Moody National Advisor I, LLC. 10-Q



 


EXHIBIT 10.5


 


PROMISSORY NOTE


 


	$13,250,000.00	New 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]