THIS AGREEMENT.
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SUBJECT TO SELLER’S EXPRESS AGREEMENTS AND THE EXPRESS RIGHTS AND REMEDIES RESERVED TO BUYER IN THIS AGREEMENT, THE WAIVERS, RELEASES, AND OTHER PROVISIONS CONTAINED IN SECTIONS 2.4 AND 2.5 EXTEND TO ALL CLAIMS OF ANY NATURE AND KIND WHATSOEVER, KNOWN OR UNKNOWN, PAST, PRESENT OR FUTURE, SUSPECTED OR NOT SUSPECTED, EXCEPT FOR ACTUAL FRAUD COMMITTED BY SELLER IN CONNECTION WITH A COMPLETED SALE OF ANY SITE TO BUYER. TO THE FULLEST EXTENT PERMISSIBLE BY APPLICABLE LAW, BUYER WAIVES ANY PROVISIONS OF APPLICABLE LAW THAT OTHERWISE MIGHT OPERATE TO LIMIT OR PROHIBIT ANY OF SUCH WAIVERS, RELEASES AND OTHER PROVISIONS. THE PROVISIONS OF THIS SECTION WILL SURVIVE THE CLOSING OR ANY EARLIER TERMINATION OF THIS AGREEMENT.
COVENANTS
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REPRESENTATIONS AND WARRANTIES
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For purposes of this Agreement and any Closing Documents, whenever the phrases “to the best of Seller’s knowledge”, or the “knowledge” of Seller or words of similar import are used, they shall be deemed to refer to the current, actual, conscious knowledge only, and not any implied, imputed or constructive knowledge of Ray Pacini, the Chief Financial Officer of Modiv, Inc., the general partner of the sole member of each Selling Entity (the “Seller Knowledge Party”), who Seller represents has sufficient knowledge about the Properties in connection with the making of the foregoing representations. Notwithstanding the foregoing, the Seller Knowledge Party shall have no duty to inquire about such knowledge matters. Such individual(s) will have no personal liability under this Agreement or otherwise with respect to the Property.
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For purposes of this Agreement and any Closing Documents, whenever the phrases “to the best of Buyer’s knowledge”, the “knowledge” of Buyer or the “actual knowledge” of Buyer or words of similar import are used, they shall be deemed to refer to the current, actual, conscious knowledge only, and not any implied, imputed or constructive knowledge of David Sobelman, the Chief Executive Officer and President of Buyer, Allison Davies, the Chief Financial Officer of Buyer, or Emily Hewland, the Director of Capital Markets of Buyer (the “Buyer Knowledge Parties”), who Buyer represents have sufficient knowledge in connection with the making of the foregoing representations. Notwithstanding the foregoing, the Buyer Knowledge Parties shall have no duty to inquire about such knowledge matters. Such individuals will have no personal liability under this Agreement or otherwise with respect to the Property.
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CLOSING, DELIVERIES AND PRORATIONS
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Once the registration statement relating to the registration of the GIPR Preferred Stock comprising the Share Consideration for resale is declared effective by the SEC pursuant to the terms of the Registration Rights Agreement, or, in the opinion of securities counsel to GIPR, the GIPR Preferred Stock may be sold pursuant to Rule 144 under the Securities Act without volume or manner-of-sale restrictions and without the requirement for GIPR to be in compliance with the current public information requirements pursuant to Rule 144, GIPR agrees to cooperate with Seller, Seller’s counsel and any permitted transferee to remove the restrictive legends relating to the GIPR Preferred Stock, including but not limited to providing any legal opinion that may be required by the transfer agent for the GIPR Preferred Stock.
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DEFAULT; REMEDIES
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MISCELLANEOUS
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RP |
| DES |
Seller Initials |
| Buyer Initials |
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A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.
The Subject Provisions are material and included as a material portion of the consideration given to Seller by Buyer in exchange for Seller's performance under this Agreement. Seller has given Buyer material concessions regarding this transaction in exchange for Buyer agreeing to the Subject Provisions. The Subject Provisions, including without limitation the release contained therein, shall survive the Closing and the delivery and recording of the Deed in perpetuity. Buyer has initialed this Section below to further indicate Buyer’s awareness and acceptance of each and every provision of the Subject Provisions. Notwithstanding the foregoing, the release provided for in this Section 7.23(c)(i) shall be effective as of the Closing only, and shall not be deemed to release Seller from (i) its actual fraud (ii) any of Seller’s covenants, representations and warranties set forth in this Agreement or in the documents and instruments delivered by Seller at the Closing which by their terms expressly survive the Closing or (iii) third party contractual claims relating solely to the period of time prior to the Closing and any claim for personal injury or property damage directly caused by Seller or any Affiliate or agent thereof arising prior to the Closing.
_________DES_______________
Buyer's Initials
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________DES______________
Buyer’s Initials
_______DES_______________
Buyer’s Initials
THE AMOUNT PAID TO AND RETAINED BY SELLER AS LIQUIDATED DAMAGES PURSUANT TO THE FOREGOING PROVISIONS SHALL BE SELLER’S SOLE AND EXCLUSIVE REMEDY IF BUYER FAILS TO CLOSE THE PURCHASE OF THE PROPERTY. THE PARTIES HERETO EXPRESSLY AGREE AND ACKNOWLEDGE THAT SELLER’S ACTUAL DAMAGES IN THE EVENT OF A DEFAULT BY BUYER WOULD BE EXTREMELY DIFFICULT OR IMPRACTICABLE TO ASCERTAIN AND THAT THE AMOUNT OF THE DEPOSIT REPRESENTS THE PARTIES’ REASONABLE ESTIMATE OF SUCH DAMAGES. THE PAYMENT OF SUCH AMOUNT AS LIQUIDATED DAMAGES IS NOT INTENDED AS A FORFEITURE OR PENALTY WITHIN THE MEANING OF CALIFORNIA CIVIL CODE SECTIONS 3275 OR 3369, BUT IS INTENDED TO CONSTITUTE LIQUIDATED DAMAGES TO SELLER PURSUANT TO CALIFORNIA CIVIL CODE SECTIONS 1671, 1676 AND 1677. NOTWITHSTANDING ANYTHING TO
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THE CONTRARY CONTAINED IN THIS SECTION 6.2, SELLER AND BUYER AGREE THAT THIS LIQUIDATED DAMAGES PROVISION IS NOT INTENDED AND SHOULD NOT BE DEEMED OR CONSTRUED TO LIMIT IN ANY WAY BUYER’S INDEMNITY OBLIGATIONS UNDER THIS AGREEMENT.
| RP DES |
| Seller’s Initials Buyer’s Initials |
Subject to the provisions of this Section, Buyer may, by written notice given to Seller not less than fifteen (15) Business Days prior to the subject Closing, assign Buyer’s right to receive the conveyance of any Site or Sites under this Agreement to one or more Permitted Assignees. Buyer’s rights and obligations under this Agreement are not otherwise transferable, assignable or delegable, directly or indirectly, without the prior written consent of Seller, which consent may be given or withheld in Seller’s sole and absolute discretion. Any transfer, assignment or delegation (to a Permitted Assignee or otherwise) must be made pursuant to a written agreement meeting the requirements of this Section, which agreement will include (without limitation) provisions stating that (a) the transfer, assignment or delegation does not release, diminish or otherwise affect the obligations of the original Buyer under this Agreement, including the original Buyer’s obligations to pay the Purchase Price at Closing and to indemnify Seller and the other Seller Parties in accordance with the terms hereof; and (b) the Permitted Assignee (or other approved transferee, assignee or delegee) expressly agrees for the benefit of Seller and the Seller Parties that (i) such Person is assuming all obligations of the original Buyer under this Agreement, other than obligations relating solely to any Site(s) not being acquired by such Person (if any); and (ii) the conveyance of the Site or Sites to such Person will be subject to all of the terms, provisions, conditions and limitations set forth in this Agreement to the same extent as if such Person was the original Buyer executing this Agreement. Notwithstanding anything contained in this Agreement to the contrary, Seller agrees that Buyer is entering into this Agreement with respect to those Sites located in the Commonwealth of Pennsylvania for the benefit of a certain to-be-named nominee (which nominee shall be an affiliate of Buyer), and that at the Closing, Buyer intends to assign to such nominee, for no additional consideration, all of its right, title and interest in this Agreement related to such Sites located in Pennsylvania and Buyer has no intent to obtain legal or equitable title to such Sites. The nominee shall be formed and disclosed to the Seller prior to Closing and will purchase the applicable Sites solely from its own funds. To the extent any transfer tax or similar tax is owed in connection with the assignment of this Agreement to such nominee, such tax shall be the sole at the sole cost and expense of Buyer. In such instance, Buyer shall have the right to partially assign this Agreement without Seller’s prior written consent. Upon such assignment of this Agreement to said nominee and the assumption by said nominee of Buyer’s obligations hereunder with respect to the Sites located in Pennsylvania, (i) Buyer shall be released and have no liability under this Agreement, and (ii) the term “Buyer” as used in this Agreement will be deemed to be said nominee. Subject to the limitations described herein, this Agreement will inure to the benefit of and be binding upon the Parties and their respective successors and assigns.
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The Seller understands and acknowledges that GIPR will be required to file audited financial statements accompanied by pro forma financial statements presented in accordance with Article 11 of Regulation S-X under the Securities Act (“Pro Formas”) related to each acquired Site the (collectively, the “Rule 3-14 Audit”) with the SEC on the earlier of (i) the filing of a registration statement under the Securities Act pursuant to this Agreement, the Articles Supplementary or the Registration Rights Agreement and (ii) a date within seventy-one (71) days of the date a current report on Form 8-K for the Closing is filed with the SEC (the “Rule 3-14 Audit”). Seller shall promptly provide GIPR with all Records (as hereinafter defined) as reasonably requested by GIPR in order to permit GIPR to prepare and timely file (i) the Rule 3-14 Audit and (ii) any registration statement contemplated by this Agreement (including the Registration Statement), the Articles Supplementary or the Registration Rights Agreement. Seller agrees to use commercially reasonable and good faith efforts to provide such Records at least thirty (30) days prior to the filing deadline for the respective Rule 3-14 Audit; provided, that if any request is made within the foregoing thirty (30) day period, Seller shall use commercially reasonable and good faith efforts to promptly provide the applicable Records within three (3) Business Days of such request. As used in this Section 7.24, “Records” shall mean the financial statements, including balance sheets, income statements, stockholders’ equity statements and cash flow statements and related notes prepared in accordance with United States generally accepted accounting standards, and any and all books, records, correspondence, financial data, bank statements, Leases, delinquency reports and all other documents and matters in the possession of each such Selling Entity or its agents and relating to receipts, expenditures, contributions and distributions reasonably necessary to complete (i) an audit pertaining to such Selling Entity’s Site for the most recent full calendar year and the interim period of the current calendar year and (ii) Pro Formas pertaining to such Selling Entity’s Site for the most recent full calendar year and the interim period of the current calendar year.
[SIGNATURES COMMENCE ON THE NEXT PAGE]
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IN WITNESS WHEREOF, Buyer and Seller have caused this Agreement to be executed and delivered by their duly authorized representatives as of the Effective Date written above.
BUYER: |
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Generation Income Properties, L.P., By: Generation Income Properties, Inc., its Sole General Partner |
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By: | /s/ David Sobelman | |
Name: | David Sobelman | |
Title: | Chief Executive Officer |
Generation Income Properties, Inc.,
a Maryland corporation
By: | /s/ David Sobelman |
Name: | David Sobelman |
Title: | Chief Executive Officer |
[SIGNATURES CONTINUE ON THE NEXT PAGE]
[BUYER SIGNATURE PAGE]
IN WITNESS WHEREOF, Buyer and Seller have caused this Agreement to be executed and delivered by their duly authorized representatives as of the Effective Date written above.
SELLER:
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ALL THE ENTITIES LISTED ON THE BALANCE OF THIS PAGE AND THE FOLLOWING PAGE, each, a California or Nevada limited liability company | ||
By | _Modiv Inc.,_______________________________ | |
| By: | /s/ Raymond Pacini |
| Name: | Raymond J. Pacini |
| Its: | Chief Financial Officer |
ALL THE SELLING ENTITIES LISTED BELOW, each a California or Nevada limited liability company
RU WAG Santa Maria, LLC
RU DG Big Spring, LLC
RU DT Morrow GA, LLC
RU Pre K San Antonio, LLC
RU DG Bakersfield, LLC
RU Exp Maitland FL, LLC
RU DG OHPAME6, LLC
By: Modiv Operating Partnership, LP,
a Delaware limited partnership,
its sole member
By: Modiv Inc.,
A Maryland corporation,
its general partner
By: /s/ Raymond Pacini
Name: Raymond J. Pacini
Its: Chief Financial Officer
[SELLER SIGNATURE PAGE]
ESCROW AGENT’S ACCEPTANCE
The foregoing fully executed Agreement is accepted by the undersigned as the “Escrow Agent” under this Agreement this 10th day of August, 2023. Escrow Agent accepts the engagement to handle the escrow established by this Agreement in accordance with the terms set forth in this Agreement.
FIRST AMERICAN TITLE INSURANCE COMPANY | |
By: | /s/ Brian Serikaku |
Name: | Brian M. Serikaku |
Title: | Escrow Officer |