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Moody National Reit I, Inc. 8-K [moody-8k_0607.htm]
 
 
EXHIBIT 10.4

 
RENEWAL, EXTENSION AND MODIFICATION AGREEMENT

THE STATE OF TEXAS
§
 
§             KNOW ALL MEN BY THESE PRESENTS:
COUNTY OF TARRANT
§

This Renewal, Extension and Modification Agreement (the “Agreement”) is made and
entered into on the 3rd day of June, 2011, but effective as of the 5th day of
May, 2011 (“Effective Date”), by and between MNHP NOTE HOLDER, LLC, a Delaware
limited liability company, whose address for purposes of notice is 6363 Woodway,
Suite 110, Houston, Texas 77057 (“Lender”), and MOODY NATIONAL HP GRAPEVINE
TRUST, a Delaware statutory trust, whose address for purposes of notice is 6363
Woodway, Suite 110, Houston, Texas 77057 (“Borrower”).

WITNESSETH:

WHEREAS, PATRIOT BANK, a Texas banking association (“Patriot”), extended to
Borrower a loan in the original principal amount of THIRTEEN MILLION AND NO/100
DOLLARS ($13,000,000.00) (the “Loan”) in accordance with the terms of the Loan
Documents (as hereinafter defined), such Loan being evidenced, in part, by the
following instruments:

(1)           that certain Real Estate Lien Note (Non-Recourse) (the “Note”)
dated August 5, 2008, from Borrower payable to the order of Patriot in the
original principal amount of the Loan;

(2)           that certain Deed of Trust, Security Agreement and Financing
Statement (the “Deed of Trust”) of even date therewith from Borrower to GARY S.
GUNN, Trustee, recorded under Clerk’s File No. D208315128 of the Official Public
Records of Tarrant County, Texas;

(3)           that certain Assignment of Rents (the “Assignment of Rents”) of
even date therewith from Borrower to Patriot, recorded under Clerk’s File No.
D208315129 of the Official Public Records of Tarrant County, Texas;

(4)           that certain Commercial Loan Agreement of even date therewith
between Borrower and Patriot, as amended and restated by that certain Amended
and Restated Commercial Loan Agreement dated March 5, 2010 (as so amended and
restated, the “Loan Agreement”) by and between Borrower and Patriot; and

(5)           that certain Modification Agreement (“Modification Agreement”)
dated March 5, 2010, by and between Borrower, Master Tenant and Patriot,
recorded under Clerk's File No. D210064198 of the Real Property Records of
Tarrant County, Texas.

 
 

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WHEREAS, the aforementioned Deed of Trust and Assignment of Rents relate to the
following-described real property and improvements (hereinafter the “Property”):

Tract I:
Being Lot One (1), Block Six (6) of Grapevine Mills Addition, an addition to the
City of Grapevine, Tarrant County, Texas, according to the plat thereof recorded
in Cabinet A, Slide 4713, Plat Records, Tarrant County, Texas, said lot being
more particularly described by metes and bounds in attached Exhibit "A";

Tract II:
Non-Exclusive Easement Rights contained in Declaration of Restrictions and
Reciprocal Easement Agreement dated July 9, 1996, filed July 10, 1996, recorded
in Volume 12429, Page 2207, Deed Records, Tarrant County, Texas;

Tract III:
Non-Exclusive Easement Rights created in Master Declaration of Easements,
Covenants, Conditions and Restrictions, dated April 18, 1997, filed April 28,
1997, recorded in Volume 12747, Page 494, Deed Records, Tarrant County, Texas;
as amended by First Amendment to Master Declaration of Easements, Covenants,
Conditions and Restrictions filed July 22, 1997, recorded in Volume 12842, Page
397, Deed Records, Tarrant County, Texas, in and to the Project Roads, the
Project Sidewalks and/or Common Areas, as defined therein; and

Tract IV:
Non-Exclusive Easement Rights created in that certain Signage and Access
Agreement dated December 19, 1998, filed for record in Volume 13576, Page 270,
Deed Records, Tarrant County, Texas;

WHEREAS, Patriot has transferred and assigned the Note, the Deed of Trust, the
Assignment of Rents and all other liens and security interests securing the Note
to Lender, such assignment being evidenced, in part, by the following
instruments (the “Assignment Documents”):

 
(1)
Allonge Endorsement of even date therewith by Patriot in favor of Lender; and

 
(2)
Assignment of Note and Liens of even date therewith by Patriot in favor of
Lender.

WHEREAS, the Deed of Trust, the Assignment of Rents, all instruments, documents,
and agreements executed by or on behalf of the Borrower to guaranty or provide
collateral security for the Loan (hereinafter collectively called the "Security
Documents"), the Note, all extensions, renewals, and modifications thereof, the
Loan Agreement and each and every other document and instrument executed in
connection with the Loan (together with the Security Documents being hereinafter
collectively called the “Loan Documents”) are hereby incorporated by reference
for all purposes to the same extent as if set out herein verbatim and each
reference herein to any such documents shall refer to such documents as each may
be modified by all extensions, renewals, and modifications;

 
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WHEREAS, Lender and the Borrower desire to: (i) renew and extend the maturity
date of the Note and Liens (hereinafter defined) to February 1, 2018; and (ii)
make certain other modifications to the Loan Documents as set forth herein;

NOW, THEREFORE, in consideration of Ten and No/100 Dollars ($10.00) and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and in further consideration of the terms and covenants and
agreements contained in the Loan Documents and this Agreement, Lender and the
Borrower hereby agree that:

(1)
Status of Loan.  As of the Effective Date, the principal balance of the Note is
TWELVE MILLION SEVEN HUNDRED FIFTY-NINE THOUSAND ONE HUNDRED NINETY-NINE AND
49/100 DOLLARS ($12,759,199.49). As of the Effective Date, no funds remain
available to be disbursed under the Note.  Concurrently herewith and as a
condition hereof, Borrower has paid all accrued interest and fees due and owing
on the Loan as of the Effective Date.  Borrower further hereby acknowledges
that, as of the Effective Date, there are no defenses, counterclaims or setoffs
to or against payment of the Loan, as modified hereby.

(2)
Modification of Note.  As of the Effective Date, the Note shall be and hereby is
modified as follows:

 
(a)
Interest Rate.  From and after the Effective Date, interest on the Note shall be
computed at the Stated Rate (hereinafter defined), but in no event to exceed the
Maximum Rate (as such term is defined in the Note); with adjustments to the
Stated Rate to be made pursuant to the schedule set forth below, and adjustments
due to changes in the Maximum Rate to be made on the effective date of any
change in the Maximum Rate; such interest payable as it accrues on the maturity
date of each of the installments described below, on the then unpaid principal
balance of this Note.  “Stated Rate” means the following:

 
(i)
until the First Change Date (as hereinafter defined), a fixed rate of five and
fifteen one hundredths percent (5.15%)  per annum;

 
(ii)
beginning on the First Change Date and continuing until the Second Change Date
(as hereinafter defined), a fixed rate equal to (a) the Prime Rate (as
hereinafter defined) in effect as of the First Change Date, plus (b) one and
nine tenths percent (1.90%) (hereinafter called the “Margin Percentage”); and

 
(iii)
beginning on the Second Change Date and continuing through the Maturity Date, a
fixed rate equal to (a) the Prime Rate in effect as of the Second Change Date,
plus (b) the Margin Percentage.

 
(b)
Installment Payments.  As of the Effective Date, Borrower and Lender agree that
the Note, as modified, shall be and hereby is due and payable in eighty-one (81)
remaining monthly installments, the first fifteen (15) monthly installments
being in the amount of SEVENTY THOUSAND FOUR HUNDRED THIRTY-FOUR AND 49/100
DOLLARS ($70,434.49), the sixteenth (16th) through eightieth (80th)
monthly installments being calculated and adjusted as set forth in the following
paragraph, and the eighty-first (81st) and final installment being in the amount
of the balance of principal and accrued interest then due on the Note. The first
such installment is due and payable on June 5, 2011, and the remaining
installments are due and payable in consecutive order on the same day of each
and every succeeding calendar month thereafter until the Maturity Date, when all
sums called for under the Note shall be due and payable in full.

 
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(c)
Payment Recasting Provision.  Notwithstanding the interest rate and payment
amounts specified in paragraphs 2(a) and 2(b) above, (a) on August 21, 2012 (the
“First Change Date”), the interest rate charged under the Note will be increased
or decreased to equal the Stated Rate as of the First Change Date (but in no
event to exceed the Maximum Rate), and (b) on August 21, 2015 (the “Second
Change Date”), the interest rate charged under the Note will be increased or
decreased to equal the Stated Rate as of the Second Change Date (but in no event
to exceed the Maximum Rate).  Following the First Change Date and the Second
Change Date, the monthly installments of principal and interest will be
increased or decreased to an amount sufficient to fully amortize the remaining
principal balance and interest thereon at the then-current Stated Rate over a
period ending March 5, 2041, at the new interest rate.  Payee will give written
notice to Maker of any changes in the interest rate and payments and Payee will
use commercially reasonable efforts to provide such notice to Maker no later
than five (5) business days prior to the relevant change date.  Such notice will
be considered as given when deposited in the United States mail, postage
prepaid, addressed to Maker at the address specified in the Deed of Trust
referred to below.

 
(d)
Maturity Date.  The Maturity Date of the Note (as defined therein) is hereby
extended to February 1, 2018.

(3)
Modification of Loan Agreement.  Borrower and Lender agree that the Loan
Agreement shall be and hereby is modified as follows:

 
(a)
The definition of “Cash Flow” in Section 1.02 of the Loan Agreement shall be
deleted in its entirety and replaced with the following:

“Cash Flow” means, for any period, all actual income from the Property for such
period minus (i) ordinary operating expenses, including, as applicable, the
Management Fee (which shall not exceed the Management Fee Cap) and (ii) a
monthly escrow deposit for ad valorem taxes and insurance premiums on the
Property, for such period.
 
 
(b)
The definition of “Modification Fee” in Section 1.02 of the Loan Agreement shall
be deleted in its entirety and replaced with the following:

“Modification Fee” means a Modification Fee payable by Master Tenant to Lender
in the amount of One Hundred Fifty-Nine Thousand Eight Hundred Seventeen and
83/100 Dollars ($159,817.83).
 
 
(c)
Section 2.06 of the Loan Agreement shall be deleted in its entirety and replaced
with the following:

 
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“Section 2.06Modification Fee. The Master Lease shall be amended to require
Master Tenant to pay the modification fee to Lender, and Lender shall be
entitled to receive the same in addition to amounts due under the Note.”
 
 
(d)
Section 5.07 of the Loan Agreement shall be deleted in its entirety and replaced
with the following:

 
“Section 5.07Debt Service Coverage Ratio.   Borrower covenants that, commencing
with the semi-annual calendar period ending December 31, 2011, and continuing
with each semi-annual calendar period thereafter, it shall have a Debt Service
Coverage Ratio of not less than the ratio designated for such period in the
table below.
 
Semi-Annual Calendar Period Ending
 
Debt Service Coverage Ratio
 
12/31/2011
 
1.00 to 1.00
6/30/2012 and 12/31/2012
 
1.10 to 1.00
6/30/2013 and 12/31/2013
 
1.20 to 1.00
6/30/2014, 12/31/2014, and each June 30 and December 31 thereafter
during the term of the Loan
1.25 to 1.00

(4)
Characterization of Cash Flow Reserve Account and FF&E Reserve Account.  Lender
and Borrower agree and acknowledge that the Cash Flow Reserve Account and FF&E
Reserve Account, as required under Section 5.10 of the Loan Agreement and
Section 5 of the Modification Agreement, were incorrectly characterized as
Borrower accounts.  Lender and Borrower further agree and acknowledge that each
of the Cash Flow Reserve Account and FF&E Reserve Account are, and always have
been, Master Tenant accounts.  These Reserve Accounts shall be established and
maintained by the Master Tenant at all times during the term of the Loan,
including any renewal term.

(5)
FF&E Reserve Account.  The Master Lease may be amended to allow Master Tenant to
make deposits into the FF&E Reserve Account, as required under Section 5.10(b)
of the Loan Agreement, only to the extent such funds are available after the
priority payments set forth in Section 6 below.

(6)
Application of Cash Flow.  The Master Tenant will apply any and all Cash Flow
until the Cash Flow Reserve Account and the FF&E Reserve Account are fully
funded as set forth in the Master Lease and this Agreement, in the following
order of priority:

 
(a)
First, to Base Rent, as defined in the Master Lease;

 
(b)
Second, to the Cash Flow Reserve Account, until such account is sufficient to
pay the balance of the Modification Fee due by Master Tenant ;

 
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(c)
Third, to the Cash Flow Reserve Account, until such account has an account
balance of $400,000; and

 
(d)
Fourth, to the FF&E Reserve Account.

Base Rent shall be paid to the Borrower, but as an accommodation to Borrower,
Master Tenant shall pay directly to Lender (as provided in Section 4.1 of the
Master Lease) all principal and interest payments due under the Loan.

(7)
Pledge and Security Agreement.   Borrower, Master Tenant and Lender agree and
acknowledge that the pledge of Borrower’s interest in the Cash Flow Reserve
Account and the FF&E Reserve Account, as provided for under Pledge and Security
Agreement dated March 5, 2010, constitutes the pledge of Borrower’s interest in
the Reserve Accounts pursuant to that certain Assignment of Leases and Rents and
Security Agreement by and between the Borrower and the Master Tenant, dated
August 5, 2008.

(8)
Joinder and Authority of Master Tenant.  Master Tenant is made a party hereto
for the purpose of evidencing its agreement with and consent to Paragraphs (4)
through (7) above.  The execution, delivery and performance of this Agreement by
Master Tenant has been duly authorized by all necessary partnership action and
by all necessary limited partnership action of the Master Tenant’s general
partner.

(9)
Maturity Date.  As set forth above, the Maturity Date of the Note (as defined
therein) is hereby modified to February 1, 2018, and all references in the Loan
Documents to any other maturity date are hereby modified and amended to
contemplate the Maturity Date set forth herein.

(10)
Appraisals.  Lender hereby reserves the right to demand appraisals in the future
at Borrower’s sole expense should it be deemed necessary in Lender’s sole and
absolute discretion.

(11)
Effect of Modification on Loan Documents; Definitions.  All references to the
Note in the Loan Documents are hereby amended to refer to the same document as
amended by this Agreement.  All capitalized items not otherwise defined in this
Agreement shall have the meanings ascribed to them in the Loan Agreement.

(12)
Conditions Precedent to Effectiveness of Agreement.  The Lender’s obligations
under this Agreement are conditioned upon the completion of the following, each
of which constitutes a condition precedent to the effectiveness of this
Agreement:

 
(a)
The Borrower and Master Tenant execute and deliver this Agreement to the Lender
and it shall be properly recorded in the Official Records of Tarrant County,
Texas, with all recording fees paid by the Borrower;

 
(b)
The Lender has received, at its option, an endorsement to the Loan / Mortgagee
Policy of Title Insurance (the “Policy”) previously issued to the Lender on
insuring Form T-38 pursuant to Rule P-9. b.(3), covering the liens and security
interests granted or created in the Loan Documents, together with an
acknowledgment by the applicable title insurance company (collectively the
“Title Insurer”) that the liability of the Title Insurer for the payment of any
loss or damage under the Policy has not been waived, surrendered or reduced by
the execution of this Agreement or the Assignment Documents; and

 
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(c)
The Borrower delivers to the Lender evidence in form and substance satisfactory
to the Lender that all taxes and assessments against or affecting the Property
have been paid and are current and/or that Borrower has made arrangements for
the payment of all unpaid taxes and assessments, which arrangements shall be
satisfactory to Lender in its sole discretion.

(13)
Miscellaneous Provisions.  The Borrower hereby warrants, represents, reaffirms,
acknowledges, and agrees that:

 
(a)
The Loan is a business loan, as contemplated by Title V of the Depository
Institutions Deregulation and Monetary Control Act of 1980;

 
(b)
Each of the representations, warranties, covenants and agreements set forth in
the Loan Documents continues in full force and effect as if each were separately
stated herein and made as of the Effective Date;

 
(c)
The Loan Documents, and each and every other document and instrument which
evidences or secures payment of the Note represent the valid, enforceable and
collectible obligations of the Borrower, and the Borrower further acknowledges
that there are no existing claims, defenses, personal or otherwise, or rights of
setoff whatsoever with respect to any of the aforementioned instruments or
documents;

 
(d)
No event has occurred and no condition exists which would constitute a default
under any of the Loan Documents, or this Agreement, either with or without
notice or lapse of time, or both;

 
(e)
Except as specifically modified herein, all of the terms and provisions of the
Loan Documents and all other documents and instruments executed in connection
with the Note are hereby ratified and reaffirmed by the Borrower, and the
Borrower specifically acknowledges the validity and enforceability thereof;

 
(f)
This Agreement modifies the Note and the Deed of Trust, and in no way acts as a
release or relinquishment of liens, security interests and rights (“Liens”)
securing payment of the Note, including without limitation, the Lien created by
the Deed of Trust.  The Liens are hereby renewed, extended, ratified, and
confirmed by the Borrower in all respects.  This Agreement is given, in whole or
in part, to evidence the modification, but not discharge or novation, of the
Note, the outstanding balance of which is being modified by this Agreement;

 
(g)
This Agreement, the Loan Documents and all other documents and instruments
executed in connection with the Note shall be governed and construed according
to the laws of the State of Texas from time to time in effect except to the
extent United States federal law permits Lender to contract for, charge, take,
receive, or reserve a greater amount of interest; and

 
(h)
This Agreement and all of the Loan Documents are in full force and effect so
nothing herein contained shall be construed as modifying in any manner said Loan
Documents except as specifically modified hereby.

 
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(14)
Usury.  No provisions of this Agreement or the Loan Documents shall require the
payment or permit the collection, application or receipt of interest in excess
of the maximum permitted by applicable state or federal law.  If any excess of
interest in such respect is herein or in any such other instrument provided for,
or shall be adjudicated to be so provided for herein or in any such instrument,
the provisions of this paragraph shall govern, and neither Borrower nor any
endorsers of the Note nor their respective successors, assigns or personal
representatives shall be obligated to pay the amount of such interest to the
extent it is in excess of the amount permitted by applicable law.  It is
expressly stipulated and agreed to be the intent of Borrower and Lender to at
all times comply with the usury and other laws relating to the Loan Documents
and any subsequent revisions, repeals or judicial interpretations thereof, to
the extent applicable thereto.  In the event Lender or other holder of the Note
ever receives, collects or applies as interest any such excess, such amount
which would be excessive interest shall be applied to the reduction of the
unpaid principal balance of the Note and, if upon such application the principal
balance of the Note is paid in full, any remaining excess shall be forthwith
paid to Borrower and the provisions of the Loan Documents shall immediately be
deemed reformed and the amounts thereafter collectible thereunder reduced,
without the necessity of execution of any new document, so as to comply with the
then applicable law, but so as to permit the recovery of the fullest amount
otherwise called for thereunder.  In determining whether or not the interest
paid or payable under any specific contingency exceeds the maximum interest
allowed to be charged by applicable law, Borrower and Lender or other holder
hereof shall, to the maximum extent permitted under applicable law, amortize,
prorate, allocate and spread the total amount of interest throughout the entire
term of the Note so that the amount or rate of interest charged for any and all
periods of time during the term of the Note is to the greatest extent possible
less than the maximum amount or rate of interest allowed to be charged by law
during the relevant period of time.  Notwithstanding any of the foregoing, if at
any time applicable laws shall be changed so as to permit a higher rate or
amount of interest to be charged than that permitted prior to such change, then
unless prohibited by law, references in the Note to “applicable law” for
purposes of determining the maximum interest or rate of interest that can be
charged shall be deemed to refer to such applicable law as so amended to allow
the greater amount or rate of interest.

(15)
Maximum Lawful Rate of Interest.  Lender hereby advises Borrower that to the
extent the Lender is relying on Chapter 303 of the Texas Finance Code, as
amended, to determine the "maximum lawful rate of interest" (as defined herein),
Lender shall utilize that weekly rate ceiling from time to time in effect as
provided in such chapter.  To the extent United States federal law permits
Lender to contract for, charge, take, receive, or reserve a greater amount of
interest, Lender shall rely on United States federal law instead of such
Chapter, for the purposes of determining the "maximum lawful rate of interest"
(as defined herein).  Additionally, to the extent permitted by applicable law
now or hereafter in effect, Lender may, at its option and from time to time,
implement any other method of computing the "maximum lawful rate of interest"
(as defined herein) under such Chapter, or under other applicable law by giving
notice, if required, to Borrower as provided by applicable law now or hereafter
in effect.  In no event shall provisions of Chapter 346 of the Texas Finance
Code (which regulates certain revolving credit loan accounts and revolving
tri-party accounts) apply to the Loan.

(16)
No Waiver or Consent.  Notwithstanding anything to the contrary contained herein
or inferred hereby or in any other instrument executed by the Borrower and/or
Lender, on or before the Effective Date, the agreements, covenants and
provisions contained herein shall constitute the only evidence of Lender’s
consent to modify the terms and provisions of the Loan Documents in the manner
set forth herein.  Accordingly, no express or implied consent to any further

 
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modifications of the Loan or the Loan Documents, whether any such modifications
involve any of the matters set forth in this Agreement or otherwise, shall be
inferred or implied from Lender’s execution of the Agreement unless evidenced by
an express written agreement executed by Lender.  Further, Lender’s execution of
this Agreement shall not constitute a waiver (either express or implied) of the
requirement that any further modifications of the Loan or any of the Loan
Documents shall require the express written approval of Lender, no such approval
(either express or implied) having been given as of the Effective Date.

(17)
Successors and Assigns.  This agreement shall be binding upon and inure to the
benefit of Lender and/or the Borrower and its respective heirs, legal
representatives, successors and assigns.

(18)
Payment of Costs and Expenses. As a further condition hereof, Borrower hereby
agrees to pay, or reimburse Lender for, all costs and expenses incurred by
Lender in connection with this Agreement, including, but not limited to, all
recording and filing costs and expenses and all reasonable fees and expenses of
Lender’s attorneys.

(19)
Loan Agreement and Financial Covenants.  This Agreement is executed subject to
the terms and conditions of the Loan Agreement.  The Borrower hereby ratifies
and confirms, in its entirety, the Loan Agreement. The Borrower covenants and
agrees that, until final payment and performance in full of the indebtedness,
the Borrower shall furnish to Lender all financial information required under,
and otherwise comply with all terms and conditions of, the Loan Agreement.

(20)
Document Retention Policy.  The Borrower expressly acknowledges, understands and
agrees that Lender’s document retention policy involves the imaging of the Loan
Documents and the destruction of the paper originals thereof.  In connection
therewith, the Borrower hereby waives any and all rights it has or may have to
claim, for any and all purposes whatsoever, that the imaged copy of the Loan
Documents are not originals thereof.

(21)
Counterparts.  This Agreement may be executed in two or more counterparts, and
it shall not be necessary that the signatures of all parties hereto be contained
on any one counterpart hereof; each counterpart shall be deemed an original, but
all of which together shall constitute one and the same instrument.

(22)
Conflicts.  This Agreement relates to the Loan Documents defined above.  To the
extent that the provisions of this Agreement are in conflict with the other Loan
Documents, then and in that event the provisions this Agreement, as applicable,
shall control.

(23)
NO ORAL AGREEMENTS.  THIS AGREEMENT AND ALL OTHER LOAN DOCUMENTS EXECUTED BY ANY
OF THE PARTIES PRIOR TO OR SUBSTANTIALLY CONCURRENTLY HEREWITH TOGETHER
CONSTITUTES A WRITTEN AGREEMENT WHICH REPRESENTS THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES, AND THERE ARE NO UNWRITTEN AGREEMENTS
BETWEEN THE PARTIES.  THIS PROVISION IS INTENDED TO COMPLY WITH SECTION 26.02 OF
THE TEXAS BUSINESS AND COMMERCE CODE.

 
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(24)
RELEASE AND WAIVER OF CLAIMS.  IN CONSIDERATION OF (I) THE MODIFICATION OF
CERTAIN PROVISIONS OF THE LOAN DOCUMENTS, AS HEREIN PROVIDED, AND (II) THE OTHER
BENEFITS RECEIVED BY  THE BORROWER HEREUNDER,  THE BORROWER HEREBY RELEASES,
RELINQUISHES AND FOREVER DISCHARGES LENDER, AS WELL AS ITS PREDECESSORS
(INCLUDING, WITHOUT LIMITATION, PATRIOT), SUCCESSORS, ASSIGNS, AGENTS, OFFICERS,
DIRECTORS, EMPLOYEES AND REPRESENTATIVES (COLLECTIVELY, THE “RELEASED PARTIES”),
OF AND FROM ANY AND ALL CLAIMS, DEMANDS, ACTIONS AND CAUSES OF ACTION OF ANY AND
EVERY KIND OR CHARACTER, PAST OR PRESENT, WHICH  THE BORROWER MAY HAVE AGAINST
THE RELEASED PARTIES ARISING OUT OF OR WITH RESPECT TO (A) ANY RIGHT OR POWER TO
BRING ANY CLAIM AGAINST LENDER FOR USURY OR TO PURSUE ANY CAUSE OF ACTION
AGAINST LENDER BASED ON ANY CLAIM OF USURY, AND (B) ANY AND ALL TRANSACTIONS
RELATING TO THE LOAN DOCUMENTS OCCURRING PRIOR TO THE DATE HEREOF, INCLUDING,
WITHOUT LIMITATION, ANY LOSS, COST OR DAMAGE, OF ANY KIND OR CHARACTER, ARISING
OUT OF OR IN ANY WAY CONNECTED WITH OR IN ANY WAY RESULTING FROM THE ACTS,
ACTIONS OR OMISSIONS OF THE RELEASED PARTIES, INCLUDING, WITHOUT LIMITATION, ANY
BREACH OF FIDUCIARY DUTY, BREACH OF ANY DUTY OF FAIR DEALING, BREACH OF
CONFIDENCE, BREACH OF FUNDING COMMITMENT, UNDUE INFLUENCE, DURESS, ECONOMIC
COERCION, CONFLICT OF INTEREST, NEGLIGENCE, BAD FAITH, MALPRACTICE, INTENTIONAL
OR NEGLIGENT INFLICTION OF MENTAL DISTRESS, TORTIOUS INTERFERENCE WITH
CONTRACTUAL RELATIONS, TORTIOUS INTERFERENCE WITH CORPORATE GOVERNANCE OR
PROSPECTIVE BUSINESS ADVANTAGE, BREACH OF CONTRACT, DECEPTIVE TRADE PRACTICES,
LIBEL, SLANDER OR CONSPIRACY, BUT IN EACH CASE ONLY TO THE EXTENT PERMITTED BY
APPLICABLE LAW.

 
 
(25)
ARBITRATION AGREEMENT AND WAIVER OF JURY TRIAL. THE BORROWER AGREES TO BE BOUND
BY THE TERMS AND PROVISIONS OF THE BINDING ARBITRATION AGREEMENT AND WAIVER OF
JURY TRIAL PREVIOUSLY EXECUTED BY THE BORROWER IN CONNECTION WITH THE LOAN,
WHICH IS INCORPORATED BY REFERENCE HEREIN AND IS ACKNOWLEDGED AS RECEIVED BY THE
BORROWER.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK –
 
SIGNATURE PAGE FOLLOWS.]

 
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WITNESS THE EXECUTION HEREOF effective as of the Effective Date.

BORROWER:

MOODY NATIONAL HP GRAPEVINE TRUST,
a Delaware statutory trust

By:
MOODY NATIONAL HP GRAPEVINE
DST MANAGEMENT, LLC,
a Delaware limited liability company,
its Administrative Manager
 

By:
MOODY NATIONAL MANAGEMENT, L.P.,
a Texas limited partnership,
its Sole Member
 

By:
MOODY MANAGEMENT CORPORATION,
a Texas corporation,
its General Partner
 

By:
/s/ Brett C. Moody    
Brett C. Moody, President
 

LENDER:

MNHP NOTE HOLDER, LLC,
a Delaware limited liability company

By:
MOODY NATIONAL OPERATING
PARTNERSHIP I, L.P.,
a Delaware limited partnership,
its Manager
 

By:
MOODY NATIONAL REIT I, INC.,
a Maryland corporation,
its General Partner
 

By:
/s/ Brett C. Moody    
Brett C. Moody, CEO
 

 
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MASTER TENANT:

MOODY NATIONAL HP GRAPEVINE MT, L.P.,
A Delaware limited partnership

By:
MNGP HP GRAPEVINE MT, LLC,
a Delaware limited liability company,
its General Partner
 

By:
MOODY NATIONAL MANAGEMENT, L.P.,
a Texas limited partnership,
its sole Member
 

By:
MOODY MANAGEMENT CORPORATION,
a Texas corporation,
its General Partner
 

By:
/s/ Brett C. Moody    
Brett C. Moody, President
 

STATE OF TEXAS
§
 
§
COUNTY OF HARRIS
§

This instrument was acknowledged before me on this the ____ day of June, 2011,
by  Brett C. Moody, Individually, as President of Moody Management Corporation,
a Texas corporation, General Partner of Moody National Management, L.P., a Texas
limited partnership, Sole Member of Moody National HP Grapevine DST Management,
LLC, a Delaware limited liability company, Administrative Manager of Moody
National HP Grapevine Trust, a Delaware statutory trust, on behalf of the
corporation, the limited liability company, the limited partnership and the
trust.

         
Notary Public, State of Texas
                 
Printed or Typed Name of Notary
         
My commission expires: ________________

 
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STATE OF TEXAS
§
 
§
COUNTY OF HARRIS
§

This instrument was acknowledged before me on this the ____ day of June, 2011,
by  Brett C. Moody, ECO of Moody National REIT I, Inc., a Maryland corporation,
General Partner of Moody National Operating Partnership I, L.P., a Delaware
limited partnership, Manager of MNHP Note Holder, LLC, a Delaware limited
liability company, on behalf of the corporation, limited liability company and
the limited partnership.

         
Notary Public, State of Texas
                 
Printed or Typed Name of Notary
         
My commission expires: ________________

STATE OF TEXAS
§
 
§
COUNTY OF HARRIS
§

This instrument was acknowledged before me on this the ____ day of June, 2011,
by Brett C. Moody, President of Moody Management Corporation, a Texas
corporation, General Partner of Moody National Management, L.P., a Texas limited
partnership, Sole Member of MNGP HP Grapevine MT, LLC, a Delaware limited
liability company, General Partner of Moody National HP Grapevine MT, L.P., a
Delaware limited partnership, on behalf of the corporation, the limited
partnerships and the limited liability company.

         
Notary Public, State of Texas
                 
Printed or Typed Name of Notary
         
My commission expires: ________________

WHEN RECORDED, RETURN TO:
                 

 
 
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