Exhibit 10.5

 

Execution Version

 

PURCHASE AND SALE AGREEMENT

 

This PURCHASE AND SALE AGREEMENT (this “Agreement”) dated as of the 8th day of
January, 2018, among Charles M. Pinckney, LLC; Johnson Holdings, LLC; and
Morrison Grove CS Venture Partner, Inc. (collectively, the “MGM Principals” or
“Sellers”); MMA Capital Management, LLC (“MMAC”, and together with its
successors and permitted assigns, “Buyer”), recites and provides as follows:

 

RECITALS:

 

A.          A Limited Liability Company Agreement dated as of October 8, 2014
(the “LLC Agreement”) currently governs Morrison Grove Management, LLC, a
Delaware limited liability company (the “Company”).

 

B.          The MGM Principals own and will continue to own until Closing (as
defined herein) all of the issued and outstanding membership interests in the
Company (the “Membership Interests”).

 

C.          MMA Financial, Inc., (“Financial”), a subsidiary of Buyer, has an
option (“Option”) to purchase all of the Membership Interests.  The current
terms of the Option are set forth in an Amended and Restated Purchase Option
Agreement dated as of June 24, 2015 (the “Option Agreement”).  The Option
Agreement shall be terminated upon the execution of this Agreement, subject to
reinstatement as and when provided herein

 

D.          MG Woodside, LLC, an affiliate of the MGM Principals, owns all of
the general partnership interest (“Woodside GP Interest”) in OHC/Woodside, LTD,
a Texas limited partnership (“Woodside’) and will own the Woodside Senior
Capital Advance Note (“WSCA Note”).  As part of this Agreement, the MGM
Principals will cause their affiliate to consummate the transfers described in
Section 1.3.

 

E.           Simultaneously with the execution of this Agreement, Hunt FS
Holdings II, LLC, a Delaware limited liability company, together with its
affiliates ("Hunt") will acquire certain assets of Buyer (the “Hunt
Transaction”).  Buyer shall have the right to assign its rights and obligations
under this Agreement to Hunt, subject to the conditions and limitations
below.  The Sellers will allow the Buyer to designate Hunt to acquire the
Membership Interests, subject to the terms, conditions and limitations set forth
in this Agreement.

 

F.           This Agreement also provides for a consulting agreement between the
Sellers and Buyer, to ensure a smooth transition in the management and
operations of the Company, as well as other ancillary agreements all on the
terms and conditions set forth herein.  

 

NOW, THEREFORE, for and in consideration of the premises, the mutual covenants
and agreements set forth herein, and in reliance on the representations and
warranties contained herein, the parties hereto hereby agree as follows:

 

1.           Purchase and Sale; Purchase Price.

 

1.1         Purchase and Sale of the Membership Interests.   Subject to the
terms and conditions of this Agreement, at the Closing, Sellers shall sell,
transfer, convey, assign, set over and deliver all of the Membership Interests
to Buyer, and Buyer agrees to purchase the Membership Interests.  

 

1.2         Purchase Price.

 

1.2.1       The aggregate purchase price for the Membership Interests (the
“Purchase Price”) shall be Fifteen Million Eight Hundred Thousand Dollars
($15,800,000), subject to the prorations and adjustments provided herein, and
shall be paid as follows:

 

 

 

 

1.2.1.1   Cash.  Five Million and No/100 Dollars ($5,000,000) shall be payable
in cash, by wire transfer or in other immediately available funds at Closing,
unless Hunt is the purchaser at Closing, in which case Section 1.2.1.4 shall
apply.

 

1.2.1.2   Notes.  The remaining Purchase Price shall be paid at Closing in the
form of promissory notes from Buyer to each Seller (the “Notes”).   Five Million
and No/100 Dollars ($5,000,000) of the Notes shall be in the form attached
hereto as Exhibit 1.2.1-A (the “Eight Year Notes”).  The remaining Notes shall
be in the form attached hereto as Exhibit 1.2.1-C (the “MMA Seven Year Notes”).
The Notes will include the following basic terms:

 

1.2.1.2.1    Interest.  Interest shall accrue on the principal at a rate equal
to 5% per annum.

 

1.2.1.2.2    Payment/Term/Eight-Year Notes.  From the date of Closing until
December 31, 2018, interest only shall be due and payable quarterly on the last
day of each calendar quarter on the Eight Year Notes.  Thereafter, in addition
to quarterly installments of accrued interest, the following aggregate quarterly
installments of principal shall be due and payable on the last day of each
calendar quarter:  $500,000 shall be due and payable each quarter of calendar
year 2019; $50,000 shall be due and payable each quarter of calendar years
2020-2024; and $500,000 shall be due and payable each quarter of calendar year
2025.

 

1.2.1.2.3    Payment/Term/MMA and Hunt Seven Year Notes.  From the date of
Closing until December 31, 2019, interest only shall be due and payable
quarterly on the last day of each calendar quarter on the MMA and Hunt Seven
Year Notes.  Thereafter, in addition to quarterly installments of accrued
interest, the MMA and Hunt Seven Year Notes shall be paid in equal quarterly
installments of principal on the last day of each calendar quarter, sufficient
to fully amortize the loan over the remaining 5 years of the term. 

 

1.2.1.2.4    Amortization Catch-up.  In the event that Closing occurs after
principal payments would have been due under any given Note, as provided in
Sections 1.2.1.2.2 and 1.2.1.2.3  above, such amounts shall be added to the cash
payable at Closing and the applicable Notes shall be modified accordingly.

 

1.2.1.2.5    Collateral.  The MMA Seven Year Notes shall be secured by a first
priority lien on the Membership Interests.  The pledge agreement granting such
first priority lien shall prohibit (i) additional debt of the Company, and (ii)
distributions to the Company’s members, without the prior written consent of the
Sellers, consent not to be unreasonably withheld, unless there is a default
under one of the Notes.

 

1.2.1.3    Assignment of Notes.  The Notes will be fully assignable by Sellers
and shall be in such amounts as Sellers may direct, subject to Section
1.2.1.2.  

 

1.2.1.4   Hunt as Buyer.  If Hunt is the Buyer at Closing, the following shall
apply.

 

1.2.1.4.1    Payment.  Hunt shall deliver to Sellers seven year notes in the
form attached hereto as Exhibit 1.2.1-B in an aggregate principal amount equal
to the Purchase Price (the “Hunt Seven Year Notes”).  Concurrently therewith,
MMAC shall purchase Ten Million Dollars ($10,000,000) in aggregate principal
amount of such Notes from Sellers.  MMAC shall purchase such Notes for Five
Million Dollars ($5,000,000) in cash and Five Million Dollars ($5,000,000), in
the aggregate, in the form of one or more Eight Year Notes from MMAC payable to
Sellers in such principal amounts as Sellers may direct and such purchase shall
be a condition of Closing for the Sellers.  Alternatively, for administrative
convenience, the parties may agree that at the Closing (a) Hunt shall execute
and deliver an allonge increasing by Ten Million Dollars ($10,000,000) the
outstanding principal amount of the note provided by Hunt as Maker to Financial
as Payee in connection with the closing of the Hunt Transaction, (b) Hunt shall
execute and deliver to Sellers one or more Hunt Seven Year Notes (as Sellers may
direct) for the balance of the Purchaser Price in excess of Ten Million Dollars
($10,000,000) and (c) MMAC will pay Sellers Five Million Dollars ($5,000,000) in
cash and Five Million Dollars ($5,000,000) in an Eight Year Note.

 

 

 

 

1.2.1.4.2    Loan Documents.  The Notes made by Hunt shall be subject to a
limited guaranty by Hunt Companies, Inc. of certain bad acts. The form of the
Guaranty is attached hereto as Exhibit 1.2.1.4.  The Guaranty and the additional
documents attached hereto as Exhibit 1.2.1.4, further evidencing and securing
the Hunt Notes are referred to herein as the “Loan Documents”.  The Notes made
by Hunt, including the Woodside Note, as defined below, if applicable, will be
secured, pari passu, with the same guaranties and collateral securing the
repayment to Financial of the purchase price under the Hunt Transaction and the
Loan Documents shall so provide.

 

1.2.1.4.3    Collateral.  The collateral in the event Hunt closes shall not
include the Membership Interests.

 

1.2.1.5   Follow on Closing.  In the event that MMAC or an affiliate is the
Buyer, and Hunt subsequently acquires the Membership Interests from such Buyer
(the “Subsequent Closing”), Sellers agree, if so requested by MMAC, (a) to
reduce the total amount of the Buyer Notes at such Subsequent Closing to an
aggregate principal amount of $5,000,000, (b) to release the collateral
described in Section 1.2.1.2.5, and (c) to accept promissory notes from Hunt in
an aggregate amount equal to the Purchase Price minus $10,000,000 in the form of
the Hunt Seven Year Notes attached hereto as Exhibit 1.2.1-B subject to Sections
1.2.1.4.2 and 1.2.1.4.3, which obligation of Sellers is conditioned on also
receiving the Loan Documents.  

 

1.3         Woodside.  Simultaneously with the execution of this Agreement,
Buyer and MG Woodside, LLC will execute a Transfer Agreement for the transfer of
the Woodside GP Interest and the WSCA Note in the form of Exhibit 1.3 (the
“Transfer Agreement”).  Pursuant to the Transfer Agreement, the Woodside GP
Interest and the WSCA Note will be transferred to Buyer and Buyer will pay the
aggregate purchase price of Four Million Five Hundred Thousand Dollars
($4,500,000) with a note at Closing (the “Woodside Note”). The Woodside Note
shall be in the same form as the MMA Seven Year Notes or the Hunt Seven Year
Notes, as applicable.  Repayment of the Woodside Note will be secured by the
Membership Interests if MMAC or an affiliate is the Buyer and by the membership
interests in Hunt FS Holdings II, LLC if Hunt is the Buyer.

 

1.4         Joint Investment Agreement.  Sellers shall enter into a joint
investment agreement (the “Joint Investment Agreement”) with the Buyer in the
form attached hereto as Exhibit 1.4.

 

1.5         Staffing Agreement.  Concurrently with the execution and delivery of
this Agreement, the Company and Morrison Grove CS Venture Partner, Inc.
(“CSVPI”) shall enter into an agreement (the “Staffing Agreement”), pursuant to
which Jason Kessler (“Kessler”) and Adam Cohen (“Cohen”), as employees of CSVPI,
will provide to the Company certain “Services”, as defined therein. The Staffing
Agreement will be executed concurrent with the execution of this Agreement, but
will take effect upon Closing under this Agreement and will terminate on
September 30, 2018. A copy of the Staffing Agreement is attached hereto as
Exhibit 1.5.  The MGM Principals will also negotiate with Kessler and Cohen to
retain them full-time under their employment agreements with the MGM Principals’
affiliates after the expiration of the Staffing Agreement.  Kessler and Cohen,
as employees of CSVPI, have participated in the management of certain assets for
PSP Investments and their affiliates (the “PSP Assets”).  Kessler and Cohen
shall continue in this role, entirely outside the Staffing Agreement as part of
their 10% time allocation to the MGM Principals, and the Company shall have no
responsibility for the management of the PSP Assets.

 

 

 

 

1.6         Transactions before Closing; Excluded Property.

 

1.6.1      The parties acknowledge that the Company is the borrower under a loan
(the “Senior Loan”) in the amount of $9,000,000 from MGM Financial, LLC, an
affiliate of the MGM Principals.  Repayment of the Senior Loan is secured by the
assets of the Company.  Simultaneously with or prior to the execution of this
Agreement, Financial will acquire the Senior Loan at par pursuant to the Note
and Asset Purchase Agreement, which is attached hereto as Exhibit 1.6.1, and the
purchase of the Senior Loan will not cause any adjustment to the Purchase Price
or the other terms of this Agreement.

 

1.6.2      The Company currently occupies the office condominium at 900 W. Platt
Street, Suite 200, Tampa, Florida 33606 (the “Condominium”).  The Condominium
was purchased using the proceeds of a Note, dated August 31, 2015, from the
Company to Financial in the original face amount of $449,000 (the “Condominium
Note”).  Simultaneously with the execution of this Agreement, the MGM Principals
will purchase the Condominium Note from Financial for $437,045.69 plus accrued
interest, if any, and the Company will make payments under the Note to the MGM
Principals thereafter.  On the sooner of the date of the Closing or fifteen (15)
days after written notice by the MGM Principals to the Company, the MGM
Principals will close on the acquisition of the Condominium from the Company
pursuant to the form of contract which is attached hereto as Exhibit 1.6.2 (the
“Condominium Contract”).  At the closing on the Condominium (the “Condominium
Sale”), the Company will convey the Condominium to the MGM Principals or to the
person or entity the MGM Principals may designate, in consideration for the
termination/cancellation of the Condominium Note.  The third-party costs of the
Condominium Sale shall be allocated according to local custom and each party
will pay its own legal fees.    The Put-Call Agreement among MGM, Financial and
the MGM Principals, dated as of August 31, 2015 is hereby cancelled.

 

1.6.3       Contemporaneously with the Condominium Sale, the Company will
execute a joint occupancy agreement in the form attached hereto as Exhibit
1.6.3, pursuant to which the Company will be allowed to cohabitate with the MGM
Principals and their affiliates in the Condominium for a rent of $4,000 per
month, plus all expenses associated with the use and occupancy of the
Condominium. The joint occupancy agreement shall expire on September 30,
2018.  The joint occupancy agreement shall be assignable by the MGM Principals
to the party taking title to the Condominium, but not by Buyer (except as
permitted under Section 9).  The provisions of this Section 1.6.3 shall survive
Closing or the earlier termination of this Agreement.

 

1.6.4       The MGM Principals will maintain the exclusive right to the Morrison
Grove name, Internet domain, all phone numbers and will continue to own all
related companies and other holdings not included in the Purchased Assets, which
such exclusions shall be listed in Exhibit 1.6.4.  Any attorney work product and
any attorney-client communications, whether subject to any right of privilege or
not, contained on the Company’s or its affiliates’ computers, servers or other
storage devices as of Closing are expressly excluded from the Purchased
Assets.  Simultaneously with the Closing, the parties will join in all necessary
documents and filings to change the name of the Company.

 

1.7         Schedules.  At least fifteen (15) days prior to the Closing, the
Seller shall deliver to the Buyer any Schedule referenced in this Agreement
which were not delivered upon the execution hereof.

 

2.           Allocation of Purchase Price.  The parties understand that Closing
will cause the Company to cease being a tax partnership for federal income tax
purposes under Section 708(b)(1)(A) of the Internal Revenue Code of 1986, as
amended (the “Code”).  The Sellers will cause the Company to file its final
federal partnership tax return (the “Final Return”) on a timely basis and will
cause the Company to pay any and all tax liabilities of the Company attributable
to any tax period ending on or before the Closing Date.  The parties will
allocate the Purchase Price among the assets of the Company on whatever manner
the Sellers determine as reasonable and anticipate that little or no income will
occur under Section 751 of the Code.  If timely requested by the Buyer, the
Sellers will cause the Company to make an election under Section 754 of the Code
on the Final Return.  The parties will cooperate fully in effecting this Section
2, in reporting the transactions under this Agreement consistently with this
Section 2, and in completing and filing all related forms and schedules.

 

 

 

 

3.           The Closing.

 

3.1         Date of Closing.  

 

3.1.1       Closing Hereunder.  The closing (the "Closing") of the Transaction
contemplated under this Agreement shall be held within 30 days after completion
of all conditions to Closing, which the parties anticipate will occur, and will
use their commercially reasonable efforts to have occur, on or before April 1,
2018 (with such actual date being hereinafter referred to as the "Closing
Date").  

 

3.1.2       Failure of Closing.  If Closing does not occur before September 30,
2019 (unless the parties mutually extend that date), this Agreement will be null
and void, in which event the Option Agreement will be reinstated with MMAC as
the sole optionee according to its terms with the following adjustments.  The
base Option Price will be increased (subject to adjustment as provided in the
Option Agreement) by $1,357,107 to a total base price of Thirteen Million Three
Hundred Fifty-Seven Thousand One Hundred Seven Dollars ($13,357,107), and Buyer
shall pay Sellers (a) a “make-whole amount” equal to the excess of the
distributions to which the MGM Principals would have been entitled under the
Junior Loan Agreement over the payments made to the MGM Principals under Section
4.6 hereof, and (b) an amount equal to the excess of $9,945,587 over the
purchase price paid by Buyer to the MGM Principals to acquire the Senior
Loan.  Closing shall take place in the offices of Buyer's attorney or at such
other place as the parties may mutually agree.  The reinstated Option Agreement
shall be personal to MMAC and may not be assigned to any other entity; provided,
however, that if the Option is exercised, then at the closing under the Option
Agreement, MMAC may designate Hunt as the party to which the MGM Principals will
convey the Membership Interests.

 

3.2         Sellers’ Deliveries at Closing.  The Sellers shall deliver, or cause
to be delivered, to Buyer at Closing the following:

 

3.2.1       Certificate and Good Standing Certificates.  (A) The Company’s
Certificate of Organization, as amended through the Closing Date, certified as
of a recent date by the Secretary of State of its jurisdiction of incorporation
and (B) a certificate of good standing for the Company from the Secretary of its
jurisdiction of incorporation, as of a recent date;

 

3.2.2       Certificates for Membership Interests.  The membership Interests are
not represented by certificates.

 

3.2.3       Joint Investment Agreement and Other Agreements. The Joint
Investment Agreements referred to in Section 1.4.

 

3.2.4       Assignment Documents.  Each Seller shall transfer, assign and set
over the Membership Interests, free of all liens, claims or encumbrances other
than any liens securing repayment of the Senior Loan and the Junior Loan,
pursuant to three (3) Assignments of Member Interest agreements (one for each
Seller) in substantially the form attached hereto as Exhibit 3.2.4.

 

3.2.5       Additional Documents.  Seller and Buyer shall execute such other
instruments, documents or certificates as are required to be delivered or made
available by either party in accordance with any of the other provisions of this
Agreement or as may be reasonably required to convey or assign the Membership
Interests, or any part thereof, or to close this transaction, duly executed and,
as applicable or customary, acknowledged, by Seller and/or Buyer, as
applicable.  

 

3.3         Payment at Closing.  At the Closing, Buyer shall deliver to Seller
the Cash, as applicable, and Notes (and if Hunt is the Buyer at Closing, the
other Loan Documents), fully executed and authorized and shall consummate the
Transfer Agreement as provided in Section 1.3.  At the Closing, Seller and Buyer
shall also deliver all other instruments and documents required to be delivered
by Buyer under this Agreement, including the Staffing Agreement under Section
1.5 and the documents required under Section 1.2.

 

4.           Representations and Warranties of Seller.  The Sellers hereby
severally represent and warrant to Buyer that the statements contained in this
Section 4 are correct and complete as of the date of this Agreement and will be
correct and complete as of the Closing Date.

 

 

 

 

4.1         Authority.  Such Seller has full power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby in
accordance with the terms hereof.  The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have to the extent
required been duly and validly approved by the members and managers, as the case
may be, of such Seller, and applicable laws and regulations.  Except for such
approvals and the approval and consents pursuant to full execution of this
Agreement, no other proceedings or approvals on the part of such Seller are
necessary to consummate the transactions so contemplated.  This Agreement has
been duly and validly executed and delivered by such Seller and constitutes a
valid and binding obligation of such Seller, enforceable against such Seller in
accordance with its terms.

 

4.2         Litigation.  Except as set forth on Exhibit 4.2, there is no pending
or, to Seller’s actual knowledge, threatened litigation or proceeding, or to the
actual knowledge of the Sellers any investigation currently pending against the
Company in any court, administrative, or other body.  Without limitation, the
Company has not been charged with, or tried for, violations of any federal,
state, or local law or regulation.  The Company is not under any judgment,
order, assessment, decree, or injunction of any court, or of any federal, state,
local, or foreign governmental agency, having jurisdiction over the Company.

 

4.3         Compliance with Laws.  To the actual knowledge of the Sellers, the
Company is in compliance with all applicable federal, state and local laws,
rules, regulations and orders and is not and has not violated any laws, rules or
regulations which remain uncorrected.  Company has filed all reports that are
required to be filed with any regulatory authority having jurisdiction over
them, and such reports, registrations and statements are true and correct in all
material respects.  The Company has obtained all licenses required to conduct
its business as it is being conducted and where it is being conducted and all
such licenses are in good standing.

 

4.4         Membership Interests.  Each Seller owns the applicable Membership
Interests free of all liens, claims or encumbrances other than any liens
securing repayment of the Senior Loan and the Junior Loan, and such Membership
Interests constitute 100% of the Membership Interests in the Company.

 

4.5         Broker and Other Fees.  Neither the Company nor such Seller has
employed any investment bank, business broker or intermediary, or finder or
incurred any liability for any broker's or finder's fees or commissions in
connection with any of the transactions provided for in this Agreement.

 

4.6         [Reserved].

 

4.7         Disclosure.   The parties acknowledge and agree that MMAC has
complete knowledge of the business operations of the Company, through the
reporting requirements of the Company under the Junior Loan and otherwise.  MMAC
also acknowledges that, to its knowledge, Hunt has also performed all due
diligence that it has deemed necessary and will have the benefit of the Audit
described in Section 6.2.  The Buyer (expressly including Hunt, to the extent
this Agreement is assigned to Hunt) will rely upon this due diligence, the
Audit, and its own financial, business, tax, and other advisors in consummating
this Agreement.  The Sellers have made no representations or warranties
regarding the Company except as expressly set forth in this Section 4 of the
Agreement.

 

4.8         Cobb Theater Guaranty.  The parties are aware that the Company has
guaranteed certain obligations of an affiliated developer, related to the
construction of a Cobb Theater in Tallahassee, Florida.  To the extent that the
Company incurs actual losses in the form of payment of a judgment or settlement
of claims under such guaranty, the Buyer’s sole recourse for such losses shall
be in the form of a setoff against amounts due under the Notes (which remain
payable to the Sellers) and the note or notes payable to MGCS and the Noteholder
under the Transfer Agreement equal to the amount of the payments on account of
the Cobb Theater Guaranty, with such setoff first against any amount past due
under such notes.  In the event this Agreement is assigned to Hunt and there are
Buyer Notes payable by Hunt and by MMAC outstanding in favor of the Sellers,
then as to the setoff against amounts payable under the Notes, setoff shall
first be applied against amounts due under the Buyer Notes under which Hunt is
obligated, and then to the MMAC Notes.  The provisions of this Section shall
survive Closing or the earlier termination of this Agreement.

 

 

 

 

4.9         Records and Files.  Other than provided in Section 1.6.3, Sellers
shall surrender and transfer to Buyer all original records, files, invoices,
customer lists, specifications, accounting records, business records, operating
data and other data of the Company, and all electronic data that contains
Company records including but not limited to financial records, employee records
including payroll, payroll deduction and employee history, tax records, asset
listings, depreciation schedules, etc. (collectively, the “Records”).  After the
Closing, Seller shall have the right to retain copies of only those records
which may be necessary in connection with the preparation of its tax
returns.  Any such retained copies shall be treated as the Confidential
Information of the Buyer and shall not be released or disseminated in any matter
except in connection with the preparation and filing of its tax returns or
pursuant to a court order.

 

5.           Covenants and Further Agreements.

 

5.1         Conduct of the Business of the Company.  From and after the date of
this Agreement to the Closing Date, the MGM Principals shall cause the Company
to, and the Company shall (i) conduct its business in substantially the same
manner as in the past and in accordance with prudent business practices; (ii)
maintain and keep its properties in good repair and condition; (iii) maintain in
full force and effect insurance comparable in amount and scope of coverage to
that currently maintained; (iv) substantially perform all its obligations under
material contracts, leases and documents relating to or affecting its assets,
properties, and business, except such obligations as it may in good faith
reasonably dispute; (v) materially comply with and perform all obligations and
duties imposed upon it by all federal, state and local laws, and all rules,
regulations and orders imposed by federal, state or local governmental
authorities; (vi) pay any and all debts incurred in the ordinary course of
business; and (vii) not engage in any transaction that is not in the ordinary
course of business.

 

5.2         Access to Properties and Records.  

 

5.2.1      The Seller will afford the executive officers, employees and
authorized representatives (including legal counsel, accountants and
consultants) of the Buyer and Hunt reasonable access to the Company’s
properties, books and records including, but not limited to, all books of
account (including the general ledger), tax records, organizational documents,
material contracts and agreements, filings with any regulatory authority,
accountants' work papers, litigation files, plans affecting employees, and any
other business activities or prospects in which such party and its designated
representatives may have a reasonable interest and shall make their Managers,
Members, employees, agents, representatives and accountants available to confer
with the other parties and their designated representatives; provided, however,
that such investigations shall be conducted with reasonable prior notice in a
manner so as not to unreasonably interfere with the operations of the affected
party.  The officers of the Company will furnish the Buyer and Hunt and their
designated representatives with such additional financial and operating data and
other information as to their business and properties as the other shall, from
time to time, reasonably request.  However, this disclosure shall not apply to
any attorney work product and any attorney-client communications, whether
subject to any right of privilege or not.

 

5.2.2      All information furnished by the parties previously in connection
with transactions contemplated by this Agreement or pursuant hereto shall be
used solely for the purpose of evaluating the transaction contemplated hereby
and shall be treated as the sole property of the party delivering the
information until consummation of the acquisition contemplated hereby and, if
such acquisition shall not occur, each party and each party's advisors shall
return to the other party all documents or other materials containing,
reflecting or referring to such information, will not retain any copies of such
information, shall use its best efforts to keep confidential all such
information, and shall not directly or indirectly use such information for any
competitive or other commercial purposes.  If the transaction contemplated
hereby does not occur, all documents, notes and other writings prepared by a
party hereto or its advisors based on information furnished by the other party
shall be promptly destroyed.  The obligation to keep such information
confidential shall continue for five years from the date the proposed
acquisition is abandoned but shall not apply to (i) any information which (A)
the party receiving the information can establish by convincing evidence was
already in its possession prior to the disclosure thereof to it by the other
party; (B) was then generally known to the public; (C) became known to the
public through no fault of the party receiving such information; or (D) was
disclosed to the party receiving such information by a third party not bound by
an obligation of confidentiality; (ii) disclosures pursuant to a legal
requirement or in accordance with an order of a court of competent jurisdiction,
or (iii) disclosures in any action to enforce or defend a party’s rights under
this Agreement or any related document.

 

 

 

 

5.3         Further Assistance.  Subject to the terms and conditions herein
provided, each of the parties agrees to use its reasonable best efforts to take,
or cause to be taken, all action and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations to satisfy
the conditions to Closing and to consummate and make effective the transactions
contemplated by this Agreement, including, without limitation, using reasonable
efforts to lift or rescind any injunction or restraining order or other order
adversely affecting the ability of the parties to consummate the transactions
contemplated by this Agreement and using its reasonable best efforts to prevent
the breach of any representation, warranty, covenant or agreement of such party
contained or referred to in this Agreement and to promptly remedy the same.  In
case at any time after the Closing Date any further action is necessary or
desirable to carry out the purposes of this Agreement, parties to this Agreement
shall take all such necessary action.  Nothing in this section shall be
construed to require any party to participate in any threatened or actual legal,
administrative or other proceedings (other than proceedings, actions or
investigations to which it is a party or subject or threatened to be made a
party or subject) in connection with the consummation of the transactions
contemplated by this Agreement unless such party shall consent in advance and in
writing to such participation and the other party agrees to reimburse and
indemnify such party for and against any and all costs and damages related
thereto.

 

5.4         Junior Loan.  The parties acknowledge that the Company is the
borrower of a loan in the amount of $13,000,000 from Financial (the “Junior
Loan”), the repayment of which is secured by the assets of the Company.  The
parties agree that the Subordinate Loan Agreement (the “Junior Loan Agreement”)
and other documents evidencing the Junior Loan (collectively, the “Junior Loan
Documents”) shall be amended as follows:

 

5.4.1       to permit the Company to make annual distributions totaling
$1,015,000, beginning on January 1, 2018 and continuing until Closing and
payable pro-rata on a quarterly basis to the MGM Principals after payment of all
interest due under the Senior Loan and the Junior Loan, except Contingent
Interest (as defined in such documents), which shall be paid after such
distributions.  The Junior Loan Documents shall also permit tax distributions,
as necessary.  The Company will make no further distribution to its Members as
such without the consent of the Buyer for so long as this Agreement remains in
effect;

 

5.4.2       to eliminate the Option Agreement as a benefit to the lender under
the Junior Loan Documents;

 

5.4.3       to allow the Company to pay off the Junior Loan at par, without
penalty or premium, beginning October 1, 2019;

 

5.4.4       to allow the Company to resume the annual distributions permitted
under the Junior Loan Documents, in the event that Closing does not occur by
September 30, 2019;

 

5.4.5       for the Company to confirm to Financial that except as disclosed to
Buyer or Financial and except to the extent inconsistent with the terms or
requirements of this Agreement, the representations and warranties contained in
the following sections of the Junior Loan Agreement will be true and correct as
of Closing: Sections 5.01, 5.02, 5.03, 5.05, 5.08, 5.10, 5.12, 5.13, 5.14, 5.15,
5.16, 5.17, 5.18, 5.20, 5.21 and 5.22; and if MMAC is the Buyer at Closing, the
Company will confirm the foregoing representations and warranties to MMAC at
Closing; and

 

5.4.6       to eliminate the death or incompetence of a Key Principal as an
Event of Default.

 

5.5         Disclosure Supplements.  From time to time prior to the Closing
Date, each party will promptly supplement or amend (by written notice to the
other) its respective Schedules delivered pursuant hereto with respect to any
matter hereafter arising which, if existing, occurring or known at the date of
this Agreement, would have been required to be set forth or described in such
Schedule or which is necessary to correct any information in such Schedules
which has been rendered materially inaccurate thereby.  

 

5.6         Further Assurances.  The parties agree to execute and deliver or
cause to be executed and delivered at the Closing or at other reasonable times
and places such additional instruments as another party hereto may reasonably
request for the purpose of carrying out this Agreement.

 

 

 

 

5.7         Consents of Parties.  Each party executing this Agreement hereby
consents to each of the other parties executing, delivering, and consummating
this Agreement and the transactions contemplated under this Agreement.  Sellers
and Financial hereby terminate the Option Agreement (subject to possible
reinstatement as provided for herein) and will comply with Section 5.3 with
respect to the Option Agreement and otherwise.

 

5.8         Expenses.  Each party shall pay its own expenses and costs,
including without limitation counsel fees and accounting expenses incurred in
connection with the consummation of this Agreement and the transactions
contemplated hereby.

 

5.9         Additional Covenants.  The Sellers will not permit the Company to
make any prepayments on the Junior Loan in the amount of $1,500,000 as long as
Closing under this Agreement and the Transfer Agreement is being pursued by
Sellers and Buyer in good faith.

 

6.           Conditions to Obligation of Buyer.  The Buyer's obligations
hereunder are subject to the satisfaction of each of the conditions precedent
set forth in this Section 6, on or before the Closing Date.  If any of such
conditions precedent is not satisfied, this Agreement shall terminate as
provided in Section 3.1.

 

6.1         Representations and Covenants.  All representations and warranties
made by the Sellers and the Company in this Agreement are true now, and must be
true at the time of Closing, and the Sellers must have performed all covenants
made under this Agreement.  

 

6.2         Audit.  The Company shall have received an unqualified audit of the
Company as of December 31, 2017 in form and substance reasonably satisfactory to
Buyer in its sole discretion (the “Audit”), which Audit shall be at the expense
of Buyer.  

 

6.3         Consents.  The Company shall have obtained, at its sole cost and
expense, all third-party approvals, consents and qualifications (including,
without limitation, any approvals or consents required to be obtained from HUD,
from any other agency or governmental entity, any partner, or any investor, or
under  any applicable fund documents, Company contracts or loan documents)
necessary to consummate the transaction as outlined in this Agreement, including
without limitation all consents set forth on Exhibit 6.3 hereto (collectively,
the “Consents”).

 

6.4         Transfer Agreement.  Closing under the Transfer Agreement shall
occur concurrent with Closing hereunder.  For avoidance of doubt, Sellers shall
be under no obligation to complete Closing under this Agreement, unless closing
occurs concurrently under the Transfer Agreement.

 

6.5         No Default.  Sellers and Buyer shall each have performed and
complied with all of the covenants and conditions required by this Agreement to
be performed or complied with at or prior to Closing, and there shall be no
default in the performance of any obligations hereunder.

 

6.6         Membership Interests.  Sellers shall continue to be the sole owners
of the Membership Interests (which shall constitute 100% of the Membership
Interests in the Company), free and clear of any liens or encumbrances, other
than any liens securing repayment of the Senior Loan and the Junior Loan.

 

6.7         MGM Foundation Transactions.  By the earlier of Closing or the date
that is ninety (90) days after the date of this Agreement, the general partner
interests in the Orchard Walk and Breckenridge projects will be sold to MuniMae
Foundation, Inc. and the project partnership agreements will be amended or a
side letter will be signed so as to permit the limited partners to determine
when, after the expiration of the compliance period, such projects shall be
sold.  The parties acknowledge that such amendments will require the consent of
various third parties, including the MuniMae Foundation, Inc. and MGM
Foundation, which will be jointly pursued by Sellers and Buyer in good
faith.  The parties acknowledge that the MGM Foundation will be entitled to
$5,000 per property for such consent.

 

7.           Indemnification.  Sellers hereby agree to jointly and severally
indemnify and hold harmless Buyer and its equity holders and employees, officers
and directors, from and against any and all liabilities, claims, demands, causes
of action, losses, costs, damages or expenses (including, without limitation,
reasonable accounting and legal expenses) (collectively, "Claims") which are
determined in a final judgment to have been based on (a) fraud or active
concealment of material facts from Buyer, which inured to the benefit of the
Sellers, or (b) liabilities of the Company to the MGM Principals, which, in
either case, were not known by or disclosed to Buyer prior to Closing.      

 

 

 

 

8.           Limitation of Sellers’ Liability.  The Buyer (including Hunt, to
the extent this Agreement is assigned to Hunt) has had complete access to the
books, records and operating history of the Company and MMAC has had employees
in residence at the Company, with complete access to operating data.  With the
exception of the Sellers indemnification obligations set forth in Section 7
above and actual monetary losses arising solely from those matters expressly set
forth in this Section below, the Sellers shall have no liability to the Buyer
and Buyer shall have no right of setoff under the Notes for any matters related
to the Company or its assets, this Agreement or the transactions contemplated in
this Agreement, whether arising or accruing before or after the Closing under
this Agreement:

 

8.1         A final judgment finding that the Company and/or the MGM Principals
were guilty of fraud or criminal conduct;

 

8.2         A material breach of a representation or warranty contained in
Sections 4.1 through 4.9;

 

8.3         Actual amounts required to be paid by the Company under the Cobb
Theater Guaranty; or

 

8.4         A material breach of any of Seller’s covenants hereunder.

 

9.           Binding Effect; Assignment.  This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their permitted
assigns, successors, heirs and personal representatives.  Without the prior
written consent of the Buyer or the Seller, the Seller or the Buyer,
respectively, shall not have the right to assign this Agreement. Notwithstanding
the foregoing, the Buyer shall have the right to assign its rights and
obligations under this Agreement to (a) any wholly-owned direct or indirect
subsidiary of MMAC, or (b) Hunt, provided in each case the assignee executes an
assignment and assumption agreement in the form of Exhibit 9 hereto.  For the
avoidance of doubt, any assignment of this Agreement or designation of rights
hereunder to Hunt, shall be subject to Hunt’s written acceptance in its sole
discretion.  Any assignment to Hunt shall expressly exclude any assignment of
the MGM Principals representations and warranties, other than Sections 4.1
through 4.3, it being the intent of the parties that the MGM Principals shall
not have any liability to Hunt thereunder, other than Sections 4.1 through
4.3.  In the event of any assignment to Hunt, MMAC (x) shall remain liable for
the performance of all of the obligations of Buyer hereunder in the event of the
failure by Hunt to first perform such obligations.  

 

10.          Disputes and Litigation.  In the event of any dispute or litigation
among the parties, including any suit related to the enforcement of any of the
provisions hereof or the collection of any amount owed hereunder, the prevailing
party shall be entitled to its costs and expenses, including reasonable
attorney's fees and costs.  The parties agree that a final judgment in any
action or proceeding shall, to the extent permitted by applicable law, be
conclusive and may be enforced in other jurisdictions by suit on the judgment,
or in any other manner provided by applicable law related to the enforcement of
judgments.

 

11.          Notices.  Any notice or other communication required or permitted
hereunder shall be sufficiently given if sent by certified mail, postage
prepaid, addressed as follows:

 

  If to any Seller: c/o MGM Management, LLC     900 W. Platt Street, Suite 200  
  Tampa, Florida 33606     Attn: Charles M. Pinckney, President         With a
copy to: Spotts Fain     411 E. Franklin Street, Suite 600     Richmond,
Virginia 23219     Attn:  Brian R. Marron, Esq.

 

 

 

 

  If to Buyer: MMA Capital Management, LLC     3600 O'Donnell Street, Suite 600
    Baltimore, Maryland  21224     Attention: Gary Mentesana         With a copy
to: Gallagher Evelius & Jones LLP     218 N Charles Street, Suite 400  
Baltimore, Maryland 21201     Attn: Stephen A. Goldberg, Esq.

 

or to such other address as the intended recipient may have specified in a
notice to the other party.  Notice shall be deemed effective when sent by hand
or overnight courier or when received if sent by certified mail.

 

12.         Entire Agreement.  The exhibits hereto and the certificates and
other documents to be furnished in connection herewith are an integral part of
this Agreement.  All understandings and agreements between the parties are
merged into this Agreement which fully and completely expresses their agreements
and supersedes any prior agreement or understanding relating to the subject
matter, and no party has made any representations or warranties, express or
implied, not herein expressly set forth.  This Agreement shall not be changed or
terminated except by written amendment signed by the parties hereto.

 

13.         Governing Law; Submission to Jurisdiction.  This Agreement and the
agreements contemplated hereby shall be construed in accordance with and
governed by the laws of the State of New York without giving effect to any
choice or conflict of law provision or rule (whether of the State of New York or
any other jurisdiction).  Any legal suit, action or proceeding arising out of or
based upon this Agreement or the transactions contemplated hereby may be
instituted in the federal courts of the United States of America or the courts
of the State of New York, in each case, located in the county of New York, in
the City of New York, New York and each party irrevocably submits to the
jurisdiction of such courts in any such suit, action or proceeding.

 

14.         Counterparts.  This Agreement is executed in several counterparts,
all of which taken together shall constitute one instrument.

 

15.         Severability.  If any clause, provision or section of this Agreement
shall be held illegal or invalid by any court, the illegality or invalidity of
such clause, provision or section shall not affect the remainder of this
Agreement which shall be construed and enforced as if such illegal or invalid
clause, provision or section had not been contained in this Agreement.  If any
agreement or obligation contained in this Agreement is held to be in violation
of law, then such agreement or obligation shall be deemed to be the agreement or
obligation of the respective party only to the extent permitted by law.

 

16.         Headings; Construction.  The titles and headings of the various
Sections and Subsections are intended solely for means of reference and are not
intended for any purpose whatsoever to modify, explain or place any construction
on any of the provisions of this Agreement.  The parties acknowledge that they
are sophisticated in business transactions and have negotiated this Agreement on
advice of counsel.  As such, the usual rule of construction that any ambiguities
be resolved against the drafting party shall be inapplicable in the construction
and interpretation of this Agreement and any amendments or exhibits hereto. Any
pronoun used herein shall refer to any gender, either masculine, feminine or
neuter, as the context requires.  Singular references shall include the plural
and vice versa.

 

17.         Amendments.  This Agreement may not be amended, restated,
supplemented, or otherwise modified without the prior written consent of Hunt.

 

18.         Submission Not an Offer.  Neither the submission of this Agreement
by either party, nor the reliance by either party on the terms hereof, shall
constitute a contract or give either party a right to rely on the terms hereof
unless and until this Agreement has been executed by all parties hereto.  This
Agreement shall have no force or effect until it has been executed by all
parties hereto.  

 

[Signatures to Follow]

 

 

 

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
as of the day and year first above written.

 

  SELLERS:       Charles M. Pinckney, LLC         By: /s/ Charles M. Pinckney  
Its: Authorized Signatory         Johnson Holdings, LLC         By: /s/ Mark
Johnson   Its: Managing Member         Morrison Grove CS Venture Partner, Inc.  
      By: /s/ Charles M. Pinckney   Its: President         BUYER:       MMA
Capital Management, LLC         By: /s/ Michael L. Falcone   Its: CEO        
FINANCIAL:       MMA Financial, Inc.         By: /s/ Michael L. Falcone   Its:
President