Exhibit 10.2
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this “Agreement”) is made and entered into as of August 10th, 2023, by and between Generation Income Properties, Inc., a Maryland corporation (the “Company”), and Modiv Inc., a Maryland corporation (“Modiv”).
This Agreement is made pursuant to the Agreement of Purchase and Sale, dated as of August __, 2023, between (i) Modiv, (ii) each entity identified as a Seller on Schedule A thereto, (iii) Generation Income Properties, L.P., a Delaware limited partnership, or its assigns, and (iv) the Company (the “Purchase Agreement”), pursuant to which the Company has agreed, upon the terms and subject to the conditions of the Purchase Agreement, to issue and sell to Modiv at the Closing (as defined in the Purchase Agreement) an aggregate of 2,400,000 shares (the “Preferred Shares”) of a newly created series of preferred stock, (the “Preferred Stock”), designated as Series A Redeemable Preferred Stock, which shall initially be redeemable for a minimum of 2,200,000 shares and a maximum of 3,000,000 shares of the Company’s common stock, par value $0.01 per share (the “Common Stock,” the shares of Common Stock issuable upon redemption of the Preferred Shares referred to as the “Redemption Shares”), in accordance with the terms of the Company’s Articles Supplementary establishing and designating the terms of the Series A Redeemable Preferred Stock (as the same may be amended, restated, modified or supplemented and in effect from time to time, the “Articles Supplementary”).
The Company and Modiv hereby agree as follows:
Capitalized terms used and not otherwise defined herein that are defined in the Purchase Agreement shall have the meanings given such terms in the Purchase Agreement. As used in this Agreement, the following terms shall have the following meanings:
“Advice” shall have the meaning set forth in Section 7(b).
“Demand Registration” shall have the meaning set forth in Section 2(a).
“Filing Date” means the date of the filing of a Registration Statement pursuant to this Agreement, which shall be not more than 30 days after the Company’s receipt of the Demand Registration, unless extended pursuant to Section 2(b).
“Losses” shall have the meaning set forth in Section 6(a).
“Plan of Distribution” shall have the meaning set forth in Section 2(a).
“Prospectus” means the prospectus included in a Registration Statement (including, without limitation, a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated by the SEC pursuant to the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by a Registration Statement, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus.
“Registrable Securities” means (a) such Preferred Shares that are issued and outstanding after March 15, 2024 and (b) any securities issued or then issuable upon any stock split, dividend or other distribution, recapitalization or similar event with respect to the foregoing; provided, however,
that any such Registrable Securities shall cease to be Registrable Securities (and the Company shall not be required to maintain the effectiveness of any, or file another, Registration Statement hereunder with respect thereto) when (i) a Registration Statement with respect to the sale of such Registrable Securities is declared effective by the SEC under the Securities Act and such Registrable Securities have been disposed of by Modiv in accordance with such effective Registration Statement, (ii) such securities shall have been otherwise transferred, new certificates or book entry provisions for such securities not bearing a legend restricting further transfer shall have been delivered by the Company and subsequent public distribution of such securities shall not require registration under the Securities Act; (iii) such securities shall have ceased to be outstanding; (iv) such securities may be sold without registration pursuant to Rule 144 promulgated under the Securities Act (or any successor rule promulgated thereafter by the SEC) without limitation as to volume and manner of sale or public information requirements, or (v) such Registrable Securities have been previously sold in a transaction in which the purchaser or transferee does not execute a counterpart to this Agreement pursuant to Section 7(e).
“Registration Statement” means any registration statement required to be filed hereunder pursuant to Section 2(a) and any additional registration statements contemplated by Section 2(c), including (in each case) the Prospectus, amendments and supplements to any such registration statement or Prospectus, including pre- and post-effective amendments, all exhibits thereto, and all material incorporated by reference or deemed to be incorporated by reference in any such registration statement.
“Rule 415” means Rule 415 promulgated by the SEC pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the SEC having substantially the same purpose and effect as such Rule.
“Rule 424” means Rule 424 promulgated by the SEC pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the SEC having substantially the same purpose and effect as such Rule.
“SEC Guidance” means (i) any publicly-available written or oral guidance of the SEC staff, or any comments, requirements or requests of the SEC staff and (ii) the Securities Act.
“Selling Stockholder Questionnaire” shall have the meaning set forth in Section 4(a).
2
In connection with the Company’s registration obligations hereunder, the Company shall:
3
4
5
6
7
The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 6(d) were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the immediately preceding paragraph. The indemnity and contribution agreements contained in this Section are in addition to any liability that the indemnifying parties may have to the indemnified parties.
8
********************
(Signature Pages Follow)
9
IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first written above.
GENERATION INCOME PROPERTIES, Inc.
|
By:_/s/ David Sobelman___________________________ Name: David E. Sobelman Title: Chief Executive Officer
|
MODIV Inc.
|
By: /s/ Raymond Pacini Name: Raymond J. Pacini Title: Chief Financial Officer
|
Annex A
PLAN OF DISTRIBUTION
Each Selling Stockholder (the “Selling Stockholders”) of the securities and any of their pledgees, assignees and successors-in-interest may, from time to time, sell any or all of their securities covered hereby on The Nasdaq Capital Market or any other stock exchange, market or trading facility on which the securities are traded or in private transactions. These sales may be at fixed or negotiated prices. A Selling Stockholder may use any one or more of the following methods when selling securities:
A Selling Stockholder which is an entity may elect to make a pro rata in-kind distribution of its securities to its respective members, partners or stockholders. To the extent that such members, partners, or stockholders are not affiliates of ours, such members, partners, or stockholders would thereby receive freely tradeable securities pursuant to the distribution through a registration statement.
The Selling Stockholders may also sell securities under Rule 144 or any other exemption from registration under the Securities Act of 1933, as amended (the “Securities Act”), if available, rather than under this prospectus.
Broker‑dealers engaged by the Selling Stockholders may arrange for other brokers‑dealers to participate in sales. Broker‑dealers may receive commissions or discounts from the Selling Stockholders (or, if any broker‑dealer acts as agent for the purchaser of securities, from the purchaser) in amounts to be negotiated, but, except as set forth in a supplement to this Prospectus, in the case of an agency transaction not in excess of a customary brokerage commission in compliance with FINRA Rule 2121; and in the case of a principal transaction a markup or markdown in compliance with FINRA Rule 2121.
In connection with the sale of the securities or interests therein, the Selling Stockholders may enter into hedging transactions with broker-dealers or other financial institutions, which may in turn engage in short sales of the securities in the course of hedging the positions they assume. The Selling Stockholders may also sell securities short and deliver these securities to close out their short positions, or loan or pledge the securities to broker-dealers that in turn may sell these securities. The Selling Stockholders may also enter into option or other transactions with broker-dealers or other financial institutions or create one or more derivative securities which require the delivery to such broker-dealer or other financial institution of securities offered by this prospectus, which securities such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).
The Selling Stockholders and any broker-dealers or agents that are involved in selling the securities may be deemed to be “underwriters” within the meaning of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the securities purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. Each Selling Stockholder has informed the Company that it does not have any written or oral agreement or understanding, directly or indirectly, with any person to distribute the securities.
The Company is required to pay certain fees and expenses incurred by the Company incident to the registration of the securities. The Company has agreed to indemnify the Selling Stockholders against certain losses, claims, damages and liabilities, including liabilities under the Securities Act.
We agreed to keep this prospectus effective until the earlier of (i) all of the securities have been sold pursuant to this prospectus or in a transaction in which the applicable registration rights of the Selling Stockholders are not assigned pursuant to the Registration Rights Agreement between the Company and Modiv Inc., (ii) such securities shall have been otherwise transferred, new certificates or book entry provisions for such securities not bearing a legend restricting further transfer shall have been delivered by the Company and subsequent public distribution of such securities shall not require registration under the Securities Act; (iii) such securities shall have ceased to be outstanding; or (iv) such securities may be sold without registration pursuant to Rule 144 promulgated under the Securities Act (or any successor rule promulgated thereafter by the SEC) without limitation as to volume and manner of sale or public information requirements. The resale securities will be sold only through registered or licensed brokers or dealers if required under applicable state securities laws. In addition, in certain states, the resale securities covered hereby may not be sold unless they have been registered or qualified for sale in the applicable state or an exemption from the registration or qualification requirement is available and is complied with.
Under applicable rules and regulations under the Exchange Act, any person engaged in the distribution of the resale securities may not simultaneously engage in market making activities with respect to such securities for the applicable restricted period, as defined in Regulation M, prior to the commencement of the distribution. In addition, the Selling Stockholders will be subject to applicable provisions of the Exchange Act and the rules and regulations thereunder, including Regulation M, which may limit the timing of purchases and sales of securities by the Selling Stockholders or any other person. We will make copies of this prospectus available to the Selling Stockholders and have informed them of the need to deliver a copy of this prospectus to each purchaser at or prior to the time of the sale (including by compliance with Rule 172 under the Securities Act).
2
Annex B
SELLING STOCKHOLDERS
We are registering the shares of our Series A Preferred Stock for resale by the selling stockholder listed below. On August [__], 2023, we issued to the selling stockholder 2,400,000 shares of Series A Preferred Stock as partial consideration for the sale by the selling stockholder of a portfolio of 13 properties (the “Portfolio Acquisition”), pursuant to an agreement of purchase and sale (the “Purchase Agreement”) entered into by and among us, our operating partnership, the selling stockholder and each entity identified as a “Seller” on Schedule A of the Purchase Agreement. The issuance of the shares of Series A Preferred Stock was made in reliance on the exemption from registration in Section 4(a)(2) of the Securities Act and Regulation D thereunder. In accordance with our obligations under the Purchase Agreement and the Registration Rights Agreement entered into between us and the selling stockholder, we agreed to register the resale of the Series A Preferred Stock offered by the selling stockholder hereby. Copies of the Purchase Agreement and the amendments thereto are attached as exhibits to our [Current Report on Form 8-K filed on [__________], 2023].
The selling stockholder does not currently hold, and has not held within the past three years, any position or office with us or any of our predecessors or affiliates, nor does the selling stockholder currently have, and has not had within the past three years, any other material relationship with us or any of our predecessors or affiliates except as a result of the selling stockholder’s ownership of our Series A Preferred Stock in connection with the Portfolio Acquisition.
The information contained in the table below in respect of the selling stockholder has been obtained from the selling stockholder and has not been independently verified by us. The information set forth in the following table regarding the beneficial ownership after resale of shares is based upon the assumption that the selling stockholder will sell all of the shares owned by it and covered by this prospectus supplement and the accompanying prospectus.
| Number of shares of Preferred Stock Owned Prior to Offering | Maximum Number of shares of Preferred Stock to be Sold Pursuant to this Prospectus | Number of shares of Preferred Stock Owned After Offering |
Modiv Inc. | [2,400,000] | [2,400,000](1) | 0 |
2
Annex C
Generation income properties, Inc.
Selling Stockholder Notice and Questionnaire
The undersigned beneficial owner of Series A preferred stock (the “Registrable Securities”) of Generation Income Properties, Inc., a Maryland corporation (the “Company”), understands that the Company intends to file with the Securities and Exchange Commission (the “Commission”) a registration statement (the “Registration Statement”) for the registration and resale under Rule 415 of the Securities Act of 1933, as amended (the “Securities Act”), of the Registrable Securities, in accordance with the terms of the Registration Rights Agreement (the “Registration Rights Agreement”) to which this document is annexed. A copy of the Registration Rights Agreement is available from the Company upon request at the address set forth below. All capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Registration Rights Agreement.
Certain legal consequences arise from being named as a selling stockholder in the Registration Statement and the related prospectus. Accordingly, holders and beneficial owners of Registrable Securities are advised to consult their own securities law counsel regarding the consequences of being named or not being named as a selling stockholder in the Registration Statement and the related prospectus.
NOTICE
The undersigned beneficial owner (the “Selling Stockholder”) of Registrable Securities hereby elects to include the Registrable Securities owned by it in the Registration Statement.
The undersigned hereby provides the following information to the Company and represents and warrants that such information is accurate:
QUESTIONNAIRE
|
|
|
|
|
|
|
|
|
Telephone: |
Email: |
Contact Person: |
Yes No
2
Yes No
Note: If “no” to Section 3(b), the Commission’s staff has indicated that you should be identified as an underwriter in the Registration Statement.
Yes No
Yes No
Note: If “no” to Section 3(d), the Commission’s staff has indicated that you should be identified as an underwriter in the Registration Statement.
Except as set forth below in this Item 4, the undersigned is not the beneficial or registered owner of any securities of the Company.
|
|
|
Except as set forth below, neither the undersigned nor any of its affiliates, officers, directors or principal equity holders (owners of 5% of more of the equity securities of the undersigned) has held any position or office or has had any other material relationship with the Company (or its predecessors or affiliates) during the past three years.
State any exceptions here:
|
|
|
3
The undersigned agrees to promptly notify the Company of any material inaccuracies or changes in the information provided herein that may occur subsequent to the date hereof at any time while the Registration Statement remains effective; provided, that the undersigned shall not be required to notify the Company of any changes to the number of securities held or owned by the undersigned or its affiliates.
By signing below, the undersigned consents to the disclosure of the information contained herein in its answers to Items 1 through 5 and the inclusion of such information in the Registration Statement and the related prospectus and any amendments or supplements thereto. The undersigned understands that such information will be relied upon by the Company in connection with the preparation or amendment of the Registration Statement and the related prospectus and any amendments or supplements thereto.
IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this Notice and Questionnaire to be executed and delivered either in person or by its duly authorized agent.
Date: Beneficial Owner:
By:
Name:
Title:
PLEASE EMAIL A .PDF COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE TO:
4