Document:

Moody National REIT II, Inc. POS AM

 

EXHIBIT 10.11

 

EXECUTED VERSION

 

 

RESIDENCE
INN BY MARRIOTT

RELICENSING FRANCHISE AGREEMENT

 

 

	franchisor:	MARRIOTT INTERNATIONAL, INC.
	 	 
	franchisee:	MOODY NATIONAL LANCASTER-AUSTIN MT, LLC
	 	 
	LOCATION:	1200 Barbara Jordan Blvd. Building 4,

Austin, TX 78723

  

 

DATE:
october 15, 2015

 

    	 

    	 

    

 

TABLE
OF CONTENTS

 

	 	Page
	1.   LICENSE	1
	1.1   Limited
Grant.	1
	1.2   Franchisor’s
Reserved Rights.	1
	2.   TERM	1
	2.1   Term.	1
	2.2   Not
Renewable.	1
	3.   FEES,
CHARGES AND COSTS	1
	3.1   Application
Fee; Expansion Fee.	1
	3.2   Franchise
Fees.	2
	3.3   Franchisor
Travel Costs.	2
	3.4   Other
Fees, Charges and Costs.	2
	3.5   Calculation
of Fees, Charges and Costs.	2
	3.6   Timing
of Payments and Performance of Services.	2
	3.7   Interest
on Late Payments.	2
	4.   HOTEL
CONSTRUCTION, RENOVATION AND MAINTENANCE	3
	4.1   Number
of Guestrooms; Expansion.	3
	4.2   Initial
Construction or Renovation of the Hotel.	3
	4.3   Periodic
Renovations.	3
	4.4   Design
Process.	3
	4.5   Maintenance.	4
	5.   FURNITURE,
FIXTURES, EQUIPMENT, INVENTORIES AND SUPPLIERS	4
	5.1   Uniformity
of System.	4
	5.2   Suppliers.	4
	6.   ADVERTISING
AND MARKETING; PRICINGS, RATES AND RESERVATIONS	4
	6.1   Franchisee’s
Local Advertising and Marketing Programs.	4
	6.2   Marketing
Fund.	5
	6.3   Additional
Marketing Programs.	6
	6.4   Pricing,
Rates and Reservations.	6
	7.   ELECTRONIC
SYSTEMS	7
	7.1   Systems
Installation and Use.	7
	7.2   Reservation
System.	7
	7.3   Electronic
Systems Provided Under License.	7
	7.4   Access
to Information.	7
	8.   HOTEL
OPERATIONS	7
	8.1   Operator
of the Hotel.	7
	8.2   Employees.	8
	8.3   Compliance
with the Standards.	8
	8.4   System
Promotion; No Diversion to Other Businesses.	9
	9.   TRAINING,
COUNSELING AND ADVISORY SERVICES	9
	9.1   Training.	9
	9.2   Counseling
and Advisory Services.	9

 

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	10.   SYSTEM
AND STANDARDS; FRANCHISEE ASSOCIATION	9
	10.1   Compliance
with System and Standards.	9
	10.2   Modification
of the System and Standards.	9
	10.3   Franchisee
Association.	10
	11.   PROPRIETARY
MARKS AND INTELLECTUAL PROPERTY	10
	11.1   Franchisor’s
Representations Concerning the Proprietary Marks.	10
	11.2   Franchisee’s
Use of Intellectual Property and the System.	10
	11.3   Franchisee’s
Use of Other Marks.	12
	11.4   Websites
and Domain Names.	12
	12.   CONFIDENTIAL
INFORMATION; DATA PROTECTION LAWS	12
	12.1   Confidential
Information.	12
	12.2   Data
Protection Laws.	13
	13.   ACCOUNTING
AND REPORTS; TAXES	13
	13.1   Accounting.	13
	13.2   Books,
Records and Accounts.	13
	13.3   Accounting
Statements.	13
	13.4   Franchisor
Examination and Audit of Hotel Records.	14
	13.5   Taxes.	14
	14.   INDEMNIFICATION	15
	15.   INSURANCE	15
	15.1   Insurance
Required.	15
	15.2   Other
Requirements.	16
	16.   FINANCING
OF THE HOTEL	16
	17.   TRANSFERS	16
	17.1   Franchisee’s
Transfer Rights.	16
	17.2   Transfers
Not Requiring Notice or Consent.	16
	17.3   Transfers
Requiring Notice but Not Consent.	17
	17.4   Transfers
Requiring Notice and Consent.	18
	17.5   Proposed
Transfer to Competitor and Right of First Refusal.	19
	17.6   Restricted
Persons.	20
	17.7   Transfers
by Franchisor.	20
	18.   PROSPECTUS
REVIEW	20
	18.1   Franchisor’s
Review of Prospectus.	20
	18.2   Exemption
from Review.	21
	19.   DEFAULT
AND TERMINATION	21
	19.1   Immediate
Termination.	21
	19.2   Default
with Opportunity to Cure.	22
	19.3   Suspension
of Reservation System.	23
	19.4   Damages.	23

 

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	20.   POST-TERMINATION	24
	20.1   Franchisee
Obligations.	24
	20.2   Franchisor’s
Rights on Expiration or Termination.	25
	21.   CONDEMNATION
AND CASUALTY	25
	21.1   Condemnation.	25
	21.2   Casualty.	26
	22.   COMPLIANCE
WITH APPLICABLE LAW; LEGAL ACTIONS	26
	22.1   Compliance
with Applicable Law.	26
	22.2   Notice
of Legal Actions.	26
	23.   RELATIONSHIP
OF PARTIES	26
	24.   GOVERNING
LAW; INTERIM RELIEF; COSTS OF ENFORCEMENT; WAIVERS	27
	24.1   Governing
Law and Jurisdiction.	27
	24.2   Equitable
Relief.	27
	24.3   Costs
of Enforcement.	27
	24.4   WAIVER
OF PUNITIVE DAMAGES.	27
	24.5   WAIVER
OF JURY TRIAL.	27
	25.   NOTICES	27
	26.   REPRESENTATIONS
AND WARRANTIES	28
	26.1   Existence;
Authorization; Ownership; Other Representations.	28
	26.2   Additional
Franchisee Acknowledgments and Representations.	28
	27.   MISCELLANEOUS	29
	27.1   Counterparts.	29
	27.2   Construction
and Interpretation.	29
	27.3   Reasonable
Business Judgment.	30
	27.4   Consents
and Approvals.	30
	27.5   Waiver.	31
	27.6   Entire
Agreement.	31
	27.7   Amendments.	31
	27.8   Survival.	31
	EXHIBIT
A KEY TERMS	A-1
	ATTACHMENT
ONE TO EXHIBIT A     OWNERSHIP INTEREST IN FRANCHISEE	A-4
	EXHIBIT
B DEFINITIONS	B-1
	EXHIBIT
C CHANGE OF OWNERSHIP	C-1

 

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RELICENSING
FRANCHISE AGREEMENT

 

This
Agreement between Franchisor and Franchisee is executed and becomes effective on the Effective Date.

 

RECITALS

 

A.Franchisor
owns the System and Franchisee has requested a license to use the System to operate the Hotel as a System Hotel at the Approved
Location.

 

B.Franchisor
has agreed to grant a license to Franchisee subject to the terms of this Agreement.

 

C.Guarantor
will provide the Guaranty.

 

NOW,
THEREFORE, in consideration of the promises in this Agreement and other good and valuable consideration, the receipt and sufficiency
of which are acknowledged, Franchisor and Franchisee agree as follows:

 

	1.	LICENSE

 

1.1 Limited
Grant.Franchisor grants to Franchisee a limited,
non-exclusive license to use the Proprietary Marks and the System to operate the Hotel as a System Hotel at the Approved
Location under the terms of this Agreement.

 

1.2Franchisor’s
Reserved Rights.

 

A.Development
Activities. Franchisee agrees that Franchisor and its Affiliates reserve the right to conduct Development Activities at any
location, other than the Approved Location, without notice to Franchisee, subject to Item 9 of Exhibit A. Franchisee covenants
not to do anything that may interfere with Franchisor’s and its Affiliates’ exercise of such right to conduct Development
Activities.

 

B.Territorial
Rights. Franchisee agrees that it is not entitled to any territorial rights or exclusivity, except as stated in Item 9 of
Exhibit A.

 

C.Use
of the System. Franchisee acknowledges that Franchisor and its Affiliates will allow other Franchisor Lodging Facilities to
use various parts of the System and may allow other lodging facilities to use various parts of the System under affiliation or
marketing agreements.

 

	2.	TERM

 

2.1 Term. The
term of this Agreement is stated in Item 4 of Exhibit A (the “Term”).

 

2.2
Not Renewable. This Agreement expires on the last day of the Term, and the rights granted under it are not renewable and
Franchisee has no expectation of any right to extend the Term.

 

	3.	FEES, CHARGES AND COSTS 

 

3.1
Application Fee; Expansion Fee. Franchisee has paid Franchisor the non-refundable application fee stated in Item
10 of Exhibit A. If Franchisor approves an increase in the number of Guestrooms in the Hotel under Section 4.1, Franchisee
will pay an expansion fee equal to the then-current per-Guestroom charge for calculating the application fee for System Hotels,
multiplied by the number of additional Guestrooms.

 

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3.2 Franchise Fees. Beginning
on the Opening Date, Franchisee will pay Franchisor for each month an amount equal to the percentage of Gross Room Sales stated
in Item 11 of Exhibit A for such month (the “Franchise Fees”). Franchisee will not offer complimentary
or reduced-price Guestrooms or food and beverage to benefit any other business at or outside of the Hotel.

 

3.3 Franchisor Travel Costs. If
Franchisor requests, Franchisee will reimburse Franchisor for all Travel Costs for individuals designated by Franchisor
to provide training, inspections or services for the Hotel, including counseling and advisory services, which will not exceed
the amounts permissible under Franchisor’s corporate travel policies. If the Hotel is not in a sold-out position,
Franchisee will provide complimentary lodging at the Hotel to such individuals while they are providing such training,
inspections, or services, and to Franchisor’s representatives or independent auditors while conducting
audits.

 

3.4 Other
Fees, Charges and Costs. Franchisee will pay the fees, charges and costs in the following Sections: Section 4.4 (Design
Process); Sections 6.2 and 6.3 (Marketing Fund and Additional Marketing Programs); Section 7 (Electronic Systems); Section
8.3.A. (F&B Support); Section 8.3.C. (Inspections); Section 9.1 (Training); Section 16 (Comfort Letter);
Section 17 (Transfer); Section 20.1.B. (Termination); and Exhibit C (Inspections; Additional Work; Site Visits;
Extensions). Franchisee will also pay Franchisor for: (i) any goods or services purchased, leased or licensed by
Franchisee from Franchisor, including any costs related to purchasing, installing and upgrading any Electronic Systems;
(ii) any optional or mandatory programs in which Franchisee participates; (iii) any costs of System modifications; and
(iv) any other amounts due under this Agreement and any other Marriott Agreement.

 

3.5 Calculation
of Fees, Charges and Costs. The fees, charges and costs
under Section 3.4 will be computed on a fair and consistent basis among similarly situated System Hotels. Franchisor may
change such fees, charges and costs to reflect: (i) any increase or decrease in the costs of providing the relevant
goods or services; (ii) any change in the method Franchisor uses to determine allocation of the applicable charges; or
(iii) any change in the competitive needs of the System.

 

3.6Timing
of Payments and Performance of Services.

 

A.Timing
of Payments. Franchise Fees are due within 15 days after the end of each month. All other payments are due as invoiced.
All payments will be made by wire transfer to the accounts designated by Franchisor or by such other method as Franchisor approves.

 

B.Affiliates
and Designees. Any service or obligation of Franchisor under this Agreement may be performed by an Affiliate or designee of
Franchisor. Franchisor may designate that payment be made to the Person performing the service. Any reference in this Agreement
to Franchisor concerning payments or performance of services includes such Affiliates and designees. Any designation for the performance
of services will not relieve Franchisor or Franchisee of any of their obligations under this Agreement.

 

3.7 Interest
on Late Payments. If any payment due under this Agreement is not received by its due date, such payment will be overdue,
and Franchisor may require Franchisee to pay interest that will accrue at a rate of 18% per annum (or, if less, the maximum
interest rate permitted by Applicable Law) from the date such overdue amount was due until paid. Franchisor’s right to
receive interest is in addition to any other remedies Franchisor may have.

 

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	4.	HOTEL CONSTRUCTION, RENOVATION AND MAINTENANCE

 

4.1
Number of Guestrooms; Expansion. The Hotel will have
the number of Guestrooms stated in Item 7 of Exhibit A or such other number approved by Franchisor. Franchisee may expand
the Hotel or build additional Guestrooms in compliance with this Agreement only with Franchisor’s prior written approval.
If additional Guestrooms are approved, Franchisee will pay an expansion fee under Section 3.1.

 

4.2
Initial Construction or Renovation of the Hotel. Franchisee will timely start and complete the initial construction
or renovation of the Hotel, as applicable, to Franchisor’s satisfaction in accordance with Section 4.4, Exhibit C
and the Standards (the “Initial Work”).

 

 4.3
Periodic Renovations. Franchisee will timely start and
complete the periodic renovation of all Guestrooms and Public Facilities to Franchisor’s satisfaction in accordance with
Section 4.4 and the Standards, including replacing Soft Goods and Case Goods periodically as required by the Standards (“Periodic
Renovations”). At the time of any replacement of FF&E, Franchisor may require Franchisee to upgrade the rest of
the Hotel to conform to the Standards applicable to similarly situated System Hotels.

 

4.4 Design
Process. Franchisee will obtain the Design Criteria from Franchisor
within 10 days of the Effective Date for the Initial Work, and in a timely manner for any Periodic Renovation. In connection
with the Initial Work and any Periodic Renovation, Franchisee will comply with the following requirements (the
“Design Process”):

 

A.Design
Team. For the Initial Work, and as needed for Periodic Renovations, Franchisee will retain a qualified registered architect,
engineer and interior designer, and based on the nature of the project, Franchisor may require that Franchisee retain other specialty
consultants. Franchisee will provide Franchisor the name, address and relevant work experience on similar projects for any such
Person that Franchisee proposes to retain, and Franchisor will have 30 days after receipt of such information to notify Franchisee
of its election to consent or withhold its consent. Franchisor’s election to consent or withhold its consent will be based
on prior experiences with such Person and such Person’s reputation and experience on similar projects. If Franchisor does
not respond to Franchisee within 30 days after Franchisor’s receipt of such information, then Franchisee may retain such
Person. Neither Franchisor’s failure to respond nor Franchisor’s consent to the use of such Person will be deemed
an endorsement or recommendation by Franchisor. Franchisor is not liable for the unsatisfactory performance of any Person retained
by Franchisee.

 

B.Submission
of Plans. For the Initial Work and Periodic Renovations, Franchisee will adapt the Design Criteria to the Hotel and Applicable
Law, including Accessibility Requirements. For the Initial Work, and if Franchisor requests for any Periodic Renovations, Franchisee
will prepare and submit Plans electronically in the phases and with the detail required by the Standards. The Plans will not deviate
from the Design Criteria unless previously approved by Franchisor, and any such deviations will be clearly designated in a separate
document delivered along with the Plans.

 

C.Review
of Plans. Franchisor will promptly review the Plans only for compliance with the Design Criteria and any applicable property
improvement plan, and in the case of the Initial Work, to confirm that the number, configuration and location of Guestrooms and
the size, configuration and location of Public Facilities are as previously approved by Franchisor. If Franchisor determines that
the Plans do not satisfy such requirements, Franchisor may require changes and Franchisee will deliver revised Plans incorporating
such changes. If Franchisor determines that the Plans are incomplete, Franchisor may defer its review of the Plans until it receives
complete Plans. Based on the level of complexity of the Plans, the custom nature of the project or the services requested or needed,
Franchisor may charge its then-current fee for reviewing the Plans and inspecting the Hotel plus Travel Costs. Franchisee will
not begin the Initial Work or any Periodic Renovation requiring submission of Plans until Franchisor confirms in writing that
such Plans comply with such requirements. On receipt of Franchisor’s confirmation, Franchisee will promptly submit the final
Plans electronically. Once finalized, the Plans will not be changed without Franchisor’s prior consent. Franchisee will
ensure that the renovation of the Hotel is completed in accordance with the Plans.

 

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D.Compliance
with Applicable Law. Franchisee (and not Franchisor or its Affiliates) is responsible for ensuring that the Plans comply with
Applicable Law, including Accessibility Requirements. Franchisor and its Affiliates will have no liability or obligation concerning
the means, methods or techniques used in constructing or renovating the Hotel. Franchisee will not reproduce, use or permit the
use of any Design Criteria or Plans other than for the Hotel.

 

4.5 Maintenance. Franchisee
will maintain the Hotel in good repair and first-class condition and in conformity with Applicable Law and the Standards.
Franchisee will make repairs, alterations and replacements to the Hotel as required by the Standards. Franchisee will not
make any material alterations to the Hotel without Franchisor’s prior consent, unless such alterations are required by
Applicable Law or for the continued safe and orderly operation of the Hotel.

 

	5.	FURNITURE, FIXTURES, EQUIPMENT, INVENTORIES AND SUPPLIERS

 

5.1
Uniformity of System. Franchisee will use only such FF&E, Inventories and Fixed Asset Supplies that comply with the Standards.
The requirements of this Section 5.1 are to ensure that items used at System Hotels are uniform and of high quality to maintain
the identity, integrity and reputation of the System. Before purchasing FF&E to be used in constructing or renovating the
Hotel, if requested by Franchisor, Franchisee will prepare furnished models of Guestrooms, color boards and drawings for Franchisor’s
confirmation that such proposed FF&E will meet the Standards. Franchisor will promptly respond to Franchisee’s proposal. 

 

5.2
Suppliers. Franchisor may designate suppliers, including Franchisor, for certain items related to FF&E, Inventories
and Fixed Asset Supplies. Franchisee may propose new suppliers by delivering sufficient information and samples for
Franchisor’s confirmation that such item meets the Standards and the proposed supplier is capable of providing such
item in accordance with the Standards. Franchisor may require: (i) reimbursement for the cost of such review; (ii) that such
supplier have insurance protecting Franchisor and Franchisee; and (iii) that any supplier using the Intellectual
Property enter into an agreement for its use. Franchisor will have no liability for damage to any sample. Franchisor may
refuse to permit future purchases if the supplier fails to meet the requirements of this Section 5.2 or the
Standards.

 

	6.	ADVERTISING AND MARKETING; PRICINGS, RATES AND RESERVATIONS

 

6.1Franchisee’s
Local Advertising and Marketing Programs.

 

A.Local
Advertising. Franchisee will undertake local advertising, marketing, promotional, sales and public relations programs and
activities for the Hotel, including preparing and using any Marketing Materials, in accordance with the Standards.

 

B.Use
of Signs and Marketing Materials. Franchisee will use signs and other Marketing Materials only in the places and manner approved
or required by Franchisor and in accordance with the Standards and Applicable Law. Franchisee will deliver samples of Marketing
Materials not provided by Franchisor and obtain prior approval from Franchisor before any use. If Franchisor withdraws its approval,
Franchisee will promptly stop using such Marketing Materials. Any Marketing Materials developed by Franchisee may be used or modified
by other Franchisor Lodging Facilities without compensation to Franchisee.

 

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6.2Marketing
Fund.

 

A.Marketing
Fund Activities. To promote general public recognition of the Proprietary Marks and use of System Hotels, Franchisor may undertake
the following activities (the “Marketing Fund Activities”):

 

1.brand
strategy and brand development activities;

 

2.the
creation, production, placement and distribution of Marketing Materials in any form of media;

 

3.advertising,
marketing, promotional, public relations, inventory management, reservation activities and sales campaigns, programs, sponsorships,
seminars and other sales activities;

 

4.market
research and oversight and management of the guest satisfaction program and the Loyalty Programs; and

 

5.the
retention or employment of personnel, advertising agencies, marketing consultants and other professionals or specialists to assist
in the development, implementation and administration of any such activities.

 

These activities
may be conducted on a local, regional, national or Category basis. Franchisor may modify the Marketing Fund Activities from time
to time.

 

B.Marketing
Fund Contribution. Beginning on the Opening Date, Franchisee will pay Franchisor for each month an amount equal to the percentage
of Gross Room Sales stated in Item 12.A of Exhibit A for such month, which Franchisor will use for the Marketing Fund
Activities (the “Marketing Fund Contribution”). Franchisor may change the method of funding the Marketing Fund
Activities (including by establishing methods of funding Marketing Fund Activities other than by the Marketing Fund Contribution)
or the amount of the Marketing Fund Contribution, subject to Item 12.B of Exhibit A, and Franchisee will be bound by any
such changes. System Hotels operated by Franchisor’s Affiliates will make contributions to the Marketing Fund at the same
percentage of Gross Room Sales required of System franchisees.

 

C.Benefits.
Franchisor may use the Marketing Fund for purposes that benefit or include System Hotels as a whole, groups of System Hotels
and other Franchisor Lodging Facilities in addition to System Hotels. Franchisor has no obligation to ensure that any particular
System Hotel, including the Hotel, benefits from Marketing Fund Activities on a pro-rata or other basis or that the Hotel will
benefit from the Marketing Fund Activities proportionate to the Marketing Fund Contribution paid by Franchisee.

 

D.Allotment
of Marketing Materials. If Marketing Materials are produced using funds from the Marketing Fund, all System Hotels will receive
an allotment of relevant materials. If Franchisee requests Marketing Materials in addition to the portion allotted to Franchisee,
Franchisor may require Franchisee to pay additional costs.

 

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E.No
Fiduciary Duty. Franchisor and its Affiliates do not hold the Marketing Fund Contribution as a trustee or as a trust fund
and have no fiduciary duty to Franchisee for the Marketing Fund. The Marketing Fund Contribution may be commingled with other
money of Franchisor and its Affiliates and used to pay all costs, including administrative costs, salaries and overhead, and collection
and accounting costs, incurred by Franchisor or any of its Affiliates for the Marketing Fund and the Marketing Fund Activities.
Franchisor or its Affiliates may (but are not obligated to): (i) loan money for Marketing Fund Activities and charge interest
on any such loan; and (ii) use the Marketing Fund Contribution to repay any such loan plus interest. On request, Franchisor will
provide to Franchisee an unaudited accounting of the uses of amounts in the Marketing Fund for any fiscal year of Franchisor if
such request is made between 90 and 180 days after the end of such fiscal year.

 

F.Permitted
Changes. Franchisor may change the local, country, regional, continental or international scope of the Marketing Fund or the
Marketing Fund Activities and discontinue the Marketing Fund or the Marketing Fund Activities.

 

6.3
Additional Marketing Programs. Franchisor may provide, and Franchisee will participate in, Additional Marketing Programs
that are mandatory for similarly situated System Hotels. Franchisee may elect to participate in optional Additional Marketing
Programs. Franchisee will pay for Additional Marketing Programs in which it participates on the same basis as other
participating System Hotels.

 

6.4Pricing,
Rates and Reservations.

 

A.Pricing
and Rates. Franchisee is responsible for setting its own prices and rates for Guestrooms and other products and services at
the Hotel, including determining any prices or rates that appear in the Reservation System. Franchisor may, however: (i) prohibit
certain types of charges or billing practices that Franchisor determines are misleading or detrimental to the System, including
price-gouging or incremental fees for services that guests would normally expect to be included in the Guestroom charge; (ii) require
that Franchisee price consistently in all distribution channels; or (iii) impose other pricing requirements permitted by
Applicable Law.

 

B.Pricing
Recommendations; Participation in Programs. Franchisor may recommend prices or rates for the products and services offered
by Franchisee or require participation in various sales or inventory management programs or promotions offered by Franchisor.
Franchisor’s recommendations are not mandatory; Franchisee is ultimately responsible for determining the prices or rates
at which it offers its products and services, and Franchisor’s recommendations are not a representation or warranty by Franchisor
that the use of such recommended prices or rates will produce, increase, or optimize Franchisee’s profits. Franchisor will
have no liability for any such recommendations, including those made in connection with any sales activity or Inventory Management.
Franchisor may require Franchisee to participate in Inventory Management or may act as Sales Agent for Franchisee. If Franchisor
is acting as Sales Agent for Franchisee, Franchisee consigns hotel inventory to Franchisor, and Franchisee retains all risk of
loss of unsold inventory or inventory sold at a reduced price.

 

C.Honoring
Reservations. Franchisee will provide its prices and rates for use in the Reservation System in accordance with the Standards.
Franchisee will: (i) honor any prices, rates or discounts that appear in the Reservation System or elsewhere; (ii) honor
all reservations made through the Reservation System or that are confirmed; and (iii) not charge any Hotel guest a rate higher
than the rate specified for the Hotel guest’s reservation in the Reservation System or, if not made through the Reservation
System, in the reservation confirmation. Franchisee will also honor all pricing and terms for any other product or service offered
in connection with the Hotel.

 

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	7.	ELECTRONIC SYSTEMS

 

7.1 Systems
Installation and Use. At its cost, Franchisee will purchase or
lease, install, maintain and use at the Hotel all mandatory Electronic Systems (and optional Electronic Systems that
Franchisee elects to use) in compliance with the Standards or other approved specifications. Franchisee will pay all
Electronic Systems Fees to Franchisor. Franchisee will not use the Electronic Systems for any purpose except for the benefit
of the Hotel.

 

7.2
Reservation System. Subject to Section 19.3, Franchisor will make
the Reservation System available to the Hotel. Franchisee will cause the Hotel to participate in the Reservation System
in accordance with the Standards and this Agreement. Franchisor is not required to make the Reservation System available to
the Hotel for any reservations occurring after the expiration or termination of this Agreement.

 

7.3 Electronic
Systems Provided Under License. As a condition to using
the Electronic Systems, Franchisee will execute the Electronic Systems License Agreement. The Electronic Systems that
are proprietary to Franchisor or third-party vendors, as applicable, will remain their sole property. Franchisee will treat
the Electronic Systems as confidential at all times. The Electronic Systems may be modified, replaced or become obsolete, and
new Electronic Systems may be created to meet the needs of the System and changes in technology. If Franchisor determines
that it is necessary to amend or replace the Electronic Systems License Agreement because of such events, Franchisee will
execute the then-current form of, or an amendment to, the Electronic Systems License Agreement.

 

7.4
Access to Information. Franchisor may access the Electronic Systems to obtain marketing, sales and guest information and Franchisee
will take all actions reasonably necessary to provide such access. Franchisor and its Affiliates may use any data related to the
Hotel, Franchisee and its Affiliates obtained through the Electronic Systems, including Guest Profile Data.

 

	8.	HOTEL OPERATIONS

 

8.1Operator
of the Hotel.

 

A.Franchisor
Consent Required. The Hotel will be operated only by Franchisee or a Management Company, in either case, only with the prior
consent of Franchisor. Any Management Company and Franchisee will execute and deliver to Franchisor a Management Company Acknowledgment
in the form contained in the then-current Disclosure Document. Franchisee will at all times be responsible for complying with
the obligations of this Agreement even though Franchisee may retain a Management Company. Franchisor has consented to the Person
identified in Item 8 of Exhibit A to operate the Hotel. Franchisor’s consent may be withdrawn at any time if Franchisor
determines that such Person is no longer qualified to operate the Hotel.

 

B.Conditions
for Consent. Franchisor may withhold its consent to any proposed management company that: (i) Franchisor determines (a)
is not financially capable, (b) does not have the managerial skills or operational capacity required to operate the Hotel
in accordance with the Standards and this Agreement or (c) is a Competitor, an Affiliate of a Competitor, or the principal operator
of hotels for a Competitor; (ii) does not provide Franchisor with all information and access that Franchisor reasonably requests;
or (iii) has (or any of its Affiliates have) (a) been convicted of a Serious Crime, (b) engaged in conduct that Franchisor
determines may adversely affect the Hotel, the System or Franchisor’s interests or (c) been a party to any material civil
litigation with Franchisor or its Affiliates. Franchisor will not consent to any proposed management company that is a Restricted
Person, is an Affiliate of a Restricted Person, or in which a Restricted Person has an interest. Franchisor has the right to review
any management agreement between Franchisee and its proposed management company.

 

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C.Change
in Circumstances. If there is a change in Control of the Management Company or if the Management Company becomes a Competitor
(or an Affiliate of a Competitor) or a Restricted Person (or an Affiliate of a Restricted Person), or if Management Company becomes
the principal operator for a Competitor or if there is a material adverse change to the financial condition or operational capacity
of the Management Company, Franchisee will promptly notify Franchisor of any such event together with such additional information
that Franchisor may reasonably request. Based on these changed circumstances, Franchisor may require Franchisee to terminate its
agreement with such Management Company and retain a replacement management company that will be subject to Franchisor’s
consent. After Franchisor receives such notice and any such additional information Franchisor reasonably requests, Franchisor
will respond to Franchisee within 30 days.

 

8.2Employees.

 

A.Hotel
Staffing. Franchisee will ensure that suitable qualified individuals are employed at the Hotel sufficient to staff the Hotel.
Managers at the Hotel will devote their full time to the management and operation of the Hotel and supervision of employees. Franchisee
will use its best efforts to ensure that Hotel employees at all times comply with the Standards.

 

B.Hotel
Employment Matters. All employment decisions at the Hotel will be made solely by Franchisee or the Management Company. Franchisor
does not direct or control the employment policies or decisions for the Hotel. All employees at the Hotel are solely employees
of Franchisee or the Management Company, not Franchisor, and neither Franchisee nor the Management Company is Franchisor’s
agent for any purpose with regard to Hotel employees. Franchisee or the Management Company will promptly inform Franchisor whenever
it hires a general manager.

 

C.Communication
with Managers and Management Company. Franchisor may communicate directly with the managers at the Hotel and the Management
Company about day-to-day operations of the Hotel and Franchisor may rely on such statements of the managers and Management Company.
Such communications will not affect the requirements of Section 25 or Section 27.7. Franchisor will under no circumstances direct
or control such Hotel operations.

 

8.3Compliance
with the Standards.

 

A.Required
Activities. Franchisee will: (i) operate the Hotel at all times in compliance with the Standards; (ii) fully participate in
the Quality Assurance Program and all mandatory programs for System Hotels (which may require providing complimentary guestrooms
and refunds); (iii) offer all guest services required for System Hotels (which may include complimentary services); (iv) make
all payments due in accordance with the terms of all contracts and invoices related to the Hotel, except for payments that are
disputed in good faith; and (v) provide all food and beverage service in the Hotel in compliance with the Standards and Applicable
Law and pay the F&B Support Fee to Franchisor.

 

B.Prohibited
Activities. Except as permitted in the Standards, Franchisee will not, without Franchisor’s prior approval: (i) knowingly
permit gambling to take place at the Hotel or use the Hotel for any casino, lottery, or other type of gaming activities, or directly
or indirectly associate with any gaming activity; (ii) knowingly permit adult entertainment activities at the Hotel; or (iii) sell,
display or use in the Hotel any vending machines, honor bars, video or other entertainment devices or similar products.

 

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C.Inspection
Rights. Franchisee will permit Franchisor’s representatives to enter and inspect the Hotel at all reasonable times to
confirm that Franchisee is complying with the terms of this Agreement and the Standards, and to test the equipment, food products
and supplies at the Hotel. In conducting such inspections, Franchisor will not unduly interfere with the operation of the Hotel.
Franchisee will pay any costs related to such inspections, including costs of third-party inspectors, and costs of the development,
ongoing sustainment and field support and a reasonable return on capital related to the inspection component of the Quality Assurance
Program.

 

8.4System
Promotion; No Diversion to Other Businesses.

 

A.System
Promotion. Franchisee will use reasonable efforts to encourage and promote the use of System Hotels and will refer reservation
requests that cannot be fulfilled by the Hotel to other System Hotels or Franchisor Lodging Facilities in accordance with the
Standards.

 

B.No
Diversion to Other Businesses. Franchisee will not use any part of the Hotel for any business other than operating a System
Hotel. Franchisee will not use any part of the Hotel or the System to divert business to, or promote, any other business at or
outside of the Hotel. This prohibition includes advertising hotels, vacation or timeshare facilities or any similar product sold
on a periodic basis not operated under a trade name or trademark owned by Franchisor or any of its Affiliates (including those
which Franchisee or its Affiliates operate or in which they have an Ownership Interest).

 

	9.	TRAINING, COUNSELING AND ADVISORY SERVICES

 

9.1
Training. The Hotel will at all times be managed by personnel
who have successfully completed all mandatory training under the Standards. Franchisor may offer optional training related to
operating System Hotels. Franchisee will pay (i) all tuition, supplies, and Travel Costs and allocations of internal costs and
overhead of Franchisor and its Affiliates for any training in which Franchisee participates; (ii) an annual charge based on an
allocation among System Hotels for the costs of developing and providing such training; and (iii) a charge for the general manager
conference, regardless of whether Franchisee’s personnel attend. Franchisee will provide training required by Franchisor
for personnel working at the Hotel. 

 

9.2 Counseling and Advisory Services.
Franchisor will make representatives available at Franchisor’s
designated offices or at the Hotel to consult with Franchisee about the design and operation of the Hotel as a System Hotel. Franchisor
may require Franchisee to pay the Travel Costs of such representatives who consult at the Hotel.

 

	10.	SYSTEM AND STANDARDS; FRANCHISEE ASSOCIATION

 

10.1
Compliance with System and Standards. Franchisee agrees
that conformity with all aspects of the System and the Standards is essential to maintain the uniform quality and guest service
of System Hotels. Franchisee will comply at all times with the Standards and operate the Hotel in compliance with the System and
the Marriott Agreements. Franchisor will make the Standards available to Franchisee through the Electronic Systems or in such
other manner Franchisor deems appropriate. The Standards will at all times remain the sole property of Franchisor and its Affiliates.

 

10.2 Modification
of the System and Standards. Franchisor and its Affiliates may
modify the System and Standards, and such modifications may include materially changing, adding or deleting elements of the
System or the Standards. Franchisee agrees that modifications to the System may be made for all System Hotels or for any
Category of System Hotels. Franchisor may allocate the costs of System modifications among System Hotels or any Category of
System Hotels on a fair and consistent basis. Such costs may include development costs and a reasonable return on
capital.

 

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10.3
Franchisee Association. If Franchisor creates or approves the creation of an association organized to consider and make
recommendations on matters related to the operation of System Hotels (the “Association”), Franchisee,
Franchisor and other System Hotel franchisees will be eligible for membership. Franchisee will pay any Association dues and
assessments, which will be consistently applied to all System Hotel franchisees. The Association will vote on bylaws and
election of officers. Franchisor will regard recommendations of the Association as expressing the consensus of members of the
Association.

 

	11.	PROPRIETARY MARKS AND INTELLECTUAL PROPERTY

 

11.1Franchisor’s
Representations Concerning the Proprietary Marks.

 

A.Representations.
Franchisor represents that:

 

1.Franchisor
and its Affiliates have the right to grant Franchisee the right to use the Proprietary Marks in accordance with this Agreement;
and

 

2.Franchisor
and its Affiliates will take all steps reasonably necessary to preserve and protect the ownership and validity of the Proprietary
Marks. Franchisor will not be required to maintain any registration for any Proprietary Marks that Franchisor determines, in its
sole discretion, cannot or should not be maintained.

 

B.Indemnification
for Infringement Claims. Franchisor will indemnify and hold Franchisee harmless against claims that Franchisee’s use
of the Proprietary Marks in accordance with this Agreement infringes the rights of any third party unrelated to Franchisee, if
Franchisee: (i) is in compliance with this Agreement, (ii) gives prompt notice of any such claim to Franchisor, (iii) permits
Franchisor to have sole control over the defense and settlement of the claim and (iv) cooperates fully with Franchisor in defending
or settling the claim.

 

11.2Franchisee’s
Use of Intellectual Property and the System.

 

A.Use
of the Intellectual Property and the System. Franchisee agrees that:

 

1.Franchisee
will use the Intellectual Property and the System only for the operation of the Hotel and only in the form and manner as provided
in the Standards or approved by Franchisor. Franchisee will offer or sell only those goods and services under the Proprietary
Marks that are of a nature and quality that comply with the Standards. Any use of the System not authorized by Franchisor will
constitute an infringement of Franchisor’s rights and a default under Section 19.2 of this Agreement;

 

2.Franchisee
will use the Proprietary Marks only in substantially the same places, combination, arrangement and manner as provided in the Standards
or approved by Franchisor;

 

3.Franchisee
will identify itself as a franchisee or licensee of Franchisor and the owner or operator of the Hotel only in the form and manner
as provided in the Standards. Franchisee will not use any Proprietary Marks in any manner that could imply that Franchisee has
an Ownership Interest in the Proprietary Marks;

 

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4.Franchisee
has no right to, and will not, Transfer, sublicense or allow any Person to use any part of the System, unless permitted in this
Agreement;

 

5.Franchisee
will not use any part of the System to incur any obligation or indebtedness on behalf of Franchisor or any of its Affiliates;

 

6.Franchisee
will not use any of the Proprietary Marks or any names or marks that consist of, contain or are similar to or an abbreviation
of any Proprietary Marks, in Franchisor’s sole opinion (“Similar Marks”), as part of Franchisee’s
corporate or legal name, in connection with any business activity except the Hotel, or as a road name or address, whether alone
or in combination with Other Marks;

 

7.Franchisee
will not register or apply to register any of the Proprietary Marks or Similar Marks, whether alone or in combination with other
trademarks;

 

8.Franchisee
will notify Franchisor of any required business, trade, fictitious, assumed or similar name registration, and indicate in the
registration that Franchisee may use such name only in accordance with this Agreement;

 

9.if
litigation involving the Intellectual Property is instituted or threatened against Franchisee, or a claim of infringement involving
the Intellectual Property is made against Franchisee, or Franchisee becomes aware of any infringement of the Intellectual Property,
Franchisee will promptly notify Franchisor and will cooperate fully in any action, defense or settlement of such matters. Franchisee
will not make any demand, serve any notice, institute any legal action or negotiate, litigate, compromise or settle any controversy
about any such matter without first obtaining Franchisor’s prior consent, which may be withheld in Franchisor’s sole
discretion. Franchisor will have the right to bring any action and to join Franchisee as a party to any action involving the Intellectual
Property; and

 

10.if
Franchisor believes, in its sole discretion, that Franchisee’s use of the Intellectual Property does not conform with the
Marriott Agreements or the Standards, then Franchisee will immediately stop the non-conforming use on notice from Franchisor.

 

B.Ownership
of the System. Franchisee agrees that:

 

1.Franchisor
and its Affiliates are the owners or licensees of all right, title and interest in and to the System (except certain Electronic
Systems provided by third parties), and all goodwill arising from Franchisee’s use of the System, including the Proprietary
Marks, will inure solely and exclusively to the benefit of Franchisor and its Affiliates. On the expiration or termination of
this Agreement, no monetary amount will be attributable to any goodwill associated with Franchisee’s use of the System;

 

2.the
Proprietary Marks are valid and serve to identify the System and System Hotels, and any infringement of the Proprietary Marks
will result in irreparable injury to Franchisor;

 

3.the
Proprietary Marks may be deleted, replaced or modified by Franchisor or its Affiliates in their sole discretion. Franchisor
may require Franchisee, at Franchisee’s expense, to discontinue or modify Franchisee’s use of any of the Proprietary
Marks or to use one or more additional or substitute marks;

 

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4.Franchisee
will not directly or indirectly: (i) attack the ownership, title or rights of Franchisor or its Affiliates in the System;
(ii) contest the validity of the System or Franchisor’s right to grant to Franchisee the right to use the System in
accordance with this Agreement; (iii) take any action that could impair, jeopardize, violate or infringe any part of the
System; (iv) claim any right, title, or interest in the System except rights granted under this Agreement; or (v) misuse
or harm or bring into disrepute the System;

 

5.Franchisee
has no, and will not obtain any, Ownership Interest in any part of the System (including any modifications made by or on behalf
of Franchisee or its Affiliates). Franchisee assigns, and will cause each of its employees or independent contractors who contributed
to System modifications to assign, to Franchisor, in perpetuity throughout the world, all rights, title and interest (including
the entire copyright and all renewals, reversions and extensions of such copyright) in and to such System modifications. Except
to the extent prohibited by Applicable Law, Franchisee waives, and will cause each of its employees or independent contractors
who contributed to System modifications to waive, all “moral rights of authors” or any similar rights in such System
modifications. For the purposes of this Section 11.2.B.5, “modifications” includes any derivatives and additions;
and

 

6.Franchisee
will execute, or cause to be executed, and deliver to Franchisor any documents, and take any actions required by Franchisor to
protect the Proprietary Marks and the title in any System modifications.

 

11.3
Franchisee’s Use of Other Marks. Franchisee will
not use any Mark, in connection with the Hotel or the System that is not a Proprietary Mark, including the names of restaurants
or other outlets at the Hotel (“Other Marks”) without Franchisor’s prior approval. Franchisee will not
use any Other Marks that may infringe or be confused with a third party’s trade name, trademark or other rights in intellectual
property. Franchisee consents to the use of the Other Marks by Franchisor and its Affiliates during the Term. Franchisee represents
that there are no claims or proceedings that would materially affect Franchisor’s use of the Other Marks.

 

11.4 Websites
and Domain Names. Franchisee will not display any of the
Proprietary Marks on, or associate the System with (through a link or otherwise), any website, electronic
Marketing Materials, application or software for mobile devices or other technology or media, domain name, address,
designation or listing on the internet or other communication system or medium without Franchisor’s consent or as
permitted in the Standards. Franchisee will not register or use any internet domain name, address, mobile application or
other designation that contains any Proprietary Mark or any mark that is, in Franchisor’s sole opinion, confusingly
similar. At Franchisor’s request, Franchisee will promptly cancel or transfer to Franchisor any such domain name,
address or other designation under Franchisee’s control.

 

	12.	CONFIDENTIAL INFORMATION; DATA PROTECTION LAWS

 

12.1Confidential
Information.

 

A.Confidentiality
Obligations. Franchisee will use Confidential Information only for the benefit of the Hotel. Franchisee will protect Confidential
Information and will promptly report to Franchisor the theft or loss of any Confidential Information. Franchisee may divulge Confidential
Information only to Franchisee’s employees or agents who require access to it to operate the Hotel, and only after they
are advised that such information is confidential and that they are bound by Franchisee’s confidentiality obligations under
this Agreement. Without Franchisor’s prior consent, Franchisee will not copy, reproduce or make Confidential Information
available to any Person not authorized to receive it. The Confidential Information is proprietary and a trade secret of Franchisor
and its Affiliates. Franchisee agrees that the Confidential Information has commercial value and that Franchisor and its Affiliates
have taken reasonable measures to maintain its confidentiality. Franchisee is liable for any breaches of such confidentiality
obligations by its employees or agents.

 

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B.Confidentiality
of Negotiated Terms. Franchisee agrees it will not disclose to any Person the content of the negotiated terms of this
Agreement or other Marriott Agreements without the prior consent of Franchisor except: (i) as required by Applicable Law; (ii)
as may be necessary in any legal proceedings; and (iii) to those of Franchisee’s managers, members, officers, directors,
employees, attorneys, accountants, agents or lenders to the extent necessary for the operation or financing of the Hotel and only
if Franchisee informs such Persons of the confidentiality of the negotiated terms. Franchisee will be in default under this Agreement
for any disclosure of negotiated terms by any such Persons.

 

12.2 Data
Protection Laws. Franchisee will comply with all Data Protection
Laws and the Standards and take such actions and execute such documents as requested by Franchisor that are necessary
for compliance with any of the Data Protection Laws by Franchisor or its Affiliates. Franchisee will not take any action that
could cause Franchisor or its Affiliates to violate any of the Data Protection Laws. Franchisee will reimburse Franchisor and
its Affiliates for all costs and damages incurred in connection with Franchisee’s loss of data, including Guest
Profile Data, or Franchisee’s non-compliance with Franchisee of the Data Protection Laws or the Standards.

 

	13.	ACCOUNTING AND REPORTS; TAXES 

 

13.1
Accounting. Franchisee will account for Gross Room Sales
and Gross Revenues on an accrual basis and in compliance with this Agreement.

 

13.2 Books, Records and Accounts. Franchisee
will maintain and preserve complete and accurate books, records and accounts for the Hotel in accordance with the Uniform
System and United States generally accepted accounting principles, consistently applied, Applicable Law and the Standards.
Franchisee will preserve these books, records and accounts for at least 5 years from the dates of their
preparation.

 

13.3Accounting
Statements.

 

A.Monthly
Statements. At Franchisor’s request, for each full or partial month after the Opening Date, Franchisee will prepare
and deliver to Franchisor an operating statement containing the information required by Franchisor, including Gross Revenues and
Gross Room Sales for such month.

 

B.Annual
Statements. For each full or partial year or fiscal year (whichever is used by Franchisee for income tax purposes), Franchisee
will prepare and provide to Franchisor a complete statement of income and expense from the operation of the Hotel for the preceding
year. This statement is due within 90 days after each year. This statement will be prepared in accordance with the Uniform System
and the United States generally accepted accounting principles, consistently applied, Applicable Law, the Standards, and the Uniform
System “Income Statement” with standard line items specified by Franchisor, and Franchisee will provide such supporting
documentation and other information that Franchisor may require relating to this statement. In addition, Franchisee will promptly
deliver to Franchisor such other reports and financial information relating to Franchisee and the Hotel as Franchisor may request.

 

    	13

    	 

    

 

13.4Franchisor
Examination and Audit of Hotel Records.

 

A.Examination
and Audit. Franchisor and its authorized representatives may, at any time, but on reasonable notice to Franchisee, examine
and copy all books, records, accounts and tax returns of Franchisee related to the operation of the Hotel during the five years
preceding such examination. Franchisor may have an independent audit made of any such books, records, accounts and tax returns.
Franchisee will provide any assistance reasonably requested for the audit and will provide copies of any documentation requested
by Franchisor without charge.

 

B.Underreporting.
If an examination or audit reveals that Franchisee has made underpayments to Franchisor, Franchisee will promptly pay Franchisor
on demand the amount underpaid plus interest under Section 3.7. If an examination or audit finds that Franchisee has understated
payments due Franchisor by 5% or more for the relevant period, or if the examination or audit reveals that the accounting procedures
are insufficient to determine the accuracy of the calculation of payments due, Franchisee will reimburse Franchisor for all costs
relating to the examination or audit (including reasonable accounting and legal fees). If the examination or audit establishes
a pattern of underreporting, Franchisor may require that the annual financial reports due under Section 13.3.B be audited
by an independent accounting firm consented to by Franchisor. The rights of Franchisor in this Section 13.4 are in addition to
any other remedies that Franchisor may have, including the right to terminate this Agreement.

 

C.Overpayments.
If an examination or audit reveals that Franchisee has made overpayments to Franchisor, the amount of such overpayment, without
interest, will be promptly credited against future payments due Franchisor.

 

13.5Taxes.

 

A.Payment
of Taxes. Franchisee will pay when due all Taxes relating to the Hotel, Franchisee, this Agreement, any other Marriott Agreement
or in connection with operating the Hotel, except income or franchise taxes assessed against Franchisor.

 

B.Withholding
Taxes. 

 

1.The
amounts payable to Franchisor will not be reduced by any deduction or withholding for any present or future Taxes.

 

2.If
Applicable Law imposes an obligation on Franchisee to deduct or withhold Taxes directly from any amount paid to Franchisor, then
Franchisee will deduct or withhold the required amount and will timely pay the full amount deducted or withheld to the relevant
governmental authority in accordance with Applicable Law. The amount paid to Franchisor will be increased so that after the deduction
or withholding has been made in accordance with Applicable Law, the net amount actually received by Franchisor will equal the
full amount originally invoiced or otherwise payable. If required or permitted, Franchisee must promptly pay any such deduction
or withholding directly to the relevant governmental authority and provide Franchisor proof of payment.

 

3.If
Applicable Law does not impose an obligation on Franchisee to deduct or withhold Taxes directly from any amount paid to Franchisor,
but requires Franchisor to pay such Taxes, then Franchisee will pay Franchisor, within 15 days after request, the full amount
of the Taxes paid or payable by Franchisor with respect to such payment so that the net amount actually retained by Franchisor
after payment of Taxes (other than taxes assessed on Franchisor’s net income) will equal the full amount originally invoiced
or otherwise payable.

 

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C.Sales
Tax & Similar Taxes. The amounts payable to Franchisor will not be reduced by any sales, goods and services, value added
or similar taxes, all of which will be paid by Franchisee. Therefore, in addition to making any payment to Franchisor required
under this Agreement, Franchisee will: (i) pay Franchisor the amount of these taxes due with respect to the payment; or (ii) if
required or permitted by Applicable Law, pay these taxes directly to the relevant taxing authority.

 

D.Tax
Disputes. If there is a Dispute by Franchisee as to any Tax liability, Franchisee may contest the Tax liability in accordance
with Applicable Law, but Franchisee will not permit a sale, seizure or attachment to occur against the Hotel. If such Dispute
involves payments of Taxes that will be withheld, deducted and paid by Franchisee related to payments to Franchisor as provided
in this Section 13.5, Franchisee will notify Franchisor before taking action with regard to the Dispute with the tax authority
and, if requested by Franchisor, cooperate with Franchisor in preparing its response. Upon Franchisor’s request, Franchisee
will pay such Taxes and seek reimbursement from the governmental authority. Franchisee will be responsible for any interest or
penalties assessed.

  

	14.	INDEMNIFICATION 

 

Franchisee
will indemnify, defend and hold harmless Franchisor and its Affiliates (and each of their respective predecessors, successors,
assigns, current and former directors, officers, shareholders, subsidiaries, employees and agents), against all Claims and Damages,
including allegations of negligence by such Persons, to the fullest extent permitted by Applicable Law, arising from: (i) the
unauthorized use of the Proprietary Marks; (ii) the violation of Applicable Law; or (iii) the construction, conversion
and renovation, repair, operation, ownership or use of the Hotel or the Approved Location (including Claims and Damages arising
from the use of the Other Marks) or of any other business related to the Hotel or the Approved Location. Franchisor will have
the right, at Franchisee’s cost, to control the defense of any Claim (including the right to select its counsel or defend
or settle any Claim) if Franchisor determines such Claim may affect the interests of Franchisor or its Affiliates. Such undertaking
by Franchisor will not diminish Franchisee’s indemnity obligations. Neither Franchisor nor any indemnified Person will be
required to seek recovery from third parties or mitigate its losses to maintain its right to receive indemnification from Franchisee.
The failure to pursue such recovery or mitigate its losses will not reduce the amounts recoverable from Franchisee by an indemnified
Person. Franchisee’s obligation to maintain insurance under Section 15 will not relieve Franchisee of its obligations under
this Section 14. Franchisee’s obligations under this Section 14 will survive the termination or expiration of this Agreement.

 

	15.	INSURANCE

 

15.1
Insurance Required. During the Term, Franchisee will procure and maintain insurance with the coverages, deductibles, limits,
carrier ratings, and policy obligations required by the Standards. Such insurance requirements may include: property insurance
including business interruption, earthquake, flood, terrorism and windstorm; workers’ compensation; commercial general liability;
liquor liability; business auto liability; umbrella or excess liability; fidelity coverage; employment practices liability; cyber
liability; and such other insurance customarily carried on hotels similar to the Hotel. Franchisor may change such requirements
in the Standards and may also require Franchisee to obtain additional types of insurance or increase the amount of coverages.
All insurance will by endorsement specifically:

 

A.name
as unrestricted additional insureds Franchisor, any Affiliate designated by Franchisor and their employees and agents (except
for workers’ compensation and fidelity insurance);

 

B.provide
that the coverages will be primary and that any insurance carried by any additional insured will be excess and non-contributory;

 

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C.contain a waiver of subrogation in favor of Franchisor
and any Affiliate of Franchisor; and

 

D.provide that the policies will not be canceled,
non-renewed or reduced without at least 30 days’ prior notice to Franchisor.

 

15.2Other Requirements.
Franchisee will deliver to Franchisor a certificate of insurance (and certified copy of such insurance policy if requested) evidencing
the insurance required. Renewal certificates of insurance will be delivered to Franchisor not less than 10 days before their respective
inception dates. If Franchisee fails to procure or maintain the required insurance, Franchisor will have the right and authority
to procure (without any obligation to do so) such insurance at Franchisee’s cost, including a reasonable fee for Franchisor’s
procurement and maintenance of such insurance. If Franchisee delegates its insurance obligations to any other Person, Franchisee
will ensure that such Person satisfies such obligations. Such delegation will not relieve Franchisee of its obligations under
this Section 15 and the Standards. Any failure to satisfy the insurance requirements is a default under this Agreement. Franchisee
will cooperate with Franchisor in pursuing any claim under insurance required by this Agreement.

 

	16.	FINANCING OF THE HOTEL

 

Franchisee and each Interestholder
in Franchisee may grant a lien or other security interest in the Hotel or the revenues of the Hotel, or pledge Ownership Interests
in Franchisee or a Control Affiliate as collateral for the financing of the Hotel. If any Person exercises its rights under such
lien, security interest or pledge, Franchisor will have the rights under Section 19.1. Franchisee will not pledge this Agreement
as collateral or grant a security interest in this Agreement, but Franchisor may provide a comfort letter to a lender in the form
included in the then-current Disclosure Document and, if it does so, Franchisee will pay the then-current lender comfort letter
processing fee.

 

	17.	TRANSFERS

 

17.1Franchisee’s Transfer
Rights. Franchisee agrees that its rights and duties in this Agreement are personal to Franchisee and that Franchisor entered
into this Agreement in reliance on the business skill, financial capacity and character of Franchisee and its Affiliates and their
principals. Accordingly, any Transfer of the Hotel, or any Ownership Interest in Franchisee, a Control Affiliate or the Hotel,
may be made only in accordance with this Section 17 and only if such Transfer does not violate Section 17.6. This Agreement may
not be Transferred without Franchisor’s prior consent.

 

17.2Transfers Not Requiring
Notice or Consent. As long as the following Transfers of Passive Investor Interests do not result in a change of Control of
Franchisee, no notice to or consent by Franchisor is required:

 

A.Publicly-traded Securities.
A Transfer of publicly-traded securities purchased on the open market, pursuant to a registration statement or through a registered
broker/dealer or investment adviser;

 

B.10% Threshold. A Transfer
of Passive Investor Interests (other than those held by a Guarantor) to a transferee that immediately before and after the Transfer
owns less than 10% of the Ownership Interests in Franchisee; and

 

C.Investment Fund. A Transfer
of limited partnership interests in an investment fund formed by a sponsoring company in the business of raising capital for investment
purposes, as long as such fund has at least 20 limited partners, none of which owns (immediately before or after such Transfer)
10% or more of the Ownership Interests in Franchisee or directs the decisions of, or exercises any Control over, the fund or the
companies in which the fund invests.

 

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17.3Transfers Requiring
Notice but Not Consent. Franchisee must provide notice to Franchisor at least 20 days prior to any of the following Transfers,
but no consent by Franchisor is required:

 

A.Passive Investor Transfer.
A Transfer of Passive Investor Interests (not covered in Section 17.2) if the following requirements are met:

 

1.Franchisee provides Franchisor with the identity
of the proposed transferees and their Interestholders, together with all other related information reasonably requested by Franchisor;

 

2.such Transfer, individually and in the aggregate,
will not result in: (i) a change in Control of Franchisee; (ii) any Person and its Affiliates that did not own a majority of the
Ownership Interests in Franchisee before such Transfers collectively owning a majority of the Ownership Interests in Franchisee
after such Transfer; or (iii) a Transfer of all of Guarantor’s Ownership Interest in Franchisee;

 

3.each new Interestholder meets Franchisor’s
then-current owner qualifications (which may include that such Interestholder or any of its Affiliates has not been convicted of
a Serious Crime and has not engaged in conduct that may adversely affect the Hotel, the System, or Franchisor, and has not been
a party to any material civil litigation with Franchisor or its Affiliates), and Franchisee pays the fees for any required background
checks; and

 

4.if Franchisor requests, Franchisee
will execute an amendment to this Agreement that updates the ownership information in Exhibit A, and pay Franchisor’s
outside counsel costs related to such documentation, if any.

 

B.Transfer to Affiliates; Transfer
for Estate Planning Purposes. A Transfer of the Hotel or an Ownership Interest in Franchisee to an Affiliate of Franchisee,
or a Transfer of an Ownership Interest in Franchisee for estate planning purposes to an immediate family member or to an entity
owned by, or a trust for the benefit of, an immediate family member, in the case of each such Transfer, if the following requirements
are met:

 

1.Franchisee or its Control Affiliate owns, directly
or indirectly, more than 50% of the economic interests of the proposed transferee, and such Transfer does not otherwise result
in a change of Control of Franchisee or the Hotel;

 

2.Franchisee provides the identity of the proposed
transferee and its Interestholders, documentation acceptable to Franchisor evidencing the Transfer, and all other related information
reasonably requested by Franchisor;

 

3.each Guarantor acknowledges the Transfer and reaffirms
its obligations under the Guaranty and, if required by Franchisor, another party acceptable to Franchisor executes a guaranty substantially
identical to the form in the then-current Disclosure Document;

 

4.Franchisee is not in breach
or default under any of the Marriott Agreements, or if there is a breach or default, there is an agreement to cure such breach
or default;

 

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5.each new Interestholder meets Franchisor’s
then-current owner qualifications (which may include that such Interestholder or any of its Affiliates has not been convicted
of a Serious Crime and has not engaged in conduct that may adversely affect the Hotel, the System, or Franchisor, and has not
been a party to any material civil litigation with Franchisor or its Affiliates), and Franchisee pays the fees for any required
background checks; and

 

6.if Franchisor requests, Franchisee and such transferee
will execute any documents required by Franchisor to reflect the Transfer, and Franchisee will pay Franchisor’s outside counsel
costs related to such documentation, if any.

 

17.4Transfers Requiring Notice
and Consent. Transfers of the Hotel or a Controlling Ownership Interest in the Franchisee, a Control Affiliate or the Hotel
may be made only with at least 30 days’ advance notice to Franchisor and Franchisor’s prior consent.

 

A.Conditions to Transfer.
Franchisor’s consent to a Transfer under this Section 17.4 will be subject to satisfaction of the following conditions:

 

1.Franchisee provides Franchisor the identity of
all parties and their Interestholders, a copy of the purchase agreement, the organizational documents of the transferee and its
Interestholders, together with all other information reasonably requested by Franchisor;

 

2.payment by Franchisee of the then-current non-refundable
property improvement plan fee, and payment of the then-current application fee for System Hotels to Franchisor by the transferee
with its submission of the application. If Franchisor does not consent to the Transfer, Franchisor will refund the application
fee, less $10,000;

 

3.satisfaction by each Interestholder of the transferee
of Franchisor’s then-current owner qualifications (which may include that such Interestholder or any of its Affiliates has
not been convicted of a Serious Crime and has not engaged in conduct that may adversely affect the Hotel, the System, or Franchisor,
and has not been a party to any material civil litigation with Franchisor or its Affiliates);

 

4.retention of a management company consented to
by Franchisor under Section 8.1 if Franchisor determines in its sole discretion that the transferee is not qualified to operate
the Hotel;

 

5.execution by the transferee of the then-current
form of franchise and related agreements. The new franchise agreement will contain the standard terms for new franchise System
Hotels as of the date of the Transfer, including the then-current fees and charges, except that the duration will be shortened
to the remaining Term. The new franchise agreement will also include a property improvement plan requiring the transferee to address
any renovations necessary to comply with the Standards;

 

6.payment of all amounts due Franchisor and execution
of a general release of all claims against Franchisor and its Affiliates; and

 

7.payment of Franchisor’s outside counsel costs
related to the Transfer.

 

Prior Transfers of Ownership Interests by or to a Person
that already owns Ownership Interests or an Affiliate of such Person will be taken into account in determining whether a Transfer
of a Controlling Ownership Interest has occurred. Within 30 days after Franchisor receives notice and all required information,
Franchisor will notify Franchisee of its consent to such Transfer or the reason Franchisor is withholding its consent.

 

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B.Withholding of Consent. Even if the conditions
in Section 17.4.A. are satisfied, Franchisor may withhold its consent to a Transfer under this Section 17.4 if:

 

1.Franchisor determines that the proposed transferee’s
debt service or overall financial status will not permit the Hotel to be operated in compliance with the Standards; or

 

2.an uncured breach or default of a Marriott Agreement
exists, and there is no agreement to cure such breach or default in connection with the Transfer; or

 

3.the Hotel is not in good standing under the Quality
Assurance Program.

 

C. Mental Incompetency or Death.
If any Person holding a Controlling Ownership Interest in Franchisee becomes mentally incompetent or dies, the interest of such
Person may be Transferred subject to the terms of this Section 17.4 and only if: (i) any such Transfer will be made within 12
months after such Person is deemed mentally incompetent or dies; and (ii) the obligations of Franchisee will be satisfied pending
the Transfer and the Hotel is operated in compliance with this Agreement. If such Person was a Guarantor, Franchisor may require
another party acceptable to Franchisor to execute a Guaranty substantially identical to the form in the then-current Disclosure
Document. If an executor, custodian, or other representative is appointed to oversee the management of Franchisee, Franchisee
will give Franchisor notice of such appointment within 30 days and the appointee will cause the Hotel to be operated in compliance
with this Agreement.

 

17.5Proposed Transfer to
Competitor and Right of First Refusal.

 

A.Right of First Refusal.
If there is a proposed Transfer of the Hotel or an Ownership Interest in Franchisee or a Control Affiliate to a Competitor, Franchisee
will notify Franchisor stating the identity of the prospective transferee (including the Interestholders of such prospective transferee),
the terms of the proposed transaction, and all other information reasonably requested by Franchisor. Within 30 days after receipt
of such notice and information, Franchisor will notify Franchisee of its election of one of the following:

 

1.if the proposed Transfer is a cash transaction,
Franchisor (or its designee) will have the right to purchase or lease the Hotel or acquire the Ownership Interest at the same price
and on the same terms as the Competitor, and Franchisee and Franchisor (or its designee) will promptly enter into an agreement
on such terms; or

 

2.if the proposed Transfer is
a non-cash transaction or other form of Transfer, Franchisor (or its designee) will have the right to purchase or lease the Hotel
or acquire the Ownership Interest for its fair market value; if Franchisee and Franchisor are unable to agree on the fair market
value within 14 days of Franchisor’s election, Franchisor will promptly provide Franchisee with a list of at least three
nationally recognized appraisers of hotel properties, and within five days Franchisee will select one of such appraisers to appraise
the Hotel or the Ownership Interest. Franchisor and Franchisee will share the costs of the appraisal equally. Such appraisal will
constitute the fair market value of the Hotel or the Ownership Interest for purposes of this Section 17.5.A.2. Within 30 days
of receipt of the appraisal, Franchisor (or its designee) may either: (i) enter into an agreement to purchase the Hotel or the
Ownership Interest at the fair market value determined by the appraiser; or (ii) place Franchisee in default and give notice of
its intent to terminate this Agreement under Section 19.1.B.; or

 

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3.Franchisor may place Franchisee
in default and give notice of its intent to terminate this Agreement under Section 19.1.B., in which case either: (i) Franchisee
will cancel the Transfer; or (ii) this Agreement will terminate and Franchisee will pay liquidated damages and comply with its
post-termination obligations; or

 

4.Franchisor may consent to such Transfer, which
consent will be on such terms as Franchisor may require, in its sole discretion.

 

B.Real Estate Interest and
Injunctive Relief. Franchisee acknowledges that Franchisor’s rights under Section 17.5.A. are rights in real estate.
Franchisor may record such interest in the appropriate real estate records of the jurisdiction where the Hotel is located, and
Franchisee will cooperate in such filing. Franchisee agrees that damages are not an adequate remedy if Franchisee breaches its
obligations under this Section 17.5, and Franchisor will be entitled to injunctive relief without proving the inadequacy of money
damages as a remedy and without posting a bond. If this Agreement is terminated and Franchisor’s rights under Section 17.5
are no longer in effect, on request, Franchisor will execute a termination of such interest.

 

C.Survival of Right of First
Refusal. Except for termination of this Agreement under Section 17.5.A.3. or in connection with a Transfer consented to by
Franchisor under Section 17.5.A.4., Franchisor’s rights under Section 17.5.A. survive early termination of this Agreement
and will apply to any Transfer to a Competitor that occurs within six months after such termination.

 

17.6Restricted Persons.
No Transfer of any Ownership Interest in Franchisee, the Hotel or any Marriott Agreement will be made to a Restricted Person,
an Affiliate of a Restricted Person or a Person in which a Restricted Person has an interest or provides funding. Any such Transfer
is a default under Section 19.1.B.

 

17.7Transfers by Franchisor.

 

A.Transfer to Affiliates.
Franchisor may Transfer this Agreement to any of its Affiliates that assumes Franchisor’s obligations to Franchisee and
is reasonably capable of performing Franchisor’s obligations, without prior notice to, or consent of, Franchisee.

 

B.Transfer to Other Persons.
Franchisor may Transfer this Agreement to any Person that assumes Franchisor’s obligations to Franchisee, is reasonably
capable of performing Franchisor’s obligations and acquires substantially all of Franchisor’s rights in System Hotels,
without prior notice to, or consent of, Franchisee. Franchisee agrees that any such Transfer will constitute a release of Franchisor
and a novation of this Agreement.

 

C.Franchisor’s Successors
and Assigns. This Agreement will be binding on and inure to the benefit of Franchisor and its permitted successors and assigns.

 

	18.	PROSPECTUS REVIEW

 

18.1Franchisor’s Review
of Prospectus. Except as stated in Section 18.2, if any Prospectus uses the Proprietary Marks, identifies the Hotel or Franchisor
or its Affiliates or describes the relationship between Franchisor or Franchisee and their respective Affiliates, Franchisee will:

 

A.deliver to Franchisor for its review a copy of
such Prospectus and all related materials at least 30 days before the earlier of the date such Prospectus is delivered to a potential
purchaser, a potential investor or filed with the Securities and Exchange Commission or other governmental authority. Franchisor
may require Franchisee to pay its outside counsel costs for the review of such Prospectus;

 

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B.indemnify, defend and hold harmless Franchisor
and its Affiliates in connection with such Prospectus and the offering; and

 

C.use any Proprietary Marks in such Prospectus and
in any related materials only as consented to by Franchisor.

 

Franchisor’s review of any Prospectus is conducted
solely to determine the accuracy of any description of Franchisor’s relationship with Franchisee and compliance with this
Agreement, including the requirements of Section 12.1 and this Section 18, and not to benefit any other Person. Such consent will
not constitute an endorsement or ratification of the proposed offering or Prospectus.

 

18.2Exemption from Review.
Franchisor will waive the requirement for its review of a Prospectus if such Prospectus: (i) only uses the Proprietary Marks in
block letters to identify the Hotel, (ii) provides a clear statement that the Hotel is operated under a license from Franchisor,
and (iii) provides that Franchisor has not reviewed, endorsed or ratified the proposed offering or Prospectus.

 

	19.	DEFAULT AND TERMINATION

 

19.1Immediate Termination.
Franchisee will be in default and Franchisor may terminate this Agreement without providing Franchisee any opportunity to
cure the default, effective on notice to Franchisee (or on the expiration of any notice or cure period given by Franchisor in
its sole discretion or required by Applicable Law), if any of the following occurs:

 

A.Financial Defaults.

 

1.Franchisee or any Guarantor files a voluntary petition
or a petition for reorganization under any bankruptcy, insolvency or similar law;

 

2.Franchisee or any Guarantor consents to an involuntary
petition under any bankruptcy, insolvency or similar law or fails to vacate any order approving such an involuntary petition within
90 days from the date the order is entered;

 

3.Franchisee or Guarantor is unable to pay its debts
as they become due;

 

4.Franchisee or Guarantor is adjudicated to be bankrupt,
insolvent or of similar status by a court of competent jurisdiction;

 

5.A receiver, trustee, liquidator or similar authority
is appointed over the Hotel;

 

6.Execution is levied against the Hotel, Franchisee
or any material real or personal property in the Hotel in connection with a final judgment; or

 

7.A suit to foreclose any lien, mortgage or security
interest in the Hotel or any material personal property at the Hotel, or any security interest in Franchisee is filed and is not
vacated within 90 days.

 

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B.Non-Financial Defaults.

 

1.Franchisee or any Guarantor or any other Person
that Controls or has an Ownership Interest in Franchisee is or becomes a Restricted Person;

 

2.Franchisee or any of its Affiliates
or any Guarantor takes any action that constitutes a violation of Applicable Law that adversely affects the Hotel or the System;

 

3.Franchisee
or any of its Affiliates or any Guarantor becomes a Competitor or an Affiliate of a Competitor or a Transfer occurs that does
not comply with the terms of Section 17;

 

4.Franchisee or any of its Affiliates that hold a
Controlling Ownership Interest in Franchisee or any Guarantor dissolves or liquidates;

 

5.Franchisee loses its right
to operate or possess the Hotel, or loses ownership of the Hotel; or, if the Hotel is subject to a lease referenced in Item 17
of Exhibit A, Franchisee or the Owner referenced in Item 17 of Exhibit A is in default under such lease, or such
lease is terminated for any reason;

 

6.the Hotel ceases to operate as a System Hotel;

 

7.Franchisee engages in a pattern of underreporting
amounts payable to Franchisor under this Agreement involving three or more months within any 24-month period;

 

8.a threat to public health or safety occurs from
the condition of the Hotel or its operation, that in the opinion of Franchisor, could result in: (i) substantial liability; or
(ii) an adverse effect on the Hotel, other System Hotels, the System or the Proprietary Marks and Franchisee fails to close the
Hotel and remedy the condition on notice from Franchisor;

 

9.the Hotel fails to achieve the thresholds of performance
established by the Quality Assurance Program and such failure has not been cured within the applicable cure period; or

 

10.any Confidential Information is disclosed in breach
of Section 12.

 

19.2Default with Opportunity
to Cure. Franchisee will be in default and Franchisor may terminate this Agreement for the events listed below, if after 30
days’ notice of default (or such greater number of days given by Franchisor in its sole discretion or as required by Applicable
Law), Franchisee fails to cure the default as specified in the notice:

 

A.Franchisee fails to timely start and complete construction
or conversion of the Hotel or fails to timely open the Hotel in accordance with this Agreement and the Standards; or

 

B.Franchisee fails to timely complete any renovation
or repair of the Hotel in accordance with this Agreement and the Standards; or

 

C.Franchisee and its Affiliates fail to pay any amounts
due under the Marriott Agreements; or

 

D.any Marriott Agreement is in
default or terminated based on a default of Franchisee or its Affiliates (or any Owner referenced in Item 17 of Exhibit A);
or

 

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E.Franchisee or any Interestholder in Franchisee,
or any officer, director or employee of Franchisee, is convicted of a Serious Crime or is engaged in conduct that may adversely
affect the Hotel, the System, any Franchisor Lodging Facility or Franchisor, and such Person is not terminated from its relationship
with Franchisee; or

 

F.Franchisee fails to comply with the Standards or
there occurs any other breach of the Marriott Agreements, including any representations and warranties by Franchisee.

 

19.3Suspension of Reservation
System. If Franchisee is in default under this Agreement and the default is not cured within the cure period (if any), Franchisor
may, in addition to any other remedies, suspend the Hotel from the Reservation System while such default remains uncured. Once
the default is cured, Franchisor will promptly reconnect the Hotel to the Reservation System. Franchisee waives all claims against
Franchisor and its Affiliates arising from any suspension from the Reservation System arising as a result of Franchisee’s
default under this Agreement.

 

19.4Damages.

 

A.Harm to Franchisor. Franchisee
agrees that if it fails to operate the Hotel as a System Hotel for the entire Term, Franchisor will incur damages, including loss
of future Franchise Fees and Marketing Fund Contributions and loss of opportunities for Development Activities, and that replacement
of the Hotel with a comparable hotel will take significant time and effort. Franchisee agrees that it is difficult to calculate
such damages over the remainder of the Term and that the liquidated damages provided for in this Agreement are not a penalty and
represent a reasonable estimate of fair compensation for the damages that Franchisor will incur. Franchisee acknowledges that
if this Agreement is terminated under the circumstances described in clauses 1 through 4 of Section 19.4.B., Franchisor and the
System will suffer greater damages due to the increased difficulty in replacing Franchisor Lodging Facilities and the loss of
competitive advantage and customer confidence.

 

B. Payment of Liquidated Damages.
If Franchisor terminates this Agreement due to Franchisee’s default, Franchisee will promptly pay as liquidated damages
to Franchisor an amount equal to (i) the average monthly Franchise Fees and Marketing Fund Contributions payable during the immediately
preceding 24 months (without giving effect to any discounts or incentives) multiplied by (ii) the lesser of (x) 36 or (y) 1/2
the number of months remaining in the Term (the “LD Amount”), except:

 

1.If, in addition to the termination of this Agreement,
at least one (but not more than eight) additional franchise, license or management agreement for Franchisor Lodging Facilities
between Franchisor and Franchisee, or their respective Affiliates, is terminated within 12 months of the termination of this Agreement,
Franchisee will pay 150% of the LD Amount;

 

2.If this Agreement is terminated as a result of
a Transfer to a Competitor, Franchisee will pay 150% of the LD Amount;

 

3.If this Agreement is terminated as a result of
a Transfer to a Competitor and at least one (but not more than eight) additional franchise, license or management agreement for
Franchisor Lodging Facilities between Franchisor and Franchisee, or their respective Affiliates, is terminated within 12 months
of the termination of this Agreement, Franchisee will pay 200% of the LD Amount; or

 

4.If, in addition to the termination of this Agreement,
at least nine additional franchise, license or management agreements for Franchisor Lodging Facilities between Franchisor and Franchisee,
or their respective Affiliates, are terminated within 12 months of the termination of this Agreement, Franchisee will pay 300%
of the LD Amount.

 

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If the Hotel had been operating as a System Hotel for
less than 24 months prior to termination, the “LD Amount” means (i) the greater of (a) the average monthly Franchise
Fees and Marketing Fund Contributions payable for the previous 24 months for all System Hotels on a per room basis multiplied
by the number of Guestrooms at the Hotel or (b) the average monthly Franchise Fees and Marketing Fund Contributions payable for
the Hotel during the period the Hotel was operating as a System Hotel multiplied by (ii) 36. If either Franchisee or Franchisor
believes that such calculation does not fairly represent the Hotel’s projected stabilized performance, it will notify the
other, and clause (i) will be replaced by “the average monthly Franchise Fees and Marketing Fund Contributions that would
have been payable based on the stabilized Hotel revenue projected by Franchisee in its application, without giving effect to any
discounts or incentives.”

 

C. Other Remedies. Payment
of liquidated damages will not preclude Franchisor from pursuing any equitable or other remedies under Applicable Law (other than
recovery of future Franchise Fees and Marketing Fund Contributions) and will not affect the obligations of Franchisee to comply
with Section 20.

 

	20.	POST-TERMINATION

 

20.1Franchisee Obligations.

 

A.De-Identification. On
the expiration or other termination of this Agreement, Franchisee will immediately:

 

1.cease to operate the Hotel as a System Hotel and
not represent or create the impression that it is a present or former franchisee or licensee of Franchisor or that the Hotel is
or was previously part of the System, unless required under Section 20.1.A.8. or 9. below;

 

2.permanently cease to use, and remove from the Hotel
and any other place of business, any Intellectual Property and any other identifying characteristics of the System, including any
Electronic Systems, advertising or any articles that display any of the Proprietary Marks or any trade dress or distinctive features
or designs associated with the System or Franchisor Lodging Facilities;

 

3.remove any signs containing any Proprietary Marks
(if Franchisee is unable to remove the signs immediately, Franchisee will cover the signs and remove them within 48 hours);

 

4.remove from any internet sites all content under
its control related to the System or Franchisor and take all actions necessary to disassociate itself from Franchisor on the internet.
Franchisee will, at Franchisor’s option, cancel or assign to Franchisor or its designee, any domain name under the control
of Franchisee or its Affiliates that contains any Proprietary Mark, or any mark that Franchisor determines is confusingly similar,
including misspellings and acronyms;

 

5.cancel any fictitious, trade or assumed name or
equivalent registration that contains any Proprietary Mark or any variations, and provide satisfactory evidence to Franchisor of
its compliance within 30 days after expiration or termination of this Agreement;

 

6.deliver to Franchisor the originals and all copies
of any Intellectual Property and all other materials relating to the operation of the Hotel under the System. Franchisee will not
retain a copy of any Intellectual Property or other System materials, except for any documents that Franchisee reasonably needs
for compliance with Applicable Law. If Franchisor explicitly permits Franchisee to use any Intellectual Property after the termination
or expiration date, such use by Franchisee will be in accordance with this Agreement;

 

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7.cease using any of the Confidential Information
or the System and disclosing it to anyone not authorized by Franchisor to receive it;

 

8.make such necessary alterations to the Hotel so
that the public will not confuse it with a System Hotel. Until such alterations are completed, Franchisee will place a conspicuous
sign at the registration desk, stating that the Hotel is no longer a System Hotel; and

 

9.advise all customers in accordance with the Standards
that the Hotel is no longer a System Hotel.

 

B.Other Obligations and Termination
Costs. On expiration or termination of this Agreement, Franchisee will (a) comply with the obligations in the Sections referenced
under Section 27.8; and (b) promptly pay: (i) all amounts owing to Franchisor; (ii) all of Franchisor’s costs or fees charged
for removing the Hotel from the System; and (iii) a reasonable estimate of costs and fees that will be due but have not yet been
invoiced (if the estimated payment exceeds actual amounts due, Franchisor will refund the difference to Franchisee). Franchisor
will have the right to recover reasonable legal fees and court costs incurred in collecting such amounts. If this Agreement is
terminated under Section 21.2, Franchisee will cooperate with Franchisor in pursuing its claim under the business interruption
insurance required under this Agreement.

 

20.2Franchisor’s Rights
on Expiration or Termination. Before or on the expiration or termination of this Agreement, Franchisor may give notice that
the Hotel is leaving the System and take any other action related to customers, Travel Management Companies, suppliers and other
Persons affected by such expiration or termination.

 

	21.	CONDEMNATION AND CASUALTY

 

21.1Condemnation.

 

A.Condemnation Notification.
Franchisee will promptly notify Franchisor if it receives notice of any proposed taking of any portion of the Hotel by eminent
domain, condemnation, compulsory acquisition or similar proceeding by any governmental authority.

 

B.Condemnation Restoration.
If the condemnation award is sufficient to restore the Hotel to meet the Standards, Franchisee will cause the Hotel to be promptly
restored and reopened within a reasonable time.

 

C.Condemnation Termination.
If the taking in Section 21.1.A. would materially affect the continued operation of the Hotel as a System Hotel, Franchisor or
Franchisee may terminate this Agreement, in which case, Franchisor and Franchisee will execute a termination agreement and release
on Franchisor’s then-current form, and Franchisee will comply with the post-termination obligations in Section 20.

 

D.No Liquidated Damages on
Condemnation Termination. A termination under this Section 21.1 will not be a default under this Agreement and Franchisee
will not be required to pay liquidated damages. However, Franchisor will be entitled to receive a fair and reasonable portion
of any condemnation award to compensate Franchisor for its lost revenue, but not more than the amount of liquidated damages that
would have been due under Section 19.4.B.

 

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21.2Casualty.

 

A.Casualty Notification.
Franchisee will promptly notify Franchisor if the Hotel is damaged by any casualty.

 

B.Casualty Restoration.
If the Hotel is damaged by any casualty and the cost to restore the Hotel to the same condition as existed previously is less
than 60% of the Hotel’s replacement cost at the time of the casualty, Franchisee will cause the Hotel to be promptly renovated
and reopened within a reasonable time under Section 4.

 

C.Casualty Termination.
If the Hotel is damaged by any casualty and the cost to restore the Hotel to the same condition as existed previously is 60% or
more of the Hotel’s replacement cost at the time of the casualty, Franchisee will have 180 days after the date of the casualty
to elect whether it will restore the Hotel to its previous condition or terminate this Agreement. If Franchisee elects to restore
the Hotel, the Hotel will be promptly renovated and reopened within a reasonable time under Section 4. If Franchisee elects to
terminate this Agreement, Franchisor and Franchisee will execute a termination agreement and release on Franchisor’s then-current
form and Franchisee will comply with the post-termination obligations in Section 20. Such termination will not affect Franchisor’s
right to business interruption insurance proceeds.

 

D.No Liquidated Damages on
Casualty Termination. A termination under this Section 21.2 will not be a default under this Agreement and Franchisee will
not be required to pay liquidated damages unless, before the date on which the Term otherwise would have ended, Franchisee or
any of its Affiliates operates an Other Lodging Product at the Approved Location.

 

	22.	COMPLIANCE WITH APPLICABLE LAW; LEGAL ACTIONS

 

 22.1Compliance with
Applicable Law. Franchisee will comply with all Applicable Law, and will obtain all permits, certificates and licenses necessary
to operate the Hotel and comply with the Marriott Agreements.

 

22.2Notice of Legal Actions.
Within seven days of receipt, Franchisee will notify Franchisor and provide copies of: (i) any Claim involving the Hotel,
Franchisee or Franchisor; (ii) any judgment, order, or other decree related to the Hotel or Franchisee; or (iii) any inspection
reports and warnings about a material failure to meet health or life safety requirements or any other material violation of Applicable
Law related to the Hotel or Franchisee. This Section 22.2 will not change any notice requirement that Franchisee may have under
any insurance policies.

 

	23.	RELATIONSHIP OF PARTIES

 

 This Agreement does not create
a fiduciary relationship between Franchisor and Franchisee. Franchisee is an independent contractor, and neither party is an agent,
legal representative, joint venturer, partner or employee of the other for any purpose and Franchisee will make no representation
to the contrary. Nothing in this Agreement authorizes Franchisee to make any agreement or representation on Franchisor’s
behalf or to incur any obligation in Franchisor’s name.

 

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	24.	GOVERNING LAW; INTERIM RELIEF; COSTS OF ENFORCEMENT; WAIVERS

 

24.1Governing Law and Jurisdiction.

 

A.Governing Law. This Agreement
takes effect on its acceptance and execution by Franchisor in Maryland and will be construed under and governed by Maryland law,
which law will prevail if there is any conflict of law. Nothing in this Section 24.1 will make the Maryland Franchise Registration
and Disclosure Law apply to this Agreement or the relationship between Franchisor and Franchisee, if such law would not otherwise
apply.

 

B.Jurisdiction. Franchisee
expressly and irrevocably submits to the non-exclusive jurisdiction of the courts of the State of Maryland for the purpose of
any Dispute. So far as permitted under Maryland law, this consent to personal jurisdiction will be self-operative.

 

24.2Equitable Relief.
Franchisor is entitled to injunctive or other equitable relief, including restraining orders and preliminary injunctions, in any
court of competent jurisdiction for any threatened or actual material breach of the Marriott Agreements or non-compliance with
the Standards. Franchisor is entitled to such relief without the necessity of proving the inadequacy of money damages as a remedy,
without the necessity of posting a bond and without waiving any other rights or remedies.

 

24.3Costs of Enforcement.
If either party initiates any legal or equitable action to protect its rights under this Agreement or other Marriott Agreements,
the prevailing party will be entitled to recover its costs, including reasonable legal fees.

 

24.4WAIVER OF PUNITIVE DAMAGES.
EACH OF FRANCHISEE AND FRANCHISOR ABSOLUTELY, IRREVOCABLY AND UNCONDITIONALLY WAIVES THE RIGHT TO CLAIM OR RECEIVE PUNITIVE
DAMAGES IN ANY DISPUTE RELATED TO THE HOTEL, THE MARRIOTT AGREEMENTS, THE RELATIONSHIP OF THE PARTIES, OR ANY ACTIONS OR OMISSIONS
IN CONNECTION WITH ANY OF THE ABOVE. NOTHING IN THIS SECTION 24.4 LIMITS FRANCHISEE’S OBLIGATIONS UNDER SECTION 14.

 

24.5WAIVER OF JURY TRIAL.
EACH OF FRANCHISEE AND FRANCHISOR ABSOLUTELY, IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY DISPUTE RELATED
TO THE HOTEL, THE MARRIOTT AGREEMENTS, THE RELATIONSHIP OF THE PARTIES OR ANY ACTIONS OR OMISSIONS IN CONNECTION WITH ANY OF THE
ABOVE.

 

	25.	NOTICES

 

A.Written Notices. Subject
to Section 25.B., all notices, requests, statements and other communications under this Agreement will be: (i) in writing; (ii)
delivered by hand with receipt, or by courier service with tracking capability; and (iii) addressed, (a) in the case of Franchisor,
to the address stated in Item 15 of Exhibit A; and (b) in the case of Franchisee, to the address stated in Item 16 of Exhibit
A, or in either case at any other address designated in writing by the party entitled to receive the notice. Any notice will
be deemed received (i) when delivery is received or first refused, if delivered by hand or (ii) one day after posting of such
notice, if sent via overnight courier.

 

B.Electronic Delivery.
Franchisor may provide Franchisee with electronic delivery of routine information, invoices, the Standards and other System requirements
and programs. Franchisor and Franchisee will cooperate with each other to adapt to new technologies that may be available for
the transmission of such information.

 

    	27

    	 

    

	26.	REPRESENTATIONS AND WARRANTIES

 

26.1Existence; Authorization;
Ownership; Other Representations.

 

A.Existence. Each of Franchisor
and Franchisee represents and warrants that it: (i) is duly formed, validly existing and in good standing under the laws of the
jurisdiction of its formation; and (ii) has and will continue to have the ability to perform its obligations under this Agreement.

 

B.Authorization. Each of
Franchisor and Franchisee represents and warrants that the execution and delivery of this Agreement and the performance of its
obligations under this Agreement: (i) have been duly authorized; (ii) do not and will not violate, contravene or result in a default
or breach of (a) any Applicable Law, (b) its governing documents or (c) any agreement, commitment or restriction binding on the
relevant party; and (iii) do not require any consent that has not been obtained by the relevant party.

 

C.Prior Representations.
Franchisee represents and warrants that all of the information in the application and provided for this Agreement was true as
of the time made and is true as of the Effective Date, regardless of whether such representations and warranties were provided
by Franchisee or another Person.

 

D.Restricted Person. Franchisee
represents and warrants that Franchisee is not, and that none of its Affiliates (including their directors and officers), Interestholders
or the funding sources for any of them, is a Restricted Person.

 

E.Ownership of Franchisee.
Franchisee represents and warrants that its Interestholders are completely and accurately listed in Attachment Two to Exhibit
A. Upon any Transfer under Section 17 or otherwise permitted by Franchisor, Franchisee will provide a list of the names and
addresses of the Interestholders and documents necessary to confirm such information and update Attachment Two to Exhibit A.

 

F.Ownership of the Hotel.
Unless stated in Item 17 of Exhibit A, Franchisee represents and warrants that either: (i) it is the sole owner of the
Hotel and holds good and marketable fee title to the Approved Location; or (ii) the Approved Location is subject to a valid purchase
contract, and on closing of such contract, Franchisee will be the sole owner of the Hotel and will hold good and marketable fee
title to the Approved Location. If the Approved Location is subject to a purchase contract, Franchisee will deliver a copy of
the recorded deed in Franchisee’s name to Franchisor no later than the Construction Start Deadline.

 

26.2Additional Franchisee
Acknowledgments and Representations.

 

A.NO RELIANCE. IN ENTERING
THIS AGREEMENT, FRANCHISEE REPRESENTS AND WARRANTS THAT IT DID NOT RELY ON, AND NEITHER FRANCHISOR NOR ANY OF ITS AFFILIATES HAS
MADE, ANY PROMISES, REPRESENTATIONS, WARRANTIES OR AGREEMENTS RELATING TO THE FRANCHISE, THE HOTEL, OR THE APPROVED LOCATION OR
THE SYSTEM, UNLESS CONTAINED IN THIS AGREEMENT.

 

B.BUSINESS RISK. FRANCHISEE
AGREES THAT THE BUSINESS VENTURE CONTEMPLATED BY THIS AGREEMENT INVOLVES SUBSTANTIAL BUSINESS RISK, IS A VENTURE WITH WHICH FRANCHISEE
HAS RELEVANT EXPERIENCE AND ITS SUCCESS IS LARGELY DEPENDENT ON FRANCHISEE’S ABILITY AS AN INDEPENDENT BUSINESS. FRANCHISOR
DISCLAIMS THE MAKING OF, AND FRANCHISEE AGREES IT HAS NOT RECEIVED, ANY INFORMATION, WARRANTY OR GUARANTEE, EXPRESS OR IMPLIED,
AS TO THE POTENTIAL REVENUES, PROFITS OR SUCCESS OF SUCH BUSINESS VENTURE. FRANCHISOR WILL NOT INCUR ANY LIABILITY FOR ANY ERROR,
OMISSION OR FAILURE CONCERNING ANY ADVICE, TRAINING OR OTHER ASSISTANCE FOR THE HOTEL PROVIDED TO FRANCHISEE, INCLUDING FINANCING,
DESIGN, CONSTRUCTION, RENOVATION OR OPERATIONAL ADVICE.

    	28

    	 

    

 

 C.DISCLOSURE AND NEGOTIATION. FRANCHISEE
ACKNOWLEDGES THAT IT HAS READ AND UNDERSTOOD THE DISCLOSURE DOCUMENT AND THE MARRIOTT AGREEMENTS. FRANCHISEE HAS HAD SUFFICIENT
TIME AND OPPORTUNITY TO CONSULT WITH ITS ADVISORS ABOUT THE POTENTIAL BENEFITS AND RISKS OF ENTERING INTO THIS AGREEMENT. FRANCHISEE
HAS HAD AN OPPORTUNITY TO NEGOTIATE THIS AGREEMENT.

 

D.HOLDING PERIODS. FRANCHISEE
ACKNOWLEDGES THAT IT RECEIVED A COPY OF THIS AGREEMENT, ITS EXHIBITS AND ATTACHMENTS, IF ANY, AND RELATED AGREEMENTS, IF ANY,
AT LEAST SEVEN DAYS BEFORE THE DATE ON WHICH THIS AGREEMENT WAS EXECUTED. FRANCHISEE FURTHER ACKNOWLEDGES THAT IT HAS RECEIVED
THE DISCLOSURE DOCUMENT AT LEAST 14 DAYS BEFORE THE DATE ON WHICH IT EXECUTED THIS AGREEMENT OR MADE ANY PAYMENT TO FRANCHISOR
IN CONNECTION WITH THIS AGREEMENT.

 

E.DISCLOSURE EXEMPTION.
NOTWITHSTANDING FRANCHISEE’S ACKNOWLEDGMENT IN SECTION 26.2.D, FRANCHISEE REPRESENTS AND ACKNOWLEDGES THAT THIS FRANCHISE
SALE IS FOR MORE THAN $1,084,900, EXCLUDING THE COST OF UNIMPROVED LAND AND ANY FINANCING RECEIVED FROM FRANCHISOR OR ITS AFFILIATES,
AND THUS IS EXEMPTED FROM THE FEDERAL TRADE COMMISSION’S FRANCHISE RULE DISCLOSURE REQUIREMENTS PURSUANT TO 16 CFR 436.8(a)(5)(i).

 

	27.	MISCELLANEOUS

 

27.1Counterparts.
This Agreement may be executed in any number of counterparts, each of which will be deemed an original and all of which constitute
one and the same instrument. Delivery of an executed signature page by electronic transmission is as effective as delivery of
an original signed counterpart.

 

27.2Construction and Interpretation.

  

A.Partial Invalidity. If
any term of this Agreement, or its application to any Person or circumstance, is invalid or unenforceable at any time or to any
extent, then: (i) the remainder of this Agreement, or the application of such term to Persons or circumstances except those as
to which it is held invalid or unenforceable, will not be affected and each term of this Agreement will be valid and enforced
to the fullest extent permitted by Applicable Law; and (ii) Franchisor and Franchisee will negotiate in good faith to modify this
Agreement to implement their original intent as closely as possible in a mutually acceptable manner.

 

B.Non-Exclusive Rights and
Remedies. No right or remedy of Franchisor or Franchisee under this Agreement is intended to be exclusive of any other right
or remedy under this Agreement at law or in equity.

 

    	29

    	 

    

 

 C.No Third-Party Beneficiary. Nothing
in this Agreement is intended to create any third-party beneficiary or give any rights or remedies to any Person except Franchisor
or Franchisee and their respective permitted successors and assigns.

 

D.Actions from Time to Time.
When this Agreement permits Franchisor to take any action, exercise discretion or modify the System, Franchisor may do so from
time to time.

 

E.Interpretation of Agreement.
Franchisor and Franchisee intend that this Agreement excludes all implied terms to the maximum extent permitted by Applicable
Law. Headings of Sections are for convenience and are not to be used to interpret the Sections to which they refer. All Exhibits
to this Agreement form an integral part of this Agreement and are incorporated by reference, including all Items of Exhibit
A even if such Items are not specifically referred to in this Agreement. Words indicating the singular include the plural
and vice versa as the context may require. References to days, months and years are all calendar references. References that a
Person “will” do something mean the Person has an obligation to do such thing. References that a Person “may”
do something mean a Person has the right, but not the obligation, to do so. References that a Person “may not” or
“will not” do something mean the Person is prohibited from doing so. Examples used in this Agreement and references
to “includes” and “including” are illustrative and not exhaustive.

 

F.Definitions. All capitalized
terms in this Agreement have the meaning stated in Exhibit B.

 

27.3Reasonable Business Judgment.

 

A.Definition. Reasonable
Business Judgment means:

 

1.For decisions affecting the System, that the rationale
for Franchisor’s decision has a business basis that is intended to: (i) benefit the System or the profitability of the System,
including Franchisor, regardless of whether some hotels may be unfavorably affected; (ii) increase the value of the Proprietary
Marks; (iii) enhance guest, franchisee or owner satisfaction; or (iv) minimize potential brand inconsistencies or customer confusion;
and

 

2.For decisions unrelated to the System (for example,
a requested approval for the Hotel), that the rationale for Franchisor’s decision has a business basis and Franchisor has
not acted in bad faith.

 

B.Use of Reasonable Business
Judgment. Franchisor will use Reasonable Business Judgment when discharging its obligations or exercising its rights under
this Agreement, including for any consents and approvals and the administration of Franchisor’s relationship with Franchisee,
except when Franchisor has reserved sole discretion.

 

C.Burden of Proof. Franchisee
will have the burden of establishing that Franchisor failed to exercise Reasonable Business Judgment. The fact that Franchisor
or any of its Affiliates benefited from any action or decision, or that another reasonable alternative was available, does not
mean that Franchisor failed to exercise Reasonable Business Judgment. If this Agreement is subject to any implied covenant or
duty of good faith and Franchisor exercises Reasonable Business Judgment, Franchisee agrees that Franchisor will not have violated
such covenant or duty.

 

27.4Consents and Approvals.
Except as otherwise provided in this Agreement, any approval or consent required under this Agreement will not be effective
unless it is in writing and signed by the duly authorized officer or agent of the party giving such approval or consent. Franchisor
will not be liable for: (i) providing or withholding any approval or consent; (ii) providing any suggestion to Franchisee; (iii)
any delay; or (iv) denial of any request.

 

    	30

    	 

    

 

27.5Waiver. The failure
or delay of either party to insist on strict performance of any of the terms of this Agreement, or to exercise any right or remedy,
will not be a waiver for the future.

 

27.6Entire Agreement.
This Agreement and the Marriott Agreements are fully integrated and contain the entire agreement between the parties as it relates
to this franchise, the Hotel and the Approved Location and, subject to Section 26.1.C, supersede and extinguish all prior statements,
agreements, promises, assurances, warranties, representations and understandings, whether written or oral, by any Person. Nothing
in this Agreement is intended to require Franchisee to waive reliance on any representations made in the Disclosure Document.

 

27.7Amendments. This
Agreement may only be amended in a written document that has been duly executed by the parties and may not be amended by conduct
manifesting assent, and each party is put on notice that any individual purporting to amend this Agreement by conduct manifesting
assent is not authorized to do so.

 

27.8Survival. The terms
of Sections 11, 12, 13.4, 14, 17.5, 18, 19.4, 20, 21.1.D., 21.2.D. and 24 survive expiration or termination of this Agreement.

 

[SIGNATURES APPEAR ON THE FOLLOWING
PAGE]

 

    	31

    	 

    

 

IN WITNESS WHEREOF,
Franchisor and Franchisee have caused this Relicensing Franchise Agreement to be executed, under seal, as of the Effective Date.

  

	 	FRANCHISOR: 	 
	 	 	 
	 	MARRIOTT INTERNATIONAL, INC.	 
	 	 	 
	 	By:	/s/ Michael H. Rosenman	(SEAL)
	 	Name:	Michael H. Rosenman	 
	 	Title:	Vice President, Owner and Franchise Services	 
	 	 	 	 
	 	FRANCHISEE: 	 
	 		 	 
	 	MOODY NATIONAL LANCASTER-AUSTIN MT, 

LLC, a Delaware limited liability company	 
	 	 	 	 
	 	By:	/s/ Brett C. Moody	(SEAL)
	 	Name:	Brett C. Moody	 
	 	Title:	President	 

 

    	32

    	 

    

 

EXHIBIT A

KEY TERMS

 

	1.	Trade Name(s):	Residence Inn by Marriott 
	 	 	 
	2.	Approved Location:	1200 Barbara Jordan Blvd. Building 4, Austin, TX 78723
	 	 	 
	3.	Effective Date:	October 15, 2015
	 	 	 
	4.	Term:	Begins on Effective Date and ends on January 14, 2034
	 	 	 
	5.	Franchisor:	Marriott International, Inc., a Delaware corporation
	 	 	 
	6.	Franchisee:	Moody National Lancaster-Austin MT, LLC, a Delaware limited liability company
	 	 	 
	7.	Number of Guestrooms:	112
	 	 	 
	8.	Entity that will Operate the Hotel:	Moody National Hospitality Company, LLC
	 	 	 
	9.	Restricted Territory (Residence Inn only):	Not Applicable.
	 	 	 
	10.	Application Fee:	$150,000
	 	 	 
	11.	Franchise Fees:	6% of Gross Room Sales 
	 	 	 
	12.A	Marketing Fund Contribution:	2.5% of Gross Room Sales
	 	 	 
	12.B	Marketing Fund Contribution Restriction:	A majority vote by members of the Association is required to approve an increase in the Marketing Fund Contribution. A “majority vote” as required to approve an increase means a number of votes constituting a majority of all open and operating System hotels. Members of the Association in good standing will be provided at least 30 days’ prior notice of, and an opportunity to vote on, any proposed increase. Franchisor will provide to Franchisee at least 60 days’ notice before any such approved increase is effective.
	 	 	 
	13.	Construction Start Deadline:	Not Applicable.
	 	 	 
	14.	Opening Deadline:	Not Applicable.

 

    	A-1

    	 

    

 

	15.	Franchisor Notice Address:	Marriott International, Inc.

10400 Fernwood Road

Bethesda, MD 20817

Attn: Law Department 52/923.27
	 	 	 
	16.	Franchisee Notice Address:	MOODY NATIONAL LANCASTER-AUSTIN MT, LLC

6363 Woodway Drive, Suite 110

Houston, TX 77057

Attn: David Gould

Email: DGould@MoodyNational.com
	 	 	 
	17.	Lease Provisions:	Franchisee represents and warrants that (i) Owner is the sole owner of the Hotel, (ii) the Hotel is leased to Franchisee under a lease between Franchisee and Owner and (iii) Franchisee has all rights and authority relating to the Hotel for the performance of Franchisee’s obligations under this Agreement. If the lease provides for Owner to perform any of Franchisee’s obligations under this Agreement, Franchisee will cause Owner to perform such obligations as required under this Agreement. The existence of the lease and its terms that require Owner to perform Franchisee’s obligations are not an assignment of such obligations to Owner and do not relieve Franchisee of any obligation under this Agreement. The lease will not limit or restrict Franchisor’s rights or remedies under this Agreement in any way.
	 	 	 
	 	 	 “Owner” means Moody National Lancaster-Austin Holding, LLC, a Delaware limited liability company.
	 	 	 
	18.	System Hotel-specific terms:	The following additional terms apply:    
 
	 	 	 
	 	 	Marketing Fund Activities may include the development, modification, maintenance, support, administration and operation of the Reservation System.
	 	 	 
	 	 	Franchisee will not be required to pay fees for the Reservation System to the extent
such fees are paid on behalf of Franchisee using the Marketing Fund. Franchisor’s rights under Section 6.2.B. of this
Agreement include its right to establish methods of funding the Reservation System other than by the Marketing Fund.
	 	 	 
	 	 	Section 10.3 of the Franchise Agreement is replaced in its entirety with the following:

 

    	A-2

    	 

    

 

	 	 	“10.3Franchisee Association. Subject to compliance with certain membership requirements, Franchisee, Franchisor and other System Hotel franchisees and licensees are eligible to participate in an association organized to consider and make recommendations on matters related to the operation of System Hotels (the “Association”). Franchisee will pay any Association dues and assessments, which will be consistently applied to all System Hotel franchisees. The Association will vote on bylaws and election of officers. Franchisor will regard recommendations of the Association as expressing the consensus of members of the Association.”
	 	 	 
	19.	PIP Walk-through Date:	Not Applicable.
	 	 	 
	20.	Additional Terms:	Not Applicable.

 

 

    	A-3

    	 

    

  

ATTACHMENT ONE

TO EXHIBIT A

OWNERSHIP INTEREST IN FRANCHISEE

 

	Name
of Owner	Address	%
Interest
	OWNERSHIP
OF MOODY NATIONAL LANCASTER-AUSTIN MT, LLC
	MN
Lancaster-Austin MT, Inc.	6363
Woodway Drive, Suite 110

Houston, TX 77057	100%

Sole Member
	OWNERSHIP
OF MN Lancaster-Austin MT, Inc.
	Moody
National Operating Partnership II, LP	6363
Woodway Drive, Suite 110

Houston, TX 77057	100%

Sole Shareholder
	OWNERSHIP
OF Moody National Operating Partnership II, LP
	Moody
National REIT II, Inc.	6363
Woodway Drive, Suite 110

Houston, TX 77057	99.502488%

General Partner
	Moody
OP Holdings II, LLC	6363
Woodway Drive, Suite 110

Houston, TX 77057	0.497512%

Limited Partner
	Moody
National LPOP II, LLC	6363
Woodway Drive, Suite 110

Houston, TX 77057	Special

Unit Holder
	OWNERSHIP
OF Moody National REIT II, Inc.*
	Shareholders	—	100%
	OWNERSHIP
OF Moody OP HOLDINGS II, llc
	Moody
National REIT II, Inc.	6363
Woodway Drive, Suite 110

Houston, TX 77057	100%

Sole Member
	OWNERSHIP
OF Moody National LPOP II, LLC
	Brett
C. Moody	6363
Woodway Drive, Suite 110

Houston, TX 77057	100%

Sole Member

 

*Moody National REIT II, Inc. is a publicly-registered, non-traded REIT with over 900 shareholders

 

    	A-4

    	 

    

  

EXHIBIT B

DEFINITIONS

 

The following terms used in this Agreement have
the meanings given below:

 

“Accessibility Requirements”
means the Americans with Disabilities Act and other applicable state laws, codes, and regulations governing public accommodations
for persons with disabilities.

 

“Additional Marketing Programs”
means advertising, marketing, promotional, public relations, and sales programs and activities that are not funded by the Marketing
Fund, each of which may vary in duration, apply on a local, regional, national, or Category basis, or include other Franchisor
Lodging Facilities. Examples include email marketing, internet search engine marketing, transaction-based paid internet searches,
sales lead referrals and bookings, cooperative advertising programs, Travel Management Companies programs, incentive awards, gift
cards, guest satisfaction programs, complaint resolution programs and Loyalty Programs.

 

“Affiliate” means, for any
Person, a Person that is directly or indirectly Controlling, Controlled by, or under common Control with such Person.

 

“Agreement” means this Franchise
Agreement, including any exhibits and attachments, as may be amended.

 

“Applicable Law” means applicable
national, federal, regional, state or local laws, codes, rules, ordinances, regulations, or other enactments, orders or judgments
of any governmental, quasi-governmental or judicial authority, or administrative agency having jurisdiction over the Hotel, Franchisee,
Guarantor, Franchisor in its capacity as licensor under this Agreement or any of the Marriott Agreements, or the matters that are
the subject of this Agreement, including any of the above that prohibit unfair, fraudulent or corrupt business practices and related
activities, including any such actions or inactions that would constitute a violation of money laundering or terrorist financing
laws and regulations.

 

“Approved Location” means
the site, including all land and easements used for the Hotel, described in Item 2 of Exhibit A.

 

“Brand” means a hotel brand,
trade name, trademark, system, or chain of hotels.

 

“Case Goods” means furniture
and fixtures used in the Hotel such as cabinets, shelves, chests, armoires, chairs, beds, headboards, desks, tables, mirrors, lighting
fixtures and similar items.

 

“Category” means a group
of System Hotels designated by Franchisor or its Affiliates based on criteria such as geographic (for example, local, regional,
national or international) or other attributes (for example, resorts, urban, or suburban). A Category may have specific Standards
or be a descriptive classification.

 

“Claim” means any demand,
inquiry, investigation, action, claim or charge asserted, including in any judicial, arbitration, administrative, debtor or creditor
proceeding, bankruptcy, insolvency, or similar proceeding.

 

    	B-1

    	 

    

 

“Competitor” means any Person
that has a direct or indirect Ownership Interest in a Brand or is an Affiliate of such a Person, or any Person that is a Master
Franchisee of a Brand, or any officer or director of such Person, but only if the Brand is comprised of at least: (i) 10 luxury
hotels; (ii) 20 full-service hotels; or (iii) 50 limited-service hotels. For purposes of this definition: “luxury”
hotels are hotels that had a system average daily rate in excess of $180 for the most recent year; “full-service” hotels
are hotels that offer three meals per day and have at least 3,000 square feet of meeting space; and “limited-service”
hotels are hotels that are neither “luxury” hotels nor “full-service” hotels. No Person will be considered
a Competitor if such Person has an interest in a Brand merely as: (i) a franchisee; (ii) a management company that operates hotels
on behalf of multiple brands; or (iii) a passive investor that has no Control over the business decisions of the Brand, such
as limited partners or non-Controlling stockholders.

 

“Confidential Information”
means: (i) the Standards; (ii) documents or trade secrets approved for the System or used in the design, construction,
renovation or operation of the Hotel; (iii) any Electronic Systems and related documentation; (iv) Guest Profile Data;
or (v) any other knowledge, trade secrets, business information or know-how obtained or generated (a) through the use
of the System by Franchisee or the operation of the Hotel that Franchisor deems confidential or (b) under any Marriott Agreements.

 

“Control” (in any form, including
“Controlling” or “Controlled”) means, for any Person, the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of such Person or the power to veto major policy decisions of such
Person. No Person (or Persons acting together) will be considered to have Control of a publicly-traded company if such Persons
collectively beneficially own less than 25% of the voting stock of such company.

 

“Control Affiliate” means
an Affiliate of Franchisee that Controls Franchisee.

 

“Damages” means losses, costs
(including legal or attorneys’ fees, litigation costs and settlement payments), liabilities (including employment liabilities,
bodily injury, death, property damage and loss, personal injury and mental injury), penalties, interest, and damages of every kind
and description.

 

“Data Protection Laws” means
data protection and privacy laws applicable to the Hotel and the System.

 

“Design Criteria” means those
standards for the design of Hotel Improvements and such other information for planning, constructing or renovating and furnishing
a System Hotel.

 

“Design Process” is defined
in Section 4.4.

 

“Development Activities”
means the development, promotion, construction, ownership, lease, acquisition, management or operation of: (i) Franchisor Lodging
Facilities (including other System Hotels); and (ii) other business operations, in each case by Franchisor or its Affiliates, or
the authorization, licensing or franchising to other Persons to conduct similar activities.

 

“Disclosure Document” means
that certain document provided by Franchisor to prospective franchisees of System Hotels as required by the trade regulation rule
of the Federal Trade Commission entitled “Disclosure Requirements and Prohibitions Concerning Franchising,” as such
document may be updated by Franchisor.

 

“Dispute” means any disagreement,
controversy, or Claim relating to or arising out of any Marriott Agreement, the relationship created by any Marriott Agreement,
or the validity or enforceability of any Marriott Agreement.

 

“Effective Date” means the
date stated in Item 3 of Exhibit A.

 

    	B-2

    	 

    

 

 

“Electronic Systems” means
all Software, Hardware and all electronic access to Franchisor’s systems and data (including telephone and internet access),
licensed or made available to Franchisee, including the Reservation System, the Property Management System, the Yield Management
System and any other system established under Sections 7 and 10.

 

“Electronic Systems Fees”
means the fees charged by Franchisor for the Hotel’s use of the Electronic Systems, which fees include the development and
incremental operating costs, ongoing maintenance, field support costs and a reasonable return on capital related to such system.

 

“Electronic Systems License Agreement”
means the agreement that is executed by Franchisee as a condition to using the Electronic Systems, the current form of which is
included in the Disclosure Document.

 

“F&B Support Fee” means
the fees charged by Franchisor for the food and beverage program for System Hotels, which fees include the development, ongoing
sustainment and field support costs and a reasonable return on capital related to such program.

 

“FF&E” means Case Goods,
Soft Goods, signage and equipment (including telephone systems, printers, televisions, vending machines, and Hardware), but excludes
any item included in Fixed Asset Supplies.

 

“Fixed Asset Supplies” means
items such as linen, china, glassware, tableware, uniforms and similar items included within “Operating Equipment”
under the Uniform System.

 

“Franchisee” means the Person
identified in Item 6 of Exhibit A.

 

“Franchise Fees” is defined
in Section 3.2.

 

“Franchisor” means the Person
identified in Item 5 of Exhibit A, and its successors and assigns.

 

“Franchisor Lodging Facilities”
means all hotels and other lodging facilities, chains, brands, or hotel systems owned, leased, under development, or operated or
franchised or licensed, now or in the future, by Franchisor or any of its Affiliates, including: (i) AC Hotels by Marriott; African
Pride Hotels; Autograph Collection Hotels; Bvlgari Hotels and Resorts; Courtyard by Marriott Hotels; Delta Hotels and Resorts;
Edition Hotels; Fairfield by Marriott Hotels; Fairfield Inn by Marriott Hotels; Fairfield Inn & Suites by Marriott Hotels;
Gaylord Hotels; JW Marriott Hotels & Resorts; JW Marriott Marquis Hotels; Marriott Conference Centers; Marriott Executive Apartments;
Marriott Hotels, Resorts and Suites; Marriott Marquis Hotels; Moxy Hotels; Protea Hotels; Protea Hotels Fire & Ice!; Renaissance
Hotels; Residence Inn by Marriott Hotels; Ritz-Carlton Hotels and Resorts; Ritz-Carlton Reserve; SpringHill Suites by Marriott
Hotels; and TownePlace Suites by Marriott Hotels; (ii) whole ownership facilities and other lodging products or concepts,
including Grand Residences by Marriott; JW Marriott Residences; Marriott Marquis Residences; The Residences at The Ritz-Carlton
and The Ritz-Carlton Residences; (iii) Vacation Club Products, including Marriott Vacation Club, The Ritz-Carlton Club, and
The Ritz-Carlton Destination Club; and (iv) any other lodging product or concept developed or used by Franchisor or any of its
Affiliates in the future.

 

    	B-3

    	 

    

 

 

“Gross Revenues” means all
revenues and receipts of every kind (from both cash and credit transactions, with no reduction for charge backs, credit card service
charges, or uncollectible amounts) derived from operating the Hotel. Gross Revenues includes revenues from: (i) Gross
Room Sales; (ii) food and beverage sales; (iii) licenses, leases and concessions; (iv) equipment rental; (v) vending
machines; (vi) telecommunications services; (vii) parking; (viii) health club or spa revenues; (ix) sales of merchandise;
(x) service charges; (xi) condemnation proceeds for a temporary taking; (xii) any proceeds from business interruption or other
loss of income insurance; and (xiii) any awards, judgments or settlements representing payment for loss of revenues. Gross Revenues
excludes: gratuities received by Hotel employees; value added, room, excise, goods and services, sales or use taxes
or any other taxes collected directly from customers or included as part of the sales price of any goods or services; proceeds
from the sale of FF&E; and any refunds and credits of a similar nature, paid or returned to customers in the course of obtaining
Gross Revenues.

 

“Gross Room Sales” means
all revenues and receipts of every kind that accrue from the rental of Guestrooms (with no reduction for charge backs, credit card
service charges, or uncollectible amounts). Gross Room Sales includes: (i) no-show revenue, early departure fees,
late check-out fees and other revenues allocable to rooms revenue under the Uniform System; (ii) resort fees and mandatory surcharges
for facilities (although inclusion of such fees or surcharges does not constitute approval by Franchisor of such fees and surcharges,
which may be limited or prohibited); (iii) attrition or cancellation fees collected from unfulfilled reservations for Guestrooms;
(iv) the amount of all lost sales due to the non-availability of Guestrooms in connection with a casualty event, whether or not
Franchisee receives business interruption insurance proceeds; and (v) any awards, judgments or settlements representing payment
for loss of room sales. Gross Room Sales excludes sales tax, value added tax, or similar taxes on such revenues and
receipts.

 

“Guarantor” means the Person
or Persons who guarantee the performance of Franchisee’s obligations under the Marriott Agreements.

 

“Guaranty” means a guaranty
executed by Guarantor for the benefit of Franchisor, the current form of which is included in the Disclosure Document.

 

“Guest Profile Data” means
personally identifiable information, profiles and preferences of guests, including any information from any Loyalty Program.

 

“Guestroom” means each rentable
unit in the Hotel consisting of a room, suite or suite of rooms used for overnight guest accommodation, the entrance to which is
controlled by the same key; however, adjacent rooms with connecting doors that can be locked and rented as separate units are considered
separate Guestrooms.

 

“Hardware” means all computer
hardware and other equipment (including all upgrades and replacements) required for the operation of any Electronic System.

 

“Hotel” means: (i) the Approved
Location; (ii) Hotel Improvements; and (iii) all FF&E, Fixed Asset Supplies, and Inventories at the Hotel Improvements.

 

“Hotel Improvements” means
the building or buildings containing Guestrooms, Public Facilities, administrative facilities, parking, pools, landscaping, and
all other improvements constructed or to be constructed or renovated at the Approved Location.

 

“Initial Work” is defined
in Section 4.2.

 

“Intellectual Property” means
the following items, regardless of the form or medium (for example, paper, electronic, tangible or intangible): (i) all Software,
including the data and information processed or stored by such Software; (ii) all Proprietary Marks; (iii) all Confidential
Information; and (iv) all other information, materials, and subject matter that are copyrightable, patentable or can be protected
under applicable intellectual property laws, and owned, developed, acquired, licensed, or used by Franchisor or its Affiliates
for the System.

 

 

    	B-4

    	 

    

 

“Interestholder” means, for
any Person, a Person that directly or indirectly holds an Ownership Interest in that Person.

 

“Inventories” means “Inventories”
as defined in the Uniform System, including provisions in storerooms, refrigerators, pantries and kitchens; beverages; other merchandise
intended for sale; fuel; mechanical supplies; stationery; and other expensed supplies and similar items.

 

“Inventory Management” means
those inventory management services made available by Franchisor to Franchisee under revenue management or consulting agreements.

 

“LD Amount” is defined in
Section 19.4.B.

 

“Loyalty Programs” means
all loyalty, recognition, affinity, and other programs designed to promote stays at, or usage of, the Hotel, System Hotels and
such other Franchisor Lodging Facilities designated by Franchisor or its Affiliates, or any similar, complementary, or successor
programs. As of the Effective Date, such programs include “Marriott Rewards,” “Ritz-Carlton Rewards,” and
various programs sponsored by airlines, credit card and other companies.

 

“Management Company” means
a management company for the Hotel selected by Franchisee and consented to by Franchisor.

 

“Management Company Acknowledgment”
means an acknowledgment signed by the Management Company, Franchisee and Franchisor, the current form of which is included in the
Disclosure Document.

 

“Marketing Fund” means money
collected by Franchisor for Marketing Fund Activities.

 

“Marketing Fund Activities”
is defined in Section 6.2.A.

 

“Marketing Fund Contribution”
is defined in Section 6.2.B.

 

“Marketing Materials” means
all advertising, marketing, promotional, sales and public relations concepts, press releases, materials, concepts, plans, programs,
brochures, or other information to be released to the public, whether in paper, digital or electronic, or in any other form of
media.

 

“Marks” means: (i) any trademarks,
trade names, trade dress, words, symbols, logos, slogans, designs, insignia, emblems, devices, service marks, and indicia of origin
(including taglines, program names, and restaurant, spa or other outlet names); and (ii) any combinations of the above; in each
case, whether registered or unregistered.

 

“Marriott Agreements” means,
collectively, this Agreement, any other agreements executed with this Agreement related to the Hotel and any other agreement, whenever
executed, related to the Hotel to which Franchisee, Guarantor or any of their respective Affiliates is a party and to which Franchisor
or any of its Affiliates is also a party or beneficiary, as such agreements may be amended.

 

“Master Franchisee” means
a Person that has the exclusive rights to develop, operate or sub-license a Brand.

 

    	B-5

    	 

    

 

 

“Opening Date” means the
date identified as the Hotel opening date in the letter agreement issued by Franchisor described in Exhibit C.

 

“Other Lodging Product” means
a hotel, Vacation Club Products, whole ownership facilities, condominium, apartment or other similar lodging product that is not
a Franchisor Lodging Facility.

 

“Other Mark(s)” is defined
in Section 11.3.

 

“Ownership Interest” means
all forms of legal or beneficial ownership of entities or property, including the following: stock, partnership, limited liability
company, joint tenancy, leasehold, proprietorship, trust, beneficiary, proxy, power-of-attorney, option, warrant, and any other
interest that evidences ownership or Control, whether direct or indirect (unless otherwise specified).

 

“Passive Investor Interests”
means non-Controlling Ownership Interests in Franchisee.

 

“Periodic Renovations” is
defined in Section 4.3.A.

 

“Person” means an individual
(and the heirs, executors, administrators or other legal representatives of an individual), a partnership, a joint venture, a firm,
a company, a corporation, a governmental department or agency, a trustee, a trust, an unincorporated organization or any other
legal entity.

 

“Plans” means construction
documents, including a site plan and architectural, mechanical, electrical, civil engineering, plumbing, landscaping and interior
design drawings and specifications.

 

“Property Management System”
means all property management systems (including all Software, Hardware and electronic access) designated by Franchisor for use
in the front office, back-of-the-office or other operations of System Hotels.

 

“Proprietary Marks” means
any Marks, whether owned currently by Franchisor or any of its Affiliates or later developed or acquired, that are used or registered
by Franchisor or one of its Affiliates, or by usage are associated with one or more System Hotels.

 

“Prospectus” means any registration
statement, memorandum, offering document, or similar document for the sale or transfer of an Ownership Interest.

 

“Public Facilities” means
the lobby areas, meeting rooms, convention or banquet facilities, restaurants, bars, lounges, corridors and other similar facilities
at the Hotel.

 

“Quality Assurance Program”
means the program that Franchisor uses to monitor guest satisfaction and the operations, facilities and services at System Hotels.

 

“Reasonable Business Judgment”
is defined in Section 27.3.A.

 

“Reservation System” means
any reservation system designated by Franchisor for System Hotels (including Software, Hardware and related electronic access).

 

“Restricted Person” means
a Person identified by any government or legal authority as a Person with whom Franchisor or its Affiliates are prohibited from
transacting business, including a Person: (i) described in Section 1 of U.S. Executive Order 13224; (ii) directly or
indirectly owned or controlled by the government of any country that is subject to an embargo by the United States; and (iii) acting
on behalf of a government of any country that is subject to such an embargo.

 

    	B-6

    	 

    

 

 

“Sales Agent” means a representative
of Franchisor or its Affiliates who acts on behalf of Franchisee for: (i) Inventory Management; (ii) booking reservations at the
Hotel or other booking activities, including accessing the Reservation System; or (iii) sales activities, including arranging group
sales.

 

“Serious Crime” means a crime
punishable by either or both: (i) imprisonment of one year or more; or (ii) payment of a fine or penalty of $10,000 (or
the foreign currency equivalent) or more.

 

“Similar Marks” is defined
in Section 11.2.6.

 

“Soft Goods” means wall and
floor coverings, window treatments, carpeting, bedspreads, lamps, artwork, decorative items, pictures, wall decorations, upholstery,
textile, fabric, vinyl and similar items used in the Hotel.

 

“Software” means all computer
software (including all future upgrades and modifications) and related documentation provided by Franchisor or designated suppliers
for the Electronic Systems.

 

“Standards” means Franchisor’s
manuals, procedures, systems, guides, programs (including the Quality Assurance Program), requirements, directives, specifications,
Design Criteria, and such other information and initiatives for operating System Hotels.

 

“System” means the Standards,
Intellectual Property, the Electronic Systems, the Marketing Fund Activities, Additional Marketing Programs, Marketing Materials,
training programs, and other elements that Franchisor or its Affiliates have designated for System Hotels.

 

“System Hotel” means a hotel
operated by Franchisor, an Affiliate of Franchisor, or a franchisee or licensee of Franchisor or its Affiliates under the trade
name(s) identified in Item 1 of Exhibit A in any of the 50 States of the United States of America, the District of Columbia
and Canada, and excludes any other Franchisor Lodging Facility or other business operation.

 

“Taxes” means taxes, levies,
imposts, duties, fees, charges or liabilities imposed by any governmental authority, including any interest, additions to tax or
penalties applicable to any of the foregoing.

 

“Term” is defined in Section 2.1.

 

“Transfer” means any absolute
or conditional sale, conveyance, transfer, assignment, exchange, lease or other disposition.

 

“Travel Costs” means all
travel, food and lodging, living, and other out-of-pocket costs.

 

“Travel Management Companies”
means travel agencies, online travel agencies, group intermediaries, wholesalers, concessionaires, and other similar travel companies.

 

“Uniform System” means the
Uniform System of Accounts for the Lodging Industry, Eleventh Revised Edition, 2014, as published by the American Hotel & Lodging
Educational Institute, or any later edition, revision or replacement that Franchisor designates.

 

    	B-7

    	 

    

 

“Vacation Club Products”
means timeshare, fractional, interval, vacation club, destination club, vacation membership, private membership club, private
residence club, and points club products, programs and services and includes other forms of products, programs and services where
purchasers acquire an ownership interest, use or other rights to use determinable leisure units on a periodic basis and pay in
advance for such ownership interest, use or other right.

 

“Yield Management System”
means any yield management system (including all Software, Hardware and electronic access) designated by Franchisor for use by
System Hotels.

 

    	B-8

    	 

    

   

EXHIBIT C

CHANGE OF OWNERSHIP

 

In order for the Hotel to continue to operate as a System Hotel,
the Agreement is modified by, and the Hotel is to be renovated under, the terms of this Exhibit C and Section 4.4.

 

	1.	Franchisee acknowledges that the following modifications are made to the Agreement:

 

	 	A.	“Opening Date” means January 14, 2014.

 

	 	B.	All references in Sections 3.2, 6.2.B. and 13.3.A. to “Opening Date” are deleted and replaced by references to “Effective Date.”

 

	 	C.	The following are added to Section 26.2:

 

“F.NO ENDORSEMENT. FRANCHISEE ACKNOWLEDGES
THAT FRANCHISOR DID NOT APPROVE, RECOMMEND, ENDORSE OR PARTICIPATE IN ANY DECISIONS ABOUT THE TERMS OF ANY TRANSACTION UNDER WHICH
FRANCHISEE ACQUIRED CONTROL OF THE HOTEL, INCLUDING THE PURCHASE PRICE, AND DID NOT COMMENT ON ANY FINANCIAL PROJECTIONS SUBMITTED
TO FRANCHISEE.

 

G.EXISTING AGREEMENTS. FRANCHISEE AGREES
TO BE BOUND BY ALL AGREEMENTS BETWEEN THE PRIOR FRANCHISEE OF THE HOTEL AND FRANCHISOR OR ITS AFFILIATES, SUCH AS LICENSE, SERVICE
OR REVENUE MANAGEMENT AGREEMENTS AND ANY OTHER AGREEMENTS RELATING TO THE HOTEL.”

 

	2.	Franchisee represents that it has paid Franchisor’s outside legal counsel fees and costs incurred for the preparation and negotiation of the Marriott Agreements.

 

	3.	Property Improvement Plan.

 

	 	Not Applicable.

 

    	C-1

    	 

    

 

GUARANTY

 

This Guaranty (“Guaranty”)
is executed as of October 15, 2015 (“Effective Date”) by Moody National REIT II, Inc. and Brett C. Moody (jointly
and severally, “Guarantor”) for the benefit of Marriott International, Inc., a Delaware corporation (“Franchisor”).

 

In consideration of and as an inducement to
Franchisor to execute the Residence Inn by Marriott Relicensing Franchise Agreement dated October 15, 2015 (as such agreement may
be amended, the “Agreement”), between Franchisor and Moody National Lancaster-Austin MT, LLC, a Delaware limited
liability company (“Franchisee”), for the hotel located at 1200 Barbara Jordan Blvd. Building 4, Austin, TX
78723, Guarantor agrees as follows:

 

1.Unconditional Guaranty. Guarantor
unconditionally guarantees that all of Franchisee’s obligations under the Marriott Agreements will be punctually paid and
performed. On default by Franchisee and notice from Franchisor, Guarantor will immediately make each payment and perform each obligation
required by Franchisee under the Marriott Agreements. Franchisor may extend, modify or release any indebtedness or obligation of
Franchisee, or settle, adjust or compromise any Claim against Franchisee without notice to Guarantor, and any such action will
not affect the obligations of Guarantor under this Guaranty.

 

2.Waiver of Notices. Guarantor waives
(i) notice of any amendment of any of the Marriott Agreements and (ii) notice of demand for payment or performance by Franchisee.
Guarantor’s guarantee applies to any extension or renewal of any of the Marriott Agreements. Guarantor unconditionally and
irrevocably waives notice of acceptance of this Guaranty, presentment, demand, diligence, protest and dishonor or of any other
notice to which Guarantor otherwise might be entitled under Applicable Law.

 

3.Obligations of Guarantor.

 

A.No Limitations. The obligations of
Guarantor under this Guaranty will not be reduced, limited, terminated, discharged, impaired or otherwise affected by (i) Franchisee’s
failure to pay a fee or provide consideration to Guarantor for the issuance of this Guaranty; (ii) the occurrence or continuance
of a default under any of the Marriott Agreements; (iii) any assignment of any of the Marriott Agreements; (iv) any amendment,
waiver, consent or other action taken related to any Marriott Agreement, including any discounts or extensions of time for payment
of any amounts due under any of Marriott Agreement or extensions of time for the performance of any obligation of Franchisee under
any Marriott Agreement; (v) the voluntary or involuntary liquidation, sale or other disposition of all or any portion of Franchisee’s
assets, or the receivership, insolvency, bankruptcy, reorganization or similar proceedings affecting Franchisee or its assets or
the release or discharge of Franchisee from any of its obligations under any Marriott Agreement; or (vi) any change of circumstances,
whether or not foreseeable, and whether or not any such change could affect the risk of Guarantor.

 

B.Changes to the Marriott Agreements. Any
modifications, amendments, waivers or consents to the Marriott Agreements may be agreed to or granted without the approval or consent
of Guarantor.

 

4.Payment and Performance. This Guaranty
constitutes a guaranty of payment and performance and not of collection. Guarantor waives any right to require Franchisor to proceed,
by way of set-off or otherwise, against (i) Franchisee; (ii) any assets of Franchisee; (iii) any assets of Franchisee held
by any Person as security; or (iv) any other guarantor.

 

    	1

    	 

    

 

5.Preferences or Other Return Payments.
This Guaranty will continue to be effective or be reinstated, as the case may be, if at any time payment under any of the Marriott
Agreements is rescinded or must otherwise be restored or returned by Franchisor due to the insolvency, bankruptcy or reorganization
of Franchisee or Guarantor, all as though such payment had never been made.

 

6.Notices. All notices and other
communications will be: (i) in writing; (ii) delivered by hand with receipt, or by courier service with tracking capability;
and (iii) addressed as provided below or at any other address designated in writing by Guarantor. Any notice will be deemed
received (i) when delivery is received or first refused, if delivered by hand or (ii) one day after posting of such notice, if
sent via overnight courier.

 

7.Joint and Several Liability. If
more than one Person has executed this Guaranty as a Guarantor, the liability of each Guarantor will be joint, several and primary.

 

8.Death of Guarantor. On the death
of any individual Guarantor, the estate of such Guarantor will be bound by this Guaranty but only for defaults and obligations
existing at the time of death. In such event, the obligations of any other Guarantors will continue in full force and effect.

 

9.Existence; Authorization; Prior Representations.

 

A.Existence. Each Guarantor that is
not an individual represents and warrants that it: (i) is duly formed, validly existing and in good standing under the laws
of the jurisdiction of its formation and (ii) has, and will continue to have, the ability to perform its obligations under
this Guaranty.

 

B.Authorization. Each Guarantor represents
and warrants that the execution and delivery of this Guaranty and the performance of its obligations under this Guaranty: (i) have
been duly authorized; (ii) do not and will not violate, contravene or result in a default or breach of (a) any Applicable
Law, (b) its governing documents or (c) any agreement, commitment or restriction binding on the relevant party; and (iii) do
not require any consent that has not been properly obtained by the relevant party.

 

C.Prior Representations. Guarantor
represents and warrants that all of the information in the application and provided in the Marriott Agreements, was true as of
the time made and is true as of the Effective Date, regardless of whether such representations and warranties were provided by
Franchisee or another Person.

 

D.Restricted Persons. Guarantor represents
that neither Guarantor nor any of its Affiliates (including their directors and officers), the Interestholders or the funding sources
for any of them, is a Restricted Person.

 

10.Governing Law; Jurisdiction. This
Guaranty will be construed under and governed by Maryland law which law will prevail if there is any conflict of law. Guarantor
expressly and irrevocably submits to the non-exclusive jurisdiction of the courts of the State of Maryland for the purpose of any
Dispute relating to this Guaranty. So far as is permitted under Maryland law, this consent to personal jurisdiction will be
self-operative.

 

11.Costs of Enforcement. Guarantor
agrees to pay all costs, including reasonable legal fees, incurred by Franchisor and its Affiliates to enforce or protect any rights
or to collect any amounts due under this Guaranty or any other Marriott Agreement.

 

    	2

    	 

    

 

12.WAIVER OF PUNITIVE DAMAGES. EACH
OF GUARANTOR AND FRANCHISOR ABSOLUTELY, IRREVOCABLY AND UNCONDITIONALLY WAIVES THE RIGHT TO CLAIM OR RECEIVE PUNITIVE DAMAGES IN
ANY DISPUTE RELATED TO THIS GUARANTY, THE RELATIONSHIP OF THE PARTIES OR ANY ACTIONS OR OMISSIONS IN CONNECTION WITH ANY OF THE
ABOVE.

 

13.WAIVER OF JURY TRIAL. EACH OF
GUARANTOR AND FRANCHISOR ABSOLUTELY, IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY DISPUTE RELATED TO THIS GUARANTY,
THE RELATIONSHIP OF THE PARTIES OR ANY ACTIONS OR OMISSIONS IN CONNECTION WITH THE ABOVE.

 

14.Counterparts. This Guaranty may
be executed in any number of counterparts, each of which will be deemed an original and all of which constitute one and the same
instrument. Delivery of an executed signature page by electronic transmission is as effective as delivery of an original signed
counterpart.

 

15.Definitions. All capitalized terms
not defined in this Guaranty have the meaning stated in the Agreement.

 

16.Waiver. Franchisor’s
failure to exercise any right or to insist on compliance by Guarantor with any provision of this Guaranty will not constitute a
waiver of Franchisor’s right to demand later full compliance with any provision of this Guaranty.

 

17.Amendments. This Guaranty may
only be amended in a written document that has been duly executed by the parties and may not be amended by conduct manifesting
assent, and each party is put on notice that any individual purporting to amend this Guaranty by conduct manifesting assent is
not authorized to do so.

 

18.Survival. The provisions of Sections
1, 7, 10, 11, 12 and 13 will survive the expiration or termination of the Agreement.

 

[Signatures
appear on the following page]

 

    	3

    	 

    

 

IN WITNESS WHEREOF, Guarantor has executed
this Guaranty, under seal, as of the Effective Date.

 

	 	GUARANTOR:	 
	 	 	 
	 	MOODY NATIONAL REIT II, INC.	 
	 	 	 
	 	By:	/s/ Brett C. Moody	(SEAL)
	 	Name:	Brett C. Moody	 
	 	Title:	Chief Executive Officer	 
	 	 	 	 
	 		/s/ Brett C. Moody	(SEAL)
	 	 	Brett C. Moody, an Individual	 

 

	ADDRESS FOR NOTICES TO GUARANTOR:	 
	 	 
	6363 Woodway Drive, Suite 110 	 
	Houston, TX 77057	 

 

    	4

    	 

    

 

MANAGEMENT COMPANY ACKNOWLEDGMENT

 

This Management Company Acknowledgment (the
“Acknowledgment”) is executed on October 15, 2015 (“Effective Date”) by Marriott International,
Inc., a Delaware corporation (“Franchisor”), Moody National Lancaster-Austin MT, LLC, a Delaware limited liability
company (“Franchisee”) and Moody National Hospitality Company, LLC, a Texas limited liability company (“Management
Company”).

 

RECITAL

 

Management Company has entered into an agreement
(“Management Agreement”) with Franchisee to operate the hotel located at 1200 Barbara Jordan Blvd. Building
4, Austin, TX 78723 (the “Hotel”), under the Residence Inn by Marriott Relicensing Franchise Agreement dated
October 15, 2015 (as such agreement may be amended, the “Agreement”) between Franchisor and Franchisee.

 

NOW, THEREFORE, in consideration of the promises
in this Acknowledgment and other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the parties
agree as follows:

 

1.Franchisor’s Consent. 

 

A.Consent and Grant. Franchisor consents
to the operation of the Hotel by Management Company on behalf of Franchisee and grants to Management Company the right to use the
System to operate the Hotel in compliance with the Standards, this Acknowledgment and the Agreement. Franchisor’s consent
is personal to Management Company, and this Acknowledgment is not assignable by Franchisee or Management Company. Such consent
and grant will terminate without notice to Management Company on: (i) the expiration or termination of the Agreement; (ii) the
execution of another management company acknowledgment with respect to the Hotel by Franchisor, Franchisee and another management
company; or (iii) the execution of an amendment to the Agreement consenting to the operation of the Hotel by Franchisee.

 

B.Change in Circumstances. If
there is a change in Control of Management Company or if Management Company becomes a Competitor (or an Affiliate of a Competitor)
or a Restricted Person (or an Affiliate of a Restricted Person) or if Management Company becomes the principal operator for a Competitor
or if there is a material adverse change to the financial condition or operational capacity of Management Company, Franchisee will
promptly notify Franchisor of any such change. In such circumstance, Management Company will be subject to the consent process
under the Agreement as if it were a new operator of the Hotel.

 

C.Withdrawal of Consent. If Management
Company breaches any provision of the Agreement, Franchisor may withdraw its consent for Management Company to operate the Hotel.

 

2.Management Company Representations.
Management Company represents and warrants to Franchisor that: (i) neither it nor any Person that controls Management
Company has been convicted of a Serious Crime; (ii) neither Management Company nor any Affiliate of Management Company is a Competitor;
(iii) the Management Agreement is valid, binding and enforceable, contains no terms that may cause a breach of the Agreement and
is for a term of not less than five years; and (iv) neither Management Company nor any Affiliate of Management Company is
a Restricted Person.

 

    	1

    	 

    

 

3.Management Company and Franchisee Acknowledgments.
Management Company and Franchisee acknowledge that:

 

A.Management Company will have the exclusive
authority and responsibility for the day-to-day management of the Hotel on behalf of Franchisee. The general manager of the Hotel
will be an employee of Management Company and devote his or her full time and attention to the management and operation of the
Hotel and will have successfully completed Franchisor’s mandatory management training program required by the Standards.
Management Company will promptly inform Franchisor whenever it hires a general manager. In addition to the general manager,
the other department managers of the Hotel will be employees of the Management Company, while other staff at the Hotel may be employed
by Franchisee;

 

B.Management Company will operate the Hotel
in strict compliance with the Standards. Management Company will comply with the terms of the Agreement for the management and
operation of the Hotel, including those related to Intellectual Property, as if Management Company had executed the Agreement as
“Franchisee.” Management Company, however, will have no rights under the Agreement except as stated in this Acknowledgment
and such rights do not constitute a franchise or license to Management Company. If Franchisee delegates the insurance obligations
under the Agreement to Management Company, Management Company will satisfy such obligations. Management Company will comply with
Applicable Law;

 

C.Franchisor may enforce directly against
Management Company all terms in the Agreement regarding Intellectual Property and the management and operation of the Hotel (including
insurance, if such obligations have been delegated to Management Company). Franchisor will have the right to seek and obtain all
remedies against the Management Company available at law and in equity for Management Company’s failure to comply with the
terms of this Acknowledgment, in addition to any remedies Franchisor may have against Franchisee;

 

D.Management Company assigns, and will cause
each of its employees or independent contractors who contributed to System modifications to assign, to Franchisor, in perpetuity
throughout the world, all rights, title and interest (including the entire copyright and all renewals, reversions and extensions
of such copyright) in and to such System modifications. Except to the extent prohibited by Applicable Law, Management Company waives,
and will cause each of its employees or independent contractors who contributed to System modifications to waive, all “moral
rights of authors” or any similar rights in such System modifications (for purposes of this Section 3, “modifications”
includes any derivatives and additions);

 

E.Management Company will execute or cause
to be executed and deliver to Franchisor, any documents, and take any actions required by Franchisor to protect the title in any
System modifications;

 

F.Any default under the Agreement caused solely
by Management Company will constitute a default under the Management Agreement, and Franchisee will have the right to terminate
the Management Agreement;

 

G.Franchisee and Management Company will not
modify the Management Agreement in any way that is inconsistent with the Agreement or this Acknowledgment;

 

H.Franchisee will not allow the Management
Agreement to expire or terminate the Management Agreement without providing Franchisor at least 30 days’ notice, unless Franchisee
needs to remove Management Company on an expedited basis due to theft, fraud or other material defaults of Management Company or
a default under the Agreement caused by Management Company; and

 

I.Management Company will perform the day-to-day
operations of the Hotel. Franchisor may communicate directly with Management Company and the managers at the Hotel about day-to-day
operations of the Hotel and Franchisor may rely on such statement of the managers and the Management Company. Franchisor will under
no circumstances direct or control such Hotel operations.

 

    	2

    	 

    

 

4.Existence. Each party represents
and warrants that it: (i) is duly formed, validly existing, and in good standing under the laws of the jurisdiction of its
formation; and (ii) has and will continue to have the ability to perform its obligations under this Acknowledgment.

 

5.Authorization. Each party represents
and warrants that the execution and delivery of this Acknowledgment and the performance of its obligations under this Acknowledgment:
(i) have been duly authorized, (ii) do not and will not violate, contravene or result in a default or breach of (a) any Applicable
Law, (b) its governing documents or (c) any agreement, commitment or restriction binding on the relevant party; and (iii) do
not require any consent that has not been properly obtained by the relevant party. Each of Management Company and Franchisee represents
that it has the right to perform its obligations under this Acknowledgment as of the Effective Date and covenants that it will
continue to have such right as long as this Acknowledgment remains in effect.

 

6.Controlling Agreement. If any provision
of the Agreement or this Acknowledgment conflicts with the Management Agreement, the provision of the Agreement or this Acknowledgment
will control.

 

7.No Release. Franchisee will remain
responsible for the performance of all obligations under the Agreement. This Acknowledgment will not release Franchisee from any
liability or obligation under the Agreement.

 

8.Definitions. All capitalized terms
not defined in this Acknowledgment have the meaning stated in the Agreement.

 

9.Counterparts. This Acknowledgment
may be executed in any number of counterparts, each of which will be deemed an original and all of which constitute one and the
same instrument. Delivery of an executed signature page by electronic transmission is as effective as delivery of an original signed
counterpart.

 

10.Governing Law. This Acknowledgment
will be construed under and governed by the Maryland law, which law will prevail if there is any conflict of law. Management Company
expressly and irrevocably submits to the non-exclusive jurisdiction of the courts of the State of Maryland for the purpose of any
Dispute related to this Acknowledgment. So far as permitted under Maryland law, this consent to personal jurisdiction will be self-operative.

 

11.Management Company’s Address.
Management Company’s mailing address is provided on the signature page. Management Company agrees to provide notice to both
Franchisee and Franchisor if there is any change in Management Company’s mailing address.

 

12.Partial Invalidity. If
any term of this Acknowledgment, or its application to any Person or circumstance, is invalid or unenforceable at any time or to
any extent, then (i) the remainder of this Acknowledgment, or the application of such term to Persons or circumstances other
than those as to which it is held invalid or unenforceable, will not be affected and each term of this Acknowledgment will be valid
and enforced to the fullest extent permitted by Applicable Law; and (ii) Franchisor, Franchisee and Management Company will
negotiate in good faith to modify this Acknowledgment to implement their original intent as closely as possible in a mutually acceptable
manner.

 

    	3

    	 

    

 

13.No Third-Party Beneficiary.
Nothing in this Acknowledgment is intended to create any third-party beneficiary or give any rights or remedies to any Person
other than Franchisor and its permitted successors and assigns.

 

14.Equitable Relief. Franchisor is
entitled to injunctive or other equitable relief, including restraining orders and preliminary injunctions, in any court of competent
jurisdiction for any threatened or actual material breach of this Acknowledgment or non-compliance with the Standards. Franchisor
is entitled to such relief without the necessity of proving the inadequacy of money damages as a remedy, without the necessity
of posting a bond and without waiving any other rights or remedies.

 

15.WAIVER OF PUNITIVE DAMAGES. EACH
OF MANAGEMENT COMPANY, FRANCHISEE AND FRANCHISOR ABSOLUTELY, IRREVOCABLY AND UNCONDITIONALLY WAIVES THE RIGHT TO CLAIM OR RECEIVE
PUNITIVE DAMAGES IN ANY DISPUTE RELATED TO THE HOTEL, THIS ACKNOWLEDGMENT, THE RELATIONSHIP OF THE PARTIES OR ANY ACTIONS OR OMISSIONS
IN CONNECTION WITH ANY OF THE ABOVE.

 

16.WAIVER OF JURY TRIAL. EACH OF
MANAGEMENT COMPANY, FRANCHISEE AND FRANCHISOR ABSOLUTELY, IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY DISPUTE RELATED
TO THE HOTEL, THIS ACKNOWLEDGMENT, THE RELATIONSHIP OF THE PARTIES OR ANY ACTIONS OR OMISSIONS IN CONNECTION WITH ANY OF THE ABOVE.

 

17.Costs of Enforcement. If either
party initiates any legal or equitable action to protect its rights under this Acknowledgment or other Marriott Agreements, the
prevailing party is entitled to recover its costs, including reasonable legal fees.

 

18.Entire Agreement. This Acknowledgment
and the Marriott Agreements are fully integrated and contain the entire agreement between the parties as it relates to the Hotel
and the Approved Location and supersede all prior understandings and writings.

 

19.Amendments. This Acknowledgment
may only be amended in a written document that has been duly executed by the parties and may not be amended by conduct manifesting
assent, and each party is put on notice that any individual purporting to amend this Acknowledgment by conduct manifesting assent
is not authorized to do so.

 

20.Survival. The terms of Sections
3, 14, 15, 16 and 17 survive expiration or termination of this Acknowledgment and, to the extent applicable to Management Company,
Section 27.8 of the Agreement.

 

[Signatures
appear on the following page]

 

 

    	4

    	 

    

 

IN WITNESS WHEREOF, the parties have
executed this Acknowledgment, under seal, as of the Effective Date.

 

	 	FRANCHISOR:	 
	 	 	 
	 	MARRIOTT INTERNATIONAL, INC.	 
	 	 	 
	 	By:	/s/ Michael H. Rosenman	(SEAL)
	 	Name:	Michael H. Rosenman	 
	 	Title:	Vice President, Owner and Financial Services	 
	 	 	 	 
	 	FRANCHISEE: 	 
	 		 	 
	 	MOODY NATIONAL LANCASTER-AUSTIN MT,

LLC, a Delaware limited
liability company	 
	 	 	 	 
	 	By:/	/s/ Brett C. Moody	(SEAL)
	 	Name:	Brett C. Moody	 
	 	Title:	President	 
	 	 	 	 
	 	MANAGEMENT COMPANY:	 
	 	 	 	 
	 	MOODY NATIONAL HOSPITALITY COMPANY,
 LLC, a Texas limited liability company	 
	 	 	 	 
	 	By:	/s/ Brett C. Moody	(SEAL)
	 	Name:	Brett C. Moody	 
	 	Title:	President	 

 

	ADDRESS FOR MANAGEMENT COMPANY:	 
	 	 
	6363 Woodway Drive, Suite 110 	 
	Houston, TX 77057	 

 

    	5

    	 

    

 

 ELECTRONIC SYSTEMS LICENSE AGREEMENT

 

This Electronic Systems License Agreement (this
“License Agreement”) is executed on October 15, 2015 (the “Effective Date”) between
Marriott International, Inc. (“Franchisor”) and Moody National Lancaster-Austin MT, LLC (“Franchisee”).

 

RECITALS

 

A.As of the Effective Date, Franchisor and
Franchisee have entered into a Residence Inn by Marriott Relicensing Franchise Agreement (the “Franchise Agreement”)
to operate the Hotel located at 1200 Barbara Jordan Blvd. Building 4, Austin, TX 78723 under the System.

 

B.Franchisee is required to use the Electronic
Systems that are made available under this License Agreement for the operation of the Hotel under the Franchise Agreement.

 

NOW, THEREFORE, in consideration of the promises
in this License Agreement and other good and valuable consideration, the receipt and sufficiency of which are acknowledged, Franchisor
and Franchisee agree as follows:

 

1.Limited Grant. Franchisor grants
to Franchisee a limited, non-exclusive license to use the Electronic Systems. Franchisee acknowledges that the Electronic Systems
may be modified, enhanced, replaced or may become obsolete, and that new Electronic Systems may be created to meet the needs of
the System and continual changes in technology.

 

2.Term. The term of this License
Agreement begins on the Effective Date and ends on expiration or termination of the Franchise Agreement. For each Electronic System,
the license begins on the date it is installed and ends on this License Agreement’s termination or when such Electronic System
is no longer used as part of the System for operating the Hotel.

 

3.Ownership of the Electronic Systems.
The Electronic Systems that are proprietary to Franchisor or third-party vendors, as applicable, will remain their sole property,
and Franchisee will not contest such ownership.

 

4.Support Services. Franchisor will
use commercially reasonable efforts to maintain and support the Electronic Systems (the “Support Services”)
during the term of this License Agreement. The Support Services may be provided by Franchisor or third-party vendors.

 

5.Fees and Costs. Franchisee will
pay the fees and costs for the Electronic Systems as provided in the Franchise Agreement.

 

6.Use of the Electronic Systems.
Franchisee will use the Electronic Systems exclusively for operating the Hotel under the Franchise Agreement.

 

7.Confidentiality Obligations. Franchisee
will treat the Electronic Systems as Confidential Information under the Franchise Agreement. Franchisee will ensure that only authorized
Persons have access to the Electronic Systems and that the Electronic Systems are only used for their intended purpose. Franchisee
will not, without the consent of Franchisor or any applicable third-party vendor, copy, reverse engineer, modify or provide unauthorized
access to the Electronic Systems or any of its components. Franchisee will not attempt to disregard or circumvent any measures
used by Franchisor to safeguard the Electronic Systems and the Intellectual Property.

 

    	1

    	 

    

 

8.Suspension. Franchisor reserves
the right to suspend Franchisee’s access to any Electronic System in order to protect the Intellectual Property or the intellectual
property of third-party vendors.

 

9.Third-Party Vendors. Franchisee
will comply with the terms of any license for any of the Electronic Systems provided by a third-party vendor. Any third-party vendor
will have the right to enforce such terms directly against Franchisee. Franchisor will have no liability for Franchisee’s
use of any Electronic System provided by a third-party vendor. Franchisee may be required to execute agreements with third-party
vendors in order to obtain access to certain Electronic Systems.

 

10.Preferred Vendors. Franchisor
may designate a third-party vendor of the Electronic Systems as a preferred vendor and require Franchisee to use the Electronic
Systems provided by the preferred vendor.

 

11.NO ENDORSEMENT OR WARRANTY. FRANCHISOR
DOES NOT ENDORSE OR MAKE ANY REPRESENTATION OR WARRANTY ABOUT ANY ELECTRONIC SYSTEM PROVIDED BY THIRD-PARTY VENDORS, INCLUDING
PREFERRED VENDORS. FRANCHISOR PROVIDES THE ELECTRONIC SYSTEMS AND THE SUPPORT SERVICES ON AN AS-IS BASIS. FRANCHISOR DISCLAIMS
ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND
CUSTOM OR USAGE IN THE TRADE, RELATED TO FRANCHISEE’S USE OF THE ELECTRONIC SYSTEMS AND THE SUPPORT SERVICES.

 

12.Limitation on Liability. Franchisor
is not liable for any loss or damage arising out of the use or failure of any Electronic Systems or Support Services, including
corruption or loss of data, and Franchisee waives any right to, or claim of, any direct, exemplary, incidental, indirect, special,
consequential or other similar damages (including loss of profits) in connection with the use, inability to use, breach or failure
of any Electronic Systems or Support Services, even if Franchisor has been advised of the possibility of such damage, breach or
failure. To the extent permissible, Franchisor will use reasonable efforts to make available for Franchisee any warranties or other
similar protections provided by Franchisor’s vendors with respect to the Electronic Systems.

 

13.Indemnification. Franchisee will
indemnify, defend and hold harmless Franchisor and its Affiliates (and each of their respective predecessors, successors, assigns,
current and former directors, officers, shareholders, subsidiaries, employees and agents), against all Claims and Damages, including
allegations of negligence by such Persons, to the fullest extent permitted by Applicable Law, arising from or related to Franchisee’s
use of the Electronic Systems or any failure by Franchisee to comply with this License Agreement. Franchisee’s obligations
in this Section are incorporated into Franchisee’s indemnification obligations in the Franchise Agreement.

 

14.Software License Rights Upon Termination.
The Software that Franchisee will purchase through Franchisor is generally not assignable to Franchisee upon termination of this
License Agreement (“Non-Assignable Software”). When this License Agreement terminates, Franchisee will not have
any right to use the Non-Assignable Software. At Franchisee’s request, Franchisor will use reasonable efforts to facilitate
the assignment of any Software that is assignable (“Assignable Software”). On termination of this License Agreement,
Franchisee will delete both Assignable Software and Non-Assignable Software obtained through Franchisor. Franchisee may reinstall
Assignable Software using copies obtained by Franchisee directly from the applicable vendor.

 

    	2

    	 

    

 

15.Governing Law. This License Agreement
takes effect upon its acceptance and execution by Franchisor in Maryland and will be construed under and governed by Maryland law,
which law will prevail if there is any conflict of law.

 

16.WAIVER OF PUNITIVE DAMAGES. EACH
OF FRANCHISEE AND FRANCHISOR ABSOLUTELY, IRREVOCABLY AND UNCONDITIONALLY WAIVES THE RIGHT TO CLAIM OR RECEIVE PUNITIVE DAMAGES
IN ANY DISPUTE RELATED TO THE HOTEL, THE MARRIOTT AGREEMENTS, THE RELATIONSHIP OF THE PARTIES OR ANY ACTIONS OR OMISSIONS IN CONNECTION
WITH ANY OF THE ABOVE. NOTHING IN THIS SECTION 16 LIMITS FRANCHISEE’S OBLIGATIONS UNDER SECTION 13.

 

17.WAIVER OF JURY TRIAL. EACH OF
FRANCHISEE AND FRANCHISOR ABSOLUTELY, IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY DISPUTE RELATED TO THE HOTEL,
THE MARRIOTT AGREEMENTS, THE RELATIONSHIP OF THE PARTIES OR ANY ACTIONS OR OMISSIONS IN CONNECTION WITH ANY OF THE ABOVE.

 

18.Notices. All notices and other
communications under this License Agreement will be in writing and will be delivered as provided in the Franchise Agreement.

 

19.Counterparts. This License Agreement
may be executed in any number of counterparts, each of which will be deemed an original and all of which constitute one and the
same instrument. Delivery of an executed signature page by electronic transmission is as effective as delivery of an original signed
counterpart.

 

20.Construction and Interpretation.

 

A.Partial Invalidity. If any term of
this License Agreement, or its application to any Person or circumstance, is invalid or unenforceable at any time or to any extent,
then: (i) the remainder of this License Agreement, or the application of such term to Persons or circumstances except those
as to which it is held invalid or unenforceable, will not be affected and each term of this License Agreement will be valid and
enforced to the fullest extent permitted by Applicable Law; and (ii) Franchisor and Franchisee will negotiate in good faith
to modify this License Agreement to implement their original intent as closely as possible in a mutually acceptable manner.

 

B.Non-Exclusive Rights and Remedies. No
right or remedy of Franchisor or Franchisee under this License Agreement is intended to be exclusive of any other right or remedy
under this License Agreement at law or in equity.

 

C.No Third-Party Beneficiary. Nothing
in this License Agreement is intended to create any third-party beneficiary or give any rights or remedies to any Person other
than Franchisor or Franchisee and their respective permitted successors and assigns.

 

D.Actions from Time to Time. When this
License Agreement permits Franchisor to take any action, exercise discretion or modify the System, Franchisor may do so from time
to time.

 

    	3

    	 

    

 

E.Interpretation of Agreement. Franchisor
and Franchisee intend that this Agreement excludes all implied terms to the maximum extent permitted by Applicable Law. Headings
of Sections are for convenience and are not to be used to interpret the Sections to which they refer. Words indicating the singular
include the plural and vice versa as the context may require. References that a Person “will” do something mean the
Person has an obligation to do such thing. References that a Person “may” do something mean a Person has the right,
but not the obligation, to do so. References that a Person “may not” and “will not” do something mean a
Person is prohibited from doing so.

 

F.Definitions. All capitalized terms
not defined in this License Agreement have the meaning stated in the Franchise Agreement.

 

21.Entire Agreement. This License
Agreement and the Marriott Agreements are fully integrated and contain the entire agreement between the parties as it relates to
the Hotel and the Approved Location and supersede all prior understandings and writings.

 

22.Amendments. This License Agreement
may only be amended in a written document that has been duly executed by the parties and may not be amended by conduct manifesting
assent, and each party is put on notice that any individual purporting to amend this License Agreement by conduct manifesting assent
is not authorized to do so.

 

23.Survival. The provisions of Sections
3, 7, 11, 12, 13, 14, 15, 16, 17 and 20 will survive expiration or termination of this License Agreement.

 

[Signatures
appear on the following page]

 

 

    	4

    	 

    

 

 

IN WITNESS WHEREOF, Franchisor and Franchisee
have caused this License Agreement to be executed, under seal, as of the Effective Date.

 

	 	FRANCHISOR:	 
	 	 	 
	 	MARRIOTT INTERNATIONAL, INC.	 
	 	 	 
	 	By:	/s/ Michael H. Rosenman	(SEAL)
	 	Name:	Michael H. Rosenman	 
	 	Title:	Vice President, Owner and Franchise Services	 
	 	 	 	 
	 	FRANCHISEE: 	 
	 		 	 
	 	MOODY NATIONAL LANCASTER-AUSTIN MT,

LLC, a Delaware limited
liability company	 
	 	 	 	 
	 	By:	/s/ Brett C. Moody	(SEAL)
	 	Name:	Brett C. Moody	 
	 	Title:	President	 

 

    	5

    	 

    

 

OWNER AGREEMENT

 

This Owner Agreement (“Agreement”)
is executed on October 15, 2015 (the “Effective Date”), by Marriott International, Inc., a Delaware corporation
(“Franchisor”), Moody National Lancaster-Austin MT, LLC, a Delaware limited liability company (“Franchisee”),
and Moody National Lancaster-Austin Holding, LLC, a Delaware limited liability company (“Owner”).

 

RECITALS

 

A.Franchisor and Franchisee are parties
to the Residence Inn by Marriott Relicensing Franchise Agreement dated October 15, 2015 (the “Franchise Agreement”)
relating to the Hotel, a copy of which is attached as Exhibit C.

 

B.Franchisee and Owner have entered into
a master lease (the “Lease”). Franchisee will lease the Hotel from Owner and will operate the Hotel as a System
Hotel.

 

NOW, THEREFORE, in consideration of the
promises in this Agreement and other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the
parties agree as follows:

 

	1.	ACKNOWLEDGMENTS AND COMPLIANCE

 

1.1Acknowledgments. Owner acknowledges
that:

 

A. Franchisor has granted to Franchisee a
limited, non-exclusive license to use the Proprietary Marks and the System to operate the Hotel as a System Hotel under the terms
of the Franchise Agreement for the Term;

 

B.Franchisee is obligated to operate the Hotel
as a System Hotel for the Term; and

 

C. Owner will benefit from the operation of
the Hotel as a System Hotel.

 

1.2Compliance; Confidential Information.

 

A.Compliance. If Owner has undertaken
such obligations in the Lease, Owner will develop, construct and maintain the Hotel in strict compliance with the Marriott Agreements
and the Standards as if Owner had executed the Franchise Agreement as “Franchisee.” Owner will procure the insurance
required under the Franchise Agreement if it is not obtained by Franchisee. Owner will comply with Applicable Law. Owner, however,
will not be responsible for the operation of the Hotel or payment obligations under the Franchise Agreement.

 

B.Confidential Information. Owner will
maintain the confidentiality of any Confidential Information in compliance with Section 12 of the Franchise Agreement. Owner will
obtain no other rights to use the Intellectual Property or to operate the Hotel as a System Hotel.

 

C.Not a Franchise or License. This
Agreement does not constitute a separate franchise or license to Owner.

 

	2.	TERM. 

 

The term of this Agreement will begin on the
Effective Date and will expire at the end of the Term of the Franchise Agreement unless this Agreement is terminated earlier. If
the Franchise Agreement is renewed or extended, this Agreement will automatically be extended to expire at the end of the renewal
Term or extended Term of the Franchise Agreement.

 

    	1

    	 

    

 

	3.	PROVISIONS OF THE LEASE.

 

The following terms will be considered incorporated
into the Lease. If the Lease has inconsistent terms, the terms below will control:

 

A.Possession and Control. Franchisee
will have exclusive possession of the Hotel and exclusive control of the day-to-day operations of the Hotel for a term that is
no shorter than the Term.

 

B.Compliance with Franchise Agreement.
The Hotel will be operated in compliance with the Franchise Agreement, and the Franchise Agreement will control in case of conflict
with the Lease.

 

	4.	OWNER’S OBLIGATION TO CURE DEFAULTS UNDER FRANCHISE AGREEMENT.

 

Franchisor will copy Owner on any notice of
default issued to Franchisee under the Franchise Agreement. Owner must cure such default on behalf of Franchisee during the cure
period stated in the default notice.

 

	5.	RIGHTS AND OBLIGATIONS ON TERMINATION OF FRANCHISE AGREEMENT

 

5.1New Franchise Agreement or Management
Agreement. On Franchisor’s request, and if Franchisor terminates the Franchise Agreement due to a default that is not
caused by Owner, Owner will elect to either:

 

A. enter into (or cause a substitute franchisee
to enter into) a new franchise agreement with Franchisor, in which case Owner (or such substitute franchisee) will execute such
agreement, together with any related agreements required by Franchisor, to be effective on the date of the termination of the Franchise
Agreement (“New Franchise Agreement”). The New Franchise Agreement will be in a form contained in the then-current
Disclosure Document, except that (a) the Franchise Fees will be the same as in the Franchise Agreement; and (b) the term will
be the remaining Term of the Franchise Agreement; or

 

B.enter into a management agreement with an
Affiliate of Franchisor, in which case Owner will execute such agreement, together with any related agreements required by Franchisor,
to be effective on the date of the termination of the Franchise Agreement (“Management Agreement”). The Management
Agreement will be in Franchisor’s standard form and the term will be equal to or longer than the remaining Term of the Franchise
Agreement.

 

Owner will notify Franchisor of its election under this Section
within 30 days of the date Owner receives the notice of termination of the Franchise Agreement and will enter into the applicable
agreement within 30 days of its election. If the Franchise Agreement is terminated before a New Franchise Agreement or a Management
Agreement is signed, Owner will execute a short-term agreement to operate the Hotel under the terms and conditions of the Franchise
Agreement on an interim basis until the New Franchise Agreement or Management Agreement is executed. 

 

    	2

    	 

    

 

5.2Qualifications for a New Franchise
Agreement. To obtain a New Franchise Agreement, the franchisee must be, as determined by Franchisor in its sole discretion:
(i) financially capable and responsible; (ii) sufficiently qualified in managerial skills and operational capacity (unless
a third party management company consented to by Franchisor will operate the Hotel); and (iii) able to perform the obligations
of the New Franchise Agreement. Such franchisee will provide Franchisor all information reasonably requested to determine that
it meets Franchisor’s then-current qualifications for franchisees of System Hotels.

 

5.3Additional Obligations. If Franchisor
does not make a request under Section 5.1 to continue the relationship with Owner, after termination of this Agreement and the
Franchise Agreement, Owner and Franchisee will be obligated, jointly and severally, to remove the Hotel from the System, pay all
amounts due, including liquidated damages and comply with the post-termination obligations in Section 9 of this Agreement and Section
20 of the Franchise Agreement. Franchisor may enforce the Franchise Agreement directly against Owner as if Owner were the Franchisee
under the Franchise Agreement.

 

	6.	RIGHTS AND OBLIGATIONS ON TERMINATION OF THE LEASE

 

If Owner terminates the Lease due to a default
by Franchisee, Owner and Franchisor will proceed in accordance with Section 5. However, if there is a dispute between Owner and
Franchisee about the termination of the Lease, and Franchisee retains possession of the Hotel, Franchisor may permit Franchisee
to continue to operate the Hotel under the Franchise Agreement as long as it retains possession. Franchisor’s rights under
this Agreement will be reserved pending resolution of the dispute between Owner and Franchisee.

 

	7.	TRANSFERS

 

7.1Owner’s Transfer Rights.
Owner agrees that its rights and duties in this Agreement are personal to Owner, and that Franchisor entered into this Agreement
in reliance on the business skill, financial capacity and character of Owner and its Affiliates and their principals. Given that
Owner may obtain a franchise under Section 5, the Hotel or any Ownership Interest in Owner, a Control Affiliate or the Hotel, may
be Transferred only in accordance with Section 17 of the Franchise Agreement, as if Owner were “Franchisee.” This Agreement
may not be Transferred without Franchisor’s prior consent.

 

7.2Competitor Right of First Refusal.
Owner acknowledges that Franchisor’s rights under Section 17.5.A. of the Franchise Agreement are rights in real estate.
Franchisor may record such interest in the appropriate real estate records of the jurisdiction where the Hotel is located, and
Owner will cooperate in such filing. Owner agrees that damages are not an adequate remedy if Owner breaches its obligations under
this Section, and Franchisor will be entitled to injunctive relief if available without proving the inadequacy of money damages
as a remedy and without posting a bond. If this Agreement is terminated and Franchisor’s rights under this Section are no
longer in effect, on request, Franchisor will execute a termination of such interest.

 

7.3Transfers by Franchisor.

 

A.Transfer to Affiliates. Franchisor
may Transfer this Agreement to any of its Affiliates that assume Franchisor’s obligations to Owner and is reasonably capable
of performing Franchisor’s obligations, without prior notice to, or consent of, Owner.

 

B.Transfer to Other Persons. Franchisor
may Transfer this Agreement to any Person that assumes Franchisor’s obligations to Owner, is reasonably capable of performing
Franchisor’s obligations, and acquires substantially all of Franchisor’s rights for System Hotels, without prior notice
to, or consent of, Owner. Owner agrees that any such Transfer will constitute a release of Franchisor and a novation of this Agreement.

 

C.Franchisor’s Successors and Assigns.
This Agreement will be binding on and inure to the benefit of Franchisor and its permitted successors and assigns.

 

    	3

    	 

    

 

	8.	DEFAULTS AND TERMINATION

 

8.1Immediate Termination. 

 

A.Defaults Applicable to Owner under Franchise
Agreement. If Owner would be in default under Section 19.1 of the Franchise Agreement as if Owner were “Franchisee,”
then Owner will be in default and Franchisor may terminate this Agreement without providing Owner any opportunity to cure the default.
This termination is effective on notice to Owner or on the expiration of any notice or cure period given by Franchisor in its sole
discretion or required by Applicable Law.

 

B.Defaults under Franchise Agreement Caused
by Owner. If Franchisor terminates the Franchise Agreement based on a default that is caused by an act or omission of Owner,
Franchisor may, on notice to Owner and without further action, immediately terminate this Agreement and the Hotel’s relationship
with the System and require Owner to comply with Section 9.

 

8.2Default with Opportunity to Cure.

 

A.Defaults Applicable to Owner under Franchise
Agreement. Owner will be in default and Franchisor may terminate this Agreement for the events listed in Section 19.2 of the
Franchise Agreement to the extent such default is applicable to Owner, if after 30 days’ notice of default (or such greater
number of days given by Franchisor in its sole discretion or as required by Applicable Law), Owner fails to cure the default as
specified in the notice.

 

B.Defaults under this Agreement. Owner
will be in default and Franchisor may terminate this Agreement if Owner fails to cure any default under this Agreement after 30
days’ notice of default (or such greater number of days given by Franchisor in its sole discretion or as required by Applicable
Law).

 

	9.	POST-TERMINATION OBLIGATIONS OF OWNER

 

If the Franchise Agreement and this Agreement
are terminated and Franchisee fails to perform any post-termination obligation under the Franchise Agreement, Franchisor may enforce
the Franchise Agreement directly against Owner as if Owner were “Franchisee,” and Owner will perform, or cause to be
performed, all post-termination obligations of Franchisee under Section 20.1.A of the Franchise Agreement.

 

	10.	CONDEMNATION AND CASUALTY

 

A.Condemnation. Owner will promptly
notify Franchisor if it receives notice of any proposed taking of any portion of the Hotel by eminent domain, condemnation, compulsory
acquisition or similar proceeding by any governmental authority, and will cause the Hotel to be restored and reopened if and as
required under Section 21.1 of the Franchise Agreement. Franchisor will be entitled to receive a fair and reasonable portion of
any condemnation award as provided under Section 21.1 of the Franchise Agreement.

 

B.Casualty. Owner will promptly notify
Franchisor if the Hotel is damaged by any casualty, and will cause the Hotel to be renovated and reopened the Hotel if and as required
under Section 21.2 of the Franchise Agreement.

 

    	4

    	 

    

 

	11.	FINANCING OF THE HOTEL 

 

Owner and each Interestholder in Owner may grant
a lien or other security interest in the Hotel or the revenues of the Hotel, or pledge Ownership Interests in Owner or a Control
Affiliate as collateral for the financing of the Hotel. If any Person exercises its rights under such lien, security interest or
pledge, Franchisor will have the rights under Section 8.1 of this Agreement and Section 19.1 of the Franchise Agreement. Owner
will not pledge this Agreement as collateral or grant a security interest in this Agreement.

 

	12.	GOVERNING LAW; INTERIM RELIEF; COSTS OF ENFORCEMENT

 

12.1Governing Law. This Agreement
takes effect on its acceptance and execution by Franchisor in Maryland and will be construed under and governed by Maryland law,
which law will prevail if there is any conflict of law. Owner expressly and irrevocably submits to the non-exclusive jurisdiction
of the courts of the State of Maryland for the purpose of any Dispute related to this Agreement. So far as permitted under Maryland
law, this consent to personal jurisdiction will be self-operative.

 

12.2Equitable Relief. Franchisor
is entitled to injunctive or other equitable relief, including restraining orders and preliminary injunctions, in any court of
competent jurisdiction for any threatened or actual material breach of the Marriott Agreements or non-compliance with the Standards.
Franchisor is entitled to such relief without the necessity of proving the inadequacy of money damages as a remedy, without the
necessity of posting a bond and without waiving any other rights or remedies.

 

12.3Costs of Enforcement. If either
party initiates any legal or equitable action to protect its rights under this Agreement, the prevailing party will be entitled
to recover its costs, including reasonable legal fees.

 

12.4WAIVER OF PUNITIVE DAMAGES. EACH
OF OWNER, FRANCHISEE AND FRANCHISOR ABSOLUTELY, IRREVOCABLY AND UNCONDITIONALLY WAIVES THE RIGHT TO CLAIM OR RECEIVE PUNITIVE DAMAGES
IN ANY DISPUTE RELATED TO THIS AGREEMENT, THE MARRIOTT AGREEMENTS, THE HOTEL, THE RELATIONSHIP OF THE PARTIES OR ANY ACTIONS OR
OMISSIONS IN CONNECTION WITH ANY OF THE ABOVE.

 

12.5WAIVER OF JURY TRIAL. EACH OF
OWNER, FRANCHISEE AND FRANCHISOR ABSOLUTELY, IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY DISPUTE RELATED TO THIS
AGREEMENT, THE MARRIOTT AGREEMENTS, THE HOTEL, THE RELATIONSHIP OF THE PARTIES OR ANY ACTIONS OR OMISSIONS IN CONNECTION WITH ANY
OF THE ABOVE.

 

	13.	NOTICES

 

Subject to Section 25.B of the Franchise Agreement,
all notices, requests, statements and other communications under this Agreement will be (i) in writing; (ii) delivered
by hand with receipt, or by courier service with tracking capability; and (iii) addressed as provided in Exhibit B
or at any other address designated in writing by the party entitled to receive the notice. Any notice will be deemed received (i)
when delivery is received or first refused, if delivered by hand or (ii) one day after posting of such notice, if sent via overnight
courier.

 

    	5

    	 

    

 

	14.	REPRESENTATIONS AND WARRANTIES

 

A.Existence. Each party represents
and warrants that it (i) is duly formed, validly existing and in good standing under the laws of the jurisdiction of its formation;
and (ii) has and will continue to have the ability to perform its obligations under this Agreement.

 

B.Authorization. Each of Franchisor,
Franchisee and Owner represents and warrants that the execution and delivery of this Agreement and the performance of its obligations
under this Agreement: (i) have been duly authorized; (ii) do not and will not violate, contravene or result in a default
or breach of (a) any Applicable Law, (b) its governing documents or (c) any agreement, commitment or restriction binding on the
relevant party; and (iii) do not require any consent that has not been obtained by the relevant party.

 

C.Restricted Person. Owner represents
and warrants that Owner is not, and that none of its Affiliates (including their directors and officers), Interestholders or the
funding sources for any of them, is a Restricted Person.

 

D.Ownership of Owner. Owner represents
and warrants that its Interestholders are completely and accurately listed in Exhibit A. If there have been changes, Owner will
provide a list of the names and addresses of the Interestholders and documents necessary to confirm such information and update
Exhibit A.

 

E.Ownership of the Hotel. Owner represents
and warrants that it is the sole owner of the Hotel and holds good and marketable fee title to the Approved Location.

 

	15.	MISCELLANEOUS

 

15.1Counterparts. This Agreement
may be executed in any number of counterparts, each of which will be deemed an original and all of which constitute one and the
same instrument. Delivery of an executed signature page by electronic transmission is as effective as delivery of an original signed
counterpart.

 

15.2Construction and Interpretation.

 

A.Partial Invalidity. If any
term of this Agreement, or its application to any Person or circumstance, is invalid or unenforceable at any time or to any extent,
then (i) the remainder of this Agreement, or the application of such term to Persons or circumstances other than those as
to which it is held invalid or unenforceable, will not be affected and each term of this Agreement will be valid and enforced to
the fullest extent permitted by Applicable Law; and (ii) Franchisor, Franchisee and Owner will negotiate in good faith to
modify this Agreement to implement their original intent as closely as possible in a mutually acceptable manner.

 

B.Non-Exclusive Rights and Remedies. No
right or remedy of Franchisor, Franchisee or Owner under this Agreement is intended to be exclusive of any other right or remedy
under this Agreement at law or in equity.

 

C.No Third-Party Beneficiary. Nothing
in this Agreement is intended to create any third-party beneficiary or give any rights or remedies to any Person except Franchisor,
Franchisee and Owner and their respective permitted successors and assigns.

 

D.Interpretation of Agreement. Franchisor
and Franchisee intend that this Agreement excludes all implied terms to the maximum extent permitted by Applicable Law. Headings
of Sections are for convenience and are not to be used to interpret the Sections to which they refer. All Exhibits to this Agreement
are incorporated by reference. Words indicating the singular include the plural and vice versa as the context may require. References
to days, months and years are all calendar references. References that a Person “will” do something mean the Person
has an obligation to do so. References that a Person “may” do something mean a Person has the right, but not the obligation,
to do so. References that a Person “may not” or “will not” do something mean the Person is prohibited from
doing so.

 

E.Definitions. All capitalized terms
not defined in this Agreement have the meaning stated in the Franchise Agreement.

 

    	6

    	 

    

 

15.3Reasonable Business Judgment.

 

A.Use of Reasonable Business Judgment.
Franchisor will use Reasonable Business Judgment when discharging its obligations or exercising its rights under this Agreement,
including for any consents and approvals and the administration of Franchisor’s relationship with Owner, except when Franchisor
has reserved sole discretion.

 

B.Burden of Proof. Owner will have
the burden of establishing that Franchisor failed to exercise Reasonable Business Judgment. The fact that Franchisor or any Affiliate
of Franchisor benefited from any action or decision or that another reasonable alternative was available does not mean that Franchisor
failed to exercise Reasonable Business Judgment. If this Agreement is subject to any implied covenant or duty of good faith and
Franchisor exercises Reasonable Business Judgment, Owner agrees that Franchisor will not have violated such covenant or duty.

 

15.4Waiver. The failure or delay
of either party to insist on strict performance of any of the terms of this Agreement, or to exercise any right or remedy, will
not be a waiver for the future.

 

15.5Entire Agreement. This Agreement
and the Marriott Agreements are fully integrated and contain the entire agreement between the parties as it relates to the Hotel
and the Approved Location and supersede all prior understandings and writings.

 

15.6Amendments. This Agreement may
only be amended in a written document that has been duly executed by the parties and may not be amended by conduct manifesting
assent, and each party is put on notice that any individual purporting to amend this Agreement by conduct manifesting assent is
not authorized to do so.

 

15.7Survival. The terms of Sections
1, 5, 9, 10 and 12 survive expiration or termination of this Agreement and, to the extent applicable to Owner, Section 27.8 of
the Franchise Agreement.

 

[Signatures
appear on the following page]

 

    	7

    	 

    

 

IN WITNESS WHEREOF, the parties have
caused this Owner Agreement to be executed, under seal, as of the Effective Date.

 

	 	FRANCHISOR:	 
	 	 	 
	 	MARRIOTT INTERNATIONAL, INC.	 
	 	 	 
	 	By:	/s/ Michael H. Rosenman	(SEAL)
	 	Name:	Michael H. Rosenman	 
	 	Title:	Vice President, Owner and Franchise Services	 
	 	 	 	 
	 	FRANCHISEE: 	 
	 		 	 
	 	MOODY NATIONAL LANCASTER-AUSTIN MT,

LLC, a Delaware limited
liability company	 
	 	 	 	 
	 	By:	/s/ Brett C. Moody	(SEAL)
	 	Name:	Brett C. Moody	 
	 	Title:	President	 
	 	 	 	 
	 	OWNER:	 
	 	 	 	 
	 	MOODY NATIONAL LANCASTER-AUSTIN HOLDING, LLC,
 LLC,a Delaware limited liability company	 
	 	 	 	 
	 	By:	/s/ Brett C. Moody	(SEAL)
	 	Name:	Brett C. Moody	 
	 	Title:	President	 

 

    	8

    	 

    

 

EXHIBIT A

OWNERSHIP INTERESTS IN OWNER

 

	Name of Owner	Address	% Interest
	OWNERSHIP OF Moody National Lancaster-Austin Holding, LLC
	Moody National Operating Partnership II, LP	6363
Woodway Drive, Suite 110

Houston, TX 77057	100% 

Sole Member
	OWNERSHIP OF Moody National Operating Partnership II, LP
	Moody National REIT II, Inc.	6363
Woodway Drive, Suite 110

Houston, TX 77057	99.502488% 

General Partner
	Moody OP Holdings II, LLC	6363 Woodway Drive, Suite 110 

Houston, TX 77057	0.497512% 

Limited Partner
	Moody National LPOP II, LLC	6363 Woodway Drive, Suite 110

 Houston, TX 77057	Special 

Unit Holder
	OWNERSHIP OF Moody National REIT II, Inc.*
	Shareholders	—	100%
	OWNERSHIP OF Moody OP HOLDINGS II, llc
	Moody National REIT II, Inc.	6363
Woodway Drive, Suite 110

Houston, TX 77057	100% 

Sole Member
	OWNERSHIP OF Moody National LPOP II, LLC
	Brett C. Moody	6363 Woodway Drive, Suite 110 

Houston, TX 77057	100% 

Sole Member

 

*Moody National REIT II, Inc. is a publicly-registered, non-traded
REIT with over 900 shareholders

    	9

    	 

    

 

EXHIBIT B

NOTICE ADDRESSES

 

	To Franchisor:
	 	 
	 	Marriott International, Inc. 
	 	10400 Fernwood Road 
	 	Bethesda, MD 20817 
	 	Attn: Law Department 52/923.27
	 	 
	with a copy to:
	 	 
	 	Marriott International, Inc.
	 	10400 Fernwood Road
	 	Bethesda, MD 20817
	 	Attn: Global Lodging Services
	 	 
	To Owner:
	 	 
	 	Moody National Lancaster-Austin Holding,
LLC 
	 	6363 Woodway Drive, Suite 110 
	 	Houston, TX 77057
	 	Attn: David Gould 
	 	Email: DGould@MoodyNational.com
	 	 
	To Franchisee:
	 	 
	 	MOODY NATIONAL LANCASTER-AUSTIN MT, LLC 
	 	6363 Woodway Drive, Suite 110 
	 	Houston, TX 77057 
	 	Attn: David Gould 
	 	Email: DGould@MoodyNational.com

 

    	10

    	 

    

 

EXHIBIT C

FRANCHISE AGREEMENT

 

11Moody National REIT II, Inc. POS AM

 

EXHIBIT 10.12

 

 

LOAN AGREEMENT

 

Dated as of October 15, 2015

 

Between

 

MOODY NATIONAL LANCASTER-AUSTIN HOLDING,
LLC,

 

as Borrower

 

and

 

KEYBANK NATIONAL ASSOCIATION,

 

as Lender

 

Loan No. 10096884

 

    	

    	 

    

 

TABLE OF
CONTENTS

  

	 	Page
	ARTICLE I DEFINITIONS; PRINCIPLES OF CONSTRUCTION	1
	Section 1.1   Definitions	1
	Section 1.2   Principles of Construction	29
	 	 
	ARTICLE II GENERAL TERMS	30
	 	 
	Section 2.1   Loan Commitment; Disbursement to Borrower	30
	2.1.1. Agreement to Lend and Borrow	30
	2.1.2. Single Disbursement to Borrower	30
	2.1.3. The Note, Security Instrument and Loan Documents	30
	2.1.4. Use of Proceeds	30
	Section 2.2   Interest Rate	30
	2.2.1. Interest Rate	30
	2.2.2. Interest Calculation	30
	2.2.3. Default Rate	31
	2.2.4. Usury Savings	31
	Section 2.3   Loan Payment	31
	Section 2.4   Prepayments	31
	Section 2.5   Defeasance	31
	2.5.1. Voluntary Defeasance	31
	2.5.2. Collateral	34
	2.5.3. Successor Borrower	34
	Section 2.6   Release of Property	34
	2.6.1. Release of Property	34
	Section 2.7   Clearing Account/Cash Management	35
	2.7.1. Clearing Account	35
	2.7.2. Cash Management Account	37
	2.7.3. Payments Received under the Cash Management Agreement	38
	 	 
	ARTICLE III CONDITIONS PRECEDENT	39
	 	 
	Section 3.1   Conditions Precedent to Closing	39
	 	 
	ARTICLE IV REPRESENTATIONS AND WARRANTIES	39
	 	 
	Section 4.1   Borrower Representations	39
	4.1.1. Organization	39
	4.1.2. Proceedings	39
	4.1.3. No Conflicts	39
	4.1.4. Litigation	40
	4.1.5. Agreements	40
	4.1.6. Title	40
	4.1.7. Solvency	41

 

    	i

    	 

    

 

 

	4.1.8. Full and Accurate Disclosure	41
	4.1.9. No Plan Assets	42
	4.1.10. Compliance	42
	4.1.11. Financial Information	42
	4.1.12. Condemnation	43
	4.1.13. Federal Reserve Regulations	43
	4.1.14. Utilities and Public Access	43
	4.1.15. Not a Foreign Person	43
	4.1.16. Separate Lots	43
	4.1.17. Assessments	43
	4.1.18. Enforceability	43
	4.1.19. No Prior Assignment	44
	4.1.20. Insurance	44
	4.1.21. Use of Property	44
	4.1.22. Certificate of Occupancy; Licenses	44
	4.1.23. Flood Zone	44
	4.1.24. Physical Condition	44
	4.1.25. Boundaries	44
	4.1.26. Leases	45
	4.1.27. Survey	45
	4.1.28. Inventory	45
	4.1.29. Filing and Recording Taxes	46
	4.1.30. Special Purpose Entity/Separateness	46
	4.1.31. Management Agreement	46
	4.1.32. Illegal Activity	46
	4.1.33. No Change in Facts or Circumstances; Disclosure	46
	4.1.34. Investment Company Act	47
	4.1.35. Embargoed Person	47
	4.1.36. Principal Place of Business; State of Organization	47
	4.1.37. Environmental Representations and Warranties	48
	4.1.38. Cash Management Account	48
	4.1.39. Franchise Agreement	49
	4.1.40. Hotel Personal Property	49
	4.1.41. Labor Matters	49
	4.1.42. Leases	49
	Section 4.2   Survival of Representations	49
	 	 
	ARTICLE V BORROWER COVENANTS	49
	 	 
	Section 5.1   Affirmative Covenants	49
	5.1.1. Existence; Compliance with Legal Requirements	50
	5.1.2. Taxes and Other Charges	51
	5.1.3. Litigation	52
	5.1.4. Access to Property	52
	5.1.5. Notice of Default	52
	5.1.6. Cooperate in Legal Proceedings	52
	5.1.7. Intentionally Omitted	52

 

    	ii

    	 

    

 

	5.1.8. Award and Insurance Benefits	52
	5.1.9. Further Assurances	52
	5.1.10. Principal Place of Business, State of Organization	53
	5.1.11. Financial Reporting	53
	5.1.12. Business and Operations	56
	5.1.13. Title to the Property	57
	5.1.14. Costs of Enforcement	57
	5.1.15. Estoppel Statement	57
	5.1.16. Loan Proceeds	58
	5.1.17. Performance by Borrower	58
	5.1.18. Confirmation of Representations	58
	5.1.19. Environmental Covenants	59
	5.1.20. Leasing Matters	61
	5.1.21. Alterations	62
	5.1.22. Operation of Property	63
	5.1.23. Embargoed Person	63
	5.1.24. Default under Franchise Agreement	64
	5.1.25. Intentionally Omitted	64
	5.1.26. Master Lease Documents	64
	Section 5.2   Negative Covenants	64
	5.2.1. Operation of Property	65
	5.2.2. Liens	65
	5.2.3. Dissolution	65
	5.2.4. Change In Business	66
	5.2.5. Debt Cancellation	66
	5.2.6. Zoning	66
	5.2.7. No Joint Assessment	66
	5.2.8. Intentionally Omitted	66
	5.2.9. ERISA	66
	5.2.10. Transfers	67
	5.2.11. Master Lease Documents	71
	 	 
	ARTICLE VI INSURANCE; CASUALTY; CONDEMNATION	72
	 	 
	Section 6.1   Insurance	72
	Section 6.2   Casualty	76
	Section 6.3   Condemnation	77
	Section 6.4   Restoration	77
	 	 
	ARTICLE VII RESERVE FUNDS	81
	 	 
	Section 7.1   Required Repairs	81
	7.1.1. Deposits	81
	7.1.2. Release of Required Repair Funds	82
	Section 7.2   Tax and Insurance Escrow Fund	83
	Section 7.3   Replacements and Replacement Reserve	83
	7.3.1. Replacement Reserve Fund	83

 

    	iii

    	 

    

 

	7.3.2. Disbursements from Replacement Reserve Account	84
	7.3.3. Performance of Replacements	85
	7.3.4. Failure to Make Replacements	88
	7.3.5. Balance in the Replacement Reserve Account	88
	Section 7.4   Specified Tenant Reserve	88
	7.4.1. Deposits to Specified Tenant Reserve Fund	88
	7.4.2. Withdrawal of Specified Tenant Reserve Funds	88
	Section 7.5   Excess Cash Flow Reserve Fund	89
	7.5.1. Deposits to Excess Cash Flow Reserve Account	89
	7.5.2. Release of Excess Cash Flow Reserve Funds	89
	Section 7.6   Reserve Funds, Generally	89
	Section 7.7   Free Rent Reserve	91
	7.7.1. Free Rent Reserve Fund	91
	7.7.2. Withdrawal of Free Rent Reserve Funds	91
	 	 
	ARTICLE VIII DEFAULTS	91
	 	 
	Section 8.1   Event of Default	91
	Section 8.2   Remedies	94
	Section 8.3   Remedies Cumulative; Waivers	96
	 	 
	ARTICLE IX SPECIAL PROVISIONS	96
	 	 
	Section 9.1   Securitization	96
	9.1.1. Sale of Notes and Securitization	96
	9.1.2. Securitization Costs	97
	Section 9.2   Right To Release Information	98
	Section 9.3   Exculpation	98
	Section 9.4   Matters Concerning Manager	101
	Section 9.5   Servicer	102
	 	 
	ARTICLE X MISCELLANEOUS	102
	 	 
	Section 10.1   Survival	102
	Section 10.2   Lender’s Discretion	103
	Section 10.3   Governing Law	103
	Section 10.4   Modification, Waiver in Writing	103
	Section 10.5   Delay Not a Waiver	103
	Section 10.6   Notices	104
	Section 10.7   Trial by Jury	104
	Section 10.8   Headings	105
	Section 10.9   Severability	105
	Section 10.10   Preferences	105
	Section 10.11   Waiver of Notice	105
	Section 10.12   Remedies of Borrower	105
	Section 10.13   Expenses; Indemnity	106
	Section 10.14   Schedules Incorporated	107

 

    	iv

    	 

    

 

	Section 10.15   Offsets, Counterclaims and Defenses	107
	Section 10.16   No Joint Venture or Partnership; No Third Party Beneficiaries	107
	Section 10.17   Publicity	108
	Section 10.18   Waiver of Marshalling of Assets	108
	Section 10.19   Waiver of Counterclaim	108
	Section 10.20   Conflict; Construction of Documents; Reliance	108
	Section 10.21   Brokers and Financial Advisors	109
	Section 10.22   Prior Agreements	109
	Section 10.23   Liability	109
	Section 10.24   Certain Additional Rights of Lender (VCOC)	109
	Section 10.25   (OFAC)	110
	Section 10.26   Duplicate Originals; Counterparts	110
	Section 10.27   Release of Moody Guarantor	110
	Section 10.28   Post Closing Matters	110
	 	 
	ARTICLE XI LOCAL LAW PROVISIONS	111
	 	 
	Section 11.1   Inconsistencies	111

 

    	v

    	 

    

 

SCHEDULES

 

	Schedule I	–	Rent Roll
	 	 	 
	Schedule II	–	Required Repairs – Deadlines for Completion 
	 	 	 
	Schedule III	–	Organizational Chart of Borrower
	 	 	 
	Schedule IV	–	Tenant Direction Letter Form 
	 	 	 
	Schedule V	–   	Credit Card Direction Letter Form
	 	 	 
	Schedule VI	–	Schedule of Free Rent

 

    	vi

    	 

    

 

LOAN AGREEMENT

 

THIS LOAN AGREEMENT
is made as of October 15, 2015 (this “Agreement”), between KEYBANK NATIONAL ASSOCIATION, a national banking
association, having an address at 11501 Outlook, Suite 300, Overland Park, Kansas 66211 (“Lender”) and MOODY
NATIONAL LANCASTER-AUSTIN HOLDING, LLC, a Delaware limited liability company, having its principal place of business at 6363
Woodway, Suite 110, Houston, Texas 77057 (“Borrower”).

 

RECITALS:

 

A.Borrower desires
to obtain the Loan (as hereinafter defined) from Lender.

 

B.Lender is willing
to make the Loan to Borrower, subject to and in accordance with the terms of this Agreement and the other Loan Documents (as hereinafter
defined).

 

NOW THEREFORE, for valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

ARTICLE
I

DEFINITIONS; PRINCIPLES OF CONSTRUCTION

 

Section
1.1Definitions. For all purposes of this Agreement, except as otherwise expressly required or unless the context clearly
indicates a contrary intent:

 

“Accrual Period”
means the period commencing on and including the first (1st) day of each calendar month during the term of the Loan and ending
on and including the final calendar date of such calendar month; however, the initial Accrual Period shall commence on and include
the Closing Date and shall end on and include the final calendar date of the calendar month in which the Closing Date occurs.

 

“Action”
has the meaning set forth in Section 10.3 hereof.

 

“Additional Permitted
Transfer” has the meaning set forth in Section 5.2.10(f) hereof.

 

“Affiliate”
means, as to any Person, any other Person that, directly or indirectly, is in Control of, is Controlled by or is under common Control
with such Person or is a director or executive officer of such Person or of an Affiliate of such Person.

 

“Affiliated Manager”
means any Manager in which Borrower, Master Tenant, Principal, or Guarantor has, directly or indirectly, any legal, beneficial
or economic interest.

 

“Agent”
means KeyBank National Association, or any successor Eligible Institution acting as Agent under the Cash Management Agreement.

 

“Annual Budget”
means an operating budget, including all planned Capital Expenditures, for the Property prepared by or on behalf of Borrower in
accordance with Section 5.1.11(g) hereof for the applicable Fiscal Year or other period.

 

    	

    	 

    

 

“Approved Annual
Budget” has the meaning set forth in Section 5.1.11(g) hereof.

 

“Assignment of
Management Agreement” means that certain Assignment of Management Agreement and Subordination of Management Fees, dated
as of the date hereof, among Lender, Borrower and Manager, and consented and agreed to by Master Tenant, as the same may be amended,
restated, replaced, supplemented or otherwise modified from time to time.

 

“Availability
Threshold” means the greater of $30,000.00 or 1% of the initial principal balance of the Loan.

 

“Award”
means any compensation paid by any Governmental Authority in connection with a Condemnation.

 

“Bankruptcy Action”
means with respect to any Person (a) such Person filing a voluntary petition under the Bankruptcy Code or any other Federal or
state bankruptcy or insolvency law; (b) the filing of an involuntary petition against such Person under the Bankruptcy Code or
any other Federal or state bankruptcy or insolvency law; (c) such Person filing an answer consenting to or otherwise acquiescing
in or joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal
or state bankruptcy or insolvency law; (d) such Person consenting to or acquiescing in or joining in an application for the appointment
of a custodian, receiver, trustee, or examiner for such Person or any portion of the Property; (e) such Person making an assignment
for the benefit of creditors, or (f) such Person admitting, in writing or in any legal proceeding, its insolvency or inability
to pay its debts as they become due.

 

“Bankruptcy Code”
means Title 11 of the United States Code, 11 U.S.C. §101, et seq., as the same may be amended from time to time,
and any successor statute or statutes and all rules and regulations from time to time promulgated thereunder, and any comparable
foreign laws relating to bankruptcy, insolvency or creditors’ rights or any other Federal or state bankruptcy or insolvency
law.

 

“Borrower”
has the meaning set forth in the introductory paragraph hereto, together with its successors and permitted assigns.

 

“Borrower’s
Excess Cash Flow Subaccount” shall have the meaning set forth in Section 7.5.1 hereof.

  

“Business Day”
means a day upon which commercial banks are not authorized or required by law to close in the city designated from time to time
as the place for receipt of payments.

 

“Capital Expenditures”
shall mean, for any period, the amount expended for items capitalized under GAAP and the Uniform System of Accounts (including
expenditures for building improvements or major repairs, leasing commissions and tenant improvements).

 

“Cash Management
Account” has the meaning set forth in Section 2.7.2 hereof.

 

    	2

    	 

    

 

“Cash Management
Agreement” means that certain Cash Management Agreement, dated as of the date hereof, by and among Borrower, Lender,
Master Tenant and Agent, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

 

“Cash Sweep Event”
means the occurrence of: (a) an Event of Default; (b) any Bankruptcy Action of Borrower, Master Tenant, Principal or Manager; or
(c) a DSCR Trigger Event.

 

“Cash Sweep Event
Cure” means

 

(a) if the Cash Sweep Event
is caused solely by the occurrence of a DSCR Trigger Event, the achievement of a Debt Service Coverage Ratio of 1.25 to 1.00 or
greater for two (2) consecutive quarters based upon the trailing three (3) month period immediately preceding the date of determination,

 

(b) if the Cash Sweep Event
is caused solely by an Event of Default, the acceptance by Lender of a cure of such Event of Default (which cure Lender is not
obligated to accept and may reject or accept in its discretion), or

 

(c) if the Cash Sweep Event
is caused solely by a Bankruptcy Action of Manager, if Borrower replaces the Manager with a Qualified Manager under a Replacement
Management Agreement within sixty (60) days of such Bankruptcy Action;

 

provided, however,
that, such Cash Sweep Event Cure set forth in this definition shall be subject to the following conditions, (i) no Event of Default
shall have occurred and be continuing under this Agreement or any of the other Loan Documents, (ii) a Cash Sweep Event Cure may
occur no more than a total of three (3) times in the aggregate during the term of the Loan, and (iii) Borrower shall have paid
all of Lender’s reasonable expenses incurred in connection with such Cash Sweep Event Cure including, reasonable attorney’s
fees and expenses. Notwithstanding any provision in this Agreement to the contrary, in no event shall Borrower have the right to
cure any Cash Sweep Event caused by a Bankruptcy Action of Borrower, Master Tenant or Principal.

 

“Cash Sweep Period”
means each period commencing on the occurrence of a Cash Sweep Event and continuing until the earlier of (a) the Payment Date next
occurring following the related Cash Sweep Event Cure, or (b) payment in full of all principal and interest on the Loan and all
other amounts payable under the Loan Documents or defeasance of the Loan in accordance with the terms and provisions of the Loan
Documents.

 

“Casualty”
has the meaning set forth in Section 6.2 hereof.

 

“Casualty Consultant”
has the meaning set forth in Section 6.4(b)(iii) hereof.

 

“Casualty Retainage”
has the meaning set forth in Section 6.4(b)(iv) hereof.

 

“Clearing Account”
has the meaning set forth in Section 2.7.1 hereof.

 

    	3

    	 

    

 

“Clearing Account
Agreement” means that certain Deposit Account Control Agreement dated the date hereof among Borrower, Lender and Clearing
Bank, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time, relating to funds deposited
in the Clearing Account.

 

“Clearing Bank”
means the clearing bank which establishes, maintains and holds the Clearing Account, which shall be an Eligible Institution acceptable
to Lender in its discretion.

 

“Closing Date”
means the date of the funding of the Loan.

 

“Code”
means the Internal Revenue Code of 1986, as amended, as it may be further amended from time to time, and any successor statutes
thereto, and applicable U.S. Department of Treasury regulations issued pursuant thereto in temporary or final form.

 

“Collateral Assignment”
means that certain Collateral Assignment of Escrow Rights, dated as of the date hereof, by and among Borrower, Master Tenant and
Lender, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

 

“Collected Taxes”
shall have the meaning set forth in the Cash Management Agreement.

 

“Condemnation”
means a temporary or permanent taking by any Governmental Authority as the result or in lieu or in anticipation of the exercise
of the right of condemnation or eminent domain, of all or any part of the Property, or any interest therein or right accruing thereto,
including any right of access thereto or any change of grade affecting the Property or any part thereof.

 

“Condemnation
Proceeds” has the meaning set forth in Section 6.4(b) hereof.

 

“Control”
means the possession, directly or indirectly, of the power to direct or cause the direction of management, policies or activities
of a Person, whether through ownership of voting securities, by contract or otherwise. “Controlled” and “Controlling”
have correlative meanings.

 

“Credit Card Company”
shall have the meaning set forth in the Cash Management Agreement.

 

“Credit Card Direction
Letter” means an instruction letter to Tenants substantially in the form attached hereto as Schedule V.

 

“Debt”
means the outstanding principal amount of the Loan set forth in, and evidenced by, this Agreement and the Note together with all
interest accrued and unpaid thereon and all other sums (including the Defeasance Payment Amount and any Yield Maintenance Premium
(as defined in the Note)) due to Lender in respect of the Loan under the Note, this Agreement, the Security Instrument or
any other Loan Document.

 

“Debt Service”
means, with respect to any particular period of time, the scheduled principal and interest payments due under this Agreement and
the Note.

 

“Debt Service
Coverage Ratio” means a ratio for the applicable period in which:

 

    	4

    	 

    

 

(a)the numerator
is the Net Operating Income (excluding interest on credit accounts and using annualized operating expenses for any recurring expenses
not paid monthly (e.g., Taxes and Insurance Premiums)) for such period as set forth in the statements required hereunder, without
deduction for (i) actual management fees incurred in connection with the operation of the Property, (ii) actual franchise fees
incurred in connection with the operation of the Property, or (iii) amounts paid to the Reserve Funds, less (A) management fees
equal to the greater of (1) assumed management fees of 4% of Gross Income from Operations and (2) the actual management fees incurred,
(B) franchise fees (inclusive of any royalty fees and contribution fees) equal to the greater of (1) assumed franchise fees of
six percent (6%) of Room Revenues and (2) the actual franchise fees incurred, and (C) annual Replacement Reserve Fund contributions
equal to four percent (4%) of Gross Income from Operations; and

 

(b)the denominator
is the aggregate amount of Debt Service for such period assuming full payments of principal and interest with amortization based
on a 30-year schedule notwithstanding any interest-only period under the Loan.

 

“Default”
means the occurrence of any event hereunder or under any other Loan Document which, but for the giving of notice or passage of
time, or both, would be an Event of Default.

 

“Default Rate”
means, with respect to the Loan, a rate per annum equal to the lesser of (a) the Maximum Legal Rate or (b) five percent (5%) above
the Interest Rate.

 

“Defeasance Date”
has the meaning set forth in Section 2.5.1(a)(i) hereof.

 

“Defeasance Deposit”
means an amount equal to the remaining principal amount of the Note, the Defeasance Payment Amount, any costs and expenses incurred
or to be incurred in the purchase of U.S. Obligations necessary to meet the Scheduled Defeasance Payments, any revenue, documentary
stamp or intangible taxes or any other tax or charge due in connection with the transfer of the Note or otherwise required to accomplish
the agreements of Sections 2.4 and 2.5 hereof (including any fees and expenses of accountants, attorneys and the
Rating Agencies incurred in connection therewith), and a customary defeasance processing fee in an amount determined by Lender
in its discretion.

 

“Defeasance Event”
has the meaning set forth in Section 2.5.1(a) hereof.

 

“Defeasance Payment
Amount” means the amount which, when added to the remaining principal amount of the Note, will be sufficient to purchase
U.S. Obligations providing the required Scheduled Defeasance Payments.

 

“Disclosure Documents”
means, collectively and as applicable, any offering circular, prospectus, prospectus supplement, private placement memorandum or
other offering document, in each case, in connection with a Securitization.

 

“DSCR Trigger
Event” means, that as of the date of determination, the Debt Service Coverage Ratio based on the trailing twelve (12) month
period immediately preceding the date of such determination is less than 1.20 to 1.00.

 

    	5

    	 

    

 

“Eligible Account”
means a separate and identifiable account from all other funds held by the holding institution that is either (a) an account or
accounts maintained with a federal or state-chartered depository institution or trust company which complies with the definition
of Eligible Institution or (b) a segregated trust account or accounts maintained with a federal or state chartered depository institution
or trust company acting in its fiduciary capacity which, in the case of a state chartered depository institution or trust company,
is subject to regulations substantially similar to 12 C.F.R. §9.10(b), having in either case a combined capital and surplus
of at least $50,000,000.00 and subject to supervision or examination by federal and state authority. An Eligible Account will not
be evidenced by a certificate of deposit, passbook or other instrument.

 

“Eligible Institution”
means KeyBank National Association or a depository institution or trust company insured by the Federal Deposit Insurance Corporation,
the short term unsecured debt obligations or commercial paper of which are rated at least “A-1+” by S&P, “P-1”
by Moody’s and “F-1+” by Fitch in the case of accounts in which funds are held for thirty (30) days or less (or,
in the case of accounts in which funds are held for more than thirty (30) days, the long-term unsecured debt obligations of which
are rated at least “AA-” by Fitch and S&P and “Aa3” by Moody’s).

 

“Embargoed Person”
means any person, entity or government subject to trade restrictions under U.S. law, including The USA PATRIOT Act (including the
anti terrorism provisions thereof), the International Emergency Economic Powers Act, 50 U.S.C. §§ 1701, et seq.,
The Trading with the Enemy Act, 50 U.S.C. App. 1 et seq., and any Executive Orders or regulations promulgated thereunder including
those related to Specially Designated Nationals and Specially Designated Global Terrorists, with the result that the investment
in Borrower, Master Tenant, Principal or Guarantor, as applicable (whether directly or indirectly), is prohibited by law or
the Loan made by the Lender is in violation of law.

 

“Environmental
Indemnity” means that certain Environmental Indemnity Agreement, dated as of the date hereof, executed by Borrower and
Guarantor in connection with the Loan for the benefit of Lender, as the same may be amended, restated, replaced, supplemented or
otherwise modified from time to time.

 

“Environmental
Law” means any present and future federal, state and local laws, statutes, ordinances, rules, regulations and the like,
as well as common law, relating to protection of human health from exposure to Hazardous Substances, relating to protection of
the environment, relating to Hazardous Substances, relating to liability for or costs of Remediation or prevention of Releases
of Hazardous Substances or relating to liability for or costs of other actual or threatened danger to human health (from exposure
to Hazardous Substances) or the environment. Environmental Law includes, but is not limited to, the following statutes, as amended,
any successor thereto, and any regulations promulgated pursuant thereto, and any state or local statutes, ordinances, rules, regulations
and the like addressing similar issues: the Comprehensive Environmental Response, Compensation and Liability Act; the Emergency
Planning and Community Right-to-Know Act; the Hazardous Substances Transportation Act; the Resource Conservation and Recovery Act
(including but not limited to Subtitle I relating to underground storage tanks); the Solid Waste Disposal Act; the Clean Water
Act; the Clean Air Act; the Toxic Substances Control Act; the Safe Drinking Water Act; the Occupational Safety and Health Act (as
it relates to Hazardous Substances); the Federal Water Pollution Control Act; the Federal Insecticide, Fungicide and Rodenticide
Act; the Endangered Species Act; the National Environmental Policy Act; and the River and Harbors Appropriation Act. Environmental
Law also includes, but is not limited to, any present and future federal, state and local laws, statutes, ordinances, rules, regulations
and the like, as well as common law: conditioning transfer of property upon a negative declaration or other approval of a Governmental
Authority of the environmental condition of the Property; requiring notification or disclosure of Releases of Hazardous Substances
or other environmental condition of the Property to any Governmental Authority or other Person, whether or not in connection with
transfer of title to or interest in property; imposing conditions or requirements in connection with Hazardous Substances or other
environmental conditions of the Property, in connection with permits or other authorization for lawful activity; relating to nuisance,
trespass or other causes of action related to the Property, in each such case, arising from exposure to, or the presence of, Hazardous
Substances; or relating to wrongful death, personal injury, or property or other damage in connection with any physical condition
or use of the Property, in each such case, arising from exposure to, or the presence of, Hazardous Substances.

 

    	6

    	 

    

 

“Environmental
Liens” has the meaning set forth in Section 5.1.19 hereof.

 

“Environmental
Report” has the meaning set forth in Section 4.1.37 hereof.

 

“ERISA”
means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and the
rulings issued thereunder.

 

“Escrow Agreement”
shall have the meaning set forth in the Collateral Assignment.

 

“Event of Default”
has the meaning set forth in Section 8.1(a) hereof.

 

“Evidence of Insurance”
has the meaning set forth in Section 10.28 hereof.

 

“Excess Cash Flow”
has the meaning set forth in the Cash Management Agreement.

 

“Excess Cash Flow
Reserve Account” has the meaning set forth in Section 7.5 hereof.

 

“Excess Cash Flow
Reserve Fund” has the meaning set forth in Section 7.5 hereof.

 

“Extraordinary
Expense” has the meaning set forth in Section 5.1.11(h) hereof.

 

“Fiscal Year”
means each twelve (12) month period commencing on January 1 and ending on December 31 during each year of the term of the Loan.

 

“Fitch”
means Fitch, Inc.

 

“Foreclosure Sale”
has the meaning set forth in Section 9(c) of the Note.

 

“Franchise Agreement”
shall mean that certain Relicensing Franchise Agreement dated as of the date hereof between Master Tenant and Franchisor, as the
same may be further amended, supplemented or otherwise modified from time to time in accordance with the terms and provisions of
this Agreement, or, if the context requires, the Replacement Franchise Agreement executed in accordance with the terms and provisions
of this Agreement.

 

    	7

    	 

    

 

“Franchise Guaranty”
shall mean that certain Guaranty executed by Moody REIT II and Brett C. Moody in favor of Franchisor, dated as of the date hereof
(and/or any replacement therefor entered into pursuant to the Franchise Agreement).

 

“Franchisor”
shall mean Marriott International, Inc., or, if the context requires, a Qualified Franchisor that is the franchisor under a Replacement
Franchise Agreement.

 

“Free Rent”
shall have the meaning set forth in Section 7.7.1 hereof.

 

“Free Rent Reserve
Account” shall have the meaning set forth in Section 7.7.1 hereof.

 

“Free Rent Reserve
Deposit” shall have the meaning set forth in Section 7.7.1 hereof.

 

“Free Rent Reserve
Estoppel” shall mean an estoppel certificate reasonably acceptable to Lender confirming (a) the applicable Lease is in
full force and effect, (b) neither Master Tenant nor such Tenant is in default under such Tenant’s Lease, (c) such Tenant
is open for business and in actual, physical possession of the premises demised under such Tenant’s Lease, (d) such Tenant
is paying full contractual rent without any right of offset or free rent credit and (e) the expiration date of such Tenant’s
Lease.

 

“Free Rent Reserve
Fund” shall have the meaning set forth in Section 7.7.1 hereof.

 

“GAAP”
means generally accepted accounting principles in the United States of America as of the date of the applicable financial report.

 

“Governing State”
has the meaning set forth is Section 10.3 hereof.

 

“Governmental
Authority” means any court, board, agency, commission, office or other authority of any nature whatsoever for any governmental
unit (foreign, federal, state, county, district, municipal, city or otherwise) whether now or hereafter in existence.

 

“Gross Income
from Operations” shall mean all sustainable income and proceeds (whether in cash or on credit and computed on an accrual
basis) received by Borrower, Master Tenant or Manager for the use, occupancy or enjoyment of the Property, or any part thereof,
or received by Borrower, Master Tenant or Manager for the sale of any goods, services or other items sold on or provided from the
Property in the ordinary course of the Property operation, including without limitation: (i) all income and proceeds received from
Leases and rental of rooms, commercial space and meeting, conference and/or banquet space within the Property (including net parking
revenue); (ii) all income and proceeds received from food and beverage operations and from catering services conducted from the
Property even though rendered outside of the Property; (iii) all income and proceeds from business or rental interruption or other
loss of income insurance and use and occupancy insurance with respect to the operation of the Property (after deducting therefrom
all costs and expenses incurred in the adjustment or collection thereof); (iv) all Awards for temporary use (after deducting therefrom
all costs and expenses incurred in the adjustment or collection thereof and in Restoration of the Property); (v) all income and
proceeds from judgments, settlements and other resolutions of disputes with respect to matters which would be includable in this
definition of “Gross Income from Operations” if received in the ordinary course of the Property operation (after deducting
therefrom all costs and expenses incurred in the adjustment or collection thereof); (vi) interest on credit accounts, rent concessions
or credits, and other required pass-throughs and interest on Reserve Funds; and (vii) disbursements to Borrower and/or Master Tenant
from the Free Rent Reserve, if any; but excluding, (a) gross receipts received by Tenants (i.e., other than Master Tenant) or received
by licensees or concessionaires of the Property; (b) consideration received at the Property for hotel accommodations, goods and
services to be provided at or for the benefit of other hotels, although arranged by, for or on behalf of Borrower, Master Tenant
or Manager; (c) income and proceeds from the sale or other disposition of goods, capital assets and other items not in the ordinary
course of the Property operation; (d) federal, state and municipal excise, sales, use or other taxes collected directly from patrons
or guests of the Property as a part of or based on the sales price of any goods, services or other items, such as gross receipts,
room, admission, cabaret or equivalent taxes; (e) Awards (except to the extent provided in clause (iv) above); (f) refunds of amounts
not included in Operating Expenses at any time and uncollectible accounts; (g) gratuities collected by, and wages paid to, the
Property employees; and fees and other amounts payable to Manager by Master Tenant or Borrower, as the case may be, in respect
of services provided by Manager to Master Tenant or Borrower pursuant to the Management Agreement; (8) rent payable to Borrower
under the Master Lease; (h) the proceeds of any financing; (i) other income or proceeds resulting other than from the use or occupancy
of the Property, or any part thereof, or other than from the sale of goods, services or other items sold on or provided from the
Property in the ordinary course of business; and (j) any credits or refunds made to customers, guests or patrons in the form of
allowances or adjustments to previously recorded revenues.

 

    	8

    	 

    

 

“Guarantor”
means, individually and collectively, Moody REIT II and Moody Guarantor.

 

“Guaranty”
means that certain Guaranty Agreement, dated as of the date hereof, executed and delivered by Guarantor in connection with the
Loan to and for the benefit of Lender, as the same may be amended, restated, replaced, supplemented or otherwise modified from
time to time.

 

“Hazardous Substances”
means any and all substances (whether solid, liquid or gas) defined, listed, or otherwise classified as pollutants, hazardous wastes,
hazardous substances, hazardous materials, extremely hazardous wastes, or words of similar meaning or regulatory effect under any
present or future Environmental Laws or that, by virtue of the presence thereof or exposure thereto, may have a negative impact
on human health or the environment, including but not limited to petroleum and petroleum products, asbestos and asbestos-containing
materials, polychlorinated biphenyls, lead, radon, radioactive materials, flammables, explosives, mold, mycotoxins, microbial matter
and airborne pathogens (naturally occurring or otherwise), but excluding substances of kinds and in amounts ordinarily and customarily
used or stored in similar properties for the purpose of cleaning or other maintenance or operations and otherwise in compliance
with all Environmental Laws.

 

“Hotel Transactions”
means (i) occupancy arrangements for customary hotel transactions in the ordinary course of Borrower’s or Master Tenant’s
business conducted at the Property, including nightly rentals (or licensing) of individual hotel rooms or suites, banquet room
use and food and beverage services, and (ii) informational or guest services that are terminable on one month’s notice or
less without cause and without penalty or premium, including co-marketing, promotional services and outsourced services.

 

    	9

    	 

    

 

“Improvements”
has the meaning set forth in the granting clause of the Security Instrument.

 

“Indebtedness”
of a Person, at a particular date, means the sum (without duplication) at such date of (a) all indebtedness or liability of such
Person (including amounts for borrowed money and indebtedness in the form of mezzanine debt or preferred equity); (b) obligations
evidenced by bonds, debentures, notes, or other similar instruments; (c) obligations for the deferred purchase price of property
or services (including trade obligations); (d) obligations under letters of credit; (e) obligations under acceptance facilities;
(f) all guaranties, endorsements (other than for collection or deposit in the ordinary course of business) and other contingent
obligations to purchase, to provide funds for payment, to supply funds, to invest in any Person or entity, or otherwise to assure
a creditor against loss; and (g) obligations secured by any Liens, whether or not the obligations have been assumed (other than
the Permitted Encumbrances).

 

“Indemnified Liabilities”
has the meaning set forth in Section 10.13(b) hereof.

 

“Indemnified Parties”
means Lender and, its designee (whether or not it is the Lender), any Affiliate of Lender that has filed any registration statement
relating to the Securitization or has acted as the sponsor or depositor in connection with the Securitization, any Affiliate of
Lender that acts as an underwriter, placement agent or initial purchaser of Securities issued in the Securitization, any other
co underwriters, co placement agents or co initial purchasers of Securities issued in the Securitization, and each of their respective
officers, directors, partners, employees, representatives, agents and Affiliates and each Person or entity who Controls any such
Person within the meaning of Section 15 of the Securities Act of 1933 as amended or Section 20 of the Security Exchange Act of
1934 as amended, any Person who is or will have been involved in the origination of the Loan, any Person who is or will have been
involved in the servicing of the Loan secured hereby, any Person in whose name the encumbrance created by the Security Instrument
is or will have been recorded, any Person who may hold or acquire or will have held a full or partial interest in the Loan secured
hereby (including investors or prospective investors in the Securities, as well as custodians, trustees and other fiduciaries who
hold or have held a full or partial interest in the Loan secured hereby for the benefit of third parties) as well as the respective
directors, officers, shareholders, partners, employees, agents, servants, representatives, contractors, subcontractors, affiliates,
subsidiaries, participants, successors and assigns of any and all of the foregoing (including any other Person who holds or acquires
or will have held a participation or other full or partial interest in the Loan, whether during the term of the Loan or as a part
of or following a foreclosure of the Loan and including any successors by merger, consolidation or acquisition of all or a substantial
portion of Lender’s assets and business), in each case, in their respective capacities as such.

 

“Initial Interest
Payment Per Diem” has the meaning set forth in the Loan Terms Table of the Note.

 

    	10

    	 

    

 

“Initial
Management Fees” shall have the meaning set forth in Section 9.4 hereof.

 

“Institutional
Controls” means any legal or physical restrictions or limitations on the use of, or access to, the Property to eliminate
or minimize potential exposures to any Hazardous Substance, to prevent activities that could interfere with the effectiveness of
any Remediation, or to ensure maintenance of a level of risk to human health or the environment from Hazardous Materials, including
physical modifications to the Property such as slurry walls, capping, hydraulic controls for ground water, or point of use water
treatment, restrictive covenants, environmental protection easements, or property use limitations.

 

“Insurance Premiums”
has the meaning set forth in Section 6.1(b) hereof.

 

“Insurance Proceeds”
has the meaning set forth in Section 6.4(b) hereof.

 

“Interest Rate”
means a rate of four and 58/100 percent (4.58%).

 

“Key Principal”
shall mean Brett C. Moody.

 

“Land”
has the meaning set forth in the granting clause of the Security Instrument.

 

“Lease”
has the meaning set forth in the Security Instrument. Notwithstanding the foregoing, for purposes hereof, neither the Master Lease
nor any Hotel Transaction shall constitute a Lease.

 

“Legal Requirements”
means, all federal, state, county, municipal and other governmental statutes, laws, rules, orders, regulations, ordinances, judgments,
decrees and injunctions of Governmental Authorities affecting Borrower or the Property or any part thereof, or the construction,
use, alteration or operation thereof, or any part thereof, whether now or hereafter enacted and in force, and all permits, licenses
and authorizations and regulations relating thereto, and all covenants, agreements, restrictions and encumbrances contained in
any instruments, either of record or known to Borrower or Master Tenant, at any time in force affecting Borrower, Master Tenant,
the Property or any part thereof, including any which may (a) require repairs, modifications or alterations in or to the Property
or any part thereof, or (b) in any way limit the use and enjoyment thereof.

 

“Lender”
has the meaning set forth in the introductory paragraph hereto, together with its successors and assigns.

 

“Lien”
means, any mortgage, deed of trust, deed to secure debt, indemnity deed of trust, lien, pledge, hypothecation, assignment, security
interest, or any other encumbrance, charge or transfer for security of, on or affecting Borrower, the Property, any portion thereof
or any interest therein, including any conditional sale or other title retention agreement, any financing lease having substantially
the same economic effect as any of the foregoing, the filing of any financing statement, and mechanic’s, materialmen’s
and other similar liens and encumbrances.

 

“Loan”
means the loan in the Original Principal Amount made by Lender to Borrower pursuant to this Agreement.

 

    	11

    	 

    

 

“Loan Documents”
means, collectively, this Agreement, the Note, the Security Instrument, the Environmental Indemnity, the Assignment of Management
Agreement, the Guaranty, the Clearing Account Agreement, the Cash Management Agreement, the Master Lease Subordination Agreement,
the Master Lease ALR, the Collateral Assignment and all other documents pursuant to which a Person incurs or assumes an obligation
to or for the benefit of Lender that are executed or delivered in connection with the Loan.

 

“Loan to Value
Ratio” shall mean, as of the date of its calculation, the ratio of (i) the sum of the outstanding principal amount of
the Loan as of the date of such calculation to (ii) the fair market value of the Property, as determined, in Lender’s sole
discretion, by any commercially reasonable method permitted to a REMIC Trust.

 

“Management Agreement”
means the management agreement entered into by and between Master Tenant and Manager, pursuant to which Manager is to provide management
and other services with respect to the Property, or, if the context requires, a Qualified Manager who is managing the Property
in accordance with the terms and provisions of this Agreement pursuant to a Replacement Management Agreement.

 

“Manager”
means Moody National Hospitality Management, LLC, a Texas limited liability company, or, if the context requires, a Qualified Manager
who is managing the Property in accordance with the terms and provisions of this Agreement pursuant to a Replacement Management
Agreement.

 

“Master Lease”
means that certain Hotel Lease Agreement dated as of the date hereof by and between Borrower and Master Tenant, as the same may
be amended, restated, replaced, supplemented or otherwise modified in accordance herewith with the consent of Lender.

 

“Master Lease
ALR” shall mean that certain Master Lease Assignment of Leases and Rents and Security Agreement, dated the date hereof,
executed and delivered by Master Tenant in favor of Borrower, as the same may be amended, restated, replaced, supplemented or otherwise
modified from time to time.

 

“Master Lease
Documents” shall mean the Master Lease, the Master Lease ALR, the Collateral Assignment and the Master Lease Subordination
Agreement.

 

“Master Lease
Subordination Agreement” shall mean the Master Lease Subordination and Attornment Agreement executed by Master Tenant
for the benefit of Lender, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

 

“Master Tenant”
shall mean Moody National Lancaster-Austin MT, LLC, a Delaware limited liability company.

 

“Master Tenant’s
Excess Cash Flow Subaccount” shall have the meaning set forth in Section 7.5.1 hereof.

 

    	12

    	 

    

 

“Material Action”
means, with respect to any Person, to file any insolvency or reorganization case or proceeding, to institute proceedings to have
such Person be adjudicated bankrupt or insolvent, to institute proceedings under any applicable insolvency law, to seek any relief
under any law relating to relief from debts or the protection of debtors, to consent to the filing or institution of bankruptcy
or insolvency proceedings against such Person, to file a petition seeking, or consent to, reorganization or relief with respect
to such Person under any applicable federal or state law relating to bankruptcy or insolvency, to seek or consent to the appointment
of a receiver, liquidator, assignee, trustee, sequestrator, custodian, or any similar official of or for such Person or a substantial
part of its property, to make any assignment for the benefit of creditors of such Person, to admit in writing in any legal proceeding
such Person’s inability to pay its debts generally as they become due, or to affirmatively take action in furtherance of
any of the foregoing.

 

“Maturity Date”
means November 1, 2025, or such other date on which the final payment of principal of the Note becomes due and payable as therein
or herein provided, whether at such stated maturity date, by declaration of acceleration, or otherwise.

 

“Maximum Legal
Rate” has the meaning set forth in Section 7 of the Note.

 

“Memorandum of
Subordination Agreement” shall mean that certain Memorandum of Subordination Agreement, dated on or about the date hereof,
by and between Master Tenant and Lender.

 

“MNOP II”
shall mean Moody National Operating Partnership II, L.P., a Delaware limited partnership.

 

“Monthly Debt
Service Payment Amount” means (i) on each Payment Date up to and including November 1, 2018, an amount equal to interest
only at the Interest Rate on the outstanding principal balance of the Loan for the related Accrual Period, and (ii) on each Payment
Date occurring on and after December 1, 2018, a constant monthly payment of $84,772.80.

 

“Moody’s”
means Moody’s Investors Service, Inc.

 

“Moody Guarantor”
shall mean Brett C. Moody, a natural person.

 

“Moody REIT II”
means Moody National REIT II, Inc., a Maryland corporation.

 

“Net Cash Flow”
means, with respect to the Property for any period, the amount obtained by subtracting Operating Expenses and Capital Expenditures
for such period from Gross Income from Operations for such period.

 

“Net Operating
Income” means the amount obtained by subtracting Operating Expenses from Gross Income from Operations.

 

“Net Proceeds”
has the meaning set forth in Section 6.4(b) hereof.

 

“Net Proceeds
Deficiency” has the meaning set forth in Section 6.4(b)(vi) hereof.

 

    	13

    	 

    

 

“Note”
means that certain Promissory Note, dated the date hereof, in the principal amount of $16,575,000.00, made by Borrower in favor
of Lender, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

 

“OFAC”
has the meaning set forth in Section 10.25 hereof.

 

“Officer’s
Certificate” means a certificate delivered to Lender by Borrower, Master Tenant or Guarantor, as applicable, which is
signed by an authorized officer of Borrower, Master Tenant or Guarantor, or of the general partner of (1) the sole member of Borrower,
or (2) the sole member of Master Tenant, as applicable.

 

“Operating Expenses”
shall mean the sum of all costs and expenses of operating, maintaining, directing, managing and supervising the Property (excluding
(i) depreciation and amortization, (ii) any Debt Service, (iii) any Capital Expenditures, or (iv) the costs of any other things
specified to be done or provided at Borrower’s, Master Tenant’s or Manager’s sole cost and expense), incurred
by Borrower, Master Tenant or Manager pursuant to the Management Agreement, or as otherwise specifically provided therein, which
are properly attributable to such period under Borrower’s or Master Tenant’s system of accounting, including, without
limitation: (a) the cost of all food and beverages sold or consumed and of all necessary chinaware, glassware, linens, flatware,
uniforms, utensils and other items of a similar nature, including such items bearing the name or identifying characteristics of
the hotel as Borrower, Master Tenant and/or Manager shall reasonably consider appropriate (collectively, the “Operating
Equipment”) and paper supplies, cleaning materials and similar consumable items (collectively, the “Operating
Supplies”) placed in use (other than reserve stocks thereof in storerooms). Operating Equipment and Operating Supplies
shall be considered to have been placed in use when they are transferred from the storerooms of the Property to the appropriate
operating departments; (b) salaries and wages of personnel of the Property, including costs of payroll taxes and employee benefits
(which benefits may include, without limitation, a pension plan, medical insurance, life insurance, travel accident insurance and
an executive bonus program) and the costs of moving (1) employees of the Property whose primary duties consist of the management
of the Property or of a recognized department or division thereof; or (2) personnel (A) who customarily and regularly direct the
work of five (5) or more other employees of the Property, (B) who have authority with reference to the hiring, firing and advancement
of other employees of the Property, (C) who customarily and regularly exercise discretionary powers, (D) who devote at least ninety
five percent (95%) of their work time to activities which are directly and closely related to the performance of the work described
in clauses (A) through (C) of clause (2) of this sentence, and (E) who are not compensated on an hourly basis (the “Executive
Hotel Personnel”), their families and their belongings to the area in which the Property is located at the commencement
of their employment at the Property and all other expenses not otherwise specifically referred to in this definition which are
referred to as “Administrative and General Expenses” in the Uniform System of Accounts. If the Executive Hotel
Personnel are on the payroll of Guarantor or any Affiliate of Guarantor, the cost of their salaries, payroll taxes and employee
benefits (which benefits, in the case of employees who are not United States citizens or in the case of employees of hotels located
outside the continental United States may include, without limitation, in addition to the foregoing benefits, reasonable home leave
transportation expenses approved by Lender) shall be billed by said Affiliate to and be reimbursed by Borrower, Master Tenant and/or
Manager monthly, and such reimbursement shall be an Operating Expense. Except as otherwise expressly provided under the Management
Agreement with respect to employees regularly employed at the Property, the salaries or wages of other employees or executives
of Manager, Guarantor or any of their respective Affiliates shall in no event be Operating Expenses, but they shall be entitled
to free room and board and the free use of all facilities at such times as they visit the Property exclusively in connection with
the management of the Property. Notwithstanding the foregoing, if it becomes necessary for an employee of Guarantor or an employee
or executive of any Affiliate of Guarantor to temporarily perform services at the Property of a nature normally performed by personnel
of the Property, his or her salary (including payroll taxes and employee benefits) as well as his or her traveling expenses will
be Operating Expenses and he or she will be entitled to free room, board and use of the facilities as aforesaid, while performing
such services; (c) the cost of all other goods and services obtained by Borrower, Master Tenant or Manager in connection with its
operation of the Property, including, without limitation, heat and utilities, office supplies and all services performed by third
parties, including leasing expenses in connection with telephone and data processing equipment, and all existing and any future
installations necessary for the operation of the Improvements for hotel purposes (including, without limitation, heating, lighting,
sanitary equipment, air conditioning, laundry, refrigerating, built-in kitchen equipment, telephone equipment, communications systems,
computer equipment and elevators), Operating Equipment and existing and any future furniture, furnishings, wall coverings, fixtures
and hotel equipment necessary for the operation of the Property for hotel purposes which shall include all equipment required for
the operation of kitchens, bars, laundries (if any), and dry cleaning facilities (if any), office equipment, cleaning and engineering
equipment and vehicles; (d) the cost of repairs to and maintenance of the Property other than of a capital nature; (e) Insurance
Premiums for general liability insurance, workers’ compensation insurance or insurance required by similar employee benefits
acts and such business or rental interruption or other insurance as may be provided for protection against claims, liabilities
and losses arising from the operation of the Property (as distinguished from any property damage insurance on the Property or its
contents) and losses incurred on any self-insured risks of the foregoing types, provided that (1) Lender has specifically approved
in advance such self-insurance or (2) insurance is unavailable to cover such risks. Premiums on policies will be pro rated over
the period of insurance and premiums under blanket policies will be allocated among properties covered; (f) all Taxes and Other
Charges (other than federal, state or local income taxes and franchise taxes or the equivalent) payable by or assessed against
Borrower, Master Tenant or Manager with respect to the operation of the Property; (g) legal fees and fees of any firm of independent
certified public accounts designated from time to time by Borrower and/or Master Tenant (the “Independent CPA”)
for services directly related to the operation of the Property; (h) [omitted]; (i) all expenses for advertising the Property and
all expenses of sales promotion and public relations activities; (j) all out-of-pocket expenses and disbursements determined by
the Independent CPA to have been reasonably, properly and specifically incurred by Borrower, Master Tenant, Manager, Guarantor
or any of their respective Affiliates pursuant to, in the course of and directly related to, the management and operation of the
Property under the Management Agreement. Without limiting the generality of the foregoing, such charges may include all reasonable
travel, telephone, telegram, radiogram, cablegram, air express and other incidental expenses, but, excluding costs relating to
the offices maintained by Borrower, Master Tenant, Manager, Guarantor, or any of their respective Affiliates other than the offices
maintained at the Property for the management of the Property and excluding transportation costs of Borrower, Master Tenant or
Manager related to meetings between Borrower and/or Master Tenant and Manager with respect to administration of the Management
Agreement, as applicable, or of the Property involving travel away from such party’s principal offices; (k) the cost of any
reservations system, any accounting services or other group benefits, programs or services from time to time made available to
properties in the Borrower’s and/or Master Tenant’s system; (l) the cost associated with any commercial Leases; (m)
any management fees, basic and incentive fees or other fees and reimbursables paid or payable to Manager under the Management Agreement;
(n) any franchise fees or other fees and reimbursables paid or payable to Franchisor under the Franchise Agreement; and (o) all
costs and expenses of owning, maintaining, conducting, directing, managing and supervising the operation of the Property to the
extent such costs and expenses are not included above.

 

    	14

    	 

    

 

“Original Principal
Amount” means $16,575,000.00.

 

“Other Charges”
means all ground rents, maintenance charges, impositions other than Taxes, and any other charges, including vault charges and license
fees for the use of vaults, chutes and similar areas adjoining the Property, now or hereafter levied or assessed or imposed against
the Property or any part thereof.

 

“Other Obligations”
has the meaning as set forth in the Security Instrument.

 

“Outstanding Principal
Balance” or “OPB” means the portion of the Original Principal Amount that remains outstanding from
time to time.

 

“Owner Agreement”
shall mean that certain Owner Agreement, dated on or about the date hereof, by and among Franchisor, Master Tenant, and Borrower.

 

“Payment Date”
means the first (1st) day of each calendar month during the term of the Loan.

 

“Permitted Defeasance
Date” means the date that is two (2) years from the “startup day” within the meaning of Section 860G(a)(9)
of the Code for the REMIC Trust which holds the portion of the Note last to be securitized.

 

“Permitted Encumbrances”
means, with respect to the Property, collectively, (a) the Liens and security interests created by the Loan Documents, (b) all
Liens, encumbrances and other matters disclosed in the Title Insurance Policy, (c) Liens, if any, for Taxes imposed by any Governmental
Authority or for other Charges not yet delinquent or that are being contested in accordance with the Loan Documents, (d) mechanics’,
materialmen’s, and other similar Liens on the Property that are not yet delinquent or that are being contested, or are otherwise
discharged or bonded, in accordance with the Loan Documents; (e) Leases entered into in accordance with the Loan Documents, and
(f) such other title and survey exceptions as Lender has approved or may approve in writing in Lender’s sole discretion,
which Permitted Encumbrances individually or in the aggregate do not materially adversely affect the value or use or operation
of the Property or the security intended to be provided by the Security Instrument or with the current ability of the Property
to generate Net Cash Flow sufficient to service the Loan or Borrower’s ability to pay its obligations under the Loan Documents
when they become due.

 

    	15

    	 

    

 

“Permitted Indebtedness”
has the meaning set forth in clause (xxiii) of the definition of Special Purpose Entity.

 

“Permitted Investments”
means any one or more of the following obligations or securities acquired at a purchase price of not greater than par, including
those issued by Servicer, the trustee under any Securitization or any of their respective Affiliates, payable on demand or having
a maturity date not later than the Business Day immediately prior to the first Payment Date following the date of acquiring such
investment and meeting one of the appropriate standards set forth below:

 

(i)obligations
of, or obligations fully guaranteed as to payment of principal and interest by, the United States or any agency or instrumentality
thereof provided such obligations are backed by the full faith and credit of the United States of America including obligations
of: the U.S. Treasury (all direct or fully guaranteed obligations), the Farmers Home Administration (certificates of beneficial
ownership), the General Services Administration (participation certificates), the U.S. Maritime Administration (guaranteed Title
XI financing), the Small Business Administration (guaranteed participation certificates and guaranteed pool certificates), the
U.S. Department of Housing and Urban Development (local authority bonds) and the Washington Metropolitan Area Transit Authority
(guaranteed transit bonds); provided, however, that the investments described in this clause must (A) have a predetermined
fixed dollar of principal due at maturity that cannot vary or change, (B) if rated by S&P, must not have an “r”
highlighter affixed to their rating, (C) if such investments have a variable rate of interest, such interest rate must be tied
to a single interest rate index plus a fixed spread (if any) and must move proportionately with that index, and (D) such investments
must not be subject to liquidation prior to their maturity;

 

(ii)Federal
Housing Administration debentures;

 

(iii)obligations
of the following United States government sponsored agencies: Federal Home Loan Mortgage Corp. (debt obligations), the Farm Credit
System (consolidated systemwide bonds and notes), the Federal Home Loan Banks (consolidated debt obligations), the Federal National
Mortgage Association (debt obligations), the Financing Corp. (debt obligations), and the Resolution Funding Corp. (debt obligations);
provided, however, that the investments described in this clause must (A) have a predetermined fixed dollar of principal
due at maturity that cannot vary or change, (B) if rated by S&P, must not have an “r” highlighter affixed to their
rating, (C) if such investments have a variable rate of interest, such interest rate must be tied to a single interest rate
index plus a fixed spread (if any) and must move proportionately with that index, and (D) such investments must not be subject
to liquidation prior to their maturity;

 

(iv)federal
funds, unsecured certificates of deposit, time deposits, bankers’ acceptances and repurchase agreements with maturities of
not more than 365 days of any bank, the short term obligations of which at all times are rated in the highest short term rating
category by each Rating Agency (or, if not rated by all Rating Agencies, rated by at least one Rating Agency in the highest short
term rating category and otherwise acceptable to each other Rating Agency, as confirmed in writing that such investment would not,
in and of itself, result in a downgrade, qualification or withdrawal of the initial, or, if higher, then current ratings assigned
to the Securities); provided, however, that the investments described in this clause must (A) have a predetermined
fixed dollar of principal due at maturity that cannot vary or change, (B) if rated by S&P, must not have an “r”
highlighter affixed to their rating, (C) if such investments have a variable rate of interest, such interest rate must be tied
to a single interest rate index plus a fixed spread (if any) and must move proportionately with that index, and (D) such investments
must not be subject to liquidation prior to their maturity;

 

    	16

    	 

    

 

(v)fully
Federal Deposit Insurance Corporation-insured demand and time deposits in, or certificates of deposit of, or bankers’ acceptances
issued by, any bank or trust company, savings and loan association or savings bank, the short term obligations of which at all
times are rated in the highest short term rating category by each Rating Agency (or, if not rated by all Rating Agencies, rated
by at least one Rating Agency in the highest short term rating category and otherwise acceptable to each other Rating Agency, as
confirmed in writing that such investment would not, in and of itself, result in a downgrade, qualification or withdrawal of the
initial, or, if higher, then current ratings assigned to the Securities); provided, however, that the investments
described in this clause must (A) have a predetermined fixed dollar of principal due at maturity that cannot vary or change, (B)
if rated by S&P, must not have an “r” highlighter affixed to their rating, (C) if such investments have a variable
rate of interest, such interest rate must be tied to a single interest rate index plus a fixed spread (if any) and must move proportionately
with that index, and (D) such investments must not be subject to liquidation prior to their maturity;

 

(vi)debt
obligations with maturities of not more than 365 days and at all times rated by each Rating Agency (or, if not rated by all Rating
Agencies, rated by at least one Rating Agency and otherwise acceptable to each other Rating Agency, as confirmed in writing that
such investment would not, in and of itself, result in a downgrade, qualification or withdrawal of the initial, or, if higher,
then current ratings assigned to the Securities) in its highest long-term unsecured rating category; provided, however,
that the investments described in this clause must (A) have a predetermined fixed dollar of principal due at maturity that cannot
vary or change, (B) if rated by S&P, must not have an “r” highlighter affixed to their rating, (C) if such investments
have a variable rate of interest, such interest rate must be tied to a single interest rate index plus a fixed spread (if any)
and must move proportionately with that index, and (D) such investments must not be subject to liquidation prior to their maturity;

 

(vii)commercial
paper (including both non interest-bearing discount obligations and interest-bearing obligations payable on demand or on a specified
date not more than one year after the date of issuance thereof) with maturities of not more than 365 days and that at all times
is rated by each Rating Agency (or, if not rated by all Rating Agencies, rated by at least one Rating Agency and otherwise acceptable
to each other Rating Agency, as confirmed in writing that such investment would not, in and of itself, result in a downgrade, qualification
or withdrawal of the initial, or, if higher, then current ratings assigned to the Securities) in its highest short-term unsecured
debt rating; provided, however, that the investments described in this clause must (A) have a predetermined fixed
dollar of principal due at maturity that cannot vary or change, (B) if rated by S&P, must not have an “r” highlighter
affixed to their rating, (C) if such investments have a variable rate of interest, such interest rate must be tied to a single
interest rate index plus a fixed spread (if any) and must move proportionately with that index, and (D) such investments must not
be subject to liquidation prior to their maturity;

 

    	17

    	 

    

 

(viii)units
of taxable money market funds, which funds are regulated investment companies, seek to maintain a constant net asset value per
share and invest solely in obligations backed by the full faith and credit of the United States, which funds have the highest rating
available from each Rating Agency (or, if not rated by all Rating Agencies, rated by at least one Rating Agency and otherwise acceptable
to each other Rating Agency, as confirmed in writing that such investment would not, in and of itself, result in a downgrade, qualification
or withdrawal of the initial, or, if higher, then current ratings assigned to the Securities) for money market funds; and

 

(ix)any other
security, obligation or investment which has been approved as a Permitted Investment in writing by (a) Lender and (b) each Rating
Agency, as evidenced by a written confirmation that the designation of such security, obligation or investment as a Permitted Investment
will not, in and of itself, result in a downgrade, qualification or withdrawal of the initial, or, if higher, then current ratings
assigned to the Securities by such Rating Agency;

 

provided, however,
that no obligation or security shall be a Permitted Investment if (A) such obligation or security evidences a right to receive
only interest payments or (B) the right to receive principal and interest payments on such obligation or security are derived from
an underlying investment that provides a yield to maturity in excess of 120% of the yield to maturity at par of such underlying
investment.

 

“Permitted Par
Prepayment Date” means July 2, 2025.

 

“Permitted Transfer”
means any of the following: (a) any transfer, directly as a result of the death of a natural person, of stock, membership interests,
partnership interests or other ownership interests previously held by the decedent in question to the Person or Persons lawfully
entitled thereto and (b) any transfer, directly as a result of the legal incapacity of a natural person, of stock, membership interests,
partnership interests or other ownership interests previously held by such natural person to the Person or Persons lawfully entitled
thereto.

 

“Person”
means any individual, corporation, partnership, joint venture, limited liability company, estate, trust, unincorporated association,
any federal, state, county or municipal government or any bureau, department or agency thereof and any fiduciary acting in such
capacity on behalf of any of the foregoing.

 

“Personal Property”
has the meaning set forth in the granting clause of the Security Instrument.

 

“Policies”
has the meaning specified in Section 6.1(b) hereof.

 

    	18

    	 

    

 

“Policy”
has the meaning specified in Section 6.1(b) hereof.

 

“Principal”
means the Special Purpose Entity that is the general partner of Borrower or Master Tenant, if Borrower or Master Tenant is a limited
partnership, or (b) the Special Purpose Entity that is the managing member of Borrower or Master Tenant, if Borrower or Master
Tenant is a limited liability company, provided, however, that to the extent that Borrower or Master Tenant satisfies the requirements
set forth in clause (x) of the definition of Special Purpose Entity, neither Borrower nor Master Tenant shall be deemed to have
a “Principal” and this definition of “Principal” shall have no meaning when used in the Loan Documents.
As of the Closing Date, (a) Borrower is a Delaware single-member limited liability company that satisfies the requirements set
forth in clause (x) of the definition of Special Purpose Entity and has no Principal and (b) Master Tenant is a Delaware single-member
limited liability company that satisfies the requirements set forth in clause (x) of the definition of Special Purpose Entity and
has no Principal.

 

“Property”
means the parcel of real property, the Improvements thereon and all personal property owned by Borrower and encumbered by the Security
Instrument, together with all rights pertaining to such property and Improvements, as more particularly described in the granting
clauses of the Security Instrument and referred to therein as the “Property.”

 

“Provided Information”
means any and all financial and other information provided at any time prepared by, or on behalf of, Borrower, Principal, Master
Tenant, Guarantor and/or Manager.

 

“Qualified Franchisor”
shall mean (i) Franchisor or (ii) a reputable and experienced franchisor which, in the reasonable judgment of Lender, possesses
experience in flagging hotel properties similar in location, size, class, use, operation and value as the Property; provided, that,
if required by Lender, Borrower shall have obtained a Rating Agency Confirmation from the applicable Rating Agencies that franchising
of the Property by such Person will not cause a downgrade, withdrawal or qualification of the then current ratings of the Securities
or any class thereof. Lender or Servicer shall make any required request for written confirmation directly to the Rating Agencies.

 

“Qualified Manager”
means either (a) Manager; or (b) in the reasonable judgment of Lender, a reputable and experienced management organization (which
may be an Affiliate of Borrower or Master Tenant) possessing experience in managing properties similar in size, scope, use and
value as the Property, provided, that, if required by Lender, Borrower shall have obtained prior written confirmation from
the applicable Rating Agencies that management of the Property by such entity will not cause a downgrade, withdrawal or qualification
of the then current ratings of the Securities or any class thereof.

 

“Rating Agencies”
means each of S&P, Moody’s, Fitch, and Morningstar Credit Ratings, LLC, or any other nationally recognized statistical
rating agency which has been approved by Lender and designated by Lender to assign a rating to the Securities.

 

“Related Entities”
has the meaning set forth in Section 5.2.10(e) hereof.

 

    	19

    	 

    

 

“Release”
shall mean any release, deposit, discharge, emission, leaking, spilling, seeping, migrating, injecting, pumping, pouring, emptying,
escaping, dumping, disposing or other movement of Hazardous Substances.

 

“Remediation”
includes any response, remedial, removal, or corrective action, any activity to cleanup, detoxify, decontaminate, contain or otherwise
remediate any Hazardous Substance, any actions to prevent, cure or mitigate any Release of any Hazardous Substance, any action
to comply with any Environmental Laws or with any permits issued pursuant thereto, any inspection, investigation, study, monitoring,
assessment, audit, sampling and testing, laboratory or other analysis, or evaluation relating to any Hazardous Substances.

 

“REMIC Requirements”
shall mean any applicable legal requirements relating to any REMIC Trust (including, without limitation, those relating to the
continued treatment of the Loan (or the applicable portion thereof or interest therein) as a “qualified mortgage” held
by such REMIC Trust, the continued qualification of such REMIC Trust as such under the Code, the non-imposition of any tax on such
REMIC Trust under the Code (including, without limitation, taxes on “prohibited transactions” and “contributions”)
and any other constraints, rules or other regulations or requirements relating to the servicing, modification or other similar
matters with respect to the Loan (or any portion thereof and/or interest therein) that may now or hereafter exist under applicable
legal requirements (including, without limitation under the Code)).

 

“REMIC Trust”
means a “real estate mortgage investment conduit” within the meaning of Section 860D of the Code that holds the Note
or a portion thereof.

 

“Rents”
shall have the meaning set forth in the Security Instrument.

 

“Replacement Franchise
Agreement” shall mean, collectively, (i)(a) a franchise, trademark and license agreement with a Qualified Franchisor
substantially in the same form and substance as the Franchise Agreement, or (b) a franchise, trademark and license agreement with
a Qualified Franchisor, which franchise, trademark and license agreement shall be reasonably acceptable to Lender in form and substance;
provided that, with respect to this clause (b) Lender, at its option, may require that Borrower shall have obtained, prior written
confirmation from the applicable Rating Agencies that such franchise, trademark and license agreement will not cause a downgrade,
withdrawal or qualification of the then current rating of the Securities or any class thereof, and (ii) a comfort letter or tri-party
agreement reasonably acceptable to Lender, executed and delivered to Lender by Borrower (or, as applicable, Master Tenant) and
such Qualified Franchisor. Lender or Servicer shall make any required request for written confirmation directly to the Rating Agencies.

 

“Replacement Management
Agreement” means, collectively, (a) either (i) a management agreement with a Qualified Manager substantially in the same
form and substance as the Management Agreement, or (ii) a management agreement with a Qualified Manager, which management agreement
shall be reasonably acceptable to Lender in form and substance, provided, with respect to this subclause (ii), Lender, at
its option, may require that Borrower shall have obtained prior written confirmation from the applicable Rating Agencies that such
management agreement will not cause a downgrade, withdrawal or qualification of the then current rating of the Securities or any
class thereof and (b) an assignment of management agreement and subordination of management fees substantially in the form then
used by Lender (or of such other form and substance reasonably acceptable to Lender), executed and delivered to Lender by Borrower
and such Qualified Manager at Borrower’s expense.

 

    	20

    	 

    

 

“Replacements
Payment” means an amount equal to the greater of one-twelfth (1/12) of four percent (4.0%) of (1) gross revenues from
the Property for the preceding calendar year, and (2) projected forward twelve (12) month Replacements expenditures based on the
Annual Budget. For the avoidance of doubt, Lender shall calculate the Replacements Payment on an annual basis at such time as Lender
reviews and approves the Annual Budget.

 

“Replacement Reserve
Account” has the meaning set forth in Section 7.3.1 hereof.

 

“Replacement Reserve
Fund” has the meaning set forth in Section 7.3.1 hereof.

 

“Replacement Reserve
Monthly Deposit” means for the initial Payment Date an amount equal to $16,759, and then with respect to any calendar
month, an amount equal to the greater of (1) the Replacements Payment and (2) the aggregate amount of Replacements expenditures,
if any, required to be reserved under the Management Agreement and the Franchise Agreement (or, as applicable any Replacement Franchise
Agreement).

 

“Replacements”
means all furniture, fixtures, equipment and items of personal property located on or used in connection with the operation of
the hotel at the Property.

 

“Reporting Company”
shall mean a Person that is required to file, with respect to the equity interests of such company, periodic reports with the Securities
and Exchange Commission under the Exchange Act.

 

“Required Repair
Account” has the meaning set forth in Section 7.1.1 hereof.

 

“Required Repair
Fund” has the meaning set forth in Section 7.1.1 hereof.

 

“Required Repairs”
has the meaning set forth in Section 7.1.1 hereof.

 

“Reserve Funds”
means, collectively, the Tax and Insurance Escrow Fund, the Replacement Reserve Fund, the Required Repair Fund, the Free Rent Reserve,
the Specified Tenant Reserve Funds, the Excess Cash Flow Reserve Fund, and any other escrow fund established by the Loan Documents.

 

“Restoration”
means the repair and restoration of the Property after a Casualty or Condemnation as nearly as possible to the condition the Property
was in immediately prior to such Casualty or Condemnation, with such alterations as may be reasonably approved by Lender.

 

“Restricted Party”
shall mean collectively, Borrower, Master Tenant, Principal, Guarantor, and any Affiliated Manager, Moody National Operating Partnership
II, LP, a Delaware limited partnership, and Moody OP Holdings II, LLC, a Delaware limited liability company.

 

“Revised
Management Fees” shall have the meaning set forth in Section 9.4 hereof.

 

    	21

    	 

    

 

“Room Revenue”
shall mean that portion of Gross Income from Operations attributable to the rental of hotel rooms, upon which Franchisor calculates
franchise fees.

 

“S&P”
means Standard & Poor’s Ratings Group, a division of the McGraw-Hill Companies.

 

“Sale or Pledge”
means a voluntary or involuntary sale, conveyance, assignment, transfer, encumbrance, pledge, grant of option or other transfer
or disposal of a legal or beneficial interest, whether direct or indirect.

 

“Scheduled Defeasance
Payments” has the meaning set forth in Section 2.5.1(b) hereof.

 

“Securities”
has the meaning set forth in Section 9.1 hereof.

 

“Securitization”
has the meaning set forth in Section 9.1 hereof.

 

“Security Agreement”
has the meaning set forth in Section 2.5.1(a)(v) hereof.

 

“Security Instrument”
means, that certain first priority Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing, dated
the date hereof, executed and delivered by Borrower to Lender as security for the Loan and encumbering the Property, as the same
may be amended, restated, replaced, supplemented or otherwise modified from time to time.

 

“Servicer”
has the meaning set forth in Section 9.5 hereof.

 

“Severed Loan
Documents” has the meaning set forth in Section 8.2(c) hereof.

 

“Special Purpose
Entity” means a corporation, limited partnership or limited liability company that, since the date of its formation and
at all times on and after the date thereof while the Loan is outstanding and undefeased, unless such Person no longer owns any
interest in the Property, has complied with and shall at all times comply with the following requirements unless it has received
either prior consent to do otherwise from Lender or a permitted administrative agent thereof, or, while the Loan is securitized,
confirmation from each of the applicable Rating Agencies that such noncompliance would not result in the requalification, withdrawal,
or downgrade of the ratings of any Securities or any class thereof:

 

(i)is and shall be
organized solely for the purpose of (A) in the case of Borrower, acquiring, developing, owning, holding, selling, leasing, transferring,
exchanging, financing, managing, operating and disposing of the Property, entering into and performing its obligations under the
Loan Documents with Lender, refinancing the Property in connection with a permitted repayment of the Loan, and transacting lawful
business that is incident, necessary and appropriate to accomplish the foregoing; (B) in the case of Master Tenant, leasing, subleasing,
operating, managing, maintaining, developing, and improving the Property, entering into and performing its obligations under the
Master Lease Documents with Borrower, Hotel Transactions, the Franchise Agreement, and subleases, operating agreements, or management
agreements with third-party operators or managers for the management and operation of the Property, and transacting lawful business
that is incident, necessary and appropriate to accomplish the foregoing; or (C) in the case of a Principal, acting as a general
partner of the limited partnership that is the Borrower or Master Tenant, as applicable, or as member of the limited liability
company that is the Borrower or Master Tenant, as applicable, and transacting lawful business that is incident, necessary and appropriate
to accomplish the foregoing;

 

    	22

    	 

    

 

(ii)has not engaged
and shall not engage in any business unrelated to (A) the acquisition, development, ownership, leasing, management or operation
of the Property (including, in the case of Master Tenant, entering into the Master Lease Documents, Hotel Transactions and subleases,
operating agreements or management agreements with third-party operators or managers for the management and operation of the Property),
or (B) in the case of a Principal, acting as general partner of the limited partnership that is the Borrower or Master Tenant,
as applicable, or acting as a member of the limited liability company that is the Borrower or Master Tenant, as applicable;

 

(iii)has not owned
and shall not own any real property other than (A) in the case of Borrower, the Property; or (B) in the case of Master Tenant,
the leasehold interest in the Master Lease;

 

(iv)does not have,
shall not have and at no time had any assets other than (A) in the case of Borrower, the Property and personal property necessary
or incidental to its ownership and operation of the Property; (B) in the case of Master Tenant, the leasehold interest under the
Master Lease and personal property necessary or incidental to ownership of its leasehold interest in and operation of the Property;
or (C) in the case of a Principal, its partnership interest in the limited partnership or the member interest in the limited liability
company that is the Borrower or Master Tenant, as applicable, and personal property necessary or incidental to its ownership of
such interests;

 

(v)has not engaged
in, sought, consented to or permitted and shall not engage in, seek, consent to or permit (A) any dissolution, winding up, liquidation,
consolidation or merger, (B) any sale or other transfer of all or substantially all of its assets or any sale of assets outside
the ordinary course of its business, except as permitted by the Loan Documents, or (C) in the case of a Principal, any transfer
of its partnership or membership interests in Borrower;

 

(vi)shall not cause,
consent to or permit any amendment of its limited partnership agreement, articles of incorporation, articles of organization, certificate
of formation, operating agreement or other formation document or organizational document (as applicable) with respect to the matters
set forth in this definition;

 

(vii)if such entity
is a limited partnership, has and shall have at least one general partner and has and shall have, as its only general partners,
Special Purpose Entities each of which (A) is a corporation or single-member Delaware limited liability company, (B) holds a direct
interest as general partner in the limited partnership of not less than one percent (1.0%); and (C) intentionally omitted.

 

(viii)if such entity
is a corporation, shall not cause or permit the board of directors of such entity to take any Material Action either with respect
to itself or, if the corporation is a Principal, with respect to Borrower, or any action requiring the unanimous affirmative vote
of one hundred percent (100%) of the members of its board of directors, unless one hundred percent (100%) of the members of its
board of directors shall have participated in such vote and shall have voted in favor of such action;

 

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(ix)if such entity
is a limited liability company (other than a limited liability company meeting all of the requirements applicable to a single-member
limited liability company set forth in this definition of “Special Purpose Entity”), has and shall have at least one
(1) member that is a Special Purpose Entity, that is either a corporation or a single-member limited liability company, that directly
owns at least one percent (1.0%) of the equity of the limited liability company;

 

(x)if such entity is
a single-member limited liability company, (A) is and shall be a Delaware limited liability company, (B) intentionally omitted,
(C) shall not take any Material Action and shall not cause or permit the members or managers of such entity to take any Material
Action, either with respect to itself or, if the company is a Principal, with respect to Borrower, in each case unless one hundred
percent (100%) of the members of the company shall have participated consented in writing to such action, and (D) has and shall
have either (1) a member which owns no economic interest in the company, has signed the company’s limited liability company
agreement and has no obligation to make capital contributions to the company, or (2) two natural persons or one entity that is
not a member of the company, that has signed its limited liability company agreement and that, under the terms of such limited
liability company agreement becomes a member of the company immediately prior to the withdrawal or dissolution of the last remaining
member of the company;

 

(xi)has not and shall
not (and, if such entity is (a) a limited liability company, has and shall have a limited liability agreement or an operating agreement,
as applicable, (b) a limited partnership, has a limited partnership agreement, or (c) a corporation, has a certificate of
incorporation or articles that, in each case, provide that such entity shall not) (1) dissolve, merge, liquidate, consolidate;
(2) sell all or substantially all of its assets except as permitted by the Loan Documents; (3) amend its organizational documents
with respect to the matters set forth in this definition without the consent of Lender; or (4) without the affirmative vote of
one hundred percent (100%) of its members, partners or shareholders, as applicable, of itself or the consent of a Principal that
is a member or general partner in it take any Material Action;

 

(xii)to the extent
revenues of the Property are available to it and are sufficient therefor (or Borrower’s lack of access thereto is due to
the exercise of rights or remedies by Lender), (A) has at all times been and shall at all times remain solvent and has paid and
shall pay its debts and liabilities (including, a fairly-allocated portion of any personnel and overhead expenses that it shares
with any Affiliate) from its assets as the same shall become due, and (B) has maintained and shall maintain adequate capital for
the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business
operations;

 

(xiii)holds itself
out as a legal entity, separate and apart from any other person or entity, has not failed and shall not fail to correct any known
misunderstanding regarding the separate identity of such entity and has not identified and shall not identify itself as a division
of any other Person;

 

    	24

    	 

    

 

(xiv)has maintained
and shall maintain (subject to clause (xvi) below) its bank accounts, books of account, books and records separate from those of
any other Person and, to the extent that it is required to file tax returns under applicable law, has filed and shall file its
own tax returns, except to the extent that it is a disregarded entity or otherwise is required by law to file consolidated tax
returns and, if it is a corporation, has not filed and shall not file a consolidated federal income tax return with any other corporation,
except to the extent that it is required by law to file consolidated tax returns;

 

(xv)has maintained
and shall maintain its own records, books, resolutions and agreements;

 

(xvi)except as required
by the Loan Documents, has not commingled and shall not commingle its funds or assets with those of any other Person and has not
participated and shall not participate in any cash management system with any other Person;

 

(xvii)except as required
by the Loan Documents, has held and shall hold its assets in its own name;

 

(xviii)has conducted
and shall conduct its business in its name or in a name franchised or licensed to it by an entity other than an Affiliate of itself
or (except in the case of Borrower) of Borrower, except for business conducted on behalf of itself by another Person under a business
management services agreement that is on commercially-reasonable terms, so long as the manager, or equivalent thereof, under such
business management services agreement holds itself out as an agent of such Person;

 

(xix)(A) has maintained
and shall maintain its financial statements, accounting records and other entity documents separate from those of any other Person;
(B) has shown and shall show, in its financial statements, its asset and liabilities separate and apart from those of any other
Person; and (C) has not permitted and shall not permit its assets to be listed as assets on the financial statement of any of its
Affiliates except as required (or, if such entity is disregarded for tax purposes, permitted) by GAAP; provided, however, that
any such consolidated financial statement contains a note indicating that the Special Purpose Entity’s separate assets and
credit are not available to pay the debts of such Affiliate and that the Special Purpose Entity’s liabilities do not constitute
obligations of the consolidated entity;

 

(xx)to the extent that
revenues of the Property are available to it and are sufficient therefor (or Borrower’s lack of access thereto is due to
the exercise of rights or remedies by Lender), has paid and shall pay its own liabilities and expenses, including the salaries
of its own employees, out of its own funds and assets, and has maintained and shall maintain a sufficient number of employees in
light of its contemplated business operations;

 

(xxi)has observed and
shall observe all partnership, corporate or limited liability company formalities, as applicable;

 

(xxii)has not incurred
any Indebtedness other than (i) acquisition financing with respect to the Property; construction financing with respect to the
Improvements and certain off-site improvements required by municipal and other authorities as conditions to the construction of
the Improvements; and first mortgage financings secured by the Property; and Indebtedness pursuant to letters of credit, guaranties,
interest rate protection agreements and other similar instruments executed and delivered in connection with such financings, (ii) unsecured
trade payables and operational debt not evidenced by a note, and (iii) Indebtedness incurred in the financing of equipment and
other personal property used on the Property;

 

    	25

    	 

    

 

(xxiii)shall have no
Indebtedness (including loans (whether or not such loans are evidenced by a written agreement) between such Person and any Affiliates
of such Person) other than (A) in the case of the Borrower, the Loan, (B) in the case of Master Tenant, its obligations under the
Master Lease, and (C) in the case of Borrower and Master Tenant, unsecured trade payables and operational debt incurred in the
ordinary course of business relating to the ownership of its interest in and operation of the Property and the routine administration
ofMaster Tenant and Borrower, which liabilities are (i) paid when due and in any event not more than sixty (60) days past the later
of the date incurred or invoiced (unless disputed in accordance with applicable law or unless revenues of the Property, net of
all other amounts payable by Master Tenant under the Master Lease or the Loan Documents, are insufficient to pay such sums, or,
to the extent they are sufficient and Lender is then sweeping Excess Cash Flow under the Loan Documents, Lender has not released
such funds to Master Tenant), (ii) not evidenced by a note, (iii) normal and reasonable under the circumstances, and (iv) do not
exceed 2% of the original principal balance of the Loan (unless such maximum amount is breached solely as a result of non-payment
of the liability under the circumstances described in sub-clause (i) above), and (D) in the case of Borrower and Master Tenant,
such other liabilities as are permitted pursuant to this Agreement (the Indebtedness described in the foregoing clauses (A) through
(D) is referred to herein, collectively, as “Permitted Indebtedness”). Except pursuant to the Master Lease Documents
or another Loan Document to which Master Tenant is a party, no Indebtedness other than the Debt may be secured (subordinate or
pari passu) by the Property;

 

(xxiv)has not assumed,
guaranteed or become obligated and shall not assume or guarantee or become obligated for the debts of any other Person, has not
held out and shall not hold out its credit as being available to satisfy the obligations of any other Person or has not pledged
and shall not pledge its assets for the benefit of any other Person, in each case except as permitted pursuant to this Agreement;

 

(xxv)has not acquired
and shall not acquire obligations or securities of its partners, members or shareholders or any other owner or Affiliate; provided
that no Master Lease Document shall be deemed to violate this provision;

 

(xxvi)has allocated
and shall allocate fairly and reasonably any overhead expenses that are shared with any of its Affiliates, constituents, or owners,
or any guarantors of any of their respective obligations, or any Affiliate of any of the foregoing, including paying for shared
office space and for services performed by any employee of an Affiliate;

 

(xxvii)has maintained
and used and shall maintain and use separate stationery, invoices and checks bearing its name and not bearing the name of any other
entity unless such entity is clearly designated as being the Special Purpose Entity’s agent;

 

(xxviii)has not pledged
and shall not pledge its assets to or for the benefit of any other Person other than with respect to loans secured by the Property
or, in the case of Master Tenant, pursuant to the Master Lease Documents, and no such pledge remains outstanding except to Lender
to secure the Loan and Borrower to secure Master Tenant’s obligations under the Master Lease Documents;

 

    	26

    	 

    

 

(xxix)has held itself
out and identified itself and shall hold itself out and identify itself as a separate and distinct entity under its own name or
in a name franchised or licensed to it by an entity other than an Affiliate of Borrower and not as a division or part of any other
Person;

 

(xxx)has maintained
and shall maintain its assets in such a manner that it shall not be costly or difficult to segregate, ascertain or identify its
individual assets from those of any other Person;

 

(xxxi)has not made
and shall not make loans to any Person and has not held and shall not hold evidence of indebtedness issued by any other Person
or entity (other than cash and investment-grade securities issued by an entity that is not an Affiliate of or subject to common
ownership with such entity);

 

(xxxii)has not identified
and shall not identify its partners, members or shareholders, or any Affiliate of any of them, as a division or part of it, and
has not identified itself and shall not identify itself as a division of any other Person;

 

(xxxiii)other than
the Master Lease Documents and the Management Agreement, capital contributions, and distributions permitted under the terms of
its organizational documents, has not entered into or been a party to, and shall not enter into or be a party to, any transaction
with any of its partners, members, shareholders or Affiliates except in the ordinary course of its business and on terms which
are commercially reasonable terms comparable to those of an arm’s-length transaction with an unrelated third party;

 

(xxxiv)has not had
and shall not have any obligation to, and has not indemnified and shall not indemnify its partners, officers, directors or members,
as the case may be, in each case unless such an obligation or indemnification is fully subordinated to the Debt and shall not constitute
a claim against it if its cash flow is insufficient to pay the Debt;

 

(xxxv)if such entity
is a corporation, has considered and shall consider, to the extent permitted under applicable law, the interests of its creditors
in connection with all corporate actions;

 

(xxxvi)has not had
and shall not have any of its obligations guaranteed by any Affiliate except pursuant to the Franchise Guaranty, the Owner Agreement,
or as otherwise provided by the Loan Documents;

 

(xxxvii)has not formed,
acquired or held and shall not form, acquire or hold any subsidiary, except that a Principal may acquire and hold its interest
in Borrower or Master Tenant;

 

(xxxviii)has complied
and shall comply with all of the terms and provisions contained in its organizational documents relating to separateness;

 

    	27

    	 

    

 

(xxxix)intentionally
omitted;

 

(xl)except pursuant
to the Loan Documents, has not permitted and shall not permit any Affiliate or constituent party independent access to its bank
accounts;

 

(xli)is, has always
been and, to the extent that revenues of the Property are available to it and sufficient therefor, shall continue to be, duly formed,
validly existing, and in good standing in the state of its incorporation or formation and in all other jurisdictions where it is
required to be qualified to do business; and

 

(xlii)has no material
contingent or actual obligations not related to the Property.

 

“Specified Tenant
Deposit Event” shall mean that Lender has received funds pursuant to Section 16 of the Collateral Assignment.

 

“Specified Tenant
Reserve Account” shall have the meaning set forth in Section 7.4.1 hereof.

 

“Specified Tenant
Reserve Funds” shall have the meaning set forth in Section 7.4.1 hereof.

 

“State”
means, the State or Commonwealth in which the Land or any part thereof is located.

 

“Successor Borrower”
has the meaning set forth in Section 2.5.3 hereof.

 

“Survey”
means a survey of the Property prepared by a surveyor licensed in the State and satisfactory to Lender and the company or companies
issuing the Title Insurance Policy, and containing a certification of such surveyor satisfactory to Lender.

 

“Tax and Insurance
Escrow Fund” has the meaning set forth in Section 7.2 hereof.

 

“Taxes”
means all real estate and personal property taxes, assessments, water rates or sewer rents, now or hereafter levied or assessed
or imposed against the Property or part thereof.

 

“Tenant”
means the lessee of all or a portion of the Property under a Lease (other than Master Tenant).

 

“Tenant Direction
Letter” means an instruction letter to Tenants substantially in the form attached hereto as Schedule IV.

 

“Threshold Amount”
has the meaning set forth in Section 5.1.21 hereof.

 

“Title Insurance
Policy” means the mortgagee title insurance policy issued with respect to the Property and insuring the lien of the Security
Instrument.

 

“Transfer”
has the meaning set forth in Section 5.2.10(b) hereof.

 

“Transferee”
has the meaning set forth in Section 5.2.10(e) hereof.

 

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“Transferee’s
Principals” means collectively, (A) Transferee’s managing members, general partners or principal shareholders and
(B) such other members, partners or shareholders which directly or indirectly shall own a fifty-one percent (51%) or greater economic
and voting interest in Transferee.

 

“TRIPRA”
shall have the meaning set forth in Section 6.1(a)(ix) hereof.

 

“UCC”
or “Uniform Commercial Code” means the Uniform Commercial Code as in effect in the State in which the Property
is located.

 

“Uniform System
of Accounts” shall mean the most recent edition of the Uniform System of Accounts for Hotels, as adopted by the American
Hotel and Motel Association.

 

“U.S. Obligations”
means non redeemable, non prepayable, non callable securities evidencing an obligation to timely pay principal or interest in a
full and timely manner that constitute “government securities” within the meaning of Section 2(a)(16) of the Investment
Company Act of 1940, as amended, and are (a) direct obligations of the United States of America for the payment of which its full
faith and credit is pledged, or (b) to the extent acceptable to the Rating Agencies, other “government securities”
within the meaning of Section 2(a)(16) of the Investment Company Act of 1940, as amended.

 

Section
1.2Principles of Construction. The following rules of construction shall be applicable for all purposes of this Agreement
and all documents or instruments supplemental hereto, unless the context otherwise clearly requires:

 

(a)any pronoun used
herein shall be deemed to cover all genders, and words importing the singular number shall mean and include the plural number,
and vice versa;

 

(b)the term “or”
has, except where otherwise indicated, the inclusive meaning represented by the phrase “and/or”;

 

(c)an Event of Default
shall “continue” or be “continuing” until such Event of Default has been waived in writing by Lender;

 

(d)no inference in
favor of or against any party shall be drawn from the fact that such party has drafted any portion hereof or any other Loan Document;

 

(e)the cover page (if
any) of, all recitals set forth in, and all Exhibits to, this Agreement are hereby incorporated herein;

 

(f)all references to
sections and schedules are to sections and schedules in or to this Agreement unless otherwise specified;

 

(g)all uses of the
words “include,” “including” and similar terms shall be construed as if followed by the phrase “without
being limited to” unless the context shall indicate otherwise;

 

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(h)unless otherwise
specified, the words “hereof,” “herein” and “hereunder” and words of similar import when used
in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement; and

 

(i)unless otherwise
specified, all meanings attributed to defined terms herein shall be equally applicable to both the singular and plural forms of
the terms so defined.

 

ARTICLE
II

GENERAL TERMS

 

Section
2.1Loan Commitment; Disbursement to Borrower.

 

2.1.1.
Agreement to Lend and Borrow. Subject to and upon the terms and conditions set forth herein, Lender hereby agrees to make
and Borrower hereby agrees to accept the Loan on the Closing Date.

 

2.1.2.
Single Disbursement to Borrower. Borrower may request and receive only one (1) borrowing hereunder in respect of the Loan
and any amount borrowed and repaid or defeased hereunder in respect of the Loan may not be reborrowed. Borrower acknowledges and
agrees that the Loan has been fully funded as of the Closing Date.

 

2.1.3.
The Note, Security Instrument and Loan Documents. The Loan shall be evidenced by the Note and secured or supported, as the
case may be, by the Security Instrument and the other Loan Documents.

 

2.1.4.
Use of Proceeds. Borrower shall use the proceeds of the Loan to (a) acquire the Property or repay and discharge any existing
loans relating to the Property, (b) pay all past due basic carrying costs, if any, with respect to the Property, (c) make deposits
into the Reserve Funds on the Closing Date in the amounts provided herein, (d) pay costs and expenses incurred in connection with
the closing of the Loan, as approved by Lender, (e) fund any working capital requirements of the Property and (f) distribute the
balance, if any, to Borrower.

 

Section
2.2Interest Rate.

 

2.2.1.
Interest Rate. Interest on the outstanding principal balance of the Loan shall accrue at the Interest Rate or as otherwise
set forth in this Agreement or in the Note from (and including) the Closing Date to but excluding the Maturity Date.

 

2.2.2.
Interest Calculation. Interest on the outstanding principal balance of the Loan shall be calculated by multiplying (a) the
actual number of days elapsed in the relevant Accrual Period by (b) a daily rate based on the Interest Rate and a three hundred
sixty (360) day year by (c) the outstanding principal balance of the Loan. Borrower acknowledges that the calculation method for
interest described herein results in a higher effective interest rate than the numeric Interest Rate and Borrower hereby agrees
to this calculation method.

 

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2.2.3.
Default Rate. Upon the occurrence of an Event of Default (including the failure of Borrower to make full payment on the Maturity
Date), Lender shall be entitled to receive and Borrower shall pay interest on the Outstanding Principal Balance at the Default
Rate. Interest shall accrue and be payable at the Default Rate from the occurrence of an Event of Default until all Events of
Default have been waived in writing by Lender in its discretion. Such accrued interest shall be added to the Outstanding Principal
Balance, and interest shall accrue thereon on a daily basis at the Default Rate until fully paid. Such accrued interest shall
be secured by the Security Instrument and other Loan Documents. Borrower agrees that Lender’s right to collect interest
at the Default Rate is given for the purpose of compensating Lender at reasonable amounts for Lender’s added costs and expenses
that occur as a result of Borrower’s default and that are difficult to predict in amount, such as increased general overhead,
concentration of management resources on problem loans, and increased cost of funds. Lender and Borrower agree that Lender’s
collection of interest at the Default Rate is not a fine or penalty, but is intended to be and shall be deemed to be reasonable
compensation to Lender for increased costs and expenses that Lender will incur if there occurs an Event of Default hereunder.
Collection of interest at the Default Rate shall not be construed as an agreement or privilege to extend the Maturity Date or
to limit or impair any rights and remedies of Lender under any Loan Documents. If judgment is entered on the Note, interest shall
continue to accrue post-judgment at the greater of (a) the Default Rate or (b) the applicable statutory judgment rate.

 

2.2.4.
Usury Savings. This Agreement, the Note and the other Loan Documents are subject to the express condition that at no time
shall Borrower be obligated or required to pay interest on the principal balance of the Loan at a rate which could subject Lender
to either civil or criminal liability as a result of being in excess of the Maximum Legal Rate. If, by the terms of this Agreement
or the other Loan Documents, Borrower is at any time required or obligated to pay interest on the principal balance due hereunder
at a rate in excess of the Maximum Legal Rate, the Interest Rate or the Default Rate, as the case may be, shall be deemed to be
immediately reduced to the Maximum Legal Rate and all previous payments in excess of the Maximum Legal Rate shall be deemed to
have been payments in reduction of principal and not on account of the interest due hereunder or, if the Loan has been repaid
in full, such excess shall be promptly returned to Borrower. All sums paid or agreed to be paid to Lender for the use, forbearance,
or detention of the sums due under the Loan, shall, to the extent permitted by applicable law, be amortized, prorated, allocated,
and spread throughout the full stated term of the Loan until payment in full so that the rate or amount of interest on account
of the Loan does not exceed the Maximum Legal Rate of interest from time to time in effect and applicable to the Loan for so long
as the Loan is outstanding.

 

Section
2.3Loan Payment. Payments of principal, interest, and Late Charges (as defined in the Note) shall be made as provided
in the Note.

 

Section
2.4Prepayments. Except as otherwise provided in Section 9 of the Note, Borrower shall not have the right to prepay the
Loan in whole or in part prior to the Maturity Date.

 

Section
2.5Defeasance.

 

2.5.1.
Voluntary Defeasance. (a) Provided no Event of Default shall then exist, Borrower shall have the right at any time after
the Permitted Defeasance Date and prior to the Permitted Par Prepayment Date to voluntarily defease all, but not part, of the
Loan by and upon satisfaction of the following conditions (such event being a “Defeasance Event”):

 

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(i)Borrower
shall provide not less than thirty (30) days prior written notice to Lender specifying the Payment Date (the “Defeasance
Date”) on which the Defeasance Event is to occur;

 

(ii)Borrower
shall pay to Lender all accrued and unpaid interest on the principal balance of the Loan to and including the Defeasance Date.
If for any reason the Defeasance Date is not a Payment Date, the Borrower shall also pay interest that would have accrued on the
Note through and including the next Payment Date, provided, however, if the Defeasance Deposit shall include (or
if the U.S. Obligations purchased with such Defeasance Deposit shall provide for payment of) all principal and interest computed
from the Payment Date prior to the Defeasance Date through the next succeeding Payment Date, Borrower shall not be required to
pay such short term interest pursuant to this sentence;

 

(iii)Borrower
shall pay to Lender all other sums, not including scheduled interest or principal payments, then due under the Note, this Agreement,
the Security Instrument and the other Loan Documents;

 

(iv)Borrower
shall pay to Lender the required Defeasance Deposit for the Defeasance Event and complies with and satisfies the requirements of
Section 2.5.1(b) below;

 

(v)Borrower
shall execute and deliver a pledge and security agreement, in form and substance that would be reasonably satisfactory to a prudent
lender creating a first priority lien on the Defeasance Deposit and the U.S. Obligations purchased with the Defeasance Deposit
in accordance with the provisions of this Section 2.5 (the “Security Agreement”);

 

(vi)Borrower
shall deliver one or more opinions from counsel reasonably satisfactory to Lender that are standard in commercial lending transactions
and subject only to customary qualifications, assumptions and exceptions opining, among other things, that Borrower has legally
and validly transferred and assigned the U.S. Obligations and all obligations, rights and duties under and to the Note to the Successor
Borrower, that Lender has a perfected first priority security interest in the U.S. Obligations purchased with the Defeasance Deposit
and that the Security Agreement is enforceable against Borrower in accordance with its terms, and (b) the defeasance or any
other transaction that occurs pursuant to the provisions of this Section 2.5.1(a) will not cause the failure of any
REMIC Trust or any other entity that holds the Note to maintain its tax status;

 

(vii)If required
by pursuant to the applicable pooling and servicing agreement, Borrower shall deliver confirmation in writing from each of the
applicable Rating Agencies to the effect that such release will not result in a downgrade, withdrawal or qualification of the respective
ratings in effect immediately prior to such Defeasance Event for the Securities issued in connection with the Securitization which
are then outstanding.

 

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(viii)Borrower
shall deliver an Officer’s Certificate certifying that the requirements set forth in this Section 2.5.1(a) (except
for such, if any, as have been specifically waived in writing in connection with the Defeasance Event) have been satisfied;

 

(ix)Borrower
shall deliver a certificate of a certified public accountant reasonably acceptable to Lender (which may be an employee of Borrower
or its Affiliates) certifying that the U.S. Obligations purchased with the Defeasance Deposit generate monthly amounts equal to
or greater than the Scheduled Defeasance Payments;

 

(x)Borrower
shall deliver such other certificates, documents or instruments as Lender may reasonably request; and

 

(xi)Borrower
shall pay all costs and expenses of Lender incurred in connection with the Defeasance Event, including (A) any costs and expenses
associated with a release of the Lien of the Security Instrument as provided in Section 2.6 hereof, (B) reasonable attorneys’
fees and expenses incurred in connection with the Defeasance Event, (C) the costs and expenses of the Rating Agencies, (D) any
revenue, documentary stamp or intangible taxes or any other tax or charge due in connection with the assumption of the Note by
the Successor Borrower, or otherwise required to accomplish the defeasance and (E) the costs and expenses of Servicer and any trustee,
including reasonable attorneys’ fees and expenses.

 

(b)In connection with
the Defeasance Event, Borrower shall use the Defeasance Deposit, or cause it to be used, to purchase U.S. Obligations which provide
payments on or prior to, but as close as possible to, all successive scheduled Payment Dates after the Defeasance Date upon which
interest and principal payments are required under this Agreement and the Note, and in amounts equal to or more than the scheduled
payments due on such Payment Dates under this Agreement and the Note (including scheduled payments of principal, interest, and
any other amounts due under the Loan Documents on such Payment Dates) and assuming the Note is repaid in full on the Maturity Date
(the “Scheduled Defeasance Payments”). Notwithstanding the foregoing, at Lender’s option, Lender, acting
on Borrower’s behalf as Borrower’s agent and attorney-in-fact, shall use the Defeasance Deposit to purchase, or cause
to be purchased, the above-referenced U.S. Obligations that Borrower is required to purchase pursuant to this Section 2.5.1(b).
By depositing the Defeasance Deposit with Lender, Borrower shall thereby appoint Lender or Lender’s servicer or other agent
as Borrower’s agent and attorney-in-fact, with full power of substitution, for the purpose of purchasing the U.S. Obligations
with the Defeasance Deposit and delivering the U.S. Obligations to Lender. Borrower, pursuant to the Security Agreement or other
appropriate document, shall authorize and direct that the payments received from the U.S. Obligations may be applied to satisfy
the Debt Service obligations of Borrower under this Agreement and the Note. Any portion of the Defeasance Deposit in excess of
the amount necessary to purchase the U.S. Obligations required by this Section 2.5 and satisfy Borrower’s other obligations
under this Section 2.5 and Section 2.6 shall be remitted to Borrower.

 

(c)If any notice of
defeasance is given pursuant to Section 2.5.1(a)(i), Borrower shall be required to defease the Loan on the Defeasance
Date (unless such notice is revoked by Borrower prior to the Defeasance Date in which event Borrower shall immediately reimburse
Lender for any and all reasonable costs and expenses incurred by Lender in connection with Borrower’s giving of such notice
and revocation).

 

    	33

    	 

    

 

2.5.2.
Collateral. Each of the U.S. Obligations that are part of the defeasance collateral shall be duly endorsed by the holder thereof
as directed by Lender or accompanied by a written instrument of transfer in form and substance that would be satisfactory to a
prudent lender (including such instruments as may be required by the depository institution holding such securities or by the
issuer thereof, as the case may be, to effectuate book entry transfers and pledges through the book entry facilities of such institution)
in order to perfect upon the delivery of the defeasance collateral a first priority security interest therein in favor of Lender
in conformity with all applicable state and federal laws governing the granting of such security interests.

 

2.5.3.
Successor Borrower. In connection with any Defeasance Event, Borrower shall establish or designate a successor entity (the
“Successor Borrower”) acceptable to Lender in its reasonable discretion, which shall be a special purpose entity,
which shall not own any other assets or have any other liabilities or operate other property (except in connection with other
defeased loans held in the same securitized loan pool with the Loan). Borrower shall transfer and assign all obligations, rights
and duties under and to the Note, together with the pledged U.S. Obligations to such Successor Borrower. Such Successor Borrower
shall assume the obligations under the Note and the Security Agreement and Borrower shall be relieved of its obligations under
such documents, and each of Guarantor and Master Tenant shall be released from its obligations under the other Loan Documents,
except with respect to matters occurring prior to such release. Borrower shall pay $1,000 to any such Successor Borrower as consideration
for assuming the obligations under the Note and the Security Agreement. Notwithstanding anything in this Agreement to the contrary,
no other assumption fee shall be payable upon a transfer of the Note in accordance with this Section 2.5.3, but Borrower
shall pay all costs and expenses incurred by Lender, including Lender’s attorneys’ fees and expenses and any fees
and expenses of any Rating Agencies, incurred in connection therewith.

 

Section
2.6Release of Property. Except as set forth in this Section 2.6 or upon repayment of the Loan in full on or after
the Maturity Date, no repayment, prepayment or defeasance of all or any portion of the Loan shall cause, give rise to a right
to require, or otherwise result in, the release of the Lien of the Security Instrument on all or any portion of the Property and
any other Loan Document pursuant to which a Lien thereon exists.

 

2.6.1.
Release of Property. (a) If Borrower has the right to and has elected to prepay in full or defease the Loan in accordance
with this Agreement and the Note, upon satisfaction of the requirements of Section 2.4 and Section 9 of the Note (in the
case of a prepayment, if then permitted under this Agreement and the Note) or Section 2.5 (in the case of a full defeasance,
if then permitted under this Agreement and the Note), as applicable, and this Section 2.6, all of the Property shall
be released from the Liens of the Loan Documents.

 

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(b)In
connection with the release of the Security Instrument in connection with a Defeasance Event, Borrower shall submit to Lender,
not less than thirty (30) days (or such shorter time period as Lender may agree to in its sole discretion) prior to the Defeasance
Date, a release of Lien (and related Loan Documents) for the Property for execution by Lender. Such release shall be in a form
appropriate in the jurisdiction in which the Property is located and that would be satisfactory to a prudent lender and contains
standard provisions, if any, protecting the rights of the releasing lender. In addition, Borrower shall provide all other documentation
Lender reasonably requires to be delivered by Borrower in connection with such release, together with an Officer’s Certificate
certifying that such documentation (i) is in compliance with all Legal Requirements, and (ii) will effect such releases in accordance
with the terms of this Agreement. Borrower shall reimburse Lender and Servicer for any costs and expenses Lender and Servicer
incur arising from such release (including reasonable attorneys’ fees and expenses) and Borrower shall pay, in connection
with such release, (i) all recording charges, filing fees, taxes or other expenses payable in connection therewith, and (ii) the
lesser of the current fee then generally being assessed by such Servicer to effect such release and the maximum amount permitted
under applicable law to be assessed as a fee therefor. Upon the release of the Property in accordance with this Section 2.6.1
following a defeasance, Borrower shall have no further right to prepay the Note.

 

Section
2.7Clearing Account/Cash Management.

 

2.7.1.
Clearing Account. (a) Upon the occurrence of a Cash Sweep Event, Borrower shall establish and maintain an Eligible Account
(the “Clearing Account”) with Clearing Bank for the benefit of Lender, which Clearing Account shall be under
the sole dominion and control of Lender. The Clearing Account shall be entitled in the name of Master Tenant for the benefit of
Lender. Master Tenant shall grant to Borrower, as security for Master Tenant’s obligations under the Master Lease, a first-priority
security interest in the Clearing Account and all deposits at any time contained therein and the proceeds thereof and will take
all actions necessary to maintain in favor of Borrower and of Lender, as Borrower’s assignee, a perfected first priority
security interest in the Clearing Account, including, without limitation, authorizing the filing UCC-1 Financing Statements and
continuations thereof. Borrower hereby grants to Lender a first-priority security interest in all of Borrower’s right, title
and interest in and to the Clearing Account and all deposits at any time contained therein and the proceeds thereof and shall
take all actions deemed necessary or desirable by Lender to maintain in favor of Lender a perfected first priority security interest
in the Clearing Account, including authorizing the filing of UCC-1 Financing Statements and continuations thereof. All costs and
expenses for establishing and maintaining the Clearing Account shall be paid by Borrower or Master Tenant. All monies now or hereafter
deposited into the Clearing Account shall be deemed additional security for Master Tenant’s obligations under the Master
Lease, and, to the extent of Borrower’s interest therein, additional security for the Debt. All funds in the Clearing Account,
less the reasonable fees of the Clearing Bank and any minimum balance required to be maintained therein, shall be wire transferred
each Business Day (i) during the existence of a Cash Sweep Period, to the Cash Management Account and (ii) if a Cash Sweep Period
does not then exist, to Master Tenant’s operating account specified pursuant to the Clearing Agreement. Upon the occurrence
of a Cash Sweep Event, the Clearing Account Agreement and Clearing Account shall remain in effect until the Loan has been repaid
or defeased in full.

 

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(b)On
or before the Closing Date, Borrower shall, or shall cause Master Tenant to (or cause Manager to), execute and deliver to Lender
(i) Credit Card Direction Letters to each of the Credit Card Companies to deliver all receipts payable with respect to the Property
directly to the Clearing Account, and (ii) with respect to commercial Leases in existence on the date hereof, execute and deliver
Tenant Direction Letters to all Tenants under such commercial Leases to deliver all Rents payable under their respective Leases
directly to the Clearing Account, and deposit all Rents payable under the Master Lease directly to the Clearing Account. In connection
with each commercial Lease executed after the date hereof, Borrower shall simultaneously deliver to Lender an executed Tenant
Direction Letter. Lender shall hold the Credit Card Direction Letters and the Tenant Direction Letters in escrow and shall not
complete and deliver them to Credit Card Companies or Tenants unless (i) a Cash Sweep Event occurs and (ii) Borrower shall have
failed promptly thereafter to provide satisfactory written evidence to Lender that Borrower has delivered, or has caused Master
Tenant and/or Manager to deliver, completed Credit Card Direction Letters to Credit Card Companies and Tenant Direction Letters
to Tenants. Without the prior written consent of Lender, neither Borrower, Master Tenant nor Manager shall (i) terminate,
amend, revoke or modify any Credit Card Direction Letter or any Tenant Direction Letter in any manner or (ii) direct or cause
any Credit Card Company, Tenant or Master Tenant to pay any amount in any manner other than as provided in the Credit Card Direction
Letter or Tenant Direction Letter, as applicable. After the occurrence of a Cash Sweep Event, Borrower shall, and shall cause
Master Tenant to or to cause Manager to, deposit all amounts received by Borrower, Master Tenant or Manager constituting Rents
(other than operating cash, not in excess of $5,000, retained for the purpose of the day-to-day operations of the Property) into
the Clearing Account within two (2) Business Days after receipt thereof. Until so deposited, all Rents received by Borrower or
Manager shall be held in trust for the benefit of Lender and shall not be commingled with any other funds or property of Borrower
or Manager.

 

(c)Master
Tenant shall obtain from Clearing Bank its agreement to transfer on each Business Day all amounts on deposit in the Clearing Account
(i) during the existence of a Cash Sweep Period, to the Cash Management Account and (ii) if a Cash Sweep Period does not then
exist, to Master Tenant’s operating account specified pursuant to the Clearing Account Agreement.

 

(d)If
Lender has accelerated the Loan as a result of an Event of Default or any Bankruptcy Action of Borrower, Master Tenant, Principal
or Manager, Lender may, in addition to any and all other rights and remedies available to Lender, apply any sums then present
in the Clearing Account to the payment of the Debt in any order in its sole discretion. If Lender has not accelerated the Loan
notwithstanding the existence of an Event of Default or any Bankruptcy Action of Borrower, Master Tenant, Principal or Manager,
Lender shall have the continuing exclusive control of, and right to withdraw and apply, the funds in the Clearing Account that
would constitute rent under the Master Lease to payment of any and all debts, liabilities and obligations of Borrower to Lender
pursuant to or in connection with this Agreement and the other Loan Documents, in such order, proportion and priority as Lender
may determine in its sole discretion. Notwithstanding anything to the contrary contained in this Section 2.7.1(d), Lender
shall make any Collected Taxes available for payment to the relevant tax authorities to the extent such Collected Taxes are required
to be so remitted.

 

(e)The
Clearing Account shall not be commingled with other monies held by Borrower, Master Tenant, Manager or Clearing Bank and shall
be an Eligible Account.

 

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(f)Neither
Borrower nor Master Tenant shall further pledge, assign or grant any security interest in the Clearing Account or the monies deposited
therein or permit any lien or encumbrance to attach thereto, or any levy to be made thereon, or authorize any UCC-1 Financing
Statements, except those naming Lender as the secured party and Borrower as Lender’s assignor, to be filed with respect
thereto.

 

(g)Borrower
shall indemnify Lender and hold Lender harmless from and against any and all actions, suits, claims, demands, liabilities, losses,
damages, obligations and costs and expenses (including litigation costs and reasonable attorneys’ fees and expenses) arising
from or in any way connected with the Clearing Account or the Clearing Account Agreement (unless arising from the gross negligence
or willful misconduct of Lender) or the performance of the obligations for which the Clearing Account was established.

 

(h)Upon
(i) Clearing Bank ceasing to be an Eligible Institution, (ii) the Clearing Account ceasing to be an Eligible Account,
(iii) any resignation by Clearing Bank or termination of the Clearing Account Agreement by Clearing Bank or Lender or (iv) the
occurrence and continuance of an Event of Default, Borrower and/or Master Tenant, as applicable, shall, within fifteen (15) days
of Lender’s written request, (A) terminate the existing Clearing Account Agreement, (B) appoint a new Clearing
Bank (which such Clearing Bank shall (I) be an Eligible Institution, (II) other than during the continuance of an Event
of Default, be selected by Borrower and approved by Lender and (III) during the continuance of an Event of Default, be selected
by Lender), (C) cause such Clearing Bank to open a new Clearing Account (which such account shall be an Eligible Account)
and enter into a new Clearing Account Agreement with Lender on substantially the same terms and conditions as the previous Clearing
Account Agreement and (D) provide new Tenant Direction Notices and Credit Card Direction Letters and the other notices required
pursuant to the terms hereof relating to such new Clearing Account Agreement and Clearing Account. Each of Borrower and Master
Tenant constitutes and appoints Lender its true and lawful attorney-in-fact with full power of substitution to complete or undertake
any action required of Borrower and/or Master Tenant under this Section 2.7.1 in the name of Borrower and/or Master Tenant (as
applicable) in the event Borrower and/or Master Tenant fails to do the same. Such power of attorney shall be deemed to be a power
coupled with an interest and cannot be revoked.

 

2.7.2.
Cash Management Account. (a) Upon the occurrence of a Cash Sweep Event, Borrower shall cause Master Tenant to establish
and maintain a segregated Eligible Account (the “Cash Management Account”) to be held by Agent in trust and
for the benefit of Borrower and Lender and to which, during a Cash Sweep Period, all amounts that otherwise would have been wired
to Master Tenant pursuant to the Clearing Account Agreement shall be transferred instead, which Cash Management Account shall
be under the sole dominion and control of Lender. The Cash Management Account shall be entitled in the name of Master Tenant for
the benefit of Lender. Master Tenant shall grant to Borrower a first-priority security interest in the Cash Management Account
and all deposits at any time contained therein and the proceeds thereof and will take all actions deemed necessary or desirable
by Lender to maintain in favor of Borrower and of Lender, as Borrower’s assignee, a perfected first priority security interest
in the Cash Management Account, including, without limitation, authorizing the filing of UCC-1 Financing Statements and continuations
thereof. Borrower hereby grants to Lender a first priority security interest in all of Borrower’s right, title and interest
in and to the Cash Management Account and all deposits at any time contained therein and the proceeds thereof and shall take all
actions deemed necessary or desirable by Lender to maintain in favor of Lender a perfected first priority security interest in
the Cash Management Account, including, without limitation, authorizing the filing of UCC-1 Financing Statements and continuations
thereof. Borrower will not, and will not permit Master Tenant to, in any way alter or modify the Cash Management Account and will
notify Lender of the account number thereof. Lender and Servicer shall have the sole right to make withdrawals from the Cash Management
Account, and all costs and expenses for establishing and maintaining the Cash Management Account shall be paid by Borrower or
Master Tenant.

 

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(b)The
insufficiency of funds on deposit in the Cash Management Account shall not relieve Borrower from the obligation to make any payments,
as and when due pursuant to this Agreement and the other Loan Documents, and such obligations shall be separate and independent,
and not conditioned on any event or circumstance whatsoever.

 

(c)All
funds on deposit in the Cash Management Account following the occurrence of an Event of Default or any Bankruptcy Action of Borrower
or Manager and the acceleration of the Loan by Lender may be applied by Lender in such order and priority as Lender shall determine.
If Lender has not accelerated the Loan notwithstanding the existence of an Event of Default or any Bankruptcy Action of Borrower,
Master Tenant, Principal or Manager, Lender shall have the continuing exclusive control of, and right to withdraw and apply, funds
in the Cash Management Account that would constitute rent under the Master Lease and all of Borrower’s Excess Cash Flow
(excluding, for the avoidance of doubt, Master Tenant’s Excess Cash Flow) to payment of any and all debts, liabilities and
obligations of Borrower to Lender pursuant to or in connection with this Agreement and the other Loan Documents, in such order,
proportion and priority as Lender may determine in its sole discretion. Notwithstanding anything to the contrary contained in
this Section 2.7.2(c), Lender shall make any Collected Taxes available for payment to the relevant tax authorities to the
extent such Collected Taxes are required to be so remitted.

 

(d)Borrower
hereby agrees that Lender may modify the Cash Management Agreement for the purpose of establishing additional sub-accounts in
connection with any payments otherwise required under this Agreement and the other Loan Documents and Lender shall provide notice
thereof to Borrower.

 

2.7.3.
Payments Received under the Cash Management Agreement. Notwithstanding anything to the contrary contained in this Agreement
or the other Loan Documents, and provided no Event of Default has occurred and is continuing, Borrower’s obligations with
respect to the payment of the Monthly Debt Service Payment Amount and amounts required to be deposited into the Reserve Funds,
if any, shall be deemed satisfied to the extent sufficient amounts are deposited in the Cash Management Account to satisfy such
obligations pursuant to this Agreement on the dates each such payment is required, regardless of whether any of such amounts are
so applied by Lender.

 

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ARTICLE
III

CONDITIONS PRECEDENT

 

Section
3.1Conditions Precedent to Closing. The obligation of Lender to make the Loan hereunder is subject to the fulfillment
by Borrower or waiver by Lender of all of the conditions precedent to closing set forth in the application or term sheet for the
Loan delivered by Borrower to Lender and the commitment or commitment rider, if any, to the application or term sheet for the
Loan issued by Lender.

 

ARTICLE
IV

REPRESENTATIONS AND WARRANTIES

 

Section
4.1Borrower Representations. Borrower represents and warrants as of the date hereof that:

 

4.1.1.
Organization. Borrower and Master Tenant have been duly organized and are validly existing and in good standing in their respective
jurisdictions of organization with requisite power and authority to own or lease the Property as the case may be and to transact
the businesses in which it is now engaged. Each of Borrower and Master Tenant is duly qualified to do business and is in good
standing in the State in which the Property is located, and each of Borrower and Master Tenant possesses all rights, licenses,
permits and authorizations, governmental or otherwise, necessary to entitle it to own the interest in the Property and to transact
the businesses in which it is now engaged, and the sole business each of Borrower and Master Tenant is as set forth with respect
to it in the definition of “Special Purpose Entity.” The ownership interests in Borrower and Master Tenant are as
set forth on the organizational chart attached hereto as Schedule III.

 

4.1.2.
Proceedings. Each of Borrower, Master Tenant and Guarantor has each taken all necessary action to authorize the execution,
delivery and performance, as applicable, of this Agreement and/or the other Loan Documents to which it is a party. This Agreement
and such other Loan Documents to which Borrower is a party have been duly executed and delivered by or on behalf of Borrower and
constitute legal, valid and binding obligations of Borrower enforceable against Borrower in accordance with their respective terms,
subject only to applicable bankruptcy, insolvency, fraudulent transfer, reorganization or other similar laws affecting the enforcement
of creditors’ rights generally and subject, as to enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law).

 

4.1.3.
No Conflicts. The execution, delivery and performance of this Agreement and the other Loan Documents to which Borrower and/or
Master Tenant is a party by Borrower and/or Master Tenant, as applicable, will not conflict with or result in a breach of any
of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance
(other than pursuant to the Loan Documents and the Master Lease Documents) upon any of the property or assets of Borrower and/or
Master Tenant pursuant to the terms of any indenture, mortgage, deed of trust, loan agreement, partnership agreement, management
agreement or other agreement or instrument to which Borrower and/or Master Tenant is a party or by which any of the Property,
Borrower’s or Master Tenant’s assets is subject, nor will such action result in any violation of the provisions of
any statute or any order, rule or regulation of any Governmental Authority having jurisdiction over Borrower or Master Tenant
or any of Borrower’s or Master Tenant’s properties or assets, and any consent, approval, authorization, order, registration
or qualification of or with any court or any such Governmental Authority required for the execution, delivery and performance
by Borrower and/or Master Tenant of this Agreement or any other Loan Documents has been obtained and is in full force and effect.

 

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4.1.4.
Litigation. There are no actions, suits or proceedings at law or in equity, arbitrations, or governmental investigations by
or before any Governmental Authority or other agency now pending, filed, or, to Borrower’s knowledge, threatened against
or affecting Borrower, Guarantor, Master Tenant, Principal or the Property, which actions, suits or proceedings, or governmental
investigations, if determined against Borrower, Guarantor, Master Tenant, Principal or the Property, could reasonably be expected
to materially adversely affect (a) title to the Property; (b) the validity or enforceability of the Security Instrument; (c) Borrower’s
ability to perform under the Loan; (d) Guarantor’s ability to perform under the Guaranty; (e) Master Tenant’s
ability to perform under the Master Lease and/or the Loan Documents to which Master Tenant is a party, (f) the use, operation
or value of the Property; (g) the principal benefit of the security intended to be provided by the Loan Documents; (h) the current
ability of the Property to generate Net Cash Flow sufficient to service the Loan; or (i) the current principal use of the Property.

 

4.1.5.
Agreements. Neither Borrower nor Master Tenant is a party to any agreement or instrument or subject to any restriction (to
Borrower’s knowledge, with respect to any Permitted Encumbrance reflected in the Title Insurance Policy) which could reasonably
be expected to materially and adversely affect Borrower, Master Tenant, or the Property, or Borrower’s or Master Tenant’s
business, properties or assets, operations or condition, financial or otherwise. Neither Borrower nor Master Tenant is in default
in any material respect in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained
in any agreement or instrument to which it is a party or by which Borrower, Master Tenant or the Property is bound. Neither Borrower
nor Master Tenant has any material financial obligation under any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which Borrower or Master Tenant is a party or by which Borrower, Master Tenant or the Property is otherwise
bound, other than (a) Permitted Indebtedness and (b) obligations under the Loan Documents, the Master Lease Documents, the Franchise
Agreement, and the Management Agreement.

 

4.1.6.
Title. Borrower has good, marketable and insurable fee simple title to the real property comprising part of the Property and
owns the balance of the Property, free and clear of all Liens whatsoever except the Permitted Encumbrances, such other Liens as
are expressly permitted pursuant to the Loan Documents and the Liens created by the Loan Documents. The Permitted Encumbrances
in the aggregate do not materially and adversely affect the value, operation or use of the Property (as currently used) or Borrower’s
ability to repay the Loan. The Security Instrument, when properly recorded in the appropriate records, together with any Uniform
Commercial Code financing statements required to be filed in connection therewith, will create (a) a valid, perfected first priority
lien on that portion of the Property constituting an interest in real property, subject only to Permitted Encumbrances and the
Liens created by the Loan Documents and (b) to the extent that a security interest therein may be created under the Uniform Commercial
Code and perfected by the filing of a financing statement under the Uniform Commercial Code, as enacted in the State of Delaware,
perfected security interests in all personalty (including, to the extent that they constitute an in interest in personal property
subject to the Uniform Commercial Code the Leases), all in accordance with the terms thereof, in each case subject only to any
applicable Permitted Encumbrances, such other Liens as are permitted pursuant to the Loan Documents and the Liens created by the
Loan Documents. There are no claims for payment for work, labor or materials affecting the Property which are or may become a
Lien prior to, or of equal priority with, the Liens created by the Loan Documents.

 

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4.1.7.
Solvency. Borrower has (a) not entered into this transaction or executed the Note, this Agreement or any other Loan Documents
with the actual intent to hinder, delay or defraud any creditor and (b) received reasonably equivalent value in exchange for its
obligations under such Loan Documents. Giving effect to the Loan and the transactions contemplated by the Master Lease Documents,
the fair saleable value of Borrower’s assets exceeds and will, immediately following the making of the Loan and the transactions
contemplated by the Master Lease Documents, exceed Borrower’s total liabilities, including subordinated, unliquidated, disputed
and contingent liabilities. The fair saleable value of Borrower’s assets is and will, immediately following the making of
the Loan and the transactions contemplated by the Master Lease Documents, be greater than Borrower’s probable liabilities,
including the probably maximum amount of its contingent liabilities on its debts as such debts become absolute and matured. Borrower’s
assets do not and, immediately following the making of the Loan will not, constitute unreasonably small capital to carry out its
business as conducted or as proposed to be conducted. Neither Borrower nor Master Tenant intends to, and does not believe that
it will, incur debt and liabilities (including contingent liabilities and other commitments) beyond its ability to pay such debt
and liabilities as they mature (taking into account the timing and amounts of cash to be received by Borrower or Master Tenant,
respectively, and the amounts to be payable on or in respect of obligations of Borrower or Master Tenant, respectively, and the
anticipated need to refinance the Loan in order to repay it on the Maturity Date). No petition in bankruptcy has been filed against
Borrower, Master Tenant or any constituent Person of Borrower or Master Tenant in the last seven (7) years, and neither Borrower,
Master Tenant nor any constituent Person in the last seven (7) years has ever made an assignment for the benefit of creditors
or taken advantage of any insolvency act for the benefit of debtors. Neither Borrower, Master Tenant nor any of its constituent
Persons are contemplating either the filing of a petition by it under any state or federal bankruptcy or insolvency laws or the
liquidation of all or a major portion of Borrower’s or Master Tenant’s assets or property, and Borrower has no knowledge
of any Person contemplating the filing of any such petition against it or Master Tenant, and the transactions contemplated by
the Master Lease Documents or such constituent Persons.

 

4.1.8.
Full and Accurate Disclosure. No statement of fact made by Borrower in this Agreement or in any of the other Loan Documents
contains any untrue statement of a material fact or omits to state any material fact necessary to make statements contained herein
or therein not misleading. With the exception of risk factors applicable generally to the ownership and operation of hotels such
as the Property located in the same geographic region as the Property, there is no material fact presently known to Borrower which
has not been disclosed to Lender, which materially adversely affects, nor as far as Borrower can foresee, could reasonably be
expected to materially adversely affect, the Property or the business, operations or condition (financial or otherwise) of Borrower.

 

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4.1.9.
No Plan Assets. Neither Borrower nor Master Tenant sponsors, is obligated to contribute to, and is itself an “employee
benefit plan,” as defined in Section 3(3) of ERISA, subject to Title I of ERISA or Section 4975 of the Code, and none of
the assets of Borrower or Master Tenant constitutes or will constitute “plan assets” of one or more such plans within
the meaning of 29 C.F.R. Section 2510.3-101. In addition, (a) neither Borrower nor Master Tenant is a “governmental plan”
within the meaning of Section 3(32) of ERISA and (b) transactions by or with Borrower or Master Tenant are not subject to any
state or other statute , regulation or other restriction regulating investments of, or fiduciary obligations with respect to,
governmental plans within the meaning of Section 3(32) of ERISA which is similar to the provisions of Section 406 of ERISA or
Section 4975 of the Code and which prohibit or otherwise restrict the transactions contemplated by this Agreement, including the
exercise by Lender of any of its rights under the Loan Documents.

 

4.1.10.
Compliance. Except as disclosed in the zoning report delivered to Lender in connection with the origination of the Loan, the
Borrower, Master Tenant and the Property and the use thereof comply in all material respects with all applicable Legal Requirements,
including building and zoning ordinances and codes. Neither Borrower nor Master Tenant is in default or violation of any order,
writ, injunction, decree or demand of any Governmental Authority. There has not been committed by Borrower, Master Tenant or,
to Borrower’s knowledge, any other Person in occupancy of or involved with the operation or use of the Property any act
or omission affording the federal government or any other Governmental Authority the right of forfeiture as against the Property
or any part thereof or any monies paid in performance of Borrower’s obligations under any of the Loan Documents or the transactions
contemplated by the Master Lease Documents. On the Closing Date, the Improvements at the Property were in material compliance
with applicable law.

 

4.1.11.
Financial Information. All financial data, including the statements of cash flow and income and operating expense, that have
been delivered to Lender in connection with the Loan (a) are true, complete and correct in all material respects, (b) accurately
represent the financial condition of Borrower, Master Tenant and the Property, as applicable, as of the date of such reports,
and (c) to the extent prepared or audited by an independent certified public accounting firm, have been prepared in accordance
with GAAP and the Uniform System of Accounts throughout the periods covered, except as disclosed therein; provided, however,
that if any financial data is delivered to Lender by any Person other than Borrower, Guarantor, Master Tenant or any Affiliate
of Borrower, Guarantor or Master Tenant, or if such financial data has been prepared by or at the direction of any Person other
than Borrower, Guarantor, Master Tenant or any Affiliate of Borrower, Master Tenant or Guarantor, then the foregoing representations
with respect to such financial data shall be to the best of Borrower’s knowledge, after due inquiry. Except for Permitted
Encumbrances, neither Borrower nor Master Tenant has any contingent liabilities, liabilities for taxes, unusual forward or long-term
commitments or unrealized or anticipated losses from any unfavorable commitments that are known to Borrower or Master Tenant and
reasonably likely to have a material adverse effect on the Property or the current operation thereof, except as referred to or
reflected in said financial statements. Since the date of such financial statements delivered with respect to Borrower and Master
Tenant, there has been no material adverse change in the financial condition, operations or business of Borrower or Master Tenant
from that set forth in said financial statements.

 

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4.1.12.
Condemnation. No Condemnation or other similar proceeding has been commenced or, to Borrower’s best knowledge, is threatened
or contemplated with respect to all or any portion of the Property or for the relocation of roadways providing access to the Property.

 

4.1.13.
Federal Reserve Regulations. No part of the proceeds of the Loan will be used for the purpose of purchasing or acquiring any
“margin stock” within the meaning of Regulation U of the Board of Governors of the Federal Reserve System or for any
other purpose which would be inconsistent with such Regulation U or any other Regulations of such Board of Governors, or for any
purposes prohibited by Legal Requirements or by the terms and conditions of this Agreement or the other Loan Documents.

 

4.1.14.
Utilities and Public Access. The Property has rights of access to public ways and is served by water, sewer, sanitary sewer
and storm drain facilities adequate to service the Property for its intended uses. All public utilities necessary or convenient
to the full use and enjoyment of the Property are located either in the public right of way abutting the Property (which are connected
so as to serve the Property without passing over other property) or in recorded easements serving the Property and such easements
are set forth in and insured by the Title Insurance Policy. All roads necessary for the use of the Property for its current purposes
have been completed and dedicated to public use and accepted by all Governmental Authorities.

 

4.1.15.
Not a Foreign Person. Neither Borrower nor Master Tenant is a “foreign person” within the meaning of §1445(f)(3)
of the Code.

 

4.1.16.
Separate Lots. The Property is comprised of one (1) or more parcels which constitute a separate tax lot or lots and does not
constitute a portion of any other tax lot not a part of the Property.

 

4.1.17.
Assessments. There are no pending or, to Borrower’s knowledge, proposed special or other assessments for public improvements
or otherwise affecting the Property, nor are there any contemplated improvements to the Property that may result in such special
or other assessments.

 

4.1.18.
Enforceability. The Loan Documents are enforceable by Lender (or any subsequent holder thereof) in accordance with their respective
terms, subject to principles of equity and bankruptcy, insolvency and other laws generally applicable to creditors’ rights
and the enforcement of debtors’ obligations. To the best of Borrower’s knowledge, the Loan Documents are not subject
to any right of rescission, set off, counterclaim or defense by Borrower, Master Tenant or Guarantor, including the defense of
usury, nor would the operation of any of the terms of the Loan Documents, or the exercise of any right thereunder in accordance
with applicable law, render the Loan Documents unenforceable (subject to principles of equity and bankruptcy, insolvency and other
laws generally affecting creditors’ rights and the enforcement of debtors’ obligations), and neither Borrower, Master
Tenant nor Guarantor has asserted any right of rescission, set off, counterclaim or defense with respect thereto.

 

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4.1.19.
No Prior Assignment. There are no prior assignments of the Leases or any portion of the Rents due and payable or to become
due and payable which , upon the funding of the Loan and the application of the proceeds thereof in accordance with this Agreement,
will be outstanding, other than from the Master Tenant to Borrower and from Borrower to Lender.

 

4.1.20.
Insurance. Subject to Section 10.28 hereof, Borrower has obtained and has delivered to Lender evidence reasonably satisfactory
to Lender that Policies reflecting the insurance coverages, amounts and other requirements set forth in this Agreement are in
place. No claims with respect to the Property have been made or are currently pending, outstanding or otherwise remain unsatisfied
under any such Policy, and neither Borrower nor, to Borrower’s knowledge, any other Person, has done, by act or omission,
anything which would impair the coverage of any such Policy.

 

4.1.21.
Use of Property. The Property is used exclusively for hotel purposes and other appurtenant and related uses, including, without
limitation, uses permitted under commercial leases permitted under the Loan Documents.

 

4.1.22.
Certificate of Occupancy; Licenses. All certifications, permits, franchises, licenses, consents, authorizations, and approvals,
including without limitation, certificates of completion, occupancy permits, and any applicable liquor license, required for the
legal use, occupancy and operation of the Property by Borrower and Master Tenant have been obtained and are in full force and
effect. The use being made of the Property is in conformity with the certificate of occupancy issued for the Property.

 

4.1.23.
Flood Zone. None of the Improvements on the Property are located in an area as identified by the Federal Emergency Management
Agency as an area having special flood hazards, or, if so located, the flood insurance required pursuant to Section 6.1(a) is
in full force and effect with respect to the Property.

 

4.1.24.
Physical Condition. Subject to any physical condition report delivered to Lender in connection with its underwriting of the
Loan, to Borrower’s knowledge, the Property, including, without limitation, all buildings, Improvements, parking facilities,
sidewalks, storm drainage systems, roofs, plumbing systems, HVAC systems, fire protection systems, electrical systems, equipment,
elevators, exterior sidings and doors, landscaping, irrigation systems and all structural components, are in good condition, order
and repair in all material respects; there exists no structural or other material defects or damages in the Property, whether
latent or otherwise, and neither Borrower nor Master Tenant has received notice from any insurance company or bonding company
of any defects or inadequacies in the Property, or any part thereof, which would adversely affect the insurability of the same
or cause the imposition of extraordinary premiums or charges thereon or of any termination or threatened termination of any policy
of insurance or bond.

 

4.1.25.
Boundaries. To Borrower’s knowledge, except, if applicable, as otherwise disclosed in the survey of the Property delivered
to Lender in connection with the closing of the Loan, all of the improvements which were included in determining the appraised
value of the Property lie wholly within the boundaries and building restriction lines of the Property, and no improvements on
adjoining properties encroach upon the Property, and no easements or other encumbrances upon the Property encroach upon any of
the Improvements, so as to affect the value or marketability of the Property except those which are insured against by the Title
Insurance Policy.

 

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4.1.26.
Leases. The Property is not subject to any leases other than the Master Lease and the Leases described in the rent roll attached
hereto as Schedule I and made a part hereof, which rent roll is true, complete and accurate in all respects as of the Closing
Date. Borrower is the owner of landlord’s interest in, and is lessor under, the Master Lease, and Master Tenant is the owner
of landlord’s interest in, and is lessor under, the Leases. Borrower is the holder of an assignee’s interest of the
Rents from Leases pursuant to the Master Lease ALR. No Person has any possessory interest in the Property or right to occupy the
same except under and pursuant to the provisions of the Master Lease, the Leases and Hotel Transactions. The Master Lease is in
full force and effect and there is no Event of Default (as defined in the Master Lease) thereunder by either party and there are
no conditions that, with the passage of time or the giving of notice, or both, would constitute such an Event of Default. The
Leases are in full force and effect and there are no defaults thereunder by either party and to Borrower’s knowledge, there
are no conditions that, with the passage of time or the giving of notice, or both, would constitute defaults thereunder. No Rent
or any amounts payable by Master Tenant to Borrower under the Master Lease has been paid more than one (1) month in advance of
its due date. All security deposits are held by Borrower or Master Tenant (as applicable) in accordance with applicable law. Except
as disclosed in the tenant estoppels delivered to Lender in connection with the closing of the Loan or as disclosed in the rent
roll, all work to be performed by Borrower under the Master Lease and Master Tenant under each Lease has been performed as required
and has been accepted by Master or the relevant Tenant (as applicable), and any payments, free rent, partial rent, rebate of rent
or other payments, credits, allowances or abatements required to be given by Borrower to Master Tenant or by Master Tenant to
any Tenant has already been received by Master Tenant or such Tenant (as applicable). Except pursuant to the Master Lease ALR,
there has been no prior sale, transfer or assignment, hypothecation or pledge of the Master Lease, any Lease, the rents payable
under the Master Lease, or of the Rents received under the Leases which is outstanding. No Tenant listed on Schedule I
has assigned its Lease or sublet all or any portion of the premises demised thereby, no such Tenant holds its leased premises
under assignment or sublease (other than with respect to the Master Lease), nor does anyone except such Tenant and its employees
occupy such leased premises (other than Master Tenant pursuant to the Master Lease). Neither Master Tenant nor any Tenant under
any Lease has a right or option pursuant to the Master Lease or such Lease or otherwise to purchase all or any part of the leased
premises or the building of which the leased premises are a part. No Tenant under any Lease has any right or option for additional
space in the Improvements.

 

4.1.27.
Survey. To Borrower’s knowledge, the Survey for the Property delivered to Lender in connection with this Agreement does
not fail to reflect any material matter affecting the Property or the title thereto.

 

4.1.28.
Inventory. Borrower or Master Tenant is the owner of all of the Equipment, Fixtures and Personal Property (as such terms are
defined in the Security Instrument) located on or at the Property and constituting collateral for the Loan, and shall not lease
any Equipment, Fixtures or Personal Property other than as permitted hereunder. All of the Equipment, Fixtures and Personal Property
are sufficient to operate the Property in the manner required hereunder and in the manner in which it is currently operated.

 

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4.1.29.
Filing and Recording Taxes. All transfer taxes, deed stamps, intangible taxes or other amounts in the nature of transfer taxes
required to be paid by any Person under applicable Legal Requirements in connection with the transfer of the Property to Borrower
have been, or concurrently with the recording of the Security Instrument are being, paid. All mortgage, mortgage recording, stamp,
intangible or other similar tax required to be paid by any Person under applicable Legal Requirements currently in effect in connection
with the execution, delivery, recordation, filing, registration, perfection or enforcement of any of the Loan Documents, including,
without limitation, the Security Instrument, have been, or concurrently with the recording of the Security Instrument will be,
paid.

 

4.1.30.
Special Purpose Entity/Separateness. (a) Borrower hereby represents and warrants and until the Debt has been paid or
defeased in full, covenants that (i) Borrower is, shall be and shall continue to be a Special Purpose Entity, (ii) so long as
the Master Lease is in effect, Master Tenant is, shall be and shall continue to be a Special Purpose Entity, and (iii) (if applicable)
Principal is, shall be and shall continue to be a Special Purpose Entity. Lender acknowledges that the single purpose entity provisions
contained in the limited liability company agreements of each of Borrower and Master Tenant as of the Closing Date satisfy the
requirements of a Special Purpose Entity.

 

(b)The
representations, warranties and covenants set forth in Section 4.1.30(a) shall survive until the Loan is defeased or until
no amount remains payable to Lender under this Agreement or any other Loan Document (other than with respect to surviving indemnity
obligations as to which no claim is then pending).

 

4.1.31.
Management Agreement. The Management Agreement is in full force and effect and there is no default thereunder by any party
thereto and no event has occurred that, with the passage of time and/or the giving of notice would constitute a default thereunder.
The Management Agreement was entered into on commercially reasonable terms.

 

4.1.32.
Illegal Activity. No portion of the Property has been or will be purchased with proceeds of any illegal activity.

 

4.1.33.
No Change in Facts or Circumstances; Disclosure. All information submitted by and on behalf of Borrower or Master Tenant to
Lender and in all financial statements, rent rolls (including the rent roll attached hereto as Schedule I), reports, certificates
and other documents submitted in connection with the Loan or in satisfaction of the terms thereof and all statements of fact made
by Borrower in this Agreement or in any other Loan Document, are true, complete and correct in all material respects, provided,
however, that if such information was provided to Borrower or Master Tenant by non-affiliated third parties, Borrower represents
that such information is, to the best of its knowledge after due inquiry, true, complete and correct in all material respects.
To Borrower’s knowledge, there has been no material adverse change in any condition, fact, circumstance or event that would
make any such information inaccurate, incomplete or otherwise misleading in any material respect or that otherwise materially
and adversely affects or could reasonably be expected to materially and adversely affect the use, operation or value of the Property
or the business operations or the financial condition of Borrower or Master Tenant. Borrower has disclosed to Lender all material
facts known to it and has not failed to disclose any material fact known to it that could cause any Provided Information or representation
or warranty made herein to be materially misleading.

 

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4.1.34.
Investment Company Act. Neither Borrower nor Master Tenant is (a) an “investment company” or a company “controlled”
by an “investment company,” within the meaning of the Investment Company Act of 1940, as amended; (b) a “holding
company” or a “subsidiary company” of a “holding company” or an “affiliate” of either
a “holding company” or a “subsidiary company” within the meaning of the Public Utility Holding Company
Act of 1935, as amended; or (c) subject to any other federal or state law or regulation which purports to restrict or regulate
its ability to borrow money.

 

4.1.35.
Embargoed Person. To the best of Borrower’s knowledge, as of the date hereof and at all times throughout the term of
the Loan, including after giving effect to any Transfers permitted pursuant to the Loan Documents, (a) none of the funds or other
assets of Borrower, Master Tenant and Guarantor constitute property of, or are beneficially owned, directly or indirectly, by
any Embargoed Person; (b) no Embargoed Person has any interest of any nature whatsoever in Borrower, Master Tenant or Guarantor,
as applicable, with the result that the investment in Borrower, Master Tenant or Guarantor, as applicable (whether directly or
indirectly), is prohibited by law or the Loan is in violation of law; and (c) none of the funds of Borrower, Master Tenant or
Guarantor, as applicable, have been derived from any unlawful activity with the result that the investment in Borrower, Master
Tenant or Guarantor, as applicable (whether directly or indirectly), is prohibited by law or the Loan is in violation of law.
Notwithstanding the foregoing, to the extent that an Embargoed Person acquires a non-controlling interest in Borrower or Master
Tenant, either (1) without the knowledge of Borrower, Master Tenant, Key Principal or Guarantor, through a transaction brokered
by a FINRA licensed broker dealer not affiliated with Guarantor, provided such broker dealer has executed a dealer agreement or
selling agreement with Guarantor or an affiliate of Guarantor in which it covenants to, among other things, comply with The USA
PATRIOT Act (or any successor legislation), or (2) without the knowledge of Borrower, Master Tenant, Key Principal or Guarantor,
after the initial sale or offering of such interests in Borrower, the resulting breach of the foregoing representations shall
be deemed to be unintentional and not willful or grossly negligent for purposes of Section 9.3 hereof.

 

4.1.36.
Principal Place of Business; State of Organization. Borrower’s principal place of business as of the date hereof is
the address set forth in the introductory paragraph of this Agreement. Borrower’s state of organization is as set forth
in the introductory paragraph of this Agreement.

 

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4.1.37.
Environmental Representations and Warranties. Except as otherwise disclosed by that certain Phase I environmental report (or
Phase II environmental report, if required) delivered to Lender by Borrower in connection with the origination of the Loan (such
report is referred to as the “Environmental Report”), (a) to Borrower’s knowledge, there are no Hazardous
Substances or underground storage tanks in, on, or under the Property and no Hazardous Substances have been handled, manufactured,
generated, stored, processed, or disposed of on or released or discharged from the Property, except those that are (i) in compliance
with Environmental Laws and with permits issued pursuant thereto (to the extent such permits are required under Environmental
Law), and (ii) commercially reasonable amounts necessary to operate and maintain the Property for the purposes set forth
in this Agreement which will not result in an environmental condition in, on or under the Property and which are otherwise permitted
under (if required to be so permitted under) and used in compliance with Environmental Law; (b) to Borrower’s knowledge,
there are no past, present or threatened Releases of Hazardous Substances in, on, under or from the Property which has not been
fully remediated in accordance with Environmental Law; (c) to Borrower’s knowledge, there is no threat of any Release of
Hazardous Substances migrating to the Property; (d) to Borrower’s knowledge, there is no past or present non-compliance
with Environmental Laws, or with permits issued pursuant thereto, in connection with the Property which has not been fully remediated
in accordance with Environmental Law; (e) Borrower does not know of, and has not received, any written notice or other written
communication from any Person (including a Governmental Authority) relating to Hazardous Substances or Remediation thereof with
respect to the Property, of possible liability of any Person with respect to the Property pursuant to any Environmental Law, other
environmental conditions in connection with the Property, or any actual or potential administrative or judicial proceedings in
connection with any of the foregoing; (f) Borrower has truthfully and fully disclosed to Lender, in writing, any and all information
relating to environmental conditions in, on, under or from the Property that is known to Borrower and has provided to Lender all
information that is contained in Borrower’s and/or Master Tenant’s files and records, including any reports relating
to Hazardous Substances in, on, under or from the Property or to the environmental condition of the Property; and (g) there are
no Institutional Controls on or affecting the Property.

 

4.1.38.
Cash Management Account. Borrower hereby represents and warrants to Lender that:

 

(a)This
Agreement, together with the other Loan Documents, create a valid and continuing security interest (as defined in the Uniform
Commercial Code) in, once established, Borrower’s interest in each of the Clearing Account and the Cash Management Account
in favor of Lender, which security interest is prior to all other Liens, other than Permitted Encumbrances, and is enforceable
as such against creditors of and purchasers from Borrower. Other than in connection with the Loan Documents and except for Permitted
Encumbrances, neither Borrower nor Master Tenant has sold, pledged, transferred or otherwise conveyed any interest in the Clearing
Account or Cash Management Account (and shall not take any of the foregoing actions);

 

(b)Once
established, each of the Clearing Account and Cash Management Account shall constitute a “deposit account” or “securities
account” within the meaning of the Uniform Commercial Code);

 

(c)Pursuant
and subject to the terms hereof and the other applicable Loan Documents or Master Lease Documents, the Clearing Bank and Agent
have agreed to comply with all instructions originated by Lender, without further consent by Borrower or Master Tenant, directing
disposition of the Clearing Account and Cash Management Account and all sums at any time held, deposited or invested therein,
together with any interest or other earnings thereon, and all proceeds thereof (including proceeds of sales and other dispositions),
whether accounts, general intangibles, chattel paper, deposit accounts, instruments, documents or securities;

 

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(d)The
Clearing Account and Cash Management Account shall not be in the name of any Person other than Master Tenant, as pledgor, or Lender,
as pledgee. Neither Borrower nor Master Tenant has consented to the Clearing Bank and Agent complying with instructions with respect
to the Clearing Account and Cash Management Account from any Person other than Lender, except that, unless a Cash Sweep Period
is in effect, the Clearing Bank is instructed to remit funds to Master Tenant’s operating account as set forth in Section
2.7.1; and

 

(e)The
Property is not subject to any cash management system (other than pursuant to the Loan Documents), and any and all existing tenant
instruction letters issued in connection with any previous financing have been duly terminated prior to the date hereof.

 

4.1.39.
Franchise Agreement. The Franchise Agreement is in full force and effect and there is no default thereunder by Master Tenant
or, to Borrower’s knowledge, Franchisor, and no event has occurred that, with the passage of time and/or giving of notice,
would constitute a default thereunder (to Borrower’s knowledge, as to the obligations of Franchisor).

 

4.1.40.
Hotel Personal Property. The Property includes all personal property necessary to operate the Property as a hotel in a manner
consistent with operations at the Property on the date hereof.

 

4.1.41.
Labor Matters. There are no collective bargaining agreements or similar agreement to which Borrower is a party or which affect
or relate to the Property.

 

4.1.42.
Leases. There are no Leases with respect to residential space or guest rooms at the Property with terms of more than thirty
(30) days.

 

Section
4.2Survival of Representations. Borrower agrees that all of the representations and warranties of Borrower set forth in
Section 4.1 hereof and elsewhere in this Agreement and in the other Loan Documents shall survive for so long as the Loan
has not been defeased in full and any amount remains owing to Lender under this Agreement or any of the other Loan Documents by
Borrower (other than surviving indemnity obligations as to which no claim is then pending). All representations, warranties, covenants
and agreements made in this Agreement or in the other Loan Documents by Borrower shall be deemed to have been relied upon by Lender
notwithstanding any investigation heretofore or hereafter made by Lender or on its behalf.

 

ARTICLE
V

BORROWER COVENANTS

 

Section
5.1Affirmative Covenants. From the date hereof and until payment and performance in full of all obligations of Borrower
under the Loan Documents, other than surviving indemnity obligations as to which no claim is then pending, or the earlier release
of the Lien of the Security Instrument encumbering the Property (and all related obligations) in accordance with the terms of
this Agreement and the other Loan Documents, Borrower hereby covenants and agrees with Lender that:

 

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5.1.1.
Existence; Compliance with Legal Requirements. Each of Borrower and Master Tenant shall do or cause to be done all things
necessary to preserve, renew and keep in full force and effect Borrower’s and Master Tenant’s existence, rights, licenses,
permits, authorizations and franchises, respectively, to the extent necessary to the ownership and/or operation of the Property,
as the case may be, and comply in all material respects with all Legal Requirements applicable to Borrower, Master Tenant and
the Property, including all regulations, building and zoning codes and certificates of occupancy. There shall never be committed
by Borrower or Master Tenant, and Borrower shall never knowingly and intentionally permit any other Person in occupancy of or
involved with the operation or use of the Property to commit any act or omission affording the federal government or any state
or local government the right of forfeiture against the Property or any part thereof or any monies paid in performance of Borrower’s
obligations under any of the Loan Documents. Borrower hereby covenants and agrees not to commit, or knowingly to permit or suffer
to exist any act or omission affording such right of forfeiture. Borrower shall, or shall cause Master Tenant to, at all times
maintain, (x) preserve and protect all franchises and trade names used in the operation of the Property and preserve all the remainder
of its property used or useful in the conduct of its business and (y) keep the Property in good working order and repair, and
from time to time make, or cause to be made, all reasonably necessary repairs, renewals, replacements, betterments and improvements
thereto, all as more fully provided in the Loan Documents. Borrower shall, or shall cause Master Tenant to, keep the Property
insured at all times by financially sound and reputable insurers, to such extent and against such risks, and maintain liability
and such other insurance, as is more fully provided in this Agreement. Borrower shall from time to time, upon Lender’s request,
provide Lender (or cause to be provided to Lender) with evidence reasonably satisfactory to Lender that the Property complies
with all Legal Requirements or is exempt from compliance with Legal Requirements. Borrower shall give prompt notice to Lender
of the receipt by Borrower, Master Tenant and/or Manager of any notice related to a violation of any Legal Requirements and of
the commencement of any proceedings or investigations which relate to compliance with Legal Requirements. After prior written
notice to Lender, Borrower or Master Tenant, at Borrower’s or Master Tenant’s own expense, may contest by appropriate
legal proceeding promptly initiated and conducted in good faith and with due diligence, the validity of any Legal Requirement,
the applicability of any Legal Requirement to Borrower or Master Tenant or the Property or any alleged violation of any Legal
Requirement, provided that (i) no Event of Default has occurred and remains uncured; (ii) such proceeding shall be permitted under
and be conducted in accordance with the provisions of any instrument to which Borrower or Master Tenant is subject and shall not
constitute a default thereunder and such proceeding shall be conducted in accordance with all applicable statutes, laws and ordinances;
(iii) neither the Property nor any part thereof or interest therein will be in impending danger of being sold, forfeited, terminated,
cancelled or lost; (iv) Borrower shall, and shall cause Master Tenant to, promptly upon final determination thereof comply with
any such Legal Requirement determined to be valid or applicable or cure any violation of any Legal Requirement; (v) such proceeding
shall suspend the enforcement of the contested Legal Requirement against Borrower, Master Tenant and/or the Property, as applicable;
and (vi) Borrower shall furnish, or shall cause Master Tenant to furnish, such security as may be required in the proceeding,
or (if no security is required in the proceeding) as may be requested by Lender, to insure compliance with such Legal Requirement,
together with all interest and penalties payable in connection therewith. Lender (x) may apply any such security, as necessary
to cause compliance with such Legal Requirement at any time when, in the reasonable judgment of Lender, the validity, applicability
or violation of such Legal Requirement is finally established or the Property (or any part thereof or interest therein) shall
be in danger of being sold, forfeited, terminated, cancelled or lost, (y) shall make such security available to Borrower or Master
Tenant, as the case may be, to satisfy any obligation that may be payable by it in connection with the matter so contested, and
(z) provided that no Event of Default has occurred and is continuing, shall release any balance of such security to Borrower or
Master Tenant, as the case may be.

 

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5.1.2.
Taxes and Other Charges. Borrower shall, or shall cause Master Tenant to, pay all Taxes and Other Charges now or hereafter
levied or assessed or imposed against the Property or any part thereof as the same become due and payable; provided, however,
Borrower’s obligation to directly pay Taxes shall be suspended for so long as Borrower complies with the terms and provisions
of Section 7.2 hereof. Borrower shall deliver to Lender receipts for payment or other evidence satisfactory to Lender that
the Taxes and Other Charges have been so paid or are not then delinquent prior to the date on which the Taxes or Other Charges
would otherwise be delinquent if not paid. Borrower shall furnish or cause Master Tenant to furnish to Lender receipts for the
payment of the Taxes and the Other Charges prior to the date the same shall become delinquent (provided, however, Borrower is
not required to furnish such receipts for payment of Taxes if such Taxes have been paid by Lender pursuant to Section 7.2
hereof and Lender has received receipts from the relevant taxing authority). Borrower shall not suffer and shall promptly cause
to be paid and discharged any Lien or charge whatsoever which may be or become a Lien or charge against the Property, and shall
promptly pay or cause Master Tenant to pay for all utility services provided to the Property. After prior written notice to Lender,
Borrower or Master Tenant, at Borrower’s or Master Tenant’s own expense, may contest by appropriate legal proceeding,
promptly initiated and conducted in good faith and with due diligence, the amount or validity or application in whole or in part
of any Taxes or Other Charges, provided that (i) no Event of Default has occurred and remains uncured; (ii) such proceeding shall
be permitted under and be conducted in accordance with the provisions of any other instrument to which Borrower and/or Master
Tenant is subject and shall not constitute a default thereunder and such proceeding shall be conducted in accordance with all
applicable statutes, laws and ordinances; (iii) neither the Property nor any part thereof or interest therein will be in impending
danger of being sold, forfeited, terminated, cancelled or lost; (iv) Borroweror Master Tenant shall promptly upon final determination
thereof pay the amount of any such Taxes or Other Charges, together with all costs, interest and penalties which may be payable
in connection therewith; (v) such proceeding shall suspend the collection of such contested Taxes or Other Charges from the Property;
and (vi) Borrower shall furnish such security as may be required in the proceeding, or (if no security is required in the proceeding)
as may be requested by Lender, to insure the payment of any such Taxes or Other Charges, together with all interest and penalties
thereon. Lender (x) may pay over any such cash deposit or part thereof held by Lender to the claimant entitled thereto at any
time when, in the judgment of Lender, the entitlement of such claimant is established or the Property (or part thereof or interest
therein) shall be in danger of being sold, forfeited, terminated, cancelled or lost or there shall be any danger of the Lien of
the Security Instrument being primed by any related Lien, (y) shall make such security available to Borrower or Master Tenant,
as the case may be, to satisfy any obligation that may be payable by it in connection with the matter so contested, and (z) provided
that no Event of Default has occurred and is continuing, shall release any balance of such security to Borrower or Master Tenant,
as the case may be.

 

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5.1.3.
Litigation. Borrower shall, after becoming aware thereof, give prompt written notice to Lender of any litigation or governmental
proceedings pending or threatened in writing against Borrower, Master Tenant and/or Guarantor which could reasonably be expected
to materially adversely affect Borrower’s, Master Tenant’s or Guarantor’s condition (financial or otherwise)
or business or the Property.

 

5.1.4.
Access to Property. Borrower shall, and shall cause Master Tenant to, permit agents, representatives and employees of Lender
to inspect the Property or any part thereof at reasonable hours upon reasonable advance notice.

 

5.1.5.
Notice of Default. Upon becoming aware thereof, Borrower shall promptly advise Lender of the occurrence of any Default or
Event of Default.

 

5.1.6.
Cooperate in Legal Proceedings. Borrower shall cooperate, and shall cause Master Tenant to cooperate, fully with Lender with
respect to any proceedings before any court, board or other Governmental Authority which may in any way affect the rights of Lender
hereunder or any rights obtained by Lender under any of the other Loan Documents and, in connection therewith, permit Lender,
at its election, to participate in any such proceedings.

 

5.1.7.
Intentionally Omitted.

 

5.1.8.
Award and Insurance Benefits. Borrower shall, and shall cause Master Tenant to, cooperate with Lender in obtaining for Lender
the benefits of any Awards or Insurance Proceeds lawfully or equitably payable in connection with the Property, and Lender shall
be reimbursed for any reasonable expenses incurred in connection therewith (including reasonably attorneys’ fees and disbursements,
and the payment by Borrower of the expense of an appraisal on behalf of Lender in case of Casualty or Condemnation affecting the
Property or any part thereof) out of such Insurance Proceeds.

 

5.1.9.
Further Assurances. Borrower shall, at Borrower’s sole cost and expense:

 

(a)furnish
to Lender all instruments, documents, boundary surveys, footing or foundation surveys, certificates, plans and specifications,
appraisals, title and other insurance reports and agreements, and each and every other document, certificate, agreement and instrument
required to be furnished by Borrower pursuant to the terms of the Loan Documents or which are reasonably requested by Lender in
connection therewith;

 

(b)execute
and deliver (or cause to be executed and delivered) to Lender such documents, instruments, certificates, assignments and other
writings, and do such other acts necessary or desirable, to evidence, preserve and/or protect the collateral at any time securing
or intended to secure the obligations of Borrower and/or Master Tenant under the Loan Documents, as Lender may reasonably require
including, without limitation, the execution and delivery of all such writings necessary to transfer any liquor licenses with
respect to the Property into the name of Lender or its designee upon acceleration of the Loan or the commencement of any action
by Lender to foreclose the Lien of the Security Instrument or for the appointment of a receiver for the Property; and

 

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(c)do
and execute all and such further lawful and reasonable acts, conveyances and assurances for the better and more effective carrying
out of the intents and purposes of this Agreement and the other Loan Documents, as Lender shall reasonably require from time to
time.

 

5.1.10.
Principal Place of Business, State of Organization. Neither Borrower nor Master Tenant shall cause or permit any change to
be made in Borrower’s or Master Tenant’s name, identity (including its trade name or names), place of organization
or formation (as set forth in Section 4.1.36 hereof) or Borrower’s or Master Tenant’s corporate or partnership
or other structure unless Borrower or Master Tenant, as applicable, shall have first notified Lender in writing of such change
at least thirty (30) days prior to the effective date of such change, and shall have first taken all action required by Lender
for the purpose of perfecting or protecting the lien and security interests of Lender pursuant to this Agreement, and the other
Loan Documents and, in the case of a change in Borrower’s or Master Tenant’s structure, without first obtaining the
prior written consent of Lender, which consent may be given or denied in Lender’s discretion. Upon Lender’s request,
Borrower shall (or shall cause Master Tenant to), at Borrower’s sole cost and expense, execute and deliver additional security
agreements and other instruments which may be necessary to effectively evidence or perfect Lender’s security interest in
the Property as a result of any such change of principal place of business or place of organization. Each of Borrower’s
and Master Tenant’s principal place of business and chief executive office, and the place where Borrower or Master Tenant
keeps its respective books and records, including recorded data of any kind or nature, regardless of the medium or recording,
including software, writings, plans, specifications and schematics, has been for the preceding four months (or, if less, the entire
period of the existence of Borrower and Master Tenant) and will continue to be (i) in the case of Borrower, the address of Borrower
set forth at the introductory paragraph of this Agreement (unless Borrower notifies Lender in writing at least thirty (30) days
prior to the date of such change), and (ii) in the case of Master Tenant, as set forth in the Master Lease Documents. Borrower
shall promptly notify Lender of any change in its or Master Tenant’s organizational identification number. If Borrower or
Master Tenant does not now have an organizational identification number and later obtains one, Borrower promptly shall notify
Lender of such organizational identification number.

 

5.1.11.
Financial Reporting. (a) Borrower shall keep and maintain or shall cause to be kept and maintained on a Fiscal Year basis,
in accordance with the requirements for a Special Purpose Entity set forth herein the Uniform System of Accounts and reconciled
in accordance with GAAP (or such other accounting basis acceptable to Lender), proper and accurate books, records and accounts
reflecting all of the financial affairs of Borrower and Master Tenant and all items of income and expense in connection with the
operation of the Property. Lender shall have the right from time to time at all times during normal business hours upon reasonable
notice to examine such books, records and accounts at the office of Borrower or any other Person maintaining such books, records
and accounts and to make such copies or extracts thereof as Lender shall desire. After the occurrence and during the continuation
of an Event of Default, Borrower shall pay any costs and expenses incurred by Lender to examine Borrower’s and Master Tenant’s
accounting records with respect to the Property, as Lender shall determine to be necessary or appropriate in the protection of
Lender’s interest.

 

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(b)Borrower
shall furnish (or shall cause Master Tenant to furnish) to Lender annually, within ninety (90) days following the end of each
Fiscal Year of Borrower, a complete copy of Borrower’s and Master Tenant’s annual financial statements prepared by
a certified public accountant acceptable to Lender (which may be an employee of Borrower or its Affiliates) in accordance with
the Uniform System of Accounts and reconciled in accordance with GAAP (or such other accounting basis acceptable to Lender) covering
the Property for such Fiscal Year and containing statements of profit and loss for Borrower, Master Tenant and the Property, an
annual rent roll and a balance sheet for Borrower and Master Tenant, which statements shall be accompanied by an Officer’s
Certificate stating that such items are true, correct, accurate, and complete in all material respects and fairly present the
financial condition and results of the operations of Borrower, Master Tenant and the Property. Such statements shall set forth
the financial condition and the results of operations for the Property for such Fiscal Year, and shall include amounts representing
annual net operating income, Net Cash Flow, gross income, and operating expenses.

 

(c)Borrower
shall furnish, or cause to be furnished, to Lender on or before forty five (45) days after the end of each calendar quarter
the following items, accompanied by an Officer’s Certificate stating that such items are true, correct, accurate, and complete
in all material respects and fairly present the financial condition and results of the operations of Borrower, Master Tenant and
the Property (subject to normal year-end adjustments) as applicable: (i) an occupancy report (including an average daily rate)
and a rent roll for the subject quarter; (ii) quarterly and year-to-date operating statements (including Capital Expenditures)
prepared for each calendar quarter, noting net operating income, gross income, and operating expenses (not including any contributions
to the Replacement Reserve Fund and the Required Repair Fund), and other information necessary and sufficient to fairly represent
the financial position and results of operation of the Property during such calendar quarter, and containing a comparison of budgeted
income and expenses and the actual income and expenses; (iii) provided in each case that Borrower has owned the Property for sufficiently
long to permit such calculation to be made, a calculation reflecting the annual Debt Service Coverage Ratio for the immediately
preceding three (3), six (6), and twelve (12) month periods as of the last day of such quarter, and (iv) occupancy statistic for
the Property. In addition, such certificate shall also be accompanied by an Officer’s Certificate stating that the representations
and warranties of Borrower set forth in Section 4.1.30 are true and correct as of the date of such certificate. On or before
thirty (30) days after the end of each calendar month, Borrower also will furnish, or cause to be furnished, to Lender (x) the
most current Smith Travel Research Reports then available to Borrower reflecting market penetration and relevant hotel properties
competing with the Property, and (y) if not contained in the quarterly financial statements referred to above, the monthly operating
statement for the immediately preceding calendar month, for the purposes of determining the Replacement Reserve Monthly Deposit.

 

(d)Until
the earlier of Securitization or twelve (12) months after the date of this Agreement, Borrower shall furnish, or cause to be furnished,
to Lender on or before twenty (20) days after the end of each calendar month, all of the following items with respect to the previous
calendar month, accompanied by an Officer’s Certificate stating that such items are true, correct, accurate, and complete
in all material respects and fairly present the financial condition and results of the operations of Borrower, Master Tenant and
the Property (subject to normal year-end adjustments) as applicable: (A) a rent roll for the subject month; (B) monthly
operating statement(s) of the Property; and (C) year-to-date operating statement(s) of the Property.

 

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(e)Intentionally
omitted.

 

(f)Intentionally
omitted.

 

(g)The
operating budget for the Property for the partial year period commencing on the date hereof, as delivered to Lender in connection
with Lender’s underwriting of the Loan, shall constitute the initial Annual Budget hereunder. For each Fiscal Year thereafter,
Borrower shall (or shall cause Master Tenant to) submit to Lender an Annual Budget not later than thirty (30) days prior to the
commencement of such Fiscal Year in form reasonably satisfactory to Lender. The Annual Budget shall be subject to Lender’s
written approval, not to be unreasonably withheld, conditioned or delayed unless an Event of Default then exists (each such Annual
Budget, an “Approved Annual Budget”). If Lender objects to a proposed Annual Budget submitted by Borrower,
Lender shall advise Borrower and Master Tenant of such objections within fifteen (15) days after receipt thereof (and deliver
to Borrower a reasonably detailed description of such objections) and Borrower shall promptly revise such Annual Budget and resubmit
the same to Lender. Borrower’s and/or Master Tenant’s written request therefor shall be delivered together with such
materials reasonably requested by Lender in order to evaluate such request (it being acknowledged and agreed that no request for
consent shall be effective unless and until such materials have been delivered to Lender) and shall conspicuously state, in large
bold type, that “PURSUANT TO SECTION 5.1.11(g) OF THE LOAN AGREEMENT, THIS IS A REQUEST FOR LENDER’S CONSENT. LENDER’S
RESPONSE IS REQUESTED WITHIN FIFTEEN (15) DAYS. LENDER’S FAILURE TO RESPOND WITHIN SUCH TIME PERIOD WILL ENABLE BORROWER
TO DELIVER A SECOND NOTICE REQUESTING LENDER’S CONSENT”“. In the event that Lender objects to a proposed
Annual Budget submitted by Borrower, Lender shall advise Borrower of such objections within fifteen (15) days after receipt
thereof (and deliver to Borrower a reasonably detailed description of such objections) and Borrower shall promptly revise such
Annual Budget and resubmit the same to Lender. In the event that Lender fails to approve or disapprove the foregoing written request
within such fifteen (15) day period, then Borrower shall be entitled to deliver a second notice. Such notice shall conspicuously
state, in large bold type, that “PURSUANT TO SECTION 5.1.11(g) OF THE LOAN AGREEMENT, THIS IS A REQUEST FOR LENDER’S
CONSENT. THE PROPOSED ANNUAL BUDGET SHALL BE DEEMED APPROVED IF LENDER DOES NOT RESPOND TO THE CONTRARY WITHIN FIFTEEN (15) DAYS’
OF LENDER’S RECEIPT OF THIS WRITTEN NOTICE”. Unless an Event of Default shall then exist, in the event that Lender
fails to approve or disapprove the second written request within such fifteen (15) day period, then Lender’s consent shall
be deemed to have been granted. Lender shall advise Borrower of any objections to such revised Annual Budget within fifteen (15)
days after receipt thereof (and deliver to Borrower a reasonably detailed description of such objections) and Borrower shall promptly
revise and resubmit the same to Lender until Lender approves the Annual Budget. Until such time that Lender approves a proposed
Annual Budget (or such proposed Annual Budget is deemed approved pursuant to this Section 5.1.11(g)), the most recently
Approved Annual Budget shall apply; provided that, such Approved Annual Budget shall be adjusted to reflect actual increases in
Taxes, Insurance Premiums and Other Charges and for increases in occupancy.

 

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(h)If
Borrower must incur an extraordinary operating expense or capital expense not set forth in the Approved Annual Budget (each an
“Extraordinary Expense”), then Borrower shall promptly deliver to Lender a reasonably detailed explanation
of such proposed Extraordinary Expense for Lender’s approval, which approval shall not be unreasonably withheld, conditioned
or delayed unless an Event of Default then exists.

 

(i)Borrower
shall furnish, or cause to be furnished, to Lender, within ten (10) Business Days after request (or as soon thereafter as may
be reasonably possible), such further detailed information with respect to the operation of the Property and the financial affairs
of Borrower and/or Master Tenant as may be reasonably requested by Lender.

 

(j)Borrower
shall furnish, or cause to be furnished, to Lender, within ten (10) Business Days after Lender’s request (or as soon thereafter
as may be reasonably possible), financial and sales information from any commercial Tenant designated by Lender (to the extent
such financial and sales information is required to be provided under the applicable Lease and same is received by Borrower or
Master Tenant after request therefor).

 

(k)Borrower
shall cause Guarantor to furnish to Lender annually, within ninety (90) days following the end of each Fiscal Year of Guarantor:
(i) with respect to Moody REIT II, financial statements audited by an independent certified public accountant satisfying the requirements
applicable to the annual financial statements required to be filed by a Reporting Company or (ii) with respect to Moody Guarantor,
a signed personal financial statement in a form satisfactory to Lender if such Guarantor is an individual.

 

(l)If
requested by Lender, Borrower shall use commercially reasonable efforts to provide, or cause to be provided to, Lender, as soon
after Lender’s request as practicable, with any financial statements, or financial, statistical or operating information,
as Lender shall determine to be required pursuant to Regulation AB under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), or any amendment, modification or replacement thereto
or other legal requirements in connection with any private placement memorandum, prospectus or other disclosure documents or any
filing pursuant to the Exchange Act in connection with the Securitization or as shall otherwise be reasonably requested by Lender.

 

(m)Any
reports, statements or other information required to be delivered under this Agreement shall be delivered (i) in electronic format
(if, within the capabilities of Guarantor’s or Borrower’s data systems, as applicable, without change or modification
thereto, prepared using Microsoft Word for Windows files (which files may be prepared using a spreadsheet program and saved as
word processing files)), and (ii) if requested by Lender, in paper form and/or on a diskette. Borrower agrees that Lender may
disclose information regarding the Property and Borrower that is provided to Lender pursuant to this Section 5.1.11 in
connection with the Securitization to such parties requesting such information in connection with such Securitization.

 

5.1.12.
Business and Operations. Borrower shall continue, and shall cause Master Tenant to continue, to engage in the businesses presently
conducted by it as and to the extent the same are necessary for the ownership, maintenance, management and operation of the Property.
Borrower shall, and shall cause Master Tenant to, qualify to do business and to remain in good standing under the laws of the
jurisdiction of its formation as and to the extent the same are required for the ownership, maintenance, management and operation
of the Property. Borrower or Master Tenant shall, at all times during the term of the Loan, continue to own all of Equipment,
Fixtures and Personal Property which are necessary to operate the Property in the manner required hereunder and in the manner
in which it is currently operated.

 

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5.1.13.
Title to the Property. Borrower shall warrant and defend (a) the title to the Property and every part thereof, subject only
to Liens permitted hereunder (including Permitted Encumbrances) and (b) the validity and priority of the Lien of the Security
Instrument on the Property, subject only to Liens permitted hereunder (including Permitted Encumbrances), in each case against
the claims of all Persons whomsoever. Borrower shall reimburse Lender for any losses, costs, damages or expenses (including reasonable
attorneys’ fees and expenses) incurred by Lender if an interest in the Property, other than as permitted hereunder, is claimed
by another Person.

 

5.1.14.
Costs of Enforcement. In the event (a) that the Security Instrument encumbering the Property is foreclosed in whole or in
part or that the Security Instrument is put into the hands of an attorney for collection, suit, action or foreclosure, (b) of
the foreclosure of any mortgage encumbering the Property prior to or subsequent to the Security Instrument in which proceeding
Lender is made a party, or (c) of the bankruptcy, insolvency, rehabilitation or other similar proceeding in respect of Borrower,
Master Tenant or any of their respective constituent Persons or an assignment by Borrower, Master Tenant or any of their respective
constituent Persons for the benefit of its creditors, Borrower, its successors or assigns, shall be chargeable with and agrees
to pay all costs of collection and defense, including reasonable attorneys’ fees and expenses, incurred by Lender or Borrower
in connection therewith and in connection with any appellate proceeding or post judgment action involved therein, together with
all required service or use taxes.

 

5.1.15.
Estoppel Statement. (a) After request by Lender, Borrower shall within ten (10) days furnish Lender with a statement,
duly acknowledged and certified, setting forth (i) the original principal amount of the Note, (ii) the unpaid principal amount
of the Note, (iii) the Interest Rate of the Note, (iv) the terms of payment and Maturity Date, (v) the date installments of interest
or principal were last paid, (vi) that, except as provided in such statement, there are no Defaults or Events of Default under
this Agreement or any of the other Loan Documents, (vii) that the Loan Documents are valid, legal and binding obligations
and have not been modified, or if any of them has been modified, giving particulars of such modification, (viii) whether any offsets
or defenses exist against the obligations secured hereby and, if any are alleged to exist, a detailed description thereof, (ix)
that all Leases and the Master Lease are in full force and effect and (provided the Property is not a residential multifamily
property) have not been modified (or if any of them has been modified, setting forth all modifications), (x) the date to which
the Rents thereunder have been paid pursuant to the Leases and the Master Lease, (xi) whether or not, to the best knowledge of
Borrower, any of the lessees under the Leases or the Master Tenant under the Master Lease are in default under the Leases, and,
if any of the lessees are in default, setting forth the specific nature of all such defaults, (xii) the amount of security deposits
held by Borrower or Master Tenant (as applicable) under each Lease and that such amounts are consistent with the amounts required
under each Lease, and (xiii) as to any other matters reasonably requested by Lender and reasonably related to the Leases, the
obligations secured hereby, the Property or the Security Instrument.

 

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(b)Borrower
shall cause Master Tenant to use commercially reasonable efforts to obtain and deliver, or caused to be delivered, to Lender,
upon request, tenant estoppel certificates from each commercial Tenant leasing space at the Property in form and substance reasonably
satisfactory to Lender provided that Borrower shall not be required to request that Master Tenant obtain such certificates more
frequently than two (2) times in any calendar year, unless an Event of Default then exists.

 

(c)Borrower
shall, upon request by Lender, direct Master Tenant to use best efforts to cause Franchisor to replace and/or re-issue any comfort
letter or tri-party agreement delivered in connection with the Loan.

 

(d)Borrower
shall, promptly upon request of Lender deliver an estoppel certificate from the Master Tenant stating that (i) the Master Lease
is in full force and effect and has not been modified, amended or assigned (or listing the modifications, amendments or assignments,
if any), (ii) no Event of Default (as defined in the Master Lease) by Master Tenant exists under the Master Lease (or describing
in reasonable detail any Event of Default that does exist), (iii) neither Master Tenant nor Borrower has commenced any action
or given or received any notice for the purpose of terminating the Master Lease and (iv) all sums due and payable under the Master
Lease have been paid in full (or describing in reasonable detail any amounts then remaining due and unpaid).

 

5.1.16.
Loan Proceeds. Borrower shall use the proceeds of the Loan received by it on the Closing Date only for the purposes set forth
in Section 2.1.4 hereof.

 

5.1.17.
Performance by Borrower. Borrower shall in a timely manner observe, perform and fulfill each and every covenant, term and
provision of each Loan Document executed and delivered by, or applicable to, Borrower, and shall not enter into or otherwise suffer
or permit any amendment, waiver (other than waivers by Borrower with respect to obligations of Lender), supplement, termination
or other modification of any Loan Document executed and delivered by, or applicable to, Borrower without the prior written consent
of Lender.

 

5.1.18.
Confirmation of Representations. If requested by Lender, Borrower shall deliver, in connection with any Securitization, (a) one
(1) or more Officer’s Certificates certifying as to the accuracy of (or specifying any inaccuracy in) all representations
made by Borrower in the Loan Documents as of the date of the closing of such Securitization in all relevant jurisdictions, and
(b) certificates of the relevant Governmental Authorities in all relevant jurisdictions indicating the good standing and qualification
of Borrower, Principal, Master Tenant and Guarantor as of the date of the Securitization.

 

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5.1.19.
Environmental Covenants. (a) Borrower covenants and agrees that: (i) all uses and operations on or of the Property, whether
by Borrower, Master Tenant or any other Person, shall be in compliance with all Environmental Laws and permits issued pursuant
thereto; (ii) there shall be no Releases of Hazardous Substances in, on, under or from the Property; (iii) there shall be no Hazardous
Substances in, on, or under the Property, except those that are (A) in compliance with all Environmental Laws and with permits
issued pursuant thereto (to the extent such permits are required by Environmental Law), and (B) commercially reasonable amounts
necessary to operate and maintain the Property for the purposes set forth in the Loan Agreement which will not result in an environmental
condition in, on or under the Property and which are otherwise permitted under (if required to be so permitted) and used in compliance
with Environmental Law; (iv) Borrower shall, and shall cause Master Tenant to, keep the Property free and clear of all liens and
other encumbrances imposed pursuant to any Environmental Law, whether due to any act or omission of Borrower, Master Tenant or
any other Person (the “Environmental Liens”), provided that Borrower and/or Master Tenant may contest any Environmental
Law in accordance with the provisions of Section 5.1.1 applicable to contests of Legal Requirements; (v) Borrower shall,
and shall cause Master Tenant to, at its or Master Tenant’s sole cost and expense, fully and expeditiously cooperate in
all activities pursuant to subsection (b) below, including providing all relevant information and making knowledgeable
persons available for interviews; (vi) Borrower shall, and shall cause Master Tenant to, at its or Master Tenant’s sole
cost and expense, perform any environmental site assessment or other investigation of environmental conditions in connection with
the Property, pursuant to any reasonable written request of Lender made if Lender has reason to believe that an environmental
hazard exists on the Property (including sampling, testing and analysis of soil, water, air, building materials and other materials
and substances whether solid, liquid or gas), and share with Lender the reports and other results thereof, and Lender and other
Indemnified Parties shall be entitled to rely on such reports and other results thereof; (vii) Borrower shall, and shall cause
Master Tenant to, at its or Master Tenant’s sole cost and expense, comply with all reasonable written requests of Lender
made if Lender has reason to believe that an environmental hazard exists on the Property (A) reasonably effectuate Remediation
of any condition (including a Release of a Hazardous Substance) in, on, under or from the Property; (B) comply with any Environmental
Law; (C) comply with any directive from any Governmental Authority; and (D) take any other reasonable action necessary or appropriate
for protection of human health (from exposure to Hazardous Substances) or the environment; (viii) Borrower shall not do or allow
Master Tenant or any Tenant or other user of the Property to do any act with respect to Hazardous Substances that (A) materially
increases the dangers to human health (from exposure to Hazardous Substances) or the environment, (B) poses an unreasonable risk
of harm from exposure to Hazardous Substances to any Person (whether on or off the Property), or (C) due to the presence of Hazardous
Substances or any Release thereof, (1) impairs or could reasonably be expected to impair the value of the Property, (2) is contrary
to any requirement of any insurer, with respect to Hazardous Substances, (3) constitutes a public or private nuisance, (4) constitutes
waste, or (5) violates any covenant, condition, agreement or easement applicable to the Property; and (ix) Borrower shall immediately
notify Lender in writing of (A) any presence or Releases or threatened Releases of Hazardous Substances in, on, under, from or
migrating towards (and reasonably likely to affect) the Property; (B) any non-compliance with any Environmental Laws related in
any way to the Property; (C) any actual or potential Environmental Lien; (D) any required or proposed Remediation of environmental
conditions relating to the Property; and (E) any written notice or other written communication of which Borrower becomes aware
from any source whatsoever (including a Governmental Authority) relating in any way to the release or potential release of Hazardous
Substances on, under, or above the Property or Remediation thereof, likely to result in liability of any Person pursuant to any
Environmental Law, other environmental conditions in connection with the Property, or any actual or potential administrative or
judicial proceedings in connection with anything referred to in this Section; (x) Borrower shall not install, use, generate,
manufacture, store, treat, release or dispose of, nor permit the installation, use, generation, storage, treatment, release or
disposal of, any Hazardous Substances (except commercially reasonable amounts necessary to operate and maintain the Property for
the purposes set forth in the Loan Agreement which will not result in an environmental condition in, on or under the Property
and which are otherwise permitted (if required to be so permitted) under and used in compliance with Environmental Law) on, under
or about the Property, and all uses and operations on or of the Property, whether by Borrower or any other person or entity, shall
be in compliance with all Environmental Laws and permits issued pursuant thereto; (xi) Borrower shall not make any change in the
use or condition of the Property which (A) could reasonably be expected to lead to the presence on, under or about the Property
of any Hazardous Substances which is not in accordance with any applicable Environmental Law, or (B) would require, under any
applicable Environmental Law, notice be given to or approval be obtained from any governmental agency in the event of a transfer
of ownership or control of the Property, in each case without the prior written consent of Lender; (xii) Borrower shall not allow
any Institutional Control on or to affect the Property; and (xiii) Borrower shall take all acts necessary to preserve its
status, if applicable, as an “innocent landowner,” “contiguous property owner,” or “prospective
purchaser” as to the Property and as those terms are defined in CERCLA; provided, however, that this covenant does not limit
or modify any of Borrower’s other duties or obligations under this Agreement.

 

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(b)If
Lender has reason to believe that an environmental hazard exists on the Property that could reasonably be expected, in Lender’s
discretion, to endanger any Tenants or other occupants of the Property or their guests or the general public or may materially
and adversely affect the value of the Property, upon reasonable notice from Lender, Borrower shall, at Borrower’s expense,
promptly cause an engineer or consultant satisfactory to Lender to conduct an environmental assessment or audit (the scope of
which shall be determined in Lender’s discretion) and take any samples of soil, groundwater or other water, air, or building
materials or any other invasive testing requested by Lender and promptly deliver the results of any such assessment, audit, sampling
or other testing; provided, however, if such results are not delivered to Lender within a reasonable period or if Lender has reason
to believe that an environmental hazard exists on the Property that, in Lender’s sole judgment, endangers any Tenant or
other occupant of the Property or their guests or the general public or could reasonably be expected to materially and adversely
affect the value of the Property, upon reasonable notice to Borrower, Lender and any other Person designated by Lender, including
any receiver, any representative of a Governmental Authority, and any environmental consultant, shall have the right, but not
the obligation, to enter upon the Property at all reasonable times to assess any and all aspects of the environmental condition
of the Property and its use, including conducting any environmental assessment or audit (the scope of which shall be determined
in Lender’s discretion) and taking samples of soil, groundwater or other water, air, or building materials, and reasonably
conducting other invasive testing. Borrower shall, and shall cause Master Tenant to, cooperate with and provide Lender and any
such Person designated by Lender with access to the Property.

 

(c)Intentionally
omitted.

 

(d)Intentionally
omitted.

 

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(e)Borrower
shall promptly perform, or cause to be performed, all necessary remedial work in response to the presence of any Hazardous Substances
on the Property, any violation of any Environmental Laws, or any claims or requirements made by any governmental agency or authority.
All such work shall be conducted by licensed and reputable contractors pursuant to written plans approved by the agency or authority
in question (if applicable), under proper permits and licenses (if applicable) with such insurance coverage as is customarily
maintained by prudent property owners in similar situations. If the cost of the work exceeds $100,000, then Lender shall have
the right of prior approval over the environmental contractor and plans, which shall not be unreasonably withheld or delayed.
All costs and expenses of the remedial work shall be promptly paid by Borrower or Master Tenant, as applicable, in accordance
with the provisions of the Master Lease. In the event Borrower fails to undertake (or cause to be undertaken) the remedial work,
or fails to complete (or cause the completion of) the same within a reasonable time period after the same is undertaken, and if
Lender is of the good faith opinion that Lender’s security in the Property is jeopardized thereby, then Lender shall have
the right to undertake or complete the remedial work itself. In such event all costs of Lender in doing so, including all fees
and expenses of environmental consultants, engineers, attorneys, accountants and other professional advisors, shall become a part
of the Loan and shall be due and payable from Borrower upon demand. Such amount shall be secured by the Loan Documents, and failure
to pay the same shall be an Event of Default under the Loan Documents. In the event any Hazardous Substances are removed from
the Property, by any of Borrower, Master Tenant or Lender, the number assigned by the United States Environmental Protection Agency
to such Hazardous Substances shall be solely in the name of Borrower, and Borrower shall have any and all liability for such removed
Hazardous Substances.

 

5.1.20.
Leasing Matters. All commercial Leases with respect to the Property written after the date hereof shall be subject to the
prior written approval of Lender, which approval shall not be unreasonably withheld, conditioned or delayed. Upon request, Borrower
shall furnish Lender with executed copies of all commercial Leases. All renewals of commercial Leases and all proposed commercial
Leases shall provide for rental rates comparable to existing local market rates. All proposed commercial Leases shall be on commercially
reasonable terms and shall not contain any terms which would materially affect Lender’s rights under the Loan Documents.
All commercial Leases executed after the date hereof shall provide that they are subordinate to the Security Instrument and that
the lessee agrees to attorn to Lender or any purchaser at a sale by foreclosure or power of sale. Borrower shall, or shall cause
Master Tenant to, (i) observe and perform the obligations imposed upon the lessor under the Leases in a commercially reasonable
manner; (ii) shall enforce and may amend or terminate the terms, covenants and conditions contained in the Leases upon the part
of the lessee thereunder to be observed or performed in a commercially reasonable manner and in a manner not to impair the value
of the Property involved except that no termination by Borrower or Master Tenant, as the case may be, or acceptance of surrender
by a Tenant of any Leases shall be permitted unless by reason of a tenant default and then only in a commercially reasonable manner
to preserve and protect the Property; provided, however, that no such termination or surrender of any Lease will be permitted
without the prior written consent of Lender; (iii) shall not collect any of the rents more than one (1) month in advance (other
than security deposits); (iv) shall not execute any other assignment of lessor’s interest in the Leases or the Rents
(except as contemplated by the Loan Documents); (v) shall not alter, modify or change the terms of any commercial Lease in a manner
inconsistent with the provisions of the Loan Documents; and (vi) shall execute and deliver at the request of Lender all such further
assurances, confirmations and assignments in connection with the Leases as Lender shall from time to time reasonably require.
Notwithstanding anything to the contrary contained herein, (i) neither Borrower nor Master Tenant shall enter into a lease of
all or substantially all of the Property without Lender’s prior written consent, which may be granted or withheld in Lender’s
sole discretion, and (ii) all new Leases and all amendments, modifications, extensions, and renewals of existing Leases with Tenants
that are Affiliates of Borrower and/or Master Tenant shall be subject to the prior written consent of Lender, which may be granted
in Lender’s sole discretion.

 

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5.1.21.
Alterations. Borrower shall obtain, and shall require Master Tenant to obtain, Lender’s prior written consent to any
alterations to any Improvements (it being understood that Replacements do not constitute “alterations” subject to
this Section 5.1.21), which consent shall not be unreasonably withheld or delayed except with respect to alterations that
could reasonably be expected to have a material adverse effect on Borrower’s financial condition, the value of the Property
or the Property’s Net Operating Income. Notwithstanding the foregoing, Lender’s consent shall not be required in connection
with any alterations that (a) are required to comply with the Franchise Agreement, unless the aggregate cost of such alterations
is reasonably anticipated to exceed five percent (5%) of the original principal amount of the Debt or (b) will not have a material
adverse effect on Borrower’s financial condition, the value of the Property or the Property’s Net Operating Income
and (i) are made in connection with (a) tenant improvement work performed pursuant to the terms of any Lease executed on or before
the date hereof, (b) tenant improvement work performed pursuant to the terms and provisions of a Lease and not adversely affecting
any structural component of any Improvements, any utility or HVAC system contained in any Improvements or the exterior of any
building constituting a part of any Improvements, or (c) are alterations performed in connection with the Restoration of the Property
after the occurrence of a Casualty or Condemnation in accordance with the terms and provisions of this Agreement; or (ii) the
cost of which (including any related alteration, improvement or replacement) is reasonably anticipated not to exceed $250,000.00
(the “Threshold Amount”). If the total unpaid amounts due and payable with respect to alterations to the Improvements
at the Property (other than such amounts to be paid or reimbursed by Tenants under the Leases) shall at any time exceed the Threshold
Amount, Borrower shall promptly deliver to Lender as security for the payment of such amounts and as additional security for Borrower’s
obligations under the Loan Documents any of the following: (A) cash, (B) U.S. Obligations, (C) other securities having a rating
acceptable to Lender and that, at Lender’s option, the applicable Rating Agencies have confirmed in writing will not, in
and of itself, result in a downgrade, withdrawal or qualification of the initial, or, if higher, then current ratings assigned
to any Securities or any class thereof in connection with any Securitization or (D) a completion and performance bond or an irrevocable
letter of credit (payable on sight draft only) issued by a financial institution having a rating by S&P of not less than “A-1+”
if the term of such bond or letter of credit is no longer than three (3) months or, if such term is in excess of three (3) months,
issued by a financial institution having a rating that is acceptable to Lender and that, at Lender’s option, the applicable
Rating Agencies have confirmed in writing will not, in and of itself, result in a downgrade, withdrawal or qualification of the
initial, or, if higher, then current ratings assigned to any Securities or class thereof in connection with any Securitization.
Such security shall be in an amount equal to the excess of the total unpaid amounts with respect to alterations to the Improvements
on the Property (other than such amounts to be paid or reimbursed by Tenants under the Leases) over the Threshold Amount and Lender
shall make such security available to pay, or to reimburse Borrower or Master Tenant for, the costs of such alteration, in accordance
with the disbursement procedures applicable to disbursements from the Replacement Reserve Fund; and, upon presentation by Borrower
or Master Tenant of satisfactory completion of such alteration, Lender shall release any remaining portion of such security to
Borrower or Master Tenant, as either of them may direct, provided that no Event of Default has occurred and is continuing.

 

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5.1.22.
Operation of Property. (a) Borrower shall, and shall cause Master Tenant to, cause the Property to be operated in all
material respects, in accordance with the Management Agreement (or Replacement Management Agreement) and the Franchise Agreement
(or Replacement Franchise Agreement) as applicable. In the event that the Management Agreement or Franchise Agreement expires
or is terminated (without limiting any obligation of Borrower to obtain Lender’s consent to any termination or modification
of the Management Agreement or Franchise Agreement in accordance with the terms and provisions of this Agreement), Borrower shall
promptly cause Master Tenant to enter into a Replacement Management Agreement with Manager or another Qualified Manager, or a
Replacement Franchise Agreement with Franchisor or another Qualified Franchisor, as applicable.

 

(b)Borrower
shall, and shall cause Master Tenant to: (i) promptly perform and/or observe, in all material respects, all of the covenants and
agreements required to be performed and observed by it under the Management Agreement and the Franchise Agreement and do all things
necessary to preserve and to keep unimpaired its material rights thereunder; (ii) promptly notify Lender of any material default
under the Management Agreement or the Franchise Agreement of which it is aware; (iii) upon request by Lender, promptly deliver
to Lender a copy of each of the following received by Borrower or Master Tenant, as applicable, under the Management Agreement:
(A) completed financial statement, business plan, capital expenditures plan or report required to be delivered to Borrower by
Manager pursuant to the Management Agreement, (B) notice of default, or (C) estimate delivered to Borrower for its approval with
respect to the contemplated expenditure of an amount in excess of $25,000; and (iv) enforce, in a commercially reasonable manner,
the performance and observance, of all of the covenants and agreements required to be performed and/or observed by Manager under
the Management Agreement and Franchisor under the Franchise Agreement.

 

5.1.23.
Embargoed Person. Borrower has performed and shall perform (or shall cause Master Tenant to perform) reasonable due diligence
to insure that to the best of Borrower’s knowledge at all times throughout the term of the Loan, including after giving
effect to any Transfers permitted pursuant to the Loan Documents, (a) none of the funds or other assets of Borrower, Master Tenant,
Principal and Guarantor constitute property of, or are beneficially owned, directly or indirectly, by any Embargoed Person; (b)
no Embargoed Person has any interest of any nature whatsoever in Borrower, Master Tenant, Principal or Guarantor, as applicable,
with the result that the investment in Borrower, Master Tenant, Principal or Guarantor, as applicable (whether directly or indirectly),
is prohibited by law or the Loan is in violation of law; and (c) none of the funds of Borrower, Master Tenant, Principal or Guarantor,
as applicable, have been derived from, or are the proceeds of, any unlawful activity, including money laundering, terrorism or
terrorism activities, with the result that the investment in Borrower, Master Tenant, Principal or Guarantor, as applicable (whether
directly or indirectly), is prohibited by law or the Loan is in violation of law, or may cause the Property to be subject to forfeiture
or seizure. Notwithstanding the foregoing, to the extent that an Embargoed Person acquires a non-controlling interest in Borrower
or Master Tenant, either (1) without the knowledge of Borrower, Master Tenant, Key Principal or Guarantor, through a transaction
brokered by a FINRA licensed broker dealer not affiliated with Guarantor, provided such broker dealer has executed a dealer agreement
or selling agreement with Guarantor or an affiliate of Guarantor in which it covenants to, among other things, comply with The
USA PATRIOT Act (or any successor legislation), or (2) provided Borrower performs reasonable due diligence, without the knowledge
of Borrower, Master Tenant, Key Principal or Guarantor, after the initial sale or offering of such interests in Borrower, the
resulting breach of the foregoing representations shall be deemed to be unintentional and not willful or grossly negligent for
purposes of Section 9.3 hereof.

 

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5.1.24.
Default under Franchise Agreement. If Borrower or Master Tenant shall be in default under the Franchise Agreement, then, without
limiting the generality of the other provisions of this Agreement, and without waiving or releasing Borrower from any of its obligations
hereunder, Lender shall have the right, but shall be under no obligation, to pay any sums and to perform any act or take any action
as may be appropriate to cause all the terms, covenants and conditions of the Franchise Agreement on the part of Borrower or Master
Tenant to be performed or observed. Lender and any Person designated by Lender shall have, and are hereby granted, the right to
enter upon the Property at any time and from time to time for the purpose of taking any such action. If the Franchisor shall deliver
to Lender a copy of any notice sent to Borrower, Master Tenant and/or Manager concerning a default under the Franchise Agreement,
such notice shall constitute full protection to Lender for any action taken or omitted to be taken by Lender in good faith, in
reliance thereon. Any sums expended by Lender pursuant to this Section 5.1.24 shall bear interest at the Default Rate from
the date such cost is incurred to the date of payment to Lender, shall be deemed to constitute a portion of the Debt, shall be
secured by the Lien of the Security Instrument and the other Loan Documents, and shall be immediately due and payable upon demand
by Lender therefore.

 

5.1.25.
Intentionally Omitted.

 

5.1.26.
Master Lease Documents. Borrower shall (a) promptly perform and/or observe in all material respects all of the covenants,
agreements and obligations required to be performed and observed by Borrower under the Master Lease Documents and do all things
necessary to preserve and to keep unimpaired its material rights thereunder; (b) promptly notify Lender of any material default
under the Master Lease Documents; (c) upon written request from Lender, promptly deliver to lender a copy of each financial statement,
business plan, capital expenditures plan, notice, report and estimate received by Borrower under the Master Lease; (d) promptly
enforce, in a commercially reasonable manner, the performance and observance of all of the covenants and agreements required to
be performed and/or observed by Master Tenant under the Master Lease Documents; and (e) cause Master Tenant to deposit or cause
to be deposited all Rents into the Clearing Account in accordance with the provisions of the Loan Documents.

 

Section
5.2Negative Covenants. From the date hereof until payment and performance in full of all obligations of Borrower (other
than surviving indemnity obligations as to which no claim is then pending) under the Loan Documents or the earlier release of
the Lien of the Security Instrument and any other collateral in accordance with the terms of this Agreement and the other Loan
Documents, Borrower covenants and agrees with Lender that it shall not do, directly or indirectly, any of the following:

 

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5.2.1.
Operation of Property. (a) Borrower shall not (and shall cause Master Tenant to not), without Lender’s prior written
consent (which consent shall not be unreasonably withheld unless an Event of Default then exists): (i) surrender, terminate, cancel,
amend or modify the Management Agreement; provided, that Borrower or Master Tenant may, without Lender’s consent, replace
the Manager so long as the replacement manager is a Qualified Manager pursuant to a Replacement Management Agreement; (ii) surrender,
terminate, cancel, amend or modify the Franchise Agreement; (iii) reduce or consent to the reduction of the term of the Management
Agreement or Franchise Agreement; (iv) increase or consent to the increase of the amount of any charges under the Management Agreement
or Franchise Agreement, or (v) otherwise modify, change, supplement, alter or amend, or waive or release any of its rights and
remedies under, the Management Agreement or Franchise Agreement in any material respect; provided, however, that
Borrower and/or Master Tenant, as applicable, may modify, supplement or amend the Franchise Agreement so long as such modification,
supplement, or amendment (A) does not materially increase the obligations (or materially decrease the rights) of Borrower and/or
Master Tenant thereunder, (B) add any additional restrictions on Borrower, Master Tenant or the Property, (C) materially increase
the rights (or materially decrease the obligations) of Franchisor thereunder, or (D) include or modify any restriction on Lender’s
ability to sell the Loan (provided that customary releases of claims that might exist against the Franchisor required in connection
with a waiver, consent, forbearance or other modification entered into for the benefit of Borrower or Master Tenant shall not
be deemed to violate the foregoing limitations). Any such surrender of the Management Agreement and/or the Franchise Agreement
or termination, cancellation, modification, change, supplement, alteration or amendment of the Management Agreement and/or the
Franchise Agreement without the prior consent of Lender (to the extent such consent is required) shall be void and of no force
and effect.

 

(b)Following
the occurrence and during the continuance of an Event of Default, if so instructed by Lender, Borrower shall not cause or permit
Master Tenant to exercise any rights, make any decisions, grant any approvals or otherwise take any action under the Management
Agreement or Franchise Agreement without the prior written consent of Lender, which consent may be granted, conditioned or withheld
in Lender’s discretion.

 

(c)If
under applicable zoning provisions the use of all or any portion of the Property is or shall become a nonconforming use, Borrower
shall not cause or permit the nonconforming use or Improvement to be discontinued or abandoned without the express written consent
of Lender.

 

5.2.2.
Liens. Borrower shall not create, incur, assume or suffer to exist any Lien on any portion of the Property or permit any such
action to be taken, except for Permitted Encumbrances.

 

5.2.3.
Dissolution. Borrower shall not (and shall cause Master Tenant to not) (a) engage in any dissolution, liquidation or consolidation
or merger with or into any other business entity, (b) engage in any business activity not related to the ownership (with respect
to Borrower only) and operation of the Property, or (c) transfer, lease or sell, in one transaction or any combination of transactions,
the assets or all or substantially all of the properties or assets of Borrower or Master Tenant except to the extent permitted
by the Loan Documents.

 

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5.2.4.
Change In Business. Neither Borrower nor Master Tenant shall enter into any line of business other than the ownership (with
respect to Borrower only) and operation of the Property, or make any material change in the scope or nature of its business objectives,
purposes or operations, or undertake or participate in activities other than the continuance of its present business. Nothing
contained in this Section 5.2.4 is intended to expand the rights of Borrower contained in Section 5.2.10(d) hereof.

 

5.2.5.
Debt Cancellation. Neither Borrower nor Master Tenant shall cancel or otherwise forgive or release any material claim or debt
(other than termination of Leases in accordance herewith) owed to Borrower or Master Tenant by any Person, except for adequate
consideration and in the ordinary course of Borrower’s or Master Tenant’s business, and except that (if applicable)
cancellation, forgiveness or releases in respect of Hotel Transactions may be effected in Borrower’s reasonable business
judgment.

 

5.2.6.
Zoning. Borrower shall not, and shall cause Master Tenant to not, initiate or consent to any zoning reclassification of any
portion of the Property or seek any variance under any existing zoning ordinance or use or permit the use of any portion of the
Property in any manner that could result in such use becoming a non conforming use under any zoning ordinance or any other applicable
land use law, rule or regulation, without the prior written consent of Lender.

 

5.2.7.
No Joint Assessment. Borrower shall not, and shall cause Master Tenant to not, suffer, permit or initiate the joint assessment
of the Property (a) with any other real property constituting a tax lot separate from the Property, and (b) which constitutes
real property with any portion of the Property which may be deemed to constitute personal property, or any other procedure whereby
the lien of any taxes which may be levied against such personal property shall be assessed or levied or charged to such real property
portion of the Property.

 

5.2.8.
Intentionally Omitted.

 

5.2.9.
ERISA. (a) Borrower shall not, and shall cause Master Tenant to not, engage in any transaction which would cause any
obligation, or action taken or to be taken, hereunder (or the exercise by Lender of any of its rights under the Note, this Agreement
or the other Loan Documents) to be a non-exempt (under a statutory or administrative class exemption) prohibited transaction under
ERISA.

 

(b)Borrower
further covenants and agrees to deliver to Lender such certifications or other evidence from time to time throughout the term
of the Loan, as requested by Lender in its discretion, that (A) Borrower and Master Tenant are not and do not maintain an “employee
benefit plan” as defined in Section 3(3) of ERISA, which is subject to Title I of ERISA, or a “governmental plan”
within the meaning of Section 3(32) of ERISA; (B) Borrower and Master Tenant are not subject to any state statute regulating investment
of, or fiduciary obligations with respect to governmental plans and (C) one or more of the following circumstances is true:

 

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(i)Equity
interests in Borrower and Master Tenant are publicly offered securities, within the meaning of 29 C.F.R. §2510.3-101(b)(2);

 

(ii)Less
than twenty-five percent (25%) of each outstanding class of equity interests in Borrower and Master Tenant are held by “benefit
plan investors” within the meaning of 29 C.F.R. §2510.3-101(f)(2); or

 

(iii)Borrower
and Master Tenant qualify as an “operating company” or a “real estate operating company” within the meaning
of 29 C.F.R. §2510.3-101(c) or (e).

 

5.2.10.
Transfers. (a) Borrower acknowledges that Lender has examined and relied on the experience of Borrower, Master Tenant
and its and Master Tenant’s stockholders, general partners, members, principals and (if Borrower is a trust) beneficial
owners in owning and operating properties such as the Property in agreeing to make the Loan, and will continue to rely on Borrower’s
ownership of the Property as a means of maintaining the value of the Property as security for repayment of the Debt and the performance
of the Other Obligations. Borrower acknowledges that Lender has a valid interest in maintaining the value of the Property so as
to ensure that, should Borrower default in the repayment of the Debt or the performance of the Other Obligations, Lender can recover
the Debt by a sale of the Property.

 

(b)Without
the prior written consent of Lender, and except to the extent otherwise set forth in this Section 5.2.10, Borrower shall
not, and shall not permit Master Tenant or any Restricted Party to do any of the following (collectively, a “Transfer”):
(i) sell, convey, mortgage, grant, bargain, encumber, pledge, assign, grant options with respect to, or otherwise transfer or
dispose of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration
or of record) the Property or any part thereof or any legal or beneficial interest therein or (ii) permit a Sale or Pledge of
an interest in any Restricted Party, other than (A) pursuant to Leases of space in the Improvements to Tenants in accordance with
the provisions of Section 5.1.20, (B) Hotel Transactions, and (C) Permitted Transfers.

 

(c)A
Transfer shall include, but not be limited to, (i) an installment sales agreement wherein Borrower or Master Tenant agrees to
sell the Property or any part thereof for a price to be paid in installments; (ii) an agreement by Borrower leasing all or a substantial
part of the Property for other than actual occupancy by a space Tenant thereunder or a sale, assignment or other transfer of,
or the grant of a security interest in, Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if
a Restricted Party is a corporation, any merger, consolidation or Sale or Pledge of such corporation’s stock or the creation
or issuance of new stock; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation
or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any
general partner or any profits or proceeds relating to such partnership interest, or the Sale or Pledge of limited partnership
interests or any profits or proceeds relating to such limited partnership interest or the creation or issuance of new limited
partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation or the change, removal,
resignation or addition of a managing member or non member manager (or if no managing member, any member) or the Sale or Pledge
of the membership interest of a managing member (or if no managing member, any member) or any profits or proceeds relating to
such membership interest, or the Sale or Pledge of non managing membership interests or the creation or issuance of new non managing
membership interests; or (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation or the Sale or Pledge
of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests.

 

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(d)Notwithstanding
anything to the contrary contained in the Loan Documents.

 

(i)Lender’s
consent shall not be required in connection with one (1) or a series of Transfers of up to forty-nine percent (49%) in the aggregate
of the direct or indirect ownership interests in any Restricted Party provided that (a) no Event of Default shall have occurred
and remain uncured or would occur as a result of such Transfer, (b) such Transfer shall not (i) cause the transferee (together
with its Affiliates) to acquire Control of any Restricted Party unless such transferee is Guarantor, (ii) result in any Restricted
Party that is as of the Closing Date controlled by Guarantor no longer being controlled by Guarantor, or (iii) cause the transferee
(together with its Affiliates) to increase its direct or indirect interest in any Restricted Party to an amount which exceeds
forty-nine percent (49%) in the aggregate, unless such transferee owned more than forty-nine percent (49%) of the direct or indirect
ownership interests in such Restricted Party on the Closing Date or as a result of a Transfer previously made in accordance with
the terms and provisions of this Agreement, (c) the Property shall continue to be managed by Manager or a Qualified Manager, (d)
after giving effect to such Transfer, Guarantor shall continue to own, directly or indirectly, at least fifty-one percent (51%)
of all legal, beneficial and economic interests in each of Borrower and Master Tenant, (e) if, immediately following such Transfer,
the transferee owns ten percent (10%) or more of the direct or indirect ownership interests in Borrower or Master Tenant then,
to the extent such transferee did not own ten percent (10%) or more of the direct or indirect ownership interests in Borrower
or Master Tenant on the Closing Date, Borrower shall deliver, or cause to be delivered, at Borrower’s sole cost and expense,
such searches (including credit, negative news, OFAC, litigation, judgment, lien and bankruptcy searches) as Lender may reasonably
require with respect to such transferee and its Controlling Persons, the results of which must be reasonably acceptable to Lender
(unless such transferee and Controlling Persons were previously the subject of searches by Lender which were reasonably acceptable
to Lender, in which case Borrower’s obligation to deliver or cause the delivery of such searches under this Section 5.2.10(d)
shall be satisfied to the extent reasonably acceptable updates to such searches are delivered to Lender), and such transferee,
its Borrowers and controlling Persons shall otherwise satisfy Lender’s then current applicable underwriting criteria and
requirements, (f) Borrower shall give Lender notice of such Transfer together with copies of all instruments effecting such Transfer
(or final drafts thereof with signed copies to follow upon the effect date of such transfer) and the organizational documents
of the transferee and its constituent parties reasonably required by Lender not less than ten (10) days prior to the date of such
Transfer), and (g) the legal and financial structure of Borrower, Master Tenant and their respective stockholders, members or
partners, as applicable, and the single purpose nature and bankruptcy remoteness of Borrower, Master Tenant and their respective
stockholders, members or partners, as applicable, after such Transfer, shall satisfy Lender’s then current applicable underwriting
criteria and requirements. Notwithstanding anything in this Section 5.2.10(d) to the contrary, and without limiting any
of the foregoing requirements of this Section 5.2.10(d), if after giving effect to any such Transfer, more than forty-nine
percent (49%) in the aggregate of direct or indirect ownership interests in any Restricted Party are owned by any Person (together
with its Affiliates) that owned less than forty-nine percent (49%) of the direct or indirect ownership interests in such Restricted
Party as of the Closing Date or as a result of a Transfer previously made in accordance with the terms and provisions of this
Agreement, then Borrower shall, prior to the effective date of any such Transfer, deliver (or cause to be delivered) to Lender
a written confirmation from the applicable Rating Agencies that such change in ownership will not cause a downgrade, withdrawal
or qualification of the then current rating of the Securities or any class thereof; and

 

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(ii)The
sale, conveyance, transfer, disposition, alienation, hypothecation, pledge or encumbering of all or any portion of the direct
or indirect ownership interests in Moody REIT II (each a “Permitted REIT Transfer”) shall be permitted at any
and all times without (1) Lender’s consent, (2) notice to Lender, or (3) the payment of any fee, premium, penalty or other
payment to Lender other than payment of Lender’s actual out-of-pocket expenses, if any, provided, however, that upon completion
of such Permitted REIT Transfer (a) except with the Lender’s prior written consent, Moody REIT II is a Reporting Company,
(b) there is no change of Control of Borrower, Master Tenant, Principal or Moody REIT II, (c) no Person together with such Person’s
Affiliates, other than the Key Principal and his Affiliates, owns more than forty-nine percent (49%) of the direct or indirect
ownership interests in Moody REIT II, (d) Moody REIT II continues to own, directly or indirectly, at least seventy-five percent
(75%) of the ownership interests in MNOP II and MNOP II continues to own, directly or indirectly, one hundred percent (100%) of
the ownership interests in Borrower and Master Tenant, and (e) if the Franchise Agreement will be terminated as a result of any
such Permitted REIT Transfer, the Property shall be operated in accordance with a Replacement Franchise Agreement.

 

(e)No
Transfer of the Property and assumption of the Loan shall occur during the period that is sixty (60) days prior to and sixty (60)
days after a Securitization. Otherwise, Lender’s consent to a one (1) time Transfer of the Property and assumption of the
Loan shall not be unreasonably withheld provided that Lender receives sixty (60) days prior written notice of such Transfer and
no Event of Default has occurred and is continuing, and further provided that the following additional requirements are satisfied:

 

(i)Borrower
shall pay Lender a transfer fee equal to one percent (1%) of the outstanding principal balance of the Loan at the time of such
transfer;

 

(ii)Borrower
shall pay any and all reasonable out-of-pocket costs incurred in connection with such Transfer (including, without limitation,
Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes
and the fees and expenses of the Rating Agencies pursuant to clause (x) below);

 

(iii)The
proposed transferee (the “Transferee”) or Transferee’s Principals must have demonstrated expertise in
owning and operating properties similar in location, size, class and operation to the Property, which expertise shall be reasonably
determined by Lender;

 

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(iv)Transferee
and Transferee’s Principals shall, as of the date of such transfer, have an aggregate net worth and liquidity reasonably
acceptable to Lender;

 

(v)Transferee,
Transferee’s Principals, and any other entities which may be owned or Controlled directly or indirectly by Transferee’s
Principals (“Related Entities”), either (I) shall not have (x) been party to any bankruptcy proceedings, voluntary
or involuntary, (y) made an assignment for the benefit of creditors, or (z) taken advantage of any insolvency act, or any act
for the benefit of debtors, in each case within seven (7) years prior to the date of the proposed Transfer or (y) shall be acceptable
to Lender in its sole discretion;

 

(vi)Transferee
shall assume all of the obligations of Borrower under the Loan Documents in a manner satisfactory to Lender in all respects, including,
without limitation, by entering into an assumption agreement in form and substance satisfactory to Lender;

 

(vii)There
shall be no material litigation or regulatory action pending or threatened against Transferee, Transferee’s Principals or
Related Entities which is not reasonably acceptable to Lender;

 

(viii)Neither
Transferee, nor Transferee’s Principals nor Related Entities shall not have defaulted under its or their obligations with
respect to any other Indebtedness in a manner which is not reasonably acceptable to Lender;

 

(ix)Transferee
and Transferee’s Principals must be able to satisfy all the representations and covenants set forth in Sections 4.1.30,
4.1.35, 5.1.23 and 5.2.9 of this Agreement, no Default or Event of Default shall otherwise occur as a result
of such Transfer, and Transferee and Transferee’s Principals shall deliver (A) all organizational documentation reasonably
requested by Lender, which shall be reasonably satisfactory to Lender and (B) all certificates, agreements, covenants and legal
opinions reasonably required by Lender;

 

(x)If
required by Lender, Transferee shall be approved by the Rating Agencies selected by Lender, which approval, if required by Lender,
shall take the form of a confirmation in writing from such Rating Agencies to the effect that such Transfer will not result in
a requalification, reduction, downgrade or withdrawal of the ratings in effect immediately prior to such assumption or transfer
for the Securities or any class thereof issued in connection with a Securitization which are then outstanding;

 

(xi)Prior
to any release of Guarantor, one (1) or more substitute guarantors reasonably acceptable to Lender shall have assumed all of the
liabilities and obligations of Guarantor under the Guaranty and Environmental Indemnity executed by Guarantor or executed a replacement
guaranty and environmental indemnity satisfactory to Lender;

 

(xii)Borrower
shall deliver, or cause to be delivered, at Borrower’s or Transferee’s sole cost and expense, an endorsement to the
Title Insurance Policy, as modified by the assumption agreement, as a valid first lien on the Property and naming the Transferee
as owner of the Property, which endorsement shall insure that, as of the date of the recording of the assumption agreement, the
Property shall not be subject to any additional exceptions or liens other than those contained in the Title Insurance Policy issued
on the date hereof and the Permitted Encumbrances;

 

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(xiii)The
Property shall be managed by Manager pursuant to the Management Agreement or by a Qualified Manager pursuant to a Replacement
Management Agreement; and

 

(xiv)If
the Franchise Agreement will be terminated as a result of such Transfer, the Property shall be operated in accordance with a Replacement
Franchise Agreement.

 

Immediately
upon a Transfer to such Transferee and the satisfaction of all of the above requirements, the named Borrower and Guarantor herein
shall be released from all liability under this Agreement, the Note, the Security Instrument and the other Loan Documents accruing
after such Transfer. The foregoing release shall be effective upon the date of such Transfer, but Lender agrees to provide written
evidence thereof reasonably requested by Borrower.

 

(f)Borrower,
without the consent of Lender, may grant easements, restrictions, covenants, reservations and rights of way in the ordinary course
of business for water and sewer lines, telephone and telegraph lines, electric lines and other utilities or for other similar
purposes, provided that no transfer, conveyance or encumbrance shall materially impair the utility and operation of the Property
or materially adversely affect the value of the Property or the Net Operating Income of the Property. If Borrower shall receive
any consideration in connection with any of said described transfers or conveyances, provided no Event of Default then exists,
Borrower shall have the right to use any such proceeds in connection with any alterations performed in connection therewith, or
required thereby. In connection with any transfer, conveyance or encumbrance permitted above, Lender shall, unless it reasonably
determines that the foregoing conditions have not been satisfied, execute and deliver any instrument reasonably necessary or appropriate
to evidence its consent to said action or to subordinate the Lien of the Security Instrument to such easements, restrictions,
covenants, reservations and rights of way or other similar grants upon receipt by the Lender of: (A) a copy of the instrument
of transfer; and (B) an Officer’s Certificate stating with respect to any transfer described above, that such transfer does
not materially impair the utility and operation of the Property or materially reduce the value of the Property or the Net Operating
Income of the Property. Borrower shall pay all of Lender’s reasonable expenses incurred in connection with the foregoing
including, reasonable attorney’s fees and expenses.

 

Lender
shall not be required to demonstrate any actual impairment of its security or any increased risk of default hereunder in order
to declare the Debt immediately due and payable upon Borrower’s Transfer without Lender’s consent. This provision
shall apply to every Transfer regardless of whether voluntary or not, or whether or not Lender has consented to any previous Transfer.

 

5.2.11.
Master Lease Documents. Without Lender’s prior written consent, Borrower shall not (and shall cause Master Tenant to
not) (i) surrender, assign any interest in, terminate or cancel the Master Lease Documents; (ii) reduce or consent to the reduction
of the term of the Master Lease; (iii) if the then-scheduled termination date of the Master Lease falls before the scheduled Maturity
Date, fail to exercise, or fail to cause Master Tenant to exercise, any option or right to renew or extend the term of the Master
Lease; (iv) surrender, terminate, forfeit, or suffer or permit the surrender, termination or forfeiture of the Master Lease Documents;
(v) increase or consent to the increase of the amount of any charges to Borrower under the Master Lease Documents; or (vi) in
each case, to any material extent, modify, change, supplement, alter or amend the Master Lease or waive or release any of Borrower’s
rights and remedies under the Master Lease Documents.

 

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ARTICLE
VI

INSURANCE; CASUALTY; CONDEMNATION

 

Section
6.1Insurance. (a) Borrower shall obtain and maintain, or cause to be maintained, insurance for Borrower, Master
Tenant and the Property providing at least the following coverages:

 

(i)comprehensive
all risk “special form” insurance including loss caused by any type of windstorm, windstorm related perils, “named
storms,” or hail on the Improvements and the Personal Property, including contingent liability from Operation of Building
Laws, Demolition Costs and Increased Cost of Construction Endorsements, (A) in an amount equal to one hundred percent (100%)
of the “Full Replacement Cost,” which for purposes of this Agreement means actual replacement value (exclusive of
costs of excavations, foundations, underground utilities and footings) with a waiver of depreciation; (B) containing an agreed
amount endorsement with respect to the Improvements and Personal Property waiving all co-insurance provisions or to be written
on a no co-insurance form; (C) providing for no deductible in excess of 5% of Net Cash Flow of the Property for all such insurance
coverage; provided however with respect to windstorm and earthquake coverage, providing for a deductible satisfactory
to Lender in its discretion; and (D) if any of the Improvements or the use of the Property shall at any time constitute legal
non-conforming structures or uses, coverage for loss due to operation of law in an amount equal to the full Replacement Cost,
coverage for demolition costs and coverage for increased costs of construction. In addition, Borrower shall obtain: (y) if any
material portion of the Improvements is currently or at any time in the future located in a federally designated “special
flood hazard area,” flood hazard insurance in an amount equal to the maximum amount of such insurance available under the
National Flood Insurance Act of 1968, the Flood Disaster Protection Act of 1973 or the National Flood Insurance Reform Act of
1994, as each may be amended, plus excess flood coverage in an amount equal to the “probable maximum loss” for the
Improvements, as determined by an engineer satisfactory to Lender, or such greater amount as Lender shall require, and (z) earthquake
insurance in amounts and in form and substance satisfactory to Lender (but in any event, in an amount not less than 150% of the
“probable maximum loss”) in the event the Property is located in an area with a high degree of seismic activity and
the “probable maximum loss” for the Improvements, as determined by an engineer satisfactory to Lender, is 20% or greater
(based on a 475-year return period, an exposure period of 50 years and a 10% probability of exceedance), provided that the insurance
pursuant to clauses (y) and (z) hereof shall be on terms consistent with the comprehensive all risk insurance policy
required under this subsection (i);

 

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(ii)business
income or rental loss insurance (A) with loss payable to Lender; (B) covering all risks required to be covered by the insurance
provided for in subsection (i) above; (C) in an amount equal to one hundred percent (100%) of the projected gross
revenues from the operation of the Property (as reduced to reflect expenses not incurred during a period of Restoration) for a
period of (1) not less than twelve (12) months from the date of casualty or loss if the amount of the Loan is less than $35,000,000,
or (2) not less than eighteen (18) months from the date of casualty or loss if the amount of the Loan is $35,000,000 or more;
and (D) if the amount of the Loan is $50,000,000 or more, containing an extended period of indemnity endorsement which provides
that after the physical loss to the Improvements and Personal Property has been repaired, the continued loss of income will be
insured until such income either returns to the same level it was at prior to the loss, or the expiration of 180 days from the
date that the Property is repaired or replaced and operations are resumed, whichever first occurs, and notwithstanding that the
policy may expire prior to the end of such period. The amount of such business income or rental loss insurance shall be determined
prior to the date hereof and at least once each year thereafter based on Borrower’s reasonable estimate of the gross revenues
from the Property for the succeeding twelve (12) month period. Notwithstanding the provisions of Section 2.7.1 hereof,
all proceeds payable to Lender pursuant to this subsection shall be held by Lender and shall be applied to the obligations secured
by the Loan Documents from time to time due and payable hereunder and under the Note; provided, however, that nothing
herein contained shall be deemed to relieve Borrower of its obligations to pay the obligations secured by the Loan Documents on
the respective dates of payment provided for in this Agreement and the other Loan Documents except to the extent such amounts
are actually paid out of the proceeds of such business income insurance;

 

(iii)at
all times during which structural construction, repairs or alterations are being made with respect to the Improvements, and only
if the Property coverage form does not otherwise apply, (A) owner’s contingent or protective liability insurance, otherwise
known as Owner Contractor’s Protective Liability, covering claims not covered by or under the terms or provisions of the
above mentioned commercial general liability insurance policy and (B) the insurance provided for in subsection (i) above
written in a so-called builder’s risk completed value form (1) on a non-reporting basis, (2) against all risks insured against
pursuant to subsection (i) above, (3) including permission to occupy the Property and (4) with an agreed amount endorsement
waiving co-insurance provisions;

 

(iv)comprehensive
boiler and machinery insurance, if steam boilers, other pressure-fixed vessels, large air conditioning systems, elevators or other
large machinery are in operation, in amounts as shall be reasonably required by Lender on terms consistent with the commercial
property insurance policy required under subsection (i) above;

 

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(v)commercial
general liability insurance against claims for personal injury, bodily injury, death, contractual damage or property damage occurring
upon, in or about the Property, such insurance (A) to be on the so-called “occurrence” form with a combined limit
of not less than $2,000,000.00 in the aggregate and $1,000,000.00 per occurrence; (B) to continue at not less than the aforesaid
limit until required to be changed by Lender in writing by reason of changed economic conditions making such protection inadequate
and (C) to cover at least the following hazards: (1) premises and operations; (2) products and completed operations on an “if
any” basis; (3) independent contractors; (4) blanket contractual liability for all written contracts and (5) contractual
liability covering the indemnities contained in Article 9 of the Security Instrument to the extent the same is available;

 

(vi)automobile
liability coverage for all owned and non-owned vehicles, including rented and leased vehicles containing minimum limits per occurrence
of $1,000,000.00;

 

(vii)worker’s
compensation and employee’s liability subject to the worker’s compensation laws of the applicable state;

 

(viii)umbrella
and excess liability insurance in an amount not less than: (A) $5,000,000.00 per occurrence if the amount of the Loan is
less than $35,000,000, or (B) $25,000,000.00 per occurrence, if the amount of the Loan is $35,000,000 or more, on terms consistent
with the commercial general liability insurance policy required under subsection (v) above, including supplemental coverage
for employer liability and automobile liability, which umbrella liability coverage shall apply in excess of the automobile liability
coverage in clause (vi) above;

 

(ix)the
insurance required under this Section 6.1(a) above shall cover perils of terrorism and acts of terrorism and Borrower shall
maintain insurance for loss resulting from perils and acts of terrorism on terms (including amounts) consistent with those required
under Sections 6.1(a) above at all times during the term of the Loan. Notwithstanding the foregoing, if the Terrorism Risk
Insurance Program Reauthorization Act of 2007 or a similar or subsequent statute (“TRIPRA”) is not in effect,
Borrower shall be required to carry terrorism insurance throughout the term of the Loan as required by the preceding sentence,
but in such event Borrower shall not be required to spend on terrorism insurance coverage more than two times the amount of the
insurance premium that is payable at such time in respect of the property and business interruption/rental loss insurance required
hereunder on a stand-alone-basis (without giving effect to the cost of the terrorism component of such casualty and business interruption/rental
loss insurance), and if the cost of terrorism insurance exceeds such amount, Borrower shall purchase the maximum amount of terrorism
insurance available with funds equal to such amount;

 

(x)if
applicable, insurance against employee dishonesty containing minimum limits in an amount reasonably acceptable to Lender;

 

(xi)if
applicable, liquor liability coverage containing minimum limits per occurrence in an amount reasonably acceptable to Lender; and

 

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(xii)upon
sixty (60) days written notice, such other reasonable insurance, including sinkhole or land subsidence insurance, and in such
reasonable amounts as Lender from time to time may reasonably request against such other insurable hazards which at the time are
commonly insured against for property similar to the Property located in or around the region in which the Property is located.

 

(b)All
insurance provided for in Section 6.1(a) hereof, shall be obtained under valid and enforceable policies (collectively,
the “Policies” or in the singular, the “Policy”), and shall be subject to the approval of
Lender as to insurance companies, amounts, deductibles, loss payees and insureds. The Policies shall be issued by financially
sound and responsible insurance companies authorized to do business in the State and having a rating of (A) if the amount of the
Loan is $35,000,000 or more, “A:VIII” or better in the current Best’s Insurance Reports and a claims paying
ability rating of “A-” or better by S&P, and “A3” or better by Moody’s or (B) if the amount
of the Loan is less than $35,000,000, “A-:VIII” or better in the current Best’s Insurance Reports and a claims
paying ability rating of “A-” or better by S&P, and “A3” or better by Moody’s. Notwithstanding
the foregoing, any required earthquake insurance must satisfy the requirements of subsection (A) hereof regardless of the amount
of the Loan. The Policies described in Section 6.1 hereof (other than those strictly limited to liability protection) shall
designate Lender as loss payee. Borrower shall deliver, or cause to be delivered, to Lender certificates of insurance evidencing
the Policies, to be followed by complete copies of the Policies upon issuance (redacted, as necessary, to remove information regarding
other properties covered by blanket policies), accompanied by evidence satisfactory to Lender of payment of the premiums due thereunder
(the “Insurance Premiums”). Notwithstanding the foregoing, Borrower shall not be required to provide proof
of payment of the Insurance Premiums to the extent such Insurance Premiums are being escrowed. Borrower shall promptly forward
to Lender a copy of each written notice received by Borrower of any modification, reduction or cancellation of any of the Policies
or of any of the coverages afforded under any of the Policies.

 

(c)Any
blanket insurance Policy shall specifically allocate to the Property the amount of coverage from time to time required hereunder
and shall otherwise provide the same protection as would a separate Policy insuring only the Property in compliance with the provisions
of Section 6.1(a) hereof.

 

(d)All
Policies provided for or contemplated by Section 6.1(a) hereof, except for the Policy referenced in Section 6.1(a)(vii)
of this Agreement, shall name Borrower as the insured and Lender as the additional insured, as its interests may appear, and
in the case of property damage, boiler and machinery, flood and earthquake insurance, shall contain a so-called New York
standard non-contributing mortgagee clause in favor of Lender providing that the loss thereunder shall be payable to Lender.

 

(e)All
property Policies shall contain clauses or endorsements to the effect that:

 

(i)no
act or negligence of Borrower, or Master Tenant, or anyone acting for Borrower or Master Tenant, or of any Tenant or other occupant,
or failure to comply with the provisions of any Policy, which might otherwise result in a forfeiture of the insurance or any part
thereof, or foreclosure or similar action, shall in any way affect the validity or enforceability of the insurance insofar as
Lender is concerned;

 

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(ii)to
the extent that such endorsement is obtainable by the exercise of commercially reasonable efforts, the Policy shall not be canceled
without at least thirty (30) days written notice to Lender, except ten (10) days’ notice for non-payment of premium;

 

(iii)the
issuers thereof shall give written notice to Lender if the Policy has not been renewed thirty (30) days prior to its expiration;
and

 

(iv)Lender
shall not be liable for any Insurance Premiums thereon or subject to any assessments thereunder.

 

(f)If
at any time Lender is not in receipt of written evidence that all insurance required hereunder is in full force and effect, Lender
shall have the right, without notice to Borrower, to take such action as Lender deems necessary to protect its interest in the
Property, including the obtaining of such insurance coverage as Lender in its discretion deems appropriate after fifteen (15)
Business Days notice to Borrower if prior to the date upon which any such coverage will lapse or at any time Lender deems necessary
(regardless of prior notice to Borrower) to avoid the lapse of any such coverage. All premiums incurred by Lender in connection
with such action or in obtaining such insurance and keeping it in effect shall be paid by Borrower to Lender upon demand and,
until paid, shall be secured by the Security Instrument and shall bear interest at the Default Rate.

 

Section
6.2Casualty. If the Property shall be damaged or destroyed, in whole or in part, by fire or other casualty (a “Casualty”),
estimated by Borrower to cost more than $50,000 to repair, Borrower shall give prompt written notice of such damage to Lender
and shall promptly commence and diligently prosecute (or shall cause the prompt commencements and diligent prosecution of) the
completion of the Restoration of the Property pursuant to Section 6.4 hereof as nearly as possible to the condition the
Property was in immediately prior to such Casualty, with such alterations as may be reasonably approved by Lender and otherwise
in accordance with Section 6.4 hereof. Borrower shall pay or cause to be paid all costs of such Restoration whether or
not such costs are covered by insurance. Lender may, but shall not be obligated to make proof of loss if not made promptly by
Borrower. In addition, Lender may participate in any settlement discussions with any insurance companies (and shall approve the
final settlement, which approval shall not be unreasonably withheld or delayed) with respect to any Casualty in which the Net
Proceeds or the costs of completing the Restoration are equal to or greater than the Availability Threshold and Borrower shall
deliver (or shall cause to be delivered) to Lender all instruments required by Lender to permit such participation.

 

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Section
6.3Condemnation. Borrower shall give Lender notice of the actual or threatened commencement of any proceeding for the
Condemnation of the Property promptly after becoming aware thereof, and shall deliver to Lender copies of any and all papers served
in connection with such proceedings. Lender may participate in any such proceedings if an Event of Default exists or if the amount
of the Award exceeds the Threshold Amount, and Borrower shall from time to time deliver (or cause to be delivered) to Lender all
instruments requested by it to permit such participation. Borrower shall, at its expense, diligently prosecute (or cause the diligent
prosecution of) any such proceedings, and shall consult with Lender, its attorneys and experts, and cooperate with them in the
carrying on or defense of any such proceedings. Notwithstanding any taking by any public or quasi-public authority through Condemnation
or otherwise (including any transfer made in lieu of or in anticipation of the exercise of such taking), Borrower shall continue
to pay the Debt at the time and in the manner provided for its payment in the Note and in this Agreement and the Debt shall not
be reduced until any Award shall have been actually received and applied by Lender, after the deduction of expenses of collection,
to the reduction or discharge of the Debt (provided that Awards in respect of any temporary taking of the Property, unless an
Event of Default shall have occurred and be continuing, shall be applied as if they constituted Rent). Lender shall not be limited
to the interest paid on the Award by the condemning authority but shall be entitled to receive out of the Award interest at the
rate or rates provided herein or in the Note. If any portion of the Property is taken by a condemning authority, Borrower shall
promptly commence and diligently prosecute (or shall cause the prompt commencement and diligent prosecution of) the Restoration
of the Property pursuant to Section 6.4 hereof and otherwise comply with the provisions of Section 6.4 hereof.
If the Property is sold, through foreclosure or otherwise, prior to the receipt by Lender of the Award, Lender shall have the
right, whether or not a deficiency judgment on the Note shall have been sought, recovered or denied, to receive the Award, or
a portion thereof sufficient to pay the Debt. Notwithstanding the foregoing provisions of this Section 6.3, and Section
6.4 hereof, if the Loan or any portion thereof is included in a REMIC Trust and, immediately following a release of any portion
of the Lien of the Security Instrument in connection with a Condemnation (but taking into account any proposed Restoration on
the remaining portion of the Property), the Loan to Value Ratio is greater than 125% (such value to be determined, in Lender’s
sole discretion, by any commercially reasonable method permitted to a REMIC Trust), the principal balance of the Loan must be
paid down in an amount sufficient to satisfy the REMIC Requirements, unless the Lender receives an opinion of counsel that if
such amount is not paid, the Securitization will not fail to maintain its status as a REMIC Trust as a result of the related release
of such portion of the Lien of the Security Instrument. In connection with the foregoing, the Net Proceeds shall not be available
for Restoration and shall be used to pay down the principal balance of the Loan, without Yield Maintenance Premium or other penalty
or perjury, to the extent set forth above.

 

Section
6.4Restoration. The following provisions shall apply in connection with the Restoration of the Property:

 

(a)If
the Net Proceeds shall be less than the Availability Threshold and the costs of completing the Restoration shall be less than
the Availability Threshold, the Net Proceeds shall be disbursed by Lender to Borrower upon receipt, provided that all of the conditions
set forth in Section 6.4(b)(i) hereof are met and Borrower delivers to Lender a written undertaking to expeditiously commence
and to satisfactorily complete with due diligence the Restoration in accordance with the terms of this Agreement.

 

(b)If
the Net Proceeds are equal to or greater than the Availability Threshold or the costs of completing the Restoration are equal
to or greater than the Availability Threshold, Lender shall make the Net Proceeds available for the Restoration in accordance
with the provisions of this Section 6.4. The term “Net Proceeds” for purposes of this Section 6.4
means: (i) the net amount of all insurance proceeds received by Lender pursuant to Section 6.1(a)(i), (iv),
(ix) and (x) as a result of such damage or destruction, after deduction of its reasonable costs and expenses (including
reasonable counsel fees), if any, in collecting same (“Insurance Proceeds”), or (ii) the net amount of the
Award, after deduction of its reasonable costs and expenses (including reasonable counsel fees), if any, in collecting same (“Condemnation
Proceeds”), whichever the case may be.

 

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(i)The
Net Proceeds shall be made available to Borrower for Restoration provided that each of the following conditions are met:

 

(A)no
Default or Event of Default shall have occurred and be continuing;

 

(B)(1)
in the event the Net Proceeds are Insurance Proceeds, less than thirty-five percent (35%) of the total floor area of the Improvements
on the Property has been damaged, destroyed or rendered unusable as a result of such Casualty or (2) in the event the Net Proceeds
are Condemnation Proceeds, less than fifteen percent (15%) of the land constituting the Property is taken, and such land is located
along the perimeter or periphery of the Property, and no portion of the Improvements is located on such land;

 

(C)The
Master Lease shall remain in full force and effect during and after the completion of the Restoration, notwithstanding the occurrence
of any such Casualty or Condemnation, whichever the case may be, and Borrower and/or Master Tenant, as applicable under the Master
Lease, shall make all necessary repairs and restorations thereto at their sole cost and expense.

 

(D)Borrower
shall commence (or cause the commencement of) the Restoration as soon as reasonably practicable (but in no event later than the
later of (i) one hundred twenty (120) days after such Casualty or Condemnation, whichever the case may be, and (ii) thirty (30)
days after receipt of the first installment of insurance proceeds or Award, whichever the case may be) and shall diligently pursue
the same to satisfactory completion;

 

(E)Lender
shall be satisfied that any operating deficits, including all scheduled payments of principal and interest under the Note, which
will be incurred with respect to the Property as a result of the occurrence of any such Casualty or Condemnation, whichever the
case may be, will be covered out of (1) the Net Proceeds, (2) the insurance coverage referred to in Section 6.1(a)(ii)
hereof, if applicable, or (3) by other funds of Borrower or Master Tenant;

 

(F)Lender
shall be satisfied that the Restoration will be completed on or before the earliest to occur of (1) six (6) months prior to the
Maturity Date, (2) the earliest date required for such completion under the terms of any Leases, the Master Lease and the
Franchise Agreement or Replacement Franchise Agreement, as applicable, (3) such time as may be required under all applicable Legal
Requirements in order to repair and restore the Property to the condition it was in immediately prior to such Casualty or to as
nearly as possible the condition it was in immediately prior to such Condemnation, as applicable, or (4) the expiration of the
insurance coverage referred to in Section 6.1(a)(ii) hereof;

 

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(G)the
Property and the use thereof after the Restoration will be in compliance with and permitted under all applicable Legal Requirements;

 

(H)the
Restoration will not result in a permanent reduction of guest rooms at the Property and the shall be done and completed by Borrower
in an expeditious and diligent fashion and in compliance with all applicable Legal Requirements;

 

(I)such
Casualty or Condemnation, as applicable, does not result in the loss of access to the Property or the Improvements;

 

(J)the
Debt Service Coverage Ratio for the Property, after giving effect to the Restoration, shall be equal to or greater than 1.20 to
1.0;

 

(K)Borrower
shall deliver, or cause to be delivered, to Lender a signed detailed budget approved in writing by Borrower’s architect
or engineer stating the entire cost of completing the Restoration, which budget shall be subject to Lender’s approval, which
shall not be unreasonably withheld unless an Event of Default then exists;

 

(L)the
Net Proceeds (including any undisbursed insurance proceeds that the relevant insurer has agreed to disburse as restoration work
progresses), together with any cash or cash equivalent deposited by Borrower with Lender are sufficient in Lender’s discretion
to cover the cost of the Restoration; and

 

(M)the
Management Agreement and the Franchise Agreement (or a Replacement Franchise Agreement) shall remain in full force and effect
notwithstanding the occurrence of such Casualty or Condemnation.

 

(ii)The
Net Proceeds, as paid out by the relevant insurer, shall be held by Lender in an interest-bearing Eligible Account and, until
disbursed in accordance with the provisions of this Section 6.4(b), shall constitute additional security for the Debt and
Other Obligations under the Loan Documents. The Net Proceeds shall be disbursed by Lender to, or as directed by, Borrower from
time to time during the course of the Restoration, upon receipt of evidence satisfactory to Lender that (A) all materials installed
and work and labor performed (except to the extent that they are to be paid for out of the requested disbursement or are subject
to a Casualty Retainage) in connection with the Restoration have been paid for in full, and (B) there exist no notices of pendency,
stop orders, mechanic’s or materialman’s liens or notices of intention to file same, or any other liens or encumbrances
of any nature whatsoever on the Property which have not either been fully bonded to the satisfaction of Lender and discharged
of record or in the alternative fully insured to the satisfaction of Lender by the title company issuing the Title Insurance Policy.

 

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(iii)All
plans and specifications required in connection with a Restoration the cost of which shall exceed the Threshold Amount shall be
subject to prior review and acceptance in all respects by Lender and, at Lender’s election, by an independent consulting
engineer selected by Lender (the “Casualty Consultant”), such review and acceptance not to be unreasonably
withheld unless an Event of Default then exists. Lender shall have the use of the plans and specifications and all permits, licenses
and approvals required or obtained in connection with the Restoration. The identity of the contractors, subcontractors and materialmen
engaged in the Restoration in respect of any contract pursuant to which they are to receive compensation in excess of $100,000,
as well as the contracts under which they have been engaged, shall be subject to prior review and approval by Lender and the Casualty
Consultant, not to be unreasonably withheld. All reasonable costs and expenses incurred by Lender in connection with making the
Net Proceeds available for the Restoration including, without limitation, reasonable counsel fees and disbursements and the Casualty
Consultant’s fees, shall be paid by Borrower.

 

(iv)In
no event shall Lender be obligated to make disbursements of the Net Proceeds in excess of an amount equal to the costs actually
incurred from time to time for work in place as part of the Restoration, as certified by the Casualty Consultant, minus the Casualty
Retainage. The term “Casualty Retainage” means an amount equal to ten percent (10%) of the costs actually incurred
for work in place as part of the Restoration, as certified by the Casualty Consultant, until the Restoration has been completed.
The Casualty Retainage shall in no event, and notwithstanding anything to the contrary set forth above in this Section 6.4(b),
be less than the amount actually held back by Borrower and/or Master Tenant from contractors, subcontractors and materialmen engaged
in the Restoration. The Casualty Retainage shall not be released until the Casualty Consultant certifies to Lender that the Restoration
has been completed in accordance with the provisions of this Section 6.4(b) and that all approvals necessary for the
re-occupancy and use of the Property have been obtained from all appropriate governmental and quasi-governmental authorities,
and Lender receives evidence satisfactory to Lender that the costs of the Restoration have been paid in full or will be paid in
full out of the Casualty Retainage; provided, however, that Lender shall release the portion of the Casualty Retainage being held
with respect to any contractor, subcontractor or materialman engaged in the Restoration as of the date upon which the Casualty
Consultant certifies to Lender that the contractor, subcontractor or materialman has satisfactorily completed all work and has
supplied all materials in accordance with the provisions of the contractor’s, subcontractor’s or materialman’s
contract, the contractor, subcontractor or materialman delivers the lien waivers (or conditional lien waivers) and evidence of
payment in full, upon application of the funds so released, of all sums due to the contractor, subcontractor or materialman as
may be reasonably requested by Lender or by the title company issuing the Title Insurance Policy, and, if requested by Lender,
Lender receives an endorsement to the Title Insurance Policy insuring the continued priority of the lien of the Security Instrument
and evidence of payment of any premium payable for such endorsement. If required by Lender, the release of any such portion of
the Casualty Retainage shall be approved by the surety company, if any, which has issued a payment or performance bond with respect
to the contractor, subcontractor or materialman.

 

(v)Lender
shall not be obligated to make disbursements of the Net Proceeds more frequently than once every calendar month.

 

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(vi)If
at any time the Net Proceeds or the undisbursed balance thereof shall not, in the opinion of Lender in consultation with the Casualty
Consultant, be sufficient to pay in full the balance of the costs which are estimated by the Casualty Consultant to be incurred
in connection with the completion of the Restoration, Borrower shall deposit the deficiency (the “Net Proceeds Deficiency”)
with Lender before any further disbursement of the Net Proceeds shall be made. The Net Proceeds Deficiency deposited with Lender
shall be held by Lender and shall be disbursed for costs actually incurred in connection with the Restoration on the same conditions
applicable to the disbursement of the Net Proceeds, and until so disbursed pursuant to this Section 6.4(b) shall constitute
additional security for the Debt and Other Obligations under the Loan Documents.

 

(vii)Provided
no continuing Event of Default shall then exist, after the Casualty Consultant certifies to Lender that the Restoration has been
completed in accordance with the provisions of this Section 6.4(b), and the receipt by Lender of evidence satisfactory
to Lender that all costs incurred in connection with the Restoration have been paid in full, the excess, if any, of the Net Proceeds
(and the remaining balance, if any, of the Net Proceeds Deficiency) deposited with Lender shall be (1) if a Cash Sweep Period
then exists, deposited in the Cash Management Account to be disbursed in accordance with this Agreement, and (2) if no Cash
Sweep Period then exists, disbursed to or in accordance with the instructions of Borrower.

 

(c)All
Net Proceeds not required (i) to be made available for the Restoration or (ii) to be returned to Borrower as excess Net Proceeds
pursuant to Section 6.4(b)(vii) hereof may be retained and applied by Lender toward the payment of the Debt in accordance
with Section 9(b) of the Note, whether or not then due and payable in such order, priority and proportions as Lender in
its discretion shall deem proper (provided that, other than during the existence of an Event of Default, no prepayment premium
shall be payable in connection therewith), or, at the discretion of Lender, the same may be paid, either in whole or in part,
to or at the direction of Borrower for such purposes as Lender shall approve, in its discretion.

 

(d)In
the event of foreclosure of the Security Instrument, or other transfer of title to the Property in extinguishment in whole or
in part of the Debt all right, title and interest of Borrower in and to the Policies that are not blanket Policies then in force
concerning the Property and all proceeds payable thereunder shall thereupon vest in the purchaser at such foreclosure or Lender
or other transferee in the event of such other transfer of title.

 

ARTICLE
VII

RESERVE FUNDS

 

Section
7.1Required Repairs.

 

7.1.1.
Deposits. Borrower shall complete (or cause the completion of) the repairs at the Property, as more particularly set forth
on Schedule II hereto (such repairs hereinafter referred to as “Required Repairs”). Borrower shall complete
or cause the completion of the Required Repairs on or before the required deadline for each repair as set forth on Schedule
II. It shall be an Event of Default under this Agreement if (a) Borrower does not complete (or cause the completion of) the
Required Repairs at the Property by the required deadline for each repair as set forth on Schedule II, or (b) Borrower
does not satisfy (or cause the satisfaction of) each condition contained in Section 7.1.2 hereof. Subject to Section
7.6(b) hereof, upon the occurrence of such an Event of Default, Lender, at its option, may withdraw all Required Repair Funds
from the Required Repair Account and Lender may apply such funds either to completion of the Required Repairs at the Property
or toward payment of the Debt in such order, proportion and priority as Lender may determine in its discretion. Lender’s
right to withdraw and apply Required Repair Funds shall be in addition to all other rights and remedies provided to Lender under
this Agreement and the other Loan Documents. On the Closing Date, Borrower shall deposit with Lender the amount for the Property
set forth on such Schedule II hereto to perform the Required Repairs for the Property. Amounts so deposited with Lender
shall be held by Lender in accordance with Section 7.6 hereof. Amounts so deposited shall hereinafter be referred to as
Borrower’s “Required Repair Fund” and the account in which such amounts are held shall hereinafter be
referred to as Borrower’s “Required Repair Account.”

 

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7.1.2.
Release of Required Repair Funds. Lender shall disburse to Borrower the Required Repair Funds from the Required Repair Account
from time to time upon satisfaction by Borrower of each of the following conditions: (a) Borrower shall submit a written request
for payment to Lender at least fifteen (15) Business Days prior to the date on which Borrower requests such payment be made and
specifies the Required Repairs to be paid, (b) on the date such request is received by Lender and on the date such payment is
to be made, no Default or Event of Default shall exist and remain uncured, (c) Lender shall have received an Officers’ Certificate
(i) stating that all Required Repairs to be funded by the requested disbursement have been completed in good and workmanlike manner
and in accordance with all applicable federal, state and local laws, rules and regulations, such certificate to be accompanied
by a copy of any license, permit or other approval by any Governmental Authority required to commence or complete the Required
Repairs, (ii) identifying each Person that supplied materials or labor in connection with the Required Repairs to be funded by
the requested disbursement, and (iii) stating that each such Person has been paid in full or will be paid in full upon such disbursement,
such Officers’ Certificate to be accompanied by lien waivers or other evidence of payment satisfactory to Lender, (d) at
Lender’s option, if the cost of the Immediate Repairs exceeds $50,000, a title search for the Property indicating that the
Property is free from all liens, claims and other encumbrances not previously approved by Lender, and (e) Lender shall have
received such other evidence as Lender shall reasonably request that the Required Repairs to be funded by the requested disbursement
have been completed and are paid for or will be paid upon such disbursement to Borrower. Lender shall not be required to make
disbursements from the Required Repair Account with respect to the Property (i) more than once a month and (ii) unless such requested
disbursement is in an amount greater than $25,000.00 (or a lesser amount if the total amount in the Required Repair Account is
less than $25,000.00), in which case only one disbursement of the amount remaining in the account shall be made) and such disbursement
shall be made only upon satisfaction of each condition contained in this Section 7.1.2.

 

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Section
7.2Tax and Insurance Escrow Fund. Borrower shall pay to Lender (a) on the Closing Date an initial deposit and (b) on each
Payment Date thereafter (i) one-twelfth (1/12) of the Taxes and Other Charges that Lender estimates will be payable during the
next ensuing twelve (12) months in order to accumulate with Lender sufficient funds to pay all such Taxes and Other Charges at
least thirty (30) days prior to their respective delinquency dates, and (ii) one-twelfth (1/12) of the Insurance Premiums that
Lender estimates will be payable for the renewal of the coverage afforded by the Policies upon the expiration thereof in order
to accumulate with Lender sufficient funds to pay all such Insurance Premiums at least thirty (30) days prior to the expiration
of the Policies (said amounts in (a) and (b) above hereinafter called the “Tax and Insurance Escrow Fund”).
Provided, however, so long as (x) Borrower provides Lender with satisfactory evidence (as determined by Lender) that Guarantor
maintains blanket policies of insurance covering substantially all real property owned directly or indirectly by Guarantor, including,
without limitation, the Property and in accordance with Section 6.1 hereof and (x) no monetary Event of Default shall have
occurred, the provisions of this Section with regard to Insurance Premiums shall not be applicable, until and unless Lender elects
to apply such provisions following (i) the issuance by any insurer or its agent of any notice of cancellation, termination, or
lapse of any insurance coverage required under Section 6.1 hereof, (ii) any cancellation, termination, or lapse of any
insurance coverage required under Section 6.1 hereof whether or not any notice is issued, (iii) Lender having not received
from Borrower evidence of insurance coverages as required by and in accordance with the terms of Section 6.1 hereof, or
(iv) during the existence of any Event of Default. Lender shall apply the Tax and Insurance Escrow Fund to payments of Taxes and
Insurance Premiums required to be made by Borrower pursuant to Section 5.1.2 hereof and under the Security Instrument.
In making any payment relating to the Tax and Insurance Escrow Fund, Lender may do so according to any bill, statement or estimate
procured from the appropriate public office (with respect to Taxes) or insurer or agent (with respect to Insurance Premiums),
without inquiry into the accuracy of such bill, statement or estimate or into the validity of any tax, assessment, sale, forfeiture,
tax lien or title or claim thereof. If the amount of the Tax and Insurance Escrow Fund shall exceed the amounts due for Taxes,
Other Charges and Insurance Premiums pursuant to Section 5.1.2 hereof, Lender shall, in its discretion, return any excess
to Borrower or credit such excess against future payments to be made to the Tax and Insurance Escrow Fund. If at any time Lender
reasonably determines that the Tax and Insurance Escrow Fund is not or will not be sufficient to pay Taxes, Other Charges and
Insurance Premiums by the dates set forth in (a) and (b) above, Lender shall notify Borrower of such determination and Borrower
shall increase its monthly payments to Lender by the amount that Lender estimates is sufficient to make up the deficiency at least
thirty (30) days prior to the delinquency date of the Taxes and Other Charges or thirty (30) days prior to expiration of the Policies,
as the case may be.

 

Section
7.3Replacements and Replacement Reserve.

 

7.3.1.
Replacement Reserve Fund. Borrower shall pay to Lender (a) on the Closing Date an initial deposit of $16,759 and (b) on each
Payment Date thereafter the Replacement Reserve Monthly Deposit for expenses with respect to Replacement incurred after the date
hereof. Amounts so deposited shall hereinafter be referred to as Borrower’s “Replacement Reserve Fund”
and the account in which such amounts are held shall hereinafter be referred to as Borrower’s “Replacement Reserve
Account.” Lender may reassess its estimate of the amount necessary for the Replacement Reserve Fund from time to time,
and may increase the monthly amounts required to be deposited into the Replacement Reserve Fund upon thirty (30) days’ notice
to Borrower if Lender determines in its discretion that an increase is necessary to maintain the proper maintenance and operation
of the Property.

 

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7.3.2.
Disbursements from Replacement Reserve Account. (14) Lender shall make disbursements from the Replacement Reserve Account
to pay, or to reimburse Borrower or Master Tenant, for the costs of the Replacements only. Lender shall not be obligated to make
disbursements from the Replacement Reserve Account to pay, or to reimburse Borrower or Master Tenant, for the costs of routine
maintenance to the Property, replacements of inventory or for costs which are to be reimbursed from the Required Repair Fund or
of a type not typically accounted for as an “FF&E” expense or of inventory consumed in the ordinary course of
the operation of the Property.

 

(b)Lender
shall, upon written request from Borrower or Master Tenant and satisfaction of the requirements set forth in this Section 7.3.2,
disburse to Borrower or Master Tenant, as the case may be, amounts from the Replacement Reserve Account necessary to pay for the
actual approved costs of Replacements or to reimburse Borrower or Master Tenant therefor, upon completion of such Replacements
(or to pay vendors’ required deposits as provided under the terms of the contract relating to Borrower’s purchase
of such Replacements, or upon partial completion, or to pay required installment payments, in the case of Replacements made pursuant
to Section 7.3.2(e) hereof) as determined by Lender. In no event shall Lender be obligated to disburse funds from the Replacement
Reserve Account if a Default or an Event of Default exists.

 

(c)Each
request for disbursement from the Replacement Reserve Account shall be in a form specified or approved by Lender and shall specify
(i) the specific Replacements for which the disbursement is requested, (ii) the quantity and price of each item purchased, if
the Replacement includes the purchase or replacement of specific items, (iii) the price of all materials (grouped by type or category)
used in any Replacement other than the purchase or replacement of specific items, and (iv) the cost of all contracted labor or
other services applicable to each Replacement for which such request for disbursement is made. With each request Borrower, or
Master Tenant, shall certify that all Replacements for which such disbursement is requested have been or will be made in accordance
with all applicable Legal Requirements of any Governmental Authority having jurisdiction over the Property (or, in the case of
a vendor’s required deposit, that such deposit is due and payable). Each request for disbursement shall include copies of
invoices for all items or materials purchased and all contracted labor or services provided, or for the relevant required vendor’s
deposit and, if Borrower or Master Tenant is seeking reimbursement rather than payment, evidence satisfactory to Lender of payment
of all such amounts. Except as provided in this Section 7.3.2 with respect to required vendor’s deposits or in Section
7.3.2(e) hereof, each request for disbursement from the Replacement Reserve Account shall be made only after completion of
the Replacement for which disbursement is requested. Borrower shall provide, or cause Master Tenant to provide, Lender evidence
of completion of the subject Replacement satisfactory to Lender in its reasonable judgment.

 

(d)Borrower
shall pay, or shall cause Master Tenant to pay, all invoices in connection with the Replacements with respect to which a disbursement
is requested prior to submitting such request for disbursement from the Replacement Reserve Account or, at the request of Borrower
or Master Tenant, Lender shall issue checks, payable to Borrower or Master Tenant, as applicable (or, in respect of any requested
check in excess of $25,000, joint checks payable to Borrower or Master Tenant (as applicable) and the contractor, supplier, materialman,
mechanic, subcontractor or other party to whom payment is due in connection with a Replacement. In the case of payments made by
joint check, Lender may require a conditional waiver of lien from each Person who is to receive payment from such payment prior
to Lender’s disbursement thereof from the Replacement Reserve Account. In addition, as a condition to any disbursement,
Lender may require Borrower to obtain lien waivers, or conditional lien waivers, from each contractor, supplier, materialman,
mechanic or subcontractor who receives payment in an amount equal to or greater than $100,000.00 for completion of its work or
delivery of its materials. Any lien waiver or conditional lien waiver delivered hereunder shall conform to the requirements of
applicable law and shall cover all work performed and materials supplied (including equipment and fixtures) for the Property by
that contractor, supplier, subcontractor, mechanic or materialman through the date covered by the current reimbursement request
(or, if payment to such contractor, supplier, subcontractor, mechanic or materialmen is to be made by a joint check, the release
of lien shall be effective through the date covered by the previous release of funds request).

 

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(e)If
(i) the contractor performing such Replacement requires periodic payments pursuant to terms of a written contract, and (ii) in
the case of a Replacement the cost of which exceeds $100,000.00, Lender has approved in writing in advance (such approval not
to be unreasonably withheld, conditioned or delayed) such periodic payments, a request for reimbursement from the Replacement
Reserve Account may be made after completion of a portion of the work under such contract, provided (A) such contract requires
payment upon completion of such portion of the work or payment of a final installment prior to delivery of the Replacements to
which such contract relates, (B) the materials for which the request is made are on site at the Property and are properly secured
or have been installed in the Property, or delivery thereof is conditioned upon payment of the requested disbursement, (C) all
other conditions in this Agreement for disbursement have been satisfied, (D) funds remaining in the Replacement Reserve Account
are, in Lender’s reasonable judgment, sufficient to complete such Replacement, and (E) if required by Lender in respect
of any Replacement the cost of which exceeds $100,000 and which involves the performance of work to the Property by a contractor
engaged for such purpose, each contractor or subcontractor receiving payments under such contract shall provide a waiver of lien
with respect to amounts which have been paid to that contractor or subcontractor.

 

(f)Borrower
shall not make a request for disbursement from the Replacement Reserve Account more frequently than once in any calendar month
and (except in connection with the final disbursement) the total cost of all Replacements in any request shall not be less than
$5,000.00.

 

7.3.3.
Performance of Replacements. (a) Borrower shall make or cause Master Tenant to make Replacements when required in order
to keep the Property in condition and repair consistent with other comparable properties in the same market segment in the metropolitan
area in which the Property is located, the brand standards provided in the Franchise Agreement and to keep the Property or any
portion thereof from deteriorating. Borrower shall complete or cause Master Tenant to complete all Replacements in a good and
workmanlike manner as soon as practicable following the commencement of making each such Replacement.

 

(b)Lender
reserves the right, at its option, to approve each contract or work order with any materialman, mechanic, supplier, subcontractor,
contractor or other party providing labor or materials in connection with the Replacements the total contracted-for payments to
which exceed $100,000. Upon Lender’s request, Borrower shall assign to Lender any such contract or subcontract to which
Borrower is a party, or cause Master Tenant to assign to Borrower, and then shall assign to Lender, any such contract or subcontract
to which Master Tenant is a party.

 

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(c)In
the event Lender determines in its reasonable discretion that any Replacement is not being performed in a workmanlike or timely
manner or that any Replacement has not been completed in a workmanlike or timely manner or any Replacement does not comply with
brand standards under the Franchise Agreement and such failure continues for more than thirty (30) days after notice from Lender
to Borrower, Lender shall have the option (upon five (5) Business Days’ notice to Borrower, except in the case of an emergency)
to withhold disbursement for such unsatisfactory Replacement and to proceed under existing contracts or to contract with third
parties to complete such Replacement and to apply the Replacement Reserve Fund toward the labor and materials necessary to complete
such Replacement, without providing any further notice to Borrower and to exercise any and all other remedies available to Lender
upon an Event of Default hereunder.

 

(d)In
order to facilitate Lender’s completion or making of such Replacements pursuant to Section 7.3.3(c) above, Borrower
grants Lender the right, during the existence of an Event of Default or as necessary to respond to emergency conditions, to enter
onto the Property and perform any and all work and labor necessary to complete or make such Replacements or employ watchmen to
protect the Property from damage. All sums so expended by Lender, to the extent not from the Replacement Reserve Fund, shall be
deemed to have been advanced under the Loan to Borrower and secured by the Security Instrument. For this purpose Borrower constitutes
and appoints Lender its true and lawful attorney in fact with full power of substitution to complete or undertake such Replacements
in the name of Borrower. Such power of attorney shall be deemed to be a power coupled with an interest and cannot be revoked.
Borrower empowers said attorney in fact as follows: (i) to use any funds in the Replacement Reserve Account for the purpose of
making or completing such Replacements; (ii) to make such additions, changes and corrections to such Replacements as shall be
necessary or desirable to complete such Replacements; (iii) to employ such contractors, subcontractors, agents, architects and
inspectors as shall be required for such purposes; (iv) to pay, settle or compromise all existing bills and claims which are or
may become Liens against the Property, or as may be necessary or desirable for the completion of such Replacements, or for clearance
of title; (v) to execute all applications and certificates in the name of Borrower which may be required by any of the contract
documents; (vi) to prosecute and defend all actions or proceedings in connection with the Property or the rehabilitation and repair
of the Property; and (vii) to do any and every act which Borrower might do in its own behalf to fulfill the terms of this Agreement.

 

(e)Nothing
in this Section 7.3.3 shall: (i) make Lender responsible for making or completing any Replacements; (ii) require Lender
to expend funds in addition to the Replacement Reserve Fund to make or complete any Replacement; (iii) obligate Lender to proceed
with any Replacements; or (iv) obligate Lender to demand from Borrower additional sums to make or complete any Replacement.

 

(f)Borrower
shall permit, and shall cause Master Tenant to permit, Lender and Lender’s agents and representatives (including Lender’s
engineer, architect, or inspector) or third parties making Replacements pursuant to this Section 7.3.3 to enter onto the
Property during normal business hours (subject to the rights of Tenants under their Leases or Hotel Transactions) to inspect the
progress of any Replacements and all materials being used in connection therewith, to examine all plans and shop drawings relating
to such Replacements which are or may be kept at the Property, and to complete any Replacements made pursuant to this Section
7.3.3. Borrower shall cause, or shall cause Master Tenant to cause, all contractors and subcontractors to cooperate with Lender
or Lender’s representatives or such other persons described above in connection with inspections described in this Section
7.3.3(f) or the completion of Replacements pursuant to this Section 7.3.3.

 

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(g)Lender
may require an inspection of the Property at Borrower’s expense prior to making a disbursement in excess of $100,000 from
the Replacement Reserve Account in respect of any completed Replacement in in order to verify completion of the Replacements for
which reimbursement is sought. Lender may require that such inspection be conducted by an appropriate independent qualified professional
selected by Lender or may require a copy of a certificate of completion by an independent qualified professional acceptable to
Lender prior to the disbursement of any amount in excess of $100,000 from the Replacement Reserve Account. Borrower shall pay
the expense of the inspection as required hereunder, whether such inspection is conducted by Lender or by an independent qualified
professional.

 

(h)The
Replacements and all materials, equipment, fixtures, or any other item comprising a part of any Replacement shall be constructed,
installed or completed, as applicable, free and clear of all mechanic’s, materialmen’s or other liens (except for
those Liens existing on the date of this Agreement which have been approved in writing by Lender or otherwise exist in compliance
with the Loan Documents).

 

(i)Before
each disbursement from the Replacement Reserve Account, Lender may require Borrower to provide Lender with a search of title to
the Property effective to the date of the disbursement, which search shows that no mechanic’s or materialmen’s liens
or other liens of any nature have been placed against the Property since the date of recordation of the related Security Instrument
and that title to the Property is free and clear of all Liens (other than the lien of the related Security Instrument and any
other Liens previously approved in writing by Lender, if any).

 

(j)All
Replacements shall comply with all applicable Legal Requirements of all Governmental Authorities having jurisdiction over the
Property and applicable insurance requirements including applicable building codes, special use permits, environmental regulations,
and requirements of insurance underwriters.

 

(k)In
addition to any insurance required under the Loan Documents, Borrower shall to the extent applicable provide or cause to be provided
workmen’s compensation insurance, builder’s risk, and public liability insurance and other insurance to the extent
required under applicable law in connection with a particular Replacement. All such policies shall be in form and amount reasonably
satisfactory to Lender. All such policies which can be endorsed with standard mortgagee clauses making loss payable to Lender
or its assigns shall be so endorsed. Certified copies of such policies shall be delivered to Lender.

 

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7.3.4.
Failure to Make Replacements. (a) It shall be an Event of Default under this Agreement if Borrower fails to comply with
any provision of this Section 7.3 and such failure is not cured within thirty (30) days after notice from Lender; provided,
however, if such failure is not capable of being cured within said thirty (30) day period, then provided that Borrower commences,
or causes commencement of, action to complete such cure and thereafter diligently proceeds to complete such cure (or causes it
to be so completed), such thirty (30) day period shall be extended for such time as is reasonably necessary for Borrower or Master
Tenant, in the exercise of due diligence, to cure such failure, but such additional period of time shall not exceed ninety (90)
days. Subject to Section 7.6(b) hereof, upon the occurrence and during the continuation of such an Event of Default, Lender
may use the Replacement Reserve Fund (or any portion thereof) for any purpose, including completion of the Replacements as provided
in Section 7.3.3, or for any other repair or replacement to the Property or toward payment of the Debt in such order, proportion
and priority as Lender may determine in its sole discretion. Lender’s right to withdraw and apply the Replacement Reserve
Fund shall be in addition to all other rights and remedies provided to Lender under this Agreement and the other Loan Documents.

 

(b)Nothing
in this Agreement shall obligate Lender to apply all or any portion of the Replacement Reserve Fund on account of an Event of
Default to payment of the Debt or in any specific order or priority.

 

7.3.5.
Balance in the Replacement Reserve Account. The insufficiency of any balance in the Replacement Reserve Account shall not
relieve Borrower from its obligation to fulfill all preservation and maintenance covenants in the Loan Documents.

 

Section
7.4Specified Tenant Reserve.

 

7.4.1.
Deposits to Specified Tenant Reserve Fund. Upon Lender’s receipt of any funds resulting from the occurrence of a Specified
Tenant Deposit Event, such funds shall be deposited into a reserve account for completion of the “Purchaser’s Outstanding
Conditions” (as such term is defined in the Escrow Agreement). Amounts so deposited shall hereinafter be referred to as
the “Specified Tenant Reserve Funds” and the account to which such amounts are held shall hereinafter be referred
to as the “Specified Tenant Reserve Account”.

 

7.4.2.
Withdrawal of Specified Tenant Reserve Funds. Lender shall make disbursements from the Specified Tenant Reserve Account to
pay, or to reimburse Borrower or Master Tenant, for the costs of completing the Purchaser’s Outstanding Conditions only.
Lender shall make disbursements as requested by Borrower on a monthly basis in increments of no less than $5,000.00 upon delivery
by Borrower or Master Tenant of (i) Lender’s standard form of draw request accompanied by copies of paid invoices for the
amounts requested, (ii) if required by Lender, lien waivers and releases from all parties furnishing materials and/or services
in connection with the requested payment, and (iii) such other evidence of completion of the work as Lender shall reasonably require.
Lender may require an inspection of the Property at Borrower’s expense prior to making a monthly disbursement in order to
verify completion of improvements for which reimbursement is sought.

 

 

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Section
7.5Excess Cash Flow Reserve Fund.

 

7.5.1.
Deposits to Excess Cash Flow Reserve Account. During a Cash Sweep Period Borrower shall deposit with Lender, or shall cause
to be deposited with Lender, all Excess Cash Flow in the Cash Management Account, which shall be held by Lender as additional
security for the Master Lease (in the case of funds belonging to Master Tenant (“Master Tenant’s Excess Cash Flow”))
or the Loan (in the case of funds belonging to Borrower (“Borrower’s Excess Cash Flow”)), and amounts
so held shall be hereinafter referred to as the “Excess Cash Flow Reserve Fund” and the account to which such
amounts are held shall hereinafter be referred to as the “Excess Cash Flow Reserve Account”. Lender shall establish
sub-accounts within the Excess Cash Flow Reserve Account for Borrower’s Excess Cash Flow (“Borrower’s Excess
Cash Flow Subaccount”) and for Master Tenant’s Excess Cash Flow (“Master Tenant’s Excess Cash Flow
Subaccount”). Pursuant to the terms of the Cash Management Agreement, Excess Cash Flow shall be allocated between Master
Tenant’s Excess Cash Flow and Borrower’s Excess Cash Flow as set forth in written instructions from Master Tenant
to Borrower and Lender. All funds in the Borrower’s Excess Cash Flow Subaccount shall be held as additional collateral for
the Loan. All funds in the Master Tenant’s Excess Cash Flow Subaccount shall be held as additional collateral for Master
Tenant’s obligations under the Master Lease (which has been collaterally assigned by Borrower to Lender).

 

7.5.2.
Release of Excess Cash Flow Reserve Funds. During a Cash Sweep Period caused solely by a DSCR Trigger Event, Lender shall,
upon Borrower’s or Master Tenant’s request, make Master Tenant’s Excess Cash Flow available for the payment
of payroll, utilities and food services for up to six (6) consecutive months (but in any event, not more than twelve (12) months
in the aggregate during the term of the Loan) to the extent that there is insufficient current cash flow from the Property for
the payment of same, provided that (a) the total amount disbursed to Borrower or Master Tenant, as applicable, for each such expenditure
shall not exceed 110% of the amount set forth in the Approved Annual Budget and (b) no Event of Default then exists. Upon the
occurrence of a Cash Sweep Event Cure, all Excess Cash Flow Reserve Funds shall be deposited into the Cash Management Account
to be disbursed in accordance with the Cash Management Agreement. Any Excess Cash Flow Reserve Funds remaining after the Debt
has been paid in full or the Loan has been defeased shall be paid to Borrower or Master Tenant, as either of them may direct.

 

Section
7.6Reserve Funds, Generally. (a) Borrower grants to Lender a first-priority perfected security interest in all of
its right, title and interest in and to each of the Reserve Funds and any and all monies now or hereafter deposited in each Reserve
Fund (provided that, in the case of the Master Tenant’s Excess Cash Flow or other funds belonging to Master Tenant pursuant
to Section 3.4 of the Cash Management Agreement, Borrower collaterally assigns to Lender Borrower’s security interest therein,
Borrower collaterally assigns to Lender Borrower’s security interest therein) as additional security for payment of the
Debt. Until expended or applied in accordance herewith, the Reserve Funds, to the extent of Borrower’s interest therein
shall constitute additional security for the Debt, and in the case of Master Tenant’s Excess Cash Flow, for the obligations
of Master Tenant under the Master Lease.

 

(b)Upon
the occurrence of an Event of Default and the acceleration of the Loan by Lender, Lender may, in addition to any and all other
rights and remedies available to Lender, apply any sums then present in any or all of the Reserve Funds (including, without limitation,
any and all Master Tenant’s Excess Cash Flow) to the payment of the Debt in any order in its sole discretion. To the extent
of any outstanding obligations of Master Tenant under the Master Lease, such application shall be deemed to have been paid in
respect of such obligations. If an Event of Default then exists but Lender has not accelerated the Loan, Lender may, in addition
to any and all other rights and remedies available to Lender, apply any sums then present in any or all of the Reserve Funds that
would constitute rent under the Master Lease (including, without limitation, any and all Borrower’s Excess Cash Flow) to
the payment of the Debt in any order in its sole discretion.

 

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(c)The
Reserve Funds shall not constitute trust funds and may be commingled with other monies held by Lender. The Reserve Funds shall
be held in an Eligible Account in Permitted Investments as directed by Lender or Lender’s Servicer. Unless expressly provided
for in this Article VII, all interest on a Reserve Fund shall not be added to or become a part thereof and shall be the
sole property of and shall be paid to Lender. Borrower or Master Tenant, as the case may be, shall be responsible for payment
of any federal, state or local income or other tax applicable to the interest earned on the Reserve Funds credited or paid to
it.

 

(d)Neither
Borrower nor Master Tenant shall, without obtaining the prior written consent of Lender, further pledge, assign or grant any security
interest in any Reserve Fund or the monies deposited therein or permit any lien or encumbrance to attach thereto, or any levy
to be made thereon, or authorize any UCC-1 Financing Statements, except those naming Lender as the secured party, to be filed
with respect thereto.

 

(e)Lender
and Servicer shall not be liable for any loss sustained on the investment of any funds constituting the Reserve Funds provided
that they are invested in Permitted Investments. Borrower shall indemnify Lender and Servicer and hold Lender and Servicer harmless
from and against any and all actions, suits, claims, demands, liabilities, losses, damages, obligations and costs and expenses
(including litigation costs and reasonable attorneys’ fees and expenses) arising from or in any way connected with the Reserve
Funds or the performance of the obligations for which the Reserve Funds were established, except to the extent due to Lender’s
or Servicer’s willful misconduct or gross negligence. At Lender’s request, Borrower shall assign, or shall cause Master
Tenant to assign, to Borrower upon which Borrower shall collaterally assign to Lender all rights and claims Borrower may have
against all Persons supplying labor, materials or other services which are to be paid from or secured by the Reserve Funds; provided,
however, that Lender may not pursue any such right or claim unless an Event of Default has occurred and remains uncured.

 

(f)Except
as may otherwise be provided in the Cash Management Agreement, the required monthly deposits into the Reserve Funds and the Monthly
Debt Service Payment Amount shall be added together and shall be paid, or caused to be paid, as an aggregate sum by Borrower to
Lender.

 

(g)Any
amount remaining in the Reserve Funds after the Debt has been paid in full or defeased shall be returned to Borrower or Master
Tenant, at the direction of either of them.

 

 

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Section
7.7Free Rent Reserve.

 

7.7.1.
Free Rent Reserve Fund. Borrower shall pay (or shall cause Master Tenant to pay) to Lender on the Closing Date the amount
of $14,720 (the “Free Rent Reserve Deposit”), which amount equals the sum of all outstanding free rent, partial
rent, rebate of rent or other payments, credits, allowances or abatements required to be given by Master Tenant to any commercial
Tenant (the “Free Rent”). Amounts so deposited shall hereinafter be referred to as the “Free Rent
Reserve Fund” and the account in which such amounts are held shall hereinafter be referred to as the “Free
Rent Reserve Account”. All interest earned on the Free Rent Reserve Fund shall be for the benefit of Master Tenant but
shall be added to and become a part of the Free Rent Reserve Fund.

 

7.7.2.
Withdrawal of Free Rent Reserve Funds. Provided no Default or an Event of Default hereunder exists, Lender shall make disbursements
from the Free Rent Reserve Fund to (or at the direction of) Master Tenant pursuant to the schedule of Free Rent set forth on Schedule
VI hereto so long as Lender has received a Free Rent Reserve Estoppel from the applicable Tenant.

 

ARTICLE
VIII

DEFAULTS

 

Section
8.1Event of Default. (a) Each of the following events shall constitute an event of default hereunder (an “Event
of Default”):

 

(i)if
(A) any scheduled payment of principal or interest (including all amounts due on the Maturity Date) or any payment to a Reserve
Fund is not paid when due or (B) any other payment of any portion of the Debt is not paid within five (5) days after notice to
Borrower;

 

(ii)if
any of the Taxes or Other Charges, unless being contested in accordance with the Loan Documents, are not paid prior to delinquency;

 

(iii)if
the Policies are not kept in full force and effect, or if certified copies of the Policies (or other evidence of coverage satisfactory
to Lender and as may be expressly permitted hereunder) are not delivered to Lender upon request within the applicable time periods
as provided herein, provided, that Borrower shall have the right to cure such failure to deliver the certified copies (or other
evidence reasonably satisfactory to Lender) of the Policies to Lender, within five (5) Business Days of receipt of notice from
Lender;

 

(iv)if,
except with Lender’s prior written consent, a Transfer occurs in violation of the provisions of this Agreement and Article
6 of the Security Instrument;

 

(v)if
(subject to Section 8.1(a)(ix)) any representation or warranty made by Borrower or Master Tenant herein or in any other Loan
Document, or in any report, certificate, financial statement or other instrument, agreement or document furnished to Lender shall
have been false or misleading in any material respect as of the date the representation or warranty was made;

 

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(vi)if
Borrower, Master Tenant or Principal shall make an assignment for the benefit of creditors;

 

(vii)if
(A) Borrower, Principal, Master Tenant, Guarantor or any other guarantor or indemnitor under any guarantee issued in connection
with the Loan shall commence any case, proceeding or other action (I) under any existing or future law of any jurisdiction,
domestic or foreign, relating to bankruptcy, insolvency, reorganization, conservatorship or relief of debtors, seeking to have
an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debts, or
(II) seeking appointment of a receiver, trustee, custodian, conservator or other similar official for it or for all or any
substantial part of its assets, or the Borrower, Principal, Master Tenant, Guarantor or any other guarantor or indemnitor shall
make a general assignment for the benefit of its creditors; or (B) there shall be commenced against Borrower, Principal,
Master Tenant, Guarantor or any other guarantor or indemnitor any case, proceeding or other action of a nature referred to in
clause (A) above that is not dismissed within sixty (60) days of filing; or (C) there shall be commenced against the Borrower,
Principal, Master Tenant, Guarantor or any other guarantor or indemnitor any case, proceeding or other action seeking issuance
of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its assets; or (D) the
Borrower, Principal, Master Tenant, Guarantor or any other guarantor or indemnitor shall take any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of the acts set forth in clause (A), (B), or (C) above; or (E) the
Borrower, Principal, Master Tenant, Guarantor or any other guarantor or indemnitor shall generally not, or shall be unable to,
or shall admit in writing its inability to, pay its debts as they become due;

 

(viii)if
Borrower attempts to assign its rights under this Agreement or any of the other Loan Documents or any interest herein or therein
in contravention of the Loan Documents;

 

(ix)if
(1) any of the representations contained in Section 4.1.30 were breached, violated and/or false when made, or (2) Borrower
or Master Tenant breaches (A) any covenant contained in Section 4.1.30 hereof (provided that (a) if such event was inadvertent
or unintentional, (b) does not impair the status of Borrower, Master Tenant or Principal as a single purpose, bankruptcy remote
entity, and (c) is not likely to increase the risk of substantive consolidation of the assets and liability of Borrower, Master
Tenant or Principal with any other Person as evidenced in a substantive non-consolidation opinion in form and substance satisfactory
to Lender, then such event or breach shall not constitute an Event of Default if Borrower shall cure (or shall cause to be cured)
the same within ten (10) Business Days of Borrower, Master Tenant and/or Principal becoming aware of such breach or violation
(via written notice or otherwise)) or (B) there occurs any breach of any negative covenant contained in Section 5.2 hereof;

 

(x)with
respect to any term, covenant or provision set forth herein which specifically contains a notice requirement or grace period,
if Borrower shall be in default under such term, covenant or condition after the giving of such notice or the expiration of such
grace period;

 

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(xi)intentionally
omitted;

 

(xii)if
a material default has occurred and continues beyond any applicable cure period under the Management Agreement (or any Replacement
Management Agreement) and as a result of which default the Manager thereunder gives notice of termination or cancellation of the
Management Agreement or if the Management Agreement is canceled, terminated or surrendered or expires pursuant to its terms, unless
in such case Borrower and/or Master Tenant, as applicable, shall enter into a new management agreement with a Qualified Manager
in accordance with the applicable terms and provisions hereof;

 

(xiii)if
Borrower shall continue to be in Default under any of the terms, covenants or conditions of Section 9.1 hereof (provided
that Borrower shall not be deemed to be in default under Section 9.1 hereof if Borrower’s inability to satisfy any
requirement thereof is due to circumstances beyond its control, such as the unavailability of information requested by Lender),
or fails to cooperate with Lender in connection with a Securitization pursuant to the provisions of Section 9.1 hereof,
for ten (10) Business Days after notice to Borrower from Lender;

 

(xiv)if
there shall be default under any of the other Loan Documents beyond any applicable cure periods contained in such documents, whether
as to Borrower, Master Tenant or the Property;

 

(xv)if
(A) an Event of Default (as defined in the Master Lease) occurs under the Master Lease, or (B) if any of the Master Lease Documents
are amended, modified or terminated without the prior written consent of Lender; and/or

 

(xvi)if
a material default by Master Tenant has occurred and continues beyond any applicable cure period under the Franchise Agreement
(or any Replacement Franchise Agreement), as a result of which default the Franchisor thereunder gives notice of termination or
cancellation of the Franchise Agreement (or any Replacement Franchise Agreement), or any expiration or other termination of the
Franchise Agreement (or any Replacement Franchise Agreement) unless prior to or concurrently with any such expiration or termination
Borrower has entered into a Replacement Franchise Agreement;

 

(xvii)if
Borrower, Master Tenant or Guarantor shall continue to be in Default under any of the other terms, covenants or conditions of
this Agreement or any Loan Document not specified in subsections (i) to (xvi) above or subsection (xviii)
below, for ten (10) days after notice to Borrower or such other Person from Lender, in the case of any Default which can be cured
by the payment of a sum of money, or for thirty (30) days after notice from Lender in the case of any other Default; provided,
however, that if Lender determines that (A) such non monetary Default is susceptible of cure but cannot reasonably be cured within
such thirty (30) day period, (B) Borrower or such other Person, as applicable, shall have commenced to cure such Default within
such thirty (30) day period and thereafter diligently and expeditiously proceeds to cure the same, and (C) there is no material
impairment to the value, use or operation of the Property, then such thirty (30) day period shall be extended for such time as
is reasonably necessary for Borrower or such other Person, as applicable, in the exercise of due diligence to cure such Default,
such additional period not to exceed sixty (60) days;

 

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(xviii)if
there shall occur any other Event of Default, as defined in any other Loan Document; or

 

(xix)Borrower
shall be in default under any other deed of trust, mortgage or security agreement covering any part of the Property whether it
be superior or junior in priority to the Security Instrument (it not being implied by this clause that any such encumbrance will
be permitted).

 

(b)Upon
the occurrence of an Event of Default (other than an Event of Default described in clauses (vi), (vii) or (viii) above) and at
any time thereafter, in addition to any other rights or remedies available to it pursuant to this Agreement and the other Loan
Documents or at law or in equity, Lender may take such action, without notice or demand, that Lender deems advisable to protect
and enforce its rights against Borrower and the Property, including declaring the Debt to be immediately due and payable, and
Lender may enforce or avail itself of any or all rights or remedies provided in the Loan Documents against Borrower and any or
all of the Property, including all rights or remedies available at law or in equity; and upon any Event of Default described in
clauses (vi), (vii) or (viii) above, the Debt and Other Obligations of Borrower hereunder and under the other Loan Documents shall
immediately and automatically become due and payable, without notice or demand, and Borrower hereby expressly waives any such
notice or demand, anything contained herein or in any other Loan Document to the contrary notwithstanding.

 

Section
8.2Remedies. (a) Upon the occurrence of an Event of Default and during the continuation thereof, all or any one
or more of the rights, powers, privileges and other remedies available to Lender against Borrower under this Agreement or any
of the other Loan Documents executed and delivered by, or applicable to, Borrower or at law or in equity may be exercised by Lender
at any time and from time to time, whether or not all or any part of the Debt shall be declared due and payable, and whether or
not Lender shall have commenced any foreclosure proceeding or other action for the enforcement of its rights and remedies under
any of the Loan Documents with respect to all or any part of the Property. Any such actions taken by Lender shall be cumulative
and concurrent and may be pursued independently, singularly, successively, together or otherwise, at such time and in such order
as Lender may determine in its sole discretion, to the fullest extent permitted by law, without impairing or otherwise affecting
the other rights and remedies of Lender permitted by law, equity or contract or as set forth herein or in the other Loan Documents.
Without limiting the generality of the foregoing, Borrower agrees, to the extent permitted under applicable law, that if an Event
of Default is continuing (i) Lender is not subject to any “one action” or “election of remedies” law or
rule, and (ii) all liens and other rights, remedies or privileges provided to Lender shall remain in full force and effect until
Lender has exhausted all of its remedies against the Property and the Security Instrument has been foreclosed upon, sold and/or
otherwise realized upon in satisfaction of the Debt or the Debt has been paid in full.

 

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(b)With
respect to Borrower and the Property, nothing contained herein or in any other Loan Document, except to the extent specifically
limiting Lender’s right to take a specified action or specifically requiring Lender to take a specific action, shall be
construed as requiring Lender to resort to the Property for the satisfaction of any of the Debt in any preference or priority,
and Lender may seek satisfaction out of the Property, or any part thereof, in its discretion in respect of the Debt. In addition,
Lender shall have the right from time to time to partially foreclose the Security Instrument in any manner and for any amounts
secured by the Security Instrument then due and payable as determined by Lender in its discretion including the following circumstances:
(i) in the event Borrower defaults beyond any applicable grace period in the payment of one or more scheduled payments of principal
and interest, Lender may foreclose the Security Instrument to recover such delinquent payments or (ii) in the event Lender elects
to accelerate less than the entire outstanding principal balance of the Loan, Lender may foreclose the Security Instrument to
recover so much of the principal balance of the Loan as Lender may accelerate and such other sums secured by the Security Instrument
as Lender may elect. Notwithstanding one or more partial foreclosures, the Property shall remain subject to the Security Instrument
to secure payment of sums secured by the Security Instrument and not previously recovered.

 

(c)Lender
shall have the right from time to time during the continuance of an Event of Default to sever the Note and the other Loan Documents
into one or more separate notes, mortgages and other security documents (the “Severed Loan Documents”) in such denominations
as Lender shall determine in its discretion for purposes of evidencing and enforcing its rights and remedies provided hereunder.
Borrower shall execute and deliver to Lender from time to time, promptly after the request of Lender, a severance agreement and
such other documents as Lender shall reasonably request in order to effect the severance described in the preceding sentence,
all in form and substance reasonably satisfactory to Lender. Borrower hereby absolutely and irrevocably appoints Lender as its
true and lawful attorney, coupled with an interest, in its name and stead to make and execute all documents necessary or desirable
to effect the aforesaid severance, Borrower ratifying all that its said attorney shall lawfully do by virtue thereof; provided,
however, Lender shall not make or execute any such documents under such power until five (5) Business Days after notice has been
given to Borrower by Lender of Lender’s intent to exercise its rights under such power. Borrower shall be obligated to pay
any reasonable costs or expenses incurred in connection with the preparation, execution, recording or filing of the Severed Loan
Documents, and the Severed Loan Documents shall not contain any representations, warranties or covenants not contained in the
Loan Documents and any such representations and warranties contained in the Severed Loan Documents will be given by Borrower only
as of the Closing Date.

 

(d)If
an Event of Default exists, Borrower shall terminate (or shall cause Master Tenant to terminate) the Franchise Agreement upon
the written request of Lender or any receiver of the Property. If for any reason the Franchise Agreement is not terminated upon
such request, Lender may terminate the Franchise Agreement upon its acquisition of the Property by foreclosure or deed in lieu
thereof, notwithstanding any requirement of the Franchisor that Lender assume the Franchise Agreement or enter into a replacement
Franchise Agreement. Borrower shall pay (or shall cause Master Tenant to pay) any liquidated damages owed to Franchisor in connection
with any termination of the Franchise Agreement pursuant to this Section 8.2(d).

 

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(e)As
used in this Section 8.2, a “foreclosure” shall include, without limitation, any sale by power of sale.

 

Section
8.3Remedies Cumulative; Waivers. The rights, powers and remedies of Lender under this Agreement shall be cumulative
and not exclusive of any other right, power or remedy which Lender may have against Borrower pursuant to this Agreement or the
other Loan Documents, or existing at law or in equity or otherwise. Lender’s rights, powers and remedies may be pursued
singularly, concurrently or otherwise, at such time and in such order as Lender may determine in Lender’s discretion. No
delay or omission to exercise any remedy, right or power accruing upon an Event of Default shall impair any such remedy, right
or power or shall be construed as a waiver thereof, but any such remedy, right or power may be exercised from time to time and
as often as may be deemed expedient. A waiver of one Default or Event of Default with respect to Borrower shall not be construed
to be a waiver of any subsequent Default or Event of Default by Borrower or to impair any remedy, right or power consequent thereon.

 

ARTICLE
IX

SPECIAL PROVISIONS

 

Section
9.1Securitization.

 

9.1.1.
Sale of Notes and Securitization. (a) Borrower acknowledges and agrees that Lender may sell all or any portion of the
Loan and the Loan Documents, or issue one or more participations therein, or consummate one or more private or public securitizations
of rated single- or multi-class securities (the “Securities”) secured by or evidencing ownership interests
in all or any portion of the Loan and the Loan Documents or a pool of assets that include the Loan and the Loan Documents (such
sales, participations or securitizations, collectively, a “Securitization”).

 

(b)At
the request of Lender, and to the extent not already required to be provided by or on behalf of Borrower under this Agreement,
Borrower shall use reasonable efforts to provide information not in the possession of Lender or which may be reasonably required
by Lender or take other actions reasonably required by Lender, in each case in order to satisfy the market standards to which
Lender customarily adheres or which may be reasonably required by prospective investors or the Rating Agencies in connection with
any such Securitization. Lender shall have the right to provide to prospective investors and the Rating Agencies any information
in its possession, including financial statements relating to Borrower, Guarantor, if any, the Property and any Tenant of the
Improvements. Borrower acknowledges that certain information regarding the Loan and the parties thereto and the Property may be
included in a private placement memorandum, prospectus or other disclosure documents. Borrower agrees that each of Borrower, Principal,
Guarantor and their respective officers and representatives, shall, at Lender’s request, cooperate with Lender’s efforts
to arrange for a Securitization in accordance with the market standards to which Lender customarily adheres or which may be required
by prospective investors or the Rating Agencies in connection with any such Securitization. Borrower, Principal and Guarantor
agree to review, at Lender’s request in connection with the Securitization, the Disclosure Documents as such Disclosure
Documents relate to Borrower, Principal, Master Tenant, Guarantor, the Property and the Loan, including, the sections entitled
“Risk Factors,” “Special Considerations,” “Description of the Security Instrument,” “Description
of the Mortgage Loan and Mortgaged Property,” “The Manager,” “The Borrower,” and “Certain
Legal Aspects of the Mortgage Loan,” and shall confirm that the factual statements and representations contained in such
sections and such other information in the Disclosure Documents (to the extent such information relates to, or is based on, or
includes any information regarding the Property, Borrower, Master Tenant, Guarantor, Manager or the Loan) do not, to such Person’s
knowledge, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements
made, in the light of the circumstances under which they were made, not misleading.

 

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(c)Borrower
agrees to make upon Lender’s written request, without limitation, all structural or other changes to the Loan (including
delivery of one or more new component notes to replace the original note or modify the original note to reflect multiple components
of the Loan and such new notes or modified note may have different interest rates and amortization schedules), modifications to
any documents evidencing or securing the Loan, creation of one or more mezzanine loans (including amending Borrower’s organizational
structure to provide for one or more mezzanine borrowers), delivery of opinions of counsel acceptable to the Rating Agencies or
potential investors and addressing such matters as the Rating Agencies or potential investors may require; provided, however,
that in creating such new notes or modified notes or mezzanine notes Borrower shall not be required to modify (i) the initial
weighted average interest rate payable under the Note, (ii) the stated maturity of the Note, (iii) the aggregate amortization
of principal of the Note, (iv) any other material economic term of the Loan, or (v) decrease the time periods during which
Borrower is permitted to perform its obligations under the Loan Documents; and such modifications shall not, in the aggregate,
have a material adverse effect on the economics of the Loan to Borrower. In connection with the foregoing, Borrower covenants
and agrees to modify the Cash Management Agreement to reflect the newly created components or mezzanine loans.

 

(d)Intentionally
Omitted.

 

(e)Borrower
hereby appoints Lender its attorney-in-fact with full power of substitution (which appointment shall be deemed to be coupled with
an interest and to be irrevocable until the Loan is paid and the Security Instrument is discharged of record, with Borrower hereby
ratifying all that its said attorney shall do by virtue thereof) to execute and deliver all documents and do all other acts and
things necessary or desirable to effect any Securitization authorized hereunder; provided, however, that unless an Event of Default
exists, Lender shall not execute or deliver any such documents or do any such acts or things under such power until five (5) days
after written notice has been given to Borrower by Lender of Lender’s intent to exercise its rights under such power. Borrower’s
failure to deliver any document or to take any other action Borrower is obligated to take hereunder with respect to any Securitization
for a period of ten (10) Business Days after such notice by Lender shall, at Lender’s option, constitute an Event of Default
hereunder.

 

9.1.2.
Securitization Costs. All reasonable third party costs and expenses incurred by Borrower and Guarantor in connection with
Borrower’s compliance with this Section 9.1 (including the fees and expenses of the Rating Agencies) shall be paid
or reimbursed by Borrower.

 

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Section
9.2Right To Release Information. Following the occurrence of any Event of Default, Lender may forward to any broker, prospective
purchaser of the Property or the Loan, or other person or entity all documents and information which Lender now has or may hereafter
acquire relating to the Debt, Borrower, Master Tenant, any Guarantor, any indemnitor, the Property and any other matter in connection
with the Loan, whether furnished by Borrower, Master Tenant, any Guarantor, any indemnitor or otherwise, as Lender determines
necessary or desirable. Borrower irrevocably waives any and all rights it may have to limit or prevent such disclosure, including
any right of privacy or any claims arising therefrom.

 

Section
9.3Exculpation. (a) Subject to the qualifications below, Lender shall not enforce the liability and obligation of
Borrower to perform and observe the obligations contained in the Note, this Agreement, the Security Instrument or the other Loan
Documents by any action or proceeding wherein a money judgment shall be sought against Borrower, except that Lender may bring
a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce
and realize upon its interest under the Note, this Agreement, the Security Instrument and the other Loan Documents, or in the
Property, the Rents, or any other collateral given to Lender pursuant to the Loan Documents; provided, however,
that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower
only to the extent of Borrower’s interest in the Property, in the Rents and in any other collateral given to Lender, and
Lender, by accepting the Note, this Agreement, the Security Instrument and the other Loan Documents, agrees that it shall not
sue for, seek or demand any deficiency judgment against Borrower in any such action or proceeding under or by reason of or under
or in connection with the Note, this Agreement, the Security Instrument or the other Loan Documents. The provisions of this Section
shall not, however, (i) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan
Documents; (ii) impair the right of Lender to name Borrower as a party defendant in any action or suit for foreclosure and sale
under the Security Instrument; (iii) affect the validity or enforceability of the Guaranty or Environmental Indemnity or any of
the rights and remedies of Lender thereunder; (iv) impair the right of Lender to obtain the appointment of a receiver; (v) impair
the enforcement of any assignment of leases and rents contained in the Security Instrument and any other Loan Documents; or (vi) constitute
a prohibition against Lender to seek a deficiency judgment against Borrower in order to fully realize the security granted by
the Security Instrument or to commence any other appropriate action or proceeding in order for Lender to exercise its remedies
against the Property.

 

(b)Nothing
contained herein shall in any manner or way release, affect or impair the right of Lender to recover, and Borrower shall be fully
and personally liable and subject to legal action, for any loss, cost, expense, damage, claim or other obligation (including reasonable
attorneys’ fees and court costs) incurred or suffered by Lender arising out of or in connection with the following:

 

(i)fraud
or material willful misrepresentation by Borrower, Master Tenant , Principal or Guarantor (or any of their respective Affiliates
which are controlled by Borrower, Master Tenant, Principal and/or Guarantor) or any agent, employee or other person with actual
or apparent authority to make statements or representations on behalf of Borrower, Master Tenant, Principal, or Guarantor (or
any of their respective Affiliates which are controlled by Borrower, Master Tenant, Principal and/or Guarantor) in connection
with the Loan (“apparent authority” meaning such authority as the principal knowingly or negligently permits the agent
to assume, or which he holds the agent out as possessing);

 

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(ii)the
gross negligence or willful misconduct of Borrower, Principal, Master Tenant or Guarantor (or any of their respective Affiliates
which are controlled by Borrower, Master Tenant, Principal and/or Guarantor), agent, or employee of the foregoing;

 

(iii)material
physical waste of the Property;

 

(iv)the
removal or disposal of any portion of the Property during the continuation of an Event of Default without the replacement of same,
to the extent the same is material to the operation of the Property;

 

(v)the misapplication, misappropriation, or conversion
by Borrower, (or any of its Affiliates which are controlled by Borrower, Master Tenant, Principal and/or Guarantor), Principal,
Master Tenant or Guarantor of (A) any Insurance Proceeds paid by reason of any loss, damage or destruction to the Property, (B)
any Awards received in connection with a Condemnation of all or a portion of the Property, (C) any Rents or other Property income
or collateral proceeds, or (D) any Rents paid more than one month in advance (including, but not limited to, security deposits);

 

(vi)during
the continuation of an Event of Default, the failure to either apply rents or other Property income, whether collected before
or after such Event of Default, to the ordinary, customary, and necessary expenses of operating the Property or, upon demand,
to deliver such rents or other Property income to Lender;

 

(vii)failure
to maintain insurance or to pay taxes and assessments (unless Lender is escrowing funds therefor and fails to make such payments
or has taken possession of the Property following an Event of Default, has received all Rents from the Property applicable to
the period for which such insurance, taxes or other items are due, and thereafter fails to make such payments) to the extent that
the revenue from the Property is sufficient to pay such amounts as well as other costs of servicing the Debt and of operating
the Property;

 

(viii)failure
to pay charges for labor or materials or other charges or judgments that can create Liens on any portion of the Property, to the
extent that the revenue from the Property is sufficient to pay such amounts as well as other costs of servicing the Debt and of
operating the Property (and other than any election by Lender not to make funds held in any applicable Reserve Fund available
therefor, so long as no Event of Default then exists and Borrower has otherwise complied with the applicable terms of the
Loan Documents related to such disbursement);

 

(ix)any
security deposits, advance deposits or any other deposits collected with respect to the Property which are not delivered to Lender
upon a foreclosure of the Property or action in lieu thereof, except to the extent any such security deposits were applied in
accordance with the terms and conditions of any of the Leases prior to the occurrence of the Event of Default that gave rise to
such foreclosure or action in lieu thereof;

 

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(x)any
failure by Borrower to comply with any of the representations, warranties or covenants set forth in Sections 4.1.37 or
5.1.19 hereof;

 

(xi)Borrower
and/or Master Tenant fails to permit on-site inspections of the Property, fails to maintain its status as a Special Purpose Entity
or comply with any representation, warranty or covenant set forth in Section 4.1.30 hereof or fails to appoint a new property
manager upon the request of Lender as permitted under this Agreement, each as required by, and in accordance with, the terms and
provisions of this Agreement or the Security Instrument;

 

(xii)Borrower
and/or Master Tenant’s failure to comply with Section 2.7 hereof, the Cash Management Agreement and/or the Clearing
Account Agreement relating to the establishment of a Clearing Account, a Cash Management Account, and/or the institution of cash
management generally;

 

(xiii)any
amendment, modification or termination of the Master Lease without Lender’s consent;

 

(xiv)any
amendment or modification of the Franchise Agreement without Lender’s consent (to the extent such consent is required under
the Loan Documents);

 

(xv)the
termination, surrender or cancellation of the Franchise Agreement by Master Tenant without Lender’s prior written consent
or the termination or cancellation of the Franchise Agreement by Franchisor (as a result of the action or omission of Borrower
or Master Tenant) prior to the expiration date of the Franchise Agreement unless such termination or cancellation is solely the
result of Master Tenant’s failure to pay the franchise fees and other charges due under the Franchise Agreement and such
failure to pay is solely the result of revenue from the Property being insufficient to pay such amounts as well as other costs
of servicing the Debt and of operating the Property provided that the foregoing shall not apply to the extent that (A) Borrower
would otherwise be liable under this subsection (xvi) and (B) during the continuance of a Cash Sweep Period, Lender has not made
funds available to Borrower to pay the charges described above; and/or

 

(xvi)failure
to provide the Evidence of Insurance in accordance with Section 10.28 hereof.

 

(c)Notwithstanding
anything to the contrary in this Agreement, the Note or any of the other Loan Documents,

 

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(i)Borrower
and any general partner of Borrower shall be personally liable for the Debt if (A) Borrower fails to obtain Lender’s prior
written consent to any voluntary Transfer if as required by this Agreement or the Security Instrument, which Transfer results
in (x) the transfer of the Property, (y) a change in control of Borrower and/or Master Tenant, and/or (z) a transfer of a fifty
percent (50%) or greater direct or indirect interest in Borrower or Master Tenant; (B) Borrower fails to obtain Lender’s
prior written consent to any Indebtedness or voluntary Lien encumbering the Property; (C) Borrower and/or Master Tenant shall
at any time hereafter make an assignment for the benefit of its creditors; (D) Borrower and/or Master Tenant fails to maintain
its status as a Special Purpose Entity or comply with any representation, warranty or covenant set forth in Section 4.1.30
hereof as required by, and in accordance with, the terms and provisions of this Agreement or the Security Instrument, and
such failure is cited as a factor in the substantive consolidation of Borrower and/or Master Tenant with any other person; (E)
other than at Lender’s written request, Borrower, Master Tenant or any Principal admits, in writing or in any legal proceeding,
its insolvency or inability to pay its debts as they become due; (F) Borrower fails to make the first full monthly payment of
principal and interest on or before the first Payment Date; (G) Borrower and/or Master Tenant files (other than at Lender’s
request), consents to, or acquiesces in a petition for bankruptcy, insolvency, dissolution or liquidation under the Bankruptcy
Code or any other Federal or State bankruptcy or insolvency law, or there is a filing of an involuntary petition against Borrower,
Master Tenant or any Principal under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law in which Borrower,
Master Tenant or Guarantor or any Principal colludes with, or otherwise assists any party in connection with such filing, or solicits
or causes to be solicited petitioning creditors for any involuntary petition against Borrower, Master Tenant or such Principal
from any party; or (H) there is substantive consolidation of Borrower, Master Tenant or any Restricted Party with any other Person
in connection with any federal or state bankruptcy proceeding involving Guarantor or any of Affiliate of Guarantor and one of
the factors cited as the bases therefor is a breach by Borrower or Master Tenant of any representation, warranty or covenant contained
in Section 4.1.30 of this Agreement.

 

(d)Nothing
herein shall be deemed to constitute a waiver by Lender of any right Lender may have under Sections 506(a), 506(b), 1111(b) or
any other provision of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall
continue to secure all of the Debt.

 

Section
9.4Matters Concerning Manager.

 

(a)If
(i) an Event of Default hereunder has occurred and remains uncured, (ii) Manager shall become subject to a Bankruptcy Action,
(iii) a default by Manager occurs under the Management Agreement that would permit Master Tenant to terminate the Management Agreement,
or (iv) a DSCR Trigger Event occurs and Lender reasonably determines that the Property is performing at less than eighty percent
(80%) of the performance of other hotels generally in the same competitive set, Borrower shall, at the request of Lender, cause
Master Tenant to terminate the Management Agreement and replace the Manager with a Qualified Manager pursuant to a Replacement
Management Agreement, it being understood and agreed that the management fee for such Qualified Manager shall not exceed then
prevailing market rates.

 

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(b)Manager
shall be permitted to earn management fees in connection with its operation of the Property equal to four percent (4.0%) of gross
operating revenues of the Property (the “Initial Management Fees”) so long as a DSCR Trigger Event does not
then exist. for so long as the Debt Service Coverage Ratio for the Property, after giving effect to such increased management
fee, shall be equal to or greater than 1.20 to 1.0. For so long as a DSCR Trigger Event exists (if ever), such management fees
shall be reduced automatically to the greater of (x) three percent (3.0%) of gross operating revenues of the Property and (y)
the then-current market management rate for property managers managing other hotels located in the Austin, Texas area and generally
in the same competitive set (the “Revised Management Fees”). In furtherance of the foregoing, Lender acknowledges
that the difference between the DSCR Trigger Management Fees and the Initial Management Fees shall not be due or paid during any
such Cash Sweep Period but may accrue during such period and be paid to Manager upon the cure of all Cash Sweep Events as funds
are available.

 

Section
9.5Servicer. At the option of Lender, the Loan may be serviced by a master servicer, primary servicer, special servicer
and/or trustee (any such master servicer, primary servicer, special servicer, and trustee, together with its agents, nominees
or designees, are collectively referred to as “Servicer”) selected by Lender and Lender may delegate all or
any portion of its responsibilities under this Agreement and the other Loan Documents to Servicer pursuant to a pooling and servicing
agreement, servicing agreement, special servicing agreement or other agreement providing for the servicing of one or more mortgage
loans (collectively, the “Servicing Agreement”) between Lender and Servicer. Borrower shall not be responsible for
any set up fees or any other initial costs relating to or arising under the Servicing Agreement, nor shall Borrower be responsible
for payment of the regular monthly master servicing fee or trustee fee due to Servicer under the Servicing Agreement or any fees
or expenses required to be borne by, and not reimbursable to, Servicer. Notwithstanding the foregoing, Borrower shall promptly
reimburse Lender on demand for the following costs and expenses payable by Lender to Servicer as a result of the Loan becoming
specially serviced: (i) any liquidation fees that are due and payable to Servicer under the Servicing Agreement in connection
with the exercise of any or all remedies permitted under this Agreement, (ii) any workout fees and special servicing fees that
are due and payable to Servicer under the Servicing Agreement, which fees may be due and payable under the Servicing Agreement
on a periodic or continuing basis, and (iii) the costs of all property inspections and/or appraisals of the Property (or any updates
to any existing inspection or appraisal) that Servicer may be required to obtain (other than the cost of regular annual inspections
required to be borne by Servicer under the Servicing Agreement).

 

ARTICLE
X

MISCELLANEOUS

 

Section
10.1Survival. This Agreement and all covenants, agreements, representations and warranties made herein and in the certificates
delivered pursuant hereto shall survive the making by Lender of the Loan and the execution and delivery to Lender of the Note,
and all such covenants and agreements shall continue in full force and effect so long as all or any of the Debt is outstanding
and unpaid (or, in the case of a defeasance, defeased) unless a longer period is expressly set forth herein or in the other Loan
Documents. Whenever in this Agreement any of the parties hereto is referred to, such reference shall be deemed to include the
legal representatives, successors and assigns of such party. All covenants, promises and agreements in this Agreement, by or on
behalf of Borrower, shall inure to the benefit of the legal representatives, successors and assigns of Lender.

 

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Section
10.2Lender’s Discretion. Whenever pursuant to this Agreement, Lender exercises any right given to it to approve
or disapprove, or any arrangement or term is to be satisfactory to Lender, the decision of Lender to approve or disapprove or
to decide whether arrangements or terms are satisfactory or not satisfactory shall (except as is otherwise specifically herein
provided) be in the sole discretion of Lender and shall be final and conclusive.

 

Section
10.3Governing Law. This Agreement shall be governed, construed, applied and enforced in accordance with the laws of the
state where the Land is located without regard to the conflicts of law provisions thereof (“Governing State”).
Borrower hereby consents to personal jurisdiction in the Governing State. JURISDICTION AND VENUE OF ANY ACTION BROUGHT TO ENFORCE
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY ACTION RELATING TO THE LOAN OR THE RELATIONSHIPS CREATED BY OR UNDER THE LOAN
DOCUMENTS (“ACTION”) SHALL, AT THE ELECTION OF LENDER, BE IN (AND IF ANY ACTION IS ORIGINALLY BROUGHT IN ANOTHER
VENUE, THE ACTION SHALL AT THE ELECTION OF LENDER BE TRANSFERRED TO) A STATE OR FEDERAL COURT OF APPROPRIATE JURISDICTION LOCATED
IN THE GOVERNING STATE. BORROWER HEREBY CONSENTS AND SUBMITS TO THE PERSONAL JURISDICTION OF THE STATE COURTS OF THE GOVERNING
STATE AND OF FEDERAL COURTS LOCATED IN THE GOVERNING STATE IN CONNECTION WITH ANY ACTION AND HEREBY WAIVES ANY AND ALL PERSONAL
RIGHTS UNDER THE LAWS OF ANY OTHER STATE TO OBJECT TO JURISDICTION WITHIN SUCH GOVERNING STATE FOR PURPOSES OF ANY ACTION. Borrower
hereby waives and agrees not to assert, as a defense to any Action or a motion to transfer venue of any Action, (i) any claim
that it is not subject to such jurisdiction, (ii) any claim that any Action may not be brought against it or is not maintainable
in those courts or that this Agreement may not be enforced in or by those courts, or that it is exempt or immune from execution,
(iii) that the Action is brought in an inconvenient forum, or (iv) that the venue for the Action is in any way improper.

 

Section
10.4Modification, Waiver in Writing. No modification, amendment, extension, discharge, termination or waiver of any provision
of this Agreement, or of the Note, or of any other Loan Document, nor consent to any departure by Borrower therefrom, shall in
any event be effective unless the same shall be in a writing signed by the party against whom enforcement is sought, and then
such waiver or consent shall be effective only in the specific instance, and for the purpose, for which given. Except as otherwise
expressly provided herein, no notice to, or demand on Borrower, shall entitle Borrower to any other or future notice or demand
in the same, similar or other circumstances.

 

Section
10.5Delay Not a Waiver. Neither any failure nor any delay on the part of Lender in insisting upon strict performance of
any term, condition, covenant or agreement, or exercising any right, power, remedy or privilege hereunder, or under the Note or
under any other Loan Document, or any other instrument given as security therefor, shall operate as or constitute a waiver thereof,
nor shall a single or partial exercise thereof preclude any other future exercise, or the exercise of any other right, power,
remedy or privilege. In particular, and not by way of limitation, by accepting payment after the due date of any amount payable
under this Agreement, the Note or any other Loan Document, Lender shall not be deemed to have waived any right either to require
prompt payment when due of all other amounts due under this Agreement, the Note or the other Loan Documents, or to declare a default
for failure to effect prompt payment of any such other amount.

 

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Section
10.6Notices. All notices, consents, approvals and requests required or permitted hereunder or under any other Loan Document
shall be given in writing and shall be effective for all purposes if hand delivered or sent by (a) certified or registered United
States mail, postage prepaid, return receipt requested or (b) expedited prepaid delivery service, either commercial or United
States Postal Service, with proof of attempted delivery, or (c) by telecopier (with answer back acknowledged) and with a second
copy to be sent to the intended recipient by any other means permitted under this Section, addressed as follows (or at such other
address and Person as shall be designated from time to time by any party hereto, as the case may be, in a written notice to the
other parties hereto in the manner provided for in this Section):

 

	 	If to Lender:	KeyBank National Association 
	 	 	11501 Outlook, Suite 300
	 	 	Overland Park, Kansas 66211
	 	 	Facsimile No.: 877-379-1625
	 	 	Attention: Loan Servicing
	 	 	 
	 	with a copy to:	Katten Muchin Rosenman LLP
	 	 	550 South Tryon Street, Suite 2900
	 	 	Charlotte, North Carolina 28202
	 	 	Attention: Daniel S. Huffenus, Esq.    
	 	 	 
	 	If to Borrower: 	Moody National Lancaster-Austin Holding, LLC
	 	 	6363 Woodway, Suite 110
	 	 	Houston, Texas 77057
	 	 	Attention: Brett C. Moody
	 	 	Facsimile No.: (713) 997-7505
	 	 	 
	 	With a copy to:	Gresham Savage Nolan & Tilden, PC
 501 W. Broadway, Suite 800
 San Diego, California 92101
 Attention: Jerome A. Grossman
 Facsimile No.: (619) 615-2180

   

A
notice shall be deemed to have been given: in the case of hand delivery, at the time of delivery; in the case of registered or
certified mail, when delivered or the first attempted delivery on a Business Day; or in the case of expedited prepaid delivery,
upon the first attempted delivery on a Business Day; or in the case of telecopy, upon sender’s receipt of a machine-generated
confirmation of successful transmission after advice by telephone to recipient that a telecopy notice is forthcoming.

 

Section
10.7Trial by Jury. TO THE FULLEST EXTENT NOW OR HEREAFTER PERMITTED BY APPLICABLE LAW, EACH OF BORROWER AND LENDER
HEREBY AGREES NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY JURY FULLY
TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO THE LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR
OTHER ACTION ARISING IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY EACH
OF BORROWER AND LENDER, AND IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL
BY JURY WOULD OTHERWISE ACCRUE. EACH OF BORROWER AND LENDER IS HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING
AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY SUCH OTHER PARTY.

 

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Section
10.8Headings. The Article and/or Section headings and the Table of Contents in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement for any other purpose.

 

Section
10.9Severability. Wherever possible, each provision of this Agreement shall be interpreted in such manner as to be effective
and valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under applicable law,
such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.

 

Section
10.10Preferences. Lender shall have the continuing and exclusive right to apply or reverse and reapply any and all payments
by Borrower received during the continuation of any Event of Default to any portion of the obligations of Borrower hereunder.
To the extent Borrower makes a payment or payments to Lender, which payment or proceeds or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside or required to be repaid to a trustee, receiver or any other party under
any bankruptcy law, state or federal law, common law or equitable cause, then, to the extent of such payment or proceeds received,
the obligations hereunder or part thereof intended to be satisfied shall be revived and continue in full force and effect, as
if such payment or proceeds had not been received by Lender.

 

Section
10.11Waiver of Notice. Borrower shall not be entitled to any notices of any nature whatsoever from Lender except with
respect to matters for which this Agreement or the other Loan Documents specifically and expressly provide for the giving of notice
by Lender to Borrower and except with respect to matters for which Borrower is not, pursuant to applicable Legal Requirements,
permitted to waive the giving of notice. Borrower hereby expressly waives the right to receive any notice from Lender with respect
to any matter for which this Agreement or the other Loan Documents do not specifically and expressly provide for the giving of
notice by Lender to Borrower or which are required by law and which cannot be waived in accordance therewith.

 

Section
10.12Remedies of Borrower. If a claim or adjudication is made that Lender or its agents have acted unreasonably or unreasonably
delayed acting in any case where by law or under this Agreement or the other Loan Documents, Lender or such agent, as the case
may be, has an obligation to act reasonably or promptly, Borrower agrees that neither Lender nor its agents shall be liable for
any monetary damages, and Borrower’s sole remedies shall be limited to commencing an action seeking injunctive relief or
declaratory judgment. The parties hereto agree that any action or proceeding to determine whether Lender has acted reasonably
shall be determined by an action seeking declaratory judgment.

  

    	105

    	 

    

 

Section
10.13Expenses; Indemnity. (a) Except to the extent otherwise provided in Article 9: (b) Borrower covenants and
agrees to pay or, if Borrower fails to pay, to reimburse, Lender upon receipt of written notice from Lender for all costs and
expenses (including reasonable attorneys’ fees and expenses) incurred by Lender in connection with (i) the preparation,
negotiation, execution and delivery of this Agreement and the other Loan Documents and the consummation of the transactions contemplated
hereby and thereby and all the costs of furnishing all opinions by counsel for Borrower (including without limitation other than
as provided in Article 9, any opinions requested by Lender as to any legal matters arising under this Agreement or the other Loan
Documents with respect to the Property); (ii) Borrower’s ongoing performance of and compliance with Borrower’s respective
agreements and covenants contained in this Agreement and the other Loan Documents on its part to be performed or complied with
after the Closing Date, including, without limitation, confirming compliance with environmental and insurance requirements; (iii)
Lender’s ongoing performance and compliance with all agreements and conditions contained in this Agreement and the other
Loan Documents on its part to be performed or complied with after the Closing Date (provided that nothing herein shall require
Borrower to reimburse Lender in respect of its overhead expenses); (iv) the negotiation, preparation, execution, delivery and
administration of any consents, amendments, waivers or other modifications to this Agreement and the other Loan Documents and
any other documents or matters requested by Lender; (v) securing Borrower’s compliance with any requests made pursuant to
the provisions of this Agreement; (vi) the filing and recording fees and expenses, title insurance and fees and expenses of counsel
for providing to Lender all required legal opinions, and other similar expenses incurred in creating and perfecting the Lien in
favor of Lender pursuant to this Agreement and the other Loan Documents; (vii) enforcing or preserving any rights, in response
to third party claims or the prosecuting or defending of any action or proceeding or other litigation, in each case against, under
or affecting Borrower, this Agreement, the other Loan Documents, the Property, or any other security given for the Loan; and (viii)
enforcing any obligations of or collecting any payments due from Borrower under this Agreement, the other Loan Documents or with
respect to the Property (including any fees incurred by Servicer in connection with the transfer of the Loan to a special servicer
prior to a Default or Event of Default) or in connection with any refinancing or restructuring of the credit arrangements provided
under this Agreement in the nature of a “work out” or of any insolvency or bankruptcy proceedings; provided, however,
that Borrower shall not be liable for the payment of any such costs and expenses to the extent the same arise by reason of the
gross negligence, illegal acts, fraud or willful misconduct of Lender. Subject to Section 5.2 of the Cash Management Agreement,
any cost and expenses due and payable to Lender may be paid from any amounts in the Clearing Account or Cash Management Account,
as applicable.

 

(c)Borrower
shall indemnify, defend and hold harmless the Indemnified Parties from and against any and all other liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, claims, costs, expenses and disbursements of any kind or nature whatsoever
(including the reasonable fees and disbursements of counsel in connection with any investigative, administrative or judicial proceeding
commenced or threatened, whether or not an Indemnified Party shall be designated a party thereto), that may be imposed on, incurred
by, or asserted against any Indemnified Party in any manner relating to or arising out of (i) any breach by Borrower of its obligations
under, or any material misrepresentation by Borrower contained in, this Agreement or the other Loan Documents, or (ii) the use
or intended use of the proceeds of the Loan (collectively, the “Indemnified Liabilities”); provided, however,
that Borrower shall not have any obligation to any Indemnified Party hereunder to the extent that such Indemnified Liabilities
arise from the gross negligence, illegal acts, fraud or willful misconduct of such Indemnified Party. To the extent that the undertaking
to indemnify, defend and hold harmless set forth in the preceding sentence may be unenforceable because it violates any law or
public policy, Borrower shall pay the maximum portion that it is permitted to pay and satisfy under applicable law to the payment
and satisfaction of all Indemnified Liabilities incurred by the Indemnified Parties.

 

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(d)Borrower
covenants and agrees to pay for or, if Borrower fails to pay, to reimburse Lender for, any fees and expenses incurred by any Rating
Agency, after any Securitization (and excluding any such fees and expenses incurred by such Rating Agency in connection with any
Rating Agency review of the Loan, the Loan Documents or any transaction contemplated thereby as part of a Securitization), in
connection such Rating Agency’s review of the Loan, the Loan documents or any transaction contemplated thereby in connection
with any consent, approval, waiver or confirmation obtained from such Rating Agency pursuant to the terms and conditions of this
Agreement or any other Loan Document, and Lender shall be entitled to require payment of such fees and expenses as a condition
precedent to the obtaining of any such consent, approval, waiver or confirmation.

 

Section
10.14Schedules Incorporated. The Schedules annexed hereto are hereby incorporated herein as a part of this Agreement with
the same effect as if set forth in the body hereof.

 

Section
10.15Offsets, Counterclaims and Defenses. Any assignee of Lender’s interest in and to this Agreement, the Note and
the other Loan Documents shall take the same free and clear of all offsets, counterclaims or defenses which are unrelated to such
documents which Borrower may otherwise have against any assignor of such documents, and no such unrelated counterclaim or defense
shall be interposed or asserted by Borrower in any action or proceeding brought by any such assignee upon such documents and any
such right to interpose or assert any such unrelated offset, counterclaim or defense in any such action or proceeding is hereby
expressly waived by Borrower.

 

Section
10.16No Joint Venture or Partnership; No Third Party Beneficiaries. (a) Borrower and Lender intend that the relationships
created hereunder and under the other Loan Documents be solely that of borrower and lender. Nothing herein or therein is intended
to create a joint venture, partnership, tenancy in common, or joint tenancy relationship between Borrower and Lender nor to grant
Lender any interest in the Property other than that of mortgagee, beneficiary or lender.

 

(b)This
Agreement and the other Loan Documents are solely for the benefit of Lender, Borrower and the other Persons party thereto, and
nothing contained in this Agreement or the other Loan Documents shall be deemed to confer upon anyone other than Lender and Borrower,
or another Party to any Loan Document, any right to insist upon or to enforce the performance or observance of any of the obligations
contained herein or therein. All conditions to the obligations of Lender to make the Loan hereunder are imposed solely and exclusively
for the benefit of Lender and no other Person shall have standing to require satisfaction of such conditions in accordance with
their terms or be entitled to assume that Lender will refuse to make the Loan in the absence of strict compliance with any or
all thereof and no other Person shall under any circumstances be deemed to be a beneficiary of such conditions, any or all of
which may be freely waived in whole or in part by Lender if, in Lender’s sole discretion, Lender deems it advisable or desirable
to do so.

 

    	107

    	 

    

 

(c)Borrower
authorizes Lender to act upon any direction it receives from Master Tenant incident to the Loan Documents with respect to matters
for which Master Tenant has responsibility pursuant to the Master Lease Documents (including, without limitation, with respect
to requests for, and the application of, disbursements from any applicable Reserve Fund), and, as between Lender and Borrower,
agrees to be bound by any such direction.

 

Section
10.17Publicity. All news releases, publicity or advertising by Borrower or its Affiliates through any media intended to
reach the general public which refers to the Loan Documents or the financing evidenced by the Loan Documents, to Lender, KeyBank
National Association or any of their Affiliates shall be subject to the prior written approval of Lender and KeyBank National
Association in their commercially reasonable discretion.

 

Section
10.18Waiver of Marshalling of Assets. To the fullest extent permitted by law, Borrower, for itself and its successors
and assigns, waives all rights to a marshalling of the assets of Borrower, Borrower’s partners and others with interests
in Borrower, and of the Property, and agrees not to assert any right under any laws pertaining to the marshalling of assets, the
sale in inverse order of alienation, homestead exemption, the administration of estates of decedents, or any other matters whatsoever
to defeat, reduce or affect the right of Lender under the Loan Documents to a sale of the Property for the collection of the Debt
without any prior or different resort for collection or of the right of Lender to the payment of the Debt out of the net proceeds
of the Property in preference to every other claimant whatsoever.

 

Section
10.19Waiver of Counterclaim. Borrower hereby waives the right to assert a counterclaim, other than a compulsory counterclaim,
in any action or proceeding brought against it by Lender or its agents.

 

Section
10.20Conflict; Construction of Documents; Reliance. In the event of any conflict between the provisions of this Agreement
and any of the other Loan Documents, the provisions of this Agreement shall control. The parties hereto acknowledge that they
were represented by competent counsel in connection with the negotiation, drafting and execution of the Loan Documents and that
such Loan Documents shall not be subject to the principle of construing their meaning against the party which drafted same. Borrower
acknowledges that, with respect to the Loan, Borrower shall rely solely on its own judgment and advisors in entering into the
Loan without relying in any manner on any statements, representations or recommendations of Lender or any parent, subsidiary or
Affiliate of Lender. Lender shall not be subject to any limitation whatsoever in the exercise of any rights or remedies available
to it under any of the Loan Documents or any other agreements or instruments which govern the Loan by virtue of the ownership
by it or any parent, subsidiary or Affiliate of Lender of any equity interest any of them may acquire in Borrower, and Borrower
hereby irrevocably waives the right to raise any defense or take any action on the basis of the foregoing with respect to Lender’s
exercise of any such rights or remedies. Borrower acknowledges that Lender engages in the business of real estate financings and
other real estate transactions and investments which may be viewed as adverse to or competitive with the business of Borrower
or its Affiliates.

 

    	108

    	 

    

 

Section
10.21Brokers and Financial Advisors. Borrower hereby represents that it has dealt with no financial advisors, brokers,
underwriters, placement agents, agents or finders in connection with the transactions contemplated by this Agreement. Borrower
hereby agrees to indemnify, defend and hold Lender harmless from and against any and all claims, liabilities, costs and expenses
of any kind (including Lender’s attorneys’ fees and expenses) in any way relating to or arising from a claim by any
Person that such Person acted on behalf of Borrower or (unless specifically engaged by Lender in writing) Lender in connection
with the transactions contemplated herein. The provisions of this Section 10.21 shall survive the expiration and termination
of this Agreement and the payment of the Debt.

 

Section
10.22Prior Agreements. This Agreement and the other Loan Documents contain the entire agreement of the parties hereto
and thereto in respect of the transactions contemplated hereby and thereby, and all prior agreements among or between such parties,
whether oral or written, between Borrower and Lender are superseded by the terms of this Agreement and the other Loan Documents.

 

Section
10.23Liability. If Borrower consists of more than one (1) Person the obligations and liabilities of each Person shall
be joint and several. Under no circumstances whatsoever shall Lender have any liability for punitive, special, consequential or
incidental damages in connection with, arising out of, or in any way related to or under this Loan Agreement or any other Loan
Document or in any way related to the transactions contemplated or any relationship established by this Agreement or any other
Loan Document or any act, omission or event occurring in connection herewith or therewith, and, to the extent not expressly prohibited
by applicable laws, Borrower for itself and its Guarantor and indemnitors waives all claims for punitive, special, consequential
or incidental damages. Lender shall have no duties or responsibilities except those expressly set forth in this Agreement, the
Security Instrument and the other Loan Documents and those imposed under applicable law. Neither Lender nor any of its officers,
directors, employees or agents shall be liable for any action taken or omitted by them as such hereunder or in connection herewith,
unless caused by their gross negligence or willful misconduct. This Agreement shall be binding upon and inure to the benefit of
Borrower and Lender and their respective successors and assigns forever.

 

Section
10.24Certain Additional Rights of Lender (VCOC). Notwithstanding anything to the contrary contained in this Agreement,
Lender shall have:

 

(a)the
right to routinely consult with and advise Borrower’s management regarding the significant business activities and business
and financial developments of Borrower; provided, however, that such consultations shall not include discussions
of environmental compliance programs or disposal of hazardous substances. Consultation meetings should occur on a regular basis
(no less frequently than quarterly) with Lender having the right to call special meetings at any reasonable times and upon reasonable
advance notice;

 

    	109

    	 

    

 

(b)the
right, in accordance with the terms of this Agreement, to examine the books and records of Borrower at any reasonable times upon
reasonable notice;

 

(c)the
right, in accordance with the terms of this Agreement, including Section 5.1.11 hereof, to receive monthly, quarterly
and year end financial reports, including balance sheets, statements of income, shareholder’s equity and cash flow, a management
report and schedules of outstanding indebtedness; and

 

(d)the
right, without restricting any other rights of Lender under this Agreement (including any similar right), to approve any acquisition
by Borrower of any other significant property (other than personal property required for the day to day operation of the Property).

 

The
rights described above in this Section 10.24 may be exercised by any entity which owns and controls, directly or indirectly,
substantially all of the interests in Lender.

 

Section
10.25(OFAC). Borrower hereby represents, warrants and covenants that neither Borrower nor any Guarantor is (or will be)
a person with whom Lender is restricted from doing business under regulations of the Office of Foreign Asset Control (“OFAC”)
of the Department of the Treasury of the United States of America (including, those Persons named on OFAC’s Specially Designated
and Blocked Persons list) or under any statute, executive order (including, the September 24, 2001 Executive Order Blocking Property
and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism), or other governmental action
and is not and shall not knowingly engage in any dealings or transactions or otherwise be associated with such persons. In addition,
Borrower hereby covenants to provide Lender with any additional information within Borrower’s or Guarantor’s possession
or control that Lender reasonably deems necessary from time to time in order to ensure compliance with all applicable laws concerning
money laundering and similar activities.

 

Section
10.26Duplicate Originals; Counterparts. This Agreement may be executed in any number of duplicate originals and each duplicate
original shall be deemed to be an original. This Agreement may be executed in several counterparts, each of which counterpart
shall be deemed an original instrument and all of which together shall constitute a single Agreement. The failure of any party
hereto to execute this Agreement, or any counterpart hereof, shall not relieve the other signatories from their obligations hereunder.

 

Section
10.27Release of Moody Guarantor. Upon satisfaction of all of the conditions set forth in Section 24 of the Guaranty and
Section 25 of the Environmental Indemnity and the release of Moody Guarantor in accordance therewith, Moody Guarantor shall be
deemed automatically released from all liability under the Guaranty and the Environmental Indemnity first accruing after such
release and all references in this Agreement and the other Loan Documents to “Guarantor” shall be solely a reference
to Moody REIT II.

 

Section
10.28Post Closing Matters. Borrower covenants and agrees to provide to Lender, within five (5) days of the date hereof,
evidence satisfactory to Lender that Policies reflecting the insurance coverages, amounts and other requirements set forth in
this Agreement are in place (the “Evidence of Insurance”).

 

    	110

    	 

    

 

ARTICLE
XI

LOCAL LAW PROVISIONS

 

Section
11.1Inconsistencies. In the event of any inconsistencies between the terms and conditions of this Article XI and
the other provisions of this Agreement, the terms and conditions of this Article XI shall control and be binding.

 

NONE

 

[NO
FURTHER TEXT ON THIS PAGE]

 

    	111

    	 

    

 

IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their duly authorized representatives,
all as of the day and year first above written.

 

BORROWER:

 

MOODY
NATIONAL LANCASTER-AUSTIN HOLDING, LLC, a Delaware limited liability company

	 	 	 
	 	By:	/s/ Brett C. Moody
	 	Name:	Brett C. Moody
	 	Title:	President

 

	STATE
OF TEXAS	)
	 	 
	 	) SS:
	 	 
	COUNTY
OF HARRIS	)

 

On
October 9, 2015, before me, Lilian C. Aragon, a Notary Public, personally appeared Brett C. Moody, President,
and as Authorized Party of Moody National Lancaster-Austin Holding, LLC, a Delaware limited liability company, personally known
to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument
and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person,
or the entity upon behalf of which the person acted, executed the instrument.

 

WITNESS
my hand and official seal.

 

(Seal)

 

	 	/s/ Lilian C. Aragon
	 	 
	 	Notary Public in and for 	Harris	 County
	 	Print Name: Lilian C. Aragon	 	 

  

    	 

    	 

    

  

LENDER:

 

KEYBANK
NATIONAL ASSOCIATION, a national banking association

 

	 	 	 
	 	By:	/s/ Mary Ann Gripka
	 	Name:	Mary Ann Gripka
	 	Title:	Vice President

  

    	 

    	 

    

 

SCHEDULE
I

 

(RENT
ROLL)

 

    	 

    	 

    

 

SCHEDULE
II

 

(REQUIRED
REPAIRS – DEADLINES FOR COMPLETION)

 

None

 

    	 

    	 

    

 

SCHEDULE
III

 

(ORGANIZATIONAL
CHART OF BORROWER)

 

    	 

    	 

    

 

SCHEDULE
IV

 

FORM
OF TENANT DIRECTION LETTER

 

[BORROWER
LETTERHEAD]

 

__________,
20__

 

[Tenants
under Leases]

 

Re:Lease
dated ________ between _______________, as Landlord, and __________________, as Tenant, concerning premises known as _____________

 

Gentlemen:

 

This
letter shall constitute notice to you that the undersigned has granted a lien and security interest in the captioned lease and
all rents, additional rent and all other monetary obligations to landlord thereunder (collectively, “Rent”)
in favor of KeyBank National Association, its successors and assigns, as lender (“Lender”), to secure certain
of the undersigned’s obligations to Lender. The undersigned hereby irrevocably instructs and authorizes you to disregard
any and all previous notices sent to you in connection with Rent and hereafter to deliver all Rent to the following address:

 

	 	[Clearing
    Bank]
	 	 	 	 
	 	 	 	 

	 	 	 	 
	 	Account Name:“	 	  Clearing Account

	 	FBO KeyBank National Association, successors and assigns

	 	Account No.: 		 

	 	Attention: 	 	 

	 	ABA#	 	 	 	 

  

The
instructions set forth herein are irrevocable and are not subject to modification in any manner, except that Lender, or any successor
lender so identified by Lender, may by written notice to you rescind the instructions contained herein.

	 	Sincerely,
	 	 
	 	[Borrower]

 

    	 

    	 

    

 

SCHEDULE
V

 

FORM
OF CREDIT CARD DIRECTION LETTER

 

[BORROWER
LETTERHEAD]

 

[Date]

 

[Addressee]

 

	 	Re:	Payment Direction Letter for 	 	   (the “Property”)

 

	 	 	Loan
No.	 	 

  

Dear
[______]:

 

MOODY
NATIONAL LANCASTER-AUSTIN HOLDING, LLC (the “Owner”), the owner of the Property has mortgaged the Property
to KeyBank National Association (together with its successors and assigns, “Lender”) and each of the Owner
and MOODY NATIONAL LANCASTER-AUSTIN MT, LLC (the “Lessee”) has agreed that all receipts received with respect
to the Property will be paid directly to a bank selected by the Lender. Therefore, from and after [DATE], please remit
all payments due to the Owner and/or Lessee under that certain [REFERENCE AGREEMENT], dated [___], [___]
(the “Agreement”) between the [Owner] [Lessee] and you, as follows:

 

 

	 	[Clearing
    Bank]
	 	 	 	 
	 	 	 	 

	 	Account Name:“	 	  Clearing Account FBO
KeyBank National

	 	Association, successors and assigns
	 	Account No.: 		 

	 	Attention: 	 	 

	 	ABA#	 	 	 	 

   

These
payment instructions cannot be withdrawn or modified without the prior written consent of the Lender or its designee, or pursuant
to a joint written instruction from the Owner, Lessee and the Lender or its designee. Until you receive written instructions from
the Lender or its designee, continue to send all payments due under the Agreement to ______________ (“Bank”)
pursuant to the terms hereof. All payments due under the Agreement shall be remitted to Bank no later than the day on which such
amounts are due.

 

If
you have any questions concerning this letter, please contact [______] at [______]. We appreciate your cooperation
in this matter.

 

[NO
FURTHER TEXT ON THIS PAGE]

 

    	2

    	 

    

 

	 	Very
truly yours,	 
	 		 
	 	BORROWER:	 

 

	 	 	,

 

	 	a 	 	 
	 	 

  

	 	By:	 
	 	Name:	 
	 	Title:	 

 

    	 

    	 

    

 

SCHEDULE
VI

 

(Schedule
of Free Rent)

  

	Tenant	 	Free Rent Amount	 	Release Date
	Tiff’s Treats	 	$	3,097.50	 	 	Dec-2015
	 	 	$	3,097.50	 	 	Jan-2016
	 	 	 	 	 	 	 
	Gino’s Vino	 	$	4,262.50	 	 	Dec-2015
	 	 	$	4,262.50	 	 	Jan-2016
	 	 	 	 	 	 	 
	Total	 	$	14,720	 	 	 

 

 2

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