Document:

MOODY NATIONAL REIT I, INC. 10-K

Exhibit 10.58

 

HOTEL
MANAGEMENT

AGREEMENT

 

TownePlace
Suites – Fort Worth, Texas

 

between

 

MOODY NATIONAL
INTERNATIONAL-FORT WORTH MT, LLC

 

and

 

MOODY NATIONAL
HOSPITALITY MANAGEMENT, LLC

 

EFFECTIVE
DATE: December 18, 2015

 

     

     

    

 

HOTEL
MANAGEMENT AGREEMENT

 

This
Hotel Management Agreement (“Agreement”) is made as of December 18, 2015 by and between MOODY NATIONAL
International-Fort Worth MT, LLC, a Delaware limited liability company, whose principal place of business is 6363 Woodway, Suite
110, Houston, Texas 77057 (“Owner”), and MOODY NATIONAL HOSPITALITY MANAGEMENT,
LLC, a Texas limited liability company, whose principal place of business is 6363 Woodway, Suite 110, Houston, Texas 77057
(“Manager”).

 

RECITALS

 

WHEREAS,
Moody National International-Fort Worth Holding, LLC (“Landlord”) is the owner of that certain tract of land
located at 4200 International Plaza, Fort Worth, Texas 76109-4807 (“Land”), upon which has been constructed
a hotel known as the TownePlace Suites Fort Worth (Hotel”);

 

WHEREAS,
Owner leases the Hotel from Landlord pursuant to a Hotel Lease Agreement dated December
__, 2015 (as it may have been, or may be,
subsequently amended, modified or supplemented) (“Master Lease”);

 

WHEREAS,
Manager is engaged in the business of managing hotels and Manager is
experienced in the various components of managing a hotel; 

 

WHEREAS,
subject to the terms and provisions of this Agreement, Owner desires to
have Manager manage and operate the Hotel; and

 

WHEREAS,
Manager desires to perform such services on behalf, and for the account, of
the Owner in accordance with the terms hereof.

 

NOW
THEREFORE, in consideration of the foregoing recitals and the premises and the
mutual covenants herein contained, the parties hereto agree as follows:

 

ARTICLE
I

DEFINED TERMS

 

Section 1.1        “Accounting
Period” shall mean each of twelve (12) accounting periods of one (1) calendar month
occurring each Fiscal Year.

 

Section 1.2        “Affiliates”
(or Affiliate) shall mean any parent, subsidiary, affiliated or related corporation or other entity of Manager or Owner, or any
officer, director, employee or stockholder of Manager or Owner or of any said parent, subsidiary, affiliated or related corporation
or other entity, except a stockholder owning less than fifty percent (50%) of the issued and outstanding stock of Manager or Owner
or of such parent, subsidiary, affiliated or related corporation or other entity directly or indirectly, who controls, is controlled
by or is under common control provided however, for the purposes of to whom this Agreement may be assigned under Section 16.1
hereof, officers, directors and employees shall not be deemed to be Affiliates. For purposes of this definition, the term “control”
(including the terms “controlling,” “controlled by” and “under common control with”) of means
the possession, directly or indirectly, of the power: (i) to vote more than fifty percent (50%) of the voting stock of any such
entity; or (ii) to direct or cause the direction of the management and policies of any such entity, whether through the ownership
of voting stock, by contract or otherwise.

 

     

     

    

  

Section 1.3       “Annual
Business Plan” shall have the meaning set forth in Section 9.1 hereof.

 

Section 1.4       “Base
Management Fee” shall have the meaning set forth in Section 10.1 hereof.

 

Section 1.5      “Capital
Renewals” shall mean a collective term for (a) normal capital replacements of, or additions to, FF&E, and (b) special
projects designed to maintain the Hotel in a first-class condition in accordance with the standards contemplated by this Agreement,
including without limitation, renovation of the guest room areas, public space, food and beverage facilities, or back of the house
areas, which projects will generally comprise replacements of, or additions to, FF&E, but may include revisions
and alterations to the Hotel; most of the expenditures for such special projects will
be capitalized, but a portion thereof may be currently expended, such as the purchase of smaller items of FF&E, or expenditures
which are ancillary to the overall project but which are properly chargeable to “Property Operations and Maintenance”
under the Uniform System.

 

Section 1.6       “Capital
Renewals Budget” shall mean a budget covering the estimated Capital Renewals for three (3) years which indicates in reasonable
detail the replacements of, or additions to, FF&E, and the nature of the special projects covered thereby, as approved by the
Owner.

 

Section 1.7       “ERISA”
shall mean the Employees Retirement Income Security Act of 1974, as amended.

 

Section
1.8       “Fiscal Year” shall mean a Calendar Fiscal Year starting on January 1 and ending on December 31
or portion thereof depending upon the Management Commencement Date.

 

Section 1.9       “Franchise
Agreement” shall mean that certain Franchise Agreement by and between Franchisor
and Owner (as franchisee), dated December 18, 2015 and any subsequent and/or future franchise agreements entered into by
Owner (as franchisee) Franchisee regarding the Hotel.

 

Section 1.10     “Franchisor”
shall mean Marriott International, Inc.

 

Section 1.11    “Furniture,
Fixtures, and Equipment” (“FF&E”) shall mean all furniture, furnishings, light fixtures, outfittings,
apparatus, equipment and all other items of personal property customarily installed in, held
in storage for use in, used in or required for use in connection with the operation of the Hotel.

 

Section 1.12     “Gross
Operating Revenues” shall mean all receipts, revenues, income and proceeds of sales of every kind received by Manager
directly or indirectly from the operation of the Hotel, and shall include, without limitation: room rentals; rent or other payments
received from sub-tenants, licensees, and occupants of commercial and retail space located in the Hotel; the proceeds of insurance
received by Owner or Manager with respect to use and occupancy or business interruption insurance; deposits forfeited and not refunded;
frequent guest program payments; and any amount recovered in any legal action or proceeding or settlement thereof which amount
represents and was directly related to, the collection of accounts receivables, cancellation fees or other uncollected revenue.
Gross Operating Revenues shall exclude all sales and excise taxes and any similar taxes collected as direct taxes payable to taxing
authorities; gratuities or service charges collected for payment to and paid to employees; credit or refunds to guests; proceeds
of insurance, save and except for proceeds of insurance with respect to use and occupancy or business interruption insurance; proceeds
of sales of property attributable under the accrual method of accounting, pursuant to generally
accepted accounting practice or the Uniform System to a different Fiscal Year; proceeds from condemnation or casualty; interest
earned on the Reserve Fund (as defined herein); and financing proceeds obtained by the Owner.

 

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Section 1.13     “Group
Services” shall have the meaning set forth in Section 5.2 hereof.

 

Section 1.14    “Hazardous
Materials” shall mean any substance or material containing one or more of any of the following: “hazardous material,”
“hazardous waste,” “hazardous substance,” “regulated substance,” “petroleum,” “pollutant,”
“contaminant,” or “asbestos,” as such terms are defined in any applicable environmental law, in such concentration(s)
or amount(s) as may impose cleanup, removal, monitoring or other responsibility under any applicable environmental law, or which
may present a significant risk of harm to guests, invitees or employees of the Hotel.

 

Section 1.15     “Hotel”
shall mean the TownePlace Suites Fort Worth referred to in the first recital herein consisting of 95 units.

 

Section 1.16     “House
Profit” shall mean the excess, during
each Fiscal Year (and proportionately for any period less than a Fiscal Year), of Gross Operating Revenues over expenses and deductions
incurred in the operation of the Hotel by Manager in fulfilling its duties hereunder during such period, determined in accordance
with the accounting system established by the Uniform System (except as modified by this Agreement). In arriving at House Profit,
the following expenses shall be proper deductions from Gross Operating Revenues insofar as they relate to the operation of the
Hotel: salaries, wages, fringe benefits, payroll taxes, workers’ compensation costs, and other costs related to Manager’s
employees in or assigned to the Hotel, including Area Manager and Regional Director, including, without limitation, any claim
for wrongful discharge and/or discrimination which expenses are not paid by insurance (provided, however, if such claim is determined
to have been caused by the negligence or willful misconduct of any Key Employee, the amount for which Manager is required to indemnify
Owner pursuant to this Agreement and has in fact paid to Owner, shall not be a deduction); department expenses; administrative
and general expenses; credit card and collection expenses; and the cost of Hotel advertising and business promotion and public
relations; heat, light and power; routine repairs, maintenance, landscaping, snow removal, and minor alterations including the
cost of maintenance contracts for equipment and any insurance costs related thereto; costs of sales and the cost of replacing
inventories and fixed asset supplies consumed in the operation of the Hotel such as linen, china, glassware, silver, uniforms
and similar items; sales or excise taxes on goods or services provided to the Hotel; a reasonable reserve for uncollectible accounts
receivable as determined by Manager; all costs and fees of independent accountants
or other third parties who perform services required or permitted hereunder on behalf
of the Hotel; the cost and expense of technical consultants and operational experts for specialized services provided to the Hotel;
the Base Management Fee; rental payments on telephone leases, long distance access systems, and other operational leases approved
by Manager; all costs or expenses incurred under any franchise, such as franchise fees if applicable, system charges for such
items as reservations, frequent traveler programs, and airline points, system advertising or promotional costs, but excluding
the initial fees paid in consideration of granting any franchise; and all other out of pocket actual costs and expenses and fees
incurred by the Manager in the proper and efficient operation of the Hotel, including, but not
limited to, all licenses, travel costs, and out-of-pocket expenses of employees of Manager or its Affiliates employed at the Hotel
or performing services for the Hotel such as fax, postage, telephone and express mail. 

 

Section 1.17     “Independent
Auditor” shall mean a reputable national firm of independent certified public accountants having
hotel experience, recommended by Manager from time to time and approved by Owner.

 

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Section 1.18     “Key
Employees” shall mean (to the extent such positions exist): (a) at the Hotel level, any salaried manager including Area Manager
and (b) at the corporate level, positions at or below Vice President Hospitality.

 

Section 1.19     “Legal
Requirements” shall mean all public laws, statutes, ordinances, orders, rules, regulations, permits, licenses, authorizations,
directions and requirements of all governments and governmental authorities, which, now or
hereafter, may be applicable to the Hotel premises and the operation thereof, including, without limitation, those relating
to zoning, building, life/safety, environmental and health, employee benefits, and providing continued health care coverage under
ERISA.

 

Section 1.20    “Management Commencement Date” shall be December 18, 2015.

 

Section 1.21     “Manager”
shall mean Moody National Hospitality Management, LLC, and its permitted successors and assigns.

 

Section 1.22     “Net
Operating Income” shall mean House Profit less property taxes and insurance expense.

 

Section 1.23     “Operating
Funds” shall have the meaning set forth in Section 7.2 hereof.

 

Section 1.24     “Operating
Supplies” shall mean all chinaware, glassware, linens, silverware, uniforms, utensils
and other similar items necessary to the operation of the Hotel.

 

Section 1.25     “Termination
Fee” shall have the meaning set forth in Section 12.3 hereof.

 

Section 1.26     “Reserve
Fund” shall have the meaning set forth in Section 7.3. 

 

Section 1.27     “Uniform
System” shall mean the Uniform System of Accounts for the Lodging Industry, “Tenth Revised Edition”, 2006,
as revised and adopted by the Hotel Association of New York City, Inc., from time to time and as modified by applicable provisions
of this Agreement.

 

Other terms are defined
in the Recitations and the further provisions of this Agreement, and shall have the respective
meanings there ascribed to them.

 

ARTICLE
II

ENGAGEMENT OF MANAGER

AND COMMENCEMENT OF MANAGEMENT OF THE HOTEL

 

Section 2.1      Engagement
of Manager to Manage Hotel. Owner hereby appoints Manager as Owner’s exclusive independent
contractor, subject to the terms of this Agreement, to supervise, direct and control the management and operation of the
Hotel, and Manager hereby undertakes and agrees to perform, as an independent contractor of
and for the account of Owner, all of the services and to comply with all of the provisions of this Agreement.

 

Section 2.2       Management
Commencement Date and Takeover Activities.

 

A.         Manager shall assume
management and operation of the Hotel at 12:00:01 AM on the Management Commencement Date.

 

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B.        In
connection with assuming management of the Hotel, Manager must undertake certain activities
prior to and following the Management Commencement Date. These activities (“Takeover Activities”) shall
include, without limitation, the following: (i) recruiting, relocating, training, and employing certain management staff required
for the Hotel; (ii) assisting Owner (as requested) in applying for and procuring (in Manager’s
name and/or Owner’s name as required by local authorities) all licenses and permits
required for the operation of the Hotel, including, but not limited to, all licenses
for the sale of alcoholic beverages (if applicable); and (iii) any other activities customarily required in order to assume management
responsibilities of a hotel under current operation or newly constructed hotel (as applicable), including, but not limited to verifying
inventories and other closing allocations on closing statements. 

 

Section 2.3       Representations
of Manager. Manager represents that it is experienced and capable in the planning, decorating, furnishing, equipping, promoting,
management, and operation of hotels, and Manager covenants and agrees to manage and operate
the Hotel and to protect and preserve the assets that comprise the Hotel. Manager covenants and agrees to manage and operate
the Hotel in accordance with the standards and specifications set forth in the Franchise Agreement for the Hotel, so long as Owner
provides sufficient capital to enable Manager to operate the Hotel in good standing under the Franchise Agreement, and in accordance
with the Annual Business Plan. Manager represents and acknowledges that as of the Management Commencement Date Manager will cause
the Hotel to be adequately staffed and capable of operating.

 

ARTICLE
III

OPERATION OF THE HOTEL AFTER

THE MANAGEMENT COMMENCEMENT DATE

 

Section 3.1       Authority
of Manager. On and after the Management Commencement Date, the Manager shall have the exclusive
authority and duty to direct, supervise, manage and operate the Hotel in an efficient and economical manner and to determine
the programs and policies to be followed in connection therewith, all in accordance with the provisions of this Agreement and the
Annual Business Plan. Subject to the provisions of this Agreement and the Annual Business Plan,
Manager shall have the discretion and control in all matters relating to the management and operation of the Hotel. Without
limiting the generality of the foregoing, Manager shall have the authority and duty consistent with the Annual Business Plan to:

 

	 	A.	Recruit, employ, relocate, pay, train, supervise, and discharge all employees and personnel necessary for the operation of the Hotel in a manner consistent with Manager’s practices at other comparable hotels managed and operated by Manager (taking into account locational differences). Included in the foregoing shall be the determination of all personnel policies, which shall be in writing;
	 	 	 
	 	B.	Establish all prices, price schedules, rates and rate schedules, rents, lease charges, concession charges, and, in connection therewith, the supervision, direction and control of the collection, receipt and giving of receipts for all services or income of any nature from the Hotel’s operations;
	 	 	 
	 	C.	Supervise and maintain complete books and records, including without limitation, the books of accounts and accounting procedures of the Hotel which shall at all times be kept at the Hotel or in its Affiliate’s corporate office or other suitable location pursuant to the operation of centralized accounting services;

 

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	 	D.	Administer leases, license and concession agreements for all public space at the Hotel, including all stores, office space and lobby space. Manager shall not, without first obtaining Owner’s prior written consent, enter into any space leases. All such leases shall be in Owner’s name and may be executed by Manager on Owner’s behalf;
	 	 	 
	 	E.	Keep the Hotel and the Furniture, Fixtures, and Equipment in good order, repair and condition, including, without limitation, making necessary replacements, improvements, additions and substitutions to the Hotel, subject to the approved Annual Business Plan and in conformity with all Legal Requirements and in accordance with the Franchisor’s standards for the operation of the Hotel;
	 	 	 
	 	F.	Negotiate and enter into, on behalf of the Owner, service contracts and licenses required in the ordinary course of business in operating the Hotel, including, without limitation, contracts for life/safety systems maintenance, electricity, gas, telephone, cleaning, elevator and boiler maintenance, air conditioning maintenance, master television service, master internet service, laundry and dry cleaning, and other services which Manager deems advisable; provided however, any contract for a term in excess of one (1) year or an annual payment in excess of Ten Thousand and No/100 Dollars ($10,000.00) shall be approved by Owner, which approval shall not be unreasonably withheld or delayed;
	 	 	 
	 	G.	Negotiate and enter into, on behalf of Owner, agreements for banquet facilities and guest rooms and agreements to provide entertainment for the Hotel, and licenses for copyright music and videos;
	 	 	 
	   	H.	Supervise and purchase or arrange for the purchase in the most economical manner of all inventories, provisions, and Operating Supplies, which, in the normal course of business, are necessary and proper to maintain and operate the Hotel in accordance with the Annual Business Plan;
	 	 	 
	 	I.	Timely prepare and submit to Owner the Annual Business Plan as hereinafter described;
	 	 	 
	 	J.	Perform such other tasks as are customary and usual in the operation of a hotel of a class and standing consistent with the Hotel’s facilities;
	 	 	 
	 	K.	Operate the Hotel in accordance with the standards and specifications set forth in the Franchise Agreement for the Hotel so long as Owner provides sufficient capital to enable Manager to operate the Hotel in good standing under the Franchise Agreement;
	 	 	 
	 	L.	Provide risk management services in accordance with the terms of this Agreement;
	 	 	 
	 	M.	Manager will not permit the presence, use, storage, handling or disposal of any Hazardous Materials on the Hotel premises and in violation of any Legal Requirements and regardless of whether or not a given Hazardous Material is permitted on the Hotel premises under applicable Legal Requirements, Manager shall only bring on the premises such Hazardous Materials as are needed in the normal course of business of the Hotel; and
	 	 	 
	 	N.	Subject to Article XVII, administer and remit all real estate, personal property taxes, and ad valorem property taxes, assessments and similar charges on or relating to the Hotel during the Term of this Agreement.

 

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Section 3.2       Employees.
Manager or an Affiliate of Manager shall at all times be the employer of all employees in the Hotel. Owner’s and Manager’s
agents and employees who provide consulting services to Manager in connection with the Hotel,
shall be acting as the agent of the Owner. Manager shall have complete authority over pay scales and all benefit plans as
long as the pay scales and benefits plans are reasonable and competitive in the market and consistent with those at comparable
hotels managed by Manager or its Affiliates.

 

Section 3.3       Independent
Contractors. Manager may hire independent contractors to provide such legal, accounting and other professional services as
Manager deems necessary or appropriate in the ordinary course of business in connection with the operation of the Hotel and at
an expense approved by Owner and itemized in the Annual Business Plan.

 

ARTICLE
IV

OPERATING EXPENSES PAID BY OWNER

 

Section 4.1      Expenses Incurred by Manager on Behalf of Owner. Everything done by Manager in the performance of its obligations
and all expenses incurred under this Agreement shall be for and on behalf of Owner and for
its account except the services referred to in Article V hereof, which shall be rendered and performed by Manager or its Affiliates
at their expense and not separately charged to Owner, except as otherwise provided in
Article V.

 

Section 4.2       Liabilities
to Third Parties. Except to the extent provided in Article XVIII hereof or elsewhere herein, all liabilities to third parties
arising in the course of business of the Hotel are and shall be the obligations of Owner, and
Manager shall not be liable for any of such obligations by reason of its management, supervision and operation of the Hotel
for Owner.

 

Section
4.3     Manager Not Obligated to Advance Own Funds. Neither Manager nor any of its Affiliates shall be obligated to
advance any of its own funds to or for the account of Owner, nor to incur any liability
unless Owner shall have furnished Manager with funds necessary for the discharge thereof prior
to incurring such liability. If Manager shall have advanced any funds in payment of an expense in the maintenance and operation
of the Hotel, Manager shall promptly provide Owner with written notice upon making Owner such advances and Owner
shall reimburse Manager therefor no later than five (5) days after receipt of such notice.
Notwithstanding the foregoing, Manager shall pay from its own funds the expenses hereinafter
described in Section 5.1 hereof.

 

ARTICLE
V

SUPPORT SERVICES PAID BY MANAGER’S AFFILIATES

 

Section 5.1       Normal
Consulting Services of Manager’s Affiliates. Except as hereinafter provided in Section 5.2, after the Management
Commencement Date, the normal consulting services of the corporate officers and employees of Manager’s Affiliates, including
its corporate executives for operations, room operations, food and beverage, sales and marketing, finance and administration, real
estate, and accounting (excluding the Accounting Fee and Revenue Management Fee), to be rendered from time to time to Manager in
connection with the operations of the Hotel, shall be provided by Manager’s Affiliates to Manager at Manager’s sole
cost and expense and not charged to Owner.

 

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Section 5.2       Exceptions
for Certain Support Services of Manager’s Affiliates. Notwithstanding the foregoing, Owner shall reimburse Manager for:
(i) the appropriate and pro-rata share of salaries, wages or benefits of any officers, directors or employees of Manager or Manager’s
Affiliates who shall be regularly or temporarily employed or assigned on a full-time basis at the Hotel or providing regular services
to the Hotel, including human resources support, accounting support and the Regional Director of Operations, subject to the prior
written approval of Owner, unless included in the Annual Business Plan; (ii) personnel providing legal services to Manager in connection
with matters involving the Hotel, which services shall be charged at rates which approximate
Manager’s Affiliates’ costs associated with such personnel and which services,
unless included in the Annual Business Plan, shall be subject to the prior written approval of Owner; (iii) the out-of-pocket
expenses directly related to the operation and management of the Hotel; and (iv) certain other services (“Group Services”)
best provided to Owner and Manager’s Affiliates on a group rather than on an individual basis, including, without limitation,
any insurance program Manager may institute. Manager and its Affiliates may profit from such programs and services through volume
rebates, rate reductions, and other incentives from outside vendors, through markups, internal profits, and other benefits. Manager’s
intention is to make available to Owner certain benefits of group or national purchasing programs on a number of items that can
be used by or at the Hotel, although Manager cannot and does not assure or represent that any item or that the total of items purchased
through any Group Services program will be at a cost lower than may otherwise be available to Owner or the Hotel from other sources.
Owner hereby acknowledges the foregoing disclosure and consents to the retention by Manager or its Affiliates of such rebates,
incentives, profits and other benefits which are paid, accrue to, or are retained by Manager in connection with the Group Services
programs Owner elects to participate in. Owner specifically acknowledges and stipulates that Manager, in its capacity as operator
of the Hotel or otherwise, is not acting as a fiduciary to Owner in connection with any aspect of Group Services. Further, Owner
agrees that Manager is not required to disclose to Owner any profit, rebate, markup, incentive or other similar payment that Manager
receives or retains from any markup or other source, including third party vendors and suppliers and Affiliates of Manager, such
disclosure being specifically waived. Owner hereby waives any claim it might have to any profit, rebate, markup, incentive or similar
sum which Manager or an Affiliate of Manager receives or retains in connection with purchases for the Hotel through any Group Services
program, if any.

 

ARTICLE
VI

COMPLIANCE WITH LAWS

 

Section 6.1        Compliance
by Manager and Owner After Management Commencement Date. Manager shall make all reasonable efforts, at expense of Owner,
to comply with all Legal Requirements, including but not limited to, all laws, rules, regulations, requirements, orders, notices,
determinations and ordinances of any governing authority, including, without limitation, the state and local liquor authorities,
and the requirements of any insurance companies covering any of the risks against which the Hotel is insured (provided, however,
if such noncompliance is determined to have been caused by the gross negligence or willful misconduct of the Manager, the amount
for which Manager is required to indemnify Owner pursuant to Article XVIII hereof shall not be an expense of Owner and Manager
shall reimburse Owner or pay same directly). If the cost of compliance exceeds Two Thousand Dollars ($2,000) in any instance,
Manager shall promptly notify Owner, and Owner shall promptly provide Manager with funds for the payment of such costs.

 

Section 6.2        Owner’s
Right to Contest or Postpone Compliance. With respect to a violation of any such laws
or rules, the Owner shall have the right to contest any of the foregoing and postpone compliance pending the determination
of such contest, if so permitted by law and not detrimental to the operation of the Hotel but in such event, Owner shall indemnify
and hold harmless Manager from any loss, cost, damage or expense, resulting solely from such postponement.

 

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Section 6.3       Manager’s
Right to Terminate Agreement. Notwithstanding anything in this Agreement to the contrary and subject to Section 12.4, if within
thirty (30) days of receiving Manager’s written request, Owner fails to approve the
changes, repairs, alterations, improvements, renewals or replacements to the Hotel
which Manager determines in its reasonable judgment are necessary to (i) protect the Hotel, Owner and/or Manager from innkeeper
liability exposure; or (ii) ensure material compliance with any applicable code requirements pertaining to life safety systems
requirements; or (iii) ensure material compliance with any and all Legal Requirements including, but not limited to, all state,
local, or federal employment law, including, without limitation, the Americans with Disabilities Act, then Manager may thirty (30)
days after providing Owner an additional notice regarding its termination and, terminate this Agreement any time after the expiration
of such second thirty (30) day notice period upon seven (7) days’ written notice.

 

ARTICLE
VII

Operating ACCOUNT and OPERATING FUNDS

 

Section 7.1       Manager
shall establish and implement Owner’s cash management plan. Manager shall establish, at such bank(s) designated by the Owner,
at least two hotel accounts necessary for the operation of the Hotel (collectively, the “Agency Accounts”).
The Agency Accounts are the property of Owner and Owner may not more frequently than weekly direct Manager to distribute into the
Owner Account, within one (1) business day after receipt of notice from Owner, any funds remaining in the Operating Account after
accrued fees and expenses have been either disbursed.

 

	 	A.	Owner Account. Manager shall deposit all monies from the operation of the Hotel and due to Owner into a depository account for the sole benefit of Owner. Manager may endorse any and all checks drawn to the order of Owner for deposit in the Owner Account, however, Manager shall have no rights to withdrawal any monies from the Owner Account, or otherwise direct, any such funds into the Operating Account (as defined below).
	 	 	 
	 	B.	Operating Account. Owner will supply to Manager any working capital for the operation of the Hotel, which sum shall be deposited into one or more separate operating accounts to assure the timely payment of expenses of the Hotel in accordance with the Franchise Agreement and Annual Business Plan (the “Operating Account”). If at any time during the Term, the funds available from the Hotel operations for the payment of any of the costs of the Hotel, including Manager’s Management Fee and reimbursable expenses, shall be insufficient to pay the same as they become due and payable, Owner shall within five (5) days of written request from Manager, deposit sufficient funds in the Hotel bank accounts to make such payments. Business days shall exclude Saturdays, Sundays and all statutory holidays observed under the laws of the state where the Hotel is located.

 

Section 7.2       Operating
Funds. From time to time if and as required, Owner shall maintain cash in the Operating
Account (“Operating Funds”) sufficient in amount to properly operate the Hotel (including amounts sufficient
to pay those expenses described as deductions from Gross Operating Revenues). If at any time during the Term, the Operating Funds
on hand fall below $35,000 (the “Minimum Balance”), Owner shall, within five (5) days after Manager’s
written notice to Owner, deposit in the Operating Account additional funds in an amount equal to the difference between the Operating
Funds then on hand and the Minimum Balance. The Operating Funds shall at all times be the property of the Owner.

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Section 7.3       Reserve
Fund Account. There shall be established the Reserve Fund in an interest bearing account in a bank selected by Owner and approved
by Manager which approval shall not be unreasonably withheld. The Reserve Fund shall at all times be the property of the Owner
(or, if so provided in the Master Lease, the Landlord). Any amounts remaining in the Reserve Fund at the end of each Fiscal
Year will be carried forward until fully expended, but shall not be credited against required contributions to the Reserve
Fund for any subsequent Fiscal Year. Owner shall deposit into a reserve fund (“Reserve Fund”) an annual amount
of up to Four Percent (4%) of Gross Operating Revenues (the “FF&E Percentage Contribution”). Manager shall
deduct the FF&E Percentage Contribution on a monthly basis from Gross Operating Revenues and deposit such amount in the Reserve
Fund. The Reserve Fund shall be used only for additions or replacements to FF&E and Capital Renewals as contemplated by the
Capital Renewals Budget. It is understood that the amounts to be reserved for Capital Renewals under this Section 7.3 may
not represent the amounts which may be required in later years to keep the Hotel in the condition contemplated by this Agreement
and, accordingly, the parties recognize that the Capital Renewals Budgets in future years may
call for additional expenditures in excess of the amounts being reserved therefor under this Section 7.3,which
additional expenditures, if necessary, shall be paid from the Operating Funds (such expenditure shall not be considered an expense
in calculating House Profit) and the balance, if any, shall be paid by Owner. Notwithstanding anything herein to the contrary,
in the event Owner’s lender (or any other lender for whose benefit the Hotel has been encumbered by mortgage, deed of trust,
or like agreement) requires the same or greater reserve requirements, and Owner provides Manager reasonable evidence to this effect,
the Reserve Fund shall not be required.

 

ARTICLE
VIII

BOOKS, RECORDS AND FINANCIAL STATEMENTS

 

Section 8.1       Accounting
System. Manager shall keep full and adequate books of account and other records reflecting the results of operation of the
Hotel on an accrual basis, all substantially in accordance with the Uniform System. The Fiscal Year used by Manager will consist
of twelve (12) Accounting Periods of one (1) calendar month each. Except for such books and records as Manager may elect
to keep in its Affiliate’s corporate office or other suitable location pursuant to the
operation of centralized accounting services, the books of account and all other records relating to, or reflecting the
operation of, the Hotel shall be kept at the Hotel and shall be available to Owner and its representatives at all reasonable times
for examination, audit, inspection and transcription. All of such books and records, including, without limitation, books of
accounts, guest records and front office records, at all times shall be the property of Owner and shall not be removed from
the Hotel by Manager without notifying Owner. Upon termination of this Agreement, all the books and records shall be turned over
to Owner to ensure the orderly continuation of the operation of the Hotel, but the books and
records shall thereafter be available to the Manager at all reasonable times for inspection, audit, examination and transcription.

 

Section 8.2     Financial Statements. Manager shall deliver to Owner within twenty-one (21) days after the end of each Accounting
Period a profit and loss statement showing the results of the operation of the Hotel for such
Accounting Period and the Fiscal Year to date and a balance sheet as of the close of such Accounting Period. Manager
shall deliver to Owner within thirty (30) days after the end of each Fiscal Year a profit
and loss statement showing the result of operation of the Hotel during such Fiscal Year, and the House Profit, if any, and Net
Operating Income, for such Fiscal Year and a balance sheet for the Hotel as of the close of such Fiscal Year. Manager shall,
if Owner elects to conduct an audit, cooperate with the Independent Auditor so as to allow
the Independent Auditor to deliver audited financial statements to Owner within ninety
(90) days after the end of each Fiscal Year. Any disputes as to the contents of any
such statements or any accounting matter hereunder, shall be determined by the independent auditor mutually agreed upon by Owner
and Manager (the “Independent Auditor”) whose decision shall be final and conclusive on Manager and Owner, the
expense for which shall be an operating expense. 

 

Section 8.3       Initial
Accounting Records. Owner shall provide Manager with opening balance sheet entries for Manager’s use within fifteen (15)
days following the Management Commencement Date, and Manager shall not be responsible for any reconstruction of accounting records
prior to the Management Commencement Date. Manager shall not be responsible for the submission of a completed profit and loss statement
prior to thirty (30) days after the receipt of the balance sheet entries. Owner acknowledges
that Manager has no knowledge of and cannot certify the accuracy of any historical financial information provided to Manager
by Owner.

 

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ARTICLE
IX

ANNUAL BUSINESS PLAN

 

Section 9.1       Preparation
of Annual Business Plan. Manager shall submit to Owner as soon as reasonably practicable after the Management Commencement
Date a forecast of performance for the balance of the year in which the Management Commencement Date Occurs. Thereafter,
at least thirty (30) days prior to the end of each Fiscal Year, Manager shall submit an annual business plan for the succeeding
Fiscal Year (“Annual Business Plan”). The Annual Business Plan shall include: an operating budget showing estimated
Gross Operating Revenues, department profits, operating expenses, House Profit and Net Operating Income for the forthcoming
Fiscal Year for the Hotel; a marketing plan; a Capital Renewals Budget; all in reasonable detail and, where appropriate,
with the basis for all assumptions expressly set forth. Owner shall review the Annual Business Plan and either approve or notify
Manager of any objections to the Annual Business Plan in writing within twenty (20) days of
its receipt thereof. Owner’s approval of the Annual Business Plan shall not be unreasonably withheld or delayed. The parties
will attempt to resolve in good faith any objections by Owner within thirty (30) days following Manager’s receipt of Owner’s
disapproval.

 

Section 9.2      Annual
Business Plan Disputes. If Manager and Owner are unable to agree upon an Annual Business Plan or any details thereof, the final
Annual Business Plan shall be determined by arbitration in accordance with the provisions of Section 19.7 hereof, it being
understood that only those details, line items or portions of the Annual Business Plan which are in dispute shall be the subject
of such arbitration. Pending the conclusion of any such arbitration proceeding, the Annual Business Plan for all purposes under
this Agreement shall be as follows: (a) the undisputed items shall be as set forth in the proposed Annual Business Plan and (b)
the disputed items shall be modified by increasing the actual expenses incurred by the Hotel during the prior year in accordance
with the Consumer Price Index (for purposes hereof, Consumer Price Index shall mean Consumer Price Index-Cities-All Urban Consumers
(1982-84=100), issued by the Bureau of Labor Statistics of the United States Department of Labor). Owner and Manager agree that
arbitration or mediation shall be the sole procedure for resolving any dispute regarding the Annual Business Plan.

 

Section 9.3      Deviations from Annual Business Plan. Manager shall diligently pursue all feasible measures to enable the
Hotel to adhere to the Annual Business Plan, provided, however, Owner acknowledges and agrees that Manager will not be responsible
for any variances from the Annual Business Plan. In the event that Manager determines that circumstances require that there be
material changes in the Annual Business Plan, Manager shall so notify Owner as soon as practically possible after the need for
such changes becomes apparent. Such determination is made when the annual amount in a specified department described below is forecasted
to exceed the budgeted amount set forth in the Annual Business Plan as reflected in the monthly forecast. For purposes of this
Section 9.3, (i) a variation of more than ten percent (10%) below or in excess of the amount set forth in the Annual Business
Plan for either the Sales & Marketing department or the Repairs & Maintenance department;
or (ii) a variation of more than ten percent (10%) in excess of the amount set forth in the Annual Business Plan for any other
major deduction category in calculating House Profit (e.g., a department such as General and Administrative), shall be deemed to
be material. Any such material change shall be subject to Owner’s approval; provided, however, Owner’s approval shall
not be required to the extent such material change consists of: (a) expenses which are deducted from House Profit, (b) expenses
which are nondiscretionary by virtue of being determined by a third party or governmental entity, such as minimum wages under collective
bargaining agreements, utility costs, franchise fee increases, changes in franchise standards and sales taxes, (c) the amount of
increased expenses resulting directly from increases in volume, provided that, departmental profit margins and House Profit margins
are not diminished or otherwise negatively affected or (d) expenditures as may be required if Manager reasonably believes such
expenditure to be required by any emergency situation imminently threatening life, health or safety (provided that Manager shall
notify Owner of such emergency and the need for such expenditure in advance or if not possible in advance then as soon as practicable).
Notwithstanding anything herein to the contrary, Manager is not warranting or guaranteeing in any respect the actual operating
results of the Hotel.

 

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ARTICLE
X

MANAGER’S FEES AND REIMBURSEMENTS

 

Section 10.1     Base
Management Fee. During each Fiscal Year after the Management Commencement Date (and for a fraction of any partial Fiscal Year),
in consideration of the services Manager is to render under this Agreement, Manager will be paid a fee (“Base Management
Fee”) at the rate of three percent (3%) of Gross Operating Revenues per Fiscal Year. The Base Management Fee will
be paid in installments by deducting such fee from Gross Operating Revenues immediately following each Accounting Period at the
rate of three percent (3%) of Gross Operating Revenues for that Accounting Period.

 

Section 10.2    Accounting Fee and Revenue Management Fee. In addition to the Base Management Fee, the Manager shall be paid
a fee for centralized accounting services (the “Accounting Fee”) equal to $2,500 per Accounting Period during the Term
of this Agreement and for one (1) Accounting Period after the termination of this Agreement.
The Accounting Fee shall be increased each year in accordance with increases in the Consumer Price Index-Cities-All Urban
Consumers (1982-84 — 100), issued by the Bureau of Labor Statistics of the United States
Department of Labor. In addition, the Manager shall be paid a monthly fee for revenue management services (the “Revenue Management
Fee”) equal to $1,200 per month. 

 

Section 10.3     Technical,
Procurement or Other Services. Service fees for technical or procurement services for
the Hotel shall be paid to Manager or its Affiliates if and only if Owner requests such services of Manager, or any other
services beyond the scope of services to be provided pursuant to this Agreement. The amount of fees shall be agreed to by Owner
and Manager prior to commencing such services. Technical services include renovation coordination, design review, construction
management and related services. Procurement services relate to purchase and installation of furniture, fixtures, equipment, and
operating equipment of the hotel. Other services may include such services as IT Support.

 

Section 10.4    Takeover Expenses. Appropriate expenses incurred in connection with the Takeover Activities (the “Takeover
Expenses”) shall be paid by Owner and advanced to Manager in accordance with
an accounting of such expenses and any and all relevant documents to support such accounting
prepared by Manager.

 

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ARTICLE
XI

INSURANCE

 

Section 11.1    Insurance Coverage. Manager and/or Owner (as identified in Exhibit A) shall procure and maintain from
and after the Management Commencement Date, at Owner’s cost and expense, the insurance policies as provided on Exhibit
A in amounts sufficient to reasonably and adequately protect Owner and Manager against loss or damage arising in connection
with the ownership, management and operation of the Hotel, as well as to satisfy the requirements of Owner’s lender and the
Franchise Agreement. The Owner shall be responsible for obtaining the insurance coverages identified in Part A to Exhibit
A. These policies will be in the name of Owner and will name the Manager as an additional insured. The Manager shall be responsible
for obtaining the insurance coverages identified in Part B to Exhibit A. These policies will be in the name of Manager
and name the Owner of the Hotel as an additional insured. All insurance policies shall be issued by insurance companies having
an A.M. Best’s rating of not less than A – IX. Any insurance required to be provided by Manager in Section 11.1
may be provided under the blanket insurance policy of Manager, which policy covers other hotel properties managed by Manager. All
premiums, costs and expenses shall be allocated among the properties participating under such program in accordance with generally
accepted underwriting standards. Owner assumes no responsibility for, or interest in, additional premiums or proceeds (other than
standard audit adjustments) generated by the blanket insurance policy of Manager. Owner shall be provided certificates evidencing
the insurance coverages required pursuant to Section 11.1 on or before thirty (30) days after the Management Commencement
Date, and upon any and all subsequent renewals thereof. Owner shall have the right at any time for any reasonable period of time
to place property and casualty insurance coverage, and with the consent of Manager (which shall not be unreasonably withheld or
delayed) any other required coverage under this Section 11.1. If Owner notifies Manager that Owner shall place the insurance
coverage, Manager shall cooperate with Owner and shall terminate, with advance notice to Owner, any overlapping insurance coverage.

 

Section 11.2     Waiver
of Subrogation - Owner Assumes Risk of Adequacy. Neither Manager nor Owner shall assert against the other, and do hereby waive
with respect to each other, or against any other entity or person named as additional insureds on any policies carried under this
Article XI, any claims for any losses, damages, liability or expenses (including attorneys’ fees) incurred or sustained by
either of them on account of injury to persons or damage to property arising out of the operation or maintenance of the Hotel,
to the extent that the same are covered by the insurance required under this Article XI. Each policy of insurance shall contain
a specific waiver of subrogation reflecting the provisions of this Section 11.2, and a provision to the effect that the
existence of the preceding waiver shall not affect the validity of any such policy or the obligation of the insurer to pay the
full amount of any loss sustained. Owner and Manager acknowledge that they have agreed on the adequacy of the amounts of any insurance
coverage provided under this Agreement.

 

ARTICLE
XII

TERM

 

Section 12.1     Term.
This Agreement shall be for a period commencing on the Management Commencement Date and unless sooner terminated as hereinafter
provided, shall continue until the end of the Fiscal Year in which the tenth (10th) annual anniversary of the Management Commencement
Date occurs (the “Term”). Thereafter, and subject to the mutual written consent of the Owner and Manager, this Agreement
shall automatically renew for four (4) consecutive five (5) year renewal terms (“Renewal Terms”) unless
Manager or Owner provides written notice of termination to the other party at least one hundred and eighty (180) days prior to
the end of the then current term. Any reference in this Agreement to “Term” shall be deemed to be a reference to the
Initial Term and any Renewal Term.

 

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Section 12.2     Early
Termination. Owner and Manager acknowledge that, but for the Term of this Agreement and the parties’ commitment to the
contemplated relationship for the Term of this Agreement, the Manager would not have made the significant investments of money
and time necessary to commence and conduct services under this Agreement and foregone other opportunities. In the event that this
Agreement is terminated prior to the expiration of the Term (or any Renewal Term), for any reason other than Manager Default and
except as set forth in Section 12.4, then Owner shall pay to Manager the Termination Fee (as calculated below). Owner and Manager
further acknowledge and agree that Manager’s damages in the event of a termination of this Agreement would be difficult or
impossible to determine, including, without limitation, loss of management fees, harm to Manager’s reputation, loss of goodwill,
disruption of operations, loss of contributions to budgeted system expenses and loss of a hotel with strategic significance to
Manager’s system, and the Termination Fee is a fair estimate of those damages which has been agreed to in an effort to cause
the amount of said damages to be certain.

 

Section 12.3     Termination
Fee. The Termination Fee shall be the sum of the Base Management Fee estimated to be received for each Fiscal Year remaining
Term of this Agreement (“Termination Fee”). The fees estimated to be received for any given Fiscal Year shall
be determined by increasing the Base Management Fee for the last Fiscal Year prior to the termination of this Agreement (if there
has not been one (1) full Fiscal Year under this Agreement prior to such termination, then the fees that would have been earned
by Manager for the twelve (12) month period under the Annual Business Plan. Owner and Manager specifically acknowledge that the
calculation of the Termination Fee must take into account, and reasonably does take into account, (1) Manager’s loss of
Management Fees and the benefit of this Agreement over the full remaining Term of this Agreement, (2) the material impact of inflation
on Fees over such an extended period, and (3) the inherent difficulty in predicting or quantifying the measure of damages from
the non-fee components of Manager’s damages described above.

 

Section 12.4     Special
Lender Provision. Notwithstanding any other provision of this Agreement, so long as the loan to Landlord from Trustee for the
registered holders of Cobalt CMBS Commercial Mortgage Trust 2007-C3, Commercial Pass-Through Certificates, Series 2007-C3, or its
successors, remains outstanding, this Agreement may be terminated by Owner upon 30 days prior written notice, with or without cause,
and no termination fee shall be payable while the loan is outstanding.

 

ARTICLE
XIII

 

DEFAULT AND REMEDIES

 

Section 13.1     Manager
Default. This Agreement and the employment of Manager may be terminated by Owner, at its option, upon the happening of any
of the following events: (a) a material breach, default, or noncompliance by Manager with any covenants contained in this Agreement;
(b) operation of the Hotel by Manager in such a manner as to cause the Franchisor to require the removal of Manager as the operator
of the Hotel or to give notice to the Owner of intent to terminate the Franchise Agreement (unless such termination is due to Owner’s
failure to provide the funds necessary for any required capital improvements or renovations); or (c) the making by Manager of a
general assignment for the benefit of creditors; or a petition of application by either party to any tribunal for the appointment
of a trustee, custodian, receiver or liquidator of all or substantially all of its business, estate or assets; or the commencement
by Manager of any proceeding under any bankruptcy, reorganization, arrangement, insolvency, readjustment or debt, dissolution or
liquidation law of any jurisdiction, whether now or hereafter in effect.

 

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Section 13.2     Owner
Default. This Agreement may be terminated by Manager, at its option, upon the happening of any of the following events: (a)
failure of Owner to pay or reimburse Manager as stipulated in this Agreement, said termination to become effective within five
(5) days after Manager having served Owner notice of the failure and Owner’s continued failure to remedy; (b) material breach,
default or noncompliance by Owner with any other covenants contained in this Agreement; (c) the making by Owner of a general assignment
for the benefit of creditors; or a petition of application by either party to any tribunal for the appointment of a trustee, custodian,
receiver or liquidator of all or substantially all of its business, estate or assets; or the commencement by Owner of any proceeding
under any bankruptcy, reorganization, arrangement, insolvency, readjustment or debt, dissolution or liquidation law of any jurisdiction,
whether now or hereafter in effect.

 

Section 13.3     Right
to Cure. Except with respect to a default under Section 13.2(a) above, the defaulting party shall have a period of thirty
(30) days after receipt of written notice from the non-defaulting party to cure the matter giving rise to the default, and if the
nature of the default is such that it is not reasonably susceptible to cure within a thirty (30) day period, the defaulting party
shall have up to one hundred twenty (120) days after receipt of written notice to cure such default, provided the defaulting party
promptly commences and diligently pursues the curing of such default.

 

Section 13.4     Remedies.
Upon the breach of any term or condition of this Agreement by Manager and the expiration of any applicable cure period, the sole
remedy of Owner shall be to terminate this Agreement without the payment of any Termination Fee to Manager; except that Owner shall
be able to seek actual damages and/or equitable relief in the event that: (a) Manager solely causes a default under the Franchise
Agreement, (b) Manager voluntarily ceases operations of the Hotel for more than twenty-four (24) hours; or (c) Manager commits
a crime or intentional tort, as the case may be. Upon the breach of any term or condition of this Agreement by Owner and expiration
of any applicable cure period, Manager can elect to terminate this Agreement and shall be entitled to the Termination Fee.

 

ARTICLE
XIV

 

DAMAGE
TO AND DESTRUCTION OF THE HOTEL

 

Section 14.1     Casualty.
In the event that the Hotel shall be substantially destroyed during the term of the Agreement, by fire or other casualty, and the
Owner shall elect, for any reason, not to rebuild the Hotel and other improvements, the terms of this Agreement shall cease and
terminate as of the date of such destruction and no Termination Fee shall be applicable. If this Agreement is terminated pursuant
to the provisions of this Section 14.1 and within a period of two (2) years from the date of termination, Owner commences
the construction of a new hotel on the Land, then Manager shall be given a right of first refusal to operate the Hotel on the basis
set forth in this Agreement, subject to those changes required by the changes in circumstances and for a term which remained under
the Agreement prior to such termination. In the event that the Hotel shall be partially destroyed during the term of the Agreement,
by fire or other casualty, and the Owner shall elect to temporarily close all or a portion the Hotel for repair and restoration,
Manager shall continue to manage the Hotel and shall be entitled to all Fees described in Article X, including a monthly
management fee during the period or reconstruction. The proceeds of any business interruption insurance shall be included in Gross
Operating Revenues for the period for which such proceeds are payable. In addition, in the event that Owner engages the Manager
to complete the renovations, Manager shall be entitled to a renovation and construction fee of five percent (5%) of the entire
cost of reconstruction for the additional time and expense associated with the work as approved by Owner in writing. Upon completion
of the reconstruction, Manager shall be entitled to its normal management fee as set forth in Article
X.

 

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Section 14.2     Condemnation.
If the whole or a substantial portion of the Hotel shall be taken or condemned in any eminent domain, condemnation, compulsory
acquisition or like proceeding by any competent authority for any public or quasi-public use of purpose, or if such a portion thereof
shall be taken or condemned as to make it imprudent or unreasonable, in either party’s reasonable opinion, to use the remaining
portion as a Hotel of the type and class immediately preceding such taking or condemnation, then, in either of such events, the
terms of this Agreement shall cease and terminate as of the date of such taking or condemnation and no Termination Fee shall be
applicable. If this Agreement is terminated pursuant to the provisions of this Section 14.2 and within a period of two (2)
years from the date of termination, Owner commences the construction of a hotel on the Land, then Manager shall be given a right
of first refusal to operate the Hotel on the basis set forth in this Agreement subject to those changes required by the changes
in circumstances and for a term which remained under the Agreement prior to such termination. Any condemnation award or similar
compensation shall be the property of Owner, provided that Manager shall have the right to bring a separate proceeding against
the condemning authority for any damages and expenses specifically incurred by Manager as a result of such condemnation.

 

ARTICLE
XV

 

EARLY TERMINATION

 

Section 15.1    If a termination event occurs pursuant to this Agreement for any reason other than under Section 13.2(a), the party electing
to terminate shall give the other party written notice of such election. On the date which
is thirty (30) days after the date of such notice, Manager shall cease all activities at the Hotel and shall have no further obligations
under this Agreement.

 

Section 15.2    If a termination occurs pursuant to Section 13.2(a), Manager shall give to Owner notice of such election. Any time
thereafter, Manager may, on ten (10) days’ written notice, cease all activities at the Hotel and thereafter have no further
obligations under this Agreement.

 

Section 15.3     Manager
shall continue to operate the Hotel in good faith in accordance with the terms of this Agreement until the effective date of such
termination. Manager shall peacefully vacate and surrender the Hotel to Owner on the effective date of such termination.

 

Section 15.4    After the notice is given, and prior to the date Manager ceases activities at the Hotel, Manager shall be paid any
and all fees or expenses due it pursuant to this Agreement, and Manager shall cooperate
with Owner in the orderly transfer of management to Owner or Owner’s designated agent.

 

Section 15.5    Manager shall assign and transfer to Owner:

 

1.         any interest which
Manager may have or claim in and to all of Owner’s books and records, plans and specifications, architectural or engineering
drawings, contracts, leases and other documents respecting the Hotel that are not Manager’s
proprietary information and are in the custody and control of Manager; and

 

2.         all of Manager’s
right, title and interest in and to all liquor, restaurant and any other licenses and permits, if any, held by Manager in connection
with the operation of the Hotel; but only to the extent such assignment or transfer is permitted under the law of the state in
which the Hotel is located; provided, however, that if Manager has expended any of its own funds in the acquisition of licenses
or permits, Owner shall reimburse Manager therefore;

 

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3.         and any interest which Manager
may have or claim in and to the Operating Account(s) (excluding any funds deposited in the
payroll account for final payrolls) or the Reserve Fund.

 

Section 15.6     Non-Solicitation
of Employees. During the period ending six (6) months from the termination or expiration of this Agreement, Owner shall not,
directly or indirectly, hire or solicit for hire (whether as an employee, consultant or otherwise) any Key Employees of Manager,
without the prior written consent of Manager. For the purposes of this Section 15.6 “solicit for hire” shall
not include a general advertisement for employment not directed at employees of Manager.

 

ARTICLE
XVI

ASSIGNMENT

 

Section 16.1     Assignment.
Neither party shall assign or transfer or permit the assignment or transfer of this Agreement
without the prior written consent of the other; provided, however, that Manager shall have the right, without such consent,
to irrevocably and totally assign its interest in this Agreement to (i) any of its Affiliates, (ii) any successor by merger or
consolidation with Manager, or (iii) any party succeeding to substantially all of the assets of the Manager.

 

ARTICLE
XVII

TAXES

 

Section 17.1    Real Estate and Property Taxes. Upon (i) the written request of Owner
and (ii) the provision of sufficient funds and the necessary documentation, and unless otherwise required by Owner’s
lender, all real estate and ad valorem property taxes, assessments and similar charges on or relating to the Hotel during the Term
of this Agreement shall be paid by Manager before any fine, penalty or interest is added thereto or lien placed upon the Hotel
or this Agreement, unless payment thereof is, in good faith, being contested and enforcement thereof is stayed. Manager shall,
within the earlier of thirty (30) days of payment or ten (10) days following written demand by Owner, furnish Owner with copies
of official tax bills, assessments and evidence of payment or contest thereof. Owner, or Manager at direction of Owner, at Owner’s
expense, may contract with a tax consultant firm to review assessments and tax bills, file personal property tax returns as necessary,
make recommendations regarding appeals, and to manage the appeals process. 

 

ARTICLE
XVIII

INDEMNIFICATION AND LIMITATION OF LIABILITY

 

Section 18.1     Indemnification
by Owner. Owner shall hold harmless, indemnify and defend Manager and its Affiliates and their respective agents, employees,
officers, directors and shareholders (collectively, “Manager Indemnities”), from and against any action, cause
of action, suit, debt, cost, expense (including, without limitation, reasonable attorneys’ fees for pre-trial, trial and
appellate proceedings), claim or demand whatsoever brought or asserted by any third person whomsoever, at law or in equity, incurred
by Manager Indemnities arising out of, as a result of, or in connection with the operation of the Hotel including, without limitation:
(a) the performance by Manager or its Affiliates of its services hereunder, including, without limitation, any and all obligations
incurred relating to any agreements with third parties entered into by Manager or Owner in connection with the management or operation
of the Hotel in accordance with this Agreement; (b) any act or omission (whether or not willful, tortuous, or negligent) of Owner
or any third party; or (c) any other occurrence related to the Hotel or Manager’s duties under this Agreement (except for
liabilities for which Manager indemnifies Owner). Owner may apply the proceeds of any available insurance to the payment of any
claim under the indemnity set for the in this Section 18.1. The provisions of this Section 18.1 shall survive the
expiration or termination of this Agreement ands hall be binding upon Owner’s successors and assigns.

 

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Section 18.2     Indemnification
by Manager. Manager shall hold harmless, indemnify and defend Owner and its Affiliates and their respective agents, employees,
officers, directors and shareholders (collectively, “Owner Indemnities”), from and against any action, cause
of action, suit, debt, cost, expense (including, without limitation, reasonable attorneys’ fees for pre-trial, trial and
appellate proceedings), claim or demand whatsoever brought or asserted by any third person whomsoever, at law or in equity, incurred
by Owner Indemnities, arising by reason of: (a) the gross negligence or willful misconduct
of any Key Employees, which results in a claim for bodily injury, death or property damage occurring on, in or in conjunction
with the business of the Hotel, to the extent not covered by insurance (including the deductible, if any); (b) Manager’s
gross negligence or willful misconduct in the selection, hiring, training discharge or supervision of any Hotel employees; or (c)
any action taken by Manager, its employee or agent, which is beyond the scope of Manager’s authority under this Agreement.
Manager may apply the proceeds of any available insurance to the payment of any claim under the indemnity set for the in this Section
18.2. The provisions of this Section 18.2 shall survive the expiration or termination of this Agreement ands hall be
binding upon Manager’s successors and assigns.

 

Section 18.3   Indemnification
Procedure. Upon the occurrence of a claim of an event giving rise to indemnification, the party seeking indemnification shall
notify the other party hereto and provide the other party hereto with copies of any documents reflecting the claim, damage,
loss or expense. The party seeking indemnification is entitled to engage such attorneys and other persons to defend against
the claim, damage, loss or expense, as it may choose. The party providing indemnification
shall pay the reasonable charges and expenses of such attorneys and other persons on
a current basis within twenty (20) days of submission of invoices or bills. In the
event Owner neglects or refuses to pay such charges, Manager may pay such charges out of
the Operating Account and deduct such charges from any amounts due Owner or add such charges to any amounts due Manager from Owner.

 

ARTICLE
XIX

MISCELLANEOUS

 

Section 19.1     Severability.
In the event that any portion of this Agreement shall be declared invalid by order, decree or judgment of a court, this Agreement
shall be construed as if such portion had not been inserted herein except when such construction would operate as an undue
hardship to Manager or Owner or constitute a substantial deviation from the general intent and purpose of said parties as
reflected in this Agreement.

 

Section 19.2     Performance.
The failure of either party to insist upon a strict performance of any of the terms
or provisions of this Agreement or to exercise any option, right or remedy herein contained, shall not
be construed as a waiver or as a relinquishment for the future of such term, provision, option, right or remedy, but the
same shall continue and remain in full force and effect. No waiver by either party of any term
or provision hereof shall be deemed to have been made unless expressed in writing and signed by such party.

 

Section 19.3     Relationship.
The relationship of Owner and Manager shall be that of independent contractor. Nothing contained in this Agreement shall be
construed to create an agency, partnership or joint venture between them or their successors
in interest. Neither party shall borrow money in the name of, or pledge the credit of, the other.

 

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Section 19.4     Meetings.
Owner shall meet with representatives of the Manager, from time to time, so that the Manager and Owner may discuss the status
of operations and future plans, recommendations and projections. The meetings will be held
at mutually convenient dates and locations.

 

Section 19.5     Consents. Except as herein otherwise provided, whenever in this Agreement the
consent or approval of Owner or Manager is required, such consent or approval shall not
be unreasonably withheld or delayed. Such consent or approval shall be in writing only and
shall be duly executed by an authorized officer or agent of the party granting such consent or approval.

 

Section 19.6     Applicable
Law. This Agreement shall be construed under, and governed in accordance with, the laws of the State of Texas.

 

Section 19.7     Mediation
and Arbitration. Any controversy, dispute or claim arising out of or relating to this Agreement or the performance, enforcement,
breach, termination or validity thereof, including the determination of the scope of this Agreement to arbitrate, shall first be
submitted to non-binding mediation and shall thereafter be determined by final binding arbitration, and not litigation, the agreed
venue for mediation and arbitration being in Houston, Texas. The mediation process shall be administered by a mutually acceptable
mediator selected in accordance with the Commercial Mediation Rules of the American Arbitration Association (“AAA”).
If any dispute remains unresolved between the parties after the mediation process has been completed, either party may then submit
any such unresolved dispute to final and binding arbitration pursuant to the Commercial Arbitration rules of AAA, with all matters
related to the enforceability of this arbitration agreement and any award rendered pursuant
to this agreement to be governed by the Federal Arbitration Act, 9 U.S.C. Section 1-16. The Arbitration Tribunal shall
be formed of three (3) arbitrators each of which shall have at least five (5) years’ experience in hotel operation,
management, ownership or leasing, one (1) to be appointed by each party and the third (3rd) to be appointed by the American Arbitration
Association. The arbitration panel may require and facilitate such discovery as it shall determine
is appropriate in the circumstances, taking into account the needs of the parties and the desirability of making discovery
expeditious and cost-effective. The arbitration panel shall be empowered to subpoena non-party and party witnesses for deposition
and hearing to the full extent provided under the AAA Rules and the Federal Arbitration Act (or the applicable state arbitration
statute if the arbitration panel is appointed pursuant to a petition filed in state court). The arbitration panel may also direct
the production of documents and other information and the advance identification of witnesses to be called and documents to be
admitted. The arbitration panel may issue orders to protect the confidentiality of proprietary information, trade secrets and other
sensitive information before it is required to be disclosed in discovery. In addition to monetary damages, or in lieu thereof,
the arbitration panel shall have the power to grant all equitable relief (both by way of interim relief and as a part of its final
award) as may be granted by any court in the state where the Hotel is located. Monetary damage liability shall be limited to actual
damages; the parties hereby waive the right to claim and/or receive punitive damages or exemplary relief. The arbitration panel
shall determine whether and to what extent any party is a prevailing party and shall award attorneys’
fees and expenses associated with the arbitration proceeding to the “prevailing party, if any. All proceedings shall
be reported by a certified shorthand court reporter and written transcripts of the proceedings
shall be prepared and made available to the parties. The fees of the arbitration panel, together with all costs and expenses
incurred in conducting the arbitration (but excluding the parties’ respective attorney, witness and related costs and expenses)
shall be borne by the party against whom the arbitral award is made and shall be a (the) component of the arbitral award. The arbitration
shall take place in Orlando, Florida, and shall be conducted in the English language. The arbitration award shall be final and
binding upon the parties hereto and subject to no appeal. Arbitration expenses shall not be an expense in determining House Profit.
Judgment upon the award rendered maybe entered into any court having jurisdiction, or applications may be made to such court for
an order of enforcement.

 

     19

     

    

  

Section 19.8     Successors
Bound. This Agreement shall be binding upon and inure to the benefit of Owner, its successors and assigns, and shall be binding
and inure to the benefit of Manager and its permitted assigns.

 

Section 19.9     Headings.
Headings of Articles and Sections are inserted only for convenience and are in no way to be
construed as a limitation on the scope of the particular Articles or Sections to which they refer.

 

Section 19.10   Incorporation
of Recitals. The recitals set forth in the preamble of this Agreement are hereby incorporated into this Agreement as if fully
set forth herein.

 

Section 19.11   Force
Majeure. If any one or more of the following events or circumstances that, alone or in combination, adversely affects the operation
of the Hotel: fire, earthquake, storm or other casualty; strikes, lockouts, or other labor interruptions; war, acts of terrorism,
rebellion, riots or other civil unrest; or any other event beyond Manager’s or Owner’s, as the case maybe, reasonable
control, a party shall be excused from performance of any provision hereof to the extent that
such party’s ability to comply with such provision is materially impacted by such event.

 

Section 19.12   Notices.
Notices, statements and other communications to be given under the terms of this Agreement shall be in writing and delivered by
hand against receipt or sent by certified or registered mail, return receipt requested, or by Federal Express or other similar
overnight mail service:

 

	To Owner:
	 
	Moody National International-Fort Worth MT,
	LLC
	6363 Woodway, Suite 110
	Houston, Texas 77057
	Attn: Vice President - Corporate Asset
	Management
	Phone: 713-977-7500
	Fax: 713-977-7505
	 
	To Manager:
	 
	Moody National Hospitality
	Management, LLC
	6363 Woodway, Suite 110
	Houston, Texas 77057
	Attn: Vice President - Hospitality
	Phone: 714-977-7500
	Fax: 713-977-7505

 

or at such
other address as from time to time designated by the party receiving the notice.

 

Section 19.13  Entire Agreement. This Agreement, together with other writings signed by
the parties expressly stated to be supplementing hereto and together with any instruments to be executed and delivered pursuant
to this Agreement, constitutes the entire agreement between the parties and supersedes all
prior understandings and writings, and may be changed only by a writing signed by the parties hereto.

 

     20

     

    

  

Section 19.14   Manager’s
Authority Limited. Manager’s authority shall be derived wholly from this Agreement, and Manager has no authority
to act for or represent Owner except as herein specified.

 

Section 19.15  Exclusive Compensation. The payments to be made to Manager hereunder
shall be in lieu of all other or further compensation or commissions of any nature whatsoever for
the services described herein and this Agreement shall be considered as a special agreement between the parties hereto covering
the appointment and compensation of Manager to the exclusion of any other method of compensation unless otherwise agreed to in
writing.

 

Section 19.16   Time.
Time is of the essence with respect to this Agreement.

 

Section 19.17   Attorneys’
Fees. In the event of any litigation arising out of this Agreement, the prevailing party
shall be entitled to reasonable costs and expenses, including without limitation, attorneys’ fees.

 

Section 19.18   Complimentary/Discount
Policies. Manager will be permitted to provide customary gratuitous accommodations, services and amenities to such employees
and representatives of Manager visiting the Hotel in connection with the Hotel’s management.

 

[Signatures
appear on following page]

 

     21

     

    

 

IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their
duly authorized officers.

 

	 	OWNER:
	 	 
	 	MOODY NATIONAL INTERNATIONAL-FORT WORTH MT, LLC, a Delaware limited liability company

 

	 	By:	 
	 	Name:	Brett C. Moody
	 	Title:	President

 

	 	MANAGER:
	 	 
	 	MOODY NATIONAL HOSPITALITY MANAGEMENT, LLC., a Texas limited liability company

 

	 	By:	 
	 	Name:	 
	 	Title:	 

 

     

     

    

 

Exhibit A

 

Insurance

 

Insurance Requirements for Owner and Manager

 

PART A –
OWNER REQUIREMENTS

 

	 	1.	Commercial General Liability policy (with respect to the Property) with limits not less than $1,000,000 per occurrence with a $2,000,000 annual aggregate.
	 	 	 
	 	2.	Commercial Umbrella policy (with respect to the Property) with limits not less than $10,000,000.
	 	 	 
	 	3.	Business Automobile Insurance with limits not less than a $1,000,000 Combined Single Limit.
	 	 	 
	 	4.	Commercial Property policy insuring the building, business personal property, business income and signs at a replacement cost with agreed upon deductibles. Policy shall be written on a special causes of loss form including coverage for flood, wind and earthquake where applicable.
	 	 	 
	 	5.	Terrorism.
	 	 	 
	 	6.	Business Interruption.
	 	 	 
	 	7.	Boiler & Machinery.
	 	 	 
	 	8.	Garage Keepers Liability.
	 	 	 
	 	9.	Liquor Liability Insurance policy with limits not less than $1,000,000 per occurrence (Only when applicable)
	 	 	 
	 	10.	Insurance against the theft or damage to guests’ property in an amount not less than $25,000 per guest.
	 	 	 
	 	11.	Insurance against such other operating risks against which it is customary or advisable to insure in the operations of hotels of this nature.

 

PART B –
MANAGER REQUIREMENTS

 

	 	1.	Commercial General Liability policy (with respect to Management Company) with limits not less than $1,000,000 per occurrence with a $2,000,000 annual aggregate.
	 	 	 
	 	2.	Commercial Umbrella policy (with respect to Management Company) with limits not less than $10,000.000.
	 	 	 
	 	3.	Workers Compensation Insurance on all Hotel Employees in compliance with applicable statutory requirements with a $1,000,000 limit under the employer’s liability section.

 

     

     

    

  

	 	4.	A blanket Fidelity bond with a limit not less than $500,000 and a deductible of no more than $25,000, or as may be reasonably requested by the Owner.
	 	 	 
	 	5.	Employment Practices Liability insurance policy covering all employees with a limit of not less than $1,000,000 per occurrence.
	 	 	 
	 	6.	Management Errors and Omissions policy with limits of at least $1,000,000 per occurrence.
	 	 	 
	 	7.	Insurance covering such other hazards an in such amounts as may be customary for comparable properties in the areas of the Hotel as may be reasonably requested by the Owner.

 

2MOODY NATIONAL REIT I, INC. 10-K

Exhibit
10.59

 

HOTEL LEASE AGREEMENT 

 

EFFECTIVE December 18, 2015

 

BETWEEN 

 

Moody National International-Fort Worth Holding,
LLC, a 

 Delaware limited liability company

 

AS LESSOR 

 

AND 

 

Moody National International-Fort Worth MT,
LLC, a 

Delaware limited liability company 

 

AS LESSEE 

 

    	 

    	 

    

 

HOTEL LEASE AGREEMENT

 

THIS HOTEL LEASE AGREEMENT (hereinafter called
“Lease”), effective as of the 18th day of December, 2015, by and between Moody National International-Fort Worth
Holding, LLC, a Delaware limited liability company (hereinafter called “Lessor”), and Moody National International
Fort-Worth MT, LLC, a Delaware limited liability company (hereinafter called “Lessee”), provides as follows:

 

AGREEMENT: 

 

Lessor, for and in consideration
of the payment of rent by Lessee to Lessor, the covenants and agreements to be performed by Lessee, and upon the terms and conditions
hereinafter stated, does hereby rent and lease unto Lessee, and Lessee does hereby rent and lease from Lessor, the Leased Property.

 

ARTICLE
1

LEASED PROPERTY; term

 

1.1           Leased
Property. The Leased Property shall mean and is comprised of Lessor’s interest in the following:

 

(a)   the land described
in Exhibit A attached hereto and by reference incorporated herein (the “Land”);

 

(b)   all buildings,
structures and other improvements of every kind including, but not limited to, alleyways and connecting tunnels, sidewalks, utility
pipes, conduits and lines (on-site and offsite), parking areas and roadways appurtenant to such buildings and structures presently
situated upon the Land (collectively, the “Leased Improvements”);

 

(c)   all easements,
rights and appurtenances relating to the Land and the Leased Improvements;

 

(d)   all equipment,
machinery, fixtures, and other items of property required for or incidental to the use of the Leased Improvements as a hotel, including
all components thereof, now and hereafter permanently affixed to or incorporated into the Leased Improvements, including, without
limitation, all furnaces, boilers, heaters, electrical equipment, heating, plumbing, lighting, ventilating, refrigerating, incineration,
air and water pollution control, waste disposal, air-cooling and air-conditioning systems and apparatus, sprinkler systems and
fire and theft protection equipment, all of which to the greatest extent permitted by law are hereby deemed by the parties hereto
to constitute real estate, together with all replacements, modifications, alterations and additions thereto (collectively, the
“Fixtures”);

 

(e)   all furniture and
furnishings and all other items of personal property (excluding Inventory and personal property owned by Lessee, if any) located
on, and used in connection with, the operation of the Leased Improvements as a hotel, together with all replacements, modifications,
alterations and additions thereto.

 

THE LEASED PROPERTY IS DEMISED IN ITS PRESENT
CONDITION WITHOUT REPRESENTATION OR WARRANTY (EXPRESSED OR IMPLIED) BY LESSOR AND SUBJECT TO THE RIGHTS OF PARTIES IN POSSESSION,
AND TO THE EXISTING STATE OF TITLE INCLUDING ALL COVENANTS, CONDITIONS, RESTRICTIONS, EASEMENTS AND OTHER MATTERS OF RECORD INCLUDING
ALL APPLICABLE LEGAL REQUIREMENTS AND OTHER MATTERS WHICH WOULD BE DISCLOSED BY AN INSPECTION OF THE LEASED PROPERTY OR BY AN ACCURATE
SURVEY THEREOF.

 

1.2           Term.
The term of this Lease (the “Term”) shall commence on the date hereof (the “Commencement Date”) and
shall end on the tenth (10th) anniversary of the last day of the month in which the Commencement Date occurs,
unless sooner terminated in accordance with the provisions hereof; provided, however, in the event that the Initial Loan is
not repaid on or before this termination date, the term of this Lease shall automatically renew for a one-year extension from
the initial termination date.

 

    	 

    	 

    

 

(a)   Option to Terminate
Lease. In the event Lessor enters into a contract to sell the Leased Property to a non-Affiliate, Lessor may terminate the
Lease by giving not less than forty-five (45) days’ prior written notice of the election to terminate the Lease effective
upon the consummation of such transaction. Effective upon such termination date, the Lease shall terminate and be of no further
force and effect as to any obligations of the parties existing as of such date that survive termination of this Lease. Lessor shall
pay to Lessee, or reimburse Lessee for any assignment or termination fees or other liabilities arising under the Management Agreement
or any Franchise Agreement solely as a result of the termination or assignment of such agreements in connection with a termination
of the Lease under this Section 1.2(a).

 

1.3           Transition Procedures.
Upon the expiration or termination of the Term of this Lease, Lessor and Lessee shall do the following (and the provisions of this
Section 1.3 shall survive the expiration or termination of this Lease until they have been fully performed) and, in general,
shall cooperate in good faith to effect an orderly transition of the management and/or lease of the Hotel:

 

(a)   Transfer of Licenses.
Lessee shall use reasonable efforts (i) to transfer to Lessor or Lessor’s nominee all licenses, operating permits and
other governmental authorizations and all contracts, including contracts with governmental or quasi-governmental entities, that
may be necessary for the operation of the Hotel (collectively, “Licenses”), or (ii) if such transfer is
prohibited by law or Lessor otherwise elects, to cooperate with Lessor or Lessor’s nominee in connection with the processing
by Lessor or Lessor’s nominee of any applications for, all Licenses; provided, in either case, that the costs and expenses
of any such transfer or the processing of any such application shall be paid by Lessor or Lessor’s nominee.

 

(b)   Leases and Concessions.
Lessee shall assign to Lessor or Lessor’s nominee simultaneously with the termination of this Lease, and the assignee shall
assume, all leases and concession agreements in effect with respect to the Hotel then in Lessee’s name.

 

(c)   Books and Records.
All books and records for the Hotel kept by Lessee pursuant to Section 4.2 shall be delivered promptly to Lessor or Lessor’s
nominee, simultaneously with the termination of this Lease, but such books and records shall thereafter be available to Lessee
at all reasonable times for inspection, audit, examination, and transcription for a period of one (1) year and Lessee may
retain (on a confidential basis) copies or computer records thereof.

 

(d)   Receivables and
Payables. Lessee shall be entitled to retain all cash, bank accounts and house banks, and to collect all Gross Revenues and
accounts receivable accrued through the termination date. In addition, Lessee shall be entitled to retain any amounts remaining
of the monthly furniture and equipment funded by Lessee as required by the Loan Documents and/or the Management Agreement. Lessee
shall be responsible for the payment of Rent, all Gross Operating Expenses and all other obligations of Lessee accrued under this
Lease as of the termination date, and Lessor or Lessor’s nominee shall be responsible for all Gross Operating Expenses of
the Hotel accruing after the termination date.

 

(e)   Final Accounting.
Lessee shall, within forty five (45) days after the expiration or termination of the Term, prepare and deliver to Lessor
a final accounting statement, dated as of the date of the expiration or termination, along with a statement of any sums due from
Lessee to Lessor pursuant hereto and payment of such funds.

 

(f)   Inventory.
Lessee shall insure that the Leased Property, at the date of such termination or expiration, has Inventory of a substantially
equivalent nature and amount as exists at the Leased Property on the Commencement Date, and Lessor or its designee shall acquire
such Inventory from Lessee for a sale price equal to the fair market value of such Inventory to the extent that such Inventory
is the personal property of the Lessee.

 

(g)   Surrender.
Lessee will, upon the expiration or prior termination of the Term, vacate and surrender the Leased Property to Lessor in the condition
in which the Leased Property was originally received from Lessor, except as repaired, rebuilt, restored, altered or added to as
permitted or required by the provisions of this Lease and except for ordinary wear and tear (subject to the obligation of Lessee
to maintain the Leased Property in good order and repair, as would a prudent owner, during the entire Term of the Lease), or damage
by casualty or Condemnation (subject to the obligations of Lessee to restore or repair as set forth in the Lease).

 

     3

     

    

 

The provisions of this Section 1.3
shall survive the expiration or termination of this Lease until they have been fully performed. Nothing contained herein shall
limit Lessor’s rights and remedies.

 

1.4           Holding Over.
If Lessee for any reason remains in possession of the Leased Property after the expiration or earlier termination of the Term,
such possession shall be as a tenant at sufferance during which time Lessee shall pay as rental each month 125% of the aggregate
of (a) one-twelfth of the aggregate Base Rent and Percentage Rent payable with respect to the last Fiscal Year of the Term,
(b) all Additional Charges accruing during the applicable month and (c) all other sums, if any, payable by Lessee under
this Lease with respect to the Leased Property. During such period, Lessee shall be obligated to perform and observe all of the
terms, covenants and conditions of this Lease, but shall have no rights hereunder other than the right, to the extent given by
law to tenancies at sufferance, to continue its occupancy and use of the Leased Property. Nothing contained herein shall constitute
the consent, express or implied, of Lessor to the holding over of Lessee after the expiration or earlier termination of this Lease.

 

1.5           Forfeiture.
In the event that any of Lessee’s Personal Property is retained by Lender in a foreclosure or otherwise due to Lessor’s
failure to satisfy amounts due under the Loan Documents that are not an obligation of the Lessee pursuant to the terms of this
Lease, Lessor shall pay to Lessee a fee in the amount of $100,000.

 

ARTICLE
2

 

DEFINITIONS

 

2.1           Definitions.
For all purposes of this Lease, except as otherwise expressly provided or unless the context otherwise requires, (a) the terms
defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular, (b) all
accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting
principles as are at the time applicable, (c) all references in this Lease to designated “Articles,” “Sections”
and other subdivisions are to the designated Articles, Sections and other subdivisions of this Lease and (d) the words “herein,”
“hereof” and “hereunder” and other words of similar import refer to this Lease as a whole
and not to any particular Article, Section or other subdivision:

 

Additional Charges: As defined in Section 3.3.

 

Affiliate: The term
“Affiliate” of a Person shall mean (a) any Person that, directly or indirectly, controls or is controlled
by or is under common control with such Person, (b) any other Person that owns, beneficially, directly or indirectly, ten
percent (10%) or more of the outstanding capital stock, shares or equity interests of such Person, or (c) any officer,
director, employee, partner, manager or trustee of such Person or any Person controlling, controlled by or under common control
with such Person or any Person that owns, beneficially, directly or indirectly, ten percent (10%) or more of the outstanding
capital stock, shares or equity interests of such Person (excluding trustees and Persons serving in similar capacities who are
not otherwise an Affiliate of such Person). For the purposes of this definition, “control” (including the correlative
meanings of the terms “controlled by” and “under common control with”), as used with respect
to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management
and policies of such Person, through the ownership of voting securities, partnership interests or other equity interests.

 

Annual Budget: The
operating and capital budget prepared by Lessee and delivered to Lessor in accordance with Section 4.1.

 

Annual Revenues Computation: As defined
in Subsection 3.1(b) and set forth on Exhibit C.

 

Base Rate: The rate
of interest announced publicly by Citibank, N.A., in New York, New York, from time to time, as such bank’s base rate. If
no such rate is announced or if such rate becomes discontinued, then such other rate as Lessor may reasonably designate.

 

Base Rent: As defined in Section 3.1(a).

 

Business Day: Each
Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on which national banks in the City of Houston, Texas are closed.

 

CERCLA: The Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended.

 

     4

     

    

 

Change of Control:
The sale, conveyance, assignment, encumbering, pledging, hypothecation, granting a security interest in, granting of options with
respect to, or other disposition of (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and
whether or not for consideration) of any class stock or other equity interests in a Person (other than among existing holders of
interests in such Person on the Commencement Date and/or family members of such holders and/or trusts for the benefit of any of
the foregoing) that, upon a transfer of any portion thereof, will create in the transferee thereof, directly or indirectly, a majority
of any class of stock or other equity interests of such Person.

 

Claims: As defined
in Section 12.2.

 

COBRA: As defined
in Subsection 8.2(b).

 

Code: The Internal
Revenue Code of 1986, as amended.

 

Commencement Date:
As defined in Section 1.2.

 

Condemnation Proceeding:
Any action or proceeding brought by competent authority for the purpose of any taking of the fee of the Leased Property or any
part thereof or estate therein as a result of the exercise of the power of eminent domain, including, but not limited to, a voluntary
conveyance to such authority under either threat of or in lieu of condemnation or while such action or proceeding is pending.

 

Consolidated Financials:
For any fiscal year or other accounting period for Lessee and its consolidated subsidiaries, if any, statements of earnings and
retained earnings and of changes in financial position for such period and for the period from the beginning of the respective
fiscal year to the end of such period and the related balance sheet as at the end of such period, together with the notes thereto,
all in reasonable detail and setting forth in comparative form the corresponding figures for the corresponding period in the preceding
fiscal year, and prepared in accordance with generally accepted accounting principles and audited by independent certified public
accountants acceptable to Lessor in its sole discretion.

 

Encumbrance: As
defined in Section 22.1.

 

Environmental Audit:
As defined in Subsection 8.3(b).

 

Environmental Authority:
Any department, agency or other body or component of any Government that exercises any form of jurisdiction or authority under
any Environmental Law.

 

Environmental Authorization:
Any license, permit, order, approval, consent, notice, registration, filing or other form of permission or authorization required
under any Environmental Law.

 

Environmental Laws:
All applicable federal, state, local and foreign laws and regulations relating to pollution of the environment (including without
limitation, ambient air, surface water, ground water, land surface or subsurface strata), including without limitation laws and
regulations relating to emissions, discharges, Releases or threatened Releases of Hazardous Materials or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials. Environmental
Laws include but are not limited to CERCLA, FIFRA, RCRA, SARA and TSCA.

 

Environmental Liabilities:
Any and all obligations to pay the amount of any judgment or settlement, the cost of complying with any settlement, judgment or
order for injunctive or other equitable relief, the cost of compliance or corrective action in response to any notice, demand or
request from an Environmental Authority, the amount of any civil penalty or criminal fine, and any court costs and reasonable amounts
for attorney’s fees, fees for witnesses and experts, and costs of investigation and preparation for defense of any claim
or any Proceeding, regardless of whether such Proceeding is threatened, pending or completed, that may be or have been asserted
against or imposed upon Lessor, Lessee, any Predecessor, the Leased Property or any property used therein and arising out of:

 

(a)   Failure of Lessee,
Lessor, any Predecessor or the Leased Property to comply at any time with all Environmental Laws;

 

     5

     

    

 

(b)   Presence of any
Hazardous Materials on, in, under, at or in any way affecting the Leased Property;

 

(c)   A Release at any
time of any Hazardous Materials on, in, at, under or in any way affecting the Leased Property;

 

(d)   Identification
of Lessee, Lessor or any Predecessor as a potentially responsible party under CERCLA or under any Environmental Law similar to
CERCLA;

 

(e)   Presence at any
time of any above-ground and/or underground storage tanks, as defined in RCRA or in any applicable Environmental Law on, in, at
or under the Leased Property or any adjacent site or facility; or

 

(f)   Any and all claims
for injury or damage to Persons or property arising out of exposure to Hazardous Materials originating or located at the Leased
Property, or resulting from operation thereof or any adjoining property.

 

Event of Default:
As defined in Section 16.1.

 

FIFRA: The Federal
Insecticide, Fungicide, and Rodenticide Act, as amended.

 

Fiscal Year: The
twelve (12) month period from January 1 to December 31, or any shorter period at the beginning or end of the Term.

 

Fixtures: As defined
in Section 1.1.

 

Force Majeure: An
Unavoidable Occurrence, generally affecting travel and/or the hotel or lodging business in the market and/or submarket in which
the Hotel is located.

 

Franchise Agreement:
any franchise agreement or license agreement with a franchisor (such as Marriott) under which the Hotel is operated.

 

Furniture and Equipment:
For purposes of this Lease, the terms “furniture and equipment” shall mean collectively all furniture, furnishings,
wall coverings, fixtures and hotel equipment and systems located at, or used in connection with, the Hotel, together with all replacements
therefor and additions thereto, including, without limitation, (i) all equipment and systems required for the operation of
kitchens and bars, laundry and dry cleaning facilities, (ii) office equipment, (iii) material handling equipment, cleaning
and engineering equipment, (iv) telephone and computerized accounting systems, and (v) vehicles.

 

Government: The
United States of America, any state, district or territory thereof, any foreign nation, any state, district, department, territory
or other political division thereof, or any agency or political subdivision of any of the foregoing.

 

Gross Operating Expenses:
The term “Gross Operating Expenses” shall include (i) all costs and expenses of operating the Hotel included
within the meaning of the term “Total Costs and Expenses” contained in the Uniform System and, (ii) without
duplication, the following: all salaries and employee expense and payroll taxes (including salaries, wages, bonuses and other compensation
of all employees of the Hotel, and benefits including life, medical and disability insurance and retirement benefits), expenditures
described in Section 9.1, operational supplies, utilities, insurance to be provided by Lessee under the terms of this Lease,
governmental fees and assessments, common area maintenance costs and other common area fees and assessments, food, beverages, laundry
service expense, the cost of Inventories, license fees, advertising, marketing, reservation systems and any and all other operating
expenses as are reasonably necessary for the proper and efficient operation of the Hotel and the Leased Property incurred by Lessee
in accordance with the provisions hereof (excluding, however, (i) federal, state and municipal excise, sales and use taxes
collected directly from patrons and guests or as a part of the sales price of any goods, services or displays, such as gross receipts,
admissions, cabaret or similar or equivalent taxes paid over to federal, state or municipal governments, (ii) the cost of
insurance to be provided under Article 13, (iii) expenditures by Lessor pursuant to Article 13 and (iv) payments on any
Mortgage or other mortgage or security instrument on the Hotel); all determined in accordance with generally accepted accounting
principles. No part of Lessee’s central office overhead or general or administrative expense (as opposed to that of the Hotel),
shall be deemed to be a part of Gross Operating Expenses, as herein provided. Reasonable out-of-pocket expenses of Lessee incurred
for the account of or in connection with the Hotel operations, including but not limited to postage, telephone charges and reasonable
travel expenses of employees, officers and other representatives and consultants of Lessee and its Affiliates, shall be deemed
to be a part of Gross Operating Expenses and such Persons shall be afforded reasonable accommodations, food, beverages, laundry,
valet and other such services by and at the Hotel without charge to such Persons or Lessee.

 

     6

     

    

 

Gross Operating Profit:
For any Fiscal Year, the excess of Gross Revenues for such Fiscal Year over Gross Operating Expenses for such Fiscal Year.

 

Gross Revenues:
All revenues, receipts, and income of any kind derived directly or indirectly by Lessee from or in connection with the Hotel (including
rentals or other payments from tenants, lessees, licensees or concessionaires but not including their gross receipts) whether on
a cash basis or credit, paid or collected, determined in accordance with generally accepted accounting principles, excluding, however:
(i) funds furnished by Lessor, (ii) federal, state and municipal excise, sales, and use taxes collected directly from
patrons and guests or as a part of the sales price of any goods, services or displays, such as gross receipts, admissions, cabaret
or similar or equivalent taxes and paid over to federal, state or municipal governments, (iii) the amount of all credits,
rebates or refunds to customers, guests or patrons, and all service charges, finance charges, interest and discounts attributable
to charge accounts and credit cards, to the extent the same are paid to Lessee by its customers, guests or patrons, or to the extent
the same are paid for by Lessee to, or charged to Lessee by, credit card companies, (iv) gratuities or service charges actually
paid to employees, (v) proceeds of insurance and condemnation, (vi) proceeds from sales other than sales in the ordinary
course of business, (vii) all loan proceeds from financing or refinancings of the Hotel or interests therein or components
thereof, (viii) judgments and awards, except any portion thereof arising from normal business operations of the Hotel, and
(ix) items constituting “allowances” under the Uniform System.

 

Hazardous Materials:
All chemicals, pollutants, contaminants, wastes and toxic substances, including without limitation:

 

(a)   Solid or hazardous
waste, as defined in RCRA or any other Environmental Law;

 

(b)   Hazardous substances,
as defined in CERCLA or any other Environmental Law;

 

(c)   Toxic substances,
as defined in TSCA or any other Environmental Law;

 

(d)   Insecticides, fungicides,
or rodenticides, as defined in FIFRA or any other Environmental Law; and

 

(e)   Gasoline or any
other petroleum product or byproduct, polychlorinated biphenyl, asbestos and urea formaldehyde.

 

Hotel: The hotel
and/or other facility offering lodging and other services or amenities being operated or proposed to be operated on the Leased
Property.

 

Impositions: Collectively,
all taxes (including, without limitation, all ad valorem, sales and use, single business, gross receipts, transaction, privilege,
rent or similar taxes as the same relate to or are imposed upon Lessee or its business conducted upon the Leased Property), assessments
(including, without limitation, all assessments for public improvements or benefit, whether or not commenced or completed prior
to the date hereof and whether or not to be completed within the Term), ground rents, water, sewer or other rents and charges,
excises, tax inspection, authorization and similar fees and all other governmental charges, in each case whether general or special,
ordinary or extraordinary, or foreseen or unforeseen, of every character in respect of the Leased Property or the business conducted
thereon by Lessee (including all interest and penalties thereon caused by any failure in payment by Lessee), which at any time
prior to, during or with respect to the Term hereof may be assessed or imposed on or with respect to or be a lien upon (a) Lessor’s
interest in the Leased Property, (b) the Leased Property, or any part thereof or any rent therefrom or any estate, right,
title or interest therein, or (c) any occupancy, operation, use or possession of, or sales from, or activity conducted on
or in connection with the Leased Property, or the leasing or use of the Leased Property or any part thereof by Lessee. Nothing
contained in this definition of Impositions shall be construed to require Lessee to pay (1) any tax based on net income (whether
denominated as a franchise or capital stock or other tax) imposed on Lessor or any other Person, or (2) any net revenue tax
of Lessor or any other Person, or (3) any tax imposed with respect to the sale, exchange or other disposition by Lessor of
any Leased Property or the proceeds thereof, or (4) any single business, gross receipts (other than a tax on any rent received
by Lessor from Lessee), transaction, privilege or similar taxes as the same relate to or are imposed upon Lessor, except to the
extent that any tax, assessment, tax levy or charge that Lessee is obligated to pay pursuant to the first sentence of this definition
and that is in effect at any time during the Term hereof is totally or partially repealed, and a tax, assessment, tax levy or charge
set forth in clause (1) or (2) is levied, assessed or imposed expressly in lieu thereof. Notwithstanding anything contained
herein to the contrary, Lessor shall fund all tax escrows required to be reserved pursuant to the Loan Documents and Lessee shall
not be responsible for the payment of such amounts.

 

     7

     

    

 

Indemnified Party:
Either of a Lessee Indemnified Party or a Lessor Indemnified Party.

 

Indemnifying Party:
Any party obligated to indemnify an Indemnified Party pursuant to Sections 8.3 or 18.1.

 

Insurance Requirements:
All terms of any insurance policy required by this Lease and all requirements of the issuer of any such policy.

 

Initial Lender:
U.S. Bank National Association, in its capacity as Trustee, Successor-In-Interest to Bank of America, N.A., in its capacity as
Trustee, Successor-In-Interest to Wells Fargo Bank, N.A., in its capacity as Trustee for the Registered Holders of Cobalt CMBS
Commercial Mortgage Trust 2007-C3, Commercial Mortgage Pass-Through Certificates, Series 2007-C3 and its successors and assigns.

 

Initial Loan: The
loan in the original principal amount of $7,840,000 made by the predecessor-in-interest to Initial Lender and assumed by Lessor
concurrently herewith.

 

Initial Loan Documents:
The (a) (i) Assumption Agreement, (ii) Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing, (iii)
Fixed Rate Note, (iv) Environmental Liabilities Agreement, (v) Assignment of Agreements, Permits and Contracts, (vi) Assignment
of Leases and Rents, (vii) Cash Management Agreement, (viii) Subordination and Attornment Agreement; and (b) any other documents
executed by Lessor, Lessee (where applicable) and Initial Lender evidencing the Initial Loan.

 

Inventory: All “Inventories
of Merchandise” and “Inventories of Supplies” as defined in the Uniform System, including without
limitation linens, china, silver, glassware and other non-depreciable personal property, and including any property of the type
described in Section 1221(1) of the Code.

 

Land: As defined
in Section 1.1.

 

Lease: This Lease
by and between the Lessor and Lessee.

 

Leased Improvements;
Leased Property: Each as defined in Section 1.1.

 

Legal Requirements:
All federal, state, county, municipal and other governmental statutes, laws, rules, orders, regulations, ordinances, judgments,
decrees and injunctions affecting either the Leased Property or the maintenance, construction, use or alteration thereof (whether
by Lessee or otherwise), whether now in force or hereafter enacted and in force, including (a) all laws, rules or regulations
pertaining to the environment, occupational health and safety and public health, safety or welfare, and (b) any laws, rules
or regulations that may (1) require repairs, modifications or alterations in or to the Leased Property or (2) in any
way adversely affect the use and enjoyment thereof; 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 Lessee
(other than encumbrances created by Lessor without the consent of Lessee), at any time in force affecting the Leased Property.

 

Lender: The Initial
Lender or any lender under a Permitted Mortgage.

 

Lessee: The Lessee
designated in this Lease and its respective permitted successors and assigns.

 

Lessee Indemnified Party:
Lessee, any Affiliate of Lessee, any other Person against whom any claim for indemnification may be asserted hereunder as a result
of a direct or indirect ownership interest (including a stockholder’s or member’s interest) in Lessee, the officers,
directors, stockholders, members, managers, employees, agents and representatives of Lessee, and the respective heirs, personal
representatives, successors and assigns of any such officer, director, stockholder, member, manager, employee, agent or representative.

 

     8

     

    

 

Lessee’s Personal
Property: As defined in Section 6.2.

 

Lessor: The Lessor
designated in this Lease and its respective successors and assigns.

 

Lessor Capital Improvements:
All capital expenditures attributable to the foundation, structural walls and the roof of the Leased Property, but excluding windows
and plate glass, mechanical, electrical and plumbing systems and equipment, including conduit and ductware, and non-load bearing
walls and parking lot surfaces.

 

Lessor Indemnified Party:
Lessor, any Affiliate of Lessor, any other Person against whom any claim for indemnification may be asserted hereunder as a result
of a direct or indirect ownership interest (including a stockholder’s or partnership interest) in Lessor, the officers, directors,
stockholders, members, managers, employees, agents and representatives of the general partner of Lessor and any partner, agent,
or representative of Lessor, and the respective heirs, personal representatives, successors and assigns of any such officer, director,
stockholder, partner, member, manager, employee, agent or representative.

 

Licenses: As defined
in Subsection 1.3(a).

 

Loan Documents:
The Initial Loan Documents or any documents comprising a Permitted Mortgage.

 

Management Agreement:
That certain Hotel Management Agreement dated concurrently herewith to which Moody National Hospitality Management, LLC and the
Lessee are the current parties (as amended and assigned) or any agreement pursuant to which a successor manager operates the Hotel.

 

Manager: Moody National
Hospitality Management, LLC, or any successor manager that is retained by Lessee to operate the Hotel pursuant to this Lease and
any Franchise Agreement.

 

Notice: As defined
in Article 26.

 

Officer’s Certificate:
A certificate of Lessee reasonably acceptable to Lessor, signed by the chief financial officer or another officer authorized so
to sign by the board of directors or other governing body of Lessee, or bylaws or limited liability company agreement of Lessee,
or any other Person whose power and authority to act has been authorized by delegation in writing by any such officer.

 

Overdue Rate: On
any date, a rate equal to the Base Rate plus 1.25% per annum, but in no event greater than the maximum rate then permitted under
applicable law.

 

Payment Date: Any
due date for the payment of any installment of Base Rent.

 

Percentage Rent:
As defined in Subsection 3.1(b).

 

Permitted Mortgage:
The mortgage, deed of trust or other similar documents (“Mortgage”) securing the Initial Loan or any subsequent mortgage
placed on the Leased Property by Lessor and Lessee in compliance with the terms of this Lease.

 

Person: Any Government,
natural person, corporation, general or limited partnership, limited liability company, stock company or association, joint venture,
association, company, trust, bank, trust company, land trust, business trust, or other entity.

 

Personal Property Taxes:
All personal property taxes imposed on the furniture, furnishings or other items of personal property located on, and used in connection
with, the operation of the Leased Improvements as a hotel (other than such Inventory and other personal property that is owned
by Lessee), together with all replacement, modifications, alterations and additions thereto.

 

Predecessor: Any
Person whose liabilities arising under any Environmental Law have or may have been retained or assumed by Lessor or Lessee, either
contractually or by operation of law, relating to the Leased Property.

 

     9

     

    

 

Primary Intended Use:
As defined in Subsection 7.2(b).

 

Proceeding: Any
judicial action, suit or proceeding (whether civil or criminal), any administrative proceeding (whether formal or informal), any
investigation by a governmental authority or entity (including a grand jury), and any arbitration, mediation or other non-judicial
process for dispute resolution.

 

RCRA: The Resource
Conservation and Recovery Act, as amended.

 

Real Estate Taxes:
All real estate taxes, including general and special assessments, if any, which are imposed upon the Land, and any improvements
thereon.

 

Release: A “Release”
as defined in CERCLA or in any Environmental Law, unless such Release has been properly authorized and permitted in writing by
all applicable Environmental Authorities or is allowed by such Environmental Law without authorizations or permits.

 

Rent: Base Rent,
Percentage Rent and Additional Charges, collectively.

 

Repositioning: As
defined in Section 3.6.

 

Restoration: The
restoration, repair, replacement, rebuilding or alteration of the Leased Property following a casualty or a partial Taking (including,
without limitation, the cost of all temporary repairs for the protection of property pending the completion of permanent restoration,
repair, replacement, rebuilding or alteration), to a complete architectural unit of as nearly as possible the same value, condition
and character that existed immediately prior to such casualty or Taking, to the extent permissible under applicable Legal Requirements,
including without limitation, all zoning and use requirements and regulations.

 

SARA: The Superfund
Amendments and Reauthorization Act of 1986, as amended.

 

Solvent: As to any
Person, (a) the sum of the assets of such Person exceeds its liabilities and (b) such Person has sufficient capital with
which to conduct its business as presently conducted and as proposed to be conducted.

 

State: The state
or commonwealth in which the Hotel is located, namely Texas.

 

Subsidiaries: Persons
in which Lessee owns, directly or indirectly, more than fifty percent (50%) of the voting stock or control, as applicable.

 

Surplus. As defined
in Section 15.2(c).

 

Taking: The event
of vesting of title to the Project or any part thereof or estate therein in the condemning authority as the result of any Condemnation
Proceeding.

 

Term: As defined
in Section 1.2.

 

TSCA: The Toxic
Substances Control Act, as amended.

 

Unavoidable Occurrence.
The occurrence of strikes, lockouts, labor unrest, gasoline and other energy shortages, widespread disruption of air, auto or other
travel, inability to procure materials or services, power or other utility failure, acts of God (such as hurricanes, tornadoes,
earthquakes, floods and mud slides), governmental restrictions, war or other enemy or terrorist action, civil commotion, fire,
casualty, condemnation or other similar causes, in each case, if such cause is beyond the reasonable control of Lessee; provided
that (i) lack of funds shall not be deemed a cause beyond the reasonable control of either party hereto unless such lack of
funds is caused by the failure of the other party hereto to perform any obligations of such party under this Lease or any guaranty
of this Lease, and (ii) any such occurrence is an extraordinary, as opposed to a routine or cyclical, material event that
was not reasonably foreseeable when the then-applicable Annual Budget was prepared.

 

     10

     

    

 

Uniform System:
The Uniform System of Accounts for Hotels (9th Revised Edition, 1996) as published by the American Hotel and Lodging Association,
with such later revisions as may be agreed to by both Lessor and Lessee.

 

Unsuitable for its Primary
Intended Use: A state or condition of the Hotel such that, in the good faith judgment of Lessee, reasonably exercised and evidenced
by the resolution of the board of directors or other governing body of Lessee, due to casualty damage or loss through Condemnation,
the Hotel cannot function as an integrated hotel facility consistent with standards applicable to a well maintained and operated
hotel.

 

Vesting Date. The
date of any Taking.

 

WARN Act: As defined
in Subsection 8.2(b).

 

Working Capital:
Funds reasonably necessary for the day-to-day operation of the Hotel’s business for a thirty (30) day period, including,
without limitation, amounts sufficient for the maintenance of change and petty cash funds, operating bank accounts, payrolls, accounts
payable, accrued current liabilities, and funds required to maintain Inventories.

 

ARTICLE
3

RENT; RENT ADJUSTMENTS

 

3.1           Rent. Lessee
will pay to Lessor in lawful money of the United States of America, in immediately available funds, at Lessor’s address set
forth in Article 26 hereof or at such other place or to such other Person as Lessor from time to time may designate in a Notice,
all Base Rent, Percentage Rent and Additional Charges, during the Term, as follows:

 

(a)   Base Rent:
The annual sum specified in Exhibit B, as adjusted pursuant to Subsection 3.1(e) hereof, payable in advance in equal, consecutive
monthly installments, on or before the tenth day of each calendar month of the Term (“Base Rent”); provided,
however, that the first monthly payment of Base Rent shall be payable during the second calendar month of the Term, and that the
first and last monthly payments of Base Rent shall be pro rated as to any partial month (subject to adjustment as provided in
Sections 14.4 and 15.3). Within thirty (30) days prior to the fifth (5th) anniversary of the Commencement Date, Lessor
and Lessee shall determine the Base Rent for the next five (5) years at a market rate mutually agreed upon by the parties. If
the parties cannot, within thirty (30) days, agree on the new Base Rent, either party may require that the matter be submitted
to binding arbitration as set forth in Section 25.1. On each subsequent five (5) year anniversary, Base Rent shall be determined
as set forth in this Section 3.1(a).

 

(b)   Percentage Rent:
For each year of the Term commencing with the Commencement Date, Lessee shall pay percentage rent (“Percentage Rent”),
to the extent that such Percentage Rent is greater than the Base Rent due for such period.

 

Percentage Rent shall be
an amount equal to the applicable Annual Revenues Computation (as set forth on Exhibit C) less an amount equal to the Base Rent
paid with respect to such year. The Annual Revenues Computation shall be adjusted beginning on the fifth (5th) anniversary
of the Commencement Date, and each 5 year anniversary thereafter , in the same manner as Base Rent is adjusted pursuant to Section
3.1(a). During the first year of the Lease, the Percentage Rent shall be calculated in November and May, and to the extent that
any Percentage Rent is due, shall be payable within 15 days following the end of November and May. Beginning on the first anniversary
of the Commencement Date, Percentage Rent shall be payable each calendar month on or before the last day of the calendar month
in an amount equal to the excess, if any, of the budgeted Percentage Rent payable with respect to the then current calendar month
(which budgeted amount shall be equal to one-twelfth (1/12) of the annual estimate of Percentage Rent included in the Annual Budget
for the year in which the calendar month occurs) over Base Rent for such calendar month. In November and May of each year, the
actual Percentage Rent due shall be calculated.

 

     11

     

    

 

There shall be no reduction
in the Base Rent regardless of the result of any Annual Revenues Computation.

 

(c)   Reserved

 

(d)   Officer’s
Certificates. In May and November of each year of the Lease term, Lessee shall deliver to Lessor an Officer’s Certificate
reasonably acceptable to Lessor setting forth the computation of the Percentage Rent that accrued for the specified semi-annual
period. If the Percentage Rent due and payable for such period exceeds the amount actually paid by Lessee for such year, Lessee
shall pay such excess to Lessor at the time the Officer’s Certificate is delivered. If the actual Percentage Rent due and
payable is less than the amount actually paid for such period, Lessor, at its option, shall reimburse such amount to Lessee or
credit such amount against subsequent months’ Base Rent. Any credit to Base Rent shall not be applied for purposes of calculating
Percentage Rent payable for any subsequent month.

 

The obligation to pay Percentage
Rent shall survive the expiration or earlier termination of the Term, and a final reconciliation, taking into account, among other
relevant adjustments, any adjustments which are accrued after such expiration or termination date but which related to Percentage
Rent accrued prior to such termination date, and Lessee’s good faith best estimate of the amount of any unresolved contractual
allowances, shall be made not later than two (2) years after such expiration or termination date, but Lessee shall advise
Lessor within sixty (60) days after such expiration or termination date of Lessee’s best estimate at that time of the
approximate amount of such adjustments, which estimate shall not be binding on Lessee or have any legal effect whatsoever.

 

(e)   Allocation of
Rent. The parties hereto acknowledge and agree that the Base Rent paid or payable by Lessee to Lessor hereunder shall, to the
extent relevant, be allocated between the personal property and real property constituting Leased Property hereunder in direct
proportion to the then recognizable fair market value of such personal property and real property. Percentage Rent in excess of
Base Rent shall be allocated solely to real property.

 

3.2           Confirmation
of Percentage Rent. Lessee shall utilize, or cause to be utilized, an accounting system for the Leased Property in accordance
with its usual and customary practices, and in accordance with generally accepted accounting principles, that will accurately
record all data necessary to compute Percentage Rent, and Lessee shall retain, for at least four (4) years after the expiration
of each semi-annual period (and in any event until the reconciliation described in Subsection 3.1(d) for such period has been
made), reasonably adequate records conforming to such accounting system showing all data necessary to compute Percentage Rent
for the applicable period. Lessor, at its expense (except as provided hereinbelow), shall have the right from time to time, upon
prior written notice to Lessee and Manager, by its accountants or representatives to audit the information that formed the basis
for the data set forth in any Officer’s Certificate provided under Subsection 3.1(d) and, in connection with such audits,
to examine all Lessee’s records (including supporting data and sales and excise tax returns) reasonably required to verify
Percentage Rent, subject to any prohibitions or limitations on disclosure of any such data under Legal Requirements; provided,
however that Lessor may only inspect or audit records in Manager’s possession subject to the terms of Lessee’s access
thereto under the Management Agreement. If any such audit discloses a deficiency in the payment of Percentage Rent, and either
Lessee agrees with the result of such audit or the matter is otherwise determined or compromised, Lessee shall forthwith pay to
Lessor the amount of the deficiency, as finally agreed or determined, together with interest at the Overdue Rate from the date
when said payment should have been made to the date of payment thereof; provided, however, that as to any audit that is commenced
more than two (2) years after the date Percentage Rent for any period is reported by Lessee to Lessor, the deficiency, if
any, with respect to such Percentage Rent shall bear interest at the Overdue Rate only from the date such determination of deficiency
is made unless such deficiency is the result of gross negligence or willful misconduct on the part of Lessee, in which case interest
at the Overdue Rate will accrue from the date such payment should have been made to the date of payment thereof. If any such audit
discloses that the Percentage Rent actually due from Lessee for any Fiscal Year exceed those reported by Lessee by more than three
percent (3%), Lessee shall pay the cost of such audit and examination. Any proprietary information obtained by Lessor pursuant
to the provisions of this Section shall be treated as confidential, except that such information may be used, subject to appropriate
confidentiality safeguards, in any litigation between the parties and except further that Lessor may disclose such information
to prospective lenders or as required to comply with applicable Legal Requirements, including without limitation, reporting requirements
under state and federal securities laws. The obligations of Lessee contained in this Section shall survive the expiration or earlier
termination of this Lease.

 

     12

     

    

 

3.3           Additional Charges.
In addition to the Base Rent and Percentage Rent, (a) Lessee also will pay and discharge as and when due and payable all other
amounts, liabilities, obligations and Impositions that Lessee assumes or agrees to pay under this Lease, and (b) in the event
of any failure on the part of Lessee to pay any of those items referred to in clause (a) of this Section 3.3, Lessee
also will promptly pay and discharge every fine, penalty, interest and cost that may be added for non-payment or late payment of
such items (the items referred to in clauses (a) and (b) of this Section 3.3 being additional rent hereunder and
being referred to herein collectively as the “Additional Charges”), and Lessor shall have all legal, equitable
and contractual rights, powers and remedies provided either in this Lease or by statute or otherwise in the case of non-payment
of the Additional Charges as in the case of non-payment of the Base Rent. If any installment of Base Rent and Percentage Rent or
Additional Charges (but only as to those Additional Charges that are payable directly to Lessor) shall not be paid on its due date,
Lessee will pay Lessor on demand, as Additional Charges, a late charge (to the extent permitted by law) computed at the Overdue
Rate on the amount of such installment, from the due date of such installment to the date of payment thereof. To the extent that
Lessee pays any Additional Charges to Lessor pursuant to any requirement of this Lease, Lessee shall be relieved of its obligation
to pay such Additional Charges to the entity to which they would otherwise be due and Lessor shall pay same from monies received
from Lessee.

 

3.4            Net Lease.
The Rent shall be paid absolutely net to Lessor, so that this Lease shall yield to Lessor the full amount of the installments of
Base Rent, Percentage Rent and Additional Charges throughout the Term, all as more fully set forth in Article 5, but subject to
any other provisions of this Lease that expressly provide for adjustment or abatement of Rent or other charges or expressly provide
that certain expenses or maintenance shall be paid or performed by Lessor.

 

3.5           No Termination
or Abatement. Except as otherwise specifically provided in this Lease, and except for loss of the Management Agreement solely
by reason of any action or inaction by Lessor, Lessee, to the extent permitted by law, shall remain bound by this Lease in accordance
with its terms and shall neither take any action without the written consent of Lessor (which shall not be unreasonably withheld
or delayed) to modify, surrender or terminate the same, nor seek nor be entitled to any abatement, deduction, deferment or reduction
of the Rent, or setoff against the Rent, nor shall the obligations of Lessee be otherwise affected by reason of (a) any damage
to, or destruction of, any Leased Property or any portion thereof from whatever cause or any Taking of the Leased Property or any
portion thereof, (b) the lawful or unlawful prohibition of, or restriction upon, Lessee’s use of the Leased Property,
or any portion thereof, or the interference with such use by any Person other than Lessor, (c) any claim which Lessee has
or might have against Lessor by reason of any default or breach of any warranty by Lessor under this Lease or any other agreement
between Lessor and Lessee, or to which Lessor and Lessee are parties, (d) any bankruptcy, insolvency, reorganization, composition,
readjustment, liquidation, dissolution, winding up or other proceedings affecting Lessor or any assignee or transferee of Lessor,
or (e) for any other cause whether similar or dissimilar to any of the foregoing other than a discharge of Lessee from any
such obligations as a matter of law. Lessee hereby specifically waives all rights, arising from any occurrence whatsoever, which
may now or hereafter be conferred upon it by law to (1) modify, surrender or terminate this Lease or quit or surrender the
Leased Property or any portion thereof, or (2) entitle Lessee to any abatement, reduction, suspension or deferment of the
Rent or other sums payable by Lessee hereunder, except as otherwise specifically provided in this Lease. The obligations of Lessee
hereunder shall be separate and independent covenants and agreements and the Rent and all other sums payable by Lessee hereunder
shall continue to be payable in all events unless the obligations to pay the same shall be terminated pursuant to the express provisions
of this Lease or by termination of this Lease other than by reason of an Event of Default.

 

3.6           Rent Adjustment:
Change in Franchise Affiliation or Change in Scope of Work. Except to the extent that doing so would cause Lessor to recognize
income other than “rents from real property” as defined in Section 856(d) of the Code, notwithstanding
anything herein (other than Article 19) to the contrary, if (i) the facts and circumstances underlying the documented, basic
assumptions upon which both Lessor and Lessee have relied in determining the Base Rent and the Percentage Rent payable hereunder
become materially incorrect solely as a result of (A) a decision to re-brand the Hotel that is made after the Commencement
Date, (B) the scope or cost of substantial renovations or other capital improvements to the Hotel (that were not planned as
of the Commencement Date), or (C) the implementation of any other hotel repositioning strategies (that were not planned as
of the Commencement Date) resulting in significant disruption of the operations of the Hotel (collectively, a “Repositioning”),
and (ii) Lessor and Lessee so agree in writing, then Lessor and Lessee shall, in good faith, negotiate modifications to the
Base Rent and Percentage Rent to adjust (i.e., increase, decrease or reallocate among revenue categories) such Base Rent and Percentage
Rent to reflect such change in basic assumptions for the affected periods, using the same methodology and other basic assumptions
as were initially utilized in determining the Base Rent and Percentage Rent hereunder. If Lessor and Lessee are unable to agree,
within thirty (30) days after the date of written certification from either Lessee or Lessor to the other party that a good
faith dispute exists, as to the existence of the occurrence of a Repositioning or the adjustments to be made to the amounts or
percentages for the Base Rent and Percentage Rent hereunder as a result of any repositioning, the dispute may be submitted by either
party to arbitration under Section 25.1 hereof for resolution (during which period Lessee shall continue to pay Base Rent
and Percentage Rent as required under Section 3.1 of this Lease).

 

     13

     

    

 

ARTICLE
4

BUDGETS; BOOKS AND RECORDS

 

4.1           Annual Budget.
Not later than twenty (20) days prior to the commencement of each Fiscal Year, Lessee shall submit the Annual Budget to Lessor.
The Annual Budget shall contain the following, to the extent included in the operating budgets and capital budgets provided to
Lessee by Manager under the Management Agreement for the Hotel:

 

(a)   Lessee’s
reasonable estimate of Gross Revenues (including room rates and Room Revenues), Gross Operating Expenses, and Gross Operating Profits
for the forthcoming Fiscal Year itemized on schedules on a monthly basis as approved by Lessor and Lessee, as same may be revised
or replaced from time to time by Lessee and approved by Lessor, together with the assumptions, forming the basis of such schedules.

 

(b)   An estimate of
the amounts to be spent for the repair, replacement, or refurbishment of Furniture and Equipment and/or Fixtures or otherwise.

 

(c)   An estimate of
any amounts Lessor will be required to provide for required or desirable capital improvements to the Hotel or any of its components.

 

(d)   A cash flow projection.

 

(e)   A business plan,
which shall describe business objectives and strategies for the forthcoming Fiscal Year, and shall include without limitation an
analysis of the market area in which the Hotel competes, a comparison of the Hotel and its business with competitive hotels, an
analysis of categories of potential guests, and a description of sales and marketing activities designed to achieve and implement
identified objectives and strategies.

 

4.2           Books and Records.
Lessee shall keep full and adequate books of account and other records reflecting the results of operation of the Hotel on
an accrual basis, all in accordance with generally accepted accounting principles and the obligations of Lessee under this Lease.
The books of account and all other records relating to or reflecting the operation of the Hotel shall be kept either at the Hotel
or at Lessee’s offices in Houston, Texas or at Manager’s central offices, and shall be available to Lessor and its
representatives and its auditors or accountants, at all reasonable times, upon prior written notice to Lessee and Manager, for
examination, audit, inspection, and transcription; provided, however that Lessor may only inspect or audit records in Manager’s
possession subject to the terms of Lessee’s access thereto under the Management Agreement. All of such books and records
pertaining to the Hotel including, without limitation, books of account, guest records and front office records, at all times
shall be the property of Lessor and shall not be removed from the Hotel or Lessee’s offices or Manager’s central offices
(but may be moved among any of the foregoing) by Lessee without Lessor approval.

 

ARTICLE
5

IMPOSITIONS and other costs

 

5.1           Payment of Impositions.
Subject to Article 12 (relating to permitted contests), Lessee will pay, or cause to be paid, all Impositions, provided that such
Impositions shall not include any taxes for which Lessor is required to reserve funds pursuant to the Loan Documents, before any
fine, penalty, interest or cost may be added for non-payment, such payments to be made directly to the taxing or other authorities
where feasible, and will promptly furnish to Lessor copies of official receipts or other satisfactory proof evidencing such payments.
Lessee’s obligation to pay such Impositions shall be deemed absolutely fixed upon the date such Impositions become a lien
upon the Leased Property or any part thereof. If any such Imposition may, at the option of the taxpayer, lawfully be paid in installments
(whether or not interest shall accrue on the unpaid balance of such Imposition), Lessee may exercise the option to pay the same
(and any accrued interest on the unpaid balance of such Imposition) in installments and in such event, shall pay such installments
during the Term hereof (subject to Lessee’s right of contest pursuant to the provisions of Article 12) as the same respectively
become due and before any fine, penalty, premium, further interest or cost may be added thereto. Lessor, at its expense, shall,
to the extent required or permitted by applicable law, prepare and file all tax returns in respect of Lessor’s net income,
gross receipts, sales and use, single business, transaction privilege, rent, ad valorem, franchise taxes, Real Estate Taxes, Personal
Property Taxes and taxes on its capital stock, and Lessee, at its expense, shall, to the extent required or permitted by applicable
laws and regulations, prepare and file all other tax returns and reports in respect of any Imposition as may be required by governmental
authorities. If any refund shall be due from any taxing authority in respect of any Imposition paid by Lessee, the same shall be
paid over to or retained by Lessee if no Event of Default shall have occurred hereunder and be continuing. If an Event of Default
shall have occurred and be continuing, any such refund shall be paid over to or retained by Lessor. Any such funds retained by
Lessor due to an Event of Default shall be applied as provided in Article 16. Lessor and Lessee shall, upon request of the other,
provide such data as is maintained by the party to whom the request is made with respect to the Leased Property as may be necessary
to prepare any required returns and reports. Lessee shall file all Personal Property Tax returns in such jurisdictions where it
is legally required so to file. Lessor, to the extent it possesses the same, and Lessee, to the extent it possesses the same, will
provide the other party, upon request, with cost and depreciation records necessary for filing returns for any property classified
as personal property. Where Lessor is required to file Personal Property Tax returns, Lessee shall provide Lessor with copies of
assessment notices in sufficient time for Lessor to file a protest. Lessor may, upon Notice to Lessee, at Lessor’s option
and at Lessor’s sole expense, protest, appeal, or institute such other proceedings (in its or Lessee’s name) as Lessor
may deem appropriate to effect a reduction of real estate or personal property assessments for those Impositions to be paid by
Lessor, and Lessee, at Lessor’s expense as aforesaid, shall fully cooperate with Lessor in such protest, appeal, or other
action. Lessor hereby agrees to indemnify, defend, and hold harmless Lessee from and against any claims, obligations, liabilities
and loss against or incurred by Lessee in connection with such cooperation. Billings by Lessor to Lessee for reimbursement of any
Personal Property Taxes paid by Lessor shall be accompanied by copies of a bill therefor and payments thereof which identify the
personal property with respect to which such payments are made. Lessor, however, reserves the right to effect any such protest,
appeal or other action and, upon Notice to Lessee, shall control any such activity, which shall then go forward at Lessor’s
sole expense. Upon such Notice, Lessee, at Lessor’s expense, shall cooperate fully with such activities.

 

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5.2           Notice
of Impositions. Lessor shall give prompt Notice to Lessee of all Impositions payable by Lessee hereunder of which Lessor
at any time has knowledge, provided that Lessor’s failure to give any such Notice shall in no way diminish
Lessee’s obligations hereunder to pay such Impositions, but such failure to provide notice shall obviate any default
hereunder for a reasonable time after Lessee receives Notice of any Imposition which it is obligated to pay during the first
taxing period applicable thereto.

 

5.3           Adjustment
of Impositions. Impositions imposed in respect of any taxing period during which the Term terminates shall be adjusted
and prorated between Lessor and Lessee, whether or not such Imposition is imposed before or after such termination, and
Lessee’s obligation to pay its prorated share thereof after termination shall survive such termination.

 

5.4           Utility Charges.
Lessee will be solely responsible for obtaining and maintaining utility services to the Leased Property and will pay or cause to
be paid all charges for electricity, gas, oil, water, sewer and other utilities used in the Leased Property during the Term.

 

5.5            Insurance
Premiums. Lessee will pay or cause to be paid all premiums for the insurance coverage’s required to be maintained
by Lessee under Article 13. Lessor will pay all premiums for the insurance coverage’s required to be maintained by
Lessor under Article 13.

 

5.6           Management or
Franchise Fees. Lessee will maintain in full force and effect, and pay or cause to be paid all fees and other charges payable
pursuant to the Franchise Agreement and any Management Agreement with respect to the Hotel.

 

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ARTICLE
6

LEASED PROPERTY; PERSONAL PROPERTY

 

6.1           Ownership of the
Leased Property. Lessee acknowledges that the Leased Property is the property of Lessor and that Lessee has only the right
to the possession and use of the Leased Property upon the terms and conditions of this Lease.

 

6.2           Lessee’s Personal
Property. Lessee may acquire and maintain throughout the Term such Inventory as is required to operate the Leased Property
in the manner contemplated by this Lease, in addition to any Inventory that is part of the Leased Property owned by Lessor or
purchased by reserved funds of the Lessor. Lessee may (and shall as provided hereinbelow), at its expense, install, affix or assemble
or place on any parcels of the Land or in any of the Leased Improvements, any items of personal property (including Inventory)
owned by Lessee. Lessee, at the commencement of the Term, and from time to time thereafter, shall provide Lessor with an accurate
list of all such items of Lessee’s personal property (collectively, the “Lessee’s Personal Property”).
Lessee may, subject to the first sentence of this Section 6.2 and the conditions set forth below, remove any of Lessee’s
Personal Property set forth on such list at any time during the Term or upon the expiration or any prior termination of the Term.
All of Lessee’s Personal Property, other than Inventory, not removed by Lessee within ten (10) days following the expiration
or earlier termination of the Term shall be considered abandoned by Lessee and may be appropriated, sold, destroyed or otherwise
disposed of by Lessor without first giving Notice thereof to Lessee, without any payment to Lessee and without any obligation
to account therefor. Lessee will, at its expense, restore the Leased Property to its original condition (ordinary wear and tear
excepted), including repair of all damage to the Leased Property caused by the removal of Lessee’s Personal Property, whether
effected by Lessee or Lessor. Upon the expiration or earlier termination of the Term, Lessor or its designee shall have the option
to purchase all Inventory on hand at the Leased Property at the time of such expiration or termination for a sale price equal
to the fair market value of such Inventory. Lessee may make such financing arrangements, title retention agreements, leases or
other agreements with respect to Lessee’s Personal Property as it sees fit provided that Lessee first advises Lessor of
any such arrangement and such arrangement expressly provides that in the event of Lessee’s default thereunder, Lessor (or
its designee) may assume Lessee’s obligations and rights under such arrangement. Notwithstanding anything in this Section
6.2 to the contrary, Lessee shall not remove any of Lessee’s Personal Property and/or enter into any financing arrangements,
title retention agreements, leases or other agreements with respect to Lessee’s Personal Property to the extent such actions
violate the Loan Documents.

 

6.3           Lessor’s Option
to Purchase Assets of Lessee. Effective on not less than ninety (90) days’ prior Notice given at any time within
one hundred eighty (180) days before the expiration of the Term, but not later than ninety (90) days prior to such expiration,
or upon such shorter Notice period as shall be appropriate if this Lease is terminated prior to its expiration date, Lessor shall
have the option to purchase all (but not less than all) of the assets of Lessee, tangible and intangible, relating to the Leased
Property (other than this Lease), at the expiration or termination of this Lease for an amount (payable in cash on the expiration
date of this Lease) equal to the fair market value thereof. In the event that Lessor and Lessee cannot agree upon the fair market
value of such property, the fair market value shall be determined by binding arbitration pursuant to Section 25.1.

 

ARTICLE
7

CONDITION AND USE OF LEASED PROPERTY

 

7.1           Condition of the
Leased Property. Lessee acknowledges receipt and delivery of possession of the Leased Property. Lessee has examined and otherwise
has knowledge of the condition of the Leased Property and has found the same to be satisfactory for its purposes hereunder. Lessee
is leasing the Leased Property “as is” in its present condition. Lessee waives any claim or action against
Lessor in respect of the condition of the Leased Property. LESSOR MAKES NO WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, IN
RESPECT OF THE LEASED PROPERTY, OR ANY PART THEREOF, EITHER AS TO ITS FITNESS FOR USE, DESIGN OR CONDITION FOR ANY PARTICULAR
USE OR PURPOSE OR OTHERWISE, AS TO THE QUALITY OF THE MATERIAL OR WORKMANSHIP THEREIN, LATENT OR PATENT, IT BEING AGREED THAT
ALL SUCH RISKS ARE TO BE BORNE BY LESSEE. LESSEE ACKNOWLEDGES THAT THE LEASED PROPERTY HAS BEEN INSPECTED BY LESSEE AND IS SATISFACTORY
TO IT. Provided, however, to the extent permitted by law, Lessor hereby assigns to Lessee all of Lessor’s rights, if any,
to proceed against any predecessor in title (other than any Affiliate of Lessee, which conveyed the Leased Property to Lessor)
for breaches of warranties or representations or for latent defects in the Leased Property. Lessor shall fully cooperate with
Lessee in the prosecution of any such claim, in Lessor’s or Lessee’s name, all at Lessee’s sole cost and expense.
Lessee hereby agrees to indemnify, defend and hold harmless Lessor from and against any claims, obligations and liabilities against
or incurred by Lessor in connection with such cooperation.

 

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7.2           Use of the Leased
Property.

 

(a)   Lessee covenants
that it will exercise reasonable efforts to obtain and to maintain all approvals needed to use and operate the Leased Property
for its Primary Intended Purpose, as defined in Section 7.2(b) below, and applicable Legal Requirements.

 

(b)   Lessee shall use
or cause to be used the Leased Property only as a TownePlace Suites hotel facility, and for such other uses as may be necessary
or incidental to such use or such other use as otherwise approved by Lessor (the “Primary Intended Use”). Lessee
shall not use the Leased Property or any portion thereof for any other use without the prior written consent of Lessor, which consent
may be granted, denied or conditioned in Lessor’s sole discretion. No use shall be made or permitted to be made of the Leased
Property, and no acts shall be done, which will cause the cancellation or increase the premium of any insurance policy covering
the Leased Property or any part thereof (unless another adequate policy satisfactory to Lessor is available and Lessee pays any
premium increase), nor shall Lessee sell or permit to be kept, used or sold in or about the Leased Property any article which may
be prohibited by law or fire underwriter’s regulations. Lessee shall, at its sole cost, comply with all of the requirements
pertaining to the Leased Property of any insurance board, association, organization or company necessary for the maintenance of
insurance, as herein provided, covering the Leased Property and Lessee’s Personal Property.

 

(c)   Subject to the
provisions of Articles 14, 15, 18 and 21, Lessee covenants and agrees that during the Term it will (1) operate continuously
the Leased Property as a hotel facility, (2) keep in full force and effect and comply with all the provisions of the Franchise
Agreement, (3) not terminate or amend the Franchise Agreement without the consent of Lessor (which shall not be unreasonably
withheld or delayed), and (4) maintain appropriate certifications and Licenses for such use.

 

(d)   Lessee shall not
commit or suffer to be committed any waste on the Leased Property, or in the Hotel, nor shall Lessee cause or permit any nuisance
thereon.

 

(e)   Lessee shall neither
suffer nor permit the Leased Property or any portion thereof, or Lessee’s Personal Property, to be used in such a manner
as (1) might reasonably tend to impair Lessor’s (or Lessee’s, as the case may be) title thereto or to any portion
thereof, or (2) may reasonably make possible a claim or claims of adverse usage or adverse possession by the public, as such,
or of implied dedication of the Leased Property or any portion thereof, except as necessary in the ordinary and prudent operation
of the Hotel on the Leased Property.

 

7.3           Lessor to Grant
Easements, Etc. Subject to the terms of the Loan Documents, Lessor will, from time to time, so long as no Event of Default
has occurred and is continuing, at the request of Lessee and at Lessee’s cost and expense (but subject to the approval of
Lessor, which approval shall not be unreasonably withheld or delayed), (a) grant easements and other rights in the nature
of easements with respect to the Leased Property to third parties, (b) release existing easements or other rights in the
nature of easements which are for the benefit of the Leased Property, (c) dedicate or transfer unimproved portions of the
Leased Property for road, highway or other public purposes, (d) execute petitions to have the Leased Property annexed to
any municipal corporation or utility district, (e) execute amendments to any covenants and restrictions affecting the Leased
Property and (f) execute and deliver to any Person any instrument appropriate to confirm or effect such grants, releases,
dedications, transfers, petitions and amendments (to the extent of its interests in the Leased Property), but only upon delivery
to Lessor of an Officer’s Certificate stating that such grant, release, dedication, transfer, petition or amendment does
not interfere with the proper conduct of the business of Lessee on the Leased Property and does not materially reduce the value
of the Leased Property.

 

7.4           Engagement of a
Manager. Lessee shall not engage a Manager for the Leased Property other than a qualified manager without the written consent
of the Lessor, which may be given or withheld in Lessor’s reasonable discretion. The parties hereby agree that Moody National
Hospitality Management, LLC is a qualified manager. Any management contract, agreement or other arrangement entered into by Lessee
shall not relieve Lessee of any of Lessee’s obligation hereunder and any such agreement shall be expressly subordinate to
the terms and conditions of this Lease.

 

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7.5           Change in Franchise
Affiliation. Lessee shall not, without the prior written consent of Lessor, which consent may be granted or withheld in Lessor’s
sole discretion, replace the existing franchise affiliation.

 

ARTICLE
8

LESSEE’S COMPLIANCE WITh legal requirements and insurance requirements

 

8.1           Compliance with
Legal and Insurance Requirements, Etc. Subject to Section 8.3(b) below and Section 12.2 (relating to permitted contests),
Lessee, at its expense, will promptly (a) comply with all applicable Legal Requirements and Insurance Requirements in respect
of the use, operation, maintenance, repair and restoration of the Leased Property, and (b) procure, maintain and comply with
all appropriate Licenses and other authorizations required for any use of the Leased Property and Lessee’s Personal Property
then being made, and for the proper erection, installation, operation and maintenance of the Leased Property or any part thereof.

 

8.2           Legal Requirement
Covenants.

 

(a)   Subject to Section
8.3 below, Lessee covenants and agrees that the Leased Property and Lessee’s Personal Property, if any, shall not be used
for any unlawful purpose, and that Lessee shall not permit or suffer to exist any unlawful use of the Leased Property by others.
Lessee shall acquire and maintain all appropriate licenses, certifications, permits and other authorizations and approvals needed
to operate the Leased Property in its customary manner for the Primary Intended Use, and any other lawful use conducted on the
Leased Property as may be permitted from time to time hereunder. Lessee further covenants and agrees that Lessee’s use of
the Leased Property and maintenance, alteration, and operation of the same, and all parts thereof, shall at all times conform to
all Legal Requirements, unless the same are finally determined by a court of competent jurisdiction to be unlawful (and Lessee
shall cause all sub-tenants, invitees or others within its control so to comply with all Legal Requirements). Lessee may, however,
upon prior Notice to Lessor, contest the legality or applicability of any such Legal Requirement or any licensure or certification
decision if Lessee maintains such action in good faith, with due diligence, without prejudice to Lessor’s rights hereunder,
and at Lessee’s sole expense. If by the terms of any such Legal Requirement compliance therewith pending the prosecution
of any such proceeding may legally be delayed without the occurrence of any charge or liability of any kind, or the filing of any
lien, against the Hotel or Lessee’s leasehold interest therein and without subjecting Lessee or Lessor to any liability,
civil or criminal, for failure so to comply therewith, Lessee may delay compliance therewith until the final determination of such
proceeding. If any lien, charge or civil or criminal liability would be incurred by reason of any such delay, Lessee, on the prior
written consent of Lessor, which consent shall not be unreasonably withheld or delayed, may nonetheless contest as aforesaid and
delay as aforesaid provided that such delay would not subject Lessor to criminal liability and Lessee both (a) furnishes to
Lessor security reasonably satisfactory to Lessor against any loss or injury by reason of such contest or delay and (b) prosecutes
the contest with due diligence and in good faith.

 

(b)   As between Lessor
and Lessee, Lessee is solely responsible for all liabilities or obligations of any kind with respect to employees at the Leased
Property during the Term. Without limiting the generality of the foregoing sentence, Lessee is solely responsible for any required
compliance with the Worker Adjustment, Retraining and Notification Act of 1988 (the “WARN Act”) or any similar
state law applicable to the Leased Property; any required compliance with the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended (“COBRA”); and all alleged and actual obligations and claims arising from or relating to any
employment agreement, collective bargaining agreement or employee benefit plans, any grievances, arbitration’s, or unfair
labor practice charges, and relating to compliance with any applicable state or federal labor employment law, including but not
limited to all laws pertaining to discrimination, workers’ compensation, unemployment compensation, occupational safety and
health, unfair labor practices, family and medical leave, and wages, hours or employee benefits. Lessee agrees to indemnify and
defend and hold harmless Lessor from and against any claims relating to any of the foregoing matters. Lessee further agrees to
reimburse Lessor for any and all losses, damages, costs, expenses, liabilities and obligations of any kind, including without limitation
reasonable attorney’s fees and other legal costs and expenses, incurred by Lessor in connection with any of the foregoing
matters.

 

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8.3           Environmental Covenants.
Lessor and Lessee additionally covenant and agree as follows:

 

(a)   At all times hereafter
until the later of (i) such time as all liabilities, duties or obligations of Lessee to Lessor under the Lease have been satisfied
in full and (ii) such time as Lessee completely vacates the Leased Property and surrenders possession of the same to Lessor,
Lessee shall fully comply with all Environmental Laws applicable to the Leased Property and the operations thereon. Lessee agrees
to give Lessor prompt Notice of (1) all Environmental Liabilities; (2) all pending, threatened or anticipated Proceedings,
and all notices, demands, requests or investigations, relating to any Environmental Liability or relating to the issuance, revocation
or change in any Environmental Authorization required for operation of the Leased Property; (3) all Releases at, on, in, under
or in any way affecting the Leased Property, or any Release known by Lessee at, on, in or under any property adjacent to the Leased
Property; and (4) all facts, events or conditions that could reasonably lead to the occurrence of any of the above-referenced
matters.

 

(b)   Lessor hereby agrees
to defend, indemnify and save harmless any and all Lessee Indemnified Parties from and against any and all Environmental Liabilities
other than (i) Environmental Liabilities resulting from conditions disclosed in any environmental audit obtained by Lessor
and provided to Lessee prior to the execution of this Lease (the “Environmental Audit”), and (ii) Environmental
Liabilities which were caused by the acts or grossly negligent failures to act of Lessee.

 

(c)   Lessee hereby agrees
to defend, indemnify and save harmless any and all Lessor Indemnified Parties from and against any and all Environmental Liabilities
which were (i) resulting from conditions disclosed in the Environmental Audit, and (ii) caused by the acts or grossly
negligent failures to act of Lessee.

 

(d)   If any Proceeding
is brought against any Indemnified Party in respect of an Environmental Liability with respect to which such Indemnified Party
may claim indemnification under either Subsection 8.3(b) or (c), the Indemnifying Party, upon request, shall at its sole expense
resist and defend such Proceeding, or cause the same to be resisted and defended by counsel designated by the Indemnified Party
and approved by the Indemnifying Party, which approval shall not be unreasonably withheld or delayed; provided, however, that such
approval shall not be required in the case of defense by counsel designated by any insurance company undertaking such defense pursuant
to any applicable policy of insurance. Each Indemnified Party shall have the right to employ separate counsel in any such Proceeding
and to participate in the defense thereof, but the fees and expenses of such counsel will be at the sole expense of such Indemnified
Party unless such counsel has been approved by the Indemnifying Party, which approval shall not be unreasonably withheld or delayed.
The Indemnifying Party shall not be liable for any settlement of any such Proceeding made without its consent, which shall not
be unreasonably withheld or delayed, but if settled with the consent of the Indemnifying Party, or if settled without its consent
(if its consent shall be unreasonably withheld or delayed), or if there be a final, nonappealable judgment for an adversary party
in any such Proceeding, the Indemnifying Party shall indemnify and hold harmless the Indemnified Parties from and against any liabilities
and loss incurred by such Indemnified Parties by reason of such settlement or judgment.

 

(e)   At any time any
Indemnified Party has reason to believe circumstances exist which could reasonably result in an Environmental Liability, upon reasonable
prior Notice to Lessee and Manager stating such Indemnified Party’s basis for such belief, an Indemnified Party shall be
given immediate access to the Leased Property (including, but not limited to, the right to enter upon, investigate, drill wells,
take soil borings, excavate, monitor, test, cap and use available land for the testing of remedial technologies), Lessee’s
employees, and to all relevant documents and records regarding the matter as to which a responsibility, liability or obligation
is asserted or which is the subject of any Proceeding; provided that such access may he conditioned or restricted as may be reasonably
necessary to ensure compliance with law and the safety of personnel and facilities or to protect confidential or privileged information.
All Indemnified Parties requesting such immediate access and cooperation shall endeavor to coordinate such efforts to result in
as minimal interruption of the operation of the Leased Property as practicable.

 

(f)   The indemnification
rights and obligations provided for in this Article 8 shall be in addition to any indemnification rights and obligations provided
for elsewhere in this Lease.

 

(g)   The indemnification
rights and obligations provided for in this Article 8 shall survive the termination of this Lease.

 

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For purposes of this Section 8.3,
all amounts for which any Indemnified Party seeks indemnification shall be computed net of (a) any actual income tax benefit
resulting therefrom to such Indemnified Party, (b) any insurance proceeds received (net of tax effects) with respect thereto,
and (c) any amounts recovered (net of tax effects) from any third parties based on claims the Indemnified Party has against
such third parties which reduce the damages that would otherwise be sustained; provided that in all cases, the timing of the receipt
or realization of insurance proceeds or income tax benefits or recoveries from third parties shall be taken into account in determining
the amount of reduction of damages. Each Indemnified Party agrees to use its reasonable efforts to pursue, or assign to Lessee
or Lessor, as the case may be, any claims or rights it may have against any third party that would materially reduce the amount
of damages otherwise incurred by such Indemnified Party.

 

Notwithstanding anything
to the contrary contained in this Lease, if Lessor shall become entitled to the possession of the Leased Property by virtue of
the termination of the Lease or repossession of the Leased Property, then Lessor may assign its indemnification rights under this
Section 8.3 (but not any other rights under this Section 8.3) to any Person to whom Lessor subsequently transfers the
Leased Property, subject to the following conditions and limitations, each of which shall be deemed to be incorporated into the
terms of such assignment, whether or not specifically referred to therein:

 

(i)     The indemnification
rights referred to in this section may be assigned only if a known Environmental Liability then exists or if a Proceeding is then
pending or, to the knowledge of Lessee or Lessor, then threatened with respect to the Leased Property;

 

(ii)    Such indemnification
rights shall be limited to Environmental Liabilities relating to or specifically affecting the Leased Property; and

 

(iii)   Any assignment
of such indemnification rights shall be limited to the immediate transferee of Lessor, and shall not extend to any such transferee’s
successors or assigns.

 

ARTICLE
9

MAINTENANCE AND REPAIRS

 

9.1           Maintenance and
Repairs.

 

(a)   Lessee, at its
sole expense, will keep the Leased Property, and all private roadways, sidewalks and curbs appurtenant thereto that are under Lessee’s
control, including windows and plate glass, mechanical, electrical and plumbing systems and equipment (including conduit and ductware),
and non-load bearing interior walls, and parking lot surfaces, in good order and repair, except (i) for ordinary wear and
tear (whether or not the need for such repairs occurred as a result of Lessee’s use, any prior use, the elements or the age
of the Leased Property, or any portion thereof) and (ii) to the extent of damage caused by Lessor’s gross negligence
or willful misconduct or that of its employees or agents, and, except as otherwise provided in Subsection 9.1(b), Article 14 or
Article 15, with reasonable promptness, make all necessary and appropriate repairs replacements, and improvements thereto of every
kind and nature, whether interior or exterior ordinary or extraordinary, foreseen or unforeseen or arising by reason of a condition
existing prior to the commencement of the Term of this Lease (concealed or otherwise), or required by any governmental agency having
jurisdiction over the Leased Property, except as to the roof, structural walls or foundation of the Leased Improvements. Lessee
will not take or omit to take any action, the taking or omission of which might materially impair the value or the usefulness of
the Leased Property or any part thereof for its Primary Intended Use.

 

(b)   Notwithstanding
Lessee’s obligations under Subsection 9.1(a) above, except to the extent of damage caused by Lessee’s negligence or
willful misconduct or that of its employees or agents, Lessor shall be required to bear the cost of maintaining any of the roof,
structural walls or foundation of the Leased Improvements, but excluding windows and plate glass, mechanical, electrical and plumbing
systems and equipment, including conduit and ductware, and non-load bearing walls, and parking lot surfaces. Except as set forth
in the preceding sentence and in Section 10.3, Lessor shall not under any circumstances be required to build or rebuild any
improvement on the Leased Property, or to make any repairs, replacements, alterations, restorations or renewals of any nature or
description to the Leased Property, whether ordinary or extraordinary, foreseen or unforeseen, or to make any expenditure whatsoever
with respect thereto, in connection with this Lease, or to maintain the Leased Property in any way. Lessee hereby waives, to the
extent permitted by law, the right to make repairs at the expense of Lessor, pursuant to any law in effect at the time of the execution
of this Lease or hereafter enacted, except following default by Lessor under this Lease, to the extent of repairs (for which Lessor
is obligated hereunder) required to be made in order for the Hotel, and Lessee’s use thereof, to comply with Lessee’s
obligations under the Management Agreement or any Franchise Agreement, as applicable. Lessor shall have the right to give, record
and post, as appropriate, notices of nonresponsibility under any mechanic’s lien laws now or hereafter existing.

 

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(c)   Nothing contained
in this Lease and no action or inaction by Lessor shall be construed as (i) constituting the request of Lessor, expressed
or implied, to any contractor, subcontractor, laborer, materialman or vendor to or for the performance of any labor or services
or the furnishing of any materials or other property for the construction, alteration, addition, repair or demolition of or to
the Leased Property or any part thereof, or (ii) giving Lessee any right, power or permission to contract for or permit the
performance of any labor or services or the furnishing of any materials or other property in such fashion as would permit the making
of any claim against Lessor in respect thereof or to make any agreement that may create, or in any way be the basis for any right,
title, interest, lien, claim or other encumbrance upon the estate of Lessor in the Leased Property, or any portion thereof.

 

9.2           Encroachments, Restrictions,
Etc. Lessor represents and warrants that the Leased Improvements do not materially encroach upon any property, street or right-of-way
adjacent to the Leased Property, or violate the agreements or conditions contained in any lawful restrictive covenant or other
agreement affecting the Leased Property, or any part thereof, or impair the rights of others under any easement or right-of-way
to which the Leased Property is subject. Except to the extent that such representation and warranty is breached by Lessor, if
any of the Leased Improvements, at any time hereafter, materially encroach upon any property, street or right-of-way adjacent
to the Leased Property, or violate the agreements or conditions contained in any lawful restrictive covenant or other agreement
affecting the Leased Property, or any part thereof, or impair the rights of others under any easement or right-of-way to which
the Leased Property is subject, then promptly upon the request of Lessor or at the behest of any Person affected by any such encroachment,
violation or impairment, Lessee shall, at its expense, subject to its right to contest the existence of any encroachment, violation
or impairment and in such case, in the event of an adverse final determination, either (a) obtain valid and effective waivers
or settlements of all claims, liabilities and damages resulting from each such encroachment, violation or impairment, whether
the same shall affect Lessor or Lessee or (b) make such changes in the Leased Improvements, and take such other actions,
as Lessee in the good faith exercise of its judgment deems reasonably practicable to remove such encroachment, and to end such
violation or impairment, including, if necessary, the alteration of any of the Leased Improvements, and in any event take all
such actions as may be necessary in order to be able to continue the operation of the Leased Improvements for the Primary Intended
Use substantially in the manner and to the extent the Leased Improvements were operated prior to the assertion of such violation,
impairment or encroachment. Any such alteration shall be made in conformity with the applicable requirements of Article 10. Lessee’s
obligations under this Section 9.2 shall be in addition to and shall in no way discharge or diminish any obligation of any
insurer under any policy of title or other insurance held by Lessor.

 

ARTICLE
10

ALTERATIONS AND IMPROVEMENTS; FF&E RESERVE

 

10.1  
     Alterations. After receiving approval of Lessor, which approval shall not be unreasonably withheld
or delayed, Lessee shall have the right to make such additions, modifications or improvements to the Leased Property from
time to time as Lessee deems desirable for its permitted uses and purposes, provided that such action will not significantly
alter the character or purposes or significantly detract from the value or operating efficiency thereof and will not
significantly impair the revenue-producing capability of the Leased Property or adversely affect the ability of Lessee to
comply with the provisions of this Lease. The cost of such additions, modifications or improvements to the Leased Property
shall be paid by Lessee, and all such additions, modifications and improvements shall, without payment by Lessor at any time,
be included under the terms of this Lease and upon expiration or earlier termination of this Lease shall pass to and become
the property of Lessor.

 

10.2        Salvage. All materials which are scrapped or removed in connection with the making of repairs required by
Articles 9 or 10 shall be or become the property of Lessor or Lessee depending on which party is paying for or providing the
financing for such work.

 

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10.3         Furniture, Fixture
and Equipment Allowance. Upon the execution of this Lease, Lessor shall have funded a $2,700,000 reserve (“PIP Reserve”)
as required under the Initial Loan Documents to meet the requirements for periodic repair, replacement or refurbishing of furniture,
fixtures and equipment that constitute Leased Property. Additional monthly reserves for such purpose required to meet the terms
of the Loan Documents shall be the obligation of the Lessor. Any requirements in addition to the Loan Documents pursuant to the
Management Agreement (or Franchise Agreement, if applicable) shall be the obligation of the Lessee. Subject to the provisions of
the Loan Documents, the PIP Reserve shall be made available by Lessor for use by Lessee for replacement or refurbishing of furniture,
fixtures and equipment that constitute Leased Property in connection with the Primary Intended Use; provided, however, that no
amounts made available under this Article shall be used to purchase property (other than “real property” within
the meaning of Treasury Regulations Section 1.856-3(d)), to the extent that doing so would cause Lessor to recognize income
other than “rents from real property” as defined in Section 856(d) of the Code. Lessor’s obligation
shall be cumulative, but not compounded, and any amounts that have accrued hereunder shall be payable in future periods for such
uses and in accordance with the procedure set forth herein. Lessee shall have no interest in any accrued obligation of Lessor hereunder
after the termination of this Lease.

 

ARTICLE
11

COMPLIANCE WITH other agreements

 

11.1      
 Compliance with Franchise Agreement and Management Agreement. To the extent any of the provisions of the
Management Agreement or Franchise Agreement, as applicable, impose a greater obligation on Lessee than the corresponding
provisions of the Lease, then Lessee shall be obligated to comply with, and to take all reasonable actions necessary to
prevent breaches or defaults under, the provisions of the Franchise Agreement and the Management Agreement, as applicable. It
is the intent of the parties hereto that Lessee shall comply in every respect with the provisions of the Management Agreement
or any Franchise Agreement so as to avoid any material default thereunder during the term of this Lease. Lessee shall not
terminate, extend or enter into any material modification of the Management Agreement or Franchise Agreement, as applicable,
without in each instance first obtaining Lessor’s prior written consent, which shall not be unreasonably withheld, and
consent of the Lender, if required by the Loan Documents. Lessor and Lessee agree to cooperate with each other in the event
it becomes necessary to obtain a Management Agreement extension or modification (or, at Lessor’s option, a new
franchise) for the Leased Property, and in any transfer of the Management Agreement or any Franchise Agreement to Lessor or
any designee of Lessor or any successor to Lessee upon the termination of this Lease. In the event of expiration or
termination of the Management Agreement or any Franchise Agreement, for whatever reason, Lessor will have the right, in the
exercise of its sole discretion, to approve any new Franchise Agreement or Management Agreement for the Hotel and such new
Franchise Agreement or Management Agreement shall also be subject to the consent of the Lender, if required by the
Loan Documents.

 

ARTICLE
12

PERMITTED LIENS AND CONTESTS

 

12.1         Liens. Subject
to the provisions of Section 12.2 relating to permitted contests, Lessee will not directly or indirectly create or allow
to remain and will promptly discharge at its expense any lien, encumbrance, attachment, title retention agreement or claim upon
the Leased Property or any attachment, levy, claim or encumbrance in respect of the Rent, not including, however, (a) this
Lease, (b) the matters included as exceptions in the title policy insuring Lessor’s interest in the Leased Property,
(c) restrictions, liens and other encumbrances which are consented to in writing by Lessor or any easements granted pursuant
to the provisions of Section 7.3 of this Lease, (d) liens for those taxes upon Lessor or the Leased Property which Lessee
is not required to pay hereunder, (e) subleases permitted by Article 20 hereof, (f) liens for Impositions or for sums resulting
from noncompliance with Legal Requirements so long as (1) the same are not yet payable or are payable without the addition
of any fine or penalty or (2) such liens are in the process of being contested as permitted by Section 12.2, (g) liens
of mechanics, laborers, materialmen, suppliers or vendors for sums either disputed or not yet due provided that (1) the payment
of such sums shall not be postponed under any related contract for more than sixty (60) days after the completion of the
action giving rise to such lien and such reserve or other appropriate provisions as shall be required by law or generally accepted
accounting principles shall have been made therefor or (2) any such liens are in the process of being contested as permitted
by Section 12.2 hereof, and (h) any liens which are the responsibility of Lessor pursuant to the provisions of Article
22 of this Lease.

 

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12.2         Permitted
Contests. Lessee shall have the right to contest the amount or validity of any Imposition to be paid by Lessee or any
Legal Requirement or Insurance Requirement or any lien, attachment, levy, encumbrance, charge or claim
(“Claims”) not otherwise permitted by Section 12.1, by appropriate legal proceedings in good faith
and with due diligence (but this shall not be deemed or construed in any way to relieve, modify or extend Lessee’s
covenants to pay or its covenants to cause to be paid any such charges at the time and in the manner as in this Section
provided), on condition, however, that such legal proceedings shall not operate to relieve Lessee from its obligations
hereunder and shall not cause the sale or risk the loss of any portion of the Leased Property, or any part thereof, or cause
Lessor or Lessee to be in default under any mortgage, deed of trust, security deed or other agreement encumbering the Leased
Property or any interest therein. Upon the request of Lessor, Lessee shall either (a) provide a bond or other assurance
reasonably satisfactory to Lessor that all Claims which may be assessed against the Leased Property together with interest
and penalties, if any, thereon will be paid, or (b) deposit within the time otherwise required for payment with a bank
or trust company as trustee upon terms reasonably satisfactory to Lessor, as security for the payment of such Claims, money
in an amount sufficient to pay the same, together with interest and penalties in connection therewith, as to all Claims which
may be assessed against or become a Claim on the Leased Property, or any part thereof, in said legal proceedings. Lessee
shall furnish Lessor and any lender of Lessor with reasonable evidence of such deposit within five (5) days of the same.
Lessor agrees to join in any such proceedings if the same be required legally to prosecute such contest of the validity of
such Claims; provided, however, that Lessor shall not thereby be subjected to any liability or loss for the payment of
any costs or expenses in connection with any proceedings brought by Lessee; and Lessee covenants to indemnify and save
harmless Lessor from any such liabilities, losses, costs or expenses. Lessee shall be entitled to any refund of any Claims
and such charges and penalties or interest thereon which have been paid by Lessee or paid by Lessor and for which Lessor has
been fully reimbursed. In the event that Lessee fails to pay any Claims when due or to provide the security therefor as
provided in this Section and diligently to prosecute any contest of the same, Lessor may, upon ten (10) days’
advance Notice to Lessee, and Lessee’s failure to correct the same within such ten (10) day period, pay such
charges together with any interest and penalties and the same shall be repayable by Lessee to Lessor as Additional Charges at
the next Payment Date provided for in this Lease; provided, however, that should Lessor reasonably determine that the giving
of such Notice would risk loss to the Leased Property or cause damage to Lessor, then Lessor shall give such Notice as is
practical under the circumstances. Lessor reserves the right to contest any of the Claims at its expense not pursued by
Lessee. Lessor and Lessee agree to cooperate in coordinating the contest of any Claims.

 

ARTICLE
13

INSURANCE REQUIREMENTS

 

13.1         General Insurance
Requirements. During the Term of this Lease, Lessee shall at all times keep the Leased Property insured with the kinds and
amounts of insurance described below, or such other insurance coverage(s) as may be required by the Management Agreement and the
Loan Documents; provided, however, all insurance coverage for which Lessor is required to reserve funds pursuant to the Loan Documents
shall be the obligation of the Lessor. This insurance shall be written by companies authorized to issue insurance in the State.
The policies must name Lessor and/or Lessee, as applicable, as the insured or as an additional named insured, as the case may be.
Losses shall be payable to Lessor or Lessee as provided in this Lease. Any loss adjustment shall require the written consent of
Lessor and Lessee, each acting reasonably and in good faith. Evidence of insurance shall be deposited with Lessor. The policies
on the Leased Property, including the Leased Improvements, Fixtures and Lessee’s Personal Property, if any, shall include
the following:

 

(i)    All Risks
Property insurance on the Leased Improvements in an amount not less than 100% of the full replacement cost of the Leased Improvements
with a Replacement Cost Endorsement. “Full replacement cost” as used herein means the cost of replacing the Leased
Improvements (exclusive of the cost of excavations, foundation and footings below the lowest basement floor) without deduction
for physical depreciation thereof;

 

(ii)   Boiler
and Machinery insurance as may reasonably be required to cover physical damage to the Improvements and to the major components
of any central hearing, air-conditioning or ventilation systems;

 

(iii)   Provided
that the Leased Property, or any portion thereof, is located in an area designated as a flood prone area participating in the National
Flood Insurance Program, flood insurance in an amount equal to the full replacement cost or the maximum amount then available,
unless neither the Leased Property, nor any portion thereof, is located within a 100 year flood plain as determined by the Federal
Insurance Administration;

 

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(iv)  During
any changes or alternations of the Leased Property or any part thereof and during any Restoration following a Taking or a casualty,
all risk builder’s risk insurance in an amount not less than 100% of the full replacement cost of the Improvements;

 

(v)   Insurance
against loss of profits or rental under a business interruption insurance policy or under a rental value insurance policy covering
risk of loss due to the occurrence of any of the hazards covered by the policies described in (i), (ii), and (iii) above, and (to
the extent insurance covering hazards is generally obtainable) in (iv) in an amount not less than the aggregate requirements for
the period of 12 months following the occurrence of the insured casualty for: (i) Base Rent and Percentage Rent, and (ii) Additional
Charges, including premiums on insurance required to be carried pursuant to this Section;

 

(vi)  Comprehensive
general liability insurance including contractual liability insurance specifically covering the indemnification obligations of
Lessee under this Lease, on an occurrence basis against claims for personal injury, (including, without limitation, elevators and/or
escalators) and the sidewalks, driveways and curbs adjacent thereto with limits not less than $1,000,000 combined single limit
and $2,000,000 in the annual aggregate in the event of bodily injury or death to any number of persons in any accident; and

 

(vii)  Any
other insurance or coverages applicable to the Leased Property which are required to be maintained by the owner or operator of
the Leased Property pursuant to the terms of any Permitted Mortgage; provided that such insurance shall only be required to be
maintained by Lessee during the term of the Permitted Mortgage.

 

13.2         Reserved.

 

13.3        Waiver of Subrogation.
All insurance policies carried by Lessor or Lessee covering the Leased Property, the Fixtures, the Hotel or Lessee’s Personal
Property, including, without limitation, contents, fire and casualty insurance, shall expressly waive any right of subrogation
on the part of the insurer against the other party. The parties hereto agree that their policies will include such waiver clause
or endorsement so long as the same are obtainable without extra cost, and in the event of such an extra charge the other party,
at its election, may pay the same, but shall not be obligated to do so. Each party agrees to seek recovery from any applicable
insurance coverage prior to seeking recovery against the other.

 

13.4         Form Satisfactory,
Etc.

 

(a)   All of the policies
of insurance referred to in this Article 13 to be maintained by Lessee shall be written in a form, with deductibles and by insurance
companies satisfactory to Lessor. Lessee shall pay all of the premiums therefor, and deliver such policies or certificates thereof
to Lessor prior to their effective date (and, with respect to any renewal policy, thirty (30) days prior to the expiration
of the existing policy), and in the event of the failure of Lessee either to effect such insurance as herein called for or to pay
the premiums therefor, or to deliver such policies or certificates thereof to Lessor at the times required, Lessor shall be entitled,
but shall have no obligation, to effect such insurance and pay the premiums therefor, and Lessee shall reimburse Lessor for any
premium or premiums paid by Lessor for the coverages required of Lessee under this Article 13 upon written demand therefor, and
Lessee’s failure to repay the same within thirty (30) days after Notice of such failure from Lessor shall constitute
an Event of Default within the meaning of Section 16.1. Each insurer mentioned in this Article 13 shall agree, by endorsement
to the policy or policies issued by it, or by independent instrument furnished to Lessor, that it will give to Lessor thirty (30) days’
written notice before the policy or policies in question shall be materially altered, allowed to expire or canceled.

 

(b)   All of the policies
of insurance referred to in this Article 13 to be maintained by Lessor shall be written in a form, with deductibles and by insurance
companies satisfactory to Lessee. Lessor shall pay all of the premiums therefor, and deliver such policies or certificates thereof
to Lessee prior to their effective date (and, with respect to any renewal policy, thirty (30) days prior to the expiration
of the existing policy), and in the event of the failure of Lessor either to effect such insurance as herein called for or to pay
the premiums therefor, or to deliver such policies or certificates thereof to Lessee at the times required, Lessee shall be entitled,
but shall have no obligation, to effect such insurance and pay the premiums therefor, and Lessor shall reimburse Lessee for any
premium or premiums paid by Lessee for the coverages required under this Section upon written demand therefor. Each insurer mentioned
in this Article 13 shall agree, by endorsement to the policy or policies issued by it, or by independent instrument furnished to
Lessee, that it will give to Lessee thirty (30) days’ written notice before the policy or policies in question shall
be materially altered, allowed to expire or canceled.

 

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13.5         Increase in
Limits. If either Lessor or Lessee at any time deems the limits of the personal injury or property damage under the comprehensive
public liability insurance then carried to be either excessive or insufficient, Lessor and Lessee shall endeavor in good faith
to agree on the proper and reasonable limits for such insurance to be carried and such insurance shall thereafter be carried with
the limits thus agreed on until further change pursuant to the provisions of this Article 13.

 

13.6         Blanket Policy.
Notwithstanding anything to the contrary contained in this Article 13, Lessee or Lessor may bring the insurance provided for herein
within the coverage of a so-called blanket policy or policies of insurance carried and maintained by Lessee (or Manager) or Lessor;
provided, however, that the coverage afforded to Lessor and Lessee will not be reduced or diminished or otherwise be different
from that which would exist under a separate policy meeting all other requirements of this Lease by reason of the use of such blanket
policy of insurance, and provided further that the requirements of this Article 13 are otherwise satisfied.

 

13.7         No Separate
Insurance. Lessee shall not, on Lessee’s own initiative or pursuant to the request or requirement of any third party,
take out separate insurance concurrent in form or contributing in the event of loss with that required in this Article to be furnished,
or increase the amount of any then existing insurance by securing an additional policy or additional policies, unless all parties
having an insurable interest in the subject matter of the insurance, including in all cases Lessor, are included therein as additional
insured, and the loss is payable under such additional separate insurance in the same manner as losses are payable under this Lease.
Lessee shall immediately notify Lessor of any such separate insurance that Lessee has obtained or of the increase of any of the
amounts of the then existing insurance.

 

13.8         Reports On Insurance
Claims. Lessee shall promptly investigate and make a complete and timely written report to the appropriate insurance company
as to all accidents, claims for damage relating to the ownership, operation, and maintenance of the Hotel, any damage or destruction
to the Hotel and the estimated cost of repair thereof and shall prepare any and all reports required by any insurance company in
connection therewith. All such reports shall be timely filed with the insurance company as required under the terms of the insurance
policy involved, and a final copy of such report shall be furnished to Lessor. Lessee shall be authorized to adjust, settle, or
compromise any insurance loss, or to execute proofs of such loss, in the aggregate amount of $30,000 or less, with respect to any
single casualty or other event.

 

ARTICLE
14

DAMAGE OR DESTRUCTION

 

14.1         Insurance Proceeds.
Subject to the provisions of Section 14.4, all proceeds payable by reason of any loss or damage to the Leased Property, or
any portion thereof, insured under any policy of insurance required by Article 13 of this Lease, shall be paid to Lessor and held
in trust by Lessor in an interest-bearing account, shall be made available, if applicable, for reconstruction or repair, as the
case may be, of any damage to or destruction of the Leased Property, or any portion thereof, and, if applicable, shall be paid
out by Lessor from time to time for the reasonable costs of such reconstruction or repair upon satisfaction of reasonable terms
and conditions specified by Lessor; provided, however, if the Initial Loan secured by the Leased Property requires that such funds
be held by the Lender, any such proceed shall be held and applied in accordance with the terms of the Loan Documents. Any excess
proceeds of insurance (and accrued interest) remaining after the completion of the restoration or reconstruction of the Leased
Property, as hereinafter set forth, shall be paid to Lessee, except for any excess funds attributable to Lessor Capital Improvements
which shall be retained by Lessor. If neither Lessor nor Lessee is required or elects to repair and restore, and the Lease is terminated
without purchase by Lessee as described in Section 14.2, all such insurance proceeds shall be retained by Lessor. All salvage
resulting from any risk covered by insurance shall belong to Lessor.

 

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14.2         Material Casualty.
In the event of any material casualty to the Project, Lessee shall promptly give written notice to Lessor thereof. Except as set
forth herein, Lessee shall be responsible for the Restoration of the Leased Property and Lessee shall be entitled to the use of
all available proceeds from any insurance for purposes of completing the Restoration. In such event this Lease shall continue in
full force and effect, without abatement, unless otherwise set forth below. If the proceeds from any casualty insurance are insufficient
to complete the Restoration, Lessee shall fund any excess required to complete the Restoration except for funds attributed to Lessor
Capital Improvements. Lessor shall provide Lessee with the funds necessary to fund any costs to complete the Restoration for Lessor
Capital Improvements. Absent receipt of Lessor’s agreement to fund such excess amounts within 30 days, Lessee may elect to
terminate this Lease upon notice to Lessor within 20 days after the expiration of the 30 day period.

 

14.3         Lessee’s
Property. All insurance proceeds payable by reason of any loss of or damage to any of Lessee’s Personal Property shall
be paid to Lessee; provided, however, no such payments shall diminish or reduce the insurance payments otherwise payable to or
for the benefit of Lessor hereunder.

 

14.4         Abatement of
Rent. In the event that this Lease is terminated pursuant to this Section 14, then the rental payments and other charges due
under this Lease shall be prorated to the date of termination. In the event that some or all of the Leased Property cannot be restored,
and Lessor and Lessee elect not to terminate this Lease, then the Base Rent and Percentage Rent shall be reduced by an amount reasonably
determined by Lessor and Lessee. If Lessor and Lessee cannot, within 30 days, agree on the new Base Rent and Percentage Rent, either
may require that the matter be settled by arbitration as set forth in Section 25.1. Except as provided herein, no destruction of
or damage to the Leased Property or any part thereof by fire or any other casualty shall permit Lessee to surrender this Lease
or shall relieve Lessee from Lessee’s liability to pay the full Base Rent and Percentage Rent and other charges due under
this Lease or from any of Lessee’s other obligations under this Lease.

 

14.5         Damage Near
End of Term. Notwithstanding any other provisions of this Section 14 to the contrary, if damage to or destruction of the Hotel
rendering it unsuitable for its Primary Intended Use occurs during the last twenty-four (24) months of the Term, then Lessee
shall have the right to terminate this Lease by giving Notice to Lessor within thirty (30) days after the date of damage or
destruction, whereupon all accrued Rent shall be paid immediately, and this Lease shall automatically terminate five (5) days
after the date of such Notice. Notwithstanding the foregoing, Lessee may not elect to terminate this Lease pursuant to the preceding
sentence if such termination would constitute a default under the Initial Loan, or if Restoration is otherwise required by the
Loan Documents, Lessee shall complete the Restoration in accordance with the terms of this Section.

 

14.6        Waiver.
Lessee waives any rights now or hereafter conferred upon Lessee by statute or otherwise to quit or surrender this Lease or the
Leased Property or any part thereof, or to any suspension, diminution, abatement or reduction of rent on account of any such destruction
or damage except as expressly set forth herein.

 

ARTICLE
15

CONDEMNATION; AWARD ALLOCATION

 

15.1         Total Taking.
Subject to any Loan Documents, in case of a Taking of all of the Leased Property, this Lease shall terminate and expire as of the
Vesting Date and the Base Rent, Percentage Rent and Additional Charges under this Lease shall be apportioned and paid to the Vesting
Date.

 

15.2         Partial
Taking. Subject to any Loan Documents, in case of a Taking of less than all of the Leased Property, Lessor shall receive the
entire award for the Taking and, except as specifically set forth in this Section, no claim or demand of any kind shall be made
by Lessee against Lessor or any other party who could, by virtue of a claim against it, make a claim against Lessor by reason
of such Taking.

 

(a)   In the case of
a Taking of a portion, but less than all, of the Leased Property, Lessee shall determine, in Lessee’s reasonable discretion,
whether the remaining Project (after Restoration referred to in (c), below (i) can be used for the Primary Intended Use and (ii)
will allow Lessee to complete the Restoration for an amount not to exceed the proceeds from the Taking. If it is determined by
Lessee that the remaining Leased Property cannot be used for the Primary Intended Use, then and in such event this Lease shall
terminate as of the Vesting Date and the Base Rent, Percentage Rent and Additional Charges shall be apportioned and paid to the
date of termination and no other claim or demand of any kind shall be made by Lessor against Lessee by reason of such termination.
If it is determined that Lessee cannot complete the Restoration for an amount that is less than or equal to the proceeds from the
Taking then and in such event Lessee can elect to terminate this Lease as of the Vesting Date and the Base Rent, Percentage Rent
and Additional Charges shall be apportioned and paid to the date of termination and no other claim or demand of any kind shall
be made by Lessor against Lessee by reason of such termination; provided, however, that if there is at least 24 months remaining
in the Term, Lessor may agree to pay the excess Restoration expenses in which case this Lease shall not terminate and Lessee shall
undertake the Restoration of the Project in accordance with the terms of (c), below.

 

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(b)   If, in the case
of a Taking of less than all of the Leased Property, this Lease is not terminated in accordance with the provisions of (a) above,
this Lease shall continue in full force and effect as to the remaining portion of the Leased Property without any reduction in
the Base Rent and Percentage Rent, except as expressly provided in Section 15.3. No such partial taking shall operate as or be
deemed an eviction of Lessee from that portion of the Leased Property not affected by such partial Taking or in any way terminate,
diminish, suspend, abate or impair the obligation of Lessee to observe and perform fully all the covenants of this Lease on the
part of Lessee to be performed with respect to the remainder of the Leased property unaffected by the partial Taking, except as
to any reduction (if any) in the Base Rent and Percentage Rent as expressly provided in Section 15.3.

 

(c)   If, in the case
of a Taking of less than all of the Leased Property, this Lease is not terminated in accordance with the provisions of (a) above,
Lessee shall, prior to the expiration of the Term of this Lease, commence and proceed with reasonable diligence to complete the
Restoration provided, however, that Lessor shall, in this case, make the award in the Condemnation Proceedings and, in the case
of (a) above, such award plus any excess funds due from Lessor, available to Lessee to be utilized for Restoration of the Leased
Property in the following manner, and subject to the following conditions and provisions. Lessor shall be entitled to receive and
retain the remainder of the award not needed to complete the Restoration (the “Surplus”)

 

15.3         Rent Reduction.
In case of a Taking of less than all of the Leased Property and if (i) this Lease shall not terminate as provided in Section 15.2
(a), and (ii) Restoration has been undertaken by Lessee pursuant to the provisions of Section 15.2(c), then commencing as of the
Vesting Date, the amount of the Base Rent and Percentage Rent payable by Lessee under this Lease shall be reduced (and Lessee shall
be credited for prior overpayments) by an amount reasonably determined by Lessor and Lessee. If Lessor and Lessee cannot, within
30 days, agree on the new Base Rent and Percentage Rent, either may require that the matter be submitted to Binding Arbitration
as set forth in Section 25.1. The new Base Rent and Percentage Rent shall be established to provide Lessee and Lessor with the
same economic return that each were entitled to prior to the Taking.

 

15.4         Notice of Condemnation.
Each of Lessor and Lessee shall promptly deliver to the other any notices it receives with respect to a Condemnation Proceeding
or threatened Condemnation Proceeding.

 

15.5         Additional Lender
Provision. Notwithstanding anything herein to the contrary, Lessee’s and Lessor’s rights and obligations in and
to any Condemnation Proceeding or related proceeds derived therefrom shall, in all cases, be subject to the rights of the holder
of any Permitted Mortgage.

 

ARTICLE
16

Lessee EVENTS OF DEFAULT; Lessor remedies

 

16.1         Events of Default.
If any one or more of the following events (individually, an “Event of Default”) occurs:

 

(a)   if Lessee fails
to make payment of the Base Rent within fifteen (15) days after the same becomes due and payable; or

 

(b)   if Lessee fails
to make payment of Percentage Rent within fifteen (15) days after the same becomes due and payable and such condition continues
for a period of thirty (30) days after the end of the applicable period; or

 

(c)   if Lessee fails
to observe or perform any other term, covenant or condition of this Lease and such failure is not cured by Lessee within a period
of thirty (30) days after receipt by Lessee of Notice thereof from Lessor, unless such failure cannot with due diligence be
cured within a period of thirty (30) days, in which case it shall not be deemed an Event of Default if Lessee proceeds promptly
and with due diligence to cure the failure and diligently completes the curing thereof provided, however, in no event shall such
cure period extend beyond ninety (90) days after such Notice; or

 

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(d)   if Lessee shall
file a petition in bankruptcy or reorganization for an arrangement pursuant to any federal or state bankruptcy law or any similar
federal or state law, or shall be adjudicated a bankrupt or shall make an assignment for the benefit of creditors or shall admit
in writing its inability to pay its debts generally as they become due, or if a petition or answer proposing the adjudication of
Lessee as a bankrupt or its reorganization pursuant to any federal or state bankruptcy law or any similar federal or state law
shall be filed in any court and Lessee shall be adjudicated a bankrupt and such adjudication shall not be vacated or set aside
or stayed within sixty (60) days after the entry of an order in respect thereof, or if a receiver of Lessee or of the whole
or substantially all of the assets of Lessee shall be appointed in any proceeding brought by Lessee or if any such receiver, trustee
or liquidator shall be appointed in any proceeding brought against Lessee and shall not be vacated or set aside or stayed within
sixty (60) days after such appointment; or

 

(e)   if Lessee is liquidated
or dissolved, or begins proceedings toward such liquidation or dissolution, or, in any manner, permits the sale or divestiture
of substantially all of its assets; or

 

(f)   if the estate or
interest of Lessee in the Leased Property or any part thereof is voluntarily or involuntarily transferred, assigned, conveyed,
levied upon or attached in any proceeding (unless Lessee is contesting such lien or attachment in good faith in accordance with
Section 12.2 hereof) or there is a Change of Control of Lessee; or

 

(g)   if, except as a
result of damage, destruction or a partial or complete Condemnation as contemplated by this Lease, Lessee voluntarily ceases operations
on the Leased Property for a period in excess of thirty (30) days; or

 

(h)   if an event of
default has been declared by franchisor under any Franchise Agreement with respect to the Hotel as a result of any action or failure
to act by Lessee or any Person with whom Lessee contracts for management services at the Hotel, and such default is not cured by
the earlier of (A) ten (10) days following notice from Lessor or (B) such earlier date as is required for Lessee
to avoid termination of the Franchise Agreement by the franchisor, as applicable;

 

then, and in any such event, Lessor may exercise one or more remedies
available to it herein or at law or in equity, including but not limited to its right to terminate this Lease by giving Lessee
not less than ten (10) days’ Notice of such termination.

 

If litigation is commenced with respect to any
alleged default under this Lease, the prevailing party in such litigation shall receive, in addition to its damages incurred, such
sum as the court shall determine as its reasonable attorneys’ fees, and all costs and expenses incurred in connection therewith.

 

No Event of Default (other than a failure to
make a payment of money) shall be deemed to exist under clause (d) during any time the curing thereof is prevented by an Unavoidable
Delay, provided that upon the cessation of such Unavoidable Delay, Lessee remedies such default or Event of Default without further
delay.

 

16.2         Surrender.
If an Event of Default occurs (and the event giving rise to such Event of Default has not been cured within the curative period
relating thereto as set forth in Section 16.1) and is continuing, whether or not this Lease has been terminated pursuant to
Section 16.1, Lessee shall, if requested by Lessor so to do, immediately surrender to Lessor the Leased Property including,
without limitation, any and all books, records, files, licenses, permits and keys relating thereto, and quit the same and Lessor
may enter upon and repossess the Leased Property by summary proceedings, ejectment or otherwise, and may remove Lessee and all
other Persons and any and all personal property from the Leased Property, subject to rights of any hotel guests and to any requirement
of law. Lessee hereby waives any and all requirements of applicable laws for service of notice to re-enter the Leased Property.
Lessor shall be under no obligation to, but may if it so chooses, relet the Leased Property or otherwise mitigate Lessor’s
damages.

 

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16.3         Damages.
Neither (a) the termination of this Lease, (b) the repossession of the Leased Property, (c) the failure of Lessor
to relet the Leased Property, nor (d) the reletting of all or any portion thereof, shall relieve Lessee of its liability and
obligations hereunder, all of which shall survive any such termination, repossession or reletting. In the event of any such termination,
Lessee shall forthwith pay to Lessor all Rent due and payable with respect to the Leased Property to and including the date of
such termination. Damages shall also consist of all reasonable and documented legal expenses and other related reasonable and documented
out-of-pocket costs incurred by Lessor following the Event of Default, all reasonable and documented out-of-pocket costs incurred
by Lessor in restoring the Leased Property to good order and condition; and any other damages available to Lessor under applicable
law.

 

16.4         Waiver.
If this Lease is terminated pursuant to Section 16.1, Lessee waives, to the extent permitted by applicable law, (a) any
right to a trial by jury in the event of summary proceedings to enforce the remedies set forth in this Article 16, and (b) the
benefit of any laws now or hereafter in force exempting property from liability for rent or for debt.

 

16.5         Application
of Funds. Any payments received by Lessor under any of the provisions of this Lease during the existence or continuance of
any Event of Default shall be applied to Lessee’s obligations in the order that Lessor may determine or as may be prescribed
by the laws of the State.

 

16.6         Lessor’s
Right to Cure Lessee’s Default. If Lessee fails to make any payment or to perform any act required to be made or performed
under this Lease, including, without limitation, Lessee’s failure to comply with the terms of the Management Agreement or
any Franchise Agreement, and fails to cure the same within the relevant time periods provided in Section 16.1, Lessor, without
waiving or releasing any obligation of Lessee, and without waiving or releasing any obligation or default, may (but shall be under
no obligation to) at any time thereafter make such payment or perform such act for the account and at the expense of Lessee, and
may, to the extent permitted by law, enter upon the Leased Property for such purpose and, subject to Section 16.4, take all
such action thereon as, in Lessor’s opinion, may be necessary or appropriate therefor. No such entry shall be deemed an eviction
of Lessee. All sums so paid by Lessor and all costs and expenses (including, without limitation, reasonable attorneys’ fees
and expenses, in each case to the extent permitted by law) so incurred, together with a late charge thereon (to the extent permitted
by law) at the Overdue Rate from the date on which such sums or expenses are paid or incurred by Lessor, shall be paid by Lessee
to Lessor on demand. The obligations of Lessee and rights of Lessor contained in this Article shall survive the expiration or earlier
termination of this Lease.

 

ARTICLE
17

lessor events of default; LESSEE’S REMEDIES

 

17.1         Breach by Lessor.
It shall be a breach of this Lease if Lessor fails to observe or perform any term, covenant or condition of this Lease on its part
to be performed and such failure continues for a period of thirty (30) days after Notice thereof from Lessee, unless such
failure cannot with due diligence be cured within a period of thirty (30) days, in which case such failure shall not be deemed
to continue if Lessor, within such thirty (30) day period, proceeds promptly and with due diligence to cure the failure and
diligently completes the curing thereof; provided, however, that such default shall be cured by Lessor in any event prior to the
date on which the default becomes an event of default under the terms of any Franchise Agreement for the Hotel. The time within
which Lessor shall be obligated to cure any such failure also shall be subject to extension of time due to the occurrence of any
Unavoidable Delay.

 

17.2         Lessee’s
Right to Cure. Subject to the provisions of Section 17.1, if Lessor breaches any covenant to be performed by it under
this Lease, Lessee, after Notice to and demand upon Lessor, without waiving or releasing any obligation hereunder, and in addition
to all other remedies available to Lessee, may (but shall be under no obligation at any time thereafter to) make such payment or
perform such act for the account and at the expense of Lessor. All sums so paid by Lessee and all costs and expenses (including,
without limitation, reasonable attorneys’ fees) so incurred, together with interest thereon at the Overdue Rate from the
date on which such sums or expenses are paid or incurred by Lessee, shall be paid by Lessor to Lessee on demand or, following entry
of a final, nonappealable judgment against Lessor for such sums, may be offset by Lessee against the Base Rent and/or Percentage
Rent payments next accruing or coming due. The rights of Lessee hereunder to cure and to secure payment from Lessor in accordance
with this Section 17.2 shall survive the termination of this Lease with respect to the Leased Property.

 

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ARTICLE
18

INDEMNIFICATION

 

18.1         Indemnification.

 

(a)   Notwithstanding
the existence of any insurance, and without regard to the policy limits of any such insurance or self-insurance, but subject to
Section 13.3 and Section 8.3, Lessee will protect, indemnify, hold harmless and defend Lessor from and against all liabilities,
losses, obligations, claims, damages, penalties, causes of action, costs and expenses (including, without limitation, reasonable
attorneys’ fees and expenses), to the extent permitted by law, imposed upon or incurred by or asserted against Lessor Indemnified
Parties by reason of: (a) any accident, injury to or death of persons or loss of or damage to property occurring on or about
the Leased Property or adjoining sidewalks, including without limitation any claims under liquor liability, “dram shop”
or similar laws, (b) any use, misuse, non-use, condition, management, maintenance or repair by Lessee or any of its agents,
employees or invitees of the Leased Property or Lessee’s Personal Property during the Term or any litigation, proceeding
or claim by governmental entities or other third parties to which a Lessor Indemnified Party is made a party or participant related
to such use, misuse, non-use, condition, management, maintenance, or repair thereof by Lessee or any of its agents, employees or
invitees, including any failure of lessee or any of its agents, employees or invitees to perform any obligations under this Lease
or imposed by applicable law (other than arising out of Condemnation proceedings), (c) any Impositions that are the obligations
of Lessee pursuant to the applicable provisions of this Lease, (d) any failure on the part of Lessee to perform or comply
with any of the terms of this Lease, and (e) the non-performance of any of the terms and provisions of any and all existing
and future subleases of the Leased Property to be performed by the landlord thereunder.

 

(b)   Notwithstanding
the existence of any insurance, and without regard to the policy limits of any such insurance or self-insurance, but subject to
Section 13.3 and Section 8.3, Lessor shall indemnify, save harmless and defend Lessee Indemnified Parties from and against
all liabilities, obligations, claims, damages, penalties, causes of action, costs and expenses imposed upon or incurred by or asserted
against Lessee Indemnified Parties as a result of (a) the gross negligence or willful misconduct of Lessor arising in connection
with this Lease or (b) any failure on the part of Lessor to perform or comply with any of the terms of this Lease. In addition,
to the extent that Lender applies Lessee’s funds to the payment of obligations of Lessor under the Loan Documents, such funds,
to the extent then owed to Lessor under this Lease, will be deemed paid to Lessor in satisfaction of such obligation of Lessee
to Lessor, and Lessor shall indemnify Lessee for any appropriation by Lender of Lessee’s funds in excess of amounts then
owed to Lessor under this Lease. Any amounts that become payable by an Indemnifying Party under this Section shall be paid within
ten (10) days after liability therefor on the part of the Indemnifying Party is determined by litigation or otherwise, and
if not timely paid, shall bear a late charge (to the extent permitted by law) at the Overdue Rate from the date of such determination
to the date of payment. An Indemnifying Party, at its expense, shall contest, resist and defend any such claim, action or proceeding
asserted or instituted against the Indemnified Party. The Indemnified Party, at its expense, shall be entitled to participate in
any such claim, action, or proceeding, and the Indemnifying Party may not compromise or otherwise dispose of the same without the
consent of the Indemnified Party, which may not be unreasonably withheld or delayed. Nothing herein shall be construed as indemnifying
a Lessor Indemnified Party against its own (or Lessor’s) grossly negligent acts or omissions or willful misconduct.

 

(c)   Lessee’s
or Lessor’s liability for a breach of the provisions of this Article shall survive any termination of this Lease.

 

ARTICLE
19

REIT REQUIREMENTS AND RESTRICTIONS

 

19.1         Personal Property
Limitation. Anything contained in this Lease to the contrary notwithstanding, the average of the fair market value of the items
of personal property that are leased to Lessee under this Lease at the beginning and at the end of any Fiscal Year shall not exceed
fifteen percent (15%) of the average of the aggregate fair market value of the Leased Property at the beginning and at the
end of such Fiscal Year (“Personal Property Limitation”). If Lessor anticipates that the Personal Property Limitation
will be exceeded with respect to the Leased Property for any Fiscal Year, Lessor shall notify Lessee and Lessee shall purchase
at fair market value any personal property anticipated to be in excess of the Personal Property Limitation and the rent obligation
shall be equitably adjusted. This Section 19.1 is intended to ensure that the Rent qualifies as “rents from real
property,” within the meaning of Section 856(d) of the Code, or any similar or successor provisions thereto, and
shall be interpreted in a manner consistent with such intent.

 

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19.2         Sublease Rent
Limitation. Anything contained in this Lease to the contrary notwithstanding, Lessee shall not sublet the Leased Property on
any basis such that the rental to be paid by the sublessee thereunder would be based, in whole or in part, on either (a) the
income or profits derived by the business activities of the sublessee, or (b) any other formula such that any portion of the
Rent would fail to qualify as “rents from real property” within the meaning of Section 856(d) of the Code,
or any similar or successor provision thereto.

 

19.3         Sublease Tenant
Limitation. Anything contained in this Lease to the contrary notwithstanding, Lessee shall not sublease the Leased Property
to any Person in which Lessor owns, directly or indirectly, a ten percent (10%) or more interest, within the meaning of Section 856(d)(2)(B)
of the Code, or any similar or successor provisions thereto.

 

19.4         Lessee Officer
and Employee Limitation. If a Person serves as both (a) a director of Lessee (or any Person who furnishes or renders services
to the tenants of the Leased Property, or manages or operates the Leased Property) and (b) an officer (or employee) of the
Lessor that Person shall not receive any compensation for serving as a director of Lessee (or any Person who furnishes or renders
services to the tenants of the Leased Property, or manages or operates the Leased Property). Furthermore, if a Person serves as
both (a) a director of the Lessor and (b) an officer (or employee) of Lessee (or any Person who furnishes or renders
services to the tenants of the Leased Property, or manages or operates the Leased Property), that Person shall not receive any
compensation for serving as a director of the Lessor.

 

19.5         Payments to
Affiliates of Lessee. During the Term, Lessee shall not pay, or become obligated to pay, any fees to any Affiliate of Lessee
in connection with the Hotel, other than fees that are subordinated to the payments that are required to be made to Lessor pursuant
to this Lease.

 

19.6         Taxable REIT
Subsidiary. Lessee, or the owner of Lessee to the extent Lessee is a disregarded entity for tax purposes, agrees to make an
election to be, and to operate as a taxable REIT subsidiary of Moody National REIT I, Inc., within the meaning of Section 856(e)
of the Code, or any similar or successor provision thereto.

 

19.7         Construction
of Lease. Both parties agree that no provision of this Lease shall be construed so as to cause Moody National REIT I, Inc.
to fail to qualify as a real estate investment trust.

 

ARTICLE
20

SUBLETTING AND ASSIGNMENT

 

20.1         Subletting and
Assignment. Subject to the provisions of Article 19 and Section 20.2 and any other express conditions or limitations set
forth herein, Lessee may (a) assign this Lease or sublet all or any part of the Leased Property to an Affiliate of Lessee,
or (b) sublet any retail or restaurant portion of the Leased Improvements in the normal course of the Primary Intended Use;
provided that any subletting to any party other than an Affiliate of Lessee shall not individually as to any one such subletting,
or in the aggregate, materially diminish the actual or potential Percentage Rent payable under this Lease. In the case of a subletting,
the sublessee shall comply with the provisions of Section 20.2, and in the case of an assignment, the assignee shall assume
in writing and agree to keep and perform all of the terms of this Lease on the part of Lessee to be kept and performed and shall
be, and become, jointly and severally liable with Lessee for the performance thereof. Notwithstanding the above, Lessee may assign
the Lease to an Affiliate without the consent of Lessor; provided that any such assignee assumes in writing and agrees to keep
and perform all of the terms of the Lease on the part of Lessee to be kept and performed and shall be and become jointly and severally
liable with Lessee for the performance thereof. In case of either an assignment or subletting made during the Term, Lessee shall
remain primarily liable, as principal rather than as surety, for the prompt payment of the Rent and for the performance and observance
of all of the covenants and conditions to be performed by Lessee hereunder. An original counterpart of each such sublease and assignment
and assumption, duly executed by Lessee and such sublessee or assignee, as the case may be, in form and substance satisfactory
to Lessor, shall be delivered promptly to Lessor. Notwithstanding the foregoing, any such assignment or sublet shall be subject
to the terms of the Loan Documents. Any sublet or assignment in violation of the requirements of this Article 20 shall be null
and void.

 

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20.2         Attornment.
Lessee shall insert in each sublease permitted under Section 20.1 provisions to the effect that (a) such sublease is
subject and subordinate to all of the terms and provisions of this Lease and to the rights of Lessor hereunder, (b) if this
Lease terminates before the expiration of such sublease, the sublessee thereunder will, at Lessor’s option, attorn to Lessor
and waive any right the sublessee may have to terminate the sublease or to surrender possession thereunder as a result of the termination
of this Lease, and (c) if the sublessee receives a Notice from Lessor or Lessor’s assignees, if any, stating that an
uncured Event of Default exists under this Lease, the sublessee shall thereafter be obligated to pay all rentals accruing under
said sublease directly to the party giving such Notice, or as such party may direct. All rentals received from the sublessee by
Lessor or Lessor’s assignees, if any, as the case may be, shall be credited against the amounts owing by Lessee under this
Lease.

 

20.3         Conveyance by
Lessor. Lessor may assign this Lease to any purchaser of the Leased Property. If Lessor or any successor owner of the Leased
Property conveys the Leased Property in accordance with the terms hereof other than as security for a debt, and the grantee or
transferee of the Leased Property expressly assumes all obligations of Lessor hereunder arising or accruing from and after the
date of such conveyance or transfer, Lessor or such successor owner, as the case may be, shall thereupon be released from all future
liabilities and obligations of Lessor under this Lease arising or accruing from and after the date of such conveyance or other
transfer as to the Leased Property and all such future liabilities and obligations shall thereupon be binding upon the new owner.

 

ARTICLE
21

QUIET ENJOYMENT; RISK OF LOSS

 

21.1         Quiet Enjoyment.
So long as Lessee pays all Rent as the same becomes due and complies with all of the terms of this Lease and performs its
obligations hereunder, in each case within the applicable grace periods, if any, Lessee shall peaceably and quietly have, hold
and enjoy the Leased Property for the Term hereof, free of any claim or other action by Lessor or anyone claiming by, through
or under Lessor, but subject to all liens and encumbrances subject to which the Leased Property was conveyed to Lessor, to the
extent not released in connection with the transactions contemplated by this Lease, or hereafter consented to by Lessee or provided
for herein. Notwithstanding the foregoing, Lessee shall have the right by separate and independent action to pursue any claim
it may have against Lessor as a result of a breach by Lessor of the covenant of quiet enjoyment contained in this Section.

 

21.2         Risk of Loss.
During the Term, the risk of loss or of decrease in the enjoyment and beneficial use of the Leased Property in consequence of the
damage or destruction thereof by fire, the elements, casualties, thefts, riots, wars or otherwise, or in consequence of foreclosures,
attachments, levies or executions (other than those caused by Lessor and those claiming from, through or under Lessor) is assumed
by Lessee, and, in the absence of gross negligence, willful misconduct or breach of this Lease by Lessor pursuant to Section 17.1,
Lessor shall in no event be answerable or accountable therefor, nor shall any of the events mentioned in this Section entitle Lessee
to any abatement of Rent except as specifically provided in this Lease.

 

ARTICLE
22

LESSOR MORTGAGES; SUBORDINATION OF LEASE

 

22.1         Lessor May Grant
Liens. Without the consent of Lessee, Lessor may, subject to the terms and conditions set forth below in this Section 22.1,
from time to time, directly or indirectly, create or otherwise cause to exist any lien, encumbrance or title retention agreement
(“Encumbrance”) upon the Leased Property, or any portion thereof or interest therein, whether to secure any
borrowing or other means of financing or refinancing. Upon the request of Lessor, Lessee shall subordinate this Lease to the lien
of a new mortgage on the Leased Property, on the condition that the proposed mortgagee executes a non-disturbance agreement recognizing
this Lease in accordance with the provisions of Section 22.2, and agreeing, for itself and its successors and assigns, to
comply with the provisions of this Article 22.

 

22.2         Subordination
of Lease. This Lease and Lessee’s interest hereunder shall at all times be subject and subordinate to the lien and security
title of any deeds to secure debt, deeds of trust, mortgages, or other Encumbrances heretofore or hereafter granted by Lessor or
which otherwise encumber or affect the Leased Property (including, for the avoidance of doubt, the Initial Loan Documents) and
to any and all advances to be made thereunder and to all renewals, modifications, consolidations, replacements, substitutions,
and extensions thereof; provided, however, that with respect to any Mortgage hereafter granted, such subordination is conditioned
upon delivery to Lessee of a non-disturbance agreement which provides that Lessee shall not be disturbed in its possession of the
Leased Property hereunder following a foreclosure of such Mortgage (or delivery of a deed-in-lieu-of-foreclosure) and that the
holder of such Mortgage or the purchaser at a foreclosure sale (or grantee under such deed-in-lieu-of-foreclosure) shall perform
all obligations of Lessor under this Lease. In confirmation of such subordination, however, Lessee shall, at Lessor’s request,
promptly execute, acknowledge and deliver any instrument which may be required to evidence subordination to any Mortgage and to
the holder thereof. In the event of Lessee’s failure to deliver such subordination and if the Mortgage does not change any
term of the Lease, Lessor may, in addition to any other remedies for breach of covenant hereunder, execute, acknowledge, and deliver
the instrument as the agent or attorney-in-fact of Lessee, and Lessee hereby irrevocably constitutes Lessor its attorney-in-fact
for such purpose, Lessee acknowledging that the appointment is coupled with an interest and is irrevocable.

 

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ARTICLE
23

ESTOPPEL CERTIFICATES; FINANCIAL STATEMENTS; INSPECTION RIGHTS

 

23.1         Estoppel Certificates;
Financial Statements.

 

(a)   At any time and
from time to time upon not less than ten (10) days Notice by Lessor, Lessee will furnish to Lessor an Officer’s Certificate
certifying that this Lease is unmodified and in full force and effect (or that this Lease is in full force and effect as modified
and setting forth the modifications), the date to which the Rent has been paid, whether to the knowledge of Lessee there is any
existing default or Event of Default exists thereunder by Lessor or Lessee, and such other information as may be reasonably requested
by Lessor. Any such certificate furnished pursuant to this Section may be relied upon by Lessor, any lender (including, for the
avoidance of doubt, Initial Lender) and any prospective purchaser of the Leased Property.

 

(b)   Lessee will furnish
the following statements to Lessor:

 

(i)    with reasonable
promptness, such information respecting the financial condition and affairs of Lessee including audited financial statements prepared
by the same certified independent accounting firm that prepares the returns for Lessor or such other accounting firm as may be
approved by Lessor, as Lessor may request from time to time; and

 

(ii)   the most
recent Consolidated Financials of Lessee within forty-five (45) days after each quarter of any Fiscal Year (or, in the case
of the final quarter in any Fiscal Year, the most recent audited Consolidated Financials of Lessee within ninety (90) days);
and

 

(iii)  on or
about the 20th day of each month, a detailed profit and loss statement for the Leased Property for the preceding month, a balance
sheet for the Leased Property as of the end of the preceding month, and a detailed accounting of revenues for the Leased Property
for the preceding month, each in form acceptable to Lessor.

 

Lessee will permit the inclusion of such statements in any filings
required to be made by Lessor under the Securities Act of 1933 and the Securities Exchange Act of 1934.

 

(c)   At any time and
from time to time upon not less than ten (10) days Notice by Lessee, Lessor will furnish to Lessee or to any Person designated
by Lessee an estoppel certificate certifying that this Lease is unmodified and in full force and effect (or that this Lease is
in full force and effect as modified and setting forth the modifications), the date to which Rent has been paid, whether to the
knowledge of Lessor there is any existing default or Event of Default on Lessee’s part hereunder, and such other information
as may be reasonably requested by Lessee.

 

23.2         Lessor’s
Right to Inspect. Lessee shall permit Lessor and its authorized representatives as frequently as reasonably requested by Lessor
to inspect the Leased Property and Lessee’s accounts and records pertaining thereto and make copies thereof, during usual
business hours upon reasonable advance Notice, subject only to any business confidentiality requirements reasonably requested by
Lessee.

 

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ARTICLE
24

LEASEHOLD MORTGAGES

 

24.1        Leasehold Mortgages.
To the extent any provision in this Article 24 conflicts or is inconsistent with any other provision of this Lease, the provisions
of this Article 24 shall control.

 

(a)   Lessee, and its
successors and assigns, shall have the unconditional right to mortgage, pledge and/or assign this Lease without having to obtain
the consent of Lessor. Lessee, and its successors and assigns, shall have the unconditional right to sublet all or a portion of
the Leased Property without having to obtain the consent of Lessor. Any pledge or assignment of any interests in Lessee shall be
permitted without having to obtain the consent of Lessor.

 

(b)   If Lessee, or Lessee’s
successors or assigns, shall mortgage this Lease in compliance with the provisions of this Section, then so long as any such mortgage
shall remain unsatisfied of record, the following provisions shall apply:

 

(i)    Lessor,
upon serving Lessee with any notice of default, or any other notice under the provisions of or with respect to this Lease, shall
also serve a copy of such notice upon the holder of such mortgage, at the address provided for in clause (vi) of this Section 24.1(b),
and no notice by Lessor to Lessee hereunder shall be deemed to have been duly given unless and until a copy thereof has been so
served.

 

(ii)   Any holder
of such mortgage, in case Lessee shall be in default hereunder, shall, within the period and otherwise as herein provided, have
the right to remedy such default, or cause the same to be remedied, and Lessor shall accept such performance by or at the instance
of such holder as if the same had been made by Lessee.

 

(iii)   For the
purposes of this Article, no event of default shall be deemed to exist in respect of the performance of work required to be performed,
or of acts to be done, or of conditions to be remedied, if steps shall in good faith, have been commenced within the time permitted
therefor to rectify the same and shall be prosecuted to completion with diligence and continuity.

 

(iv)  Notwithstanding
anything herein contained to the contrary, upon the occurrence of any event of default, Lessor shall take no action to effect a
termination of this Lease without first giving to the holder of such mortgage written notice thereof and a reasonable time thereafter
within which either (x) to obtain possession of the mortgaged property (including possession by a receiver) or (y) to institute,
prosecute and complete foreclosure proceedings or otherwise acquire Lessee’s interest under this Lease. Provided, however,
that: (x) such holder shall not be obligated to continue such possession or to continue such foreclosure proceedings after such
defaults shall have been cured and (y) such holder shall agree with Lessor in writing to comply during the period of such forbearance
with such of the terms, conditions and covenants of this Lease as are reasonably susceptible of being complied with by such holder.
Any default by Lessee, not reasonably susceptible of being cured by such holder shall be deemed to have been waived by Lessor upon
completion of such foreclosure proceedings or upon such acquisition of Lessee’s interest in this Lease, except that any of
such events of default which are reasonably susceptible of being cured after such completion and acquisition shall then be cured
with reasonable diligence. Such holder, or his designee, or other purchaser in foreclosure proceedings may become the legal owner
and holder of this Lease through such foreclosure proceedings or by assignment of this Lease in lieu of foreclosure.

 

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(v)   In the
event of the termination of this Lease prior to the expiration of the Term (including, without limitation, in connection with a
rejection of this Lease in the event of a bankruptcy of Lessee), Lessor shall serve upon the holder of such mortgage written notice
that the Lease has been terminated together with a statement of any and all sums which would at that time be due under this Lease
but for such termination, and of all other defaults, if any, under this Lease then known to Lessor. Such holder shall thereupon
have the option to obtain a new Lease in accordance with and upon the following terms and conditions:

 

(A)     Upon
the written request of the holder of such mortgage, within thirty (30) days after service of such notice that the Lease has been
terminated, Lessor shall enter into a new lease of the Leased Property with such holder, or his designee, as follows:

 

(B)     Such
new lease shall be effective as at the date of termination of this Lease, and shall be for the remainder of the term of this Lease
and at the rent and upon all the agreements, terms, covenants and conditions hereof, including any applicable rights of renewal.
Upon the execution of such new lease, Lessor shall allow to the tenant named therein and such tenant shall be entitled to an adjustment
in an amount equal to the net income derived by Lessor from the Leased Property during the period from the date of termination
of this Lease to the date of execution of such new lease.

 

(vi)   Any notice
or other communication which Lessor shall desire or is required to give to or serve upon the holder of a mortgage on this Lease
shall be in writing and shall be served by registered mail, addressed to such holder at his address as set forth in such mortgage.
Any notice or other communication which the holder of a mortgage on this Lease shall desire or is required to give to or serve
upon Lessor shall be deemed to have been duly given or served if sent in duplicate by registered mail addressed to Lessor at Lessor’s
address as set forth in this Lease or at such other addresses as shall be designated by Lessor by notice in writing given to such
holder by registered mail.

 

(vii) Effective
upon the commencement of the term of any new lease executed pursuant to paragraph (v) of this Section, all subleases shall be assigned
and transferred without recourse by Lessor to the tenant under such new lease, and all moneys on deposit with Lessor which Lessee
would have been entitled to use but for the termination or expiration of this Lease may be used by the tenant under such new lease
for the purposes of and in accordance with the provisions of such new lease. If the holders of more than one such leasehold mortgage
shall make written requests upon Lessor for a new lease in accordance with the provisions of this Section, the new lease shall
be entered into pursuant to the request of the holder whose leasehold mortgage shall be prior in lien thereto and thereupon the
written requests for a new lease of each holder of a leasehold mortgage junior in lien shall be and be deemed to be void and of
no force or effect.

 

(viii) No
agreement between Lessor and Lessee modifying, canceling or surrendering this Lease shall be effective without the prior written
consent of the leasehold mortgagee.

 

(ix)   The fee
title to the Leased Property and the leasehold estate created therein pursuant to the provisions of this Lease shall not merge
but shall always be kept separate and distinct, notwithstanding the union of such estates in Lessee, Lessor, or in any other person
by purchase, operation of law or otherwise.

 

(c)   If any leasehold
mortgagee shall acquire title to Lessee’s interest in this Lease, by foreclosure of a mortgage thereon or by assignment in
lieu of foreclosure or by an assignment from a designee or wholly owned subsidiary corporation of such mortgagee, or under a new
lease pursuant to this Article, such mortgagee may assign such lease and shall thereupon be released from all liability for the
performance or observance of the covenants and conditions in such lease contained on tenant’s part to be performed and observed
from and after the date of such assignment, provided that such assignee assumes the obligations of Lessee hereunder.

 

(d)   Lessor hereby agrees
to deliver to Lessee a ground lessor estoppel certificate in the form reasonably required by any leasehold mortgagee of Lessee.

 

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ARTICLE
25

BINDING ARBITRATION

 

25.1         Binding Arbitration.
Any controversy between the parties hereto arising out of or related to this Lease or the breach thereof shall be settled by arbitration
in Harris County, Texas, unless otherwise agreed to by the parties thereto, in accordance with the rules of the American Arbitration
Association, and judgment entered upon the aware rendered may be enforced by appropriate judicial action. The arbitration panel
shall consist of one member, which shall be the mediator if mediation has occurred or shall be a person agreed to by each party
to the dispute within 30 days following notice by one party that he or she desires that a matter be arbitrated. If there was no
mediation and the parties are unable within such 30 day period to agree upon an arbitrator, then the panel shall be one arbitrator
selected by the Harris County office of The American Arbitration Association, which arbitrator shall be experienced in the area
of real estate and who shall be knowledgeable with respect to the subject matter area of the dispute. The losing party shall bear
any fees and expenses of the arbitrator, other tribunal fees and expenses, reasonable attorneys’ fees of both parties, any
costs of producing witnesses and any other reasonable costs or expenses incurred by the losing party or the prevailing party or
such costs shall be allocated by the arbitrator. The arbitration panel shall render a decision within 30 days following the close
of presentation by the parties of their cases and any rebuttal. The parties shall agree within 30 days following selection of the
arbitrator to any prehearing procedures or further procedures necessary for the arbitration to proceed, including interrogatories
or other discovery.

 

ARTICLE
26

NOTICES

 

26.1         Notices.
All notices, demands, requests, consents approvals and other communications (“Notice” or “Notices”)
hereunder shall be in writing and hand-delivered, sent by FedEx or other nationally recognized overnight courier service, or mailed
(by registered or certified mail, return receipt requested and postage prepaid), if to Lessor at 6363 Woodway, Suite 110, Houston,
Texas 77057, Attn: Brett C. Moody and if to Lessee at 6363 Woodway, Suite 110, Houston, Texas 77057, Attn: Brett C. Moody or to
such other address or addresses as either party may hereafter designate. Personally delivered Notice shall be effective upon receipt,
and Notice given by overnight courier service or by mail shall be complete at the time of deposit with the courier service or in
the U.S. Mail system, respectively, but any prescribed period of Notice and any right or duty to do any act or make any response
within any prescribed period or on a date certain after the service of such Notice given by overnight courier service shall be
extended one (1) day and by mail shall be extended five (5) days.

 

ARTICLE
27

GENERAL PROVISIONS

 

27.1         No Waiver.
No failure by Lessor or Lessee to insist upon the strict performance of any term hereof or to exercise any right, power or remedy
consequent upon a breach thereof, and no acceptance of full or partial payment of Rent during the continuance of any such breach,
shall constitute a waiver of any such breach or of any such term. To the extent permitted by law, no waiver of any breach shall
affect or alter this Lease, which shall continue in full force and effect with respect to any other then existing or subsequent
breach.

 

27.2         Remedies Cumulative.
To the extent permitted by law and unless otherwise provided herein to the contrary, each legal, equitable or contractual right,
power and remedy of Lessor or Lessee now or hereafter provided either in this Lease or by statute or otherwise shall be cumulative
and concurrent and shall be in addition to every other right, power and remedy and the exercise or beginning of the exercise by
Lessor or Lessee of any one or more of such rights, powers and remedies shall not preclude the simultaneous or subsequent exercise
by Lessor or Lessee of any or all of such other rights, powers and remedies.

 

27.3         Waiver of Trial
by Jury. LESSOR AND LESSEE EACH WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT TO A TRIAL BY JURY IN THE
EVENT OF A PROCEEDING WITH RESPECT TO THIS LEASE, INCLUDING, WITHOUT LIMITATION, SUMMARY PROCEEDINGS TO ENFORCE THE REMEDIES SET
FORTH IN ARTICLE 16.

 

27.4        Acceptance of
Surrender. No surrender to Lessor of this Lease or of the Leased Property or any part thereof, or of any interest therein,
shall be valid or effective unless agreed to and accepted in writing by Lessor and no act by Lessor or any representative or agent
of Lessor, other than such a written acceptance by Lessor, shall constitute an acceptance of any such surrender.

 

27.5         No Merger of
Title. There shall be no merger of this Lease or of the leasehold estate created hereby by reason of the fact that the same
Person may acquire, own or hold, directly or indirectly: (a) this Lease or the leasehold estate created hereby or any interest
in this Lease or such leasehold estate and (b) the fee estate in the Leased Property.

 

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27.6         Waiver of Presentment,
Etc. Lessee waives all presentments, demands for payment and for performance, notices of nonperformance, protests, notices
of protest, notices of dishonor, and notices of acceptance and waives all notices of the existence, creation, or incurring of new
or additional obligations, except as expressly granted herein.

 

27.7         Action for Damages.
Except as otherwise expressly provided herein, in any suit or other claim brought by either party seeking damages against the other
party for breach of its obligations under this Lease, the party against whom such claim is made shall be liable to the other party
only for actual damages and not for consequential, punitive or exemplary damages.

 

27.8         Lease Assumption
in Bankruptcy Proceeding. If an Event of Default occurs and Lessee has filed or has had filed against it a petition in bankruptcy
or for reorganization or other relief pursuant to the federal bankruptcy code, Lessee shall promptly move the court presiding over
the proceeding to assume this Lease pursuant to 11 U.S.C. §365, without seeking an extension of the time to file said motion.

 

27.9         Enforceability.
Anything contained in this Lease to the contrary notwithstanding, all claims against, and liabilities of, Lessee or Lessor arising
prior to any date of termination of this Lease shall survive such termination. If any term or provision of this Lease or any application
thereof is invalid or unenforceable, the remainder of this Lease and any other application of such term or provisions shall not
be affected thereby. If any late charges or any interest rate provided for in any provision of this Lease are based upon a rate
in excess of the maximum rate permitted by applicable law, the parties agree that such charges shall be fixed at the maximum permissible
rate. Neither this Lease nor any provision hereof may be changed, waived, discharged or terminated except by a written instrument
in recordable form signed by Lessor and Lessee. All the terms and provisions of this Lease shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted assigns. The headings in this Lease are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof. This Lease shall be governed by and construed in
accordance with the laws of the State, but not including its conflicts of laws rules.

 

27.10      Memorandum
of Lease. Lessor and Lessee shall promptly, upon the request of either party, enter into a short form memorandum of this Lease,
in form suitable for recording under the laws of the State in which reference to this Lease, and all options contained herein,
shall be made. Lessor shall pay all costs and expenses of recording such memorandum of this Lease.

 

27.11      Governing Law.
This Lease shall be governed by and construed in accordance with the laws of the State, without regard to any applicable conflicts
of laws principles that would require the application of the law of any other jurisdiction and venue with respect to any action
to construe or enforce this Lease shall be laid in the State where the Leased Property is located.

 

27.12      Counterparts.
This Lease may be executed in two or more counterparts, and all such counterparts shall be deemed to constitute but one and the
same instrument.

 

27.13      Special
Lender Provisions. Notwithstanding anything to the contrary contained in this Lease or in any other agreement between Lessor
and Lessee, the following shall govern at all times while any obligations remains outstanding under the Initial Loan:

 

(a)   Each of Lessor
and Lessee hereby acknowledges and agrees that Initial Lender has made the Initial Loan to be secured by a mortgage or deed of
trust upon the Leased Property and that for all purposes hereunder such mortgage or deed of trust shall qualify as and be the first
lien mortgage or deed of trust encumbering the Leased Property and Initial Lender shall qualify as a Permitted Mortgagee.

 

(b)   While the obligations
under the Initial Loan remain outstanding, the Initial Lender will have the right to participate in any arbitration proceeding
relating to the termination or amendment of this Lease or with respect to any matter that affects the Initial Lender’s rights
under the Initial Loan Documents.

 

(c)   Lessee and Lessor
expressly acknowledge that Initial Lender is an intended third-party beneficiary of the provisions of this Lease relating, directly
or indirectly, to the Initial Loan, and Initial Lender is entitled to enforce the provisions hereof.

 

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[SIGNATURES ON NEXT PAGE]

 

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IN WITNESS WHEREOF, the parties have executed
this Lease by their duly authorized officers as of the date first above written. 

 

	 	 	 	 
	 	“LESSOR”
	 	 
	 	Moody National International-Fort Worth Holding, LLC, a Delaware limited liability company
	 	 	 
	 	By:	 	 
	 	Name:	 	Brett C. Moody
	 	Title:	 	President
	 	 
	 	“LESSEE”
	 	 
	 	Moody National International-Fort Worth MT, LLC, a Delaware limited liability company
	 	 	 
	 	By:	 	 
	 	Name:	 	Brett C. Moody
	 	Title:	 	President

  

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Exhibit A

 

Leased Property

 

Legal Description

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EXHIBIT B

 

BASE RENT

 

	Year	 	Annual Rent	 	Monthly
	Year 1	 	 	$	1,100,000	 	 	$	91,666.67	 
	Year 2  	 	 	$	1,100,000	 	 	$	91,666.67	 
	Year 3  	 	 	$	1,100,000	 	 	$	91,666.67	 
	Year 4  	 	 	$	1,100,000	 	 	$	91,666.67	 
	Year 5  	 	 	$	1,100,000	 	 	$	91,666.67	 
	 	 	 	 	 	 	 	 	 	 	 

Base Rent shall be adjusted for Year 6 as set forth in Section 3.1(a),
and shall be adjusted every 5 years thereafter until the termination of the Lease.

 

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EXHIBIT C

 

PERCENTAGE RENT

 

The Annual Revenue Computation is equal to the amount obtained by
multiplying the Gross Revenue (“x”) from the prior twelve months by a factor (“y”) as set forth below:

 

	Gross Revenue (x)	 	 	 	Factor (y)
	 	 	 	 	 
	 	 	$0 - $2,800,000	 	 	 	42.0	%
	Over	 	$2,800,000 - $2,9500,000	 	 	 	43.0	%
	Over	 	$2,9500,000 - $3,100,000	 	 	 	44.0	%
	Over	 	$3,100,000 - $3,250,000	 	 	 	45.0	%
	Over	 	$3,250,000	 	 	 	46.0	%

 

The Annual Revenue Computation shall be adjusted for Year 6 as set
forth in Section 3.1(b), and shall be adjusted every 5 years thereafter until the termination of the Lease.

 

42

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