Document:

ex10-106.htm

 Moody National REIT I, Inc. POS AM 

 Exhibit 10-106 

 

 Courtyard by Marriott Lyndhurst, NJ Unit #: 65-18L   AMENDMENT TO COURTYARD BY MARRIOTT RELICENSING FRANCHISE AGREEMENT THIS AMENDMENT TO COURTYARD BY MARRIOTT RELICENSING FRANCHISE AGREEMENT (this “Amendment”) is made and entered into as of September 30,2014 (the “Effective Date”), by and between Marriott International, Inc., a Delaware corporation (“Franchisor”), and Moody National CY Lyndhurst MT, LLC, a Delaware limited liability company (“Franchisee”). WHEREAS, Franchisor and Franchisee are parties to a Courtyard by Marriott Relicensing Franchise Agreement dated as of August 31,2007 (the “Franchise Agreement”), pursuant to which Franchisor granted to Franchisee the right to operate a Courtyard by Marriott Hotel located at 1 Polito Avenue, Lyndhurst, NJ 07071; and WHEREAS, pursuant to the Assignment of Membership Interest dated as of September 30, 2014 by and among Moody National Management, L.P., a Texas limited partnership (“Moody Management”), and MN 1 Polito Lyndhurst MT, Inc., a Delaware corporation (“MN 1 Polito”), Moody Management, concurrent with the Effective Date, contributed all of its membership interests in Franchisee to MN 1 Polito (the “Equity Contribution”); and WHEREAS, in connection with the Equity Contribution, Franchisor and Franchisee desire to amend the Franchise Agreement and to enter into certain agreements as set forth herein. NOW, THEREFORE, in consideration of the premises and the undertakings and commitments of each party to the other party set forth herein, the parties agree as follows: AMENDMENTS TO FRANCHISE AGREEMENT. Franchisor and Franchisee acknowledge and agree that, concurrent with the Effective Date, (i) the defined term “Owner” shall be deemed to be a reference to Moody National 1 Polito Lyndhurst Holding, LLC, a Delaware limited liability company, rather than a reference to Moody National CY Lyndhurst S, LLC and Moody National CY Lyndhurst H, LLC and (ii) the defined term “Lease Agreement” shall be deemed to be a reference to that certain Amended and Restated Master Lease Agreement effective September 30, 2014 between Owner and Franchisee. Franchisor and Franchisee acknowledge and agree that, concurrent with the Effective Date, the Sixth and Seventh Recitals are deleted from the Franchise Agreement. Franchisor and Franchisee acknowledge and agree that, concurrent with the Effective Date, Section XVII.B.9 is amended and restated as follows: “9. Franchisee or Owner is in default under the Lease Agreement or that certain Owner Agreement dated as of September 30, 2014 among Franchisor, Franchisee and Owner (the “Owner Agreement”), or if the Lease Agreement or Owner Agreement is terminated for any reason.” 789864v4 - Lyndhurst, NJ 61434v3 - Form Amendment to Franchise Agreement (9/18/2014) 

 

    

    

    

 

 Franchisor and Franchisee acknowledge and agree that, concurrent with the Effective Date, Item 6 of Attachment A of the Franchise Agreement is hereby amended and restated as set forth in Schedule 1 attached hereto. CERTAIN AGREEMENTS. Franchisee acknowledges and agrees that Franchisor has the right to require certain terms and conditions as part of its consent to the Equity Contribution, including, without limitation, the payment of a transfer fee. Franchisee acknowledges and agrees that, concurrent with the Effective Date, it will pay (i) past due amounts for the Hotel in the aggregate amount of Seventy Thousand Three Hundred Twenty- Nine and 92/100 Dollars ($70,329.92) to Franchisor and (ii) Franchisor’s outside legal counsel fees and expenses incurred in connection with the review, preparation, and negotiation of this Amendment and the ancillary documents related hereto. Franchisor and Franchisee acknowledge and agree that, concurrent with the Effective Date, (i) the completion date for the 12-year renovation of the Hotel’s lobby set forth in that certain Forbearance Agreement dated as of November 5, 2013 between Franchisor and Franchisee (the “Forbearance Agreement”) shall be extended from May 31, 2014 to December 31, 2014 and (ii) the completion date for the 12-year renovation of the Hotel’s rooms set forth in the Forbearance Agreement shall be extended from August 31, 2014 to January 31, 2015. Each of Franchisor and Franchisee acknowledges and agrees that (i) the Hotel continues to be in the Red Zone (Red Zone 3) under the QA Program; (ii) for both the July through December 2013 and the January through June 2014 tracking periods the Hotel was in the Yellow Zone; (iii) if Franchisee satisfies the requirements set forth in the “Terms of Forbearance Agreement” for the Hotel set forth in the Forbearance Agreement as amended by Section 2(C) of this Amendment, then (a) Franchisor will not terminate the Franchise Agreement if the Hotel is in the Red Zone for the July through December 2014 tracking period and (b) the Hotel will be required to remain out of the Red Zone for both the January through June and July through December 2015 tracking periods to earn a clean slate; and (iv) if Franchisee does not satisfy the requirements set forth in the “Terms of Forbearance Agreement” for the Hotel set forth in the Forbearance Agreement as amended by Section 2(C) of this Amendment, then Franchisor, in its sole discretion, may elect to terminate the Franchise Agreement if the Hotel is in the Red Zone for the July through December 2014 tracking period. Franchisee acknowledges and agrees that, concurrent with the Effective Date, it will deliver to Franchisor the Owner Agreement, substantially in the form of Exhibit A attached hereto, duly executed by all parties thereto other than Franchisor. FRANCHISEE ACKNOWLEDGMENTS. (A) FRANCHISEE HEREBY AFFIRMS THAT AS OF THE DATE OF THIS AMENDMENT (A) ALL OF THE ACKNOWLEDGMENTS SET FORTH IN THE FRANCHISE AGREEMENT ARE CORRECT AND (B) THAT THE EQUITY INTERESTS IN FRANCHISEE ARE OWNED AS SET FORTH IN SCHEDULE 1 ATTACHED HERETO. FRANCHISEE ACKNOWLEDGES THAT IT DID NOT RELY ON ANY PROMISES, REPRESENTATIONS OR AGREEMENTS ABOUT THE FRANCHISOR OR THE FRANCHISE NOT EXPRESSLY CONTAINED IN THIS AMENDMENT IN MAKING ITS DECISION TO SIGN THIS AMENDMENT. FRANCHISEE FURTHER REPRESENTS AND WARRANTS THAT FRANCHISOR AND ITS REPRESENTATIVES HAVE NOT MADE ANY 789864v4 - Lyndhurst, NJ 61434v3 - Form Amendment to Franchise Agreement(9/18/2014) 

 

    

    

    

 

 PROMISES, REPRESENTATIONS OR AGREEMENTS, ORAL OR WRITTEN, EXCEPT AS EXPRESSLY CONTAINED IN THIS AMENDMENT. (B)Franchisee acknowledges and agrees that (i) neither Franchisee nor any of its affiliates 

 shall be entitled to rely on the execution of this Amendment by Franchisor as indicative of the position Franchisor will take in future proposed ownership changes, transfers or assignments by Franchisee or any of its affiliates, and (ii) Franchisor may in the future approve ownership changes, transfers or assignments by Franchisee or any of its affiliates or by other franchisees, owners or management companies of Franchisor, and/or their owners, on terms and conditions materially different from those set forth in this Amendment. RELEASE. Effective as of the Effective Date, Franchisee and its owners, officers, directors, and affiliates (the “Releasors”) for themselves and their successors and all other persons acting on their behalf or claiming under any of them, release and forever discharge Franchisor, its affiliates and subsidiaries, and their respective current and former officers, directors, shareholders, partners, employees, predecessors, successors, attorneys, agents, representatives, and assigns (the “Marriott Releasees”), from any and all suits, claims, controversies, rights, promises, debts, liabilities, demands, obligations, costs, expenses, actions and causes of action of every nature, character, and description, in law or in equity, whether presently known or unknown, vested or contingent, suspected or unsuspected, which any Releasor now owns or holds or has at any time heretofore owned or held against any Marriott Releasee arising under, relating to, or in connection with the Hotel, the Franchise Agreement, or the relationship created thereby. The Releasors, for themselves and their successors and assigns and all other persons acting on their behalf or claiming under any of them, covenant not to bring any suit, action, or proceeding, or make any demand or claim of any type, against any Marriott Releasee relating to or in connection with the Hotel, the Franchise Agreement, any related agreements or the relationship created thereby. THE RELEASORS, FOR THEMSELVES AND THEIR SUCCESSORS AND ALL OTHER PERSONS ACTING ON THEIR BEHALF OR CLAIMING UNDER ANY OF THEM, WAIVE ANY RIGHTS AND BENEFITS CONFERRED BY ANY APPLICABLE PROVISION OF LAW EXISTING UNDER ANY FEDERAL, STATE OR POLITICAL SUBDIVISION THEREOF WHICH WOULD INVALIDATE ALL OR ANY PORTION OF THE RELEASE CONTAINED HEREIN BECAUSE SUCH RELEASE MAY EXTEND TO CLAIMS WHICH THE RELEASORS DO NOT KNOW OR SUSPECT TO EXIST IN THEIR FAVOR AT THE TIME OF EXECUTION OF THIS AMENDMENT. Any of the Marriott Releasees may plead or assert the release and covenant not to sue in this Section 4 as a complete defense and bar to any claim brought against any of them in contravention of this Section 4 and, if any such claim is brought against any of them, Franchisee shall indemnify, defend and hold harmless any such party from and against any such claim. MISCELLANEOUS. This Amendment (a) sets forth the entire agreement between the parties and fully supersedes any and all prior agreements and understandings (whether written or oral) between the parties and pertaining to the subject matter hereof, (b) is governed by, and interpreted and construed in accordance with, the laws of the State of Maryland (without regard to its conflicts of law principles), (c) is not assignable, in whole or in part, by Franchisee to any other person or entity without the consent of Franchisor, (d) shall be binding upon and shall inure to the benefit of the parties and their permitted successors and assigns, and (e) may be executed in counterparts, all of which taken together shall constitute one document. Delivery of an executed signature page to this Amendment by electronic transmission shall be effective as delivery of a manually signed counterpart to this Amendment. EFFECT ON FRANCHISE AGREEMENT. On and after the date hereof, each reference in the Franchise Agreement to “this Agreement,” “hereunder,” “hereof’ or words of like import referring to the Franchise Agreement, and each reference in any documents relating to the Franchise Agreement to “the Agreement,” “thereunder,” “thereof’ or words of like import referring to the Franchise Agreement, shall mean 789864v4 - Lyndhurst, NJ 361434v3 - Form Amendment to Franchise Agreement (9/18/2014) 

    

    

    

 

 

 and be a reference to the Franchise Agreement as amended by this Amendment The Franchise Agreement and any documents relating to the Franchise Agreement, including without limitation the Forbearance Agreement, as specifically amended by this Amendment, are and shall continue to be in full force and effect and are hereby in all respects ratified and confirmed. Items capitalized but not defined herein shall have the same meaning as set forth in the Franchise Agreement. [Remainder of Page Left Intentionally Blank] 789864v4 - Lyndhurst, NJ 61434v3 - Form Amendment to Franchise Agreement (9/18/2014) 

    

    

    

 

 

 IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment to Courtyard by Marriott Relicensing Franchise Agreement, under seal, as of the day and year first above written. FRANCHISOR: ATTEST: ATTEST: MARRIOTT INTERNATIONAL, INC.. By:  (SEAL) Name: Michael H. Rosenman Title: Vice President, Owner & Franchise Services FRANCHISEE:  MOODY NATIONAL CY LYNDHURST MT, LLC a Delaware limited liability company (Assistant) Secretary By:(SEAL) Name: Brett C. Moody Title: President 789864v4  - Lyndhurst, NJ 61434v3 - Form Amendment to Franchise Agreement (9/18/2014) 

    

    

    

 

 IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment to Courtyard by Marriott Relicensing Franchise Agreement, under seal, as of the day and year first above written. FRANCHISOR: ATTEST:MARRIOTT INTERNATIONAL, INC.. Assistant Secretary ATTEST: (Assistant) Secretary  By: (SEAL) Name: Title: FRANCHISEE:  MOODY NATIONAL CY LYNDHURST MT, LLC a Delaware limited liability company By: (SEAL) Name: Brett C. Moody Title: President 789864v4 - Lyndhurst, NJ 61434v3 - orm Amendment to Franchise Agreement (9/18/2014) 4 

    

    

    

 

 SCHEDULE 1 Equity Interest(s) in Franchise or Franchisee (Name(s), Address(es), and percentage(s) of ownership) Ownership of Moody National CY Lyndhurst MT, LLC MN 1 Polito Lyndhurst MT, Inc. 6363 Woodway, Suite 110, Houston, TX 77057 100% Ownership of MN 1 Polito Lyndhurst MT, Inc. Moody National Operating Partnership I, L.P. 6363 Woodway, Suite 110, Houston, TX 77057 100% Ownership of Moody National Operating Partnership I, L.P. Moody National REIT I, Inc. 6363 Woodway, Suite 110, Houston, TX 77057 99.998107% Moody National LPOP I, LLC 6363 Woodway, Suite 110, Houston, TX 77057 0.001893% Ownership of Moody National REIT I, Inc.* Moody National REIT Sponsor, LLC 6363 Woodway, Suite 110, Houston, TX 77057 0.58% Ownership of Moody National LPOP I, LLC Brett C. Moody 6363 Woodway, Suite 110, Houston, TX 77057 100% Ownership of Moody National REIT Sponsor, LLC Moody National REIT Sponsor SM, LLC 6363 Woodway, Suite 110, Houston, TX 77057 100% Ownership of Moody National REIT Sponsor SM, LLC Brett C. Moody 6363 Woodway, Suite 110, Houston, TX 77057 100% * Moody National REIT I, Inc. is a publicly-registered, non-traded REIT with over 1700 shareholders. 789864v4 - Lyndhurst, NJ 61434v3 - Form Amendment to Franchise Agreement (9/18/2014) 6 

 

    

    

    

 

 EXHIBIT A   FORM OF OWNER AGREEMENT OWNER AGREEMENT This Owner Agreement (“Agreement”) is entered into as of September 30, 2014, by and among Marriott International, Inc., a Delaware corporation (“Franchisor”), Moody National CYLyndhurstMT, LLC, a Delaware liability company (“Franchisee”), and Moody National 1 Polito Lyndhurst Holding, LLC, a Delaware limited liability company (“Owner”).   WITNESSETH: WHEREAS, Franchisor and Franchisee are parties to that certain Relicensing Franchise Agreement dated as of August 31, 2007 (as may be amended from time to time, the “Franchise Agreement”) relating to the Hotel (as defined in the Franchise Agreement); and WHEREAS, Franchisee and Owner have entered into a lease (the “Lease”) pursuant to which Franchisee will lease the Hotel from Owner and will operate the Hotel; and WHEREAS, Owner, Franchisee and Franchisor desire that the Hotel be operated as a System Hotel pursuant to the terms and conditions of the Franchise Agreement and this Agreement. NOW, THEREFORE, the parties, in consideration of the premises and the undertakings and commitments of each party set forth herein, agree as follows: Intentionally Omitted. Termination of the Franchise Agreement. Franchisor will have the right to terminate this Agreement immediately upon termination of the Franchise Agreement by delivering written notice to Owner. Termination of the Lease. Owner will notify Franchisor immediately of any pending or actual termination or expiration of the Lease that is to occur or has occurred prior to expiration of the Franchise Agreement, and Franchisor will have the right to terminate this Agreement and the Franchise Agreement in connection with any such expiration or termination. If there is a dispute between Owner and Franchisee relating to the termination of the Lease, Franchisor will have the right to permit Franchisee to operate the Hotel pursuant to the Franchise Agreement as long as Franchisee has possession of the Hotel, and all of Franchisor’s rights under this Agreement will be reserved pending resolution of such dispute whether by final court or administrative order or negotiated settlement. Transfers Not Involving Competitors. Section XV of the Franchise Agreement will apply hereunder to any Transfer of the Hotel, any ownership interest in the Hotel, Owner, this Agreement or the Lease, or a change of control in Owner or an affiliate that directly or indirectly controls Owner, as if Owner were a party thereto; any such Transfer(s) by Owner as described above will be made only in strict compliance  

 with Section XV as the context requires. Transfers Involving a Competitor and Right of First Refusal. No Transfers to a Competitor. If there is a proposed Transfer to a Competitor of (i) the Hotel (or any interest therein), (ii) Owner’s ownership interest in this Agreement or in the Lease, or (iii) an 789864v4 - Lyndhurst, NJ 7 61434v3 - Form Amendment to Franchise Agreement (9/18/2014) 

    

    

    

 

 ownership interest or other interest in either Owner or an affiliate that directly or indirectly controls Owner, Owner will give notice thereof to Franchisor, stating the full name and identity of the prospective purchaser or tenant, as the case may be, including the names and addresses of the interestholders of such prospective purchaser or tenant, the price or rental and all other terms of such proposed transaction, together with all other related information that is reasonably requested by Franchisor and reasonably available to Owner. Within thirty (30) days after receipt by Franchisor of such notice and information from Owner, Franchisor will notify Owner of Franchisor’s election, made in its sole discretion, of one (1) of the immediately following four (4) alternatives: Acquisition of Control of Hotel for Cash. If the proposed Transfer is a sale or lease of the Hotel for cash consideration, Franchisor (or its designee) will have the right to purchase or lease the Hotel at the same price or rental and upon the same terms (other than any terms relating to the Brand of the Hotel) as those contained in such offer from (or to) a Competitor. In such event, Owner and Franchisor (or its designee) will promptly enter into an agreement for sale or lease at the price or rental and on terms consistent with such offer. (1)Acquisition of Owner/Acquisition of Control of Hotel. If the proposed Transfer is a purchase or lease of all or a portion of the ownership interests or the assets (which includes the Hotel) of Owner or an affiliate that directly or indirectly controls Owner, or a merger with or into Owner or an affiliate that directly or indirectly controls Owner, or the acquisition of Owner’s ownership interest in this Agreement or the Lease, or any sale or lease of the Hotel involving non-cash consideration, or other form of Transfer, Franchisor (or its designee) will have the right to purchase or lease the Hotel at the purchase or lease price under terms consistent with such offer as agreed to by the parties. If the parties are unable to agree as to purchase or lease price and terms within fourteen (14) days of Franchisor’s election, the purchase or lease price of the Hotel will be determined as provided below. (a)Within thirty (30) days after the fourteen (14) day period in this Section 5.A(2) expires, Franchisor and Owner will each obtain, at its own expense, an appraisal of the fair market value of the Hotel from a nationally recognized appraiser of Hotel properties comparable to the Hotel. In determining the fair market value, the appraisers will assume that the Hotel is not subject to a management agreement but is subject to the existing Franchise Agreement. If, after receiving such appraisals, the parties agree on the fair market value of the Hotel, such agreed fair market value will constitute the purchase or lease price. (b)If, within fourteen (14) days after receiving the appraisals the parties are not able to agree on such fair market value, the purchase or lease price will be determined by “baseball arbitration” in Washington, D.C. in accordance with the Arbitration Rules for the Real Estate Industry of the American Arbitration Association then in effect (“AAA Rules”) as modified by this Agreement. The parties will jointly select a third party to act as the sole arbitrator (the “Arbitrator”) to determine the fair market value of the Hotel, and such Arbitrator will be a person having at least ten (10) years ’ recent professional experience as to the subject matter in question and will be qualified to act as an Arbitrator in accordance with the AAA Rules. If the parties do not agree on an Arbitrator with such qualifications within fifteen (15) days after the expiration of such fourteen (14) day period referred to above, the Arbitrator will be appointed by the American Arbitration Association in Washington, D.C. in accordance with the AAA Rules. (c)The Arbitrator will be instructed and obligated to decide, within thirty (30) days after appointment, whether the appraisal submitted by Franchisor or the appraisal submitted by Owner more accurately reflects the fair market value of the Hotel based upon the appraisals submitted and such information as is normally relied upon by an appraiser of hotels and real estate. Each party agrees to fully cooperate and provide all information requested by the Arbitrator related to the Arbitrator’s determination of 789864v4 - Lyndhurst, NJ 61434v3 - Form Amendment to Franchise Agreement (9/18/2014) 8 

 

    

    

    

 

 fair market value of the Hotel. The Arbitrator’s choice of appraisal will be in writing, will constitute the purchase price hereunder, and will be final, conclusive and binding on the parties as an “award” under the AAA Rules, and may be enforced by a court of competent jurisdiction. The expenses of the arbitration will be borne equally by the parties to the arbitration. Franchisor (or its designee) will have the right, at any time within thirty (30) days of being notified in writing of the decision of the Arbitrator, to either (a) enter into an agreement to purchase the Hotel premises and related property at the valuation determined by the Arbitrator, or (b) give notice of its intent to terminate this Agreement pursuant to Section 5.A(3) of this Agreement within fourteen (14) days of such notice. If Franchisor elects to give notice of its intent to terminate this Agreement within fourteen (14) days of such notice, upon receipt of Franchisor’s election to terminate, Owner and Franchisee will be obligated, jointly and severally, to either: (i) cancel the Transfer to a Competitor on or before the end of such fourteen (14) days or (ii) remove the Hotel from the System, pay liquidated damages, and otherwise comply with the post-termination obligations, in each case, as set forth in Section 9.B of this Agreement and Section XVIII of the Franchise Agreement or, at Franchisor ’ s election, as may be set forth in a termination agreement on terms acceptable to Franchisor. Termination of Owner Agreement and Franchise Agreement. Franchisor may place Owner and Franchisee in default and give notice of its intent to terminate this Agreement and the Franchise Agreement pursuant to Section XVII.C thereof within fourteen (14) days of such notice. If Franchisor elects to give notice of its intent to terminate this Agreement and the Franchise Agreement within fourteen (14) days of such notice, upon receipt of Franchisor’s election to terminate, Owner and Franchisee will be obligated, jointly and severally, to either: (i) cancel the Transfer to a Competitor on or before the end of such fourteen (14) days or (ii) remove the Hotel from the System, pay liquidated damages, and otherwise comply with the post-termination obligations, in each case, as set forth in Section 9.B of this Agreement and Section XVIII of the Franchise Agreement or, at Franchisor’s election, as may be set forth in a termination agreement on terms acceptable to Franchisor. Consent. Franchisor may consent to such Transfer, which consent will be on such terms as Franchisor may require, in its sole discretion. This Section 5.A will survive termination of this Agreement for any reason if, before such termination, any event specified in Section 5 occurs, as a result of which Franchisor has exercised (or has the right to exercise) such right of first refusal, notwithstanding Section 5.G. Affiliates. If a Competitor proposes to acquire all of the ownership interests of an affiliate of Owner and the affiliate does not directly or indirectly own, lease, or operate any hotels operating under a trade name owned by Franchisor or any of its affiliates, Franchisor will not have any right of first refusal to purchase the Hotel or right to terminate this Agreement, as provided above in Section 5.A with respect to such Transfer. Foreclosure. If the Transfer to a Competitor is by foreclosure, judicial or legal process, or any other means, Franchisor (or its designee) will have the right to purchase the Hotel upon notice to Owner. If the parties are unable to agree as to a purchase price and terms within thirty (30) days of Franchisor’s notice, the fair market value of the Hotel premises and related property will be determined by arbitration in accordance with Section 5.A(2) above. This provision will survive the termination of this Agreement and the termination of the Franchise Agreement under Section XVII. A thereof in connection with the Competitor’s actions under Section XV.E of the Franchise Agreement or this Section 5.C. Owner Becomes a Competitor. If Owner or any of its affiliates becomes a Competitor, Owner will notify Franchisor in accordance with Section 5.A and provide all information reasonably requested 789864v4 - Lyndhurst, NJ 61434v3 - Form Amendment to Franchise Agreement (9/18/2014) 9 

 

    

    

    

 

 by Franchisor related to becoming a Competitor and required pursuant to Section 5.A, or if Franchisor otherwise determines that Owner or any of its affiliates has become a Competitor, Franchisor will so notify Owner and Franchisor will have the rights provided in Section 5.A, as if the Hotel were subject to a non-cash offer from a third party except that Franchisor will have thirty (30) days instead of fourteen (14) to agree on purchase terms. Right of First Refusal. In addition to the events specified in Section 5.A, Franchisor will have the rights set forth in Section 5.A if any event occurs granting Franchisor a right of first refusal under Section XV of the Franchise Agreement. Real Estate Rights. Owner acknowledges that Franchisor’s rights under this Section 5 are real estate rights with respect to the Hotel. Franchisor is entitled to file a record of such interest in and among the appropriate real estate records of the jurisdiction in which the Hotel is located, and Owner will cooperate as requested by Franchisor in such filing. Such filing will indicate that Franchisor’s rights in real estate under Section XV.D of the Franchise Agreement and Section 5 of this Agreement will be subordinate only to the exercise of the rights of Lenders under a mortgage or security deed secured by the Hotel, if and for so long as: (i) Lender is not a Competitor or affiliate of a Competitor; (ii) any such mortgage or security deed is and remains validly recorded and in full force and effect; and (iii) the indebtedness underlying such mortgage or security deed complies with the requirements of Section 7 hereof. Owner agrees that damages are not an adequate remedy if Owner breaches its obligations under this Section 5 and that Franchisor will be entitled to injunctive relief to prevent or remedy such breach without the necessity of proving the inadequacy of money damages as a remedy and without the necessity of posting a bond. If this Agreement is terminated and Franchisor’s rights under this Section 5 are no longer in effect, at the request of Owner or the transferee, Franchisor will deliver an instrument in recordable form to terminate any such recording of interest in real estate. Survival of Right of First Refusal. Except for termination of this Agreement pursuant to Section 5.A(3) above, Owner agrees that Franchisor’s rights under Section 5 will survive early termination of this Agreement (as opposed to expiration of this Agreement as provided in Section 12 hereof) and will bind Owner and its affiliates, if the events in either Section 5.G(1) or Section 5.G(2) occur: before or within six (6) months after termination of this Agreement, a proposed Transfer to a Competitor occurs with respect to the Hotel, Owner or an affiliate, or an ownership interest in either Owner or such affiliate; and the Franchise Agreement is terminated pursuant to Sections XVII.A., XVR.B.1. or 4. thereof, or pursuant to Paragraph XVII.C. thereof, or pursuant to Paragraph XVII.D. thereof based upon a violation of Section X.B thereof; or the Franchise Agreement is terminated pursuant to Paragraph XVII.A. thereof and an affiliate, principal or director of Owner obtains possession of the Hotel, or such affiliate, principal or director is the party filing the suit or seeking the execution or foreclosure referenced in Paragraph XVH.A. of the Franchise Agreement. there is a purported early termination of this Agreement (as opposed to expiration of this Agreement as provided in Section 12 of this Agreement) by Owner and before or within six (6) months after such purported termination, a proposed Transfer to a Competitor occurs with respect to the Hotel, the Owner or an affiliate of Owner, or an ownership interest in either Owner or such affiliate. Intentionally Omitted. 789864v4 - Lyndhurst, NJ 61434v3 - Form Amendment to Franchise Agreement (9/18/2014) 10 

 

    

    

    

 

 7. Financing of the Hotel. Owner will not, and will cause each interestholder in Owner to not, incur or replace any indebtedness that is secured by a lien on or mortgage of the Hotel or the revenues of the Hotel or pledge of ownership interests in Owner (whether such indebtedness is incurred (i) individually on behalf of the Hotel or (ii) on a pooled basis with other hotels or legal entities (a “Financed Pool”)) unless the following conditions are met at the time the indebtedness is incurred or replaced: (1) the indebtedness is with a Lender (as defined below); (2) the terms of such indebtedness are consistent with prevailing commercial practices of Lenders at that time in the country in which the Hotel is located; and (3) there is no violation of Section 7.B below. Owner will give notice to Franchisor of the component hotels and legal entities in a Financed Pool before incurring such indebtedness. For purposes of this Agreement, “Lender” shall mean any person or entity that (a) is in the business of originating and making loans (as opposed to buying loans) as its primary business, including private lenders and any person or entity chartered as a state or federal bank, thrift, or savings and loan, and insured by the FDIC or FSLIC, and (b) is not a Competitor or an affiliate of a Competitor. In connection with any financing benefiting the Hotel or otherwise with respect to the Hotel, Owner will not, and will not allow any person or entity to, mortgage, grant a security interest in, or otherwise pledge as collateral the Hotel, the revenues of the Hotel, or an ownership interest in Owner or in a person or entity controlling Owner unless such financing meets the requirements of Section 7.A above or Franchisor otherwise consents to such financing in writing. Owner may not assign, mortgage, or grant a security interest in, or pledge as collateral, this Agreement. Franchisor has no obligation to provide a “comfort letter” in connection with, or consent to, a transaction that would be prohibited by this Section 7.B. If a lender forecloses on, or otherwise exercises its rights against, the Hotel, the revenues of the Hotel, or such ownership interests, or Owner violates this Section 7.B, Franchisor will have the rights under Section XVII.A of the Franchise Agreement and Section 2 hereof. Franchisor has no obligation to license a lender or any person or entity acting on behalf of a lender, including a receiver or servicer of a loan, unless that obligation arises from a valid and binding written agreement between Franchisor and a lender. Operation of the Hotel. The Hotel will be operated as a System Hotel for the term hereof. Owner shall cause Franchisee to operate the Hotel in accordance with the terms of the Franchise Agreement. Failure of Owner to comply with the provisions of this Section 8 will be a material default by Owner hereunder giving Franchisor the right to terminate this Agreement and the Franchise Agreement. Owner’s Obligations under the Franchise Agreement. Franchisee Default. If Franchisor declares Franchisee to be in default under the Franchise Agreement, Franchisor may (after providing the notice and applicable cure period, if any, required in Section 1 above) enforce the Franchise Agreement directly against Owner as if Owner were the Franchisee under the Franchise Agreement, and Owner will perform, or cause to be performed, the provisions of the Franchise Agreement including, without limitation, Section III on fees, Section VI on operations of the Hotel, Section XIV on insurance, and Section XXI on indemnification. Termination of Franchise Agreement. If the Franchise Agreement is terminated and Franchisee fails to perform any post-termination obligation under the Franchise Agreement, Franchisor may enforce the Franchise Agreement directly against Owner as if Owner were the Franchisee under the Franchise Agreement, and Owner will perform, or cause to be performed, all post-termination obligations of Franchisee under the Franchise Agreement, including, without limitation, Section XXI on indemnification, Section XVIII on liquidated damages, de-identifying the Hotel as part of the System and cessation of the use of the System and Proprietary Marks, and Section XVIII.F on paying other costs and amounts. 789864v4 - Lyndhurst, NJ 61434v3 - Form Amendment to Franchise Agreement (9/18/2014) 11 

 

    

    

    

 

 Provisions of the Lease. Any lease governing the lease and operation of the Hotel (including the Lease) will include the substance of the immediately following provisions or such other provisions and requirements as set forth in the Franchise Agreement or in the Franchise Disclosure Document. Franchisee will have exclusive possession of the Hotel and exclusive control of the day-to-day operations of the Hotel; The Hotel will be operated in full compliance with the provisions of the Franchise Agreement. The Franchise Agreement will control in case of conflict with the lease; A default by Franchisee under the terms of the Franchise Agreement will constitute a default under the terms of the lease; In the event of an uncured default caused by Franchisee that leads to termination of the Franchise Agreement, the lease will be terminated; and The provisions in the lease that reflect this Section 10 and any other provisions in the lease affecting, or for the benefit of, Franchisor will not be amended or modified without Franchisor’s prior written consent. Surrender by Franchisee. Upon the occurrence of the events described herein for the replacement of Franchisee as possessor and operator of the Hotel, Franchisee will surrender its rights and interest in the Franchise Agreement to Franchisor and peaceably turn over possession of the Hotel to Owner without need for legal or judicial process. Term. The term of this Agreement will commence on the date first set forth above and will expire upon the expiration of the term of the Franchise Agreement unless this Agreement is terminated prior thereto in accordance with this Agreement. If the term of the Franchise Agreement is renewed or otherwise extended, the term of this Agreement automatically will be extended to be coterminous with the extended term of the Franchise Agreement. Survival. Notwithstanding any provision to the contrary contained herein, Sections 9,16 and 17 of this Agreement will survive and remain in full force and effect after termination or expiration of this Agreement for any reason, and Sections 5 and 14 will survive the termination or expiration of this Agreement for any reason to the extent provided in such Sections. Casualty. If the Hotel is damaged or destroyed by fire or other cause and such damage or destruction is substantial and material, affecting over fifty percent (50%) of the Hotel, and necessitates the closing of the Hotel for a period in excess of ninety (90) days, Owner will have the right to terminate this Agreement upon notice to Franchisor given within ninety (90) days of such closing of the Hotel if it elects not to repair or rebuild the Hotel. Owner and Franchisee will not be required to pay Franchisor the liquidated damages due under Section XVIII.E of the Franchise Agreement in connection with such termination if such casualty is the sole basis for termination of this Agreement and Owner and Franchisee execute and deliver to Franchisor a termination agreement and release in form and substance acceptable to Franchisor; provided, however, if subsequent to such notice and before the date on which the term of the Franchise Agreement would otherwise have ended under Section 4 of the Franchise Agreement if such notice of termination had not been given (the “Term Expiration Date”), Owner, or any of its affiliates or any interestholder in Owner with an ownership interest of twenty-percent (20%) or greater operates a hotel; vacation, timesharing, interval or fractional ownership facility; condominium; apartment; or other lodging product at the Approved Location (the “Other Lodging Product”), which Other Lodging Product is not operated under a license or franchise from Franchisor or one of its affiliates, then in such event, Owner will be obligated to promptly pay to Franchisor an 789864v4 - Lyndhurst, NJ 61434v3 - Form Amendment to Franchise Agreement (9/18/2014) 12 

 

    

    

    

 

 amount equal to the applicable liquidated damages set forth in Section XVIII.E of the Franchise Agreement, but clause (ii) in the calculation of liquidated damages will be the lesser of (a) thirty-six (36) or (b) one-half (1/2) the number of months then remaining between (x) the date upon which the Other Lodging Product is first operated, and (y) the Term Expiration Date. Owner’s obligations set forth in this Section 14 will survive termination of this Agreement. If the Hotel does not close for ninety (90) days or Owner does not elect to terminate this Agreement in accordance with the provisions of this Section 14, the Hotel will be promptly renovated and reopened within a reasonable time in accordance with the System and pursuant to plans and specifications approved by Franchisor in accordance with Section VII of the Franchise Agreement. Condemnation. Owner will, at the earliest possible time, give Franchisor notice of any proposed taking of the Hotel by eminent domain, condemnation, compulsory acquisition, or similar proceeding. If such taking is substantial enough to render impractical the continued operation of the Hotel in accordance with the System and guest expectations, this Agreement will terminate upon notice by Franchisor, Owner, or Franchisee to the other parties and the execution and delivery of a termination agreement and release in form and substance acceptable to Franchisor (and the Franchise Agreement will terminate upon notice by Franchisor or Franchisee to the other party and the execution and delivery of a termination agreement and release in form and substance acceptable to Franchisor), and Franchisor and Owner will share equitably in the condemnation award; provided, however, Franchisor’s portion of such award will be limited to compensating Franchisor for Franchisor’s lost franchise fees, which amount will not exceed the amount of the applicable liquidated damages due under Section XVIII.E of the Franchise Agreement. Further, if such condemnation is the sole basis for termination of this Agreement and the Franchise Agreement, Franchisor’s portion of such award will be in lieu of payment of the applicable liquidated damages due under Section XVIII.E of the Franchise Agreement. If such taking, in Franchisor’s opinion, will not render the continued operation of the Hotel impractical, Owner must promptly make whatever repairs and restorations are necessary to make the Hotel conform substantially to its condition, character, and appearance immediately before such taking, according to plans and specifications approved by Franchisor. Owner will take all measures necessary to ensure that the resumption of normal operation of the Hotel is not unreasonably delayed. Notices. A. Subject to Section 16.B, all notices, requests, demands, statements, and other communications required or permitted to be given under the terms of this Agreement will be in writing and delivered by hand against receipt, sent by certified mail (postage prepaid and return receipt requested), or carried by reputable overnight courier service, to the respective party at the following addresses: To Franchisor: With a copy to: To Franchisee: MARRIOTT INTERNATIONAL, INC. 10400 Femwood Road Bethesda, MD 20817 Attn: Law Department 52/923.27 MARRIOTT INTERNATIONAL, INC. 10400 Femwood Road Bethesda, MD 20817 Attn: Vice President, Owner and Franchise Services MOODY NATIONAL CY LYNDHURST MT, LLC 6363 Woodway, Suite 110 Houston, TX 77057 Attn: Brett C. Moody, President 789864v4 - Lyndhurst, NJ 61434v3 - Form Amendment to Franchise Agreement (9/18/2014)13 

 

    

    

    

 

 Email: bmoodv@moodvnational.com To Owner:Moody National 1 Polito Lyndhurst Holding, LLC 6363 Woodway, Suite 110 Houston, TX 77057 Attn: Brett C. Moody, President Email: bmoody@moodynational.com or at such other address as designated by notice from the respective party to the other parties. Any such notice or communication will be deemed to have been given at the date and time of: (A) receipt or first refusal of delivery, if sent via certified mail or delivered by hand; or (B) one day after the posting thereof, if sent via reputable overnight courier service.B. Franchisor may provide Franchisee and Owner with routine information, invoices, the standards and other System requirements and programs, such as the Quality Assurance Program, including any modifications thereto, by regular mail or by e-mail, facsimile, or by making such information available to Franchisee and Owner on the Internet, an extranet, or other electronic means. Successors and Assigns. Franchisor will have the right to Transfer this Agreement to any person or entity without prior notice to, or consent of, Owner or Franchisee, provided the transferee assumes Franchisor’s obligations to Owner and Franchisee under this Agreement. Owner and Franchisee hereby acknowledge and agree that any such Transfer will constitute a release and novation of Franchisor with respect to this Agreement. This Agreement may not be assigned by Owner or Franchisee without the consent of Franchisor. Governing Law. This Agreement is executed pursuant to, and will he interpreted and construed under and governed exclusively by, the laws of the State of Maryland, United States of America, which laws will prevail in the event of any conflict of law. Each party hereby expressly and irrevocably submits itself to the non-exclusive jurisdiction of the courts of the State of Maryland, United States of America, in any suit, action, or proceeding arising, directly or indirectly, out of or relating to this Agreement; and so far as is permitted under applicable law, this consent to personal jurisdiction will be self-operative. Nothing in this Section 18 is intended, or will be deemed, to make the Maryland Franchise Registration and Disclosure Law apply to this Agreement, or the transactions or relationships contemplated hereby, if such law otherwise would not be applicable. Hotel Ownership and Ownership Structure. Owner represents, warrants, and covenants to Franchisor that: (i) Owner is the sole owner of the Hotel and holds good and marketable fee title to the Approved Location of the Hotel; and (ii) Owner is owned directly and indirectly as set forth on Attachment A. Upon the request of Franchisor, Owner will submit to Franchisor evidence, in form and substance satisfactory to Franchisor, confirming that Owner is owned directly and indirectly as set forth on Attachment A. Owner represents, warrants, and covenants to Franchisor that: (i) neither Owner (including any and all of its directors and officers), nor any of its affiliates or the funding sources for any of the foregoing is a Specially Designated National or Blocked Person; (ii) neither Owner nor any of its affiliates is directly or indirectly owned or controlled by the government of any country that is subject to an embargo by the United States government; and (iii) neither Owner nor any of its affiliates is acting on behalf of a government of any country that is subject to such an embargo. Owner further represents and warrants that it is in compliance with any applicable anti-money laundering law, including the USA Patriot Act. Owner agrees that 789864v4 - Lyndhurst, NJ 61434v3 - Form Amendment to Franchise Agreement (9/18/2014) 14 

 

    

    

    

 

 it will notify Franchisor in writing immediately upon the occurrence of any event that would render the foregoing representations and warranties of this Section 19.B. incorrect. Entire Agreement; Counterparts. This Agreement, including the attachments hereto, and the agreements executed simultaneously herewith, or pursuant to, or in connection with, this Agreement (including, without limitation, the Franchise Agreement), contains the entire agreement between the parties hereto as it relat 

 es to the Hotel as of the date hereof. The Franchise Agreement is attached hereto as Attachment B; Owner hereby acknowledges that it has read and fully understands Attachment B as it applies hereunder. This Agreement may be executed in a number of identical counterparts, each of which will be deemed an original for all purposes and all of which will constitute, collectively, one agreement. Delivery of an executed signature page to this Agreement by electronic transmission will be effective as delivery of a manually signed counterpart of this Agreement. This is a fully integrated agreement. No agreement of any kind relating to the matters covered by this Agreement will be binding upon any party unless and until the same has been made in a written, non-electronic instrument that has been duly executed by the non-electronic signature of all interested parties. This Agreement may not be amended or modified by conduct manifesting assent, or by electronic signature, and each party is hereby put on notice that any individual purporting to amend or modify this Agreement by conduct manifesting assent or by electronic signature is not authorized to do so. Effects of Waivers. No waiver, delay, omission, or forbearance on the part of Franchisor or Owner to exercise any right, option or power arising from any default or breach by the other party, or to insist upon strict compliance by the other party with any obligation or condition hereunder, will affect or impair the rights of Franchisor or Owner, respectively, with respect to any such default or breach or subsequent default or breach of the same or of a different kind. Any delay, forbearance, or omission of either party to exercise any right arising from any such default or breach will not affect or impair such party’s rights with respect to such default or breach or any future default or breach. Franchisor will not be liable to Owner for providing (or denying) any waiver, approval, consent, or suggestion to Owner in connection with this Agreement or by reason of any delay or denial of any request. Construction and Severability. Except as expressly provided to the contrary herein, each section, part, term and/or provision of this Agreement will be considered severable; and if, for any reason any section, part, term or provision herein is determined to be invalid and contrary to, or in conflict with, any existing or future law or regulation by a court or agency having valid jurisdiction, such will not impair the operation of, or have any other effect upon, such other sections, parts, terms and provisions of this Agreement as may remain otherwise intelligible, and the latter will continue to be given full force and effect and bind the parties hereto. To the extent possible, such invalid or unenforceable sections, parts, terms or provisions will be deemed to be replaced with a provision that is valid and enforceable and most nearly reflects the original intent of the invalid or unenforceable provision. Nothing in this Agreement is intended, or will be deemed, to create any third party beneficiary or confer any rights or remedies under or by reason of this Agreement upon any person or entity other than Franchisor (and its affiliates), Franchisee, or Owner, and their respective permitted successors and assigns. 789864v4 - Lyndhurst, NJ 61434v3 - Form Amendment to Franchise Agreement (9/18/2014) 15 

 

    

    

    

 

 Captions. Captions and section headings are used for convenience only. They are not part of this Agreement and will not be used in construing it. Owner Representations. Warranties and Covenants. Owner represents, warrants and covenants that (i) it is a legal entity duly formed, validly existing, and in good standing under the laws of the jurisdiction of its formation, (ii) it and its affiliates have and will continue to have throughout the term hereof the ability to perform their obligations under this Agreement, (iii) it has all necessary power and authority to execute and deliver this Agreement, (iv) it has read and fully understands the Franchise Agreement as it applies hereunder, and (v) during the term of the Franchise Agreement it will not enter into an agreement for the management of the Hotel that does not comply with the provisions of the Franchise Agreement, unless otherwise approved by Franchisor. Cost of Enforcement If for any reason it becomes necessary for Franchisor or Owner to initiate any legal or equitable action to secure or protect its rights under this Agreement, the prevailing party will be entitled to recover all costs incurred by it in successfully enforcing such rights, including reasonable attorneys’ fees. Capitalized Terms. Unless the context requires otherwise, capitalized terms not defined herein will have the meaning stated in the Franchise Agreement. WAIVER OF JURY TRIAL AND PUNITIVE DAMAGES. OWNER, FRANCHISEE AND FRANCHISOR EACH HEREBY ABSOLUTELY, IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY AND THE RIGHT TO CLAIM OR RECEIVE PUNITIVE DAMAGES IN ANY LITIGATION, ACTION, CLAIM, SUIT OR PROCEEDING, AT LAW OR IN EQUITY, ARISING OUT OF, PERTAINING TO OR IN ANY WAY ASSOCIATED WITH THE COVENANTS, UNDERTAKINGS, REPRESENTATIONS OR WARRANTIES SET FORTH HEREIN, THE RELATIONSHIPS OF THE PARTIES HERETO, WHETHER AS “OWNER”, “FRANCHISEE,” OR “FRANCHISOR” OR OTHERWISE, THIS AGREEMENT OR ANY OTHER MARRIOTT AGREEMENT, OR ANY ACTIONS OR OMISSIONS IN CONNECTION WITH ANY OF THE FOREGOING. {Signatures appear on following page} 789864v4 - Lyndhurst, NJ 61434v3 - Form Amendment to Franchise Agreement (9/18/2014) 16 

 

    

    

    

 

 IN WITNESS WHEREOF, the parties have caused their duly authorized representatives to execute this Owner Agreement, under seal, as of the date first above written.FRANCHISOR: ATTEST:MARRIOTT INTERNATIONAL, INC.  By:  (SEAL) Assistant Secretary Name: Title: FRANCHISEE: ATTEST: MOODY NATIONAL CY LYNDHURST MT, LLC a Delaware limited liability company By: (SEAL) (Assistant) Secretary Name: Brett C. Moody Title: President OWNER: ATTEST: MOODY NATIONAL 1 POLITO LYNDHURST HOLDING, LLC a Delaware limited liability company (Assistant) Secretary By: _____________ (SEAL) Name: Brett C. Moody Title: President 789864v4 - Lyndhurst, NJ 61434v3 - Form Amendment to Franchise Agreement(9/18/2014) 17 

 

    

    

    

 

 ATTACHMENT A Equity Interest(s) in Owner (Name(s), address(es), and percentages of ownership) Ownership of Moody National 1 Polito Lyndhurst Holding, LLC MN Lyndhurst Venture, LLC 6363 Woodway, Suite 110, Houston, TX 77057 100% Ownership of MN Lyndhurst Venture, LLC 20 tenant-in-common owners* 100% non-voting shares (Class A) Moody National Operating Partnership I, L.P. 6363 Woodway, Suite 110, Houston, TX 77057 100% voting shares (Class B) Ownership of Moody National Operating Partnership I, L.P. Moody National REIT I, Inc. 6363 Woodway, Suite 110, Houston, TX 77057 99.998107% Moody National LPOPI, LLC 6363 Woodway, Suite 110, Houston, TX 77057 0.001893% Ownership of Moody National REIT I, Inc.** 

 Moody National REIT Sponsor, LLC 6363 Woodway, Suite 110, Houston, TX 77057 0.4363% Ownership of Moody National LPOP I, LLC Brett C. Moody 6363 Woodway, Suite 110, Houston, TX 77057 100% Ownership of Moody National REIT Sponsor, LLC Moody National REIT Sponsor SM, LLC 6363 Woodway, Suite 110, Houston, TX 77057 100% Ownership of Moody National REIT Sponsor SM, LLC Brett C. Moody 6363 Woodway, Suite 110, Houston, TX 77057 100% * Class A shareholders only hold a right to a portion of the profits after the Class B shareholder receives a preferred return and its capital contribution. Class A shareholders have no management or voting rights (other than with respect to an amendment to the distributions set forth in the Limited Liability Company Operating Agreement). The Class A shareholders consist of the tenant-in-common owners of the property prior to the date of the Owner Agreement. ** Moody National REIT I, Inc. is a publicly-registered, non-traded REIT with over 1700 shareholders. 789864v4 - Lyndhurst, NJ 61434v3 - Form Amendment to Franchise Agreement (9/18/2014) 18 

 

    

    

    

 

 ATTACHMENT B    FRANCHISE AGREEMENT 789864v4 - Lyndhurst, NJ 61434v3 - Form Amendment to Franchise Agreement (9/18/2014) 19PX-2014.9.30-EX10.01

Praxair, Inc. and Subsidiaries
	
	
	 

EXHIBIT 10.01

PRAXAIR COMPENSATION DEFERRAL PROGRAM

Amended and Restated as of July 15, 2014

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TABLE OF CONTENTS

PAGE
SECTION 1:    PURPOSE                                                              3
SECTION 2:    DEFINITIONS                                         3
SECTION 3:    ADMINISTRATION                                                8
SECTION 4:    ELECTION TO PARTICIPATE                                                9
SECTION 5:    PAYMENTS TO PARTICIPANTS AND BENEFICIARIES                  11
SECTION 6:    BENEFICIARIES                                              16
SECTION 7:    EARNINGS ACCRUALS                                          16
SECTION 8:    GENERAL PROVISIONS                                   17

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PRAXAIR COMPENSATION DEFERRAL PROGRAM
SECTION 1:    PURPOSE
The purpose of the Praxair Compensation Deferral Program (the “Plan”) is to provide:  (i) Eligible Employees an opportunity to annually elect in advance to defer a portion or all of their Variable Compensation Awards granted pursuant to Praxair’s Variable Compensation Plans;  (ii) Designated Employees an opportunity to annually elect in advance to defer a portion or all of their base salaries; and (iii) Eligible Employees with Praxair contributions lost under the Savings Plan because of the limitations imposed under Code Section 401(a)(17).  For Plan Years prior to January 1, 2006, all Eligible Employees were permitted to elect to defer all or a portion of their base salaries.
SECTION 2:    DEFINITIONS
2.1“Affiliate” means any entity, whether or not incorporated, which is treated as a single employer with the Corporation under Code Sections 414(b), (c), (m) or (o), provided, however, that for purposes of determining whether a Participant has incurred a Separation from Service under the Plan, Code Sections 414(b) and (c) shall be applied using an “at least 50 percent” common ownership threshold in lieu of the “at least 80 percent” threshold otherwise applicable.
2.2“Beneficiary” means the person, persons or estate entitled (as determined under Section 6) to receive payment under the Plan following a Participant’s death.
2.3“Board” means the Corporation’s Board of Directors.
2.4“Change in Control” means the occurrence of any one of the following events with respect to the Corporation:
(a)     during a 12-month period, a majority of the individuals who constitute the Board are replaced by directors whose appointment or election is not endorsed by a majority of the members of the Board before the date of the appointment or election;
(b)    any one person, or more than one person acting as a group, becomes owner as defined in Section 318(a) of the Code (or has become owner during the 12-month period ending on the 

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date of the most recent acquisition by such person or group), of stock of the Corporation possessing 30 percent or more of the total voting power of the stock of the Corporation; provided, however, that the event described in this paragraph (b) shall not be deemed to be a Change in Control by virtue of any of the following acquisitions:  (i) by the Corporation or any of its subsidiaries, (ii) by any employee benefit plan sponsored or maintained by the Corporation or any of its subsidiaries, or (iii) by any underwriter temporarily holding securities pursuant to an offering of such securities; or
(c)    any one person, or more than one person acting as a group, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or group) assets from the Corporation that have a total gross fair market value equal to or more than 80 percent of the total gross fair market value of all of the assets of the Corporation immediately prior to such acquisition(s); provided, however, that a transfer of assets by the Corporation is not treated as a Change in Control if the assets are transferred to: (i) a shareholder of the Corporation (immediately before the asset transfer) in exchange for or with respect to its stock; (ii) an entity, 50 percent or more of the total value or voting power of which is owned, directly or indirectly, by the Corporation; (iii) a person, or more than one person acting as a group, that owns, directly or indirectly, 50 percent or more of the total value or voting power of all outstanding stock of the Corporation; or (iv) an entity, at least 50 percent of the total value or voting power of which is owned, directly or indirectly, by a person described in the previous subsection (iii).  For purposes of this paragraph, (1) gross fair market value means the value of the assets of the Corporation, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets, and (2) a person’s status is determined immediately after the transfer of the assets; or
(d)    any one person, or more than one person acting as a group, becomes owner, as defined in Section 318(a) of the Code, of stock of the Corporation that, together with stock held by such person or group, constitutes more than 50 percent of the total fair market value or total voting power of stock of the Corporation; provided, however, that if any one person or more than one person acting as a 

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group, is considered to own more than 50 percent of the total fair market value or total voting power of stock of the Corporation, the acquisition of additional stock by the same person is not considered to cause a Change in Control.  This paragraph applies only when there is a transfer of stock of the Corporation (or issuance of stock of the Corporation) and stock in the Corporation remains outstanding after the transaction.
For purposes of this definition:
(i)  a “person” shall be as such term is defined in Section 3(a)(9) of the Securities Exchange Act of 1934 (the “Exchange Act”) and as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act.  
(ii)  persons will be considered to be acting as a group if they are owners of a corporation that enters into a merger, consolidation, purchase or acquisition of stock, or similar transaction with the Corporation.  If a person, including an entity, owns stock in both corporations that enter into a merger, consolidation, purchase or acquisition of stock, or similar transaction, such shareholder is considered to be acting as a group with other shareholders in the corporation prior to the transaction giving rise to the Change in Control and not with respect to the ownership interest in the other corporation.  Persons will not be considered to be acting as a group solely because they purchase or own stock of the Corporation at the same time, or as a result of the same public offering.
2.5“Code” means the Internal Revenue Code of 1986, as amended from time to time.
2.6“Committee” means the Compensation and Management Development Committee of the Board, or any successor committee of the Board.
2.7“Corporation” means Praxair, Inc., and any successor thereof by merger, consolidation or otherwise.
2.8“Date of Deferral” means (i) with respect to the deferral of base salary or a Variable Compensation Award, the date on which such amount would have been paid by Praxair absent the Participant’s deferral election, and (ii) with respect to Praxair Contributions for a given Plan Year, the day 

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following the date that the Committee determines the common stock value for the Praxair Contribution deferral pursuant to the last sentence of Section 2.20.
2.9“Disability” means a Participant’s total physical or mental inability to perform any work for compensation or profit in any occupation for which the Participant is reasonably qualified by reason of training, education or ability, and which inability is adjudged to be permanent, as determined by the Vice President-Human Resources or his or her designee.
2.10 “Employee” means an individual who is an employee of Praxair.  An Employee shall be an “Eligible Employee” for any Plan Year for which he or she is on the U.S. payroll of Praxair in a position with a job level of 13 or higher (or the equivalent thereof) and is eligible to participate in a Variable Compensation Plan.  An Employee shall be a “Designated Employee” for any Plan Year in which he or she in an Eligible Employee and is designated by the Vice President-Human Resources, in his or her sole discretion, as eligible to elect to defer base salary pursuant to Section 4.1(b).
2.11“Fixed Income Rate” shall be determined for each Plan Year and shall be equal to the 1-year U.S. Treasury Bond rate in effect as of the end of the immediately preceding Plan Year, plus 50 basis points.
2.12“Participant” means an Eligible Employee who:  (i) previously elected to defer a portion or all of his or her base salary paid prior to January 1, 2006 to the Plan; (ii) is a Designated Employee and elects in advance under the Plan to defer all or a portion of his or her base salary for any Plan Year beginning after December 31, 2008; (iii) elects in advance under the Plan to defer a portion or all of any Variable Compensation Award that may be granted to him or her for a Plan Year, and who is in fact subsequently granted such an Award which is payable for said year on the Date of Deferral; or (iv) is credited with a Praxair Contribution pursuant to Section 4.2 of this Plan with respect to any Plan Year.
2.13“Plan” means this Praxair Compensation Deferral Program.
2.14“Plan Year” means the calendar year.
2.15“Praxair” means the Corporation and its Affiliates.

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2.16“Praxair Contribution” means a credit on a Participant’s behalf described in Section 4.2.
2.17“Retirement” means a Participant’s Separation from Service, after attaining age 50 and completing at least five years of service (as such service would be recognized under the Praxair Pension Plan if the Participant is, or had the Participant been, a participant in such Pension Plan).
2.18“Savings Plan” means the Praxair Retirement Savings Plan.
2.19“Separation from Service” means a Participant’s separation from service with Praxair, determined in accordance with Code Section 409A and the Treasury Regulations issued thereunder.
2.20“Stock Value Rate” means the difference between the value of the Corporation’s common stock (a) as of the date amounts credited to the Plan are directed, by initial election or by reallocation, into the Stock Value Rate (or, in the case of initial deferrals of Praxair Contributions or of Variable Compensation Awards, the common stock value determined by the Committee in accordance with the last sentence of this Section), and (b) the date such amounts are paid out or withdrawn pursuant to Section 5.  The Stock Value Rate shall include the value of any dividends paid on the Corporation’s common stock during the period for which the Stock Value Rate is being determined, as if such dividends were reinvested, when payable, in additional shares of the Corporation’s common stock purchased at the value of the Corporation’s common stock on the dividend payment date.  Except as provided in the next sentence, the value of the Corporation’s common stock for purposes of this Section, shall mean the closing price of the stock on the New York Stock Exchange on the relevant date of determination.  In January of each Plan Year, the Committee shall determine the common stock value to be used in valuing deferrals of Variable Compensation Awards and Praxair Contributions to be awarded with respect to the immediately preceding Plan Year.
2.21“Unforeseeable Emergency” means a severe financial hardship to the Participant resulting from any of the following, to the extent that the emergency cannot be relieved through reimbursement or compensation from insurance or otherwise, by liquidation of the Participant’s assets (to the extent the 

7

liquidation of such assets would not cause severe financial hardship), or by the cessation of deferrals under the Plan: 
(a)     an illness or accident of the Participant, the Participant’s spouse, the Participant’s beneficiary, or the Participant’s dependent (as defined in Code Section 152, without regard to Sections 152(b)(1), (b)(2), and (d)(1)(B));
(b)    the loss of the Participant’s property due to casualty;
(c)    the need to pay medical expenses;
(a)the need to pay for the funeral expenses of the Participant’s spouse, a beneficiary, or a dependent (as defined in Code Section 152, without regard to Sections 152(b)(1), (b)(2), and (d)(1)(B)); or
(b)any other similar extraordinary and unforeseeable circumstance arising as a result of events beyond the control of the Participant.
Whether a Participant has an Unforeseen Emergency shall be determined by the Vice President-Human Resources or his or her designee, based upon the relevant facts and circumstances.
2.22“Variable Compensation Plan” means the Praxair, Inc. Variable Compensation Plan, the Praxair, Inc. Mid-Management Variable Compensation Plan, and successors to such plans, all as amended from time to time.
2.23“Variable Compensation Award” means a variable compensation award under a Variable Compensation Plan.
2.24“Vice President-Human Resources” means the Corporation’s Vice President-Human Resources.
SECTION 3:    ADMINISTRATION
The Committee shall have full discretionary authority to interpret and construe the Plan and shall supervise the administration and interpretation of the Plan, establish administrative regulations to further the purpose of the Plan and take any other action necessary to the proper operation of the Plan.  The 

8

Committee may delegate to one or more of its members or any other person, the right to act on its behalf in any matter connected with the administration of the Plan and has delegated authority for the Plan’s day-to-day administration to the Corporation’s Human Resources Department.  All decisions and acts of the Committee or its designee shall be final and binding upon all Participants, their beneficiaries and all other persons.
SECTION 4:    ELECTION TO PARTICIPATE
4.1Participant Deferral Elections.  
(a)    Prior to the beginning of each Plan Year, Eligible Employees shall be informed of the opportunity to make an election to defer their Variable Compensation Awards under the Plan.  An Eligible Employee electing to defer his or her Variable Compensation Award must make an election to do so during the election period ending not later than December 31st of the Plan Year immediately preceding the Plan Year for which such Variable Compensation Award relates, or such earlier date as established by the Vice President-Human Resources.  An Eligible Employee’s election to defer a Variable Compensation Award shall be irrevocable with respect to the Plan Year and the Variable Compensation Plan for which it is made and shall become effective only on the applicable Date of Deferral and only if, on such date, the Eligible Employee receives a Variable Compensation Award (or would have received a Variable Compensation Award but for an election to defer under the Plan).  An individual who first becomes an Eligible Employee at any time during a Plan Year is not permitted to make a deferral election with respect to any Variable Compensation Award earned for such Plan Year.
(b)    Prior to each Plan Year beginning after December 31, 2008, the Vice President-Human Resources, in his or her sole discretion, shall designate the Designated Employees for such Plan Year and such designation shall be in effect only for the Plan Year to which it applies.  Each Designated Employee for such Plan Year shall be informed of the opportunity to make an election to defer under the Plan all or a portion of his or her base salary earned in such Plan Year.  A Designated Employee electing to defer all or any portion of his or her base salary must make an election to do so during the election period 

9

ending not later than December 31st of the Plan Year immediately preceding the Plan Year in which such base salary will be earned, or such earlier date as established by the Vice President-Human Resources.  A Designated Employee’s election to defer base salary shall be irrevocable with respect to the Plan Year and shall be effective only for such Plan Year and only while such Designated Employee remains employed by the Corporation.  An individual who first becomes an Eligible Employee at any time during a Plan Year is not permitted to make a deferral election with respect to any base salary earned for such Plan Year.
(c)    Any elections made pursuant to this Section 4.1 shall be made in accordance with such procedures as may be established from time to time by the Vice President-Human Resources.
		
	1.
	Praxair Contributions.

(a)    Shortly after the end of each Plan Year, and without requiring any election to participate in this Plan, Praxair will credit each Eligible Employee, including an individual who first becomes an Eligible Employee during such Plan Year, with an amount equal to both the Praxair matching contribution rate, if any, applicable to such Employee under the Savings Plan (based on his or her actual Savings Plan contribution rate in effect as of the end of the Plan Year to which such credit relates) and/or the Praxair company contribution rate, if any, applicable to such Employee under the Savings Plan, in each case multiplied by that portion of such Employee’s compensation (as defined in the Savings Plan but without regard to either Code Section 401(a)(17) or any deferrals under this Plan) for the Plan Year to which such credit relates, which exceeds the maximum amount of compensation permitted to be taken into account for such Plan Year under Code Section 401(a)(17).
(b)    The Praxair Contributions shall be credited to each eligible Participant in arrears, as of the relevant Date of Deferral, provided that such Participant is then employed by Praxair and has not incurred a Separation from Service.  Notwithstanding the foregoing, if the Participant has Separated from Service prior to the relevant Date of Deferral by reason of his or her death, Disability, Retirement, or termination by Praxair other than for cause, Praxair shall credit the Participant as of the relevant Date of Deferral with the appropriate Praxair Contributions even though such Participant is not employed by 

10

Praxair on said Date of Deferral.  Except as otherwise provided in Section 5.1(f), all Praxair Contributions credited on a Participant’s behalf shall become vested at the same time and to the same extent as comparable contributions made under the applicable Savings Plan.  All unvested Praxair Contributions held on a Participant’s behalf as of his or her Separation from Service shall be immediately forfeited.
SECTION 5:    PAYMENTS TO PARTICIPANTS AND BENEFICIARIES
5.1    Time of Payment.
(a)    Subject to Sections 5.1(d) and (e):  (i) a Participant who Retires shall receive payment of any vested Praxair Contributions credited on his or her behalf and adjusted for any earnings or losses under Section 7, during the January of the Plan Year immediately following his or her Retirement; and (ii) a Participant who Separates from Service prior to Retirement shall receive payment of any vested Praxair Contributions credited on his or her behalf and adjusted for any earnings or losses under Section 7, as soon as administratively possible following the date of his or her Separation from Service, but no later than 90 days after such date.  Notwithstanding any provision in this Plan to the contrary, any vested Praxair Contributions credited on such Participant’s behalf with respect to the Plan Year in which he or she Retires or otherwise Separates from Service, shall be paid (along with any applicable earnings or losses on such amount as determined under Section 7) as soon as administratively practicable following Date of Deferral of such Praxair Contribution, but no later than 90 days after such Date of Deferral.
(b)     Subject to Sections 5.1(c), (d) and (e):  (i) a Participant who Retires shall receive (or commence, in the case of installments) payment of his or her previously deferred Variable Compensation Awards and/or base salary, and any earnings or losses credited with respect to such deferrals under Section 7, during the January of the Plan Year immediately following his or her Retirement; and (ii) a Participant who Separates from Service prior to Retirement shall receive (or commence, in the case of installments)  payment of his or her previously deferred Variable Compensation Awards and/or base salary, and any earnings or losses credited with respect to such deferrals under Section 7, as soon as administratively possible following the date of his or her Separation from Service, but no 

11

later than 90 days after such date.  Participants shall be deemed to have elected to defer all such amounts until their Retirement/Separation from Service in accordance with this Section 5.1(b) unless a contrary election is made pursuant to Section 5.1(c) below.
(c)    Notwithstanding any provision in this Plan to the contrary, a Participant may, at the time of electing to defer a Variable Compensation Award and/or base salary, make an irrevocable election to receive payment of such deferred amounts during a specific future payment year other than the year including the applicable Date of Deferral.  A Participant making such an election shall receive (or commence, in the case of installments) payment of any such amount in the January of the elected future payment year.  A Participant may elect differing future payment dates for each year’s deferrals and may elect differing future payment dates with respect to deferrals of Variable Compensation Awards and base salary elected for the same Plan Year.
(d)    A Participant who has an Unforeseen Emergency may elect to receive payment of any or all of his or her vested Praxair Contributions, deferred base salary, deferred Variable Compensation Awards, and any earnings or losses credited to him or her pursuant to Section 7 of this Plan; provided that the Participant may not receive an amount greater than the amount necessary to meet the Unforeseen Emergency plus any amounts necessary to pay federal, state and local income taxes or penalties reasonably anticipated to result from a distribution made under this Section 5.1(d).
(e)    Notwithstanding any provision in this Plan to the contrary, and irrespective of any election made by the Participant under the Plan, if a Participant dies at any time before having received payment of his or her entire vested benefit under this Plan (including payment of remaining installments), payment of the Participant’s entire remaining vested benefit shall be made in full to the Participant’s Beneficiary in a single payment as soon as administratively possible following the date the Participant’s death, but no later than 90 days after such date, provided, however, that any vested Praxair Contributions credited on such Participant’s behalf with respect to the Plan Year of his or her death, shall be paid (along with any applicable earnings or losses on such amount as determined under Section 7) as soon as 

12

administratively practicable following Date of Deferral of such Praxair Contribution, but no later than 90 days after such Date of Deferral.
(f)    Notwithstanding any provision in this Plan to the contrary, all Praxair Contributions shall fully vest and each Participant shall receive a lump sum payment of his or her entire benefit under this Plan (and any election to receive installment payments shall be disregarded) at such time as the Board determines that a Change in Control has occurred.  Such payment shall be made in full within 45 days after the Change in Control.
(g)    Notwithstanding any provision in this Plan to the contrary, with respect to any Participant who, at the time of his or her Retirement or other Separation from Service, is a “Specified Employee” (as defined in Treasury Regulation Section 1.409A-1(i)), payment of benefits pursuant to Sections 5.1(a) or (b) shall commence no sooner than six (6) months after the date of such Participant’s Retirement or other Separation from Service to the extent required under Treasury Regulation Section 1.409A-3(i)(2).
5.2    Form of Payments. 
(a)    Except as otherwise provided in this Section 5.2, all benefits payable under this Plan shall be paid in a single lump sum.
(b)    In the event that, prior to January 1, 2005, a valid election was received from a Participant to receive payment of all or any portion of his or her Plan benefit in annual installments over a designated period, payment of the portion of such Participant’s Plan benefit to which such prior election applies shall be made in accordance with such election.  
(c)      Effective as of July 15, 2014, a Participant may, at the time of electing to defer a Variable Compensation Award and/or base salary, make an irrevocable election to receive payment of such deferred amounts in substantially equal annual installments over a period of ten years.  A Participant may elect differing future payment forms for each year’s deferrals and may elect differing future payment forms with respect to deferrals of Variable Compensation Awards and base salary elected for the same 

13

Plan Year.  Any installment payments elected will commence as of the applicable time set forth in Section 5.1 with subsequent annual installments payable in the calendar month including the anniversary of the date the first installment payment was made.  With respect to any amounts subject to a deferral election made prior to January 1, 2015 (other than amounts covered by Section 5.2(b) hereof), an election to receive installment payments shall be subject to the Subsequent Election requirements under Section 5.5 hereof.
5.3    Payment in U.S. Dollars or Shares.  All amounts which, at the time of payment, were accruing at the Fixed Income Rate, shall be paid in U.S. dollars and all amounts which, at the time of payment, were accruing under the Stock Value Rate, shall be paid in shares of the common stock of the Corporation. 
5.4    Reduction of Payments: Share Withholding.  
(a)    All payments under this Plan shall be reduced by any and all amounts that the Committee (or its designee) determines in its sole discretion are required to be withheld pursuant to applicable law.
(b)    In order to enable Praxair to meet any applicable federal, state or local tax withholding requirements, a Participant (or Beneficiary) who is receiving payment in shares of common stock of the Corporation, may elect to have Praxair withhold shares that would otherwise be delivered to such Participant (or Beneficiary), or may deliver to Praxair other shares of common stock of the Corporation owned by the Participant (or Beneficiary).  The value of any such shares of common stock so withheld or delivered shall be the closing price of the common stock of the Corporation as reported in the New York Stock Exchange - Composite Transactions on the date of said payment.
5.5    Subsequent Elections - Additional Deferrals and Changes in Form of Payment.  Notwithstanding Sections 5.1 and 5.2, a Participant who has made an election to defer a Variable Compensation Award and/or base salary in accordance with Section 4.1 hereof, may make a subsequent election to further defer payment of such amount and/or to change the form of payment from a single 

14

lump sum to substantially equal annual installments over a period of ten years (collectively, a “subsequent election”), provided such subsequent election is made in accordance with the following provisions:
(a)    The subsequent election must be made no later than 12 months prior to the date the Participant would otherwise have commenced receiving payments of the redeferred amounts had the subsequent election not been made;
(b)    With respect to the subsequent election applicable to any amount previously deferred until a specific future payment date in accordance with Section 5.1(c), the subsequent election must provide for the further deferral of the amount for a period of not less than five years from the date payment would otherwise have been made (or commenced, in the case of installments) had the subsequent deferral election not been made;
(c)    With respect to the subsequent election applicable to any amount previously deferred until Retirement or Separation from Service in accordance with Section 5.1(b), the subsequent election must provide for the further deferral of the amount for a period of not less than five years, nor more than ten years, from the date payment would otherwise have been made (or commenced, in the case of installments) had the subsequent election not been made;
(d)    For each original deferral election there may be only one subsequent election made pursuant to this Section 5.5; provided, however, that for purposes of this Section, a Participant’s election to defer base salary and a Variable Compensation Award payable for the same year shall be treated as two separate deferral elections and one subsequent election may be made with respect to each; and
(e)     No such subsequent election shall apply to the payment of any Praxair Contributions.
5.6    Domestic Relations Orders.  Notwithstanding any provision in this Plan to the contrary, the payment of all or any portion of a Participant’s Plan benefit may be made to an alternate payee upon or earlier than the time otherwise specified in this Section 5, to the extent necessary to fulfill a domestic relations order (as defined in Code Section 414(p)(1)(B) or a successor Section).

15

SECTION 6:    BENEFICIARIES
A Participant may at any time and from time to time prior to death designate one or more Beneficiaries to receive any payments to be made following the Participant’s death.  If no such designation is on file with Praxair at the time of a Participant’s death, the Participant’s Beneficiary shall be the beneficiary or beneficiaries named in the beneficiary designation most  recently filed by the Participant under the Savings Plan.  If the Participant has not effectively designated a beneficiary under the Savings Plan, or if no beneficiary so designated has survived the Participant, the Participant’s Beneficiary shall be the Participant’s surviving spouse, or, if no spouse has survived the Participant, the estate of the deceased Participant.  If an individual Beneficiary cannot be located for a period of one year following the Participant’s death, despite mail notification to the Beneficiary’s last known address, and if the Beneficiary has not made a written claim for benefits within such period to the Vice President-Human Resources, the Beneficiary shall be treated as having predeceased the Participant.  The Vice President-Human Resources may require such proof of death and such evidence of the right of any person to receive all or part of the benefit of a deceased Participant as the Vice President-Human Resources may consider to be appropriate.  The Vice President-Human Resources may rely upon any direction by the legal representatives of the estate of a deceased Participant, without liability to any other person. 
SECTION 7:    EARNINGS ACCRUALS 
7.1    General. All amounts deferred under the Plan, including elective deferrals and Praxair Contributions, shall be credited with earnings and losses from the applicable Date of Deferral through the date such amount is paid out, or withdrawn, pursuant to Section 5.  Earnings under this Section 7.1 shall accrue at the rate elected in accordance with Section 7.2.
7.2    Earnings Accrual Rate.  
(a)    Accrual Rates. Earnings accruing in accordance with Section 7.1 shall accrue at the Fixed Income Rate, the Stock Value Rate, or a combination of the two Rates.

16

(b)    Initial Election. Subject to Section 7.2(c), a Participant shall designate at the time of the election to defer base salary and/or Variable Compensation Awards under Section 4.1, which accrual rate or rates shall apply to each deferral, provided that such elections must be in 10% increments.  Such election shall be effective as of the Date of Deferral.  All Praxair Contributions shall at all times accrue earnings and losses at the Stock Value Rate.
(c)    Election Changes.  A Participant may elect to change the accrual rate under this Section 7.2 with respect to any or all previously deferred base salary and/or Variable Compensation Awards under the Plan from the Fixed Income Rate to the Stock Value Rate.  Any such election changes shall be effective as of January 1st of the Plan Year following the Plan Year in which the election change is received by Praxair in accordance with procedures established by the Vice President-Human Resources.  No portion of a Participant’s Plan benefit accruing earnings and losses at the Stock Value Rate, including previously deferred base salary, Variable Compensation Awards and any Praxair Contributions, may be reallocated at any time from the Stock Value Rate to the Fixed Income Rate.  Further, if a Participant has elected to receive any portion of his Plan benefit in installments, the Participant may not change the accrual rate applicable to such portion once installment payments of the portion have commenced.
SECTION 8:    GENERAL PROVISIONS
8.1    Prohibition of Assignment of Transfer.  Except to the extent necessary to fulfill a domestic relations order (as defined in Code Section 414(p)(1)(B) or a successor Section), any assignment, hypothecation, pledge or transfer of a Participant’s or Beneficiary’s right to receive payments under the Plan shall be null and void and shall be disregarded.
8.2    Plan Not To Be Funded.  Praxair is not required to, and will not, for the purpose of funding the Plan, segregate any monies from its general funds, create any trusts, or make any special deposits, and the right of a Participant or Beneficiary to receive a payment under the Plan shall be no greater than the right of an unsecured general creditor of Praxair.

17

8.3    Effect of Participation.  Neither selection as an Eligible Employee, nor an election to participate, nor participation, in the Plan, shall entitle an Eligible Employee to receive a Variable Compensation Award, or affect Praxair’s right to discharge an Eligible Employee or a Participant.
8.4    Absence of Liability.  No officer, director or employee of Praxair shall be personally liable for any act or omission to act, under the Plan, of any other person, or, except in circumstances involving bad faith, for such officer’s, director’s or employee’s own act or omission to act.
8.5    Titles for Reference Only. The titles given herein to Sections and subsections are for reference only and are not to be used to interpret the provisions of the Plan. 
8.6    Connecticut Law To Govern.  All questions pertaining to the construction, regulation, validity and effect of the provisions of the Plan shall be determined in accordance with Connecticut law.
8.7    Amendment.  The Board may amend the Plan at any time, but no amendment may be adopted which alters the payments due Participants or Beneficiaries, as of the date of the amendment, or the times at which payments are due, without the consent of each Participant affected by the amendment and of each Beneficiary (of a then deceased Participant) affected by the amendment.  In addition, any amendment which does not significantly affect the amount of any past or future, benefits under the Plan may be authorized by the Vice President-Human Resources.
8.8    Plan Termination.  The Board may terminate the Plan at any time.  In the event the Plan is terminated, a Participant’s entire Plan benefit shall then be distributed to the Participant (or Beneficiary) so long as such termination and distribution meets (a), (b) or (c) below:
(a)    The termination and liquidation of the Plan takes place within 12 months of the Corporation’s corporate dissolution taxed under Code Section 331, or with the approval of a bankruptcy court pursuant to 11 U.S.C. § 503(b)(1)(A), and the deferred amounts are included in Participants’ gross incomes in the earliest of (x) the taxable year in which the amount is actually received, or (y) the latest of the following:  (I) the calendar year in which the Plan termination and liquidation occurs; (II) the first 

18

calendar year in which the amount is no longer subject to a substantial risk of forfeiture; or (III) the first calendar year in which the payment is administratively practicable;
(b)    The termination and liquidation of the Plan is pursuant to irrevocable action taken by the Corporation within 30 days before, or 12 months following, a Change in Control, provided that all other plans that allow Participants to make non-qualified deferrals that are aggregated with this Plan are terminated and liquidated such that all deferred compensation under the terminated plans and this Plan is paid out within 12 months of the date the Corporation takes all necessary action to terminate and liquidate the plans; or
(c)    The Corporation’s determination to terminate and liquidate the Plan does not occur proximate to a downturn in the financial health of the Corporation, the Corporation terminates and liquidates all plans that would be aggregated with this Plan if the Participants in the Plan had deferrals of compensation under the other plans, no payments in liquidation of the Plan are made within 12 months of the date the Corporation takes all necessary action to irrevocably terminate and liquidate the Plan (other than making payments that would be made regardless of whether the action to terminate and liquidate the Plan had occurred), and payments are made within 24 months of the date the Corporation takes all action to irrevocably terminate and liquidate the Plan.
8.9    409A Compliance.  This Plan is intended to constitute a “nonqualified deferred compensation plan” within the meaning on Code Section 409A(d)(1), and is to be construed and administered in a manner consistent therewith.  
PRAXAIR, INC.

By: /s/ Karen Keegans

Title:  Vice President, Human Resources

Date: 7/15/14

19

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