Moody National Advisor I, LLC. 10-Q [mnrt-10q_033114.htm]

 

EXHIBIT 10.5

 

PROMISSORY NOTE

 

$13,250,000.00New York, New York
March 31, 2014

 

FOR VALUE RECEIVED MOODY NATIONAL 2020-GRAPEVINE HOLDING, LLC, a Delaware
limited liability company, as maker, having its principal place of business at
c/o Moody National REIT I, Inc., 6363 Woodway, Suite 110, Houston, Texas 77057,
(together with its permitted successors and assigns, collectively, “Borrower”),
hereby unconditionally promises to pay to the order of LADDER CAPITAL FINANCE
LLC, a Delaware limited liability company, having an address at 345 Park Avenue,
8th Floor, New York, New York 10154 (together with its successors and assigns,
collectively, “Lender”), or at such other place as the holder hereof may from
time to time designate in writing, the principal sum of THIRTEEN MILLION TWO
HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS ($13,250,000.00), or so much thereof
as is advanced pursuant to that certain Loan Agreement dated the date hereof
between Borrower and Lender (as the same may be amended, modified, supplemented,
replaced or otherwise modified from time to time, the “Loan Agreement”), in
lawful money of the United States of America, with interest thereon to be
computed from the date of this Promissory Note (the “Note”) at the Interest Rate
(as defined in the Loan Agreement), and to be paid in accordance with the terms
of this Note and the Loan Agreement. All capitalized terms not defined herein
shall have the respective meanings set forth in the Loan Agreement.

 

ARTICLE 1: PAYMENT TERMS

 

Borrower agrees to pay the principal sum of this Note and interest on the unpaid
principal sum of this Note and all other amounts due under the Loan Agreement
and other Loan Documents from time to time outstanding without relief from
valuation and appraisement laws at the rates and at the times specified in the
Loan Agreement and the outstanding balance of the principal sum of this Note and
all accrued and unpaid interest thereon and all other amounts due under the Loan
Agreement and other Loan Documents shall be due and payable on the Maturity
Date.

 

ARTICLE 2: DEFAULT AND ACCELERATION

 

The Debt shall without notice become immediately due and payable at the option
of Lender if any payment required in this Note is not paid on or prior to the
date when due (subject to any applicable grace or cure periods) or if not paid
on the Maturity Date or on the happening of any other Event of Default.

 

ARTICLE 3: LOAN DOCUMENTS

 

This Note is secured by the Mortgage and the other Loan Documents. All of the
terms, covenants and conditions contained in the Loan Agreement, the Mortgage
and the other Loan Documents are hereby made part of this Note to the same
extent and with the same force as if they were fully set forth herein. In the
event of a conflict or inconsistency between the terms of this Note and the Loan
Agreement, the terms and provisions of the Loan Agreement shall govern.

 

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ARTICLE 4: SAVINGS CLAUSE

 

Notwithstanding anything to the contrary contained herein, (a) all agreements
and communications between Borrower and Lender are hereby and shall
automatically be limited so that, after taking into account all amounts deemed
interest, the interest contracted for, charged or received by Lender shall never
exceed the Maximum Legal Rate or amount, (b) in calculating whether any interest
exceeds the Maximum Legal Rate, all such interest shall, to the extent permitted
by any Legal Requirement, be amortized, prorated, allocated and spread over the
full amount and term of all principal indebtedness of Borrower to Lender, and
(c) if through any contingency or event, Lender receives or is deemed to receive
interest in excess of the Maximum Legal Rate, any such excess shall be deemed to
have been applied toward payment of the principal of any and all then
outstanding indebtedness of Borrower to Lender, or if there is no such
indebtedness, shall immediately be returned to Borrower.

  

ARTICLE 5: NO ORAL CHANGE

 

This Note may not be modified, amended, waived, extended, changed, discharged or
terminated orally or by any act or failure to act on the part of Borrower or
Lender, but only by an agreement in writing signed by the party against whom
enforcement of any modification, amendment, waiver, extension, change, discharge
or termination is sought.

 

ARTICLE 6: WAIVERS

 

Borrower and all others who may become liable for the payment of all or any part
of the Debt do hereby severally waive presentment and demand for payment, notice
of dishonor, notice of intention to accelerate, notice of acceleration, protest
and notice of protest and non-payment and all other notices of any kind. No
release of any security for the Debt or extension of time for payment of this
Note or any installment hereof, and no alteration, amendment or waiver of any
provision of this Note, the Loan Agreement or the other Loan Documents made by
agreement between Lender or any other Person shall release, modify, amend,
waive, extend, change, discharge, terminate or affect the liability of Borrower
or any other Person who may become liable for the payment of all or any part of
the Debt under this Note, the Loan Agreement or the other Loan Documents. No
notice to or demand on Borrower shall be deemed to be a waiver of the obligation
of Borrower or of the right of Lender to take further action without further
notice or demand as provided for in this Note, the Loan Agreement or the other
Loan Documents. If Borrower is a partnership or limited liability company, the
agreements herein contained shall remain in force and be applicable,
notwithstanding any changes in the individuals comprising the partnership or
limited liability company, and the term “Borrower,” as used herein, shall
include any alternate or successor partnership or limited liability company, but
any predecessor partnership or limited liability company and their partners or
members shall not thereby be released from any liability. If Borrower is a
corporation, the agreements contained herein shall remain in full force and be
applicable notwithstanding any changes in the shareholders comprising, or the
officers and directors relating to, the corporation, and the term “Borrower,” as
used herein, shall include any alternative or successor corporation, but any
predecessor corporation shall not be relieved of liability hereunder. (Nothing
in the foregoing sentence shall be construed as a consent to, or a waiver of,
any prohibition or restriction on transfers of interests in such partnership,
limited liability company or corporation, which may be set forth in the Loan
Agreement, the Mortgage or any other Loan Document.)

 

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ARTICLE 7: TRANSFER

 

Upon the transfer of this Note, Borrower hereby waiving prior notice of any such
transfer, Lender may deliver all the collateral mortgaged, granted, pledged or
assigned pursuant to the Loan Documents, or any part thereof, to the transferee
who shall thereupon become vested with all the rights herein or under Legal
Requirements given to Lender with respect thereto, and Lender shall thereafter
forever be relieved and fully discharged from any liability or responsibility in
the matter; but Lender shall retain all rights hereby given to it with respect
to any liabilities and the collateral not so transferred.

 

ARTICLE 8: EXCULPATION

 

The provisions of Section 11.22 of the Loan Agreement are hereby incorporated by
reference into this Note to the same extent and with the same force as if fully
set forth herein.

 

ARTICLE 9: GOVERNING LAW

 

(A)      THIS NOTE WAS NEGOTIATED IN THE STATE OF NEW YORK, AND MADE BY BORROWER
AND ACCEPTED BY LENDER IN THE STATE OF NEW YORK, AND THE PROCEEDS OF THIS NOTE
WERE DISBURSED FROM THE STATE OF NEW YORK, WHICH STATE THE PARTIES AGREE HAS A
SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND TO THE UNDERLYING TRANSACTION
EMBODIED HEREBY, AND IN ALL RESPECTS, INCLUDING, WITHOUT LIMITING THE GENERALITY
OF THE FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS NOTE
AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE
AND PERFORMED IN SUCH STATE (WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS)
AND ANY APPLICABLE LAW OF THE UNITED STATES OF AMERICA. TO THE FULLEST EXTENT
PERMITTED BY LAW, BORROWER HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY
CLAIM TO ASSERT THAT THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS NOTE AND
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK PURSUANT TO SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS
LAW.

 

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(B)      ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR BORROWER ARISING
OUT OF OR RELATING TO THIS NOTE MAY AT LENDER’S OPTION BE INSTITUTED IN ANY
FEDERAL OR STATE COURT IN THE CITY OF NEW YORK, COUNTY OF NEW YORK, OR IN ANY
STATE OR FEDERAL COURT IN THE STATE OF TEXAS, PURSUANT TO SECTION 5-1402 OF THE
NEW YORK GENERAL OBLIGATIONS LAW, AND BORROWER WAIVES ANY OBJECTIONS WHICH IT
MAY NOW OR HEREAFTER HAVE BASED ON VENUE AND/OR FORUM NON CONVENIENS OF ANY SUCH
SUIT, ACTION OR PROCEEDING, AND BORROWER HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING. BORROWER DOES
HEREBY AGREE THAT SERVICE OF PROCESS UPON BORROWER AT ITS NOTICE ADDRESS AS SET
FORTH IN SECTION 11.6 OF THE LOAN AGREEMENT (OR SUCH OTHER NEW NOTICE ADDRESS
ESTABLISHED BY BORROWER UNDER THE LOAN AGREEMENT) BY REGISTERED MAIL, RETURN
RECEIPT REQUESTED, SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS
UPON BORROWER IN ANY SUCH SUIT, ACTION OR PROCEEDING AT THE TIME RECEIVED OR
REFUSED BY BORROWER. NOTHING CONTAINED HEREIN SHALL AFFECT THE RIGHT OF LENDER
TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST BORROWER IN ANY OTHER JURISDICTIONS.

 

ARTICLE 10: NOTICES

 

All notices or other written communications hereunder shall be delivered in
accordance with Section 11.6 of the Loan Agreement.

 

ARTICLE 11: SUCCESSORS AND ASSIGNS

 

This Note shall be binding upon, and shall inure to the benefit of, Borrower and
Lender and their respective successors and permitted assigns. Lender may sell,
assign, pledge, participate, transfer or delegate, as applicable, to one or more
Persons, all or a portion of its rights and obligations under this Note and the
other Loan Documents. Any assignee or transferee of Lender shall be entitled to
all the benefits afforded to Lender under this Note. Borrower shall not have the
right to assign, delegate or transfer its rights or obligations under this Note
without the prior written consent of Lender, and any attempted assignment,
delegation or transfer without such consent shall be null and void.

 

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IN WITNESS WHEREOF, Borrower has duly executed this Note as of the day and year
first above written.

 

  BORROWER:         MOODY NATIONAL 2020-GRAPEVINE HOLDING, LLC, a Delaware
limited liability company         By: /s/ Brett C. Moody     Name: Brett C.
Moody     Title: President

 

[Signature Page to Promissory Note – Grapevine Residence Inn]