Item 1.01. Entry into a Material Definitive Agreement.
Effective October 5, 2022 (the "Effective Date"), ZP RE Holdings, LLC ("ZPRE"),
a wholly owned subsidiary of Zoned Properties, Inc. (the "Company"), and Neal
Bradley Starr (the "Stone Property Seller") entered into the Purchase and Sale
Agreement and Joint Escrow Instructions (the "Purchase Agreement").
Pursuant to the terms of the Purchase Agreement and subject to the conditions
therein, ZPRE agreed to buy from the Stone Property Seller certain real property
and improvements thereon located in Tucson, Arizona, as more particularly
described in the Purchase Agreement (the "Stone Property"). The Purchase
Agreement contains terms and conditions customary to commercial real estate
transactions in Arizona.
The purchase price for the Stone Property is $1,500,000, subject to adjustment
for the apportionment of real estate taxes, utility charges and other customary
prorations. Upon the opening of escrow, ZPRE agreed to deposit earnest money of
$25,000 (the "Deposit") into a neutral escrow account, which Deposit is
refundable for the period of 30 days after the Effective Date (the "Inspection
Period"), and subject to the terms of the Purchase Agreement, non-refundable
thereafter. The closing of the transaction contemplated by the Purchase
Agreement is scheduled to occur 15 days after the expiration of the Inspection
Period, subject to certain conditions to closing for the benefit of ZPRE (the
"Contingencies"), including that either (i) ZPRE has secured a tenant for the
Stone Property, which tenant owns or controls a nonprofit medical marijuana
license (so called "dual use" license), or (ii) state and local law allow for
the use of the Stone Property by an entity owning or controlling a marijuana
establishment license (so called "adult use" license), regardless of whether
ZPRE has secured a tenant. The Contingencies required for closing are material
and require certain regulatory and/or transactional events to occur, which are
likely to extend closing of the transaction contemplated by the Purchase
Agreement beyond the 15-day period following the Inspection Period.
ZPRE and the Company intend to identify a licensed operating tenant for the
Stone Property and enter into a long-term, investment-grade, absolute NNN Lease
Agreement.
At the closing of the transaction contemplated by the Purchase Agreement, ZPRE
will deposit the sum of $300,000 minus the Deposit into escrow, to be credited
to the purchase price. The balance of the purchase price, $1,200,000, will be
paid pursuant to a promissory note under a customary seller financing
arrangement. At the closing contemplated in the Purchase Agreement, the escrow
agent will release the sum of $300,000, less the Deposit and subject to credits
and prorations, to the Stone Property Seller. If the Purchase Agreement is
terminated prior to closing due to a failure of a condition of closing, the
Deposit (less $5,000 for every 30 days the Purchase Agreement is in effect) will
be returned to ZPRE unless the Purchase Agreement is terminated by the Stone
Property Seller as a result of the ZPRE's breach of the Purchase Agreement, in
which case the Deposit will be paid to the Stone Property Seller, or unless the
Purchase Agreement is terminated by ZPRE as a result of the Stone Property
Seller's breach of the Purchase Agreement, in which case the Deposit (including
any portion thereof released to the Stone Property Seller) will be refunded to
ZPRE, together with up to $25,000 of ZPRE's out of pocket costs arising from the
Purchase Agreement.
The foregoing description of the Purchase Agreement is qualified in its entirety
by reference to the complete terms and conditions of the Purchase Agreement, a
copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K, and
is incorporated by reference into this Item 1.01.
Item 9.01 Financial Statement and Exhibits.
(d) Exhibits
Exhibit No. Description
10.1 Purchase and Sale Agreement and Joint Escrow Instructions, dated
October 5, 2022, by and between ZP RE Holdings, LLC a wholly owned
subsidiary of the registrant, and Neal Bradley Starr.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
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