Exhibit 10.5

 

THIRD AMENDMENT TO MEMBERSHIP INTEREST PURCHASE AGREEMENT

(Hilton Garden Inn Providence, Rhode Island)

 

THIS THIRD AMENDMENT TO MEMBERSHIP INTEREST PURCHASE AGREEMENT (this
“Amendment”), made as of the 27th day of February, 2020 by and between by,
between and among the persons and entities signing this Agreement below under
the heading “Sellers” (each being referred to individually as “Seller,” and
collectively as “Sellers”), and (“Buyer”).

 

W I T N E S S E T H:

 

WHEREAS, pursuant to that certain Membership Interest Purchase Agreement, dated
as of January 14, 2020, between The Procaccianti Group, LLC, a Rhode Island
limited liability company (“TPG”) and Sellers, as amended (the “Agreement”),
which agreement was assigned by TPG to Buyer pursuant to an assignment dated as
of the date hereof, Seller agreed to sell the Interests (as such term is defined
in the Agreement) to Buyer, and Buyer agreed to purchase the Interests from
Sellers, upon the terms and conditions set forth more particularly therein. All
capitalized terms used but not defined herein shall have their respective
meanings set forth in the Agreement.

 

WHEREAS, Sellers and Buyer now desire to amend the Agreement upon the terms and
conditions hereinafter set forth.

 

NOW, THEREFORE, in consideration of the covenants and agreements hereinabove and
hereinafter contained and other good and valuable consideration, the receipt and
sufficiency of which being hereby acknowledged, the parties hereto agree as
follows:

 

1.            Amendments to Agreement. The following amendments to the Agreement
shall be effective upon the date hereof:

 

(a)            TPG DP Investors, LLC is added to the Agreement as a Seller.

 

(b)            Section 2.2 is amended in its entirety in its entirety to provide
as follows:

 

2.2            Purchase Price. The purchase price (“Purchase Price”) for the
Interests is TWENTY EIGHT MILLION FIVE HUNDRED THOUSAND AND 00/100 Dollars
($28,500,000.00), which shall be payable by Purchaser to Seller at Closing less
the outstanding balance of the Existing Mortgage Loan as of the Closing Date
(subject to (i) Section 2.1.2 and (ii) the prorations and other credits provided
for in this Contract) as follows payable at Closing, as follows: (i) 90.390% of
the Purchase Price shall be paid in immediately available funds (“Cash
Consideration”) and (ii) the balance of the Purchase Price shall be in the form
of a capital contribution to Buyer of 9.610% of the Membership Interests in the
Company in exchange for a K OP Units interest in Purchaser which K OP

 

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Units have an value of $10.00 per unit (the “Rollover Interest”). The Purchase
Price shall be allocated to the Sellers (and at the option of each Seller to the
Members of such Seller) in accordance with Schedule 2.2(a).

 

(c)            The following new sentence is hereby added to the end of
Section 2.1.2 to provide as follows:

 

Sellers and Purchaser hereby acknowledge and agree that East Boston Savings Bank
(the “Mortgage Lender”), has approved the transfer of the Membership Interests
from Sellers to Purchaser pursuant to the Agreement and, after the Closing Date,
the Existing Mortgage Loan shall continue to be secured by the Property (the
“Loan Assumption”). As of the Second Amendment Effective Date, the outstanding
principal balance of the Existing Mortgage Loan is $14,936,900.72.

 

(d)            New Section 2.3.1 is hereby added to the Agreement to provide as
follows:

 

Purchaser agrees to use the “traditional method” under Treasury Regulations
Section 1.704-3(b) for purposes of making all allocations under
Section 704(c) of the Code with respect to the Property.

 

(e)            New Section 5.1.25 is hereby added to the Agreement to provide as
follows:

 

Schedule 5.1.25 attached hereto is a true and complete list of all the loan
documents evidencing and/or securing the Existing Mortgage Loan (including all
amendments and modifications, the “Mortgage Loan Documents”); true and complete
copies of all of the Mortgage Loan Documents have been made available to
Purchaser for inspection. Neither the Company nor any Seller has received any
written notice from the Mortgage Lender alleging that an Event of Default (as
defined in the Mortgage Loan Documents) has occurred pursuant to the Mortgage
Loan Documents that remains uncured, and, to Sellers’ knowledge, no Event of
Default (as defined in the Mortgage Loan Documents) exists under the Mortgage
Loan Documents.”

 

(f)            New Section 5.3.5 is added to the Agreement to provide as
follows:

 

5.3.5            When issued and delivered in accordance with this Agreement,
the Rollover Interest issued to the Sellers will be validly issued and
nonassessable, free and clear of all preemptive rights and any and all
mortgages, liens, pledges, security interests, charges, claims, restrictions and
encumbrances of any nature whatsoever other than applicable federal and state
securities laws. No consent, approval, order or authorization of, or
registration, qualification, designation, declaration or filing with, any

 

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federal, state or local governmental authority is required on the part of Buyer
in connection with the consummation of the transactions contemplated by this
Agreement, except for filings, if any, pursuant to the Securities Act of 1933,
as amended (the “Securities Act”), and applicable state securities laws.

 

(g)           New Section 7.2.1(i) is added to the Agreement to provide as
follows:

 

(i)Deliver to Buyer, the Buyer’s limited partnership agreement in the form
previously provided to the Sellers.

 

(h)           New Section 7.2.1(i) is added to the Agreement to provide as
follows:

 

(j)Without cost to Sellers, Sellers shall deliver, or cause the Company to
deliver, executed counterparts to any documents that Mortgage Lender or
Purchaser deems reasonably necessary or desirable to effectuate or evidence the
Loan Assumption.

 

(i)            New Section 7.2.2(f) is added to the Agreement to provide as
follows:

 

(f)            Deliver to Sellers Buyer’s LLC Agreement duly executed by Buyer
and the other members and managers of Buyer.

 

(i)New Section 9.1.2 is hereby added to the Agreement to provide as follows:

 

9.2.1        Existing Mortgage Loan. Sellers agree that during the period
between the Effective Date and the Closing Date, Sellers shall, and shall cause
the Company to: (a) perform all obligations of Sellers, if any, and of the
Company required to be performed under the Mortgage Loan Documents; and
(b) promptly advise Purchaser of any written notice of default received by any
Seller or the Company under any of the Mortgage Loan Documents.

 

(g)           New Schedule 2.2(a) is attached hereto is added to the Agreement.

 

2.             No Other Amendment or Modification; Ratification. The Original
Agreement remains in full force and effect and is hereby ratified and confirmed
by Seller and Purchaser, except with respect to matters set forth in this
Amendment. From and after the date hereof, all references to the Agreement shall
be deemed to refer to the Original Agreement as amended by this Amendment. In
the event of a conflict between the terms and conditions of the Original
Agreement and those set forth in this Amendment, the terms and conditions of
this Amendment shall control.

 

3.            Counterparts; Facsimile and PDF. This Amendment may be executed in
any number of counterparts each of which when so executed and delivered shall be
deemed to be an original, but all such counterparts shall constitute one and the
same agreement. Facsimile and

 

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portable document format (PDF) signatures shall have the same force and effect
as original signatures.

 

4.             Amendments. This Amendment may not be changed, modified or
terminated, nor may any provision hereunder be waived, except by an instrument
executed by the parties hereto.

 

5.             No Third-Party Beneficiaries. This Amendment is binding on and
inures to the benefit of the parties hereto. The provisions of this Amendment
are not intended to benefit any third parties.

 

6.             Entire Agreement. The Original Agreement, as amended by this
Amendment, contains all of the terms agreed upon between the parties hereto with
respect to the subject matter hereof, and all agreements heretofore had or made
between the parties hereto are merged in the Original Agreement, as amended by
this Amendment, which alone fully and completely expresses the agreement of said
parties.

 

[Remainder of page intentionally left blank]

 

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IN WITNESS WHEREOF, Seller and Purchaser have executed this Amendment as of the
date first written above.

 

 

  SELLERS:       TPG DP JV, LLC,   a Delaware limited liability company  
                    By: /s/ James A. Procaccianti     Name: James A.
Procaccianti     Title: Authorized Signatory     Address:         ETJ Gano
Holdings, Inc.   a Rhode Island corporation             By:  /s/ James A.
Procaccianti     Name: James A. Procaccianti     Title: Authorized Signatory    
Address:         PRJA Gano Holdings, LLC,   a Delaware limited liability company
             By: /s/ James A. Procaccianti     Name: James A. Procaccianti     
Title: Authorized Signatory     Address:                     EHI Gano
Holdings, Inc.   a Rhode Island corporation             By: /s/ James A.
Procaccianti      Name: James A. Procaccianti     Title: Authorized Signatory  
  Address:  

 

[signatures continue on following page]

 

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  TPG DP Investors, LLC,   a Delaware limited liability company         By:  /s/
James A. Procaccianti     Name: James A. Procaccianti     Title: Authorized
Signatory     Address:         PURCHASER:       THE PROCACCIANTI GROUP, LLC,   a
Rhode Island limited liability company             By: /s/ Ron M. Hadar    
Name: Ron M. Hadar     Title: Authorized Signatory

 

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Schedule 2.2(a)

TO BE COMPLETED BY THE PARTIES AT CLOSING

 

Seller  Purchase Price      TPG DP JV, LLC,  $11,987,230.71 in Cash      ETJ
Gano Holdings, Inc.  $6,666.20, represented by 666.62 K OP Units in    Buyer   
  PRJA Gano Holdings, LLC,  $3,999.72, represented by 399.97 K OP Units in   
Buyer      EHI Gano Holdings, Inc.  $2,666.48, represented by 266.65 K OP Units
in    Buyer   TPG DP Investors, LLC  (i) $63,932.00 in cash to be distributed to
certain of its members being Scott Harrell and P Squared Investments, LLC; and
(ii) $l,267,911.91 represented by 126,791.19 K OP Units in Buyer, to be
distributed to the following members of TPG DP Investors, LLC as follows:       
LFHI, LLC-22,641.10 K OP UNITS        PEH 1999 Realty Trust II- 11,321.19 K OP
UNITS        THE LHG 1997 Realty Trust, 11,321.19 K OP UNITS        TH
INVESTMENT HOLDINGS II, LLC. 81,507.72 K OP UNITS

 

 

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Schedule 5.1.25

Mortgage Loan Documents

 

LOAN DOCUMENTS   1. Loan Commitment     2. Commercial Real Estate Promissory
Note     3. Loan Agreement     4. Open-End Mortgage, Security Agreement,
Assignment to Secure Present and Future Loans     5. UCC-1 Financing
Statement(s)      6. Guaranty from Guarantor     7. Certificate as to Oil and
Hazardous Materials and Indemnity Agreement     8. Pledge and Security Agreement
(Bank Accounts)     9. Assignment of Borrower’s Interests in Leases, Rents and
Profits     10. Assignment of Interests in Licenses, Permit and Agreements    
11. Collateral Assignment of Architect’s Contract     12. Collateral Assignment
of Construction Contract     13. Assignment and Subordination of Management
Agreement     14. Compliance Agreement     15. Statement of Purpose     16.

I.R.S. Form W-9

(a)       Borrower

(b)       Guarantor

    17.

Customer ID Form

(a)       Borrower

(b)       Guarantor

    18. Account Number for Borrower’s operating account at Lender:     19. Loan
Disbursement Statement and Authorization (_____)  

 

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2019 LOAN MODIFICATION DOCUMENTS   20.

(a)       Omnibus Amendment and Reaffirmation Agreement

(b)       Promissory Note

(c)       Second Amendment to Mortgage and Assignment of Rents and Leases

(d)       UCC Continuation

(e)       Loan Closing Statement and Authorization

 

 

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