GIPR Generation Income Properties Inc

 

A

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 10, 2023

 

GENERATION INCOME PROPERTIES, INC.

(Exact Name of Registrant as Specified in its Charter)

 

 

Maryland		001-40771		47-4427295
(State or Other Jurisdiction of Incorporation)		(Commission File Number)		(IRS Employer Identification No.)
		401 East Jackson Street, Suite 3300 Tampa, Florida		33602
		(Address of Principal Executive Offices)		(Zip Code)

Registrant’s telephone number, including area code: (813)-448-1234

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.01 per share		GIPR		The Nasdaq Stock Market LLC
Warrants to purchase Common Stock		GIPRW		The Nasdaq Stock Market LLC

 

 

 

 

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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

 

 

 

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Item 1.01. Entry into a Material Definitive Agreement.

Overview

On August 10, 2023, Generation Income Properties, Inc. (the “Company”) and its operating partnership, Generation Income Properties, L.P. (“GIP Operating Partnership”), entered into an Agreement of Purchase and Sale (the “Purchase Agreement”) with Modiv Inc. and certain affiliates thereof (collectively, “Modiv”), pursuant to which GIP Operating Partnership purchased from Modiv a portfolio of 13 net leased properties (the “Portfolio”). The Portfolio consists of eleven (11) retail properties and two (2) office properties. The properties comprising the Portfolio are located across seven states and aggregate approximately 200,000 rentable square feet.

The purchase price paid for the Portfolio was $42 million, excluding estimated transaction costs and expenses of $1.6 million and subject to prorations and credits as set forth in the Purchase Agreement. An amount equal to $30 million of the Purchase Price was paid in cash and $12 million was paid in shares of a newly issued series of preferred stock of the Company designated as “Series A Redeemable Preferred Stock” having the rights, preferences, and redemption provisions set forth below (the “Series A Preferred Stock”). The cash portion of the purchase price was financed with a combination of (i) cash on hand, (ii) a new $21.0 million secured debt facility from Valley National Bank (“Valley”), and (iii) a $12.0 million preferred equity investment by LC2-NNN Pref, LLC, a Florida limited liability company and affiliate of Loci Capital Partners (“LC2”). The investment by LC2 was made into a special purpose subsidiary of GIP Operating Partnership named GIP VB SPE, LLC, a Delaware limited liability company (“GIP SPE”), and each of the properties in the Portfolio was transferred in a separate newly formed special purpose subsidiary of GIP SPE. As a result of the foregoing transactions, GIP SPE serves as a holding company for the various indirect subsidiaries of the Company that hold the properties included in the Portfolio plus the eight previously owned properties held by GIP that were already financed through loans with Valley.

The acquisition of the Portfolio (the “Portfolio Acquisition”), as well as the loan with Valley and the financing transaction with LC2, all closed on August 10, 2023.

For purposes of this Current Report on Form 8-K, the Company, the GIP Operating Partnership, and their direct and indirect subsidiaries are sometimes referred to as “GIP.”

Purchase and Sale Agreement

In addition to customary terms relating to the purchase and sale of a portfolio of commercial properties, the material terms of the Purchase Agreement include (i) an agreement by Modiv to distribute the shares of common stock of the Company (the “Common Stock”) issuable upon the potential redemption by the Company of the Series A Preferred Stock to Modiv’s shareholders and/or the holders of units of Modiv’s operating partnership (“Modiv OP Unit Holders”), subject to Modiv receiving the approval of its lenders to make such distribution and subject to the redemption conditions described below, (ii) an agreement by Modiv that it will promptly distribute or sell shares of Common Stock owned by it following such a redemption if Modiv’s ownership of Common Stock (together with any other persons or entities whose beneficial ownership of shares of Common Stock would be aggregated with Modiv’s for purposes of Section 13(d) of the Exchange Act of 1934, as amended) exceeds 19.9% of the aggregate number of outstanding shares of Common Stock, and (iii) an agreement by the Company to prepare and file with the U.S. Securities and Exchange Commission (the “SEC”) a registration statement to register the distribution by Modiv to its shareholders and to Modiv OP Unit Holders and/or the resale of the shares of Common Stock issuable upon redemption of the Series A Preferred Stock. The Purchase Agreement provides for an as-is/where-is purchase and sale with certain waivers, releases and covenants not to sue Seller and also contains additional covenants, representations and warranties, indemnifications, and other provisions that are generally customary for real estate purchase and sale agreements. In addition, pursuant to the Purchase Agreement, the Company granted a waiver to Modiv from the ownership limitation set forth in the Company’s charter with respect to Modiv’s ownership of the Series A Preferred Stock and the Common Stock, if any, issuable upon redemption of the Series A Preferred Stock.

The foregoing description of the Purchase Agreement is summary in nature, does not purport to be complete, and is qualified in its entirety by reference to the full text of the Purchase Agreement, a copy of which is filed as Exhibit 2.1 hereto and is incorporated by reference herein.

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Registration Rights Agreement

Pursuant to the Purchase and Sale Agreement, the Company and Modiv entered into a Registration Rights Agreement, dated August 10, 2023 (the “RRA”), with respect to the Series A Preferred Stock. The RRA provides that Modiv will have the right to cause the Company to file a registration statement with the SEC registering the resale of shares of Series A Preferred Stock held by Modiv or its assigns on a delayed or continuous basis if such shares are not redeemed by the Company on or before March 15, 2024. The RRA also provides that, commencing March 16, 2024 until March 16, 2025, if requested by Modiv, the Company will use its commercially reasonable efforts to cause the Series A Preferred Stock to be listed on each securities exchange on which the Common Stock is then listed or, if the Common Stock is not then listed, on a national securities exchange selected by Modiv, provided that the Series A Preferred Stock meets the listing requirements of any such securities exchange.

The foregoing description of the RRA is summary in nature, does not purport to be complete, and is qualified in its entirety by reference to the full text of the RRA, a copy of which is filed as Exhibit 10.2 hereto and is incorporated by reference herein.

LC2 Investment

In connection with the preferred equity investment by LC2, on August 10, 2023, GIP Operating Partnership and LC2 entered into an Amended and Restated Limited Liability Company Agreement for GIP SPE (the “GIP SPE Operating Agreement”). In connection with such investment, GIP Operating Partnership also entered into an Agreement Providing Representations and Warranties, dated August 10, 2023, with LC2 pursuant to which GIP Operating Partnership made certain representations and warranties to LC2 in connection with LC2’s preferred investment (the “Rep and Warranty Agreement”).

Under the GIP SPE Operating Agreement, LC2 made a $12.0 million initial capital contribution to GIP SPE, together with a commitment to make an additional $2.1 million contribution upon the satisfactory completion of the acquisition of a tenant-in-common interest held by a third party in GIP’s Rockford, Illinois property (the “LC2 Investment). LC2 made the investment in exchange for a preferred equity interest in GIP SPE (the “Preferred Interest”). The Preferred Interest has a cumulative accruing distribution preference of 15.5% per year, compounded monthly (the “Preferred Return”), a portion of which in the amount of 5% per annum (compounded monthly) is deemed to be the “Current Preferred Return”, and the remainder of which in the amount of 10.5% per annum (compounded monthly) is deemed to be the “Accrued Preferred Return.”

The GIP SPE Operating Agreement provides that operating distributions by GIP SPE will be made first to LC2 to satisfy any accrued but unpaid Current Preferred Return, with the balance being paid to GIP Operating Partnership, unless the “annualized debt yield” of GIP SPE is less than 10%, in which case the balance will be paid to LC2. For this purpose, “annualized debt yield” is calculated as the sum of senior debt and LC2 Investment divided by the trailing three-month annualized adjusted net operating income (as defined in the GIP SPE Operating Agreement) of GIP SPE. The GIP SPE Operating Agreement also provides that distributions from capital transactions will be paid first to LC2 to satisfy any accrued but unpaid Preferred Return (comprised of both the Current Preferred Return and Accrued Preferred Return), then to LC2 until the “Make-Whole Amount” (defined as the amount equal to 1.3 times the LC2 Investment) is reduced to zero, and then to GIP Operating Partnership.

The Preferred Interest is required to be redeemed in full by GIP on or before August 10, 2024 the (“Mandatory Redemption Date”), for a redemption amount equal to the greater of (i) the amount of the LC2 Investment plus the accrued Preferred Return, and (ii) the Make-Whole Amount. Upon a failure to timely redeem the Preferred Interest, the Preferred Return will accrue at an increased rate of 18% per annum, compounded monthly. GIP Operating Partnership will have the right to extend the Mandatory Redemption Date for two consecutive 12-month extension periods, provided that (i) LC2 is paid an extension fee of 0.01% of the outstanding amount of the LC2 Investment for each such extension, (ii) the Preferred Return is increased from 15.5% to 18% of which the Accrued Preferred Return is increased from 10.5% to 13%, (iii) the trailing 6-month annualized adjusted net operating income (as defined in the GIP SPE Operating Agreement) is in excess of $5.0 million, (iv) GIP SPE and its subsidiaries’ senior debt is extended through the end of the extension period, and there are no defaults under the GIP SPE Operating Agreement.

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Under the GIP SPE Operating Agreement, GIP SPE is also required to pay to Loci Capital, an affiliate of LC2, an equity fee of 1.5% of the LC2 Investment, with 1% having been paid upon the execution and delivery of the GIP SPE Operating Agreement and the 0.5% payable upon redemption of the LC2 Investment.

GIP SPE is managed by a single manager, which is GIP Operating Partnership, provided that LC2’s approval will be required for certain major decisions of GIP SPE, including acquiring additional properties, selling properties (unless certain return objectives are satisfied), extending loans to any person or entity, merging or consolidating with another entity, approving annual budgets, deviating from the approved budget, and certain other actions by GIP SPE. Under the GIP SPE Operating Agreement, LC2 also has customary information rights and other rights that are customary for a preferred investor. LC2 has the right to remove and replace the manager of GIP SPE upon a “Manager Default”, which is defined by the GIP SPE Operating Agreement to include an uncured breach of the GIP SPE Operating Agreement by GIP Operating Partnership, a failure to pay the Current Preferred Return when due, a failure to redeem the LC2 Investment when required, or GIP Operating Partnership ceasing to be controlled by the Company’s founder and Chief Executive Officer, David Sobelman.

The Rep and Warranty Agreement contains customary representations and warranties for an investment such as the LC2 Investment, together with related customary indemnification obligations by GIP Operating Partnership.

The foregoing description of the GIP SPE Operating Agreement and Rep and Warranty Agreement is summary in nature, does not purport to be complete, and is qualified in its entirety by reference to the full text of the GIP SPE Operating Agreement and Rep and Warranty Agreement, copies of which are filed as Exhibit 10.5 and 10.6 hereto, respectively, and are incorporated by reference herein.

Loan Agreement and Note with Valley National Bank

On August 10, 2023, GIP13, LLC, a Delaware limited liability company and wholly owned subsidiary of GIP SPE (“GIP Borrower”), entered into a Loan Agreement with Valley (the “Valley Loan Agreement”) pursuant to which Valley made a loan to GIP Borrower in the amount of $21.0 million (the “Valley Loan”) to finance the Portfolio Acquisition (the “Valley Loan Facility”). Pursuant to the Valley Loan Agreement, GIP Borrower executed and delivered to Valley a Promissory Note, dated August 10, 2023, in the original principal amount of $21.0 million (the “Note”).

The outstanding principal amount of the Valley Loan bears interest at an annual rate for each 30-day interest period equal to the compounded average of the secured overnight financing rate published by Federal Reserve Bank of New York for the thirty-day period prior to the last day of each 30-day interest rate for the applicable interest rate period plus 3.25%, with interest payable monthly after each 30-day interest period. However, the GIP Borrower has entered into an interest rate swap to fix the interest rate at 7.47% per annum. Payments of interest and principal in the amount of approximately $156,000 are due and payable monthly, with all remaining principal and accrued but unpaid interest due and payable on a maturity date of August 10, 2028. The Valley Loan may generally be prepaid at any time without penalty in whole or in part, provided that there is no return of loan fees and prepaid financing fees.

The Valley Loan is secured by first mortgages and assignments of rents in the properties comprising the Portfolio and eight other properties held by subsidiaries of GIP SPE that had outstanding loans with Valley. All of the mortgaged properties cross collateralize the Loan, and the Loan is guaranteed by the Operating Partnership and the subsidiaries of GIP Borrower that hold the properties subject to the Portfolio Acquisition. David Sobelman also entered into a personal, limited guarantee with a $7,500,000 cap, subject to customary non-recourse carveouts.

The Valley Loan Agreement requires GIP Borrower to maintain a minimum debt-service coverage ratio 1.50:1 on a trailing twelve-month basis, tested as of December 31, 2024 and annually thereafter. The Valley Loan Agreement provides for customary events of default and other customary affirmative and negative covenants that are applicable to GIP Borrower and its subsidiaries, including reporting covenants and restrictions on investments, additional indebtedness, liens, sales of properties, certain mergers, and certain management changes.

The foregoing description of the Valley Loan Agreement and Valley Note is summary in nature, does not purport to be complete, and is qualified in its entirety by reference to the full text of the Valley Loan Agreement and Valley

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Note, copies of which are filed as Exhibit 10.3 and Exhibit 10.4 hereto, respectively, and are incorporated by reference herein.

Redemption Agreements

In connection with the Portfolio Acquisition, the Valley Loan Facility, and the LC2 Investment, GIP Operating Partnership and its subsidiaries redeemed from four separate parties each of their respective entire equity interests in certain special-purpose subsidiaries of GIP Operating Partnership for an aggregate redemption price of $2.25 million. The redeemed parties were Brown Family Enterprises, LLC, Richard N. Hornstrom, and Stephen J. Brown. In connection with such redemptions, the applicable subsidiaries of GIP Operating Partnership entered into a Redemption Agreement with each of the redeemed parties, copies of which are attached as Exhibits 10.7, 10.8, 10.9, and 10.10 hereto (the “Redemption Agreements”). Under the Redemption Agreements, GIP agreed to pay the redemption price in full to the redeemed party within 10 days of the date of the applicable Redemption Agreement. The Redemption Agreements contain customary representations, warranties, covenants, and indemnification provisions. The Redemption Agreements were dated August 8, 2023, and became definitive material agreements of the Company on August 10, 2023, upon the completion of the Portfolio Acquisition and the related financing transactions with Valley and LC2.

The foregoing description of the Redemption Agreements is summary in nature, does not purport to be complete, and is qualified in its entirety by reference to the full text of the Redemption Agreements, copies of which are filed as Exhibits 10.7, 10.8, and 10.9 hereto and are incorporated by reference herein.

Amendment to Limited Partnership Agreement of GIP Operating Partnership

In connection with the issuance of the Series A Preferred Stock to Modiv, the Company, as general partnership of GIP Operating Partnership, adopted and entered into a Third Amendment to Amended and Restated Limited Partnership Agreement of Generation Income Properties, L.P., dated August 10, 2023 (the “LPA Amendment”). The LPA Amendment amends the Amended and Restated Limited Partnership Agreement of GIP Operating Partnership, as amended, to provide for the establishment and issuance by GIP Operating Partnership to the Company of newly created Series A Preferred Units of the Operating Partnership in the same amount and having generally the same economic rights and preferences as the Series A Preferred Stock issued to Modiv.

The foregoing description of the LPA Amendment is summary in nature, does not purport to be complete, and is qualified in its entirety by reference to the full text of the LPA Amendment, a copy of which is filed as Exhibit 10.1 hereto and is incorporated by reference herein.

Lease Agreements

On August 10, 2023, in connection with the Portfolio Acquisition, certain subsidiaries of GIP Operating Partnership assumed existing lease agreements for each of the properties comprising the Portfolio. At the time of the Portfolio Acquisition, the Company deemed the leases for the following two properties included in the Portfolio to be material to the Company and its subsidiaries on a consolidated basis: (i) a 50,000 square foot retail property located in San Antonio, Texas (the “San Antonio Property”) and (ii) a 33,118 square foot office property located in Maitland, Florida (the “Maitland Property”).

The San Antonio Property is a retail facility comprising 50,000 rentable square feet plus approximately 5 acres and a 171-space parking lot, which is 100% leased to pursuant to a lease, dated as of October 1 2013, and amended on April 8, 2016, March 31, 2021, June 2, 2021, and June 9, 2021, between RU Pre-K San Antonio, LLC, as landlord, and San Antonio Early Childhood Education Municipal Development Corporation, as tenant (the “San Antonio Lease”). The annual base rent of the San Antonio Lease at the time of the Portfolio Acquisition is approximately $924,000. The current term of the San Antonio Lease at the time of acquisition commenced on August 1, 2021 and expires on July 31, 2029, with one remaining eight-year renewal option at annual base rent of $1,035,000. Under the San Antonio Lease, in addition to base rent the tenant is responsible to reimburse landlord’s operating expenses, real estate taxes, insurance, repairs, maintenance, management fees (not to exceed 2.5% of total operating expenses) and capital expenditures (at an annual amortization based on cost plus an 8% annual interest factor on the unamortized balance). The tenant pays to the landlord $31,607 per month in estimated operating expenses, which are subject to an annual reconciliation when actual expenses are known. So long as tenant is not in default under the San Antonio Lease, it

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will have two options to purchase the property subject to such lease, as follows: on August 31, 2029, for a purchase price of approximately $14.8 million and on August 31, 2037, for a purchase price of approximately $16.6 million. In connection with the acquisition of the San Antonio Property, GIPTX 1235 Old Highway 90 West, LLC, a Delaware limited liability company, entered into an Assignment and Assumption of Leases with the seller of the San Antonio Property, dated August 10, 2023, pursuant to which the seller assigned and GIPTX 1235 Old Highway 90 West, LLC assumed all of the seller’s rights and obligations under the San Antonio Lease arising from and after such date.

The Maitland Property is an office facility comprising 33,118 rentable square feet, which is 100% leased pursuant to a lease, dated as of November 14, 2002, as revised on January 1, 2009, and further amended on October 30, 2009, July 15, 2014, April 17, 2015, and March 13, 2017, between BRWHP Properties, LLP, as landlord, as succeeded in interest by RU EXP Maitland FL, LLC, and X-nth, Inc., as succeeded in interest by exp US Services, Inc., as tenant (the “Maitland Lease”). The annual base rent of the Maitland Lease at the time of the Portfolio Acquisition is approximately $835,000, subject to annual increases of 3.5% per year through 2024, with the rent remaining fixed for the final two years of the current term. The current term of the Maitland Lease at the time of acquisition commenced on December 1, 2019 and expires on November 30, 2026, with one five-year renewal option. Under the Maitland Lease, the tenant is responsible for operating expenses, real estate taxes, insurance, repairs, and maintenance, in addition to base rent. Commencing January 1, 2020, the landlord pays up to $6 per square foot per year towards tenant’s share of the operating expenses, subject to increases of 3.5% per year, through the end of the renewal option period, if exercised. In connection with the acquisition of the Maitland Property, GIPFL 2601 Westhall Lane, LLC entered into an Assignment and Assumption of Lease, Security Deposit and Guaranty with the seller of the Maitland Property, dated August 10, 2023, pursuant to which the seller assigned and GIPFL 2601 Westhall Lane, LLC assumed all of the seller’s rights and obligations under the Maitland Lease.

The foregoing descriptions of the San Antonio Lease and the Maitland Lease do not purport to be complete and are qualified in their entirety by reference to the full text of those leases, copies of which will be filed by the Company as exhibits to the Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2023.

Item 2.01. Completion of Acquisition or Disposition of Assets.

The information set forth under Item 1.01 above is incorporated herein by reference. On August 10, 2023, the GIP Operating Partnership closed the Portfolio Acquisition and completed the purchase of the properties in the Portfolio pursuant to the Purchase Agreement. The following tables sets forth certain information about the properties that comprise the Portfolio:

Property Type	Location	Rentable Square Feet	Tenant	Annual Base Rent	Annual Base Rent Per Square Foot
Retail	Big Spring, TX	9,026	Dollar General Corp.	$86,040	$9.53
Retail	Castalia, OH	9,026	Dollar General Corp.	$79,320	$8.79
Retail	Wilton, ME	9,100	Dollar General Corp.	$112,440	$12.36
Retail	Lakeside, OH	9,026	Dollar General Corp.	$81,036	$8.98
Retail	Mount Gilead, OH	9,026	Dollar General Corp.	$85,920	$9.52
Retail	Litchfield, OH	9,026	Dollar General Corp.	$92,964	$10.30
Retail	Thompsontown, PA	9,100	Dollar General Corp.	$86,004	$9.45
Retail	Bakersfield, CA	18,827	Dolgen California, LLC	$344,398	$18.29
Retail	Morrow, GA	10,906	Dollar Tree Stores, Inc.	$103,607	$9.50
Office	Maitland, FL	33,118	exp US Services, Inc.	$835,346	$25.30
Office	Vacaville, CA	11,014	General Services Administration	$343,665	$31.20
Retail (Education)	San Antonio, TX	50,000	City of San Antonio Pre-K	$924,000	$18.48
Retail	Santa Maria, CA	14,490	Walgreen Co.	$369,000	$25.47

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information set forth under Item 1.01 above is incorporated herein by reference.

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Item 3.02. Unregistered Sales of Equity Securities.

The information set forth under Item 1.01 above is incorporated herein by reference. The Series A Preferred Stock issued to Modiv and Preferred Interest issued to LC2 were issued, and the Common Stock to be issued to Modiv upon the redemption of the Series A Preferred Stock will be issued, solely to “accredited investors,” as such term is defined in the Securities Act of 1933, as amended (the “Securities Act”) and in reliance on the exemption from registration afforded by Section 4(a)(2) and Regulation D (Rule 506) under the Securities Act and corresponding provisions of state securities laws. Accordingly, the issuance of such securities was not and is not registered under the Securities Act, and until registered, these securities may not be offered or sold in the United States absent registration or availability of an applicable exemption from registration.

Item 3.03. Material Modification to Rights of Security Holders.

The information set forth under Item 1.01 above is incorporated herein by reference. On August 10, 2023, in connection with the Portfolio Acquisition, the Company filed Articles Supplementary for the Series A Preferred Stock (the “Articles Supplementary”) with the State Department of Assessments and Taxation of the State of Maryland (“SDAT”) designating the rights, preferences and privileges of the Series A Preferred Stock. The following is a summary of the material terms of the Series A Preferred Stock and the Articles Supplementary:

As set forth in the Articles Supplementary, the Series A Preferred Stock ranks, with respect to dividend rights and rights upon the Company’s voluntary or involuntary liquidation, dissolution or winding up, senior to all classes or series of the Common Stock. Holders of Series A Preferred Stock, when, as and if authorized by the Company’s board of directors and declared by the Company out of funds legally available for the payment of dividends, are entitled to cumulative cash dividends at the rate of 9.5% per annum of the $5.00 liquidation preference per share, equivalent to a fixed annual amount of $0.475 per share, which shall increase to a rate of 12.0% of the $5.00 liquidation preference per share per annum, equivalent to a fixed annual amount of $0.60 per share, beginning on September 15, 2024. Dividends are payable monthly in arrears on or about the 15th day of each month, beginning on September 15, 2023. Dividends will accrue and be cumulative from and including August 10, 2023, the first date on which shares of the Series A Preferred Stock were issued.

From the date of issuance until March 15, 2024, the Series A Preferred Stock will be redeemable at the Company’s option for either (i) cash, in whole or in part, at a price per share equal to the $5.00 liquidation preference, plus an amount equal to all dividends accrued and unpaid (whether or not authorized or declared), if any, until the redemption date on each share of Series A Preferred Stock to be redeemed (the “Cash Redemption Price”) or (ii) subject to the Company’s satisfaction of certain conditions, a number of shares of Common Stock (the “Underlying Shares”), in whole only and not in part, equal to the Cash Redemption Price, divided by the share price of the Common Stock as measured by the product of (a) the 60-day volume weighted average price (“VWAP”) from the date immediately preceding the redemption date and (b) 110%. The maximum number of shares of Common Stock that shall be required to redeem the shares of Series A Preferred Stock in full shall not exceed 3,000,000 shares of Common Stock (the “Ceiling”) and the minimum number of shares of Common Stock that shall be required to redeem the shares of Series A Preferred Stock in full shall be no less than 2,200,000 shares (the “Floor”); provided that the Ceiling will not apply if at any time after August 10, 2023, and before redemption of the Series A Preferred Stock, the Company fails to pay a monthly dividend on the Common Stock or reduces, or announces its intent to reduce, the monthly dividend paid on shares of Common Stock to a rate lower than $0.039 per share per month. Each of the Floor and the Ceiling is subject to proportionate adjustments for any share splits (including those effected pursuant to a distribution of the Common Stock), subdivisions, reclassifications or combinations with respect to the Common Stock as described in the Articles Supplementary.

 

In addition, the Company’s right to redeem the Series A Preferred Stock for the Underlying Shares is conditioned upon the Company obtaining the approval of its stockholders for the issuance of such Underlying Shares as required by the rules of the Nasdaq Stock Market; such Underlying Shares being listed on Nasdaq; the SEC having declared a registration statement effective registering the distribution of such Underlying Shares by Modiv to its stockholders and/or the resale of such Underlying Shares by Modiv; and Modiv having received the approval of its lenders to distribute such Underlying Shares to its stockholders.

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After March 15, 2024, the Company may only redeem the Series A Preferred Stock for the Cash Redemption Price, unless Modiv agrees, in its sole and absolute discretion, to a redemption of the Series A Preferred Stock for shares of Common Stock, on terms acceptable to Modiv.

The Company shall redeem the Series A Preferred Stock for an amount equal to the Cash Redemption Price, upon the delisting of the Common Stock from the Nasdaq Stock Market.

In the event of a Change of Control (as defined in the Articles Supplementary) of the Company, the Company shall redeem the Series A Preferred Stock, at the option of Modiv, for either (a) cash, in an amount equal to the Cash Redemption Price, (b) a number of shares of Common Stock equal to the Cash Redemption Price divided by the price per share of the Common Stock as measured by the VWAP of the Common Stock for the 60 trading days immediately preceding the date of the announcement of such Change of Control (the “Change of Control Share Redemption Consideration”) or (c) the kind and amount of consideration which Modiv would have owned or been entitled to receive had it held a number of shares of Common Stock equal to the Change of Control Share Redemption Consideration immediately prior to the effective time of the Change of Control.

The foregoing description of the Series A Preferred Stock and Articles Supplementary is summary in nature, does not purport to be complete, and is qualified in its entirety by reference to the full text of the Articles Supplementary, a copy of which is filed as Exhibit 3.1 hereto and is incorporated by reference herein.

Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

On August 10, 2023, the Company filed the Articles Supplementary for the Series A Preferred Stock with the SDAT designating the rights, preferences and privileges of the Series A Preferred Stock. The Articles Supplementary were effective upon filing. The information about the Series A Preferred Stock set forth in Item 3.03 hereof, including the summary description of the rights, preferences and privileges of the Series A Preferred Stock, is incorporated herein by reference.

The description of the Articles Supplementary in this report is summary in nature, does not purport to be complete, and is qualified in its entirety by reference to the full text of the Articles Supplementary, a copy of which is filed as Exhibit 3.1 hereto and is incorporated by reference herein.

Item 7.01. Regulation FD Disclosure.

On August 14, 2023, the Company issued a press release announcing the Portfolio Acquisition and also released a presentation deck regarding the Portfolio Acquisition. A copy of the press release is furnished as Exhibit 99.1, and a copy of the presentation deck is furnished as Exhibit 99.2.

The information furnished in this Item 7.01, including Exhibit 99.1 and Exhibit 99.2, is not deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section. This information will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.

Item 9.01. Financial Statements and Exhibits.

The Company intends to file the financial statements required by Item 9.01(a), in accordance with Rule 3-14 of Regulation S-X, by amendment to this Current Report on Form 8-K no later than 71 calendar days following the date that this Current Report on Form 8-K is required to be filed.

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To the extent required by this item, pro forma financial information relating to the acquisition of the Portfolio will be filed in an amendment to this current report on Form 8-K not later than 71 days after the date on which this initial Current Report on Form 8-K is required to be filed.

 

Exhibit No.		Description
2.1*		Agreement of Purchase and Sale, dated August 10, 2023, among Modiv Inc., Generation Income Properties, Inc., Generation Income Properties, L.P., and each entity identified as a “Selling Entity” therein.
3.1		Articles Supplementary for the Series A Redeemable Preferred Stock of Generation Income Properties, Inc.
10.1		Third Amendment to Amended and Restated Limited Partnership Agreement of Generation Income Properties, L.P., dated August 10, 2023.
10.2		Registration Rights Agreement, dated August 10, 2023.
10.3*		Loan Agreement, dated August 10, 2023, between GIP13, LLC and Valley National Bank.
10.4		Promissory Note, dated August 10, 2023, payable by GIP13, LLC to Valley National Bank.
10.5*		Amended and Restated Liability Company Agreement of GIP VB SPE, LLC, dated August 10, 2023, between Generation Income Properties, L.P. and LC2-NNN Pref, LLC.
10.6*		Agreement Providing Representations and Warranties, dated August 10, 2023, between Generation Income Properties, L.P. and LC2-NNN Pref, LLC.
10.7		Redemption Agreement with Brown Family Enterprises, LLC dated August 8, 2023 for GIPNC 201 Etheridge Road, LLC
10.8		Redemption Agreement with Richard N. Hornstrom dated August 8, 2023 for GIPIL 525 S Perryville Rd, LLC.
10.9		Redemption Agreement with Richard N. Hornstrom dated August 8, 2023 for GIPFL 702 Tillman Place, LLC.
10.10		Redemption Agreement with Stephen J. Brown dated August 8, 2023 for GIPFL 702 Tillman Place, LLC.
99.1		Press Release, dated August 14, 2023.
99.2		Presentation Deck, dated August 14, 2023
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

*Certain exhibits and schedules to this exhibit have been omitted pursuant to Item 601(a)(5) and/or Item 601(b)(2) of Regulation S-K. The registrant hereby undertakes to furnish copies of any of the omitted schedules and exhibits upon request by the U.S. Securities and Exchange Commission.

 

Forward-Looking Statements

 

This Current Report on Form 8-K may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainty. Words such as “anticipate,” “estimate,” “expect,” “intend,” “plan,” and “project” and other similar words and expressions are intended to signify forward-looking statements. Forward-looking statements are not guarantees of future results and conditions but rather are subject to various risks and uncertainties. Such statements are based on management’s current expectations and are subject to a number of risks and uncertainties, many of which are beyond management’s control, that could cause actual results to differ materially from those described in the forward-looking statements, including without limitation

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the risk that the expected benefits of the Portfolio Acquisition will not be realized or will not be realized within the expected time periods, as well as risks relating to general economic conditions, market conditions, interest rates, and other factors. Investors are cautioned that there can be no assurance actual results or business conditions will not differ materially from those projected or suggested in such forward-looking statements as a result of various factors. Please refer to the risks detailed from time to time in the reports we file with the SEC, including our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC, as well as other filings on Form 10-Q and periodic filings on Form 8-K, for additional factors that could cause actual results to differ materially from those stated or implied by such forward-looking statements. We disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, unless required by law.

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

		GENERATION INCOME PROPERTIES, INC.
Date: August 14, 2023		By:		/s/ Allison Davies
				Allison Davies
				Chief Financial Officer

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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

 

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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.

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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.

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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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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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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:
Generation Income Properties, L.P., a Delaware limited partnership By: Generation Income Properties, Inc., its Sole General Partner
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]

 

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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.

SELLER:
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.,_______________________________ a Maryland Corporation
	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]

 

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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

 

 

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Exhibit 3.1

GENERATION INCOME PROPERTIES, INC.

 

ARTICLES SUPPLEMENTARY

 

SERIES A REDEEMABLE PREFERRED STOCK

(Liquidation Preference $5.00 per Share)

 

Generation Income Properties, Inc., a Maryland corporation (the “Corporation”), hereby certifies to the State Department of Assessments and Taxation of Maryland that:

 

FIRST: Under a power contained in Section 4.03(a) of Article IV of the charter of the Corporation (the “Charter”), the Board of Directors of the Corporation, by resolutions duly adopted, classified 2,400,000 authorized but unissued shares of preferred stock, par value $0.01 per share, of the Corporation as shares of a series of preferred stock, designated as Series A Redeemable Preferred Stock (the “Series A Preferred Stock”) with the following preferences, rights, voting powers, restrictions, limitations as to dividends and other distributions, qualifications and terms and conditions of redemption of the Series A Preferred Stock which, upon any restatement of the Charter, shall become a part thereof, with any necessary or appropriate renumbering or relettering of the sections or subsections hereof:

 

Section 1. Number of Shares and Designation.

 

A series of preferred stock of the Corporation designated as the “Series A Redeemable Preferred Stock” is hereby established, and the number of shares constituting such series shall be 2,400,000.

 

Section 2. Definitions.

 

“Aggregate Share Ownership Limit” shall have the meaning set forth in Section 4.05(a) of Article IV of the Charter.

 

“Alternative Form Consideration” shall have the meaning set forth in Section 8(a) hereof.

 

“Alternative Redemption Consideration” shall have the meaning set forth in Section 8(a) hereof.

 

“Board of Directors” shall mean the Board of Directors of the Corporation or any committee authorized by such Board of Directors to perform any of its responsibilities with respect to the Series A Preferred Stock.

 

“Business Day” shall mean any day other than a Saturday, Sunday or a day on which state or federally chartered banking institutions in New York, New York are not required to be open.

 

“Bylaws” shall have the meaning set forth in Section 9(b) hereof.

 

 

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“Capital Gains Amount” shall have the meaning set forth in Section 3(g) hereof.

 

“Ceiling” shall have the meaning set forth in Section 5(b) hereof.

 

“Change of Control” shall have the meaning set forth in Section 6(b) hereof.

 

“Change of Control Consideration” shall have the meaning set forth in Section 8(a) hereof.

 

“Change of Control Mandatory Redemption” shall have the meaning set forth in Section 6(b) hereof.

 

“Change of Control Redemption Date” shall have the meaning set forth in Section 8(a) hereof.

 

“Change of Control Share Redemption Consideration” shall have the meaning set forth in Section 8(a) hereof.

 

“Change of Control Share Redemption Right” shall have the meaning set forth in Section 8(a) hereof.

 

“Charter” shall have the meaning ascribed to it in the first paragraph of this Article First of these Articles Supplementary.

 

“Code” shall mean the Internal Revenue Code of 1986, as amended.

 

“Common Stock” shall mean the Corporation’s common stock, par value $0.01 per share.

 

“Common Stock Optional Redemption Consideration” shall have the meaning set forth in Section 5(b) hereof.

 

“Corporation” shall have the meaning ascribed to it in the first paragraph of these Articles Supplementary.

 

“Delisting Event” shall have the meaning set forth in Section 6(a) hereof.

 

“Delisting Event Mandatory Redemption” shall have the meaning set forth in Section 6(a) hereof.

 

“DTC” shall have the meaning set forth in Section 8(f) hereof.

 

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

 

“Floor” shall have the meaning set forth in Section 5(b) hereof.

 

“Holder Optional Redemption Consideration” shall have the meaning set forth in Section 5(d) hereof.

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“Holder Optional Redemption Right” shall have the meaning set forth in Section 5(d) hereof.

 

“Modiv” shall have the meaning set forth in Section 5(d) hereof.

 

“Nasdaq” shall mean the Nasdaq Stock Market or any successor that is a national securities exchange registered under Section 6 of the Exchange Act.

 

“Original Issue Date” shall mean the first date on which shares of Series A Preferred Stock are issued.

 

“Parity Preferred” shall mean all other classes and series of preferred stock of the Corporation ranking on parity with the Series A Preferred Stock with respect to dividend rights and rights upon the Corporation’s voluntary or involuntary liquidation, dissolution or winding up and upon which like voting rights have been conferred and are exercisable and with which such holders of Series A Preferred Stock are entitled to vote together as a single class.

 

“Purchase and Sale Agreement” means that certain Agreement of Purchase and Sale, dated as of August ___, 2023 between (i) Modiv Inc., a Maryland corporation, (ii) each entity identified as a Seller on Schedule A attached thereto, (iii) Generation Income Properties, L.P., a Delaware limited partnership, or its assigns, and (iv) the Corporation.

“Redemption Agent” shall have the meaning set forth in Section 8(d) hereof.

 

“REIT” shall have the meaning set forth in Article III of the Charter.

 

“Series A Dividend Period” shall mean the respective periods commencing on and including the first day of each month and ending on and including the day preceding the first day of the next succeeding Series A Dividend Period (other than the initial Series A Dividend Period, which shall commence on the Original Issue Date and end on and include August 31, 2023, and other than the Series A Dividend Period during which any shares of Series A Preferred Stock shall be redeemed pursuant to Section 5 or Section 6 (and that is not a Series A Dividend Period of the type contemplated by Section 7(b)), which, solely with respect to the shares of Series A Preferred Stock being redeemed, shall end on and include the day immediately preceding the redemption date with respect to such shares of Series A Preferred Stock being redeemed).

 

“Series A Payment Date” shall mean, with respect to each Series A Dividend Period, the fifteenth (15th) day of the month following the end of each Series A Dividend Period, commencing on September 15, 2023.

 

“Series A Preferred Stock” shall have the meaning ascribed to it in the first paragraph of this Article First of these Articles Supplementary.

 

“Series A Record Date” shall mean the close of business on the last business day of the month preceding the applicable Series A Payment Date.

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“Shares” shall have the meaning set forth in Section 4.01 of Article IV of the Charter.

 

“Stock Split” shall have the meaning set forth in Section 5(b) hereof.

 

“Total Distributions” shall have the meaning set forth in Section 3(g) hereof.

 

“Trading Day” shall mean (i) if the Common Stock is listed or admitted to trading on Nasdaq, a day on which Nasdaq is open for the transaction of business, (ii) if the Common Stock is not listed or admitted to trading on Nasdaq but is listed or admitted to trading on another national securities exchange or automated quotation system, a day on which such national securities exchange or automated quotation system, as the case may be, on which the Common Stock is listed or admitted to trading is open for the transaction of business, or (iii) if the Common Stock is not listed or admitted to trading on any national securities exchange or automated quotation system, any day other than a Saturday, a Sunday or a day on which banking institutions in the State of New York are authorized or obligated by law or executive order to close.

 

“VWAP” shall mean the volume-weighted average price per share of Common Stock on any Trading Day as displayed under the heading “Bloomberg VWAP” on the Bloomberg page (or its equivalent successor if Bloomberg ceases to publish such price or such page is not available) in respect of the period from the open of trading on the relevant Trading Day until the close of trading on such Trading Day (or if such volume-weighted average price is unavailable, the market price of one share of Common Stock on such Trading Day determined, using a volume-weighted average method, by an independent financial advisor retained for such purpose by the Corporation). The VWAP shall be determined without regard to after-hours trading or any other trading outside of the regular trading session.

 

Section 3. Dividends and other Distributions.

 

(a) Subject to the preferential rights of the holders of any class or series of equity securities of the Corporation ranking senior to the Series A Preferred Stock with respect to dividend rights, the holders of the then outstanding shares of Series A Preferred Stock shall be entitled to receive, when, as and if authorized by the Board of Directors and declared by the Corporation, out of funds legally available for the payment of dividends, cumulative cash dividends in the following amounts:

 

 

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provided, however, that if any Series A Payment Date is not a Business Day, the dividend which would otherwise have been payable on such Series A Payment Date may be paid or set apart for payment on the next succeeding Business Day with the same force and effect as if paid or set apart on such Series A Payment Date, and no interest or additional dividends or other sums shall accrue on the amount so payable from such Series A Payment Date to such next succeeding Business Day. Holders of record of all shares of Series A Preferred Stock outstanding on the applicable Series A Record Date will be entitled to receive the full dividend paid on the applicable Series A Payment Date even if such shares were not issued and outstanding for the full applicable Series A Dividend Period.

 

The initial dividend payable on the Series A Preferred Stock will cover the period from and including the Original Issue Date through August 31, 2023, and will be paid on September 15, 2023. The amount of any dividend payable on the Series A Preferred Stock for each full Series A Dividend Period shall be computed by dividing $0.475 or $0.60, as applicable, by 12, regardless of the actual number of days in such full Series A Dividend Period. The amount of any dividend payable on the Series A Preferred Stock for any partial Series A Dividend Period shall be prorated and computed on the basis of a 360-day year consisting of twelve 30-day months. Dividends will be payable to holders of record as they appear in the stockholder records of the Corporation at the close of business on the applicable Series A Record Date. Notwithstanding any provision to the contrary contained herein, the dividend payable on each share of Series A Preferred Stock outstanding on a Series A Record Date shall equal the dividend payable on each other share of Series A Preferred Stock that is outstanding on such Series A Record Date, and no holder of any share of Series A Preferred Stock shall be entitled to receive any dividends paid or payable on the Series A Preferred Stock with a Series A Record Date before the date such share of Series A Preferred Stock is issued.

 

(b) No dividends on the Series A Preferred Stock shall be authorized by the Board of Directors or paid or declared and set apart for payment by the Corporation at such time as the terms and conditions of any agreement of the Corporation, including any agreement relating to its indebtedness, prohibit such authorization, payment or setting apart for payment or provide that such authorization, payment or setting apart for payment would constitute a breach thereof, or a default thereunder, or if such authorization, payment or setting apart for payment shall be restricted or prohibited by law.

 

(c) Notwithstanding anything contained herein to the contrary, dividends on the Series A Preferred Stock shall accrue with respect to any Series A Dividend Periods whether or not dividends are authorized by the Board of Directors and declared by the Corporation, from the later of the first date on which the Series A Preferred Stock is issued and the most recent Series A Payment Date on which dividends have been paid. No interest or additional dividend shall be payable in respect of any accrued and unpaid dividend on the Series A Preferred Stock.

 

(d) Except as provided in Section 3(e) below, no dividends shall be declared and paid or set apart for payment and no other distribution of cash or other property may be declared and made,

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directly or indirectly, on or with respect to shares of Common Stock or shares of any other class or series of equity securities of the Corporation ranking, with respect to dividend rights and rights upon the Corporation’s voluntary or involuntary liquidation, dissolution or winding-up, on parity with or junior to the Series A Preferred Stock (other than a dividend paid in shares of Common Stock or in shares of any other class or series of equity securities ranking junior to the Series A Preferred Stock with respect to dividend rights and rights upon the Corporation’s voluntary or involuntary liquidation, dissolution or winding-up), nor shall any shares of Common Stock or shares of any other class or series of equity securities of the Corporation ranking, with respect to dividend rights and rights upon the Corporation’s voluntary or involuntary liquidation, dissolution or winding-up, on parity with or junior to the Series A Preferred Stock be redeemed (or any monies be paid to or made available for a sinking fund for the redemption of any such shares), purchased or otherwise acquired (except (i) by exchange for shares of Common Stock or shares of any other class or series of equity securities of the Corporation ranking junior to the Series A Preferred Stock with respect to dividend rights and rights upon the Corporation’s voluntary or involuntary liquidation, dissolution or winding-up, (ii) for the acquisition of shares made pursuant to the provisions of Section 4.05(b)(ii) and Section 4.05(c)(v) of Article IV of the Charter and (iii) for the purchase or acquisition of equity securities of the Corporation ranking on parity with the Series A Preferred Stock with respect to dividend rights and rights upon the Corporation’s voluntary or involuntary liquidation, dissolution or winding-up, pursuant to a purchase or exchange offer made on the same terms to holders of all outstanding Series A Preferred Stock and any other shares of any other class or series of equity securities ranking on parity with the Series A Preferred Stock with respect to dividend rights and rights upon the Corporation’s voluntary or involuntary liquidation, dissolution or winding-up), unless full cumulative dividends on the Series A Preferred Stock for all past Series A Dividend Periods shall have been or contemporaneously are declared and paid or declared and a sum sufficient for the payment thereof is set apart for such payment.

 

(e) When dividends are not paid in full (or declared and a sum sufficient for such full payment is not so set apart) upon the Series A Preferred Stock and any other class or series of equity securities ranking, with respect to dividend rights, on parity with the Series A Preferred Stock, all dividends (other than any acquisition of shares pursuant to the provisions of Section 4.05 of Article IV of the Charter or a purchase or exchange offer made on the same terms to holders of all outstanding shares of Series A Preferred Stock and any such other class or series of equity securities ranking on parity with the Series A Preferred Stock with respect to dividend rights or rights upon the Corporation’s voluntary or involuntary liquidation, dissolution or winding-up) declared upon the Series A Preferred Stock and any other class or series of equity securities ranking, with respect to dividend rights, on parity with the Series A Preferred Stock shall be allocated pro rata so that the amount declared per share of Series A Preferred Stock and such other equally ranked classes or series of equity securities shall in all cases bear to each other the same ratio that accrued dividends per share on the Series A Preferred Stock and such other equally ranked class or series of equity securities (which shall not include any accrual in respect of unpaid dividends on such other classes or series of equity securities for prior Series A Dividend Periods if such other class or series of equity securities does not have a cumulative dividend) bear to each other. No interest, or sum of money in lieu of interest, shall be payable in respect of any dividend payment or payments on the Series A Preferred Stock which may be in arrears.

 

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(f) Holders of shares of Series A Preferred Stock shall not be entitled to any dividend, whether payable in cash, property or stock, in excess of full cumulative dividends on the Series A Preferred Stock as provided herein. Any dividend payment made on the Series A Preferred Stock shall first be credited against the earliest accrued and unpaid dividend.

 

(g) If, for any taxable year, the Corporation elects to designate as “capital gain dividends” (as defined in Section 857 of the Code or any successor revenue code or section) any portion (the “Capital Gains Amount”) of the total distributions not in excess of the Corporation’s earnings and profits (as determined for United States federal income tax purposes) paid or made available for such taxable year to holders of all classes and series of Shares (the “Total Distributions”), then the portion of the Capital Gains Amount that shall be allocable to holders of Series A Preferred Stock shall be in the same proportion that the Total Distributions paid or made available to the holders of Series A Preferred Stock for such taxable year bears to the Total Distributions for such taxable year made with respect to all classes or series of Shares outstanding.

 

Section 4. Liquidation Preference.

 

Upon any voluntary or involuntary liquidation, dissolution or winding-up of the affairs of the Corporation, after payment of or provision for the Corporation’s debts and liabilities and any other class or series of equity securities of the Corporation ranking, with respect to rights upon the Corporation’s voluntary or involuntary liquidation, dissolution or winding up, senior to the Series A Preferred Stock and before any distribution or payment shall be made to holders of Common Stock or any other class or series of equity securities of the Corporation ranking, with respect to rights upon the Corporation’s voluntary or involuntary liquidation, dissolution or winding-up, junior to the Series A Preferred Stock, the holders of shares of Series A Preferred Stock then outstanding shall be entitled to be paid out of the assets of the Corporation legally available for distribution to its stockholders a liquidation preference of $5.00 per share, plus an amount equal to any accrued and unpaid dividends to, but not including, the date of payment (whether or not declared). If, upon any such voluntary or involuntary liquidation, dissolution or winding-up, the available assets of the Corporation are insufficient to pay the amount of the distributions payable upon liquidation, dissolution or winding-up of the affairs of the Corporation, on all outstanding shares of Series A Preferred Stock and the corresponding amounts payable on all shares of other classes or series of securities of the Corporation ranking, with respect to rights upon the Corporation’s voluntary or involuntary liquidation, dissolution or winding-up, on parity with the Series A Preferred Stock, the holders of Series A Preferred Stock and each such other class or series of securities ranking, with respect to rights upon the Corporation’s voluntary or involuntary liquidation, dissolution or winding-up, on parity with the Series A Preferred Stock shall share ratably in any such distribution of assets in proportion to the full liquidating distributions to which they would otherwise be respectively entitled. Written notice of any such voluntary or involuntary liquidation, dissolution or winding up, stating the payment date or dates when, and the place or places where, the amounts distributable in such circumstances shall be payable, shall be given by first-class mail, postage pre-paid, at least 20 days prior to the payment date stated therein, to each record holder of Series A Preferred Stock at the respective addresses of such holders as the same shall appear on the stock transfer records of the Corporation. After the holders of Series A Preferred Stock have received the full amount of the liquidating distributions to which they are entitled, they will have no right or claim to any of the remaining assets of the Corporation. The

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consolidation, conversion or merger of the Corporation with or into any other person, corporation, trust or entity, or the sale, lease, transfer or conveyance of all or substantially all of the property or business of the Corporation (whether in connection with a Change of Control or otherwise), shall not be deemed to constitute a liquidation, dissolution or winding-up of the affairs of the Corporation.

 

In determining whether any distribution (other than upon voluntary or involuntary dissolution), by dividend, redemption or other acquisition of Shares or otherwise, is permitted under the Maryland General Corporation Law, amounts that would be needed, if the Corporation were to be dissolved at the time of the distribution, to satisfy the preferential rights upon dissolution of the holders of Series A Preferred Stock will not be added to the Corporation’s total liabilities.

 

Section 5. Optional Redemption.

 

(a) The Series A Preferred Stock shall not be redeemable on or prior to March 15, 2024, except as provided in Section 4.05 of Article IV of the Charter or Section 5(b), Section 5(c) or Section 6 hereof.

 

(b) From the Original Issue Date through March 15, 2024, the Corporation, at its option, upon not fewer than 20 nor more than 60 days’ written notice as provided in Section 5(f) hereof, may redeem for cash the Series A Preferred Stock, in whole or in part, at any time or from time to time, at a redemption price equal to $5.00 per share, plus (subject to Section 7(b) hereof) an amount equal to all dividends accrued and unpaid (whether or not authorized or declared) thereon, to, but not including, the date fixed for redemption, without interest. Additionally, subject to Section 5(h) and Modiv’s receipt of approval from its lenders to make a distribution of the Common Stock Optional Redemption Consideration (as defined below) to Modiv’s stockholders, from the Original Issue Date through March 15, 2024, the Corporation, at its option, upon not fewer than 20 nor more than 60 days’ written notice as provided in Section 5(f) hereof, may redeem the Series A Preferred Stock, in whole only and not in part, for a number of shares of Common Stock per share of Series A Preferred Stock to be redeemed equal to (i) $5.00, plus (subject to Section 7(b) hereof) an amount equal to all dividends accrued and unpaid (whether or not authorized or declared) on the Series A Preferred Stock, to, but not including, the date fixed for redemption, without interest, divided by (ii) the price per share of Common Stock as measured by the product of (A) the VWAP of the Common Stock for the 60 Trading Days immediately preceding the date such written notice is provided pursuant to this sentence, and (B) 110% (the “Common Stock Optional Redemption Consideration”). Notwithstanding the foregoing sentence, (i) if, and only if, all dividends accrued (whether or not authorized or declared) on the Series A Preferred Stock, to, but not including, the date fixed for redemption have been paid as of the date fixed for redemption, the maximum number of shares of Common Stock constituting the Common Stock Optional Redemption Consideration required to redeem the Series A Preferred Stock pursuant to this Section 5(b), shall not exceed 3,000,000 (the “Ceiling”) and (ii) the minimum number of shares of Common Stock constituting the Common Stock Optional Redemption Consideration required to redeem the Series A Preferred Stock pursuant to this Section 5(b) shall be no less than 2,200,000 (the “Floor”), as the Floor and the Ceiling may be adjusted as provided below; provided, however, that, for the avoidance of doubt, no Ceiling shall apply or be in effect unless all dividends accrued (whether or not authorized or declared) on the Series A Preferred Stock, to, but not including, the date fixed for redemption

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have been paid as of the date fixed for redemption; and provided further, that no Ceiling shall apply or be in effect if at any time after the Original Issue Date and prior to the date that the Common Stock Optional Redemption Consideration has been received by the holders of shares of the Series A Preferred Stock, the Corporation fails to pay a monthly dividend on the Common Stock or reduces, or announces its intent to reduce, the monthly dividend paid on shares of Common Stock to a rate lower than $0.039 per share per month, as such monthly dividend rate may be adjusted as a result of any Stock Split (as defined below), for the period commencing the month that includes the Original Issue Date and ending the month that includes the date that the Common Stock Optional Redemption Consideration has been received by the holders of shares of the Series A Preferred Stock.

 

The Floor and Ceiling are subject to pro rata adjustments for any stock splits (including those effected pursuant to a stock dividend), subdivisions, reclassifications or combinations (in each case, a “Stock Split”) with respect to the capital stock of the Corporation as follows: the adjusted Floor and Ceiling as the result of a Stock Split shall be the number of shares of Common Stock that is equivalent to the product of (i) the Floor or Ceiling, as applicable, in effect immediately prior to the Stock Split, multiplied by (ii) a fraction, the numerator of which is the number of shares of all classes or series of common stock of the Corporation outstanding after giving effect to the Stock Split, on a fully diluted basis, and the denominator of which is the number of shares of all classes or series of common stock of the Corporation outstanding immediately prior to such Stock Split, on a fully diluted basis.

 

(c) The Corporation may redeem all or a part of the Series A Preferred Stock in accordance with the terms and conditions set forth in this Section 5 of these Articles Supplementary at any time and from time to time, whether before or after March 15, 2024, if the Board of Directors determines that such redemption is reasonably necessary for the Corporation to preserve the status of the Corporation as a qualified REIT. If the Corporation calls for redemption of any Series A Preferred Stock pursuant to and in accordance with this Section 5(c), then the redemption price for such shares will be an amount in cash equal to $5.00 per share, plus (subject to Section 7(b) hereof) all dividends accrued and unpaid (whether or not authorized or declared) thereon to and including the date fixed for redemption, without interest.

 

(d) After March 15, 2024, the Corporation, at its option, upon not fewer than 20 nor more than 60 days’ written notice as provided in Section 5(f) hereof, may redeem for cash the Series A Preferred Stock, in whole or in part, at any time or from time to time, at a redemption price equal to $5.00 per share, plus (subject to Section 7(b) hereof) an amount equal to all dividends accrued and unpaid (whether or not authorized or declared) thereon, to, but not including, the date fixed for redemption, without interest; provided, however, that if Modiv Inc., a Maryland corporation, or any of its affiliates (collectively, “Modiv”) holds any shares of Series A Preferred Stock as of the date fixed for redemption, Modiv, in its sole and absolute discretion, may allow the Corporation to redeem the Series A Preferred Stock after March 15, 2024 for shares of Common Stock instead of cash, provided that the terms and conditions of such redemption are acceptable to Modiv in its sole and absolute discretion (the “Holder Optional Redemption Right” and such to be determined consideration, the “Holder Optional Redemption Consideration”).

 

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(e) Unless full cumulative dividends on all shares of Series A Preferred Stock shall have been or contemporaneously are declared and paid or declared and a sum sufficient for the payment thereof in cash set apart for payment for all past Series A Dividend Periods, the Corporation shall not purchase or otherwise acquire directly or indirectly any shares of Series A Preferred Stock (except by exchange for equity securities of the Corporation ranking junior to the Series A Preferred Stock with respect to dividend rights and rights upon the Corporation’s voluntary or involuntary liquidation, dissolution or winding-up); provided, however, that the foregoing shall not prevent the purchase of the Series A Preferred Stock or any other class or series of equity securities of the Corporation by the Corporation in accordance with the terms of Sections 5(b) or 5(c) hereof or Section 4.05 of Article IV of the Charter or the purchase or acquisition of the Series A Preferred Stock pursuant to a purchase or exchange offer made on the same terms to holders of all outstanding Series A Preferred Stock and the holders of all outstanding shares of any other class or series of preferred stock of the Corporation ranking on parity with the Series A Preferred Stock with respect to dividend rights and rights upon the Corporation’s voluntary or involuntary liquidation, dissolution or winding up.

 

(f) Notice of redemption pursuant to this Section 5 shall be mailed by the Corporation, postage prepaid, as of a date set by the Corporation not fewer than 20 nor more than 60 days prior to such redemption date, addressed to the respective holders of record of such shares of Series A Preferred Stock to be redeemed at their respective addresses as they appear on the stock transfer records of the Corporation. Failure to give such notice or any defect thereto or in the mailing thereof shall not affect the sufficiency of notice or validity of the proceedings for such redemption of any shares of Series A Preferred Stock except as to shares held by a holder to whom notice was defective or not given. A redemption notice which has been mailed in the manner provided herein shall be conclusively presumed to have been duly given on the date mailed whether or not such holder received the redemption notice. In addition to any information required by law or the applicable rules of any exchange upon which Series A Preferred Stock may be listed or admitted to trading, each notice shall state (i) such redemption date; (ii) the redemption price, indicating the amount in cash and the Common Stock Optional Redemption Consideration to be received by such holder pursuant to Section 5(b) hereof, as applicable; (iii) the total number of shares of Series A Preferred Stock to be redeemed (and, if less than all the shares held by any holder are to be redeemed, the number of shares to be redeemed from such holder); (iv) the place or places where such shares of Series A Preferred Stock are to be surrendered for payment, together with the certificates, if any, representing such shares (duly endorsed for transfer) and any other documents the Corporation reasonably requires in connection with such redemption; and (v) that dividends on the Series A Preferred Stock to be redeemed shall cease to accrue on such redemption date.

 

(g) If less than all of the outstanding shares of Series A Preferred Stock are to be redeemed pursuant to Section 5(b), Section 5(c) or Section 5(d) hereof, the shares of Series A Preferred Stock to be redeemed shall be redeemed pro rata (as nearly as may be practicable without creating fractional shares) or by lot. If such redemption is to be by lot, and if, as a result of such redemption, any holder of Series A Preferred Stock would own shares of Series A Preferred Stock in excess of the Aggregate Share Ownership Limit or in violation of any of the other restrictions on ownership and transfer of Shares set forth in Section 4.05 of Article IV of the Charter, then, except as otherwise provided in the Charter, the Corporation will redeem the requisite number of shares of Series A Preferred Stock of such holder such that no holder will violate the Aggregate Share

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Ownership Limit or any other restrictions on ownership and transfer of Shares set forth in Section 4.05 of Article IV of the Charter subsequent to such redemption.

 

(h) Notwithstanding anything to the contrary in this Section 5, the Corporation will not be entitled to redeem the Series A Preferred Stock for the Common Stock Optional Redemption Consideration pursuant to Section 5(b) hereof, if there is not an effective registration statement at the time of redemption covering the distribution and/or resale of the Common Stock Optional Redemption Consideration by Modiv, which registration statement shall be maintained as required by the rules and regulations of the U.S. Securities and Exchange Commission in order for Modiv to effect such distribution and/or resale, as described in the registration statement, or if the Common Stock subject to the Common Stock Optional Redemption Consideration is not listed on Nasdaq. The Corporation shall comply with all Nasdaq rules in connection with any redemption of the Series A Preferred Stock for the Common Stock Optional Redemption Consideration pursuant to Section 5(b) hereof or the Holder Optional Redemption Consideration pursuant to Section 5(d) hereof, as applicable.

 

Section 6. Mandatory Redemption.

 

(a) During any period of time (whether before or after March 15, 2024) that the Common Stock is not listed on Nasdaq, but any shares of Series A Preferred Stock are outstanding (a “Delisting Event”), the Corporation shall, within 45 days of such Delisting Event, after sending written notice as provided in Section 6(c) hereof within 15 days of such Delisting Event, redeem for cash all of the outstanding shares of Series A Preferred Stock after the occurrence of the Delisting Event, for a redemption price of $5.00 per share, plus (subject to Section 7(b) hereof) an amount equal to all dividends accrued and unpaid (whether or not declared), if any, to, but not including, the redemption date (a “Delisting Event Mandatory Redemption”).

 

(b) In addition, upon the occurrence of a Change of Control, the Corporation shall, upon written notice not fewer than 15 days prior to the anticipated closing date of the Change of Control as provided in Section 6(c) hereof, redeem all of the outstanding shares of Series A Preferred Stock (the “Change of Control Mandatory Redemption”) on the Change of Control Redemption Date (as defined below) for cash at $5.00 per share plus (subject to Section 7(b) hereof) an amount equal to all dividends accrued and unpaid (whether or not declared), if any, on the Series A Preferred Stock to, but not including, the Change of Control Redemption Date. Notwithstanding the foregoing sentence, upon the occurrence of a Change of Control and in lieu of the redemption for cash provided in the foregoing sentence, each holder of Series A Preferred Stock shall have the right, at such holder’s option, to require the Corporation to redeem such holder’s shares of Series A Preferred Stock for a number of shares of Common Stock or for the Alternative Redemption Consideration, as applicable, by following the procedures set forth in Section 8 hereof.

 

A “Change of Control” occurs when, after the Original Issue Date, the following has occurred and is continuing:

 

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(c) Notice of redemption pursuant to this Section 6 shall be mailed by the Corporation, postage prepaid, as of a date set by the Corporation not fewer than 15 days prior to the anticipated closing date of the Change of Control, addressed to the holders of record of the Series A Preferred Stock at their respective addresses as they appear on the stock transfer records of the Corporation. Failure to give such notice or any defect thereto or in the mailing thereof shall not affect the sufficiency of notice or validity of the proceedings for such redemption of any shares of Series A Preferred Stock except as to a holder to whom notice was defective or not given. A redemption notice which has been mailed in the manner provided herein shall be conclusively presumed to have been duly given on the date mailed whether or not such holder received such redemption notice. In addition to any information required by law or the applicable rules of any exchange upon which Series A Preferred Stock may be listed or admitted to trading, each notice shall state (i) the redemption date; (ii) the redemption price; (iii) the total number of shares of Series A Preferred Stock to be redeemed; (iv) the place or places where such shares of Series A Preferred Stock are to be surrendered for payment, together with the certificates, if any, representing such shares (duly endorsed for transfer) and any other documents the Corporation reasonably requires in connection with such redemption; (v) that the Series A Preferred Stock is being redeemed pursuant to the Delisting Event Mandatory Redemption or the Change of Control Mandatory Redemption, as applicable, in connection with the occurrence of a Delisting Event or a Change of Control, as applicable, and a brief description of the transaction or transactions constituting such Delisting Event or Change of Control, as applicable; (vi) that each holder of Series A Preferred Stock may, at its option, in lieu of or in addition to such redemption, require the Corporation to redeem some or all of such holder’s shares of Series A Preferred Stock for a number of shares of Common Stock by following the procedures set forth in Section 8 hereof, and (vii) that dividends on the shares of Series A Preferred Stock to be redeemed will cease to accrue on such redemption date.

 

Section 7. Additional Provisions Relating to Optional Redemption and Mandatory Redemption by the Corporation.

 

(a) If (i) notice of redemption of any shares of Series A Preferred Stock has been given, (ii) the funds necessary for such redemption have been set apart by the Corporation in trust for the benefit of the holders of any Series A Preferred Stock so called for redemption or a number of shares of Common Stock equal to the aggregate Common Stock Optional Redemption Consideration or the Holder Optional Redemption Consideration, if applicable, has been duly

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authorized and reserved by the Board of Directors, as applicable, and (iii) irrevocable instructions have been given to pay the redemption price of $5.00 per share, plus (subject to Section 7(b) hereof) an amount equal to all dividends accrued and unpaid (whether or not declared) to, but not including, the applicable redemption date, or irrevocable instructions have been given to the Corporation’s transfer agent to issue the aggregate Common Stock Optional Redemption Consideration or the Holder Optional Redemption Consideration, as applicable, then from and after such redemption date, dividends shall cease to accrue on such shares of Series A Preferred Stock, such shares of Series A Preferred Stock shall no longer be outstanding, such shares of Series A Preferred Stock shall not be transferred except with the consent of the Corporation and all other rights of the holders of such shares will terminate, except the right to receive the redemption price of $5.00 per share, plus (subject to Section 7(b) hereof) an amount equal to any dividends accrued and unpaid (whether or not declared) payable upon such redemption, without interest, or the Common Stock Optional Redemption Consideration or the Holder Optional Redemption Consideration, as applicable.

 

(b) If a redemption date falls after a Series A Record Date and on or prior to the corresponding Series A Payment Date, each holder of shares of Series A Preferred Stock on the Series A Record Date shall be entitled to the dividend payable on such shares on the corresponding Series A Payment Date, notwithstanding such redemption of such shares on or prior to the Series A Payment Date, but no additional amount for accrued and unpaid dividends, if any, to, but not including the redemption date, will be included in the redemption price for each share of Series A Preferred Stock to be redeemed.

 

(c) For purposes of clause (a)(ii) above, if the shares of Series A Preferred Stock are to be redeemed for cash and not the Common Stock Optional Redemption Consideration or the Holder Optional Redemption Consideration, funds shall be deposited in trust with a bank or trust corporation and such deposit shall be irrevocable except that any balance of monies so deposited by the Corporation and unclaimed by the holders of Series A Preferred Stock entitled thereto at the expiration of one year from the applicable redemption dates shall be repaid, together with any interest or other earnings thereon, to the Corporation, and after any such repayment, the holders of the shares entitled to the funds so repaid to the Corporation shall look only to the Corporation for payment without interest or other earnings.

 

(d) No fractional shares of Common Stock shall be issued upon the redemption of the Series A Preferred Stock. In lieu of fractional shares, holders shall be entitled to receive the cash value of the fractional shares based on the Common Stock Optional Redemption Consideration or the Holder Optional Redemption Consideration, as applicable.

 

Section 8. Holder Change of Control Share Redemption Right.

 

(a) Subject to Section 8(j) and the paragraph immediately below, and in addition to the Holder Optional Redemption Right, upon the occurrence of a Change of Control in which shares of Common Stock are not converted into cash, securities or other property or assets, and in lieu of the redemption for cash provided in the first sentence of Section 6(b) hereof, each holder of shares of Series A Preferred Stock shall have the right to require the Corporation to redeem some or all of such shares of Series A Preferred Stock held by such holder (the “Change of Control Share

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Redemption Right”) on the Change of Control Redemption Date for a number of shares of Common Stock per share of Series A Preferred Stock to be redeemed (the “Change of Control Share Redemption Consideration”), which is equal to (i) the sum of $5.00 plus an amount equal to all dividends accrued and unpaid (whether or not declared) on the Series A Preferred Stock to, but not including, the Change of Control Redemption Date (unless such Change of Control Redemption Date is after a Series A Record Date and prior to the corresponding Series A Payment Date, in which case no additional amount for accrued and unpaid dividends that have been declared and are to be paid on the Series A Payment Date will be included in such sum), divided by (ii) the price per share of Common Stock as measured by the VWAP of the Common Stock for the 60 Trading Days immediately preceding the date of the announcement of such Change of Control.

 

Notwithstanding the foregoing, in the case of a Change of Control pursuant to or in connection with which shares of Common Stock shall be converted into cash, securities or other property or assets (including any combination thereof) (the “Alternative Form Consideration”), a holder of shares of Series A Preferred Stock may, in lieu of the redemption for cash provided in the first sentence of Section 6(b) hereof, exercise the Change of Control Share Redemption Right to receive upon redemption of such shares of Series A Preferred Stock pursuant to this Section 8 (subject to the next-following paragraph) the kind and amount of Alternative Form Consideration which such holder would have owned or been entitled to receive had such holder held a number of shares of Common Stock equal to the Change of Control Share Redemption Consideration immediately prior to the effective time of the Change of Control (the “Alternative Redemption Consideration” and, together with the Change of Control Share Redemption Consideration, the “Change of Control Consideration”).

 

In the case of a Change of Control pursuant to or in connection with which shares of Common Stock shall be converted into Alternative Form Consideration and holders of Series A Preferred Stock have elected to exercise the Change of Control Share Redemption Right, in the event that holders of Common Stock have the opportunity to elect the form of consideration to be received in connection with the Change of Control, the Alternative Redemption Consideration that holders of Series A Preferred Stock shall receive upon exercise of the Change of Control Share Redemption Right shall be the form of consideration elected by the holders of a plurality of the shares of Common Stock held by stockholders who participate in the election and shall be subject to any limitations to which all holders of shares of Common Stock are subject, including, without limitation, pro rata reductions applicable to any portion of the consideration payable in connection with the Change of Control.

 

The “Change of Control Redemption Date” with respect to any Change of Control shall be a Business Day fixed by the Board of Directors that is not fewer than 5 days and not more than 20 days after the closing date of the Change of Control.

 

(b) No fractional shares of Common Stock shall be issued upon the redemption of the Series A Preferred Stock. In lieu of fractional shares, holders shall be entitled to receive the cash value of the fractional shares based on the Change of Control Share Redemption Consideration.

 

(c) If a Change of Control Redemption Date falls after a Series A Record Date and on or prior to the corresponding Series A Payment Date, each holder of shares of Series A Preferred

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Stock at the close of business on the Series A Record Date shall be entitled to the dividend payable on such shares on the corresponding Series A Payment Date, notwithstanding the redemption of such shares on or prior to the Series A Payment Date, but no additional amount for accrued and unpaid dividends, if any, to, but not including the Change of Control Redemption Date, will be included in the determination of the Change of Control Share Redemption Consideration for the shares of Series A Preferred Stock to be redeemed.

 

(d) At least 15 days prior to the anticipated closing date of the Change of Control, a notice of the anticipated Change of Control describing the resulting Change of Control Share Redemption Right shall be delivered to the holders of record of the outstanding shares of Series A Preferred Stock at their addresses as they appear on the Corporation’s stock transfer records. No failure to give the notice or any defect thereto or in the mailing thereof shall affect the validity of the proceedings for the redemption of any share of Series A Preferred Stock except as to the holder to whom notice was defective or not given. Each notice shall state: (i) the events constituting the Change of Control; (ii) the anticipated closing date of the Change of Control; (iii) the last date on which the holders of Series A Preferred Stock may exercise their Change of Control Share Redemption Right, which shall be no less than 20 days following delivery of such notice; (iv) the method and period for calculating the Change of Control Share Redemption Consideration; (v) the Change of Control Redemption Date; (vi) that any shares of Series A Preferred Stock not redeemed pursuant to the Change of Control Share Redemption Right shall be redeemed for cash by the Corporation on the Change of Control Redemption Date pursuant to Section 6(b) hereof; (vii) if applicable, the type and amount of Alternative Redemption Consideration entitled to be received per share of Series A Preferred Stock; (viii) the name and address of the paying agent and the redemption agent (the “Redemption Agent”); and (ix) the reasonable procedures that holders of Series A Preferred Stock must follow to exercise the Change of Control Share Redemption Right.

 

(e) The Corporation shall issue a press release for publication on the Dow Jones & Company, Inc., Business Wire, PR Newswire or Bloomberg Business News (or, if such organizations are not in existence at the time of issuance of such press release, another news or press organization as is reasonably calculated to broadly disseminate the relevant information to the public) containing the information stated in the notice, and post the notice on the Corporation’s website, in any event prior to the opening of business on the first Business Day following the closing date of the Change of Control.

 

(f) In order to exercise the Change of Control Share Redemption Right, a holder of record of shares of Series A Preferred Stock shall be required to deliver, on or before the close of business on the Change of Control Redemption Date, the certificates, if any, representing any certificated shares of Series A Preferred Stock to be redeemed, duly endorsed for transfer, together with a completed written redemption notice and any other documents the Corporation reasonably requires in connection with the redemption, to the Redemption Agent. Such notice shall state: (i) the relevant Change of Control Redemption Date; and (ii) the number of shares of Series A Preferred Stock to be redeemed. Notwithstanding the foregoing, if such shares of Series A Preferred Stock are held in global form, such notice shall instead comply with applicable procedures of The Depository Trust Company (“DTC”).

 

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(g) Holders of the Series A Preferred Stock may withdraw any notice of exercise of a Change of Control Share Redemption Right (in whole or in part) by a written notice of withdrawal delivered to the Redemption Agent prior to the close of business on the Business Day prior to the Change of Control Redemption Date. The notice of withdrawal must state: (i) the number of withdrawn shares of Series A Preferred Stock; (ii) if certificated shares of Series A Preferred Stock have been tendered for redemption and withdrawn, the certificate numbers of the withdrawn certificated shares of Series A Preferred Stock; and (iii) the number of shares of Series A Preferred Stock, if any, which remain subject to the redemption notice. Notwithstanding the foregoing, if such shares of Series A Preferred Stock are held in global form, the notice of withdrawal shall instead comply with applicable procedures of DTC.

 

(h) Shares of Series A Preferred Stock as to which the Change of Control Share Redemption Right has been properly exercised and for which the redemption notice has not been properly withdrawn shall be redeemed for the applicable Change of Control Share Redemption Consideration on the applicable Change of Control Redemption Date.

 

(i) The Corporation shall deliver the applicable Change of Control Consideration on the Change of Control Redemption Date.

 

(j) Notwithstanding anything to the contrary in this Section 8, no holder of Series A Preferred Stock will be entitled to exercise a Change of Control Share Redemption Right or otherwise require the Corporation to redeem any shares of Series A Preferred Stock for shares of Common Stock to the extent that receipt of shares of Common Stock upon the redemption of such shares of Series A Preferred Stock in accordance with this Section 8 would cause such person or any other person to violate Section 4.05 of Article IV of the Charter.

 

(k) In connection with the exercise of any Change of Control Share Redemption Right, the Corporation shall comply with all U.S. federal and state securities laws and stock exchange rules in connection with any redemption of shares of Series A Preferred Stock for Change of Control Consideration.

 

Section 9. Voting Rights.

 

(a) Holders of the Series A Preferred Stock shall not have any voting rights except as set forth in this Section 9.

 

(b) So long as any shares of Series A Preferred Stock are outstanding, the approval of holders of at least two-thirds of the outstanding shares of Series A Preferred Stock and any equally-affected class or series of Parity Preferred with which holders of Series A Preferred Stock are entitled to vote together as a single class, voting together as a single class, shall be required to (i) authorize any amendment, alteration, repeal or other change to any provision of the Charter or the bylaws of the Corporation (the “Bylaws”), including the terms of the Series A Preferred Stock (whether by merger, conversion, consolidation, transfer or conveyance of all or substantially all of the Corporation’s assets or otherwise), that would adversely affect the rights, preferences, privileges or voting powers of the Series A Preferred Stock provided for herein or (ii) authorize the creation, issuance or increase in the authorized number of shares of any class or series of stock

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ranking senior to or on parity with the Series A Preferred Stock (or any securities convertible into or exchangeable for any such shares) with respect to dividend rights and rights upon the Corporation’s voluntary or involuntary liquidation, dissolution or winding up.

 

(c) The following actions shall not be deemed to adversely affect the rights, preferences, privileges or voting powers of the Series A Preferred Stock: any increase or decrease in the number of authorized Shares of any class or series, any increase in the number of authorized shares of Series A Preferred Stock or the classification or reclassification of any unissued Shares, or the creation or issuance of equity securities, of any class or series ranking junior to the Series A Preferred Stock with respect to dividend rights and rights upon the Corporation’s voluntary or involuntary liquidation, dissolution or winding up, provided that such action does not decrease the number of authorized shares of Common Stock below the number (after giving effect to all other outstanding shares capital stock) necessary to permit the Series A Preferred Stock to be redeemed in full in accordance with the terms hereof.

 

(d) Notwithstanding the foregoing, holders of any Parity Preferred shall not be entitled to vote together as a single class with holders of Series A Preferred Stock on any amendment, alteration, repeal or other change to any provision of the Charter or Bylaws, including the terms of the Series A Preferred Stock, unless such action affects holders of Series A Preferred Stock and such Parity Preferred equally. On any matter in which the Series A Preferred Stock may vote, each share of Series A Preferred Stock shall entitle the holder thereof to cast one vote, except that, in class votes, or in determining the percentage of outstanding shares, when voting together as a single class, with shares of one or more class or series of Parity Preferred, shares of different classes and series shall vote, or such determination shall be made, in proportion to the liquidation preference of such shares. The holders of Series A Preferred Stock shall have the exclusive voting rights on any Charter or Bylaw amendment that would alter the contract rights, as expressly set forth in the Charter or Bylaws, of only the Series A Preferred Stock.

 

(e) The foregoing voting provisions of this Section 9 shall not apply if, at or prior to the time when the act with respect to which such vote would otherwise be required shall be effected, all outstanding shares of Series A Preferred Stock shall have been redeemed or called for redemption in cash upon proper notice and sufficient funds, in cash, shall have been deposited in trust to effect such redemption, in each case, in accordance with the provisions hereof.

 

Section 10. Information Rights.

 

During any period in which the Corporation is not subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act and any shares of Series A Preferred Stock are outstanding, the Corporation will transmit by mail to all holders of Series A Preferred Stock, as their names and addresses appear in the Corporation’s record books and without cost to such holders, copies of independently audited annual financial statements conforming to the requirements for financial statements to be included in an annual report on Form 10-K and independently reviewed quarterly financial statements conforming to the requirements for financial statements to be included in a quarterly report on Form 10-Q within 15 days after the respective dates by which the Corporation would have been required to file these financial

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statements with the Securities and Exchange Commission if it were subject to Section 13 or 15(d) of the Exchange Act.

 

Section 11. Conversion.

 

The Series A Preferred Stock shall not be convertible into any other property or securities of the Corporation or any other entity, except as otherwise set forth herein or in Article IV of the Charter.

 

Section 12. Ranking.

 

In respect of rights to the payment of dividends and the distribution of assets in the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Corporation, the Series A Preferred Stock shall rank (i) senior to the Common Stock and to all other equity securities issued by the Corporation, the terms of which expressly provide that such securities rank junior to the Series A Preferred Stock with respect to dividend rights and rights upon the Corporation’s voluntary or involuntary liquidation, dissolution or winding-up; (ii) on parity with all equity securities issued by the Corporation, the terms of which expressly provide that such securities rank on parity with the Series A Preferred Stock with respect to dividend rights and rights upon the Corporation’s voluntary or involuntary liquidation, dissolution or winding-up; and (iii) junior to all equity securities issued by the Corporation, the terms of which expressly provide that such securities rank senior to the Series A Preferred Stock with respect to dividend rights and rights upon the Corporation’s voluntary or involuntary liquidation, dissolution or winding-up. All the Series A Preferred Stock shall rank equally with one another and shall be identical in all respects.

 

Section 13. Restrictions on Transfer and Ownership of Stock of the Series A Preferred Stock.

 

The Series A Preferred Stock, including any transfer thereof, is subject to the terms and conditions (including any applicable exceptions and exemptions) of Article IV of the Charter.

 

Section 14. Status of Acquired Shares of Series A Preferred Stock.

 

All shares of Series A Preferred Stock which shall have been issued and reacquired in any manner by the Corporation shall be returned to the status of authorized but unissued preferred stock, and may thereafter be classified, reclassified or issued as any series or class of preferred stock.

 

Section 15. Record Holders.

 

The Corporation may deem and treat the record holder of any share of Series A Preferred Stock as the true and lawful owner thereof for all purposes, and the Corporation shall not be affected by any notice to the contrary. Except as may be otherwise provided by the Board of Directors (and except in connection with a global certificate held by a securities depositary), holders of Series A Preferred Stock are not entitled to certificates representing the Series A Preferred Stock held by them.

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Section 16. Sinking Fund.

 

The Series A Preferred Stock shall not be entitled to the benefits of any retirement or sinking fund.

Section 17. Physical Certificate Request.

 

Shares of Series A Preferred Stock shall be eligible for the Direct Registration System service offered by DTC and may be represented in the form of uncertificated (upon the provision of evidence of the recording of such shares to the holders thereof or certification by an officer of the Corporation that irrevocable instructions have been delivered to the Corporation’s transfer agent to issue the Series A Preferred Stock) or certificated shares, provided, however, that any holder of certificated shares of Series A Preferred Stock and, upon request, every holder of uncertificated shares of Series A Preferred Stock, shall be entitled to have a certificate for shares of Series A Preferred Stock signed by, or in the name of, the Corporation certifying the number of shares owned by such holder.

 

Section 18. Headings of Subdivisions.

 

The headings of the various subdivisions hereof are for convenience of reference only and shall not affect the interpretation of any of the provisions hereof.

 

Section 19. Severability of Provisions.

 

If any preferences, rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications or terms or conditions of redemption of the Series A Preferred Stock set forth in the Charter, including the terms of the Series A Preferred Stock, are invalid, unlawful or incapable of being enforced by reason of any rule of law or public policy, all other preferences, rights, voting powers, restrictions, limitations as to distributions, qualifications or terms or conditions of redemption of the Series A Preferred Stock set forth in the Charter (including the terms of the Series A Preferred Stock) which can be given effect without the invalid, unlawful or unenforceable provision thereof shall, nevertheless, remain in full force and effect and no preferences, rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications or terms or conditions of redemption of the Series A Preferred Stock herein set forth shall be deemed dependent upon any other provision thereof unless so expressed therein.

 

SECOND: The Series A Preferred Stock has been classified and designated by the Board of Directors under the authority contained in the Charter. These Articles Supplementary have been approved by the Board of Directors in the manner and by the vote required by law.

 

THIRD: The undersigned acknowledges the foregoing Articles Supplementary to be the duly authorized corporate act of the Corporation and, as to all matters or facts required to be verified under oath, hereby acknowledges to the best of his knowledge, information and belief that these matters and facts are true in all material respects and that this statement is made under the penalties for perjury.

 

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[Remainder of page intentionally left blank. Signature page follows.]

 

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IN WITNESS WHEREOF, the Corporation has caused these Articles Supplementary to be executed under seal in its name and on its behalf by its President and Chief Executive Officer and attested to by its Chief Financial Officer on this 10th day of August, 2023.

 

ATTEST:			GENERATION INCOME PROPERTIES, INC.
By:	/s/ ALLISON DAVIES		By:	/s/ DAVID SOBELMAN
Name:	Allison Davies		Name:	David Sobelman
Title:	Chief Financial Officer		Title:	President and Chief Executive Officer

 

 

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Exhibit 10.1

 

THIRD AMENDMENT
TO THE

AMENDED AND RESTATED

LIMITED PARTNERSHIP AGREEMENT
OF
GENERATION INCOME PROPERTIES, L.P.

 

Dated as of August 10, 2023

 

This Third Amendment (this “ Amendment ”) to the Amended and Restated Limited Partnership Agreement, dated March 23, 2018, of Generation Income Properties, L.P., a Delaware limited partnership (the “ Partnership”), as amended by that certain First Amendment to the Amended and Restated Limited Partnership Agreement, dated May 21, 2019, and that certain Second Amendment to the Amended and Restated Limited Partnership Agreement, dated October 12, 2020 (as amended, the “Partnership Agreement”), is entered into effective as of the date first written above in accordance with Section 4.02(a)(i) and Section 11.01 of the Partnership Agreement. Capitalized terms used but not defined herein are used as defined in the Partnership Agreement.

 

R E C I T A L S

 

WHEREAS, the General Partner is the sole general partner of the Partnership;

 

WHEREAS, Section 4.02 of the Partnership Agreement authorizes the General Partner to cause the Partnership to issue such additional Partnership Interests, in the form of Partnership Units, for any Partnership purpose at any time or from time to time to the Partners (including the General Partner) or to other Persons for such consideration and on such terms and conditions as shall be established by the General Partner in its sole and absolute discretion, all without the approval of any Limited Partners, which additional Partnership Interests may be issued in one or more classes, or one or more series of any of such classes, with such designations, preferences and relative, participating, optional or other special rights, powers and duties, including rights, powers and duties senior to the then-outstanding Partnership Units held by the Limited Partners, all as shall be determined by the General Partner in its sole and absolute discretion and without the approval of any Limited Partner, subject to Delaware law that cannot be preempted by the terms of the Partnership Agreement (including this Amendment) and as set forth in a written document hereafter attached to and made an exhibit to the Partnership Agreement;

 

WHEREAS, the General Partner has authorized the issuance and sale of 2,400,000 shares of its Series A Redeemable Preferred Stock, $0.01 par value per share (the “Series A Preferred Stock”), with a liquidation preference of $5.00 per share of Series A Preferred Stock in exchange for property being acquired by the General Partner (or a direct or indirect Subsidiary of the General Partner), with a fair market value, as determined by the General Partner, in good faith, equal to the value of the Series A Preferred Stock, and in connection therewith, the General Partner, pursuant to Section 4.02 of the Partnership Agreement, is causing the Partnership to issue to the General Partner, the Series A Preferred Units (as hereinafter defined); and

 

WHEREAS, pursuant to the authority granted to the General Partner pursuant to Section 4.02 and Section 11.01 of the Partnership Agreement, and as authorized by the unanimous written consent, dated as of August 10, 2023, of the Board of Directors of the General Partner, the General Partner desires to amend the Partnership Agreement (i) to set forth the designations, rights, powers, preferences and duties and other terms of the Series A Preferred Units and (ii) to issue the Series A Preferred Units to the General Partner.

 

A G R E E M E N T

 

NOW, THEREFORE, in consideration of good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged, the General Partner hereby amends the Partnership Agreement as follows:

 

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(ii) Special Allocations Regarding Series A Preferred Units. After giving effect to the allocations set forth in Sections 5.01(b), (c), and (d) hereof, but before giving effect to the allocations set forth in Section 5.01(a) or Section 5.01(f)(i) hereof, items of gross income and gain shall be allocated to the General Partner until the aggregate amount so allocated to the General Partner under this Section 5.01(f)(ii) for the current and all prior years equals the aggregate amount of the Series A Preferred Return (as defined in Exhibit F hereto); provided, however, that the General Partner may, in its discretion, allocate items of gross income and gain from any given year based on the Series A Preferred Return payable on the Series A Preferred Unit Distribution Payment Date (as defined in Exhibit F hereto) occurring in January of the following year if the General Partner sets the Distribution Record Date (as defined in Exhibit F hereto) for such Series A Preferred Unit Distribution Payment Date, on or prior to December 31 of the year in which such allocation is made.

 

 

 

 

 

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the undersigned has executed this Amendment as of the date first set forth above.

	GENERAL PARTNER:
	GENERATION INCOME PROPERTIES, INC.
	By:	/s/ David Sobelman
		Name: David Sobelman
		Title: Chief Executive Officer

 

 

 

 

 

 

[Signature Page to Third Amendment to Amended and Restated Limited Partnership Agreement]

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EXHIBIT F

 

DESIGNATION OF THE SERIES A PREFERRED UNITS

OF

GENERATION INCOME PROPERTIES, L.P.

 

 

 

“Articles Supplementary” means the Articles Supplementary of the General Partner filed with the State Department of Assessments and Taxation of the State of Maryland on [August 10], 2023, designating the terms, rights and preferences of the Series A Preferred Stock.

 

“Base Liquidation Preference” shall have the meaning provided in Section 6(a).

 

“Business Day” shall mean any day other than a Saturday, Sunday or a day on which state or federally chartered banking institutions in New York, New York are not required to be open.

 

“Capital Gains Amount” shall have the meaning provided in Section 5(g).

 

“Change of Control” shall have the meaning provided in the Articles Supplementary.

 

“Delisting Event” shall have the meaning provided in the Articles Supplementary.

 

“Distribution Record Date” shall have the meaning provided in Section 5(a).

 

“Junior Preferred Units” shall have the meaning provided in Section 4.

 

“Liquidating Distribution” shall have the meaning provided in Section 6(a).

 

“Parity Preferred Units” shall have the meaning provided in Section 4.

 

“Partnership” shall have the meaning provided in Section 1.

 

“Partnership Agreement” shall have the meaning provided in Section 2.

 

“Preferred Units” means all Partnership Units designated as preferred units by the General Partner from time to time in accordance with Section 4.02 of the Partnership Agreement.

 

“Senior Preferred Units” shall have the meaning provided in Section 4.

 

“Series A Preferred Return” shall have the meaning provided in Section 5(a).

 

“Series A Preferred Stock” shall have the meaning provided in the Articles Supplementary.

 

“Series A Preferred Unit Distribution Payment Date” shall have the meaning provided in Section 5(a).

 

“Series A Preferred Units” shall have the meaning provided in Section 1.

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“Total Distributions” shall have the meaning provided in Section 5(g).

 

 

 

 

 

 

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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,

 

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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).

 

 

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In connection with the Company’s registration obligations hereunder, the Company shall:

 

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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.

 

 

 

 

 

 

 

 

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(Signature Pages Follow)

 

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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

 

 

 

 

 

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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.

 

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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).

 

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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.

 

 

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Name of Selling Stockholder	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

 

 

 

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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.

 

 

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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 

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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:

 

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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:

 

 

 

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Exhibit 10.3

 

LOAN AGREEMENT

 

 

THIS LOAN AGREEMENT is made and entered into as of August 10, 2023, by and between GIP13, LLC, a Delaware limited liability company, of 401 East Jackson Street, Suite 3300, Tampa, Florida 33602 ("Borrower"), and Valley National Bank, a national banking association, of 180 Fountain Parkway N, Suite 200, St. Petersburg, Florida 33716 ("Lender"). For value received, and in consideration of the mutual covenants hereunder, the parties agree to the following recitals, terms and conditions:

 

 

 

 

 

 

 

 

 

 

 

 

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Loan Number 4100140285

 

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company, GIPFL 2601 Westhall Lane, LLC, a Delaware limited liability company, GIPGA 2383 Lake Harbin Road, LLC, a Delaware limited liability company, GIPME 409 US Route 2, LLC, a Delaware limited liability company, GIPME 1905 Hallowell Road, LLC, a Delaware limited liability company, GIPOH 5405 Tiffin Avenue, LLC, a Delaware limited liability company, GIPOH 6696 State Route 95, LLC, a Delaware limited liability company, GIPOH 7970 E Harbor Road, LLC, a Delaware limited liability company, GIPPA 23 Wert Drive, LLC, a Delaware limited liability company, GIPTX 1235 Old Highway 90 West, LLC, a Delaware limited liability company, and GIPTX 6919 North Service Road, LLC, a Delaware limited liability company.

 

 

1.2 of this Agreement, together with any and all other instruments currently in force or executed in the future that create a lien or security interest that secures any part of the Loan Obligations, and any and all amendments, extensions, renewals, replacements, substitutions, modifications and consolidations thereof.

 

 

In addition to the foregoing terms, when accounting terms used in this Agreement are not specifically defined herein, they shall have the meanings attributable to them under generally accepted accounting principles.

 

 

 

 

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(iii) result in a lien or encumbrance on any of Borrower's assets (other than the liens of the Security Documents); (d) Borrower's articles of incorporation, by-laws, partnership agreement, articles of organization, operating agreement or other organizational or governing documents ("Governing Documents") do not prohibit any term or condition of this Agreement or the other Loan Documents; (e) each authorization, approval or consent from, each registration and filing with, each declaration and notice to, and each other act by or relating to, any party required as a condition of Borrower's execution, delivery or performance of this Agreement or any other Loan Document has been duly obtained and is in full force and effect and no other action is required under its Governing Documents or otherwise; and (f) Borrower has the power and authority to transact the business in which it is engaged and is duly licensed or qualified and in good standing in each jurisdiction in which the conduct of its business or ownership of property requires such licensing or such qualifications.

 

 

 

 

 

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shall disclose the information necessary for determining compliance with Borrower's covenants in this Agreement.

 

 

 

 

 

 

 

 

 

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partnerships, limited liability companies, entities, associations or de Jure organizations. The required subordinations shall subordinate to the Loan Obligations any debt, cause of action, lien, security interest or any other type of claim or encumbrance held against Borrower or its personal property or real estate.

 

 

 

 

 

 

 

 

6.8 Ownership and Management. There shall be no change in the ownership or management of Borrower or any Real Estate Subsidiary; provided, however, that notwithstanding anything to the contrary in this Agreement or any other loan documents or agreements between Borrower or its affiliates and Lender, it shall not be deemed a change in the control or management of the Borrower or any of its affiliates in the event Loci Capital Management Co., LLC or its affiliates becomes the "Manager" (as such term defined in Section 18-101(12) of the Delaware Limited Liability Company Act, as amended from time to time) of Borrower or any of its affiliates.

 

 

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G) The occurrence of any default under the terms of any Security Document that is not cured within the applicable cure period provided therein.

 

 

 

 

 

 

 

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provision). Any such notice shall be deemed to have been given upon the earlier of: (i) the date when personally delivered to the party; (ii) the next business day, if sent by overnight delivery,

(iii) the third business day after mailing, if mailed by certified, return receipt requested U.S. mail, or (iv) when signed for or refused, as evidenced by the return or delivery receipt.

 

 

 

 

 

 

 

 

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[SIGNATURES ON FOLLOWING PAGE]

 

 

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[Signature Page to loan Agreement]

 

Lender and Borrower have executed this Agreement as of the date first written above.

 

 

Lender: Borrower:

 

Valley National Bank GIP13,LLC,

a Delaware limited liability company

 

 

By: /s/ Kyle Bellini By: /s/ David Sobelman

David E. Sobelman, its President

Name: Kyle Bellini

 

Title: VP

 

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Exhibit 10.4

 

PROMISSORY NOTE

 

$21,000,000.00 August 10, 2023

 

FOR VALUE RECEIVED, GIP13, LLC, a Delaware limited liability company ("Borrower"), promises to pay to the order of Valley National Bank, a national banking association ("Lender"), in the manner hereafter specified, the principal sum of Twenty-One Million and No/100 Dollars ($21,000,000.00), together with interest as provided below. Principal and interest shall be paid in lawful money of the United States of America. The indebtedness evidenced by this Note is referenced hereunder as the "Loan".

 

This Loan is made pursuant to that certain Loan Agreement of even date (the "Loan Agreement"). This Note is secured by mortgage liens and/or security interests, and those liens and security interests, as well as other terms related to the Loan, are evidenced by the Security Documents (as defined in the Loan Agreement).

 

For each Interest Payment Period (as defined herein), the principal amount of the indebtedness due under this Note from time to time shall accrue simple interest at a fixed annual rate equal to the SOFR Index plus the Margin (the greater of which shall be referred to herein as the "Interest Rate").

 

For purposes of this Note, the following terms shall have the following meanings:

 

 

 

 

 

(30) day period ending fifteen (15) U.S. Government Securities Business Days prior to

 

 

Loan Number 4100140285

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the last day of each Interest Rate Period; provided, however, that if at any time the SOFR Index is less than zero, such rate shall be deemed zero for the purposes of this Note and provided further that such floor of zero shall not be applicable for any portion of the Loan subject to a Hedge Agreement (as defined in the Loan Agreement) pursuant to which the Interest Rate is being swapped unless such Hedge Agreement has a floor in which case such floor shall be applicable during the period such floor is in effect under such Hedge Agreement.

 

 

 

Notwithstanding anything herein to the contrary, in the event that (i) the SOFR Index is permanently or indefinitely unavailable or unascertainable, (ii) the SOFR Index ceases to be published, (iii) the SOFR Index is officially discontinued, (iv) the government authority having jurisdiction of Lender sets forth a specific date that the SOFR Index may no longer be available for determining interest rates, (v) the SOFR Index can no longer be lawfully relied upon in contracts, (vi) the SOFR Index does not accurately and fairly reflect the cost of making or maintaining the type of loans or advances evidenced by this Note, or (vii) Lender in its sole but reasonable judgment believes that the SOFR Index is no longer a widely recognized benchmark for the origination of loans and such circumstances are unlikely to be temporary, then all references to the Interest Rate herein will instead be to a replacement rate determined by Lender in its sole but reasonable judgment. If at any time such replacement rate is less than zero percent (0.00%), then the replacement rate shall be deemed to be zero percent (0.00%) plus any spread adjustment for purposes of calculating the Interest Rate. Lender will provide reasonable notice to Borrower of such replacement rate, which will be effective on the date of the earliest event set forth in clauses (i)-(vii) of this paragraph. If there is any ambiguity as to the date of occurrence of any such event, Lender's judgment will be dispositive.

 

Borrower shall make monthly payments of accrued interest at the Interest Rate on the outstanding principal balance of the Loan, plus principal in the amounts and on the dates set forth on Exhibit A attached hereto and made a part hereof by this reference. On August 10, 2028 (the "Maturity Date"), all accrued and unpaid interest and outstanding principal shall be paid in full. All payments due under this Note shall be paid to Lender at 180 Fountain Parkway N, Suite 200, St. Petersburg, Florida 33716, or at such other place as Lender may hereafter designate.

 

 

2

---

Daily interest under this Note shall be computed on the basis of a 360-day year for the actual number of days elapsed. Any payment hereunder shall be applied first to accrued and unpaid interest, second to principal and the balance, if any, to unpaid fees.

 

Borrower agrees that all loan fees and other prepaid finance charges are earned fully as of the date of the Loan and will not be subject to refund upon early payment (whether voluntary or as a result of default), except as otherwise required by law. Except for the foregoing, Borrower may pay without penalty all or a portion of the amount owed under this Note earlier than it is due; provided, however, that Borrower shall, at the time of such prepayment, also pay all accrued and outstanding interest due hereunder. In the event of such prepayment, Borrower shall remain responsible for any and all tennination costs under any outstanding Hedge Agreements. Early payments will not, unless agreed to by Lender in writing, relieve Borrower of Borrower's obligation to continue to make payments hereunder. Rather, early payments will reduce the principal balance due under this Note. Borrower agrees not to send Lender payments marked "paid in full", "without recourse" or similar language. If Borrower sends such a payment, Lender may accept it without losing any of Lender's rights under this Note, and Borrower will remain obligated to pay any further amount owed to Lender. All written communications concerning disputed amounts, including any check or other payment instrument that indicates that the payment constitutes "payment in full" of the amount owed or that is tendered with other conditions or limitations or as full satisfaction of a disputed amount must be mailed or delivered to Valley National Bank, 180 Fountain Parkway N, Suite 200, St. Petersburg, Florida 337162.

 

In addition to any rights of Lender under the Loan Agreement and Security Documents, Lender, upon the occurrence of and during the continuation of an Event of Default (as defined in the Loan Agreement), may set off against the Loan any debt or claim owed by Lender in any capacity to each maker, endorser, accommodation party, guarantor or other obligor under this Note, whether or not due, and upon and during the continuation of such Event of Default the set off shall automatically occur, with record entries to evidence the same made after occurrence of the automatic set off. Additionally, Borrower hereby grants Lender a security interest in all property of Borrower, whether tangible or intangible, which presently or in the future is in the possession of Lender.

 

Time is of the essence of this Note. Upon the occurrence of and during the continuation of an Event of Default (as defined in the Loan Agreement), Lender may, at Lender's option and without notice (Borrower hereby expressly waives notice of default), accelerate this Note and declare the entire principal sum immediately due and payable, together with accrued interest and fees. If any Borrower or any endorser, accommodation party, guarantor, or other obligor under this Note becomes insolvent or bankrupt, or if any Borrower is dissolved, then Lender may immediately, at Lender's option and without notice (Borrower hereby expressly waives notice of default), accelerate this Note and declare the entire remaining principal sum immediately due and payable, together with accrued interest and fees. In addition, the entire principal amount, plus accrued interest, shall be due and payable at the time of any transfer, sale, assignment or other type of disposition of, or at the time of any attachment of any encumbrance, lien or charge against, any portion of the property referenced in the Security Documents, unless Lender consents to the transfer or lien.

 

 

3

---

Upon the occurrence of and during the continuation of an Event of Default (as defined in the Loan Agreement), each party liable for the payment hereof, as maker, endorser, guarantor, or otherwise, shall pay Lender, in addition to the sums stated above, reasonable attorney's fees, which shall include attorney's fees for trial, appellate, bankruptcy, reorganization, and other proceedings, together with all other reasonable collection costs incurred, whether or not suit is brought. After maturity or default, this Note, and any judgment entered on account of this Note, shall bear interest at the highest rate permitted under then applicable law, whether now or hereafter in effect.

 

No delay or omission on the part of Lender in exercising any rights hereunder shall operate as a waiver of such right or of any other right under this Note.

 

So long as Lender has not exercised its right to accelerate as provided hereunder, in the event any periodic payment required under this Note is not received by Lender within ten (l 0) days of the date when the payment is due, Borrower shall pay Lender a late fee equal to the greater of (a) $25.00 and (b) five percent (5%) of the unpaid portion of the late payment. In the event that any payment is dishonored, Borrower shall pay Lender a dishonored item fee equal to

$36.00. The parties agree that such fees are fair and reasonable charges for late payment and dishonored items, respectively, and shall not be deemed a penalty. Failure to exercise this option shall not constitute a waiver of the right to exercise the option in the event of any subsequent default.

 

Nothing contained herein, nor in any instrument or transaction related hereto, shall be construed or shall operate to require Borrower, or any person liable for payment of the Loan, to pay interest at a rate greater than the highest rate permissible under applicable law. Should any interest paid by Borrower, or paid by any parties liable for the payment of the Loan, result in interest in excess of the highest rate permissible under applicable law, whether now or hereafter in effect, then any and all such excess shall be automatically credited against and paid in reduction of the principal balance, and any portion of said excess which exceeds the principal balance shall be paid by Lender hereof to Borrower and any parties liable for the payment of the Loan.

 

Each person liable hereon whether as maker, endorser, guarantor or otherwise waives presentment, demand and protest, and waives notice of protest, notice of dishonor and any other notice. Each maker or endorser expressly consents to any and all extensions, modifications and renewals, in whole or in part, including but not limited to changes in payment schedules and interest rates, and to all delays in time of payment or other performance which Lender may grant or permit at any time and from time to time, and to additions to, releases, reductions or exchanges of or substitutions for any collateral without limitation and without any notice to or further consent of any maker, endorser, guarantor, accommodation party or any other person.

 

This Note may be assigned by the Lender. Written notice of such an assignment shall be given to Borrower and in the event of such an assignment, the assignee shall succeed to all of Lender's rights hereunder, as well as its duties, responsibilities and obligations.

 

 

4

---

For and in consideration of the funding of this Loan by Lender, Borrower hereby agrees to cooperate or to re-execute any and all loan documentation deemed necessary or desirable in the Lender's discretion, in order to correct or to adjust for any clerical errors or omissions contained in any document executed in connection with this Loan.

 

Whenever used herein, the terms "Lender" and "Borrower" shall be construed in the singular or plural as the context may require or admit.

 

BORROWER AND LENDER EACH HEREBY KNOWINGLY, IRREVOCABLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON THIS NOTE OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE, OR ANY OTHER DOCUMENT EXECUTED IN CONJUNCTION WITH THE TRANSACTIONS CONTEMPLATED HEREUNDER, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER ORAL OR WRITTEN) OR ACTION OF ANY PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR LENDER TO MAKE THE LOAN EVIDENCED BY THIS NOTE.

 

 

 

 

 

 

 

[SIGNATURE ON FOLLOWING PAGE]

 

 

5

---

[Signature Page to Promissory Note]

 

Borrower has executed this Note as of the date first written above.

 

 

GIP13, LLC,

a Delaware limited liability company

 

 

 

/s/ David Sobelman

 

David E. Sobelman, its President

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

This Note was executed by Borrower and delivered to Lender outside the State of Florida but is secured by a multi-state mortgage against Florida real estate; accordingly, Florida Documentary Stamp Tax due hereon in the amount of $10,326.75 has been paid upon the recording of the multi-state mortgage securing this Note in the Public Records of Orange County, Florida.

 

 

6

---

EXHIBIT A

 

(Payment Schedule)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SEE ATTACHED

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

---

 

 

Loan Number 4100140285

 

 

---

CUSTOMER

GIP13, LLC



 

---

EFFECTIVE DATE

8/10/2023



 

---

MATURITY DATE

8/10/2028



 

---

FIXED RATE

7.47%



 

---

FLOATING RATE

USD-SOFR-O1S Compound +325.0000000000

 

 

---

 

 

 

PayNumber	Start Date	End Date	Payment Date	Outstanding Notional	Swap Rate	Days	Interest Payment	Principal Payment	Total Payment
	1 8/10/2023	9/11/2023	9/11/2023	$21,000,000.00	7.47000%	32	$139,440.00	$16,859.06	$156,299.06
	2 9/11/2023	10/10/2023	10/10/2023	$20,983,140.94	7.47000%	29	$126,266.05	$30,033.01	$156,299.06
	3 10/10/2023	11/10/2023	11/10/2023	$20,953,107.93	7.47000%	31	$134,780.87	$21,518.19	$156,299.06
	4 11/10/2023	12/11/2023	12/11/2023	$20,931,589.74	7.47000%	31	$134,642.45	$21,656.61	$156,299.06
	5 12/11/2023	1/10/2024	1/10/2024	$20,909,933.13	7.47000%	30	$130,164.33	$26,134.73	$156,299.06
	6 1/10/2024	2/12/2024	2/12/2024	$20,883,798.40	7.47000%	33	$143,001.81	$13,297.25	$156,299.06
	7 2/12/2024	3/11/2024	3/11/2024	$20,870,501.15	7.47000%	28	$121,257.61	$35,041.45	$156,299.06
	8 3/11/2024	4/10/2024	4/10/2024	$20,835,459.70	7.47000%	30	$129,700.74	$26,598.32	$156,299.06
	9 4/10/2024	5/10/2024	5/10/2024	$20,808,861.38	7.47000%	30	$129,535.16	$26,763.90	$156,299.06
	10 5/10/2024	6/10/2024	6/10/2024	$20,782,097.48	7.47000%	31	$133,680.84	$22,618.22	$156,299.06
	11 6/10/2024	7/10/2024	7/10/2024	$20,759,479.26	7.47000%	30	$129,227.76	$27,071.30	$156,299.06
	12 7/10/2024	8/12/2024	8/12/2024	$20,732,407.96	7.47000%	33	$141,965.16	$14,333.90	$156,299.06
	13 8/12/2024	9/10/2024	9/10/2024	$20,718,074.06	7.47000%	29	$124,671.01	$31,628.05	$156,299.06
	14 9/10/2024	10/10/2024	10/10/2024	$20,686,446.01	7.47000%	30	$128,773.13	$27,525.93	$156,299.06
	15 10/10/2024	11/12/2024	11/12/2024	$20,658,920.08	7.47000%	33	$141,461.96	$14,837.10	$156,299.06
	16 11/12/2024	12/10/2024	12/10/2024	$20,644,082.98	7.47000%	28	$119,942.12	$36,356.94	$156,299.06
	17 12/10/2024	1/10/2025	1/10/2025	$20,607,726.04	7.47000%	31	$132,559.20	$23,739.86	$156,299.06
	18 1/10/2025	2/10/2025	2/10/2025	$20,583,986.18	7.47000%	31	$132,406.49	$23,892.57	$156,299.06
	19 2/10/2025	3/10/2025	3/10/2025	$20,560,093.61	7.47000%	28	$119,454.14	$36,844.92	$156,299.06
	20 3/10/2025	4/10/2025	4/10/2025	$20,523,248.69	7.47000%	31	$132,015.80	$24,283.26	$156,299.06
	21 4/10/2025	5/12/2025	5/12/2025	$20,498,965.43	7.47000%	32	$136,113.13	$20,185.93	$156,299.06
	22 5/12/2025	6/10/2025	6/10/2025	$20,478,779.50	7.47000%	29	$123,231.06	$33,068.00	$156,299.06
	23 6/10/2025	7/10/2025	7/10/2025	$20,445,711.50	7.47000%	30	$127,274.55	$29,024.51	$156,299.06
	24 7/10/2025	8/11/2025	8/11/2025	$20,416,686.99	7.47000%	32	$135,566.80	$20,732.26	$156,299.06
	25 8/11/2025	9/10/2025	9/10/2025	$20,395,954.73	7.47000%	30	$126,964.82	$29,334.24	$156,299.06
	26 9/10/2025	10/10/2025	10/10/2025	$20,366,620.49	7.47000%	30	$126,782.21	$29,516.85	$156,299.06
	27 10/10/2025	11/10/2025	11/10/2025	$20,337,103.64	7.47000%	31	$130,818.42	$25,480.64	$156,299.06
	28 11/10/2025	12/10/2025	12/10/2025	$20,311,623.00	7.47000%	30	$126,439.85	$29,859.21	$156,299.06
	29 12/10/2025	1/12/2026	1/12/2026	$20,281,763.79	7.47000%	33	$138,879.38	$17,419.68	$156,299.06
	30 1/12/2026	2/10/2026	2/10/2026	$20,264,344.11	7.47000%	29	$121,940.69	$34,358.37	$156,299.06
	31 2/10/2026	3/10/2026	3/10/2026	$20,229,985.74	7.47000%	28	$117,536.22	$38,762.84	$156,299.06
	32 3/10/2026	4/10/2026	4/10/2026	$20,191,222.90	7.47000%	31	$129,880.04	$26,419.02	$156,299.06
	33 4/10/2026	5/11/2026	5/11/2026	$20,164,803.88	7.47000%	31	$129,710.10	$26,588.96	$156,299.06
	34 5/11/2026	6/10/2026	6/10/2026	$20,138,214.92	7.47000%	30	$125,360.39	$30,938.67	$156,299.06
	35 6/10/2026	7/10/2026	7/10/2026	$20,107,276.25	7.47000%	30	$125,167.79	$31,131.27	$156,299.06
	36 7/10/2026	8/10/2026	8/10/2026	$20,076,144.98	7.47000%	31	$129,139.80	$27,159.26	$156,299.06

 

 

---

37	8/10/2026	9/10/2026	9/10/2026	$20,048,985.72	7.47000%	31	$128,965.10	$27,333.96	$156,299.06
38	9/10/2026	10/13/2026	10/13/2026	$20,021,651.76	7.47000%	33	$137,098.26	$19,200.80	$156,299.06
39	10/13/2026	11/10/2026	11/10/2026	$20,002,450.96	7.47000%	28	$116,214.24	$40,084.82	$156,299.06
40	11/10/2026	12/10/2026	12/10/2026	$19,962,366.14	7.47000%	30	$124,265.73	$32,033.33	$156,299.06
41	12/10/2026	1/11/2027	1/11/2027	$19,930,332.81	7.47000%	32	$132,337.41	$23,961.65	$156,299.06
42	1/11/2027	2/10/2027	2/10/2027	$19,906,371.16	7.47000%	30	$123,917.16	$32,381.90	$156,299.06
43	2/10/2027	3/10/2027	3/10/2027	$19,873,989.26	7.47000%	28	$115,467.88	$40,831.18	$156,299.06
44	3/10/2027	4/12/2027	4/12/2027	$19,833,158.08	7.47000%	33	$135,807.55	$20,491.51	$156,299.06
45	4/12/2027	5/10/2027	5/10/2027	$19,812,666.57	7.47000%	28	$115,111.59	$41,187.47	$156,299.06
46	5/10/2027	6/10/2027	6/10/2027	$19,771,479.10	7.47000%	31	$127,180.04	$29,119.02	$156,299.06
47	6/10/2027	7/12/2027	7/12/2027	$19,742,360.08	7.47000%	32	$131,089.27	$25,209.79	$156,299.06
48	7/12/2027	8/10/2027	8/10/2027	$19,717,150.29	7.47000%	29	$118,647.95	$37,651.11	$156,299.06
49	8/10/2027	9/10/2027	9/10/2027	$19,679,499.18	7.47000%	31	$126,588.38	$29,710.68	$156,299.06
50	9/10/2027	10/12/2027	10/12/2027	$19,649,788.50	7.47000%	32	$130,474.60	$25,824.46	$156,299.06
51	10/12/2027	11/10/2027	11/10/2027	$19,623,964.04	7.47000%	29	$118,087.20	$38,211.86	$156,299.06
52	11/10/2027	12/10/2027	12/10/2027	$19,585,752.18	7.47000%	30	$121,921.31	$34,377.75	$156,299.06
53	12/10/2027	1/10/2028	1/10/2028	$19,551,374.43	7.47000%	31	$125,764.22	$30,534.84	$156,299.06
54	1/10/2028	2/10/2028	2/10/2028	$19,520,839.59	7.47000%	31	$125,567.80	$30,731.26	$156,299.06
55	2/10/2028	3/10/2028	3/10/2028	$19,490,108.33	7.47000%	29	$117,281.73	$39,017.33	$156,299.06
56	3/10/2028	4/10/2028	4/10/2028	$19,451,091.00	7.47000%	31	$125,119.14	$31,179.92	$156,299.06
57	4/10/2028	5/10/2028	5/10/2028	$19,419,911.08	7.47000%	30	$120,888.95	$35,410.11	$156,299.06
58	5/10/2028	6/12/2028	6/12/2028	$19,384,500.97	7.47000%	33	$132,735.37	$23,563.69	$156,299.06
59	6/12/2028	7/10/2028	7/10/2028	$19,360,937.28	7.47000%	28	$112,487.05	$43,812.01	$156,299.06
60	7/10/2028	8/10/2028	8/10/2028	$19,317,125.27	7.47000%	31	$124,257.41	$19,317,125.27	$19,441,382.68

 

 

 

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Exhibit 10.5

AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT

OF

GIP VB SPE, LLC

 

 

---

TABLE OF CONTENTS Page

 

Article 1 INCORPORATION OF THE BACKGROUND STATEMENT; CERTAIN DEFINITIONS		2
Article 2 ORGANIZATIONAL MATTERS		11
2.1 Name		11
2.2 Term		12
2.3 Formation		12
2.4 Principal Office		12
2.5 Registered Office and Registered Agent		12
2.6 Purpose		12
Article 3 COMPANY CAPITAL AND STATUS OF MEMBERS		12
3.1 Admission		12
3.2 Member Information		12
3.3 Effective Date Capital Contributions and Capital Contribution Obligations		12
3.4	Necessary Expense Shortfalls	13
3.5 Funding Default.		13
3.6 Limited Liability of a Member		13
3.7 Capital Accounts		13
3.8 Interest on Capital		14
3.9 Guarantees		14
3.10 No Withdrawal of Capital Contributions		14
3.11 Return of Capital Contributions.		14
3.12 Negative Capital Accounts		14
Article 4 DISTRIBUTIONS TO MEMBERS; REDEMPTION OF PREFERRED EQUITY INVESTMENT		15
4.1 Distributions from Operations		15
4.2 Distributions from Capital Transactions		15
4.3 Redemption and Extension		15
Article 5 ALLOCATION OF PROFITS AND LOSSES		16
5.1 Allocations of Profits and Losses		16
5.2 Special Allocations		16
5.3 Tax Allocations.		18
Article 6 MANAGEMENT OF THE COMPANY		18
6.1 Powers and Duties of the Manager		18
6.2 Approved Budget		19
6.3 Major Decisions; Prohibited Actions		20
6.4	Release of Individual Properties	21
6.5 Other Activities of the Manager		22
6.6 Other Activities of Members		22
6.7	Limitation on Liability of Covered Persons; Indemnification.	22
6.8 Officers		24

ii

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6.9 Affiliates Agreements	24
6.10 Enforcement of Agreements with Generation Member Affiliates	25
6.11 Management of Subsidiaries	25
6.12 Certain Fees	25
6.13 Cyber Security	25
Article 7 TRANSFERABILITY OF MEMBERSHIP INTERESTS; OTHER DISPOSITIONS	26
7.1 Transfers	26
7.2 Permitted Transfers by the Members.	26
7.3 Substitution of Assignees.	27
7.4 Compliance with Securities Laws	27
7.5 Redemption of Third Party Interests/Subordination Agreements	28
Article 8 TERMINATION OF THE COMPANY	28
8.1 Dissolution.	28
8.2 Liquidation.	29
Article 9 COMPANY PROPERTY	30
9.1 Bank Accounts	30
9.2 Title to Company Property	31
9.3 Waiver Of Partition	31
Article 10 BOOKS AND RECORDS: REPORTS	31
10.1 Books and Records	31
10.2 Accounting Method	31
10.3 Company Auditor	31
10.4 Reports	31
Article 11 MANAGER DEFAULT AND REMOVAL	33
11.1 Manager Defaults.	33
11.2 No Waiver	35
Article 12 GENERAL PROVISIONS	36
12.1 Amendments	36
12.2 Notices	36
12.3 Governing Law	37
12.4 Binding Nature of Agreement	37
12.5 Validity	37
12.6 Entire Agreement	37
12.7 Indulgences, Etc	37
12.8 Execution in Counterparts	38
12.9 Number of Days	38
12.10 Interpretation	38
12.11 Access; Confidentiality	38
12.12 Equitable Relief	39
12.13 Representations and Covenants of the Parties	39
12.14 Representations and Covenants of the Members	40
12.15 No Third-Party Beneficiaries	41

iii

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12.16 Tax Controversies.	41
12.17 Counsel	42

iv

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AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

OF

GIP VB SPE, LLC

AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (this “Agreement”) of GIP VB SPE, LLC a Delaware limited liability company (the “Company”), is entered into as of August 10, 2023 (the “Effective Date”) by and among Generation Income Properties, L.P., a Delaware limited partnership (the “Generation Member”) , LC2-NNN Pref, LLC, a Florida limited liability company (the “Loci Member”) and Generation Income Properties, L.P., a Delaware limited liability company, as the manager of the Company (the “Manager”). The Members and the Manager are collectively called the “Parties”. Capitalized terms used in this Agreement, including in this preamble, have the meanings indicated in Section 1.

BACKGROUND STATEMENT

A. The Company is the indirect owner of 8 rental properties (the “Company Portfolio”) through its ownership of all of the outstanding membership interests in GIP 13, LLC, a Delaware limited liability company (“NewCo”). The properties included in the Company Portfolio are each described on Schedule I attached to this Agreement. Each of the properties in the Company Portfolio is held by a special purpose entity wholly owned by NewCo or as otherwise indicated on Schedule I.

B. The Company has entered into a purchase agreement (the “Modiv Purchase Agreement”) with Modiv Inc., a Maryland corporation, (“Modiv”) dated August 10, 2023, pursuant to which the Company will acquire 13 rental properties from Modiv (the “Modiv Portfolio”) for a purchase price of $42,000,000 (the “Modiv Purchase Price”). The properties included in the Modiv Portfolio are each described on Schedule II attached to this Agreement. The Modiv Purchase Agreement has been assigned to NewCo and each of the properties included in the Modiv Portfolio will be held in a special purpose entity of which NewCo is the sole owner. A copy of the Modiv Purchase Agreement is attached to this Agreement as Exhibit 1. Simultaneously with the execution and delivery of this Agreement the Company shall complete the purchase of the Modiv Portfolio. A copy of the related organizational chart (“Org Chart”) is attached as Exhibit 2.

C. Prior to the execution and delivery of this Agreement;

(i) each of the eight special purpose entities included in the Company Portfolio entered into separate loan agreements with Valley National Bank in the respective amounts set forth on Schedule I as of the Effective Date and reflected on the Org Chart, with each loan secured by the special purpose entities’ respective properties (the “Individual Company Loan Agreements”); and

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(ii) Simultaneously with the execution and delivery of this Agreement, NewCo entered into an additional loan agreement with Valley National Bank, secured by the properties included in the Modiv Portfolio (the “Modiv Portfolio Loan Agreement”) in the amount of $21,000,000 as of the Effective Date. The Individual Company Loan Agreements and the Modiv Portfolio Loan Agreement are collectively called the “Senior Loan Agreements” and the loans made pursuant to such agreements are called the “Senior Loans”). Copies of the Senior Loan Agreements are attached to this Agreement as composite Exhibit 3.

D. The Loci Member has agreed to make initial Capital Contribution to the Company (the “Initial Capital Contribution”) as described and provided for in Section 3.3(a) and, if certain conditions are met, an additional Capital Contribution as described and provided for in Section 3.3(b) (the “Additional Capital Contribution and together with the Initial al Contribution, the “Preferred Equity Investment”).

E. The Parties are entering into this Agreement to provide for the organization and operation of the Company. This Agreement is the limited liability company agreement of the Company for purposes of the Act.

NOW THEREFORE, the Parties, intending to be legally bound, agree to the following.

Article 1

INCORPORATION OF THE BACKGROUND STATEMENT; CERTAIN DEFINITIONS

The Background Statement is true and correct and is incorporated into this Agreement.

Capitalized terms used in this Agreement, and not defined elsewhere herein shall have the following meanings:

“AAA” has the meaning set forth on Exhibit 6.

“AAA Rules” has the meaning set forth on Exhibit 6.

“Accrued Preferred Return” a portion of the Preferred Return equal to an annual rate of return of 10.5% cumulative, compounded monthly on an actual 360 day year basis.

“Act” means the Delaware Limited Liability Company Act, Title 6, Chapter 18 Sections 18-101, et seq. of the Delaware Code.

“Additional Capital Contribution” has the meaning set forth in the Preamble.

“Adjusted Capital Account Deficit” means, with respect to any Member for any Fiscal Year or other relevant period, the deficit balance, if any, in such Member’s Capital Account as of the end of the relevant Fiscal Year or other relevant period after giving effect to the following adjustments:

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(i) crediting to such Capital Account any amounts that such Member is obligated to restore pursuant to any provision of this Agreement or is deemed obligated to restore pursuant to Treasury Regulations Sections 1.704-1(b)(2)(ii)(C), 1.704-2(g)(1) and 1.704-2(i); and

(ii) debiting to such Capital Account the items described in Treasury Regulations Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) and 1.704-1(b)(2)(ii)(d)(6).

“Adjusted Net Operating Income” means, for any period, Operating Revenues minus Operating Expenses during such period, plus, to the extent deducted in determining such amount, depreciation, amortization, and all other non-cash expenses, interest expenses and income taxes for such period.

“Affiliate Agreement” has the meaning set forth in Section 6.9.

“Affiliate or affiliate” of a Person means any Person, directly or indirectly Controlling, Controlled by or under common Control with the specified Person.

“Agreement” has the meaning set forth in the Preamble.

“Appraised Value” means the value of any Property as set forth in the Property Appraisals.

“Approved Budget” means the budget attached to this Agreement as Exhibit 4 which is the initial Approved Budget, prepared by the Manager and subsequent budgets approved in writing by the Members in the manner set forth in Section 6.2, as modified or amended from time to time in accordance with this Agreement, and setting forth (a) the estimated capital and operating expenses of the Company for the then-current or immediately succeeding Fiscal Year and for each month of each such Fiscal Year, in such detail as any Member reasonably requires in connection with the approval thereof, and the anticipated sources of funds therefor including, without limitation, anticipated Operating Revenues, (b) a description in reasonable detail of the maintenance, repair, ownership, operation and management of the properties owned by the Company, including, without limitation, any planned or required improvements to such properties and the schedule therefor, (c) a reasonably detailed leasing report, including a description of anticipated revenues for the applicable year and (d) such other matters described in Section 6.2 or that any Member reasonably requests in connection with the approval thereof.

“Approved Loan” means the Senior Loans or any other loan approved by the Members in accordance with this Agreement by which the Company or any Subsidiary borrows money.

“Arbitrators” has the meaning set forth on Exhibit 6.

“Audit Committee” has the meaning set forth in Section 10.1.

“Bad Act” has the meaning set forth in Section 11.1(d).

“Bad Act Participants” has the meaning set forth in Section 11.1(d).

“Book Depreciation” means, for each taxable year or other period, an amount equal to the depreciation, amortization or other cost recovery deduction allowable with respect to an asset for

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the year or other period, as reasonably determined by the Loci Member, except that if the Gross Asset Value of an asset differs from its adjusted basis for federal income tax purposes at the beginning of the year or other period, Book Depreciation will be an amount which bears the same ratio to the beginning Gross Asset Value as the federal income tax depreciation, amortization or other cost recovery deduction for the year or other period bears to the beginning adjusted tax basis, provided that if the federal income tax depreciation, amortization, or other cost recovery deduction for the year or other period is zero, Book Depreciation will be determined with reference to the beginning Gross Asset Value using any reasonable method selected by the Loci Member.

“Business Day” or “business day” means each day which is not a Saturday, Sunday or legally recognized national public holiday or a legally recognized public holiday in the State of Florida.

“Capital Account” has the meaning set forth in Section 3.7.

“Capital Call Notice” has the meaning set forth in Section 3.4.

“Capital Contribution” means the aggregate amount of money or fair market value of property (net of liabilities assumed by the Company and liabilities to which such property is subject) contributed by a Member.

“Capital Transaction” means (a) a sale, condemnation, exchange or casualty not followed by reconstruction, or other disposition, whether by foreclosure or otherwise, of all or any portion of the properties included in the Company Portfolio or the Modiv Portfolio or otherwise owned by the Company or a Subsidiary, (b) an property, hazard or casualty insurance recovery if and to the extent such insurance proceeds are readily available and not required to pay a judgment, utilized for restoration of improvements or paid to a lender as required by any loan documents to which the Company or a Subsidiary is a party, (c) any financing or refinancing transaction, and (d) the proceeds from any other transaction with respect to the Company which, in accordance with generally accepted accounting principles, is considered capital in nature.

“Certificate of Formation” means the certificate of formation of the Company filed with the Secretary of State of the State of Delaware on March 21, 2022.

“Code” means the Internal Revenue Code of 1986, as amended (and as may be amended from time to time).

“Committed Amount” means the aggregate of the Capital Contributions provided for in Section 3.3(a) and the Additional Capital Contributions provided for in Section 3.3(b).

“Company” has the meaning set forth in the Preamble.

“Company Auditor” has the meaning set forth in Section 10.3.

“Company Minimum Gain” has the meaning set forth in Regulations Section 1.704-2(b)(2) and 1.704-2(d) with respect to partnership minimum gain.

“Company Portfolio” has the meaning set forth in the Preamble.

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“Confidential Data” has the meaning set forth in Section 6.13.

“Control” or “Controlling” means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract, or otherwise.

“Covered Person” has the meaning set forth in Section 6.7(a).

“Current Preferred Return” means that portion of the Preferred Return equal to an annual rate of return of 5% cumulative, compounded monthly on a 360 day basis, paid in arrears on or before the 15th day of each calendar month.

“Default Rate” means a rate equal to an annual 18% cumulative, compounded monthly on an actual 360 day year basis paid in arrears on the 15th day of each calendar month.

“Distributable Cash from Capital Transactions” means, with respect to any Capital Transaction, the total cash gross receipts of the Company attributable to such Capital Transaction, less amounts required to (a) pay all expenses associated with such Capital Transaction, and (b) repay all secured and unsecured funded debt of the Company required to be paid in connection with such Capital Transaction.

“Distributable Cash from Operations” means, for any period, the total cash gross receipts of the Company during such period derived from all sources (other than Capital Contributions, Capital Transactions, and Approved Loans), together with any amounts released from reserves or working capital from prior periods as provided for in the Approved Budget, less amounts required for

(i) common area maintenance, real property and state tax liabilities, and insurance liabilities that are the direct or indirect responsibility of the Company or a Subsidiary as contemplated in any tenant leases,

(ii) required debt service or other charges for any Approved Loan to the Company, including any loan made to the Company in connection with any Capital Transaction, paid during such period, and

(iii) any increases or replacements in reserves (other than from Capital Contributions) during such period, as provided for in the Approved Budget); and

(iv) Necessary Expenses and other operating and administrative expenses of the Company (excluding amounts paid from reserves or funds provided by Capital Contributions), including without limitation, fees, to the extent then due and payable, under this Agreement or the Affiliate Agreements.

“Effective Date” has the meaning set forth in the Preamble.

“Entity” means any general partnership, limited partnership, limited liability company, corporation, joint venture, trust, business trust, cooperative or other association.

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“First Arbitrator” has the meaning set forth on Exhibit 6.

“Fiscal Year” means the Company’s fiscal year, which shall be the calendar year; unless for U.S. federal income tax purposes another taxable year is required, in which case the Fiscal Year shall be such taxable year.

“Funding Deficit” has the meaning set forth in Section 3.5(a).

“Generation Member” has the meaning set forth in the Preamble.

“Generation Member Principal” means David Sobelman.

“Governmental Entity” means any court, tribunal, department, body, board, bureau, administrative agency or commission or other governmental authority or instrumentality, whether federal, state, local or foreign.

“Gross Asset Value” means, with respect to any Company asset, such asset’s adjusted basis for federal income tax purposes, except as follows:

(a) The initial Gross Asset Value of any asset contributed by a Member to the Company shall be the gross fair market value of such asset, as determined by the Members as set forth in a written contribution agreement;

(b) The Gross Asset Values of all Company assets shall be adjusted to equal their respective gross fair market values, as determined by the Members, as of the following times:

(i) the acquisition of any additional Membership Interests in the Company following its initial capitalization by any new or existing Member in exchange for more than a de minimus Capital Contribution;

(ii) the distribution by the Company to a Member of more than a de minimus amount of Company property as consideration for an interest in the Company;

(iii) the liquidation of the Company within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g); and

(iv) in connection with the grant of any Membership Interests in the Company (other than a de minimus interest) as consideration for the provision of services to or for the benefit of the Company by an existing Member acting in a member capacity, or by a new Member acting in anticipation of being a Member; provided, however, that the adjustments pursuant to clauses (i), (ii), and (i) above shall be made only if the Members determine that such adjustments are necessary or appropriate to reflect the relative economic interests of the Members in the Company;

(c) The Gross Asset Value of any Company asset distributed to any Member shall be adjusted to equal the gross fair market value of such asset on the date of distribution as determined by the Members;

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(d) The Gross Asset Values of Company assets shall be increased (or decreased) to reflect any adjustments to the adjusted basis of such assets pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent that such adjustments are taken into account in determining Capital Accounts pursuant to Regulations Section 1.704-1(b)(2)(iv)(m) and this Agreement; provided, however, that Gross Asset Values shall not be adjusted pursuant to this subparagraph (d) to the extent the Members determines that an adjustment pursuant to subparagraph (b) hereof is necessary or appropriate in connection with a transaction that would otherwise result in an adjustment pursuant to this subparagraph (d); and

(e) If the Gross Asset Value of an asset has been determined or adjusted pursuant to subparagraphs (a), (b), or (d) hereof, such Gross Asset Value shall thereafter be adjusted by the Book Depreciation taken into account with respect to such asset for purposes of computing Profits and Losses.

“Guarantee” has the meaning set forth in Section 3.9.

“Guarantor” has the meaning set forth in Section 3.9.

“Individual Company Loan Agreements” has the meaning set forth in the Preamble.

“Initial Capital Contribution” has the meaning set forth in the Preamble.

“Loan Documents” means any document executed and delivered by any Member or an Affiliate of any Member in connection with the Senior Loans or any other Approved Loan.

“Loci Capital” means Loci Capital Management Co., LLC, a Florida limited liability company and an Affiliate of the Loci Member.

“Loci Member” has the meaning set forth in the Preamble.

“Losses” has the meaning set forth in Section 6.7(e).

“Major Decision” has the meaning set forth in Section 6.3(a).

“Make-Whole Amount” means 1.3 multiplied by the amount of the aggregate Preferred Equity Investment, including any additional Preferred Equity Investments made pursuant to this Agreement.

“Manager” means, initially, Generation Income Properties L.P., in its capacity as Manager, and, following any removal of the Manager in accordance with this Agreement, the Person named as the replacement Manager in accordance with this Agreement.

“Manager Default” has the meaning set forth in Section 11.1(a).

“Manager Default Cure Period” has the meaning set forth in Section 11.1(a)(ii).

“Member” means a Person admitted as a member of the Company in accordance with this Agreement, as long as such Person remains a Member.

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“Member Nonrecourse Debt” means “partner nonrecourse debt” as defined in Treasury Regulation Section 1.704-2(b)(4), substituting the term “Company” for the term “partnership” and the term “Member” for the term “partner” as the context requires.

“Member Nonrecourse Debt Minimum Gain” means an amount, with respect to each Member Nonrecourse Debt, equal to the Company Minimum Gain that would result if the Member Nonrecourse Debt were treated as a Nonrecourse Debt, determined in accordance with Treasury Regulation Section 1.704-2(i)(3).

“Member Nonrecourse Deduction” means “partner nonrecourse deduction” as defined in Treasury Regulation Section 1.704-2(i), substituting the term “Member” for the term “partner” as the context requires.

“Membership Interest” means a Member’s entire interest in the Company including such Member’s right to receive allocations and distributions pursuant to this Agreement and the right to participate in the management of the business and affairs of the Company in accordance with this Agreement, including the right to vote on, consent to, or otherwise participate in any decision or action of or by the Members granted pursuant to this Agreement.

“Modiv” has the meaning set forth in the Preamble.

“Modiv Portfolio” has the meaning set forth in the Preamble.

“Modiv Portfolio Loan Agreement” has the meaning set forth in the Preamble.

“Modiv Purchase Agreement” has the meaning set forth in the Preamble.

“Modiv Purchase Price” has the meaning set forth in the Preamble.

“Necessary Expenses” means the following expenses and obligations of the Company or any Subsidiary: (a) real estate and personal property taxes, assessments, utility or similar charges, (b) insurance premiums or insurance deductibles, debt service, including payments of principal and interest, (c) amounts required to be paid pursuant to the terms of any Approved Loan to which the Company or a Subsidiary is a party as to which the failure to pay would constitute a default under the any loan document related to such Approved Loan, (d) payments with respect obligations secured by mechanics liens or similar encumbrances or, to the extent contested in good faith, the cost of posting and the amount of appropriate bonds, (e) non-discretionary construction or development expenses reasonably necessary to preserve the value of the any of the assets of the Company and that are reflected in property condition reports obtained in connection with the acquisition of the Modiv Portfolio or in an Approved Budget, (f) non-discretionary expense items such as the wages and related expenses of the work force for the assets of the Company, utility expenses, insurance premiums, expenses incurred to remedy a condition presenting imminent risk or injury to persons or material damage to property, and other similar expenses to the extent reasonably necessary to maintain the integrity of the Company’s and all Subsidiaries’ operations, and (g) the obligation to pay the Current Preferred Returns.

“Necessary Expense Shortfall” has the meaning set forth in Section 3.4.

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“Net Profits” and “Net Losses” means, for each Fiscal Year or other period, an amount equal to the Company’s taxable loss or income, respectively, for such year or period, determined in accordance with Section 703(a) of the Code (and for this purpose, all items of income, gain, loss, or reduction required to be stated separately pursuant to Section 703(a)(1) of the Code shall be included in taxable income or loss), with the following adjustments:

(a) Any income of the Company that is exempt from federal income tax and not otherwise taken into account in computing Net Profits or Net Losses shall be added to such taxable income or loss;

(b) Any expenditures of the Company described in Section 705(a)(2)(B) of the Code or treated as 705(a)(2)(B) expenditures pursuant to Regulation Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account in computing Net Profits or Net Losses shall be subtracted from such taxable income or loss;

(c) In the event the Gross Asset Value of any Company asset is adjusted in accordance with the definition of “Gross Asset Value”, the amount of such adjustment shall be taken into account as gain or loss from the disposition of such asset for purposes of computing Net Profits or Net Losses;

(d) Gain or loss resulting from any disposition of Company property with respect to which gain or loss is recognized for federal income tax purposes shall be computed by reference to the Gross Asset Value of the property disposed of notwithstanding that the adjusted tax basis of such property differs from its Gross Asset Value;

(e) To the extent an adjustment to the adjusted tax basis of any Company property pursuant to Code Sections 732(d), 734(b) or 743(b) is required, pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis);

(f) Any items of depreciation, amortization and other cost recovery deductions with respect to Company property having a Gross Asset Value that differs from its adjusted tax basis shall be computed by reference to the property’s Gross Asset Value (as adjusted for Book Depreciation) in accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(g); and

(g) Any items which are specially allocated pursuant to Section 5.2 shall not be taken into account in computing Net Profits or Net Losses.

“NewCo” has the meaning set forth in the Preamble.

“Nonrecourse Debt” has the meaning set forth in Treasury Regulation Section 1.704-2(b)(3).

“Nonrecourse Debt Minimum Gain” means an amount, with respect to each Nonrecourse Debt, equal to the Company Minimum Gain that would result if such Nonrecourse Debt were treated as a Nonrecourse Liability, determined in accordance with Section 1.704-2(i)(3) of the Regulations.

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“Nonrecourse Deductions” has the meaning set forth in Sections 1.704-2(b)(1) and 1.704-2(c) of the Regulations.

“Nonrecourse Liability” has the meaning set forth in Section 1.704-2(b)(3) of the Regulations.

“Operating Expenses” means, for any period, all expenses of the Company from any source arising from the ownership and operation of the business during such period (inclusive of the monthly accrual of expenses for such period for common operating expenses such as real estate taxes and insurance that are not paid on a monthly basis and that are paid for periods that are not consistent with the period for which Operating Expenses are being measured), but in all events specifically excluding expenses incurred in connection with Capital Transactions and other extraordinary items, including, but not limited to, fees paid to the Loci Member hereunder.

“Operating Revenues” means, for any period, the gross revenues of the Company from any source arising from the ownership and operation of the business during such period, including without limitation (x) rental receipts from tenants under leases, (y) proceeds of any business interruption or rental loss insurance maintained by the Company from time to time, and (z) amounts released from Company reserves, but in all events specifically excluding Capital Contributions and proceeds from Capital Transactions.

“Parties” has the meaning set forth in the Preamble.

“Partnership Representative” has the meaning set forth in Section 12.16(a).

“Preferred Equity Investment” has the meaning set forth in the Preamble

“Preferred Return” means distributions with respect to the Preferred Equity Investment accruing at an annual rate of return of 15.5% cumulative, compounded monthly on a 360-day year basis. The Preferred Return will begin accruing on the entire Committed Amount on the Effective Date and will continue to accrue until the Loci Member’s Membership Interest has been fully redeemed, provided that the if the Additional Capital Contribution provided for in Section 3.3(b) is not funded in accordance with the provisions of Section 3.3(b), the Preferred Return shall immediately cease to accrue with respect to such amount. For the avoidance of doubt, examples of the calculation of the Preferred Return are attached to this Agreement as Exhibit 8

“Person” means a natural person, or a corporation, association, limited liability company, partnership, joint stock company, Governmental Entity, trust or unincorporated organization or other entity that has independent legal status.

“Properties” mean the properties included in the Company Portfolio and in the Modiv Portfolio or any other real property acquired by the Company.

“Property Appraisals” means the third party appraisals for each of the Properties as identified on Schedule I and Schedule II attached hereto.

“Respondent” has the meaning set forth on Exhibit 6.

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“Second Arbitrator” has the meaning set forth on Exhibit 6.

“Senior Loan Agreements” has the meaning set forth in the Preamble.

“Senior Loans” has the meaning set forth in the Preamble.

“Sole Arbitrator” has the meaning set forth on Exhibit 6.

“Subsidiary” means any entity owned, in whole or in part, directly or indirectly, by the Company.

“Successor” has the meaning set forth in Section 8.1(c).

“Third Party Interests” means the interests of any non-controlling investors in the Properties, as shown on Exhibit 7 to this Agreement.

“TIC Conditions” means the delivery to LOCI Member of (i) a title commitment pursuant to which a nationally recognized title insurance carrier has committed to insure, upon completion of the acquisition of the Property by the TIC SPE, fee simple title to all of the TIC Property in the TIC SPE in an amount reasonably determined by Generation Member and subject only to the title exceptions as set forth in the existing title policy insuring title to the TIC Property, and (ii) evidence that the Company has, subject to the payment of the TIC Purchase Price, received all documents necessary to cause the transfer and conveyance of the TIC Interest to the TIC SPE free and clear of all liens and encumbrances and that such documents have been executed and delivered to the TIC SPE.

“TIC Interest” means that certain tenant-in-common interest in the TIC Property owned by Sunny Ridge MHP LLC, a Florida limited liability company.

“TIC Property” means the Property identified on Schedule I attached hereto as the property located at 535 S. Perryville Road, Rockford, IL 61108.

“TIC SPE” means GIPIL 535 S. Perryville Road, LLC, a Delaware limited liability company and wholly owned Subsidiary of the Company

“TIC Purchase Price” means $1,302,072.80.

“Treasury Regulations” or “Regulations” means the Federal Income Tax Regulations, including Temporary Regulations, promulgated under the Code, as such regulations may be amended from time to time (including corresponding provisions of succeeding regulations).

Article 2

ORGANIZATIONAL MATTERS

2.1 Name. The name of the Company is “GIP VB SPE, LLC”.

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2.2 Term. The term of the Company commenced on the date the Certificate of Formation was filed with the Secretary of State of Delaware and shall continue in existence perpetually unless the Company is dissolved and its affairs wound up in accordance with the Act or this Agreement.

2.3 Formation. Pursuant to the provisions of the Act, the Company was formed by filing its Certificate of Formation with the Secretary of the State of Delaware as required by the Act. The Parties hereby ratify the filing of the Certificate of Formation as in effect on the Effective Date with the Secretary of the State of Delaware by the authorized person identified therein.

2.4 Principal Office. The principal office of the Company is 401 E. Jackson Street, Suite 3300, Tampa, FL 33602 or such other place as the Manager may from time to time designate. The Company may have other offices at any place or places as may be determined by the Manager.

2.5 Registered Office and Registered Agent. The Company’s registered office is c/o Corporation Service Company, 251 Little Falls Drive, Wilmington, DE 19808, New Castle County. The registered agent for service of process on the Company is Corporation Service Company. The Manager may change the registered office and registered agent from time to time.

2.6 Purpose. The business and purpose of the Company is through individual special purpose bankruptcy remote Subsidiaries, to: (a) acquire, develop, redevelop, manage, operate, finance, refinance, rehabilitate, lease, hold for investment, sell and in all respects act as owner of each of the Properties, (b) acquire, own, hold for investment, dispose of ownership interests in entities that directly or indirectly own each of the Properties, and (c) engage in all activities necessary, incidental, or appropriate in connection with such activities.

Article 3

COMPANY CAPITAL AND STATUS OF MEMBERS

3.1 Admission. Each Person identified on Exhibit 5 as a Member is deemed admitted as a member of the Company as of the Effective Date.

3.2 Member Information. The name, address, and Effective Date Capital Contributions and Percentage Interest of each Member as of the Effective Date are set forth on Exhibit 5.

3.3 Effective Date Capital Contributions and Capital Contribution Obligations.

(a) Simultaneously with the execution and delivery of this Agreement, the Loci Member shall make the Initial Capital Contribution of $12,000,000.00 to the Company.

(b) So long as the TIC Conditions are satisfied on or before September 10, 2023, within five (5) Business Days after satisfaction of the TIC Conditions. the Loci Member shall make the Additional Capital Contribution in the amount of $2,100,000.

Attached to this Agreement as Exhibit 9 is a description of the sources and uses of funds as contemplated by this Agreement.

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3.4 Necessary Expense Shortfalls. If at any time a Party believes that the Company has and will have insufficient funds, out of available revenue, to pay any Necessary Expenses when due (a “Necessary Expense Shortfall”), or to timely fund amounts provided for in the Approved Budget because of a shortfall in projected revenue or cost overruns (an “Approved Budget Shortfall”) then such Party shall give written notice of such determination and a reasonably detailed explanation of the basis therefor to the other Parties. Following delivery of such a notice, the Manager shall promptly either (i) provide all Members with documentation sufficient to satisfy all Members that there is no Necessary Expense Shortfall, or (ii) issue a notice (a “Capital Call Notice”) requiring the Generation Member to make Capital Contributions in an aggregate amount sufficient to eliminate the Necessary Expense Shortfall no later than the fifth Business Day following the date of such Capital Call Notice. If the Manager fails to (i) provide such documentation, or if the Loci Member in its reasonable discretion determines it is not satisfied with such documentation, or (ii) provide such documentation and issue such Capital Call Notice, any Member may issue the Capital Call Notice provided for in clause (ii) of the preceding sentence. A Capital Call Notice issued pursuant to this Section 3.4 must be accompanied by a reasonably detailed explanation of the need for such Capital Call Notice and the reasons for such Member’s dissatisfaction with the steps taken by the Manager.

3.5 Funding Default.

(a) If the Generation Member fails to timely make the full amount of any Capital Contribution that it is required to make in response to a Capital Call Notice (the required amount not contributed, the “Funding Deficit”), the Loci Member will be entitled to make an additional Capital Contribution in the amount of the Funding Deficit and such amount shall be deemed an additional Preferred Equity Investment made as of the date of such Capital Contribution and the Preferred Return on such amounts shall be at the Default Rate.

3.6 Limited Liability of a Member. The Members, in their capacity as such, shall not be liable for the debts, liabilities, contracts or any other obligations of the Company. Furthermore, except as provided for in this Agreement, the Members shall not be obligated to make contributions to the capital of the Company.

3.7 Capital Accounts. The Company shall establish and maintain for each Member a separate capital account (a “Capital Account”) on its books and records in accordance with this Section 3.7. Each Capital Account shall be established and maintained in accordance with the following provisions:

(a) Each Member’s Capital Account shall be increased by the amount of:

(i) such Member’s Capital Contributions.

(ii) any Net Profits or other item of income or gain allocated to such Member pursuant to Section 5; and

(iii) any liabilities of the Company that are assumed by such Member or secured by any property distributed to such Member. and

(b) Each Member’s Capital Account shall be decreased by:

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(i) the cash amount or Gross Asset Value of any property distributed to such Member pursuant to Section 4 or 8.2;

(ii) the amount of any Net Loss or other item of loss or deduction allocated to such Member pursuant to Section 5; and

(iii) the amount of any liabilities of such Member assumed by the Company or which are secured by any property contributed by such Member to the Company.

3.8 Interest on Capital. Except as otherwise specifically provided for in this Agreement, no interest shall be payable on any Capital Contributions made to the Company.

3.9 Guarantees. In connection with the Senior Loans or any other Approved Loan made to the Company or a Subsidiary in accordance with this Agreement, the Generation Member, or a credit worthy Affiliate (as reasonably required by the relevant lender) (the “Guarantor”) shall provide all customary nonrecourse carve-out guarantees reasonably required by such lender for the benefit of such lender in connection with any Approved Loan (each, a “Guarantee”).

3.10 No Withdrawal of Capital Contributions. Except upon dissolution and liquidation of the Company or as otherwise set forth in this Agreement, including Section 4.3 (Redemption and Extension), no Member shall have the right to withdraw, reduce, or demand the return of its Capital Contributions, or any part thereof, or any distribution thereon. Except as otherwise provided in this Agreement, no Member shall have the right to receive assets other than cash in connection with a distribution or return of capital.

3.11 Return of Capital Contributions.

(a) No Fixed Time. Except as specifically provided for in this Agreement, including Section 4.3 (Redemption and Extension), and upon dissolution and liquidation of the Company, there is no agreement, nor time set, for the return of any Capital Contribution to any Member.

(b) No Personal Liability of Members. Except as otherwise required by the Delaware Act, the Members shall not be personally liable for the return or repayment of any Capital Contribution.

3.12 Negative Capital Accounts. In the event that any Member shall have a deficit balance in its Capital Account, such Member shall have no obligation, during the term of the Company or upon dissolution or liquidation thereof, to restore such negative balance or make any Capital Contributions to the Company by reason thereof or in respect of any negative balance resulting from a withdrawal of capital or dissolution in contravention of this Agreement.

Article 4

 

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DISTRIBUTIONS TO MEMBERS; REDEMPTION OF PREFERRED EQUITY INVESTMENT

4.1 Distributions from Operations. The Company shall distribute all Distributable Cash from Operations as follows:

(a) First, to the Loci Member, until the Loci Member’s unpaid accrued Current Preferred Return has been reduced to zero, but not less than zero.

(b) Thereafter, to the Generation Member, unless the trailing 3 month annualized debt yield is less than 10% computed by dividing the sum of the outstanding Senior Loans and the Preferred Equity Investment as of the date of such calculation by the trailing three calendar month annualized Adjusted Net Operating Income, in which case any distribution otherwise payable to the Generation Member will be distributed to the Loci Member in accordance with Section 4.2 below.

4.2 Distributions from Capital Transactions. The Company shall distribute all Distributable Cash from Capital Transactions as follows:

(a) First, to the Loci Member, until the Loci Member’s unpaid accrued Current Preferred Return has been reduced to zero, but not less than zero.

(b) Second, to the Loci Member, until the Loci Member’s Accrued Preferred Return has been reduced to zero, but not less than zero.

(c) Third, to the Loci Member until the Make-Whole Amount has been reduced to zero, but not less than zero,

(d) Thereafter, to the Generation Member.

4.3 Redemption and Extension.

(a) The Membership Interest of the Loci Member will be redeemed upon the payment to Loci Member of an amount equal to the greater of (i) the sum of the Preferred Equity Investment plus the accrued Preferred Return thereon, and (ii) the Make-Whole Amount (the “Redemption Amount”).

(b) The Redemption Amount is payable to the Loci Member on or before the date being 24 months from the Effective Date (the “Mandatory Redemption Date”). Upon the payment of the Redemption Amount to the Loci Member, the Membership Interest of the Loci Member will be deemed fully redeemed without further action on the part of the Loci Member and this Agreement deemed amended accordingly. The Generation Member shall have two 12-month extension options to extend the Mandatory Redemption Date to the dates that are 36 and 48 months from the Effective Date, provided that upon the effective date of such extension: (i) Loci Capital is paid an extension fee equal to 100 basis points on outstanding Preferred Equity Investment for each such extension, (ii) the Preferred Equity Return shall be increased from 15.5% to 18%, the Accrued Preferred Return shall be increased from 10.5% to 13% and the Current Preferred Return shall remain at 5% and all of the related provisions of this Agreement relating to such returns,

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including the payment of the Current Preferred Return in arrears on or prior to the 15th day of each calendar month, shall remain in full force and effect, (iii) the trailing six month annualized Adjusted Net Operating Income at the date of such extension is in excess of $5,000,000, (iv) the Senior Loans have been extended so that they provide for a maturity through the end of such extension period, and (v) there are no existing material breaches or material defaults under this Agreement or any agreement between the Company or any Subsidiary and Generation Member, Guarantor or any of their Affiliates. If the Redemption Amount is not paid to Loci Member at or before the Mandatory Redemption Date, as may be extended pursuant to the terms of this Agreement, then (i) a Manager Default will occur, and (ii) the Preferred Return, will accrue at a rate equal to an annual rate of return of 18% cumulative, compounded monthly on an actual 360 day year basis paid in arrears on the 15th day of each calendar month (the “Default Rate”) from and after such date.

Article 5

ALLOCATION OF PROFITS AND LOSSES

5.1 Allocations of Profits and Losses. For each Fiscal Year (or portion of such Fiscal Year), except as otherwise provided in this Agreement, Net Profits or Net Losses of the Company shall be allocated among the Members in a manner such that, after giving effect to the special allocations set forth in Section 5.2, the Capital Account balance of each Member immediately after making such allocations, is, as nearly as possible, equal to (a) the distributions that would be made to such Member pursuant to the applicable provisions Section 8.2(a)(iii), if the Company were dissolved, its affairs wound up and its assets sold for cash equal to their Gross Asset Value, all Company liabilities were satisfied (limited with respect to each Nonrecourse Liability to the Gross Asset Value of the assets securing such liability), and the net assets of the Company were distributed, as provided for in Section 8.2(a)(iii), to the Members immediately after making such allocations, minus (b) such Member’s share of Company Minimum Gain and Member Nonrecourse Debt Minimum Gain, computed immediately prior to the hypothetical sale of assets.

5.2 Special Allocations. Notwithstanding the provisions of Section 5.1:

(a) Minimum Gain Chargeback. If there is a net decrease in Company Minimum Gain during any fiscal year, then except as otherwise provided in Treasury Regulations Section 1.704-2(f), each Member shall be specially allocated Net Profit or other income items for such fiscal year (and, if necessary, subsequent years) in an amount equal to the portion of such Member’s share of the net decrease in Company Minimum Gain during such fiscal year determined in accordance with Treasury Regulations Section 1.704-2(g)(2). The items to be so allocated shall be determined in accordance with Treasury Regulations Sections 1.704-2(f)(6) and 1.704-2(j)(2). This Section 5.2(a) is intended to comply with the “minimum gain chargeback” requirement in Section 1.704-2(f) of the Treasury Regulations and shall be interpreted in accordance with such Regulation.

(b) Member Nonrecourse Debt Minimum Gain Chargeback. Except as otherwise provided in Treasury Regulations Section 1.704-2(i)(4), notwithstanding any other provision of this Section 5, if there is a net decrease in Member Nonrecourse Debt Minimum Gain, each Member who has a share of such Member Nonrecourse Debt Minimum Gain shall be specially

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allocated items of Net Profits and other items of Company income and gain for such fiscal year (and, if necessary, subsequent fiscal years) in an amount equal to the portion of such Member’s share of the net decrease in Member Nonrecourse Debt Minimum Gain. The items to be so allocated shall be determined in accordance with Treasury Regulations Sections 1.704-2(i)(4) and 1.704-2(j)(2). This Section 5.2 is intended to comply with the “minimum gain chargeback” requirement of Treasury Regulation Section 1.704-2(i)(4) and shall be interpreted consistently with such Regulation.

(c) Qualified Income Offset Allocation. In the event any Member unexpectedly receives any adjustments, allocations, or distributions described in Treasury Regulations Section 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), or 1.704-1(b)(2)(ii)(d)(6), Net Profits and other items of Company income and gain shall be specially allocated to each such Member in an amount and manner sufficient to eliminate, to the extent required by the Regulations, the Adjusted Capital Account Deficit of such Member as quickly as possible, provided that an allocation pursuant to this Section 5.2(c) shall only be made if, and only to the extent that, such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Section 5 have been tentatively made as if this Section 5.2(c) were not in the Agreement. This Section 5.2(c) is intended to comply with the qualified income offset requirement in Treasury Regulation Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently with such Regulation.

(d) Gross Income Allocation. In the event any Member has an Adjusted Capital Account Deficit at the end of any Fiscal Year, each such Member shall be specially allocated items of Company income and gain in the amount of such excess as quickly as possible, provided that an allocation pursuant to this Section 5.2(d) shall be made if and only to the extent that such Person would have a deficit Capital Account in excess of such sum after all other allocations provided for in this Section 5 have been tentatively made as if this Section 5.2(d) were not in the Agreement.

(e) Allocation of Member Nonrecourse Deductions. Member Nonrecourse Deductions shall be allocated in the manner required by Treasury Regulation Section 1.704-2(i).

(f) Curative Allocations. The allocations set forth in Section 5.3(a) through Section 5.3(e) (the “Regulatory Allocations”) are intended to comply with certain requirements of Regulations Sections 1.704-1(b) and 1.704-2. Notwithstanding any other provisions of this Section 5 (other than the Regulatory Allocations), the Regulatory Allocations shall be taken into account in allocating subsequent Net Profits, Net Losses and items of income, gain, loss and deduction among the Members so that, to the extent possible, the net amount of such allocations of subsequent Net Profits, Net Losses and other items and the Regulatory Allocations to each Member shall be equal to the net amount that would have been allocated to each such Member pursuant to the provisions of this Section 5, if the Regulatory Allocations had not occurred. For purposes of applying the foregoing sentence, allocations pursuant to this Section 5.2(f) shall be made: (i) by taking into account Regulatory Allocations which, although not made yet, are likely to be made in the future; and (ii) only to the extent the Loci Member reasonably determines that such curative allocations are appropriate in order to realize the intended economic agreement among the Members.

5.3 Tax Allocations.

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(a) Subject to Section 5.3(a) through Section 5.3(e), all income, gains, losses and deductions of the Company shall be allocated, for federal, state and local income tax purposes, among the Members in accordance with the allocation of such income, gains, losses and deductions among the Members for computing their Capital Accounts, except that if any such allocation for tax purposes is not permitted by the Code or other applicable Law, the Company’s subsequent income, gains, losses and deductions shall be allocated among the Members for tax purposes, to the extent permitted by the Code and other applicable Law, so as to reflect as nearly as possible the allocation set forth herein in computing their Capital Accounts.

(b) Items of Company taxable income, gain, loss and deduction with respect to any property contributed to the capital of the Company shall be allocated among the Members in accordance with Code Section 704(c) and the traditional method of Treasury Regulations Section 1.704-3(b), so as to take account of any variation between the adjusted basis of such property to the Company for federal income tax purposes and its Gross Asset Value.

(c) If the Gross Asset Value of any Company asset is adjusted pursuant to Treasury Regulation Section 1.704-1(b)(2)(iv)(f) as provided in clause (b) of the definition of Gross Asset Value, subsequent allocations of items of taxable income, gain, loss and deduction with respect to such asset shall take account of any variation between the adjusted basis of such asset for federal income tax purposes and its Gross Value in the same manner as under Code Section 704(c).

(d) Allocations of tax credit, tax credit recapture and any items related thereto shall be allocated to the Members according to their interests in such items as determined taking into account the allocation provisions of Section 5.

(e) The Company shall make allocations pursuant to this Section 5.3 in accordance with the traditional method in accordance with Treasury Regulations Section 1.704-3(b).

(f) Allocations pursuant to this Section 5.3 are solely for purposes of federal, state and local income taxes and shall not affect, or in any way be taken into account in computing, any Member’s Capital Account or share of Net Profits, Net Losses, distributions or other items pursuant to any provisions of this Agreement.

Article 6

MANAGEMENT OF THE COMPANY

6.1 Powers and Duties of the Manager.

(a) Subject to the approval rights of the Members as provided for in this Agreement, (i) the business and affairs of the Company shall be managed, operated and controlled by or under the direction of the Manager, and (ii) the Manager is hereby granted full and complete power, authority and discretion for, on behalf of and in the name of the Company, to take such actions as it may deem necessary or advisable to carry out the business of the Company and carry out its obligations under this Agreement. The Manager shall manage the Company in accordance

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with (i) the standard of care required of prudent and experienced third parties performing similar functions in accordance with customary industry standards for properties similar to and in the same general geographic area as each of the Properties, (ii) this Agreement, and (iii) any Approved Budget, in each case, subject to (A) the availability of adequate funds for such activities being provided for in the applicable Approved Budget and from Capital Contributions or other sources and (B) compliance by the Members with their obligations under this Agreement.

(b) Notwithstanding the limitations of the Approved Budget, the Manager shall have the authority at any time to take any action on behalf of the Company or any Company Subsidiary, without obtaining the prior approval of either Member, if, in the Manager’s reasonable judgment such action is necessary or advisable to preserve or protect any Properties or other assets of the Company or any Company Subsidiary from imminent physical damage or to prevent injury to any Person, provided that the Manager notifies each Member of such action within two (2) Business Days after such action has been taken.

(c) Upon the affirmative vote of a majority in number of the Members, with each Member having one equal vote, the Members may remove and replace the Generation Member as the Manager of the Company or otherwise appoint a different Person who is charged with the responsibilities of the Manager under this Agreement.

6.2 Approved Budget. Attached to this Agreement as Exhibit 4 is the operating budget for the operations and improvements of the Properties for the year ended December 31, 2023. The Manager shall cause to be prepared and shall submit to the Loci Member a proposed operating expense and improvement budget for the properties for each succeeding Fiscal Year in reasonable detail setting forth, among other items, the estimated receipts and disbursements (capital, operating and other) for the forthcoming Fiscal Year (or partial Fiscal Year). The proposed budget shall be delivered to the Loci Member no later than the last Business Day of November prior to the beginning of the relevant Fiscal Year or such other date as is approved in writing by the Loci Member. The Loci Member shall consider such budget and shall promptly, but in no event later than fifteen (15) Business Days after receipt thereof, approve or reject it with proposed additions, deletions and revisions as the Loci Member deems appropriate in its reasonable discretion, [taking into consideration Necessary Expenses, reserves, operating expenses and other appropriate matters]. The Manager and Loci Member shall work in good faith to address objections and revise and agree on the form of annual budget and business plan no later than December 31 of such year. The original Approved Budget for the year ended December 31, 2023, and each subsequent budget approved by the Loci Member shall be an “Approved Budget”. Until final approval of a budget for each Fiscal Year the Manager shall be authorized to continue to operate on the basis of the previous Fiscal Year’s Approved Budget, together with an increase in such Approved Budget equal to (i) the actual increase in expenses associated with real estate taxes and assessments, insurance premiums, debt service and utilities relating to the operation and development of the Properties (ii) the actual costs and expenses under any existing agreements, and (iii) the addition of a new line item for such budget in the amount of the greater of (x) three percent (3%), or (y) the increase in the consumer price index from the last day of the prior Fiscal Year to the first day of the current Fiscal Year, which may be reallocated by the Manager in its sole discretion among the budgeted line items from time to time for payment of expenses for such upcoming year.

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6.3 Major Decisions; Prohibited Actions. Until the Loci Member’s Preferred Equity Investment has been redeemed in full, no Major Decision shall be made without the consent of the Loci Member.

(a) “Major Decision” as used in this Agreement means any decision (or action) with respect to the following matters:

(i) Acquiring additional real property or any interest therein;

(ii) Selling, leasing, assigning, pledging, conveying, exchanging, encumbering or otherwise disposing of all or a material portion of the assets of the Company or any of its Properties, other than as permitted pursuant to Section 6.4;

(iii) Taking any action that deviates in a material way from the any development plans or other items included in any Approved Budget except for reallocations of cost savings in line items and application of contingencies to the extent permitted by this Agreement or as provided for in the Approved Budget itself;

(iv) Amending or waiving any provision of, or otherwise modifying this Agreement;

(v) Amending, extending or materially modifying any existing lease relating to any of the Properties or entering into any new lease with respect to any of the Properties;

(vi) Admitting, including by assignment of economic rights or permitting encumbrances of Membership Interests, any Member other than by means of a transfer permitted pursuant to Section 7.2;

(vii) Merging or consolidating the Company with or into another entity, reorganizing the Company, or making a binding commitment to do any of the foregoing;

(viii) Make an assignment for the benefit of creditors, file a petition in bankruptcy, petition or apply to any tribunal for the appointment of a custodian, receiver or any trustee for the Company, or a substantial part of any of its properties or assets, or shall commence any proceeding under any bankruptcy, reorganization, arrangement, readjustment of debt, dissolution or liquidation law or statute of any jurisdiction;

(ix) Voluntarily dissolving or liquidating the Company;

(x) Causing the Company to loan Company funds to any Person;

(xi) Except as otherwise provided in this Agreement, entering into, amending, modifying (including making price adjustments), replacing, waiving the provisions of, or granting consents under, any of the terms and conditions of any agreement or other arrangement with the Manager, any Member or their respective Affiliates or paying fees or other compensation to the Manager, any Member or their respective Affiliates (except that nothing shall prohibit the Company from entering into agreements with, and making payments of fees to, the Manager, any

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Member and their respective Affiliates if, and to the extent specifically provided for in this Agreement or the Exhibits to it, or terminating any such agreement in accordance with its terms);

(xii) Except as otherwise provided in the Agreement, engaging in any Capital Transaction, financing or any Approved Loan, or executing or otherwise entering into any loan, guaranty, indemnity or similar agreement by the Company or modifying in any material nature, extending, renewing, changing or prepaying in whole or in part any borrowing, financing, refinancing, indemnity or similar agreement, or making any commitments to borrow funds;

(xiii) Causing the Company to loan Company funds to any Person;

(xiv) Prosecuting, waiving, settling or compromising any claims or causes of action of the Company against any third party (or parties), or agreeing on behalf of the Company to pay any disputed claims or causes of action against the Company, or confessing a judgment against the Company, each in excess of Twenty Five Thousand Dollars ($25,000); provided that any settlement that would require the Company or a Member to admit to a criminal act, fraud or willful misconduct must be approved by the Members and the Manager;

(xv) Causing the Company to make, revoke or modify any tax election; or

(xvi) Making any change to the Company’s accounting practices or policies that could be material to either the Company or its Members.

(xvii) Taking any position on a tax return based on a “more likely than not” opinion from the Company’s tax or accounting advisors. with respect to any item of tax reporting for federal or state income tax purposes.

(b) Notwithstanding the other provisions of this Section 6.3, if the Manager, in its reasonable judgment, deems there to be an emergency requiring expenditures to effectuate immediate action necessary for the protection of the assets of the Company or any Subsidiary or to avoid property damage or personal injury that otherwise would require the Loci Member’s consent as a Major Decision, the Manager shall have the right to take immediate action to address the emergency and shall advise the Loci Member of the action taken (which may be an email) as promptly as possible after the Manager becomes aware of the emergency and the necessity for such expenditure.

6.4 Release of Individual Properties. The Manager may, consistent with this Section 6.4, sell any Property, provided that:

(i) the net proceeds received from the sale, calculated as the total sale price of the Property, minus all reasonable closing costs, including commissions, are greater than eighty percent (80%) of the Appraised Value of the Property, according to the Property Appraisals; and

(ii) the annualized trailing 3 full calendar months Adjusted Net Operating Income of all the Properties, other than the Property being sold, divided by the aggregate of the Senior Loans (less the payoff amount for the Property being sold) and the Preferred Equity Investment is greater than 10%.

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6.5 Other Activities of the Manager. The Manager and its Affiliates may act as managers, members, managing members, general partners, and in other roles with other companies, partnerships or other entities engaged in businesses similar to those conducted by the Company, even if competitive with the business of the Company. Nothing herein shall limit the Manager, or its Affiliates from engaging in any other business activities, and the Manager, and its Affiliates shall not incur any obligation, fiduciary or otherwise, to disclose, grant or offer any interest in such activities to any party hereto.

6.6 Other Activities of Members. The Members and Affiliates (other than the Company) of any of them may act as managers, members, managing members, general partners, and in other roles with other companies, partnerships or other entities engaged in businesses similar to those conducted by the Company, even if competitive with the business of the Company. Nothing herein shall limit any Member, or Affiliates of any of them (other than the Company) from engaging in any other business activities, and the Members and their Affiliates shall not incur any obligation, fiduciary or otherwise, to disclose, grant or offer any interest in such activities to any party hereto.

6.7 Limitation on Liability of Covered Persons; Indemnification.

(a) As used in this Agreement, the term “Covered Person” means each Member its members, managers, agents, employees and representatives, the Manager, its members, managers, agents, employees and representatives, and any officers appointed by the Manager.

(b) Except as otherwise provided for in this Agreement and any agreement between a Covered Party and the Company, no Covered Person shall be liable to the Company or any other Covered Person for any loss, damage or claim incurred by reason of any action taken or omitted to be taken by such Covered Person in good faith reliance on the provisions of this Agreement, so long as such action or omission does not constitute fraud or willful misconduct by such Covered Person.

(c) A Covered Person shall be fully protected in relying in good faith upon the records of the Company and upon such information, opinions, reports or statements (including financial statements and information, opinions, reports or statements as to the value or amount of the assets, liabilities, Net Income or Net Losses of the Company or any facts pertinent to the existence and amount of assets from which distributions might properly be paid) of the following Persons or groups: (i) the Manager; (ii) one or more officers or employees of the Company; (iii) any attorney, independent accountant, appraiser or other expert or professional employed or engaged by or on behalf of the Company; or (iv) any other Person selected in good faith by or on behalf of the Company, in each case as to matters that such relying Person reasonably believes to be within such other Person’s professional or expert competence. The preceding sentence shall in no way limit any Person’s right to rely on information to the extent provided in § 18-406 of the Act.

(d) This Agreement is not intended to, and does not, create or impose any fiduciary duty on any Covered Person. Furthermore, each of the Members and the Company waives any and all fiduciary duties that, absent such waiver, may be implied by applicable law, and in doing so, acknowledges and agrees that the duties and obligation of each Covered Person

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to each other and to the Company are only as expressly set forth in this Agreement. The provisions of this Agreement, to the extent that they restrict the duties and liabilities of a Covered Person otherwise existing at law or in equity, are agreed by the Members to replace such other duties and liabilities of such Covered Person.

(e) To the fullest extent permitted by the Act, as the same now exists or as may be amended, substituted or replaced (but, in the case of any such amendment, substitution or replacement, only to the extent that such amendment, substitution or replacement permits the Company to provide broader indemnification rights than the Delaware Act permitted the Company to provide prior to such amendment, substitution or replacement), the Company shall indemnify, hold harmless, defend, pay and reimburse any Covered Person against any and all losses, claims, damages, judgments, fines or liabilities, including reasonable legal fees or other expenses incurred in investigating or defending against such losses, claims, damages, judgments, fines or liabilities, and any amounts expended in settlement of any claims (collectively, “Losses”) to which such Covered Person may become subject by reason of:

(i) any act or omission or alleged act or omission performed or omitted to be performed on behalf of the Company, any Member or any direct or indirect Subsidiary of the foregoing in connection with the business of the Company; or

(ii) such Covered Person being or acting in connection with the business of the Company as a member, stockholder, affiliate, manager, director, officer, employee or agent of the Company, any Member, or any of their respective Affiliates, or that such Covered Person is or was serving at the request of the Company as a member, manager, director, officer, employee or agent of any Person including the Company; provided that, (A) such Covered Person acted in good faith and in a manner believed by such Covered Person to be in, or not opposed to, the best interests of the Company and/or within the scope of such Covered Person’s authority conferred on it by the Company and, with respect to any criminal proceeding, had no reasonable cause to believe its conduct was unlawful, and (B) such Covered Person’s conduct did not constitute fraud or willful misconduct. In connection with the foregoing, the termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the Covered Person did not act in good faith or, with respect to any criminal proceeding, had reasonable cause to believe that such Covered Person’s conduct was unlawful, or that the Covered Person’s conduct constituted fraud or willful misconduct.

(f) The Company shall promptly reimburse (and/or advance to the extent reasonably required) each Covered Person for reasonable legal or other expenses (as incurred) of such Covered Person in connection with investigating, preparing to defend or defending any claim, lawsuit or other proceeding relating to any Losses for which such Covered Person may be indemnified pursuant to this Section 6.7; provided that, if it is finally judicially determined that such Covered Person is not entitled to the indemnification provided by Section 6.7, then such Covered Person shall promptly reimburse the Company for any reimbursed or advanced expenses.

(g) The indemnification provided by Section 6.7 shall not be deemed exclusive of any other rights to indemnification to which those seeking indemnification may be entitled under any agreement or otherwise. The provisions of Section 6.7 shall continue to afford protection

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to each Covered Person regardless of whether such Covered Person remains in the position or capacity pursuant to which such Covered Person became entitled to indemnification under Section 6.7 and shall inure to the benefit of the executors, administrators, legatees and distributees of such Covered Person.

(h) Notwithstanding anything contained in this Agreement to the contrary, any indemnity by the Company relating to the matters covered in Section 6.7 shall be provided out of and to the extent of Company assets only, and no Member (unless such Member otherwise agrees in writing) shall have personal liability on account of such indemnification obligation or shall be required to make any Capital Contributions to help satisfy such indemnity by the Company.

(i) If Section 6.7 or any portion of it shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify and hold harmless each Covered Person pursuant to Section 6.7 to the fullest extent permitted by any applicable portion of Section 6.7 that shall not have been invalidated and to the fullest extent permitted by applicable law.

(j) The provisions of Section 6.7 shall be a contract between the Company, on the one hand, and each Covered Person who served in such capacity at any time while Section 6.7(d) is in effect, on the other hand, pursuant to which the Company and each such Covered Person intend to be legally bound. No amendment, modification or repeal of Section 6.7 that adversely affects the rights of a Covered Person to indemnification for Losses incurred or relating to a state of facts existing prior to such amendment, modification or repeal shall apply in such a way as to eliminate or reduce such Covered Person’s entitlement to indemnification for such Losses without the Covered Person’s prior written consent.

(k) The provisions of Section 6.7 shall survive the dissolution, liquidation, winding up and termination of the Company.

6.8 Officers. The Manager may appoint in writing, from time to time, such officers or approved persons of the Company as the Manager deems necessary or advisable, each of whom shall have such title, powers, authority and responsibilities (including without limitation, the power and authority to sign documents on behalf of the Company) as are delegated by the Manager from time to time; provided, however, that the Manager may only delegate power, authority and responsibility as is granted by this Agreement to the Manager. No such officer or approved person shall be compensated by the Company.

6.9 Affiliates Agreements. Any other agreement between the Company or a Subsidiary, on the one hand, and a Member or one or more Affiliates of one or more Members or the Manager, on the other hand, is referred to as an “Affiliate Agreement.”. The Manager will not cause the Company or any Subsidiary to enter into any other Affiliate Agreement without the approval of all Members.

6.10 Enforcement of Agreements with Generation Member Affiliates. Notwithstanding any provision to the contrary in this Agreement, if, at any time, the Company has entered into an agreement with an Affiliate of the Generation Member, the Loci Member shall have the sole right and authority to act on behalf of the Company with respect to the enforcement of the rights and

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remedies of the Company and defaults under any such Affiliate Agreement (including, without limitation, the exercise of any applicable right of termination in accordance with its terms).

6.11 Management of Subsidiaries. All of the provisions of this Agreement regarding the management and governance of the Company shall apply to the management and governance of each Subsidiary, whether any such Subsidiary is managed or controlled directly or indirectly by the Company, as member, manager, partner, stockholder or otherwise. Any action to be taken by any of the Subsidiaries shall for all purposes hereof be construed as an action taken by the Company and shall be subject to the same rights and limitations granted and imposed on the Members under this Agreement. Any and all references herein to the Company or any or Member causing or directing any action on behalf of a Subsidiary shall be deemed to refer to the Company causing (or such Member causing the Company to cause), in its capacity as the sole member of such Subsidiary, such action to be taken for and on behalf of such Subsidiary. The Manager shall perform, with no additional compensation, the same or substantially identical services for each such Subsidiary as the Manager performs for the Company, subject to the terms, conditions, limitations and restrictions set forth in this Agreement. Without limiting the generality of the foregoing (and notwithstanding anything contained herein to the contrary), any action or decision to be taken or made by or on behalf of a Subsidiary by the Manager that, if taken or made by or on behalf of the Company, would constitute a Major Decision, will require the approval of the Loci Member.

6.12 Certain Fees. Loci Capital shall receive an equity fee of 1.5% of the Preferred Equity Investment committed to the Company with 1% payable upon the execution and delivery of this Agreement and ½% upon redemption in full of the Preferred Equity Investment. In addition, upon execution and delivery of this Agreement, the Company shall reimburse the Loci Member for all of its reasonable legal and due diligence expenses, including travel, third-party report costs, and other out-of-pocket expenses related to due diligence and execution and delivery of this Agreement, less the $25,000 deposit delivered to the Loci Member in conjunction with the execution of the term sheet relating to this Agreement to cover the initial legal and due diligence costs. The fees contemplated by this Section 6.12 shall be treated as guaranteed payments pursuant to Section 707(c) of the Code.

6.13 Cyber Security. The Manager will do all things that a reasonable and prudent Person would do to implement reasonable cybersecurity measures to ensure that Confidential Data in the possession of the Company (or in the possession of the Manager acting on behalf of the Company), including without limitation Confidential Data related to the Members, is reasonably protected at all times from unauthorized access or use by a third party or misuse, damage or destruction by any Person. “Confidential Data” means cyber, cyber related or cyber accessed information relating to and received by the Company (or by the Manager acting on behalf of the Company), the use of which by unauthorized parties could cause a significantly adverse effect on the business prospects, operations or financial condition of the Person to which information relates, including without limitation, email addresses, password, wire instructions, account information and security protocols.

If a Party becomes aware of any actual or suspected action taken through the use of computer networks or otherwise that result or, if confirmed, would result in an actual or potentially adverse effect on the Company’s or such Party’s or another Party’s information system and/or the

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Company’s, such Party’s or another Party’s Confidential Data, such Party shall notify the Manager and each potentially affected Member in writing within a reasonable period of time after becoming aware of the incident, and comply with any commercially reasonable directions issued by the Manager and any such Member to such Party with respect to such incident, including obtaining evidence about how, when and by whom the information system and/or the Company’s or any Party’s Confidential Data has been compromised, with all expenses incurred by or on behalf of the Company in taking such actions to be treated as approved expenses of the Company.

If the Manager becomes aware of any actual or suspected action taken through the use of computer networks of the Company (or of the Manager acting on behalf of the Company) or otherwise pertaining to the Company (or to the Manager acting on behalf of the Company) that result, or if confirmed would result, in an actual or potentially adverse effect on any third party’s information system and/or the third party’s Confidential Data, the Manager shall promptly notify the Members of the incident and comply with any commercially reasonable directions issued by the Members with respect to such incident, including (i) obtaining evidence about how, when and by whom the information system and/or third party’s Confidential Data has been compromised, and (ii) delivering written notification on behalf of the Company to such third party reporting such incident, which notification may include, to the extent available or practical, the time the incident occurred and a description of the incident, a description of the Confidential Data compromised or suspected to have been compromised and the Confidential Data uncompromised, and, if appropriate, giving the third party the right to obtain a free credit report from one of the national credit reporting agencies, including appropriate instructions with respect to obtaining such report. All expenses incurred by or on behalf of the Company in taking such actions are to be treated as approved expenses of the Company

Article 7

TRANSFERABILITY OF MEMBERSHIP INTERESTS; OTHER DISPOSITIONS

7.1 Transfers. Except as otherwise provided under this Section 7, a Member may not withdraw or Transfer all or any part of its Membership Interest without the prior written consent of the Members.

7.2 Permitted Transfers by the Members.

(a) Subject to Section 7.4, the Loci Member shall have the right to Transfer all or any portion of its Membership Interest or cause any Person to be admitted as a Member to assume a portion of the Loci Member’s obligations hereunder, provided that the day-to-day operations and major decisions are at all times after such Transfer directly or indirectly Controlled, either individually (or with other Persons entitled to participate in decisions relating to such operations within the organizational structure of such Affiliate) by Michael Phillips. Notwithstanding the foregoing, the Loci Member may not Transfer its interest if such Transfer would violate the terms of any Approved Loan or any other agreement to which the Company or a Subsidiary is subject.

(b) Subject to Section 7.4, the Generation Member shall have the right to Transfer all or any portion of its Membership Interest or cause any Person to be admitted as a Member to assume a portion of the Generation Member’s obligations hereunder, provided that the day-to-day

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operations and major decisions are directly or indirectly Controlled, either individually (or with other Persons entitled to participate in decisions relating to such operations within the organizational structure of such Affiliate) by David Sobelman. Notwithstanding the foregoing, the Generation Member may not Transfer its interest if such Transfer would violate the terms of any Approved Loan or any other agreement to which the Company or a Subsidiary is subject.

(c) Any costs incurred by the Company or the Manager due to the Company’s obligations under this subsection will be promptly reimbursed by the transferring Member. Notwithstanding anything to the contrary herein, no Member may Transfer its interest if such Transfer would violate any financing or other agreement to which the Company is subject.

7.3 Substitution of Assignees.

(a) No assignee of the Membership Interest of any Member shall have the right to be admitted to the Company as a Member unless all of the following conditions are satisfied:

(i) the assignee has executed and delivered to each of the Members a written instrument of assignment which sets forth the intention and agreement of the assignor that the assignee become a Member in addition to it or in its place;

(ii) the assignor and assignee execute and acknowledge such other instruments as the Loci Member or the Generation Member, as applicable, may deem reasonably necessary or desirable to effect such admission, including the written acceptance and adoption by the assignee of the provisions of this Agreement and the assumption by the assignee of all obligations of the assignor under this Agreement arising from and after the date of such transfer.

(iii) the assignee has paid all reasonable actual expenses incurred by the Company (including its legal fees) as a result of such transfer, the cost of the preparation, filing and publishing of any amendment to the Company’s Certificate of Formation or any amendments of filings under fictitious name registration statutes.

(b) Once the conditions set forth in this Section 7.3(a) have been satisfied, the assignee shall become a Member of the Company. The Company shall, upon substitution, thereafter, make all further distributions on account of the interests so assigned to the assignee for such time as the interests are transferred on its books in accordance with the above provisions. Any person so admitted to the Company as a Member shall be subject to all provisions of this Agreement as if originally a party hereto.

7.4 Compliance with Securities Laws. The Members acknowledge and confirm that their respective Membership Interests constitute a security which has not been registered under any federal or state securities laws by virtue of exemptions from the registration provisions thereof and consequently cannot be sold except pursuant to appropriate registration or exemption from registration as applicable. No transfer or assignment of all or any part of a Membership Interest (except a transfer upon the death, incapacity or bankruptcy of a Member to his personal representative and beneficiaries), including, without limitation, any transfer of a right to distributions, profits and/or losses to a person who does not become a Member, may be made unless, if requested pursuant to Section 7.3(a)(iii), the Company is provided with satisfactory

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advice of counsel to the effect that such transfer or assignment (a) may be effected without registration under the Securities Act of 1933, as amended, or the Investment Company Act of 1940, as amended, (b) does not violate any applicable federal or state securities laws (including any investment suitability standards) applicable to the Company or the Members, (c) does not materially increase the regulatory burdens applicable to the Company or the Members, and (d) does not alter the Company’s status as a partnership for taxation purposes.

7.5 Redemption of Third Party Interests/Subordination Agreements. (a) Generation Member represents and warrants that (i) other than the with respect to the TIC Interest, it has effectuated the redemption and/or acquisition of the Third Party Interests, such that the Properties (other than with respect to the TIC Interest) will be solely owned by the Company. Exhibit 7 attached hereto represents all outstanding payments due in connection with such redemptions (the “Outstanding Redemption Payments”). Generation Member shall cause the Outstanding Redemption Payments to be made simultaneously with the closing of the acquisition of the Modiv Portfolio pursuant to the Modiv Purchase Agreement.

(b) Simultaneous with the receipt of the Additional Capital Contribution, Generation Member shall cause the Company to consummate the acquisition of the TIC Interest and to pay to the holder of the TIC Interest the TIC Purchase Price.

Article 8

TERMINATION OF THE COMPANY

8.1 Dissolution.

(a) The Company shall be dissolved upon the occurrence of any of the following events:

(i) the sale or other disposition of all or substantially all of the assets of the Company (except under circumstances where (A) all or a portion of the purchase price is payable after the closing of the sale or other disposition, (B) the Company retains a material economic or ownership interest in the entity to which all or substantially all of its assets are transferred; or (C) the Members decide to continue the Company);

(ii) a mutual determination by the Members that the Company should be dissolved; or

(iii) an event that requires dissolution of the Company under the Act.

(b) Dissolution of the Company shall be effective on the day on which the event occurs giving rise to the dissolution, but the Company shall not terminate until the Company’s Certificate of Formation shall have been canceled and the assets of the Company have been distributed as provided below. Notwithstanding the dissolution of the Company prior to the termination of the Company, as aforesaid, the business of the Company and the affairs of the Members, as such, shall continue to be governed by this Agreement.

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(c) The bankruptcy, death, dissolution, liquidation, termination or adjudication of incompetency of a Member shall not cause the termination or dissolution of the Company and the business of the Company shall continue notwithstanding such occurrence. Upon any such occurrence, the trustee, receiver, executor, administrator, committee, guardian or conservator of such Member (such Member’s “Successor”) shall have all the rights of as assignee of the Membership Interest of such member but, unless the Parties agree otherwise, will not be admitted as a Member or have any rights of a Member other than the right to receive distributions in respect of such Membership Interest as provided in this Agreement. The transfer by such trustee, receiver, executor, administrator, committee, guardian or conservator of any Membership Interest shall be subject to all of the restrictions hereunder to which such transfer would have been subject if such transfer had been made by such bankrupt, deceased, dissolved, liquidated, terminated or incompetent Member. In the event of any other withdrawal of a Member, subject to any remedies available to the Company or the other Members for a breach of this Agreement, such Member shall only be entitled to Company distributions distributable to such Member but not actually paid to him prior to such withdrawal and shall not have any right to have its Membership Interest purchased or paid for.

(d) Notwithstanding anything in this Agreement to the contrary, upon a Capital Transaction where all or any portion of the consideration payable to the Company is to be received by the Company more than Ninety (90) days after the date on which such Capital Transaction occurs, the Company shall continue for purposes of collecting the deferred payments and making distributions to the Members. In such event (i) gain recognized and cash distributed in any year as a result of such Capital Transaction shall be allocated and distributed among the Members in the same proportion as such gain and cash would have been allocated and distributed were the entire gain resulting from such Capital Transaction required to be recognized for Federal income tax purposes in the year in which such Capital Transaction occurred; and (ii) income attributable to interest on deferred payments shall be allocated among, and such interest shall be distributed to, the Members as if the deferred payment obligations received by the Company had been distributed to the Members pursuant to Section 8.2.

8.2 Liquidation.

(a) Except as otherwise provided in Section 8.1, upon dissolution of the Company, the Manager shall liquidate the assets of the Company, apply and distribute the proceeds thereof as contemplated by this Agreement and cause the cancellation of the Company’s Certificate of Formation. As soon as possible after the dissolution of the Company, a full account of the assets and liabilities of the Company shall be taken, and a statement shall be prepared by the independent accountant’s then acting for the Company setting forth the assets and liabilities of the Company. A copy of such statement shall be furnished to each of the Members within Ninety (90) days after such dissolution. Thereafter, the assets shall be liquidated as promptly as possible and the proceeds thereof shall be applied in the following order:

(i) the expenses of liquidation and the debts of the Company, other than the debts owing to the Members, shall be paid;

(ii) any reserves shall be established or continued by the Manager necessary for any contingent or unforeseen liabilities or obligations of the Company or its

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liquidation. Such reserves shall be held by the Company for the payment of any of the aforementioned contingencies, and at the expiration of such period as the Manager deems advisable, the Company shall apply the balance to (A) first, pay debts owing to the Members and (B) then, make distributions pursuant to the following clause (iii); and

(iii) the balance shall be distributed to the Members in the same manner as distributions are made under Section 4.2.

To the maximum extent permitted by the Code and the Treasury Regulations, Net Profits and Net Losses (and individual gross items thereof) in the year of liquidation of the Company (and, if liquidation occurs prior to the due date for the Company’s Federal income tax return for the prior year, the prior year as well), including any reallocation to the extent necessary and permitted by the Code, shall be allocated among the Members to ensure that each Member receives the same amount of distributions pursuant to Section 8.2(a)(iii) as such Member would have received had the distributions been made under Section 4.2.

(b) Upon dissolution of the Company, each Member shall look solely to the assets of the Company for the return of its investment, and then only pursuant to the distribution provisions in this Agreement. If the Company’s assets remaining after payment and discharge of debts and liabilities of the Company, including any debts and liabilities owed to any one or more of the Members, are not sufficient to satisfy the rights of a Member, such Member shall have no recourse or further right or claim against any of the other Members.

(c) If any assets of the Company are to be distributed in kind (which shall require approval of (i) the Manager and (ii) all of the Members), such assets shall be distributed on the basis of the fair market value thereof, and any Member entitled to any interest in such assets shall receive such interest therein as a tenant-in-common with all other Members so entitled. The fair market value of such assets shall be determined by an independent appraiser to be selected by the Company’s accountants and approved by (i) the Manager and (ii) all of the Members.

Article 9

COMPANY PROPERTY

9.1 Bank Accounts. All receipts, funds and income of the Company and Subsidiaries shall be deposited in the name of the Company or Subsidiary (as applicable) in such nationally-recognized banks or, with the consent of the Members, other financial institutions as are determined or approved by the Manager. The Manager shall be responsible for ensuring that the Company’s bank accounts, and any deposits to or withdrawals from such accounts, comply with any credit or other agreement applicable to the Company and the Subsidiaries. If the Manager is removed as Manager pursuant to Section 11, the Loci Member may, upon giving written notice to all Parties, unilaterally change the persons authorized to make withdrawals from Company and Subsidiary bank accounts. If the Manager is removed as the Manager pursuant to Section 11, the Loci Member may unilaterally change the persons authorized to make withdrawals from Company and Subsidiary bank accounts on an ongoing basis and provide that all revenues of the Company be deposited in a “lock box” bank account. The Loci Member shall give prompt notice of any

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such action to the other Parties along with a reasonably detailed explanation of its reasons for taking such action.

9.2 Title to Company Property. All property owned by the Company shall be owned by the Company as an entity and, insofar as permitted by applicable law, no Member shall have any ownership interest in any Company property in its individual name or right, and each Member’s interest in the Company shall be personal property for all purposes.

9.3 Waiver Of Partition. The Members hereby waive any right of partition or any right to take any other action which otherwise might be available to them for the purpose of severing their relationship with the Company or their interest in assets held by the Company from the interest of the other Members.

Article 10

BOOKS AND RECORDS: REPORTS

10.1 Books and Records. The Company shall keep adequate books and records at the principal place of business of the Company, setting forth a true and accurate account of all business transactions arising out of and in connection with the conduct of the Company. Such books and records shall be open to the inspection and examination of all Members or their duly authorized representatives at any reasonable time upon reasonable prior notice. The Company shall maintain an audit committee comprised of one representative appointed by each Member (the “Audit Committee”). The members of the Audit Committee shall have the power and authority to correspond with any accounting firm preparing an audit of the Company’s financial statements and/or preparing the Company’s federal tax return. Any formal correspondence between the Company and the accounting firm shall be provided to all members of the Audit Committee.

10.2 Accounting Method. The accounting basis on which the books of the Company are kept shall be the method used in preparing the Company’s annual federal tax return. The “Fiscal Year” of the Company shall be the calendar year.

10.3 Company Auditor. MaloneBailey LLP is hereby designated the “Company Auditor”.

10.4 Reports. The following reports shall be delivered to the Members.

(a) Monthly Reports. The Manager shall prepare and send, or cause to be prepared and sent, to the Members within Twenty-Five (25) days after the last day of each calendar month, a report containing the following information:

(i) (A) a balance sheet, (B) a statement of cash flows (monthly and year-to-date versus budget), and (C) an income and expense statement, including all compensation, fees, and other sums due under the terms of any management or other agreement for services to which the Company is a party (monthly and year-to-date versus budget);

(ii) variances from the Approved Budget for income and expenses;

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(iii) bank reconciliations;

(iv) an aged accounts receivable, delinquency, uncollectible items and collections report;

(v) an analysis of escrows (insurance, real estate taxes, and replacement reserves); and

(vi) a report of all material transactions occurring during such preceding month including matters pertaining to the management, operation and maintenance of the Properties during such month.

(b) Quarterly Reports. The Manager shall prepare and send, or cause to be prepared and sent, to the Members within forty-five (45) days after the last day of each of the quarterly calendar periods for each calendar year:

(i) a statement of profit and loss for the quarterly period then ended and cumulatively to date for the calendar year;

(ii) a comparison with the Approved Budget of the revenues and expenses of the Company to date with the projected revenues and expenses for such period together with an explanation of variances in excess of Five Percent (5%);

(iii) a management report summarizing significant activities affecting the Properties;

(iv) an aged accounts receivable analysis;

(v) an analysis of renovation activity and replacement expenses (actual vs. budget);

(vi) a detailed operating and capital budget; and

(vii) a balance sheet showing the financial position of the Company.

(c) Annual Reports. As soon as available, and in any event within ninety (90) days after the end of each Fiscal Year, the Company shall provide to the Members unaudited balance sheets, statements of income, cash flows and Members equity for such Fiscal Year of the Company in each case setting forth in comparative form the figures for the previous Fiscal Year, certifying to the effect that, except as set forth therein, such financial statements have been prepared using tax basis accounting, applied on a basis consistent with prior years, and fairly present in all material respects the financial condition of the Company as of the dates thereof and the results of its operations and changes in its cash flows and Members’ equity for the periods covered thereby.

(d) Tax Information and Reports. The Manager shall prepare and send, or cause to be prepared and sent to each Member:

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(i) Prior to March 15 of each Fiscal Year commencing with the Fiscal Year 2024, to each Person who was a Member during the prior Fiscal Year, an estimate of the income attributable to such Member for federal income tax, and, if applicable, Florida state income taxes with respect to such Fiscal Year.

(ii) No later than March 15 of each Fiscal Year, to each Person who was a Member during the prior Fiscal Year, a Form K-1 and a report indicating such Person’s respective proportionate share of the profits, losses, tax credits, deductions, tax preference items and investment credits, if any, for such prior Fiscal Year for Federal income tax purposes.

(e) Other Reports. The Manager shall provide to the Members copies of bank statements for each year for the Company by March 15 of the succeeding year. The Manager shall keep the Members reasonably informed regarding all material matters relating to the Company, each Subsidiary and their respective operations and assets (including the Properties) and shall so consult at all reasonable times requested by the Members and without limitation on the foregoing, shall inform the Members as promptly as practicable with respect to any major or significant Company matters that would be a Major Decision.

Article 11

MANAGER DEFAULT AND REMOVAL

11.1 Manager Defaults.

(a) The Manager shall be in default hereunder (a “Manager Default”) if:

(i) the Manager or any Affiliate of the Manager engages in fraud, misappropriation of funds or willful misconduct with respect to the Company’s assets or operations; or

(ii) the Manager or any Affiliate of the Manager materially breaches its duties, including the failure to make a required Capital Contribution as provided for in Section 3.4, committing a violation of the Major Decisions provisions or its representations and/or warranties under the terms of this Agreement, or to the extent applicable the Senior Loans or any other Company or Subsidiary loan or any Loan Document, or any other agreement between the Company and the Manager or any Affiliate of the Manager, provided that, except for actions which are fraudulent or reckless, or with respect to monetary defaults, including those set forth in Section 11.1(a)(iii), 11(a)(iv), if such Manager Default is capable of being cured, and such breach is cured to the reasonable satisfaction of the Loci Member within Thirty (30) days of delivery of written notice to the Manager of such default by the Loci Member, or, if not cured to the reasonable satisfaction of the Loci Member within such Thirty (30) day period and the Manager is diligently attempting to cure such default and the default is cured to the reasonable satisfaction of the Loci Member within Ninety (90) days of delivery of such written notice to the Manager (the “Manager Default Cure Period”);

(iii) The Current Preferred Return is not paid when due.

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(iv) The full Redemption Amount is not paid on the Mandatory Redemption Date; or

(v) The Manager or the Generation Member cease to be Controlled by David Sobelman.

(b) If a Manager Default exists, the Loci Member in addition to all other claims for damages, rights and remedies provided in this Agreement or otherwise available at law or in equity, including, without limitation, specific performance, shall have all the rights and remedies set forth in Section 11.1(c).

(c) If a Manager Default exists, the Loci Member may in its sole and absolute discretion, but is not obligated to, do any or all of the following (i) cause the Preferred Return to accrue at the Default Rate, (ii) remove the Manager or any applicable Affiliate of the Manager (a “Removal”), (iii) terminate any or all agreements between the Company and the Manager or the applicable Affiliate, (iv) charge to and collect from the Company a fee equal to one percent (1%) of the aggregate amount of the Capital Contributions made by the Loci Member, and/or (v) list and sell all or any of the Properties, Subsidiaries or the Company without the approval of the Generation Member for such consideration and upon such terms and conditions as the Loci Member may determine in its sole absolute and uncontrolled discretion. If that the Loci Member elects to cause a Removal, the Loci Member may then, in their sole, absolute and uncontrolled discretion, appoint a new Manager, including, without limitation, the appointment of the Loci Member or an Affiliate of the Loci Member as the new Manager, and enter into a new contract replacing any terminated agreement between the Company and the Manager or any applicable Affiliate on commercially reasonable terms, by (i) giving all of the Parties and any applicable Affiliate of the Manager, written notice of such removal or termination, which written notice must (A) specify the effective date of such removal or termination, (B) designate the replacement Manager, (C) in the case of an agreement between the Company and any applicable Affiliate, designate the new counterparty to such agreement, and (D) provide a reasonably detailed description of the actions of the Manager or its Affiliates that gave rise to the Manager Default and (ii) entering into such new agreement with the new Manager or replacement of the Affiliate. In the event of any removal of the “Manager” under the terms of this Agreement, or the termination of any agreement with an Affiliate of the Manager, such removed Manager and/or Affiliate whose agreement has been terminated shall account to the Company with respect to all uncompleted business of the Manager and/or such Affiliate. Following the replacement of the Manager or Affiliate, the new Manager will notify the Company’s lender(s), if applicable, pursuant to the applicable notice details in the relevant loan agreement, of the removal of the old Manager Affiliate and appointment of the new Manager. If the Manager Default is cured pursuant to Section 11.1(a)(ii) the Manager or Affiliates and all related agreements which may have been terminated as provided for in this Section 11.1(c) shall be promptly reinstated, provided that none of the actions by Loci Member pursuant to this Section 11.1(c) shall constitute a breach or default under any relevant agreement.

(d) If an act, activity or event that otherwise would constitute a Manager Default (a “Bad Act”) is caused solely by the act or omission of a Person who is not a Generation Member Principal, then the Manager or Affiliate of the Manager shall be deemed to have cured such Bad Act if all of the following conditions are satisfied: (i) the Bad Act shall have occurred without the

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complicity or approval of any Generation Member Principal, (ii) promptly following the acquisition of knowledge by any of any Generation Member Principal of such Bad Act, each employee or independent contractor of the Manager or any of its Affiliates who committed or participated in such Bad Act (the “Bad Act Participants”) shall have been immediately removed from the Property and the employment or independent contractor relationship, as the case may be, between the Manager or its Affiliates and such Bad Act Participants shall have been terminated; and (iii) within Thirty (30) days after such Bad Act, the Manager shall have cured such Bad Act (including paying all costs and expenses resulting from such Bad Act); provided, however, that if such Bad Act cannot by its nature be cured within such thirty (30) day period, such period shall be extended as shall be reasonably necessary to cure such Bad Act so long the extended cure period provided for herein while the Manager or applicable Affiliate is continually and diligently pursuing to cure such Bad Act and such cure period does not exceed Ninety (90) days in the aggregate.

(e) Upon (and as a condition to) removal pursuant to this Section 11.1, the Manager and its Affiliates that have provided any Guarantees or other guarantee or indemnification obligations to a lender to the Company or any Subsidiary shall receive (i) a full and unconditional release from any such Guarantees and other guarantee or indemnification obligations or (ii) indemnification from a source having capitalization at least equivalent to that of the Person providing such Guarantee or other guarantee or indemnification obligation for any liability incurred by such Person pursuant to the Guarantee or other guarantee or indemnification obligation, other than with respect to liabilities under such Guarantees and other guarantee or indemnification obligations which are attributable to so called “bad boy acts” of the Manager and its Affiliates under any such Guarantees and other guarantee or indemnification obligations. Upon its removal as Manager, the Manager shall have no rights or obligations under this Agreement, though it shall be liable in accordance with this Agreement for any damages to the Company resulting from any act or omission by the Manager prior to its removal for which it is liable under the terms of this Agreement.

(f) Following the replacement of the Manager or Affiliate, the new Manager will notify the Company’s lender(s), if applicable, pursuant to the applicable notice details in the relevant loan agreement, of the removal of the old Manager Affiliate and appointment of the new Manager.

11.2 No Waiver. Failure by the Loci Member to give any notice of a Manager Default as specified under Section 11.1 or otherwise herein, or any failure to insist upon strict performance of any of the terms of this Agreement, shall not constitute a waiver of any such Manager Default or of any of the terms of this Agreement. No Manager Default shall be waived, nor shall any duty to be performed, be altered or modified, except by written instrument. One or more waivers or failure to give notice of Manager Default shall not be considered as a waiver of a subsequent or continuing Manager Default of the same covenant or obligation.

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Article 12

GENERAL PROVISIONS

12.1 Amendments. No alteration, modification or amendment of this Agreement shall be made unless in writing and signed (in counterpart or otherwise) by the Members and the Manager.

12.2 Notices. All notices, demands, approvals, reports and other communications provided for in this Agreement shall be in writing, shall be given by a method prescribed below in this Section 12.2 and shall be given to the party to whom it is addressed at the address set forth below, or at such other address(es) as such party hereto may hereafter specify by at least fifteen (15) days prior written notice to the Company.

To Manager:	Generation Income Properties, L.P. c/o Generation Income Properties, Inc. 401 E. Jackson Street, Suite 3300 Tampa, FL 33602
With a copy to:	Trenam Law 101 E. Kennedy Blvd., Suite 2700 Tampa, FL 33602 Attn: Timothy Hughes Email: THughes@Trenam.com   Foley & Lardner LLP 100 N. Tampa Street Tampa, FL 33602 Suite 2700 Attn: Curt P. Creely Email: ccreely@foley.com
To the Loci Member:	c/o Loci Capital Management CO., LLC 270 Clearwater Road N. Suite C Largo, FL 33770
With a copy to:	Berger Singerman LLP 350 East Las Olas Blvd, Suite 1000 Fort Lauderdale, FL 33301 Attn: James L. Berger, Esq.

 

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Any such notice demand, approval, report or other communication may be delivered by hand, mailed by United States certified mail, return receipt requested, postage prepaid, deposited in a United States post office or a depository for the receipt of mail regularly maintained by the United States Post Office, or delivered by local or nationally recognized overnight courier which maintains evidence of receipt. Any notices, demands, approvals or other communications shall be deemed given and effective when received at the address for which such party has given notice in accordance with the provisions hereof. Notwithstanding the foregoing, no notice or other communication shall be deemed ineffective because of refusal of delivery to the address specified for the giving of such notice in accordance herewith. Any notice which is intended to initiate a response period set forth in this Agreement shall be effective to do so only if it specifically references such response period and the Section of this Agreement containing such response period. Any Member may change the address to which notices will be sent by giving notice of such change to the Company, and to other Members, in conformity with the provisions of this Section 12.2 for the giving of notice. A notice to a party designated to receive a “copy” shall not in and of itself constitute notice to the primary notice party.

12.3 Governing Law. The rights, obligations, and duties of the Parties in their capacities as members or managers of a Delaware limited liability company are governed by this Agreement and the Act. Subject to the foregoing, this Agreement shall be governed by, and construed in accordance with, the laws, of the State of Florida, notwithstanding any conflict-of-law doctrines of such State or other jurisdiction to the contrary. Subject to the provisions of Section 12.12 providing for specific performance, injunction or other equitable relief, all disputes between or among any Members arising out of or in any way connected with the Company or with the execution, interpretation and performance of this Agreement (including the validity, scope and enforceability of the dispute resolution provisions contained herein) shall be solely and finally settled in accordance with Exhibit 6 attached to this Agreement.

12.4 Binding Nature of Agreement. Except as otherwise provided, this Agreement shall be binding upon and inure to the benefit of the Members and their personal representatives, successors and assigns.

12.5 Validity. In the event that all or any portion of any provision of this Agreement shall be held to be invalid, the same shall not affect in any respect whatsoever the validity of the remainder of this Agreement.

12.6 Entire Agreement. This Agreement, including the Exhibits attached hereto, constitutes the entire understanding and agreement among the parties hereto with respect to the subject matter hereof, and supersedes all prior and contemporaneous agreements and understandings, inducements or conditions, express or implied, oral or written, except as herein contained.

12.7 Indulgences, Etc. Neither the failure nor any delay on the part of any party hereto to exercise any right, remedy, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege preclude any other or further exercise of the same or any other right, remedy, power or privilege, nor shall any waiver of any right, remedy, power or privilege with respect to any occurrence be construed as a waiver of such right, remedy, power or privilege with respect to any other occurrence. No

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waiver shall be effective unless it is in writing and signed by the party asserted to have granted such waiver.

12.8 Execution in Counterparts. This Agreement may be executed in any number of counterparts, all of which together shall constitute a single contract, and each of such counterparts shall for all purposes be deemed to be an original. This Agreement may be executed and delivered by facsimile or electronically. Delivery by email of a signed .PDF copy will be deemed delivery of an executed counterpart of this Agreement by the Party on behalf of which such email is sent without the need for provision of a separate originally signed copy. A DocuSign signature on behalf of a Party will be deemed effective execution of this Agreement by such party. This Agreement shall become binding when one or more counterparts hereof, individually or taken together, shall bear the signatures of all of the parties reflected hereon as the signatories.

12.9 Number of Days. In computing the number of days for the purpose of this Agreement, except with respect to reference to Business Days, all days shall be counted, including Saturdays, Sundays and holidays; provided, however, that if the final day of any time period falls on a day that is not a Business Day, then the final day shall be deemed to be the next day which is not a Business Day.

12.10 Interpretation. No provision of this Agreement is to be interpreted for or against either party because that party or that party’s legal representative drafted such provision

12.11 Access; Confidentiality. By executing this Agreement, each Member expressly agrees, at all times during the term of the Company and thereafter and whether or not at the time a Member of the Company, (a) not to issue any press release or advertisement or take any similar action concerning the Company’s business or affairs without first obtaining consent of the Members and the Manager, (b) not to publicize detailed financial information concerning the Company, and (c) not to disclose the Company’s affairs generally, provided that the foregoing shall not restrict any Member from disclosing information concerning such Member’s investment in the Company to its officers, directors, employees, agents, legal counsel, accountants, other professional advisors, limited partners, members and Affiliates, or to prospective or existing investors of such Member or its Affiliates or to prospective or existing lenders to such Member or its Affiliates. Nothing herein shall restrict any Member from disclosing information that: (a) is in the public domain (except where such information entered the public domain in violation of this Section 12.11); (b) was made available or becomes available to a Member on a non-confidential basis prior to its disclosure by the Company; (c) was available or becomes available to a Member on a non-confidential basis from a Person other than the Company or another Party who is not otherwise bound by a confidentiality agreement with the Company or its representatives, or is not otherwise prohibited from transmitting the information to the Member; (d) is developed independently by the Member; (e) is required to be disclosed by applicable law (provided that prior to any such required disclosure, the disclosing party shall, to the extent possible, consult with the other Parties and use best efforts to incorporate any reasonable comments of the other Parties prior to such disclosure); (f) in connection with a dispute hereunder or (g) is expressly approved in writing by the Parties. The provisions of this Section 12.11 shall survive the termination of the Company.

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12.12 Equitable Relief. The Members confirm that damages at law may be an inadequate remedy for a breach or threatened breach of this Agreement and agree that, in the event of a breach or threatened breach of any provision hereof, the respective rights and obligations hereunder shall be enforceable by specific performance, injunction or other equitable remedy, but, nothing herein contained is intended to, nor shall it, limit or affect any right or rights at law or by statute or otherwise of a Member aggrieved as against the other for a breach or threatened breach of any provision hereof, it being the intention by this Section 12.12 to make clear the agreement of the Members that the respective rights and obligations of the Members hereunder shall be enforceable in equity as well as at law or otherwise and that the mention herein of any particular remedy shall not preclude a Member from any other remedy it or he might have, either in law or in equity.

12.13 Representations and Covenants of the Parties. Each Party represents and warrants to and covenants with the Company and each other Party as follows:

(a) It is a corporation, limited liability company or partnership, as applicable, duly organized or formed and validly existing and in good standing under the laws of the state of its organization or formation; it has all requisite power and authority to enter into this Agreement, to acquire and hold, in the case of each Member, its Membership Interest and to perform its obligations hereunder; and the execution, delivery and performance of this Agreement has been duly authorized.

(b) This Agreement and all agreements, instruments and documents herein provided to be executed or caused to be executed by it as of the Effective Date are duly authorized, executed and delivered by and are and will be binding and enforceable against it.

(c) Its execution and delivery of this Agreement and the performance of its obligations hereunder will not conflict with, result in a breach of or constitute a default (or any event that, with notice or lapse of time, or both, would constitute a default) or result in the acceleration of any obligation under any of the terms, conditions or provisions of any other agreement or instrument to which it is a party or by which it is bound or to which any of its property or assets are subject, conflict with or violate any of the provisions of its organizational documents, or violate any statute or any order, rule or regulation of any Governmental Entity, that would materially and adversely affect the performance of its duties hereunder; and such Party has obtained any consent, approval, authorization or order of any Governmental Entity required for the execution, delivery and performance by such Party of its obligations hereunder.

(d) There is no action, suit or proceeding pending or, to its knowledge, threatened against it in any court or by or before any other Governmental Entity that would prohibit its entry into or performance of this Agreement.

(e) This Agreement is a binding agreement on the part of such Party enforceable in accordance with its terms against such Party.

(f) No Party or its Affiliates has dealt with any broker or finder in connection with its entering into this Agreement and shall indemnify the Company and the other Parties for all costs, damages and expenses (including reasonable attorneys’ fees) which may arise out of a breach of the aforesaid representation and warranty.

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12.14 Representations and Covenants of the Members. Each Member represents and warrants to and covenants with the Company and each other Party as follows:

(a) It has been advised to engage, and has engaged, its own counsel (whether in-house or external) and any other advisors it deems necessary and appropriate. By reason of its business or financial experience, or by reason of the business or financial experience of its own attorneys, accountants and financial advisors (which advisors, attorneys and accountants are not Affiliates of the Company or any other Party), it is capable of evaluating the risks and merits of an investment in the Membership Interest and of protecting its own interests in connection with this investment. Nothing in this Agreement should or may be construed to allow any Member to rely upon the advice of counsel acting for another Member or to create an attorney-client relationship between a Member and counsel for another Member.

(b) It is acquiring the Membership Interest for investment purposes for its own account only and not with a view to, or for sale in connection with, any distribution of all or a part of the Membership Interest.

(c) It is familiar with the definition of “accredited investor” in Rule 501(a) of Regulation D of the Securities Act of 1933, as amended, and it represents that it is an “accredited investor” within the meaning of that rule.

(d) It is not required to register as an “investment company” within the meaning ascribed to such term by the Investment Company Act of 1940, as amended, and covenants that it shall at no time while it is a Member of the Company conduct its business in a manner that requires it to register as an “investment company”.

(e) Each Person owning a Ten Percent (10%) or greater interest in such Member (i) is not currently identified on the “Specially Designated Nationals and Blocked Persons List” maintained by the Office of Foreign Assets Control, Department of the Treasury (or any other similar list maintained by the Office of Foreign Assets Control pursuant to any authorizing statute, executive order or regulation), (ii) is not a Person with whom a citizen of the United States is prohibited to engage in transactions by any trade embargo, economic sanction, or other prohibition of U.S. law, regulation, or executive order of the President of the United States, and (iii) such Member has implemented procedures, and will consistently apply those procedures, to ensure the foregoing representations and warranties remain true and correct at all times. This Section 12.14(e) shall not apply to any Person to the extent that such Person’s interest in the Member is through either (i) a Person (other than an individual) whose securities are listed on a national securities exchange, or quoted on an automated quotation system, in the United States, or a wholly-owned subsidiary of such a Person or (ii) an “employee pension benefit plan” or “pension plan” as defined in Section 3(2) of the U.S. Employee Retirement Income Security Act of 1974, as amended.

(f) It shall comply with all requirements of law relating to money laundering, anti-terrorism, trade embargos and economic sanctions, now or hereafter in effect and shall immediately notify the other Parties in writing if it becomes aware that any of the foregoing representations, warranties or covenants are no longer true or have been breached or if the Member has a reasonable basis to believe that they may no longer be true or have been breached.

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12.15 No Third-Party Beneficiaries. Except for each Covered Person, notwithstanding anything to the contrary contained herein, no provision of this Agreement is intended to benefit any party other than the Members hereto and their successors and assigns in the Company and no provision hereof shall be enforceable by any other Person. Without limiting the foregoing, no creditor of, or other Person doing business with the Company shall be a beneficiary of, or have the right to enforce, any of the provisions of this Agreement.

12.16 Tax Controversies.

(a) Appointment. The Members hereby appoint the Manager (or, if required by applicable law, an individual to be designated by the Generation Member) as the “partnership representative” (the “Partnership Representative”) .

(b) Tax Examinations and Audits. The Partnership Representative is authorized and required to represent the Company (at the Company’s expense with the consent of the Members) in connection with all examinations of the Company’s affairs by any taxing authority, including resulting administrative and judicial proceedings, and to expend Company funds with the consent of the Members for professional services and costs associated therewith. Each Member agrees that such Member will not independently act with respect to tax audits or tax litigation of the Company, unless previously authorized to do so in writing by the Partnership Representative, which authorization may be withheld by the Partnership Representative in its sole and absolute discretion. The Partnership Representative shall promptly notify the Members if any tax return of the Company is audited and upon the receipt of a notice of final partnership administrative adjustment or final partnership adjustment. Without the consent of the Members (such consent not to be unreasonably delayed), the Partnership Representative shall not extend the statute of limitations, file a request for administrative adjustment, file suit relating to any Company tax refund or deficiency or enter into any settlement agreement relating to items of income, gain, loss or deduction of the Company with any taxing authority.

(c) BBA Elections and Procedures. The Partnership Representative, with the consent of the Loci Member, if applicable, (such consent not to be unreasonably delayed), shall have the right to make any and all elections and to take any actions that are available to be made or taken by the Partnership Representative or the Company under Section 1101 of the Bipartisan Budget Act of 2015, (including any election under Code Section 6226). If an election under Code Section 6226(a) is made, the Company shall furnish to each Member for the year under audit a statement of the Member’s share of any adjustment set forth in the notice of final partnership adjustment, and each Member shall take such adjustment into account as required under Code Section 6226(b).

(d) Tax Returns and Tax Deficiencies. Each Member agrees that such Member shall not treat any Company item on such Member’s federal, state, foreign or other income tax return inconsistently with the treatment of the item on the Company’s return. Any deficiency for taxes imposed on any Member (including penalties, additions to tax or interest imposed with respect to such taxes and any tax deficiency imposed pursuant to Code Section 6226) will be paid by such Member and if required to be paid (and actually paid) by the Company, such Member shall indemnify and hold the Company harmless from any and all amounts so paid. The immediately preceding sentence shall survive a Member no longer being a member of the

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Company. To the extent that the Partnership Representative does not make an election under Code Section 6221(b) or Code Section 6226, the Company shall use commercially reasonable efforts to (i) make any modifications available under Code Section 6225(c)(3),(4), and (5), and (ii) if requested by a Member, provide to such Member information allowing such Member to file an amended federal income tax return, as described in Code Section 6225(c)(2), to the extent such amended return and payment of any related federal income taxes would reduce any taxes payable by the Company.

(e) Indemnification. Notwithstanding any other provision of this Agreement, the Company shall indemnify and reimburse, to the fullest extent provided by law, the Partnership Representative for all expenses, including legal and accounting fees (as such fees are incurred), claims, liabilities, losses, and damages incurred in connection with any tax audit or judicial review proceeding with respect to the tax liability of the Members or any action taken by the Partnership Representative acting in its capacity as such, the payment of which shall be made before any cash distributions are made to the Members.

(f) Resignation. The Partnership Representative may resign at any time. If the Manager ceases to be the Partnership Representative for any reason, a new Partnership Representative shall be appointed with the unanimous consent of the Members.

12.17 Counsel. The Generation Member agrees and acknowledges that Berger Singerman LLP has acted as counsel for the Loci Member in connection with among other things, the preparation of this Agreement and related agreements for the Company. The Generation Member understands and acknowledges:

(a) . That Berger Singerman LLP to date has acted exclusively as for the Loci Member and has not represented or been engaged to provide services to the Generation Member, or the Company in any respect, including but not limited to the preparation of this Agreement related agreements, and that Trenam, Kemker, Scharf, Barkin, Frye, O’Neill & Mullis, Professional Association (“Trenam Law”) to date has acted exclusively as for the Generation Member in respect of this Agreement and has not represented the Loci Member or the Company;

(b) That in its capacity as counsel, Berger Singerman LLP has represented the Loci Member which interests might conflict with those of the Company and/or the Generation Member, and the Company has not had its own counsel representing its interests, and that in its capacity as counsel, Trenam Law has represented the Generation Member which interests might conflict with those of the Company and/or the Loci Member, and the Company has not had its own counsel representing its interests;

(c) Each Member has been advised to seek independent counsel, to the extent each deems appropriate, to protect each of their interests in connection with any of the Agreement or the related agreements, including without limitation advice as to the tax consequences of entering into the Agreement;

(d) That the Generation Member will look solely to, and rely upon, its own advisers, and not Berger Singerman LLP, with respect to the legal, financial and tax consequences

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of this investment, and the Loci Member will look solely to, and rely upon, its own advisers, and not Trenam Law, with respect to the legal, financial and tax consequences of this investment; and

(e) The Loci Member agrees that Trenam Law may be legal counsel to the Generation Member, its Affiliates, the Company, and the Company’s Subsidiaries, and that the Manager, on behalf of the Company, may consent to Trenam Law’s representation of any of the foregoing parties and/or execute any waiver reasonably requested by Trenam Law pursuant to the rules of professional conduct or similar rules in any jurisdiction.

[Remainder of page intentionally left blank]

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IN WITNESS WHEREOF, the undersigned have set their hands as of the date first above written.

COMPANY:

 

GIP VB SPE, LLC,

a Delaware limited liability company

 

 

By: /s/ David Sobelman

Name: David Sobelman

Title: President

 

 

GENERATION MEMBER:

 

GENERATION INCOME PROPERTIES, L.P.,

a Delaware limited partnership

 

By: Generation Income Properties, Inc.,

a Maryland corporation, its General Partner

 

 

By: /s/ David Sobelman

David Sobelman

President and CEO

LOCI MEMBER:

 

LC2-NNN Pref, LLC,

a Florida limited liability company

 

By: Loci Capital Management Co., LLC,

a Florida limited liability company, its Manager

 

By: /s/ Michael Phillips

Michael J. Phillips

Manager

 

 

 

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MANAGER:

 

GENERATION INCOME PROPERTIES, L.P.,

a Delaware limited partnership

 

By: Generation Income Properties, Inc.,

a Maryland corporation, its General Partner

 

 

By: /s/ David Sobelman

David Sobelman

President and CEO

 

 

 

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Exhibit 10.6

AGREEMENT PROVIDING

REPRESENTATIONS AND WARRANTIES

between

GENERATION INCOME PROPERTIES, L.P.

and

LC2-NNN PREF, LLC, as Assured Party

 

August 10, 2023

 

 

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Section 1. Background Statement. Definitions and References.		1
Section 2. Generation’s Representations and Warranties.		4
2.1.	Representations with respect to the Company.	4
2.2. Generation’s Representations with Respect to the Properties		7
Section 3.	Miscellaneous.	9
3.1. Dispute Resolution.		10
3.2.	Notices.	10
3.3.	Integration: Modification and Amendments.	10
3.4.	Successors and Assigns.	11
3.5.	Counterparts.	11
3.6.	Severability.	11
3.7.	Limited Third Party Beneficiaries.	11
3.8.	WAIVER OF TRIAL BY JURY.	11
3.9.	Governing Law.	11
3.10.	Indemnification by Generation	11
3.11.	Payment and Procedure for General Indemnification.	12

EXHIBITS AND SCHEDULES:

Exhibit l: The JV Agreement

Exhibit 2: Pre-Transactions Organizational Chart

Exhibit 3: Post-Transactions Organizational Chart

 

Schedule 1: Ownership

Schedule 2: Organizational Documents

Schedule 3: Outstanding Debt

Schedule 4: Leases

Schedule 5: Insurance

Schedule 6: Claims

Schedule 7: Policies

Schedule 8: Existing Loan Documents

Schedule 9: Outstanding Loan Balance(s)

 

 

ii

 

12314738-6

 

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AGREEMENT PROVIDING REPRESENTATIONS AND WARRANTIES

THIS AGREEMENT PROVIDING REPRESENTATIONS AND WARRANTIES (as the same may hereinafter be amended, the “Agreement”) is entered into and effective as of this day of August 10, 2023 (the “Agreement Date”), by and among GENERATION INCOME PROPERTIES, L.P., a Delaware limited partnership (“Generation”) and LC2-NNN PREF, LLC, a Delaware limited liability company (“Assured Party”).

BACKGROUND STATEMENT

A. Simultaneously with the execution and delivery of this Agreement, the Assured Party will be (i) making an initial capital contribution of $12,000,000 (the “Investment”) into GIPVB SPE LLC, a Delaware limited liability company (the “Company”) in exchange for membership interests (the “Assured Party Membership Interests”) in the Company and (ii) entering into the Amended and Restated Limited Liability Company Agreement of the Company, among the Company, Generation and the Assured Party (the “JV Agreement”), providing for, among other things, the Investment and the issue of the Assured Party Membership Interests (the “Transactions”). A copy of the JV Agreement is attached to this Agreement as Exhibit 1. The sole members of the Company are the Assured Party and Generation and a copy of the related organizational charts before the Transactions (“Pre-Transactions Organizational Chart”) and after the Transactions (the “Post-Transactions Organizational Chart”) are attached to this Agreement as Exhibit 2 and Exhibit 3, respectively.

B. The Company is the indirect owner of 8 rental properties (the “Company Portfolio”) and is, simultaneously with the execution of this Agreement, indirectly acquiring an additional 13 rental properties (the “Modiv Portfolio”, and collectively with the Company Portfolio, the “Properties”). A description of each of the Properties is contained in the JV Agreement.

C. The execution and delivery of this Agreement is a material inducement and a condition to the Assured Party’s participation in the Transactions.

NOW, THEREFORE, in consideration of the mutual representations, warranties, covenants and agreements hereinafter contained, and other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, the Generation Parties and the Assured Party agree as follows.

Section 1. Background Statement. Definitions and References.

The Background Statement is true and correct in all respects and incorporated into this Agreement in its entirety.

The following terms, as used in this Agreement, have the following meanings and references:

 

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“Action” means any claim, action, cause of action, demand, lawsuit, arbitration, inquiry, audit, notice of violation, proceeding, litigation, citation, summons, subpoena or investigation of any nature, civil, criminal, administrative, regulatory or otherwise, whether at law or in equity.

“Affiliate” means a Person that controls, is in common control with or is controlled by, another Person; and for such purpose, “control” of a Person (including the terms “controlling,” “controlled by” and “under common control with”) means the possession, directly or indirectly, of the legal power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by contract or otherwise.

“Agreement” is defined in the introductory paragraph.

“Agreement Date” means the date of this Agreement, as set forth in the introductory paragraph of this Agreement.

“Assured Party Membership Interests” has the meaning set forth in the Background Statement.

“Business Day” means any day upon which commercial banks in the County are required to be open for business.

“Claim” means any written (including electronic) or oral charge, demand, claim, assertion, grievance, controversy, complaint, suit, action, cause of action, investigation, proceeding (whether criminal, civil, administrative or otherwise), or notice by any Person or Governmental Entity alleging actual or potential Liability of any kind, or with respect to any breach or default under any Law, contract, agreement, permit, plan, or other instrument.

“Closing Documents” has the meaning set forth in Section 2.1.m).

“Contracts” means all contracts and other agreements to which the Assured Party or Generation is a party, and all other contracts and agreements relating to the Properties (including relating to the construction, alteration, demolition, redevelopment, employment, management, service, or supply thereof).

“County” means Hillsborough County, a political subdivision of the State of Florida.

“Environmental Law” means any Law or determination of any Governmental Entity or agency affecting the Property and pertaining to human health or the environment (including ambient air, soil, surface water or groundwater, or subsurface strata), including the Comprehensive Environmental Response, Compensation and Liability Act of 1982 and the Resource Conservation and Recovery Act of 1986.

“Generation Parties” means, collectively, Generation and the Company.

“Generation Parties’ Knowledge” means, and is limited to, the actual knowledge, as of an applicable date and after reasonable inquiry, of Dave Sobelman and Emily Hewland.

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“Governmental Entity” means any international, national, federal, state, county, provincial or local governmental, regulatory or administrative authority, agency, commission, court, tribunal, arbitral body or self-regulated entity, whether domestic or foreign.

“Hazardous Substances” means any substance which is (i) designated, defined, classified or regulated as a hazardous substance, hazardous material, hazardous waste, pollutant or contaminant under any Law related to human health or the environment, as in effect as of the date hereof, (ii) petroleum hydrocarbon, including crude oil or any fraction thereof and all petroleum products, (iii) PCBs, (iv) lead, (v) friable asbestos, (vi) flammable explosives, (vii) infectious materials, (viii) radioactive materials, (ix) mold, mildew or any other biological toxins or (x) hazardous to human health or to the environment.

“Indebtedness” means, with respect to a Person, any obligations of such Person: for borrowed money, including related fees and expenses; (i) evidenced by any note, bond, debenture, mortgage or similar instrument; (ii) for the deferred purchase price of goods or services; (iii) under any license, lease, rent or other contract; or (iv) in the nature of guarantees of any of the obligations described in the foregoing clauses (i) through (iv) of any other Person.

“Indemnity Notice” is defined in Section 3.11(a).

“Inspection Materials” is defined in Section 2.2.

“IRS” is defined in Section 2.2.

“JV Agreement” is defined in the Background Statement.

“Law” means any law, statute, ordinance, order, regulation or requirement of any Governmental Entity.

“Liability” means any direct or indirect liability, indebtedness, guaranty, endorsement, encumbrance, promise, covenant, agreement, commitment, loss, damage, judgment, order, lien, security interest, encumbrance, settlement, deficiency, obligation, responsibility, amount due, Tax, penalty, cost, fee, and expense (including attorneys’ and other professional fees and costs actually incurred), fixed or unfixed, known or unknown, asserted or unassorted, choate or inchoate, liquidated or unliquidated, secured or unsecured.

“Losses” means losses, damages, Liabilities, deficiencies, Actions, judgments, interest, awards, penalties, fines, costs or expenses of whatever kind, including reasonable attorneys' fees and the cost of enforcing any right to indemnification hereunder and the cost of pursuing any insurance providers.

“Modiv Portfolio” has the meaning set forth in the Background Statement.

“OFAC” is defined in Section 2.1.

"Permitted Lien” means any Liability related to the Existing Loan Documents.

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“Person” means any natural person, corporation, limited liability company, business trust, joint venture, association, company, partnership, sole proprietorship, organization, Governmental Entity or political subdivision thereof or other legal entity.

“Post-Transactions Organizational Chart” is defined in the Background Statement.

“Pre-Transactions Organizational Chart” is defined in the Background Statement.

“Representative” means, with respect to any Person, any and all directors, officers, employees, consultants, financial advisors, counsel, accountants and other agents of such Person.

“Subsidiaries” means, collectively, GIP13, LLC and all of the special purpose entities owning each of the Properties.

“Subsidiary” means, individually, GIP13, LLC and all of the special purpose entities owning each of the Properties.

“Subsidiary Organizational Documents” is defined in Section 2.1.

“Tax Returns” means any and all reports, returns, declarations, claims for refund, elections, disclosures, estimates, information reports or returns or statements required to be supplied to a taxing authority or other Governmental Entity in connection with any Taxes, including any schedule or attachment thereto or amendment thereof,

“Taxes” means any and all federal, state, county, local, foreign or other income, property, sales, intangible, use, franchise, value added, employees’ income withholding, social security, unemployment and other taxes, of any nature whatsoever, including any interest, fines, additions to tax or penalties with respect thereto, whether disputed or not.

“Third Party Claim” is defined in Section 3.11(b).

“Transactions” has the meaning set forth in the Background Statement.

Section 2. Generation’s Representations and Warranties.

2.1. Representations with respect to the Company.Generation represents and warrants to the Assured Party, as of the Agreement Date, as follows:

(a) Organization. The Company and each Subsidiary is duly formed, validly existing and in good standing under the Laws of the jurisdiction of its organization.

(b) Authority/Consent. The Company possesses all requisite power and authority, and has taken all actions as required by its organizational documents and applicable Law to execute and deliver this Agreement, the Company’s JV Agreement and the other documents to which the Company is a Party which are necessary or appropriate to fulfill its obligations in connection with the Transactions.

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(c) Litigation. No action, suit or other proceeding is pending or, to Generations Parties’ Knowledge, has been threatened in writing, that concerns or involves the Company, any Subsidiary or any of the Properties in any manner.

(d) Bankruptcy. No bankruptcy, insolvency, reorganization or similar action or proceeding, whether voluntary or involuntary, is pending, or, to Generation Parties’ Knowledge, threatened, against the Company or any Subsidiary.

(e) Other Sales Agreements. Except as provided for in the JV Agreement, neither the Company or any Subsidiary has entered into any agreement or letter of intent to sell any interest in the Company, any Subsidiary or any of the Properties.

(f) Ownership.

(i) Since its inception, the Company has been wholly owned by Generation.

(ii) Immediately following the completion of the Transactions, and except as described on Schedule 1, (A) The Company, legally, beneficially and directly or through its ownership of NewCo, owned all of the membership interests in the Subsidiaries (including NewCo), as the case may be, free and clear of all Liabilities and Claims of others other than Permitted Liens, and (B) Neither the Company or any of the Subsidiaries directly or indirectly owned any interest in any Person or any assets other than the Properties and any assets related thereto. The Pre-Transactions Organizational Chart is a true, correct and complete depiction of the direct and indirect ownership interests of Company and the Subsidiaries prior to the consummation of the Transactions.

(iii) Immediately following the consummation of the Transactions, no Subsidiary will directly or indirectly own any interest in any Person or any assets other than the Properties and any assets related thereto, and other than as depicted on the Post-Transactions Organizational Chart. The Post-Transactions Organizational Chart is a true, correct and complete depiction of the direct and indirect ownership interests of each Subsidiary immediately following the consummation of the Transactions. Each Subsidiary is a special purpose bankruptcy remote limited liability company.

(g) Organizational Documents. The Company has delivered or made available to the Assured Party a true, complete and correct copy of all organizational documents of each Subsidiary, including all certificates of formation, foreign qualifications and operating agreements, and all amendments, modifications and supplements thereof (collectively, the “Subsidiary Organizational Documents”). A true, correct and complete list of all of the Subsidiary Organizational Documents have been made available to the Assured Party. The Subsidiary Organizational Documents constitute all of the documents, agreements and instruments with respect to the ownership, governance, management and organization of each Subsidiary. Each of the Subsidiary Organizational Documents is in full force and effect, and no defaults exist under any of the Subsidiary Organizational Documents (other than to the extent a Subsidiary Organizational Document with respect to Subsidiaries

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holding the Company Portfolio is amended and restated to be identical in form and substance to the Subsidiary Organizational Documents for the entities formed to consummate the acquisition of the Modiv Portfolio.

(h) Limited Purpose Entity. Since its inception the Company has not conducted any business other than directly owning the Subsidiaries, and since their inception, the Subsidiaries have not conducted any business other than directly or indirectly owning, developing, constructing, operating, maintaining, financing, and leasing the Properties and have not owned any asset which is not related or incidental thereto

(i) Unaudited Financial Statements of the Company. The Company has delivered or made available to the Assured Party true, complete and correct copies of the Company’s consolidated and consolidating financial statements of the Company for the 2021 and 2022 calendar years and for the six months ended June 30, 2023 (collectively, the “Financial Statements”). The Financial Statements are true, correct and complete in all material respects.

(j) Outstanding Debt. Except for the existing loans with Valley National Bank and any other obligations under the Contracts set forth on Schedule 3, and any other Liabilities expressly disclosed on the Financial Statements, or otherwise expressly disclosed in writing to the Assured Party and any other immaterial Liabilities incurred in the normal course of business, consistent with past practice, after the ending date of the balance sheets included within the Financial Statements, neither the Company or any Subsidiary has any indebtedness, obligations, contractual or other Liabilities of any nature, fixed or contingent, including any such Liabilities evidenced by bonds, debentures, notes, indemnities, judgments, orders, guaranties, loan agreements or other instruments.

(k) Operating Statements and General Ledgers. The Company has delivered or made available to the Assured Party true, complete and correct copies of the current operating statements with respect to the Properties, which operating statements accurately and fairly present, in all material respects, the results of operations of the Properties for the periods then ended.

(l) Employees. Neither the Company or any Subsidiary following the completion of the Transaction, has any employee, any employment agreements or any consulting agreement or has ever been subject to any collective bargaining agreements.

(m) No Conflicts. The execution and delivery of this Agreement and the JV Agreement by the Company, and the execution and delivery by each of the other documents necessary or appropriate for the Company to fulfill its obligation with respect to the Transactions and to which the Company is a party (the “Closing Documents”) will not: (i) violate any judgment, order, injunction, or decree to which any Company, and Subsidiary or the Properties is subject, or (ii) conflict with, result in a breach of, or constitute a default under the organizational documents of any of the Company or the Subsidiary (including the Subsidiary Organizational Documents) or any lease, mortgage, loan agreement, covenant, or other agreement or instrument to which the Company, any Subsidiary or any of the Properties are bound.

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(n) OFAC. Neither the Company, or any of the Subsidiaries, or to Generation Parties’ Knowledge, any of their equity owners, or any of their respective employees, officers, or directors, is a Person with whom U.S. Persons are restricted from doing business under regulations of the Office of Foreign Assets Control of the Department of the Treasury (“OFAC”) (including those named on OFAC’s Specially Designated Nationals List) or under any similar statute, executive order (including the September 24, 2001, Executive Order Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism), or other similar governmental action.

2.2. Generation’s Representations with Respect to the Properties. Generation represents and warrants to the Assured Party, as of the Agreement Date, as follows:

(a) Title to Property. Each Subsidiary is the sole owner, in fee simple, of its respective Property other than the tenant in common arrangement between GIPIL 525 S Perryville LLC and Sunny Ridge MHP LLC.

(b) Contracts. There exists no material default by the Company or any Subsidiary or, to Generation Parties’ Knowledge any other contracting party under any of the Contracts.

(c) No Leases. Except for leases referenced and attached hereto as Schedule 4, there are no leases, leasing Costs or outstanding brokerage agreements with respect to the Properties. The Company has provided the Assured Party with full and complete copies of the leases, including all assignments, amendments, guaranties, supplements, extensions, renewals and modifications thereto. There exists no default by any of the Subsidiaries or any tenant under the leases. No tenant under any of the leases has sought early termination of any lease nor has indicated that any such tenant would not exercise any renewal of such lease.

(d) Violations of Law. Neither the Company or any Subsidiary has received written notice from any Governmental Entity of any material violation of any Law affecting any Subsidiary or the Properties or any portion thereof (including the conduct of business operations thereon) which are unresolved. In addition, except as may be included in materials (the “Inspection Materials”) provided by the Company to the Assured Party prior to the consummation of the Transactions or otherwise disclosed in writing to the Assured Party, neither the Company or any Subsidiary has received any written notice from any Governmental Entity with respect to (i) any special assessments or proposed increases in the assessed value of any of the Properties (except as set forth in any current Notice of Proposed Property Taxes); any condemnation or eminent domain proceedings affecting the Properties; or (ii) any violation of any Law (including any Environmental Law or any zoning, health, fire safety or other Law, regulation or code applicable to any of the Properties) which remains outstanding or any investigation, administrative order, consent order or agreement with respect to Hazardous Substances.

(e) Storage Tanks: Reports. Except with respect to issues disclosed in the Inspection Materials, or otherwise disclosed by the Company to the Assured Party in writing, to the Generation Parties’ Knowledge, no underground storage tanks are currently

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located at the any of the Properties. The Company has provided the Assured Party with true, correct and complete copies of all environmental studies, tests and reports in the possession or control of Company or any Subsidiary.

(f) Taxes. The Company and each of the Subsidiaries has, since its formation through the consummation of the Transactions, been treated as an entity that is disregarded from its owner for federal and applicable state and local income Tax purposes, and has not made an election pursuant to Treasury Regulations Section 301.7701-3 to be treated as an association taxable as a corporation for federal income Tax purposes. The Company and each of the Subsidiaries has: (i) timely filed (taking into account any applicable extensions) all Tax Returns required by Law to be filed by it as of the Agreement Date, and all such Tax Returns have been properly completed in compliance with all applicable Law, and are true, correct and complete in all material respects; and (ii) timely paid all Taxes shown to be due on any such Tax Returns, and all other Taxes due and payable. All deposits, Taxes and other assessments and levies required by Law to be made, withheld, collected or provided for by the Company including deposits with respect to Taxes constituting employees’ income withholding Taxes, have been duly made, withheld, collected or provided for and have been paid over to the proper federal, state or local authorities, or are held by the applicable Person for such payment, and Company has complied with all information reporting (including Internal Revenue Service Form 1099) and backup withholding requirements, including maintenance of required records with respect thereto. No liens arising from or in a connection with Taxes have been filed and are currently in effect against Company, the Subsidiaries their respective assets (including the Properties), except for liens for Taxes which are not yet due and payable. Neither the Company or any Subsidiary has waived any statute of limitations for the period of assessment or collection of Taxes or have executed or filed with the Internal Revenue Service (“IRS”) or any other Governmental Entity any agreement or document extending, or having the effect of extending, the period for assessment or collection of any Taxes. The Company is not a party to, is not bound by, and has no obligation under, any (A) Tax indemnity agreement. Tax sharing agreement, Tax allocation agreement or similar contract or arrangement, or (B) any closing or similar agreement, Tax abatement or similar agreement or any other agreements with any Governmental Entity with respect to any period for which the statute of limitations has not expired (in each case, whether written or unwritten). Neither the Company or any Subsidiary has any potential liability or obligation (for Taxes or otherwise) to any Person as a result of, or pursuant to, any such agreement, contract or arrangement. No audits, disputes claims, proceedings or other investigations are active or pending or, to the Company’s Knowledge, threatened with respect to any Tax Returns or Taxes of Owner. All real estate Taxes and assessments on the Properties for the year 2022 and the years prior thereto have been paid in full. No Claim has been received by the Company or any Subsidiary from any authority in any jurisdiction where Company or any of its Subsidiaries in which they do not file Tax Returns that it is, or may be, subject to taxation by or required to file Tax Returns with that jurisdiction, and to the Generation Parties’ Knowledge, no such Claim exists. There are no appeals or challenges (or other Tax certiorari proceedings) pending for real estate Taxes or assessments on the Properties for the year 2021 or any prior year. Neither the Company or any Subsidiary has any liability for the Taxes of any Person under Treasury Regulation Section 1.1502-6 (or any similar

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provision of state, local or foreign Law), as a transferee, successor or as a result of similar liability, operation of Law, by contract or otherwise.

(g) Insurance. A list of all insurance policies and fidelity bonds covering the assets, business, equipment, properties and operations, of the Company and each Subsidiary and each of the Properties is set forth on Schedule 5 and true, correct and complete copies (other than in de minimis respects) of such policies and bonds have been delivered to the Assured Party prior to the Effective Date. There is no Claim by the Company or any Subsidiary pending under any of such policies or bonds as to which coverage has been questioned, reserved, denied or disputed by the underwriters of such policies or bonds or their agents or for which the Company or any Subsidiary would be required to pay any amount (other than a customary deductible). Schedule 6 lists all outstanding Claims and settlements under any insurance policies or bonds that have arisen since January 1, 2020. The Company finances the payment of its insurance premiums. All premium financing payments due and payable under all such policies and bonds have been paid, and to the Generation Parties’ Knowledge, the Company and each Subsidiary is otherwise in compliance with the terms and conditions of all such policies and bonds, except where the failure to so comply would not result in the inability of Company or any Subsidiary to collect fully under such policy or policies. Except as set forth on Schedule 7, such policies of insurance and bonds are in full force and effect, and all premiums have been paid in full. Neither the Company or any Subsidiary has received written notice from any insurance companies of (i) any threatened termination of any such policies or bonds or (ii) any defect or inadequacies in the Properties which have not been rectified.

(h) Existing Loan Documents. The Company has delivered to the Assured Party true, correct and complete copies of each of the documents relating to any existing loan (the “Existing Loan Documents”) (including all assignments, amendments, modifications, supplements and guaranties thereof). A true, correct and complete list of all of the Existing Loan Documents have been made available to the Assured Party. There are no documents, agreements or instruments governing, evidencing or securing any existing loan other than the Existing Loan Documents. Each of the Existing Loan Documents is in full force and effect. There exists no material default by the Company or any other party under any of the Existing Loan Documents, and neither the Company or any Subsidiary have received or delivered a written notice asserting a default by any party under any loan document. The principal outstanding balance of any existing loan, as of the Effective Date, after giving effect to the matters provided for in the JV Agreement is set forth on Schedule 9. All debt service, interest, amortization, loan fees and charges and other amounts currently due and payable under the Existing Loan Documents have timely been paid in full, and all other material obligations of Company (and its Affiliates) under the Existing Loan Documents have been timely performed.

Section 3. Miscellaneous.

3.1. Dispute Resolution. Any dispute between any parties to this Agreement concerning the terms of this Agreement, shall be resolved pursuant to Exhibit 6 of the JV Agreement.

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3.2. Notices. Notices required or permitted to be given pursuant to the terms of this Agreement will be delivered (a) in person, (b) by FedEx, United Parcel Service, United Postal Service Express Mail Service or a similar internationally recognized overnight courier service, or (c) by email (provided that such email expressly states that it is intended to be a notice delivered hereunder), with a confirmation copy delivered by another method set forth in this Section 3.2. Notices will be deemed delivered (i) on the date of delivery, if in person, (ii) on the date actually received, if sent by a method set forth in clause (b) of this Section 3.2. or (iii) on the date of the email transmission, if sent by email (provided that a confirmation copy is delivered by another method set forth in this Section 5.2. which may be received after the email transmission). Notices will be delivered to the following addresses, subject to the right of any party to change the address at which it is to receive notice by written notice to the other party:

To the Assured Party: c/o Loci Capital Management CO., LLC
270 Clearwater Road N.
Suite C
Largo, FL 33770

Copy to: Berger Singerman LLP
350 East Las Olas Boulevard, Suite 1000
Fort Lauderdale, Florida 33301
Attention: James L. Berger, Esq.
Email: jberger@bergersingerman.com

To Generation: Generation Income Properties, L.P.
c/o Generation Income Properties, Inc.
401 E. Jackson Street, Suite 3300
Tampa, FL 33602

Copy to: Trenam Law
101 E. Kennedy Blvd., Suite 2700
Tampa, FL 33602
Attn: Timothy Hughes
Email: THughes@Trenam.com

3.3. Integration: Modification and Amendments. This Agreement and the other Closing Documents set forth the entire understanding of the Assured Party and Generation with the respect to the matters which are the subject of this Agreement, superseding and/or incorporating all prior or contemporaneous oral or written agreements. No agreements, covenants, representations or warranties, electronic, written, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by any party other than those set forth expressly in this Agreement. This Agreement may be changed, modified, or amended only by an instrument in writing executed by the party against whom the enforcement of such change, modification or amendment is sought.

3.4. Successors and Assigns. This Agreement will inure to the benefit of and be binding upon, and is intended solely for the benefit of, the Assured Party and its respective heirs, personal representatives, successors, and assigns. No party hereto shall assign this Agreement without the prior written consent of all of the other parties hereto, which consent may be withheld in such

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parties’ sole discretion. Any such permitted assignment shall not relieve the assignor from any Liability under this Agreement.

3.5. Counterparts. This Agreement may be executed in counterparts, including PDF counterparts, each of which will be deemed to be an original and all of which are one and tire same assignment, but all of which shall together constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Agreement by PDF transmission shall be effective delivery of a manually executed counterpart of this Agreement. It shall be necessary to account for only one such counterpart in proving this Agreement.

3.6. Severability. If any provision of this Agreement is determined by a court of competent jurisdiction to be invalid or unenforceable, then the remainder of this Agreement shall nonetheless remain in full force and effect.

3.7. Limited Third Party Beneficiaries. The provisions of this Agreement and the other Closing Documents are and will be for the benefit of the parties hereto only, and are not for the benefit of any third party, and accordingly, no third party shall have the right to enforce the provisions of this Agreement.

3.8. WAIVER OF TRIAL BY JURY. EACH PARTY TO THIS AGREEMENT, TO THE EXTENT SUCH PARTY MAY LEGALLY DO SO, HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION, CAUSE OF ACTION, OR PROCEEDING ARISING UNDER OR WITH RESPECT TO THIS AGREEMENT, OR IN ANY WAY CONNECTED WITH, OR RELATED TO, OR INCIDENTAL TO, THE DEALINGS OF THE PARTIES HERETO WITH RESPECT TO THIS AGREEMENT OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND IRRESPECTIVE OF WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE. TO THE EXTENT SUCH PARTY MAY LEGALLY DO SO, EACH PARTY TO THIS AGREEMENT HEREBY AGREES THAT ANY SUCH CLAIM, DEMAND, ACTION, CAUSE OF ACTION, OR PROCEEDING SHALL BE DECIDED BY A COURT TRIAL WITHOUT A JURY AND THAT ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE OTHER PARTY OR PARTIES HERETO TO WAIVER OF ITS OR THEIR RIGHT TO TRIAL BY JURY.

3.9. Governing Law. This Agreement is governed by and will be construed in accordance with the laws of the State of Florida, and in the event of any litigation concerning the terms of this Agreement, exclusive venue thereof will be in the County.

3.10. Indemnification by Generation. Subject to the other terms and conditions of this Agreement, Generation shall indemnify and defend each of the Assured Party and Assured Party’s Affiliates and their respective Representatives (collectively, the "Assured Party Indemnitees") against, and shall hold each of them harmless from and against, and shall pay and reimburse each of them for, any and all Losses incurred or sustained by, or imposed upon, the Assured Party Indemnitees based upon, arising out of, with respect to or by reason of any inaccuracy in or breach of any of the representations or warranties of Generation contained in this Agreement. Notwithstanding anything to the contrary, (a) Generation shall not be liable to the Assured Party

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Indemnitees for indemnification under this Section 3.10 until the aggregate amount of all Losses in respect of indemnification under Section 3.10 exceeds fifty thousand dollars ($50,000) (the "Deductible"), in which event Generation shall only be required to pay or be liable for Losses in excess of the Deductible, and (b) the aggregate amount of all Losses for which Generation shall be liable pursuant to Section 3.10 shall not exceed an amount equal to the Investment. The parties acknowledge and agree that from and after the date hereof, except for rights and remedies available to Assured Party pursuant to the JV Agreement, the Assured Party’s sole and exclusive remedy with respect to any and all claims (other than claims arising from fraud) for any breach of any representation, warranty, covenant, agreement or obligation set forth herein or otherwise relating to the subject matter of this Agreement (a “Claim”), shall be pursuant to the indemnification provisions set forth in this Sections 3.10 and 3.11; provided, however, that Assured Party shall not be entitled to recover duplicate damages under both this Agreement and JV Agreement for matters arising out of the same Claim.

3.11. Payment and Procedure for General Indemnification.

(a) Claim or Liability. In the event that the Assured Party suffers Losses indemnifiable hereunder, the Assured Party shall promptly send, after obtaining knowledge of the incurrence of any such indemnifiable Liability, a written notice for such Claim of its intent to seek indemnity, describing the Liability in reasonable detail and enclosing copies of any applicable documents supporting such Claim (an “Indemnity Notice”) to Generation. The delay or failure of the Assured Party to give Generation the Indemnity Notice shall not release Generation of Liability under this Agreement except to the extent that Generation’s ability to defend such Claim or Liability is actually and materially prejudiced by the delay or failure to give such notice. Within fifteen (15) calendar days after the receipt by Generation of the Indemnity Notice, Generation either (i) shall pay to the Assured Party an amount equal to the indemnifiable Liability or (ii) shall object to such Claim, in which case Generation shall give written notice to the Assured Party of such objection, together with the reasons therefor, it being understood that the failure of Generation to so timely object shall preclude Generation from asserting any Liability, defense or counterclaim relating to Generation’s failure to pay any indemnifiable Liability. Generation’s objection shall not, in and of itself, relieve Generation from its obligations under this Agreement. Within fifteen (15) calendar days after the giving of any such notice of objection, the Assured Party and Generation shall negotiate in a bona fide attempt to resolve the subject of the Indemnity Notice. In the event that the parties are unable to resolve the subject of the Indemnity Notice, within fifteen (15) calendar days after the giving of such notice of objection, then the subject of such Indemnity Notice shall be submitted to a court of competent jurisdiction for resolution.

(b) Third Party Claim or Liability. Notwithstanding the terms of Section 3.11.a) in the event the facts giving rise to the Claim for indemnification under this Agreement shall involve any Claim or threatened Claim by any third party (each, a “Third Party Claim”), then Generation shall defend such Third Party Claim in the name of the applicable party at its own expense and through counsel of its own choosing which is reasonably acceptable to the Assured Party:

[Signatures on Next Page]

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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the date first above written.

GENERATION PARTIES:

GENERATION INCOME PROPERTIES, L.P.

 

By: /s/ David Sobelman
Name: David E. Sobelman
Its: Chief Executive Officer

 

ASSURED PARTY:

LC2-NNN PREF, LLC

By: Loci-Capital Management Co., LLC,
its Manager

By: /s/ Michael Phillips
Name: Michael J. Phillips
Its: Manager

 

 

 

 

 

12314738-6

 

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Exhibit 10.7

REDEMPTION AGREEMENT

 

GIPNC 201 ETHERIDGE ROAD, LLC

 

THIS REDEMPTION AGREEMENT (this “Agreement”) by and between GIPNC 201 ETHERIDGE ROAD, LLC, a Delaware limited liability company (the “Company”) and Brown Family Enterprises, LLC, a Delaware limited liability company (the “Redeemed Member”). Unless otherwise defined herein, any capitalized term referred to herein shall have the meaning ascribed to such term in that Limited Liability Company Agreement of the Company entered into November 20, 2020 and amended as of March 1, 2021 (the “JV Agreement”).

 

WHEREAS, the Redeemed Member has made the election, pursuant to Section 10.01(a) of the JV Agreement, for the Company to redeem its entire Membership Interest for the amount set forth below and pursuant and subject to the terms and provisions of this Agreement; and

 

WHEREAS, the Redeemed Member is entering into this Agreement to undertake and consummate the Redemption on the terms and provisions provided for herein.

 

NOW, THEREFORE, for and in consideration of the premises, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Redeemed Member and the Company agree as follows:

 

Section 1. The Redemption; Distribution of Redemption Price. The Redemption of the Redeemed Member’s Membership Interest shall occur on the date hereof and within ten (10) days of the date hereof, the Company shall distribute to the Redeemed Member an amount equal to the Redemption Price (the “Redemption Distribution Amount”) in cash, which the parties hereto have determined is Five Hundred One Thousand Two Hundred Fifty Dollars ($501,250), in complete redemption and liquidation of, and in exchange for, the Redeemed Member’s entire Membership Interest (and, thus, the Redeemed Member’s entire membership and beneficial ownership interest in and to the Company) which the Redeemed Member shall deliver to the Company free and clear of any and all liens, claims and encumbrances. The Redeemed Member hereby acknowledges and agrees that as of the execution of this Agreement, except for the payment of the Redemption Distribution Amount, the Redeemed Member shall not, and no longer, have any right, title, interest, entitlement or claim in or to any distributions, fees, profits, income, gains, payments, reimbursements, compensation, salary or other amounts or otherwise any of the assets, property and rights from, of and/or held or owned directly or indirectly by the Company or any direct or indirect subsidiary or affiliate of the Company and, further, the Redeemed Member shall no longer have any powers or rights (including, without limitation, any consent, approval, management, enforcement, termination, removal or control right or power or any right or power to propose or approve any amendment) under, to or with respect to the Company or the JV Agreement. With respect to the terms of the Redemption, this Section 1 shall supersede Section 10.01 of the JV Agreement.

 

Section 2. Intentionally Blank.

 

 

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Section 3. Representations and Warranties of Redeemed Member. The Redeemed Member hereby represents and warrants to the Company and GIPLP that as of the date hereof and through and including the closing of the Redemption, as follows:

 

 

 

 

 

 

Section 4. Deliveries.

 

 

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Redemption, the Redeemed Member, and unless waived by the Company (by the Manager, and only the Manager, acting for the Company) in its sole discretion, the Redeemed Member shall deliver to the Company:

 

(a)	this Agreement fully and duly executed and dated by the Redeemed Member;
(b)	a fully and duly executed affidavit complying with the provisions of Section 1446(f) of the Internal Revenue Code and reasonably acceptable to the Company certifying that the Redeemed Member is not a foreign person;
(c)     (d)	certified copies of resolutions authorizing the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby; and   such other and additional certificates, agreements and documents as the Company shall reasonably request.

 

 

Section 5. Indemnification.

 

 

 

Section 6. Remedies. Except as otherwise provided herein, the rights and remedies expressly provided herein are cumulative and not exclusive of any rights or remedies which a party hereto may otherwise have at law or in equity. Nothing herein shall be construed to require any party hereto to elect among remedies.

 

Section 7. Survival of Representations, Warranties and Covenants. The representations, warranties and covenants of the parties contained in this Agreement or in any certificate or statement delivered pursuant hereto shall survive the consummation and closing of the Redemption and the other transactions contemplated hereby.

 

 

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Section 8. Tax. The tax implications and consequences of the Redemption shall be as provided in the JV Agreement and applicable tax law.

 

Section 9. Miscellaneous.

 

 

 

 

 

 

 

 

 

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[The remainder of this page is intentionally blank.]

 

 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set forth below.

 

 

 

COMPANY:

 

GIPNC 201 ETHERIDGE ROAD, LLC

 

By: Generation Income Properties, L.P., its Manager

 

 

By: Generation Income Properties, Inc.,

a Maryland corporation,

its General Partner

By: _/s/ David Sobelman

David E. Sobelman, its Chief Executive Officer

 

REDEEMED MEMBER:

 

Brown Family Enterprises, LLC, a Delaware limited liability company

 

By: /s/ Christian Brown

Name: Christian Brown

Title:_Manager

Date:_August 8, 2023

 

 

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Exhibit 10.8

REDEMPTION AGREEMENT

 

GIPIL 525 S PERRYVILLE RD, LLC

 

THIS REDEMPTION AGREEMENT (this “Agreement”) by and between GIPIL 525 S PERRYVILLE RD, LLC, a Delaware limited liability company (the “Company”) and Richard N. Horrnstrom, an individual (the “Redeemed Member”). Unless otherwise defined herein, any capitalized term referred to herein shall have the meaning ascribed to such term in that Limited Liability Company Agreement of the Company entered into August 2, 2021 (the “JV Agreement”).

 

WHEREAS, the Redeemed Member has made the election, pursuant to Section 10.01(a) of the JV Agreement, for the Company to redeem its entire Membership Interest for the amount set forth below and pursuant and subject to the terms and provisions of this Agreement; and

 

WHEREAS, the Redeemed Member is entering into this Agreement to undertake and consummate the Redemption on the terms and provisions provided for herein.

 

NOW, THEREFORE, for and in consideration of the premises, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Redeemed Member and the Company agree as follows:

 

Section 1. The Redemption; Distribution of Redemption Price. The Redemption of the Redeemed Member’s Membership Interest shall occur on the date hereof and within ten (10) days of the date hereof, the Company shall distribute to the Redeemed Member an amount equal to the Redemption Price (the “Redemption Distribution Amount”) in cash, which the parties hereto have determined is Seven Hundred Seven Thousand Seven Hundred Eighty and 51/100 Dollars ($707,780.51), in complete redemption and liquidation of, and in exchange for, the Redeemed Member’s entire Membership Interest (and, thus, the Redeemed Member’s entire membership and beneficial ownership interest in and to the Company) which the Redeemed Member shall deliver to the Company free and clear of any and all liens, claims and encumbrances. The Redeemed Member hereby acknowledges and agrees that as of the execution of this Agreement, except for the payment of the Redemption Distribution Amount, the Redeemed Member shall not, and no longer, have any right, title, interest, entitlement or claim in or to any distributions, fees, profits, income, gains, payments, reimbursements, compensation, salary or other amounts or otherwise any of the assets, property and rights from, of and/or held or owned directly or indirectly by the Company or any direct or indirect subsidiary or affiliate of the Company and, further, the Redeemed Member shall no longer have any powers or rights (including, without limitation, any consent, approval, management, enforcement, termination, removal or control right or power or any right or power to propose or approve any amendment) under, to or with respect to the Company or the JV Agreement. With respect to the terms of the Redemption, this Section 1 shall supersede Section 10.01 of the JV Agreement.

 

Section 2. Intentionally Blank.

 

 

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Section 3. Representations and Warranties of Redeemed Member. The Redeemed Member hereby represents and warrants to the Company and GIPLP that as of the date hereof and through and including the closing of the Redemption, as follows:

 

 

 

 

 

 

Section 4. Deliveries.

 

 

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Redemption, the Redeemed Member, and unless waived by the Company (by the Manager, and only the Manager, acting for the Company) in its sole discretion, the Redeemed Member shall deliver to the Company:

 

(a)	this Agreement fully and duly executed and dated by the Redeemed Member;
(b)	a fully and duly executed affidavit complying with the provisions of Section 1446(f) of the Internal Revenue Code and reasonably acceptable to the Company certifying that the Redeemed Member is not a foreign person;
(c)     (d)	certified copies of resolutions authorizing the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby; and   such other and additional certificates, agreements and documents as the Company shall reasonably request.

 

 

Section 5. Indemnification.

 

 

 

Section 6. Remedies. Except as otherwise provided herein, the rights and remedies expressly provided herein are cumulative and not exclusive of any rights or remedies which a party hereto may otherwise have at law or in equity. Nothing herein shall be construed to require any party hereto to elect among remedies.

 

Section 7. Survival of Representations, Warranties and Covenants. The representations, warranties and covenants of the parties contained in this Agreement or in any certificate or statement delivered pursuant hereto shall survive the consummation and closing of the Redemption and the other transactions contemplated hereby.

 

 

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Section 8. Tax. The tax implications and consequences of the Redemption shall be as provided in the JV Agreement and applicable tax law.

 

Section 9. Miscellaneous.

 

 

 

 

 

 

 

 

 

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[The remainder of this page is intentionally blank.]

 

 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set forth below.

 

 

 

 

COMPANY:

 

GIPIL 525 S PERRYVILLE RD, LLC

 

By: Generation Income Properties, L.P., its Manager

 

 

By: Generation Income Properties, Inc.,

a Maryland corporation,

its General Partner

By: _/s/ David Sobelman__________________________

David E. Sobelman, its Chief Executive Officer

 

 

REDEEMED MEMBER:

 

 

/s/ Richard Hornstrom ____________________________________

Richard N. Hornstrom

Date: August 8, 2023

 

 

[Signature Page to Redemption Agreement-GIPIL 525 S Perryville Rd, LLC (Richard N. Hornstrom)]

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Exhibit 10.9

REDEMPTION AGREEMENT

 

GIPFL 702 TILLMAN PLACE, LLC

 

THIS REDEMPTION AGREEMENT (this “Agreement”) by and between GIPFL 702 TILLMAN PLACE, LLC, a Delaware limited liability company (the “Company”) and Richard N. Horrnstrom, an individual (the “Redeemed Member”). Unless otherwise defined herein, any capitalized term referred to herein shall have the meaning ascribed to such term in that Limited Liability Company Agreement of the Company entered into March 29, 2021 (the “JV Agreement”).

 

WHEREAS, the Redeemed Member has made the election, pursuant to Section 10.01(a) of the JV Agreement, for the Company to redeem its entire Membership Interest for the amount set forth below and pursuant and subject to the terms and provisions of this Agreement; and

 

WHEREAS, the Redeemed Member is entering into this Agreement to undertake and consummate the Redemption on the terms and provisions provided for herein.

 

NOW, THEREFORE, for and in consideration of the premises, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Redeemed Member and the Company agree as follows:

 

Section 1. The Redemption; Distribution of Redemption Price. The Redemption of the Redeemed Member’s Membership Interest shall occur on the date hereof and within ten (10) days of the date hereof, the Company shall distribute to the Redeemed Member an amount equal to the Redemption Price (the “Redemption Distribution Amount”) in cash, which the parties hereto have determined is Six Hundred Fifty Six Thousand Eight Hundred Ninety Two and 93/100 Dollars ($656,892.93), in complete redemption and liquidation of, and in exchange for, the Redeemed Member’s entire Membership Interest (and, thus, the Redeemed Member’s entire membership and beneficial ownership interest in and to the Company) which the Redeemed Member shall deliver to the Company free and clear of any and all liens, claims and encumbrances. The Redeemed Member hereby acknowledges and agrees that as of the execution of this Agreement, except for the payment of the Redemption Distribution Amount, the Redeemed Member shall not, and no longer, have any right, title, interest, entitlement or claim in or to any distributions, fees, profits, income, gains, payments, reimbursements, compensation, salary or other amounts or otherwise any of the assets, property and rights from, of and/or held or owned directly or indirectly by the Company or any direct or indirect subsidiary or affiliate of the Company and, further, the Redeemed Member shall no longer have any powers or rights (including, without limitation, any consent, approval, management, enforcement, termination, removal or control right or power or any right or power to propose or approve any amendment) under, to or with respect to the Company or the JV Agreement. With respect to the terms of the Redemption, this Section 1 shall supersede Section 10.01 of the JV Agreement.

 

Section 2. Intentionally Blank.

 

 

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Section 3. Representations and Warranties of Redeemed Member. The Redeemed Member hereby represents and warrants to the Company and GIPLP that as of the date hereof and through and including the closing of the Redemption, as follows:

 

 

 

 

 

 

Section 4. Deliveries.

 

 

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Redemption, the Redeemed Member, and unless waived by the Company (by the Manager, and only the Manager, acting for the Company) in its sole discretion, the Redeemed Member shall deliver to the Company:

 

(a)	this Agreement fully and duly executed and dated by the Redeemed Member;
(b)	a fully and duly executed affidavit complying with the provisions of Section 1446(f) of the Internal Revenue Code and reasonably acceptable to the Company certifying that the Redeemed Member is not a foreign person;
(c)     (d)	certified copies of resolutions authorizing the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby; and   such other and additional certificates, agreements and documents as the Company shall reasonably request.

 

 

Section 5. Indemnification.

 

 

 

Section 6. Remedies. Except as otherwise provided herein, the rights and remedies expressly provided herein are cumulative and not exclusive of any rights or remedies which a party hereto may otherwise have at law or in equity. Nothing herein shall be construed to require any party hereto to elect among remedies.

 

Section 7. Survival of Representations, Warranties and Covenants. The representations, warranties and covenants of the parties contained in this Agreement or in any certificate or statement delivered pursuant hereto shall survive the consummation and closing of the Redemption and the other transactions contemplated hereby.

 

 

4

 

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Section 8. Tax. The tax implications and consequences of the Redemption shall be as provided in the JV Agreement and applicable tax law.

 

Section 9. Miscellaneous.

 

 

 

 

 

 

 

 

 

5

 

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[The remainder of this page is intentionally blank.]

 

 

6

 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set forth below.

 

 

 

 

COMPANY:

 

GIPFL 702 TILLMAN PLACE, LLC

 

By: Generation Income Properties, L.P., its Manager

 

By: Generation Income Properties, Inc.,

a Maryland corporation,

its General Partner

By: __/s/ David Sobelman

David E. Sobelman, its Chief Executive Officer

 

 

REDEEMED MEMBER:

 

 

/s/ Richard Hornstrom

Richard N. Hornstrom

Date:__August 8, 2023

 

 

[Signature Page to Redemption Agreement-GIPFL 702 Tillman Place, LLC (Richard N. Hornstrom)]

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Exhibit 10.10

REDEMPTION AGREEMENT

 

GIPFL 702 TILLMAN PLACE, LLC

 

THIS REDEMPTION AGREEMENT (this “Agreement”) by and between GIPFL 702 TILLMAN PLACE, LLC, a Delaware limited liability company (the “Company”) and Stephen J. Brown, an individual (the “Redeemed Member”). Unless otherwise defined herein, any capitalized term referred to herein shall have the meaning ascribed to such term in that Limited Liability Company Agreement of the Company entered into March 29, 2021 (the “JV Agreement”).

 

WHEREAS, the Redeemed Member has made the election, pursuant to Section 10.01(a) of the JV Agreement, for the Company to redeem its entire Membership Interest for the amount set forth below and pursuant and subject to the terms and provisions of this Agreement; and

 

WHEREAS, the Redeemed Member is entering into this Agreement to undertake and consummate the Redemption on the terms and provisions provided for herein.

 

NOW, THEREFORE, for and in consideration of the premises, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Redeemed Member and the Company agree as follows:

 

Section 1. The Redemption; Distribution of Redemption Price. The Redemption of the Redeemed Member’s Membership Interest shall occur on the date hereof and within ten (10) days of the date hereof, the Company shall distribute to the Redeemed Member an amount equal to the Redemption Price (the “Redemption Distribution Amount”) in cash, which the parties hereto have determined is Three Hundred Eighty Three Thousand One Hundred Seventy Six and 95/100 Dollars ($383,176.95), in complete redemption and liquidation of, and in exchange for, the Redeemed Member’s entire Membership Interest (and, thus, the Redeemed Member’s entire membership and beneficial ownership interest in and to the Company) which the Redeemed Member shall deliver to the Company free and clear of any and all liens, claims and encumbrances. The Redeemed Member hereby acknowledges and agrees that as of the execution of this Agreement, except for the payment of the Redemption Distribution Amount, the Redeemed Member shall not, and no longer, have any right, title, interest, entitlement or claim in or to any distributions, fees, profits, income, gains, payments, reimbursements, compensation, salary or other amounts or otherwise any of the assets, property and rights from, of and/or held or owned directly or indirectly by the Company or any direct or indirect subsidiary or affiliate of the Company and, further, the Redeemed Member shall no longer have any powers or rights (including, without limitation, any consent, approval, management, enforcement, termination, removal or control right or power or any right or power to propose or approve any amendment) under, to or with respect to the Company or the JV Agreement. With respect to the terms of the Redemption, this Section 1 shall supersede Section 10.01 of the JV Agreement.

 

Section 2. Intentionally Blank.

 

 

1

 

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Section 3. Representations and Warranties of Redeemed Member. The Redeemed Member hereby represents and warrants to the Company and GIPLP that as of the date hereof and through and including the closing of the Redemption, as follows:

 

 

 

 

 

 

Section 4. Deliveries.

 

 

2

 

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3

 

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Redemption, the Redeemed Member, and unless waived by the Company (by the Manager, and only the Manager, acting for the Company) in its sole discretion, the Redeemed Member shall deliver to the Company:

 

(a)	this Agreement fully and duly executed and dated by the Redeemed Member;
(b)	a fully and duly executed affidavit complying with the provisions of Section 1446(f) of the Internal Revenue Code and reasonably acceptable to the Company certifying that the Redeemed Member is not a foreign person;
(c)     (d)	certified copies of resolutions authorizing the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby; and   such other and additional certificates, agreements and documents as the Company shall reasonably request.

 

 

Section 5. Indemnification.

 

 

 

Section 6. Remedies. Except as otherwise provided herein, the rights and remedies expressly provided herein are cumulative and not exclusive of any rights or remedies which a party hereto may otherwise have at law or in equity. Nothing herein shall be construed to require any party hereto to elect among remedies.

 

Section 7. Survival of Representations, Warranties and Covenants. The representations, warranties and covenants of the parties contained in this Agreement or in any certificate or statement delivered pursuant hereto shall survive the consummation and closing of the Redemption and the other transactions contemplated hereby.

 

 

4

 

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Section 8. Tax. The tax implications and consequences of the Redemption shall be as provided in the JV Agreement and applicable tax law.

 

Section 9. Miscellaneous.

 

 

 

 

 

 

 

 

 

5

 

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[The remainder of this page is intentionally blank.]

 

 

6

 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set forth below.

 

 

 

COMPANY:

 

GIPFL 702 TILLMAN PLACE, LLC

 

By: Generation Income Properties, L.P., its Manager

 

By: Generation Income Properties, Inc.,

a Maryland corporation,

its General Partner

By: /s/ David Sobelman

David E. Sobelman, its Chief Executive Officer

 

 

REDEEMED MEMBER:

 

 

/s/ Stephen Brown

Stephen J. Brown

Date: August 8, 2023

 

[Signature Page to Redemption Agreement-GIPFL 702 Tillman Place, LLC (Stephen J. Brown)]

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Exhibit 99.1

 

FOR IMMEDIATE RELEASE

August 14, 2023

 

Generation Income Properties (Nasdaq: GIPR) Completes Acquisition of $42 Million, Thirteen (13) Property Portfolio

 

TAMPA, FLORIDA - Generation Income Properties, Inc. (NASDAQ: GIPR) (“GIPR” or the “Company”) announced the closing of a 13-property portfolio for total consideration of $42 million on August 10, 2023. The portfolio consists of eleven (11) retail properties and two (2) office properties, and approximately 76% of the annualized base rent attributable to the portfolio is derived from tenants who have (or whose parent company has) an investment grade credit rating from a recognized credit rating agency of "BBB-" or better.

The portfolio has a weighted average remaining lease term of approximately 5.6 years, is approximately 202,000 square feet and 100% occupied. The transaction increases GIPR’s geographic footprint from eight (8) to thirteen (13) states and increases the total number of properties owned to twenty-six (26), including one property owned in a tenant-in-common structure.

The purchase price for the portfolio was $42 million, excluding estimated transaction costs and expenses of $1.6 million, consisting of $30 million paid in cash and $12 million paid in shares of a newly issued series of preferred stock of GIPR designated as “Series A Redeemable Preferred Stock.” The cash portion of the purchase price was financed with a combination of cash on hand, a new $21.0 million secured debt facility and a $12 million preferred equity investment in a special purpose subsidiary of GIPR’s operating partnership. The preferred equity investment was led by real estate private equity firm, Loci Capital. Industry veteran and Loci’s Head of Capital Markets, Garrett Francis noted, “We’ve been extremely impressed with Generation Income Properties throughout the investment process,” and added, “We hope that this first investment will mark the beginning of a long-term relationship with GIPR.”

“We believe that this acquisition showcases to the market our ability to identify accretive acquisition opportunities and consummate larger transactions regardless of wider market dislocations. We believe that our patient and disciplined approach to acquisitions over the past year positioned us to take advantage of this opportunity when presented, and the portfolio makeup fits our investment thesis nicely. We look forward to continuing to show the market our ability to creatively grow, identify additional acquisition opportunities, and realize the potential accretive effects of this acquisition on our overall portfolio and Company. We’d like to thank Aaron Halfacre, CEO of Modiv Industrial., the seller of the portfolio, and his team for their diligent work in facilitating this transaction. We believe the relationship we have built with this net lease REIT peer and the confidence they have placed in GIPR will benefit both of our shareholder bases. We look forward to continuing to manage the

 

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portfolio with the same level of professionalism displayed by Modiv,” said David Sobelman, CEO of GIPR.

Aaron Halfacre, CEO of Modiv Industrial (NYSE: MDV) stated, “I am pleased that GIPR and Modiv Industrial were able to deliver a mutually beneficial transaction to our collective shareholders. Given Modiv’s publicly stated goal of selling our non-industrial assets, finding a new owner for these high-quality assets in a timely manner that also had the management expertise to increase their value was important to us. Having known David and his team for several years, I am confident that these assets are in good hands.”

About Generation Income Properties

Generation Income Properties, Inc., located in Tampa, Florida, is an internally managed real estate investment trust focused on acquiring and managing income-producing retail, industrial and office properties net leased to high-quality tenants in densely populated submarkets throughout the United States. Additional information about Generation Income Properties, Inc. can be found at the Company's corporate website: www.gipreit.com.

Forward-Looking Statements:

This press release, whether or not expressly stated, may contain "forward-looking" statements as defined in the Private Securities Litigation Reform Act of 1995. The words "believe," "intend," "expect," "plan," "should," "will," "would," and similar expressions and all statements, which are not historical facts, are intended to identify forward-looking statements. These statements reflect the Company's expectations regarding future events and economic performance and are forward-looking in nature and, accordingly, are subject to risks and uncertainties. Such forward-looking statements include risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such forward-looking statements which are, in some cases, beyond the Company's control and which could have a material adverse effect on the Company's business, financial condition, and results of operations. These risks and uncertainties include the risk that that the expected benefits of the above-described portfolio acquisition will not be realized or will not be realized within the expected time periods, as well as risks relating to general economic conditions, market conditions, interest rates, and other risks and uncertainties that are identified from time to in the Company’s SEC filings, including those identified in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, which are available at www.sec.gov. The occurrence of any of these risks and uncertainties could have a material adverse effect on the Company's business, financial condition, and results of operations. For these reasons, among others, investors are cautioned not to place undue reliance upon any forward-looking statements in this press release. Any forward-looking statement made by us herein speaks only as of the date on which it is made. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof, except as may be required by law.

Contact Details

Investor Relations

ir@gipreit.com

813-448-1234

2

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FORWARD-LOOKING STATEMENTS ​ This presentation may contain forward-looking statements and information relating to, among other things, Generation Income Properties, Inc. (“the Company”), its business  plan and strategy, its properties and assets, and its industry. These forward-looking statements are based on the beliefs of, assumptions made by, and  information currently available to the company’s management. When used in the offering materials, the words “estimate,”  “project,” “believe,” “anticipate,” “intend,” “expect” and similar expressions are  intended  to  identify  forward-looking  statements. These statements reflect management’s current views with respect to future events and are subject to risks and uncertainties that could cause the company’s actual results to differ materially from those contained in the forward-looking statements. Investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. The company does not undertake any obligation to revise or  update these forward-looking statements to reflect events or circumstances after such date or to reflect the occurrence of  unanticipated events.​ Disclaimer | 2

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Executive Summary Immediately accretive to cash flow and AFFO per share (on a pro forma basis for 12 months ended September 2024), and reduces leverage $42 million consideration: $30 million in cash $12 million of newly issued GIPR redeemable preferred stock GENERATION INCOME PROPERTIES, INC. ACQUIRED: 13 single tenant net lease assets from Modiv, Inc. (NYSE: MDV) No change in GIPR leadership or Board of Directors |  3

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Transaction Overview |  4 Generation Income Properties, Inc. (GIPR) is acquired a portfolio of 13 net lease assets from Modiv, Inc. (MDV) GIPR acquired the portfolio for $42 million, funded by: $30 million cash $12 million of newly issued GIPR redeemable convertible preferred stock The high-quality portfolio is complementary to GIPR’s portfolio and investment strategy. The transaction nearly doubles the size of GIPR’s portfolio while helping MDV accelerate to a pure play industrial net lease portfolio Issued at $5.00 per share, a premium to GIPR’s current stock price and the following features: Redeemable at GIPR’s option in cash or common shares subject to conditions Number of GIPR common shares issued upon redemption is based on 110% of the 60-day volume weighted average price of GIPR shares, subject to a floor of 2.2 million and a ceiling of 3.0 million GIPR common shares issued $0.475 annual dividend per share, paid monthly. Increases to $0.60 annual dividend per share, paid monthly on the first anniversary Immediately accretive to cash flow and AFFO per share (on a pro forma basis for 12 months ended September 2024), and reduces leverage No change in GIPR leadership or Board of Directors Closing occurred on August 10, 2023 TRANSACTION TRANSACTION DESCRIPTION TRANSACTION BENEFITS REDEEMABLE PREFERRED SHARES FINANCIAL IMPACT MANAGEMENT & BOARD OF DIRECTORS CLOSING

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|  7 Strategic Rationale Increased total square feet of the portfolio by ~60%  Improved company cash flow and AFFO per share (on a pro forma basis for 12 months ended September 2024) Percentage of investment grade tenancy or its equivalent increased to 72%  Creates synergistic operational leverage Increased our retail asset distribution to 55%

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04 02 GIPR Management Team David Sobelman Chairman & Chief Executive Officer Emily Cusmano Chief of Staff Emily HewlandDirector of Capital Markets |  5 Allison Davies Chief Financial Officer Beth Sedgwick Corporate Controller Robert Rohrlack III Acquisitions Manager John Cowart Corporate Chaplain Management team comprised of experienced and well-respected industry leaders Relational approach to the multitude of industry professionals has allowed GIPR to capitalize on opportunities for continued long-term growth Long track record of identifying value in stabilized net lease assets EXPERIENCED AND WELL-TENURED TEAM LEADERSHIP BOARD OF DIRECTORS Ben Adams  CEO & Founder, Ten Capital Management Gena Cheng Managing Director Prospect Avenue Partners Stuart Eisenberg Partner at BDO USA LLP Retired Betsy Peck Former COO,  Jones Lang Lasalle Markets Patrick Quilty Chief Credit Officer Multinational Insurance Firm

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GIPR Portfolio Acquisition |  8 (1) Tenant or parent company is investment grade credit or equivalent ​ AT A GLANCE 13PROPERTIES 100%OCCUPANCY 76%INVESTMENT GRADETENANT OR EQUIVALENT (1) ~202K SFTOTAL GROSS LEASABLE AREA (GLA) 5.6 YearsWEIGHTED AVERAGE REMAINING LEASE TERM ~$20.27ABRPSF

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GIPR Portfolio Acquisition | 9 PROPERTY TYPE LOCATION SQUAREFEET TENANT S&P CREDIT RATING(1) REMAINING LEASE TERM Annual Base Rent (“ABR”) ABR per SQ. FT. Retail Big Spring, TX 9,026 Dollar General Corp. BBB 7.1 $86,040 $9.53 Retail Castalia, OH 9,026 Dollar General Corp. BBB 11.9 $79,320 $8.79 Retail Wilton, ME 9,100 Dollar General Corp. BBB 7.1 $112,440 $12.36 Retail Lakeside, OH 9,026 Dollar General Corp. BBB 11.9 $81,036 $8.98 Retail Mount Gilead, OH 9,026 Dollar General Corp. BBB 7.0 $85,920 $9.52 Retail Litchfield, OH 9,026 Dollar General Corp. BBB 7.3 $92,964 $10.30 Retail Thompsontown, PA 9,100 Dollar General Corp. BBB 7.3 $86,004 $9.45 Retail Bakersfield, CA 18,827 Dollar General Market BBB 5.1 $344,398 $18.29 Retail Morrow, GA 10,906 Dollar Tree Stores, Inc. BBB 2.1 $103,607 $9.50 Retail (Education) San Antonio, TX 50,000 City of San Antonio Pre-K Aaa 6.1 $924,000 $18.48 Retail Santa Maria, CA 14,490 Walgreen Co. BBB 8.8 $369,000 $25.47 Office Maitland, FL 33,118 Exp US Services, Inc. N/A 3.4 $835,346 $25.30 Office Vacaville, CA 11,014 General ServicesAdministration AA+ 3.2 $343,665 $31.20 (1) Tenant or parent company is investment grade credit or equivalent  

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Post Acquisition Footprint |  10 CA CO TX AL NC IL OH PA VA ME 2 AZ GA FL Huntsville Morrow Plant City Tampa Maitland Manteo Norfolk Thompsontown, PA East Wilton Litchfield Rockford Chicago Lakeside Castalia Mount Gilead Washington, DC San Antonio Big Spring Grand Junction Tucson Vacaville Bakersfield Santa Maria Existing Assets Acquired Assets

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High Quality Portfolio |  11 Size of GIPR’s Portfolio (in sq. ft.) increased by ~60% Increase in Weighted Average Lease Term and Investment Grade Tenant Exposure of GIPR’s portfolio IN PLACE GIPR(1) TRANSACTION POST-TRANSACTION PORTFOLIO # of Operating Properties 13 13 26 Total Owned GLA 338K 202K 540K Leased % 93% 100% 96% Investment Grade or Equivalent Tenant %(1) 62% 76% 72% Weighted Average Remaining Lease Term 4.2 Years 5.6 Years 5.2 Years Retail Exposure % 47% 67% 55% Office Exposure % 40% 33% 37% Industrial Exposure % 13% 0% 8% (1) Tenant or parent company ​is investment grade credit or equivalent  

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GIPR Takeaways and Company Outlook |  12 Post-Transaction Portfolio Well-Poised to Grow and Achieve Meaningful Scale G&A SYNERGIES G&A expenses and asset management capabilities to become right-sized, spreading expenses out over a larger asset base ACCRETIVE TO AFFO INCREASEDDIVERSIVIFICATION Immediately accretive to cash flow and AFFO per share (on a pro forma basis for 12 months ended September 2024), and reduces leverage Greater diversification of investment grade tenants and new exposure to Sunbelt markets and Southern California GIPR Portfolio

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Combined Metrics Relative to Comps |  13 Investment Grade or Equivalent Tenant %* WEIGHTED AVERAGE REMAINING LEASE TERM (YEARS) PORTFOLIO *Tenant or parent company is investment grade credit or equivalent ​

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INVESTOR RELATIONS ir@gipreit.com (813) 448-1234

v3.23.2

Document and Entity Information	Aug. 10, 2023
Document Information [Line Items]
Document Type	8-K
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Period End Date	Aug. 10, 2023
Entity Registrant Name	GENERATION INCOME PROPERTIES, INC.
Entity Central Index Key	0001651721
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity File Number	001-40771
Entity Incorporation, State or Country Code	MD
Entity Tax Identification Number	47-4427295
Entity Address, Address Line One	401 East Jackson Street
Entity Address, Address Line Two	Suite 3300
Entity Address, City or Town	Tampa
Entity Address, State or Province	FL
Entity Address, Postal Zip Code	33602
City Area Code	(813)
Local Phone Number	448-1234
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Common Stock
Document Information [Line Items]
Title of 12(b) Security	Common Stock, par value $0.01 per share
Trading Symbol	GIPR
Security Exchange Name	NASDAQ
Warrants
Document Information [Line Items]
Title of 12(b) Security	Warrants to purchase Common Stock
Trading Symbol	GIPRW
Security Exchange Name	NASDAQ

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