Document:

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
	 

 

    9Exhibit 10.6

 

OMNIBUS AMENDMENT, ASSIGNMENT, ASSUMPTION,

RELEASE AND REAFFIRMATION AGREEMENT

 

(Loan from East Boston Savings Bank)

 

 

This Omnibus Amendment,
Assignment, Assumption, Release and Reaffirmation Agreement (“Omnibus Agreement”) is made as of the 27th
day of February, 2020, between and among GANO HOLDINGS, LLC (“Borrower”, sometimes “PropCo”),
a Rhode Island limited liability company, PHR GANO OPCO SUB, LLC (“OpCo”, sometimes “Franchisee”),
a Delaware limited liability company; Procaccianti Hotel REIT, Inc. (“GPHREIT”),
a Maryland corporation; and James A. Procaccianti (“JProcaccianti”), all of the foregoing (collectively, the
 “Procaccianti Parties”) having a mailing address c/o The Procaccianti Group, 1140 Reservoir Avenue, Cranston,
Rhode Island 02920-6032, Attn: James A. Procaccianti, President and CEO, and EAST BOSTON SAVINGS BANK (“Bank”),
a Massachusetts banking corporation with its principal office at 67 Prospect Street, Peabody, Massachusetts 01960.

 

WHEREAS, the Bank earlier
made a loan to Borrower in the original amount of Thirteen Million One Hundred Thirty-Five Thousand Dollars ($13,135,000.00) and
later increased in 2019 by Two Million Five Hundred Thousand Dollars ($2,500,000.00), which loan (as previously increased, the
 “Existing Loan”) is secured in part by improved property located at 220 India Street, Providence, Rhode Island,
on which there is a 137-key hotel and parking area known as the Hilton Garden Inn (the “Hotel”); and

 

WHEREAS, the Borrower
and Bank have agreed that the collateral granted as security for the Existing Loan will also serve as collateral for the Existing
Loan as increased and modified, amended and restated as evidenced by an Amended and Restated Commercial Promissory Note of even
date herewith from Borrower to the order of Bank in the face amount of $16,936,900.72 which shall amend, restate and replace the
promissory notes evidencing the Existing Loan (the “2020 Note”) and the other Loan Documents (as “Loan
Documents” is defined in the 2020 Note)); and

 

WHEREAS, the Existing
Loan is guaranteed, in part, by JProcaccianti pursuant to the terms of the Guaranty earlier signed and delivered by him that is
one of the Loan Documents (“Guaranty”); and

 

WHEREAS, Borrower and
JProcaccianti have approached the Bank and asked it to further modify and increase the Existing Loan, to allow for (i) the transfer
of certain interests held, directly or indirectly, in the Borrower, (ii) a change and replacement of Guarantor and the release
of JProcaccianti’s obligations to the Bank with respect to the Existing Loan as now existing and/or as evidenced by the Loan
Documents (as “Loan Documents” is defined in the 2020 Note), and (iii) the Bank’s consent to an operating lease
and a new franchise agreement for the Hotel; and

 

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WHEREAS, the parties
hereto agree on the following terms on which the Existing Loan may be increased and modified;

 

NOW
THEREFORE, for good and valuable consideration, including the changes to the Loan Documents hereinafter noted, the receipt
and sufficiency of which are acknowledged, the Bank and undersigned Procaccianti Parties do agree as follows:

 

		1.	Capitalized terms used herein and not otherwise defined in this Agreement shall have the meanings
ascribed to them by the Third Amendment to (i) an Open-End Mortgage, Security Agreement and Assignment to Secure Present and Future
Loans Under Chapter 25 of Title 34 of the General Laws of the State of Rhode Island and (ii) an Assignment of Borrower’s
Interests in Leases, Rents and Profits being executed and delivered in connection herewith by the Borrower (the “Third
Amendment”).

 

		2.	PHR TRS II, LLC (“MM”), a Delaware limited liability company, is the Member
Manager of OpCo. Procaccianti Hotel REIT, Inc. (“GPHREIT”) is a Maryland corporation, whose limited partner
is Procaccianti Hotel REIT, LP, LLC (“LPHREIT”) a majority of which is owned by GPHREIT.

 

		3.	The Procaccianti Parties acknowledge and agree that the term “Loan Documents”
shall mean “Loan Documents” as defined in the 2020 Note, including, without limitation, this Omnibus Agreement, a Pledge
Agreement Regarding Liquor License from Borrower to Bank being executed and delivered in connection herewith, a Collateral Assignment
and Security Agreement in Respect of Contracts, Licenses and Permits from Borrower to Bank (“Borrower’s Contract
Assignment”) being executed and delivered in connection herewith, and a Collateral Assignment and Security Agreement
in Respect of Contracts, Licenses and Permits from OpCo to the Bank (“OpCo’s Contract Assignment”) being
executed and delivered in connection herewith.

 

		4.	JProcaccianti is and shall hereby be released and discharged from each obligation arising under
the Guaranty and/or any of the other Loan Documents from facts, circumstances or conditions first arising on or after the date
hereof.

 

		5.	GPHREIT (a) has assumed and agreed to pay and perform all the obligations of the Guarantor arising
on and after the date hereof with respect to: (i) the Guaranty as if it had originally been named as the Guarantor therein, and/or
(ii) the Certificate as to Oil and Hazardous Materials and Indemnity Agreement that was executed and delivered in connection with
the Existing Loan (“EIA”); and (b) confirms by signing below that (i) each of the Guaranty and EIA remains in
full force and effect and applicable to the obligations arising under the Loan Documents as “Loan Documents” is defined
in the 2020 Note, and (ii) GPHREIT has reviewed all such Loan Documents.

 

		6.	PropCo and OpCo represent and warrant to Bank that attached
hereto as Exhibit A is a true, accurate and complete copy of the lease (“Operating Lease” or “OpCo
Lease”) between them, and that: (i) such Operating Lease (a) reflects the entire

 

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			agreement between them with respect to the Property, and (b) is in full force and effect;
                                                                              (ii) neither Landlord nor Tenant is in default thereunder; (iii) neither of them as landlord or tenant has any knowledge of
                                                                              any fact or occurrence which, but for notice or the passage of time, would be a default under such Operating Lease; and (iv)
                                                                              no sums due landlord from tenant thereunder have been paid in advance.

 

		7.	OpCo represents and warrants to Bank that attached hereto as Exhibit B is a true, accurate and
complete copy of the franchise agreement between it and Hilton Franchise Holding, LLC (“HFH”), and that: (i)
such Franchise Agreement (“Franchise Agreement”) (a) reflects the entire agreement between them with respect
to the Property, and (b) is in full force and effect; (ii) neither OpCo nor, to OpCo’s knowledge, HFH is in default thereunder;
(iii) neither OpCo nor, to OpCo’s knowledge, HFH has any knowledge of any fact or occurrence which, but for notice or the
passage of time, would be a default under such Franchise Agreement. Where used in the Loan Documents, the term “Franchise
Agreement” shall mean the “Franchise Agreement” as defined in this paragraph.

 

		8.	The Bank hereby consents to: (i) the execution and performance by the Borrower and OpCo of the
Operating Lease; (ii) the transfers and change of ownership of the Borrower which will result in the corporate and ownership structure
as shown on Exhibit C attached hereto; (iii) the termination of the existing franchise agreement applicable to the Hotel and the
execution by OpCo of the Franchise Agreement with HFH in form as noted above; and (iv) the termination of the existing hotel management
agreement applicable to the Hotel and the execution by OpCo of the a new Hotel Management Agreement with Gano Hotel Manager, LLC
(an affiliate of JProcaccianti) in the form previously provided to the Bank by OpCo.

 

		9.	Each of the Procaccianti Parties represents and warrants that he/it has full power and authority
to execute and deliver this Agreement, and the person signing on behalf of the Borrower represents and warrants that he/it has
full power and authority to execute and deliver this document on behalf of such Procaccianti Party and that its signature shall
conclusively evidence that this document has been voluntarily signed and delivered and is binding upon such Procaccianti Party.

 

		10.	Borrower and JProcaccianti each represents and warrants to the Bank for itself/himself that it/he
is not in default under the respective Loan Documents to which it/he is a party and that, to the best of its/his knowledge, the
Bank is not in default under the respective Loan Documents to which he or it is a party.

 

		11.	Except for the transactions noted herein, Borrower represents and warrants to the Bank that it
has not granted any rights or interests in any of the Loan collateral to anyone other than Bank.

 

		12.	In the Financial Covenants section of the Loan Agreement, the following changes are made, effective
from and after the date hereof:

 

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		a.	The term “Minimum Ratio” shall mean a ratio of at least 1.4 to 1.0 when calculated
with respect to the Debt Service Coverage Ratio for the Property and/or the Debt Service Coverage Ratio for the Hotel.

 

		b.	The term “Net Operating Income” shall mean (i) for determining the Debt Service
Coverage Ratio for the Property, the amount obtained by subtracting the Property Operating Expenses from Gross Income from Property
Operations; and (ii) when determining the Debt Service Coverage Ratio for the Hotel, the amount obtained by subtracting the Hotel
Operating Expenses from Gross Income from Hotel Operations.

 

		c.	“Gross Income from Property Operations” shall mean all income received by Borrower
from the ownership of the Property from whatever source, computed on an accrual basis in accordance with generally accepted accounting
practices and principles, including, but not limited to, rent received pursuant to the OpCo Lease (“OpCo Rent Payments”)
and/or, if any, all guest room revenues, all food, beverage, and merchandise sales receipts, all revenues from group bookings and
functions, all interest income, if any, rent, utility charges, escalations, forfeited security deposits, service fees or charges,
license fees, parking fees, rent concessions or credits, and any business interruption insurance proceeds but excluding sales,
use and occupancy or other taxes on receipts required to be accounted for by Borrower to any government or governmental agency,
refunds and uncollectible accounts, sales of furniture, fixtures and equipment or any capital assets, proceeds of casualty insurance
and condemnation awards, interest on credit accounts and all revenue generated from non-recurring or one-time events. In no event
shall any Advance be deemed to be all or any part of the Gross Income from Property Operations.

 

		d.	“Gross Income from Hotel Operations” shall mean all income received by OpCo
from the operation of the Hotel from whatever source, computed on an accrual basis in accordance with generally accepted accounting
practices and principles, including, but not limited to, all guest room revenues, all food, beverage, and merchandise sales receipts,
all revenues from group bookings and functions, all interest income, if any, rent, utility charges, escalations, forfeited security
deposits, service fees or charges, license fees, parking fees, rent concessions or credits, and any business interruption insurance
proceeds but excluding sales, use and occupancy or other taxes on receipts required to be accounted for by Borrower to any government
or governmental agency, refunds and uncollectible accounts, sales of furniture, fixtures and equipment in the usual course of business,
proceeds of casualty insurance and condemnation awards, interest on credit accounts and all revenue generated from non-recurring
or one-time events. In no event shall any Advance be deemed to be all or any part of the Gross Income from Hotel Operations.

 

		e.	“Property Operating Expenses” shall
mean, without duplication for any amounts which are included in Hotel Operating Expenses, the total of all expenditures paid or
payable solely as obligations of Borrower of whatever kind relating to the operation, maintenance and management of the Property
that are

 

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			incurred on a regular monthly or other periodic basis (both department expenses and
                                                                             undistributed operating expenses), including without limitation, the following costs if the same are actual direct
                                                                             obligations of the Borrower, rent, if any, utilities, ordinary repairs and maintenance, insurance, license fees, taxes and
                                                                             assessments, advertising expenses, management fees in an amount equal to the greater of the actual fees or three percent (3%)
                                                                             of Gross Income from Operations, all franchise fees and other fees and contributions payable pursuant to the Franchise
                                                                             Agreement, if any, all required contributions to reserves and/or escrows required to be made by Borrower under the Loan
                                                                             Documents, if any, net of the distributions from such reserves and/or escrows allocable to the same reporting period, payroll
                                                                             and related taxes (if any), computer processing charges, operational equipment and/or other lease payments as approved by
                                                                             Bank, and other similar costs, but excluding depreciation, other non-cash charges, debt service on the Loan and capital
                                                                             expenditures, all calculated on a monthly basis in accordance with generally accepted accounting practices and principles
                                                                             consistently applied, all without duplication for such charges as are included within, and paid via payment of, any other
                                                                             expense.

 

		f.	“Hotel Operating Expenses” shall mean, without duplication for any Property
Operating Expenses, the total of all expenditures paid or payable of whatever kind relating to the operation, maintenance and management
of the Hotel that are incurred on a regular monthly or other periodic basis (both department expenses and undistributed operating
expenses), including without limitation, rent, utilities, ordinary repairs and maintenance, insurance, license fees, taxes and
assessments, advertising expenses, management fees in an amount equal to the greater of the actual fees or three percent (3%) of
Gross Income from Operations, all franchise fees and other fees and contributions payable pursuant to the Franchise Agreement,
all required contributions to reserves and/or escrows under the Franchise Agreement and/or the Loan Documents, if any, net of the
distributions from such reserves and/or escrows allocable to the same reporting period, payroll and related taxes, computer processing
charges, operational equipment and/or other lease payments as approved by Bank, and other similar costs, but excluding depreciation,
rents paid under the OpCo Lease, non-cash charges, debt service on the Loan, and capital expenditures, all calculated on a monthly
basis in accordance with generally accepted accounting practices and principles consistently applied, all without duplication for
such charges as are included within, and paid via payment of, any other expense.

 

		g.	“Net Operating Income” shall mean (i) with respect to a calculation of Debt
Service Coverage Ratio for the Property, the amount obtained by subtracting Property Operating Expenses from Gross Income from
Property Operations, and (ii) with respect to a calculation of Debt Service Coverage Ratio for the Hotel, shall mean the amount
obtained by subtracting Hotel Operating Expenses from Gross Income from Hotel Operations.

 

		h.	“Debt Service Coverage Ratio” or “DSCR”
shall mean each and both of the Debt Service Coverage

 

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			Ratio for the Property and the Debt Service Coverage Ratio for the Hotel. The DSCR for the
                                                                             Property shall be the ratio for the applicable period in which: (A) the numerator is the Net Operating Income for such
                                                                             period; and (B) the denominator is the aggregate amount of principal and interest due and payable on the Note for such
                                                                             period. The DSCR for the Hotel shall be the ratio for the applicable period in which: (A) the numerator is the sum of the Net
                                                                             Operating Income for the Hotel plus the OpCo Rent Payments for such period; and (B) the denominator is the aggregate amount
                                                                             of principal and interest due and payable on the Note for such period.

 

 

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Executed under seal as of the date first above written.

 

 

	BORROWER/PROPCO:	 	bank:
	 	 	 
	GANO HOLDINGS, LLC,	 	EAST BOSTON SAVINGS BANK,
	a Rhode Island limited liability company  	 	a Massachusetts banking corporation
	 	 	 
	By:	/s/ James A. Procaccianti	 	By:	/s/
    Jonpaul Sallese
	James A. Procaccianti,	 	Jonpaul Sallese
	Its: Authorized Signatory	 	Vice President, Commercial Real Estate
		 	
	OPCO/FRANCHISEE:	 	 
	 	 	 
	PHR GANO OPCO SUB, LLC,	 	 
	a
    Delaware limited liability company	 	 
	 	 	 
	By:	/s/ James A. Procaccianti	 	 
	James A. Procaccianti,	 	 
	Its:
    Authorized Signatory  	 	 
	 	 	 
	GPHREIT:	 	 
	 	 	 
	PROCACCIANTI HOTEL REIT, Inc.	 	 
	a
    Maryland corporation	 	 
	 	 	 
	By:	 	 
	 	 	 
	By:	/s/ James A. Procaccianti	 	 
	Name: James A. Procaccianti	 	 
	Its:
    Authorized Signatory  	 	 
	 	 	 
	JPROCACCIANTI,
    executing to  	 	 
	confirm the release of the 	 	 
	undersigned as provided above: 	 	 
	/s/ James A. Procaccianti	 	 
	James
    A. Procaccianti    	 	 

 

    7

     

    

 

STATE OF RHODE ISLAND

 

Providence, ss.

 

On this
26th day of February, 2020, before me, the undersigned notary public, personally appeared James A. Procaccianti,
proved to me through satisfactory evidence of identification, which was being personally known to me to be the person whose
name is signed on the preceding or attached document, and acknowledged to me that he signed it voluntarily for its stated
purpose.

 

 

	 	/s/ Natasha
    V. Ruane
	 	NOTARY PUBLIC

 

	[Affix Notarial Seal]	 

 

 

 

    8

     

    

 

COMMONWEALTH OF MASSACHUSETTS

 

__________________, ss.

 

On
this ____ day of ______________, 2020, before me, the undersigned notary public, personally appeared Jonpaul Sallese, as
Vice President, Commercial Real Estate, of East Boston Savings Bank, proved to me through satisfactory evidence of identification,
which was __________________ to be the person whose name is signed on the preceding or attached document, and acknowledged to me
that he signed it voluntarily for its stated purpose.

 

 

	 	 	 
	 	 	NOTARY PUBLIC
	 	 	 
	[Affix Notarial Seal]	 	Printed Name:	 
	 	 	 	 
	 	 	My Commission Expires:	 

  

    9

     

    

 

EXHIBIT A

 

Operating Lease

 

(BG Doc #879855)

 

 

    

     

    

 

EXHIBIT B

 

Franchise Agreement

 

(BG Doc #881108)

 

 

    

     

    

 

EXHIBIT C

 

Organization Chart

 

(BG Doc #881912)

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00305-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00305-of-00352.parquet"}]]