Document:

MOODY NATIONAL REIT II, INC. 8-K

EXHIBIT
10.9

 

NOTICE
OF CONFIDENTIALITY RIGHTS: IF YOU ARE A NATURAL PERSON, YOU MAY REMOVE OR STRIKE ANY OR ALL OF THE FOLLOWING INFORMATION FROM
ANY INSTRUMENT THAT TRANSFERS AN INTEREST IN REAL PROPERTY BEFORE IT IS FILED FOR RECORD IN THE PUBLIC RECORDS: YOUR SOCIAL SECURITY
NUMBER OR YOUR DRIVER’S LICENSE NUMBER.

 

After
Recording Return To:

Greer, Herz & Adams, L.L.P.

2525
South Shore Blvd., Suite 203 

League
City, Texas 77573

Attention: Meredith Bates 

 

STATE
OF TEXAS 

 

COUNTY
OF HARRIS

 

DEED
OF TRUST, SECURITY AGREEMENT AND FINANCING STATEMENT

 

This Deed of Trust,
Security Agreement md Financing Statement (hereinafter termed
“Deed of Trust”) is entered into on September 13, 2017, between RI II MC-HOU, LLC, a Delaware limited liability company
(hereinafter termed “Maker”), whose mailing address is 6363 Woodway, Suite 110, Houston, Texas 77057, to Darryl H.
Levy, as trustee (hereinafter termed “Trustee”), for the benefit of AMERICAN NATIONAL INSURANCE COMPANY, a Texas insurance
company, whose mailing address is Attn: Mortgage and Real Estate Investment Department, 2525 South Shore Boulevard, Suite 207,
League City, Texas 77573 (hereinafter termed “Noteholder”). 

 

		I.	DEFINITIONS

 

A. The
term “Indebtedness” shall mean and include:

_____________ 

 

(1)       Any
and all sums becoming due and payable pursuant to the Note, as hereinafter defined;

 

(2)       Any
and all other sums becoming due and payable by Maker to Noteholder including, but not limited to, such sums as may hereafter be
borrowed by Maker from Noteholder (it being contemplated that such future indebtedness may be incurred), including, but not limited
to, advancements or expenditures made by Noteholder pursuant to the terms and conditions of this Deed of Trust or any other document
evidencing, securing or otherwise relating to the Note;

 

(3)       Any
and all obligations, covenants, agreements and duties of any kind or character of Maker now or hereafter existing, known or unknown,
arising out of or in connection with the Note, this Deed of Trust or any other document or instrument evidencing, securing or
relating to the Note; and

  

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(4)
All renewals, extensions, modifications, increases, consolidations and rearrangements of any or all of the obligations,
covenants, agreements and duties of Maker arising out of or connected with the note or this Deed of Trust, whether or not
Maker executes any renewal, extension, modification, increase, consolidation or rearrangement.

 

B.       The
term “Collateral” shall mean and include all of Maker’s rights in and to: (a) all of the goods, articles of
personal property, accounts, general intangibles, instruments, documents, furniture, furnishings, equipment and/or fixtures of
every kind and nature whatsoever (including without limitation, the items described in subsections (b) through (h) below but expressly
excluding the Franchise Agreement, defined below, if and to the extent such exclusion is required by the Franchise Agreement)
now or hereafter owned by Maker, in or hereafter placed in, or used or which may become used, in connection with or in the use,
enjoyment, ownership or operation of the Mortgaged Premises (hereinafter defined) including, without limitation, the hotel operation
to be conducted therein (the “Hotel”), together with all additions thereto, replacements thereof, substitutions
therefor and all proceeds thereof, but excluding any such items owned by Franchisor or any Hotel guests or any hotel operator
in accordance with its rights under any hotel management agreement consented to in writing by Noteholder; (b) all rents (including,
without limitation, all “Rents” as defined below), rentals, payments, compensations, revenues, profits, incomes, leases,
licenses, concession agreements, parking agreements, insurance policies, plans and specifications, contract rights (including,
without limitation, all construction contracts, architect’s contracts and engineering contracts but specifically excluding
the Franchise Agreement if and to the extent such exclusion is required in order to comply with the Franchise Agreement), accounts
(including, without limitation, the advance reservations and bookings for the Hotel, as the same may be amended, canceled and
renewed by Maker or any hotel operator in accordance with its rights under any hotel management agreement and advance deposits
made in respect thereof, and all accounts receivable arising from the operation of the Hotel, including, without limitation, any
and all accounts receivable owing from any guests of the Hotel incurred during that guest’s stay), all escrowed funds (including,
without limitation, the FF&E Replacement Reserve, as defined below), and general intangibles in any way relating to the Mortgaged
Premises or used or useful in the use, enjoyment, ownership or operation of the Mortgaged Premises; (c) to the extent Maker has
a right to grant a security interest therein, all names, trade names, signs, marks and trademarks under or by which the Mortgaged
Premises may at any time be operated or known, all rights to carry on business under any such names, trade names, signs, marks
and trade marks, or any variant thereof, any goodwill in any way relating to the Mortgaged Premises and all of Maker’s rights
to carry nn the business of Winker nr the Hotel under all such names, trade nnmes, signs, marks and trade marks, or any variant
thereof; (d) all telephones (including all of Maker’s interest as tenant in any leases thereof), televisions (including
all of Maker’s interest as tenant in any leases thereof), bedding, bed linens, towels, window treatments, safety equipment
and the tangible articles of personal property owned or leased by Maker used or useful in the use, enjoyment, ownership or operation
of the Mortgaged Premises, all inventories of supplies used in connection with the operation of the business of the Hotel including,
without limitation, paper goods, brochures, office supplies, food and beverage inventory (to the extent the transfer of same is
peimissible under applicable law), chinaware, glassware, flatware, table linens, soap and other operational and guest supplies
located at the Hotel, all of the books, records, files, budgets, projections, strategic plans, business plans and specifications,
drawings, test reports, inspections and engineering reports, guest registers, employment records, maintenance records, rental
and reservation records, and any customer or frequent guest lists of Maker in connection with the use, enjoyment, ownership or
operation of the Mortgaged Premises; (e) all governmental permits relating to construction on the Mortgaged Premises, and all
other consents, authorizations, variances or waivers, licenses, permits and approvals from any governmental or quasi-governmental
agency, department, board, commission, bureau or other entity or instrumentality in respect of the Hotel, held or used by Maker
relating to the Hotel; (f) all deposits, awards, damages, payments, escrowed monies, insurance proceeds, condemnation awards or
other compensation, and interests, fees, charges or payments accruing on or received from or to be received on any of the foregoing
in any way relating to the Mortgaged Property, or the ownership, enjoyment or operation of the Mortgaged Property together with
all proceeds of all of the foregoing described in this Section 1 (B); and (g) all products, proceeds, substitutions, renumberings
and replacements of any of the collateral described in this paragraph. Notwithstanding anything to the contrary in the foregoing
provisions of this Section 1(B), to the extent required in order to comply with the Franchise Agreement, the Franchise
Agreement is expressly excluded from the term “Collateral”.

 

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C.       The
term “Mortgaged Premises” shall mean and include (a) that certain parcel of real property situated in the County of
Harris, State of Texas, described in Exhibit A, which is attached hereto and incorporated herein by reference for all purposes,
together with all Maker’s right in and to buildings and improvements of every kind and description now or hereafter erected
or placed thereon and all materials now or hereafter placed thereon including, without limitation, (i) any and all of the title,
estates, interests or rights of Maker which Maker now or may at any time acquire in and to the streets, alleys and rights of way
adjoining or adjacent to the Mortgaged Property and specifically including easements for vehicular and pedestrian ingress to and
egress from all surrounding public streets and over all privately owned roadways adjoining or adjacent to the Mortgaged Property,
and (ii) any and all materials now or hereafter placed thereon intended for construction, reconstruction, alteration and repairs
of such buildings and improvements, all of which materials shall be deemed to be included as a part of said real property immediately
upon the delivery thereof; and (b) all Maker’s right in and to any and all fixtures now or hereafter owned by Maker and
attached to, contained in or used in connection with said real property, and any and all renewals and replacements thereof, including
but not limited to (i) all equipment, apparatus, machinery, motors, elevators, fittings and radiators, (ii) all plumbing, heating,
lighting, ventilating, refrigerating, incinerating, air-conditioning and sprinkler equipment, (iii) all awnings, storm windows
and doors, mantels, cabinets, rugs, carpeting, linoleum, stoves, shades, draperies, blinds and water heaters, (iv) such other
goods and chattels and personal property as are usually furnished by landlords in letting an unfurnished building, nr which shall
be attached to said buildings and improvements by nails, screws, bolts, pipe connections, masonry or in any other manner and (v)
all built-in equipment as may be shown by plans and specifications.

 

D.       The
term “Mortgaged Property” shall mean both the Mortgaged Premises and the Collateral.

 

E.       The
term “Note” shall mean that one certain Promissory Note of even date herewith in the original principal amount
of $29,100,000.00 executed by Maker and made payable to the order of Noteholder, payable with interest in installments as
stipulated therein with final the maturity date of September 1, 2024, and providing for the right to declare the unpaid
principal balance due and payable upon the occurrence of an Event of Default (as defined herein) and otherwise as provided
therein and providing for reasonable attorneys’ fees, and any and all notes given in renewal, extension, modification,
increase, consolidation or rearrangement of said Note or any portion thereof

 

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F.       The
term “Loan Agreement” shall mean that certain Construction Loan Agreement of even date herewith executed by Maker
and Noteholder concerning the Note.

 

G.       The
term “Payment Guaranty” shall mean that certain Absolute, Unconditional Payment Guaranty of even date herewith executed
by Guarantor, in favor of Noteholder with respect to the Note.

 

H.       The
term “Payment Guaranty” shall mean that certain Absolute, Unconditional Payment Guaranty of even date herewith executed
by Guarantor, in favor of Noteholder with respect to the Note.

 

I.       The
term “Guarantor” shall mean BRETT C. MOODY, an individual.

 

J.       The
term “Guaranty” shall mean, collectively, the Payment Guaranty, the Completion Guaranty, the Tax Lien Guaranty and
any other guaranty by Guarantor for the benefit of Noteholder.

 

K.       The
terms “attorneys’ fees”, “attorneys’ fees and expenses”, “costs and expenses of enforcement”
and other terms of similar import shall mean and include support staff costs as an element of reasonable attorneys’ fees,
and the amounts expended in litigation preparation and computerized research, telephone and telefax expenses, mileage, depositions,
postage, photocopies, process service, video tapes and the like as part of the reasonable costs of collection and enforcement,
and any and all costs associated with environmental testing, audits, reviews, inspections, remediation and clean-up and any other
costs associated with preparing the Mortgaged Property for sale as part of the costs of foreclosure and/or enforcement.

 

L.       The
term “Tax Lien Guaranty” shall mean that certain Guaranty Regarding Taxes and Tax Liens of even date herewith executed
by Guarantor, in favor of Noteholder with respect to Maker’s property tax payment obligations for the Mortgaged Property.

 

		II.	CONVEYANCE
IN TRUST

 

In
consideration of Ten and 00/100 Dollars ($10.00) cash in hand paid, of Noteholder’s advancing or extending to Maker
the funds or credit constituting a part of the Indebtedness, and the mutual covenants contained herein, the receipt and
sufficiency of which are hereby acknowledged, Maker hereby conveys to Trustee the above-described Mortgaged Premises, in
trust, for the purpose of securing the Indebtedness, and the full and complete performance of each and every obligation,
covenant, duty and agreement of Maker contained herein or in the Note or any other document executed by Maker pertaining to
the Note or as security therefor; TO HAVE AND TO HOLD the Mortgaged Premises, together with the rights, privileges and
appurtenances thereto belonging unto Trustee and his substitutes or successors forever, and Maker is hereby bound to warrant
and forever defend the Mortgaged Premises unto Trustee, his substitutes or successors and their assigns, against the
claims of any and all persons claiming any interest in the Mortgaged Premises or any part thereof, save and except only these
items identified on Exhibit B attached hereto and incorporated herein by reference for all purposes (the
“Permitted Exceptions”).

 

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		III.	ADDITIONAL
SECURITY

 

As
further security for the Indebtedness and the full and complete performance of each and every obligation, covenant, agreement
and duty of Maker contained herein or contained in any other document executed by Maker pertaining to the Note or the security
therefor:

 

A.       Security
Interest. Maker hereby grants and conveys to Noteholder a security interest in and to and lien on all of the Collateral. This
Deed of Trust shall serve as a Security Agreement established pursuant to the Texas Business and Commerce Code, as may be amended
(the “TBCC”), and Noteholder shall have and may exercise any and all rights, remedies and powers of a secured party
under the TBCC. Maker hereby represents, warrants and covenants that (1) Maker is the owner and holder of the Collateral free
and clear of any adverse claim, security interest or encumbrance, except those created herein; (2) Maker will defend its right,
title and interest in and to the Collateral, and the priority of the security interest created herein as a valid first security
interest against any and all claims and demands of any person at any time claiming the same or any interest therein; (3) there
are no financing statements affecting the Collateral executed by Maker, as debtor, now on file in any public office except those
financing statements which are being released contemporaneously with the delivery of this transaction or which have been authorized
by Noteholder; (4) Maker authorizes Noteholder to file or record any and all other and further agreements, financing statements
and assignments in such offices and at such times as it is deemed by Noteholder to be necessary or desirable; and (5) Maker shall
execute and deliver to Noteholder such other and further agreements, financing statements and assignments as Noteholder may request.

 

This
Deed of Trust is intended to constitute a fixture filing in accordance with the applicable provisions of the TBCC. The debtor
is Maker and the secured party is Noteholder and their addresses are those set forth at the beginning of this Deed of Trust. Certain
of the Mortgaged Property is or will become “fixtures” (as that term is defined in the TBCC), and this Deed of Trust,
upon being filed of record in the real estate records of the county wherein the Mortgaged Premises are situated, shall operate
also as a financing statement filed as a fixture filing in accordance with the applicable provisions of the TBCC upon such Mortgaged
Property that is or may become fixtures.

 

B.       Assignment
of Condemnation Awards. To the extent of the full amount of the Indebtedness secured hereby and of the costs and
expenses (including, without limitation, reasonable attorneys’ fees and expenses) incurred by Noteholder in the
collection of any award or payment, Maker hereby assigns to Noteholder any and all awards or payments, including, without
limitation, all interest thereon, together with the right to receive the same, which may be made with respect to the
Mortgaged Property as a result of (1) the exercise of the right of eminent domain, (2) the alteration of the grade or of any
street or (3) any other injury to or decreased value in the Mortgaged Property, as well as the right, but not the obligation,
to, at Maker’s expense, participate in and make decisions concerning the progress of any proceeding involving
any such award or payment. Maker shall give Noteholder written notice of any such action or proceeding immediately upon
Maker’s becoming aware of same. All such damages, condemnation proceeds and consideration shall be paid directly and
solely to Noteholder whether or not an Event of Default has at such time occurred, and after first applying said sums to the
payment of all costs and expenses (including, without limitation, reasonable attorneys’ fees and expenses) incurred by
Noteholder in obtaining such sums, Noteholder may, at its option, apply the balance on the Indebtedness, in any order and
whether or not then due, without prepayment or penalty, or to the restoration of the Mortgaged Property, or release the
balance to Maker, provided, however, that said application or release shall not cure or waive any such Event of Default.

 

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		IV.	ABSOLUTE
ASSIGNMENT OF RENTS

 

In
further consideration for the indebtedness evidenced by the Note, Maker hereby absolutely and unconditionally assigns to
Noteholder any and all rents, revenues, profits and incomes from the Mortgaged Property or any portion thereof; provided,
however, that, for so long as no Event of Default has occurred, Maker is hereby granted a license to collect and retain the
currently accruing rents, revenues, profits and incomes from the Mortgaged Property, but in no event may Maker collect same
for more than one (1) month in advance of the date upon which such amounts become due. If an Event of Default shall occur,
however, thereupon, and at any time thereafter the underlying default is continuing beyond any applicable cure period
expressly provided herein, Noteholder may terminate such license and may, without any liability to Maker, take possession and
control of the Mortgaged Property and/or receive and collect all rents, revenues, profits and incomes, accrued or accruing
thereafter so long as any of the Indebtedness remains unpaid, applying so much thereof as may be collected first to the
expenses incident to taking possession and/or the collection thereof, second, to the payment of the Indebtedness other
than the Note and third to the amount of the Note then remaining unpaid, at Noteholder’s discretion, either
principal or interest, in any order, and whether then matured or not, paying the balance, if any, to Maker. It is intended by
Maker and Noteholder that this assignment of rents constitutes an absolute assignment and not an assignment for additional
security only, and that Noteholder shall be entitled to exercise its rights hereunder whether or not Noteholder is in
possession of the Mortgaged Property at such time. Maker agrees to fulfill or perform each and every covenant of any and all
leases and guaranties of leases of the Mortgaged Property so as to keep them at all times in full force and effect. Maker
agrees not to enter into any new lease, and not to make any modification, consent to any modification of, or cancel,
terminate or consent to the surrender of any lease of all or any part of the Mortgaged Property or any guaranty of such lease
after such lease or guaranty has been executed by Maker and the lessee or guarantor, as applicable, without the prior written
consent of Noteholder, which consent shall not be unreasonably withheld, delayed or conditioned, the failure to fulfill or
perform any such covenant or the making of or consent to any such modification or cancellation, termination or
surrender shall be an Event of Default. Nothing contained in this Deed of Trust or in any other document securing, evidencing
or relating to the Indebtedness shall preclude Noteholder from taking any action to cure or remedy any default of the
landlord under any lease of all or any portion of the Mortgaged Property or under any guaranty of lease, or any act, omission
of Landlord or occurrence, which, but for the passage of time, the giving of notice or both, would be a default under any
such lease or guaranty of lease or take any other action in connection therewith, and any amounts expended by
Noteholder in connection with such cure or remediation including, without limitation, reasonable attorneys’ fees and
expenses, shall be an advance under and secured by this Deed of Trust and shall be included in the Indebtedness and shall be
paid by Maker to Noteholder on demand. The preceding sentence shall not be construed to obligate Noteholder to cure any such
actual or potential lease defaults or any guaranty of lease defaults.

 

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		V.	MAKER’S
REPRESENTATIONS AND WARRANTIES

 

In
order to induce Noteholder to lend the funds evidenced by the Note, Maker represents and warrants that:

 

A.       Accurate
Loan Information. Any and all information and financial statements furnished or to be furnished to Noteholder by or on behalf
of Maker in connection with the Indebtedness secured by this Deed of Trust is or at the time of delivery will be complete and
accurate in all material respects.

 

B.       Valid
Title. Maker is the lawful owner of the Mortgaged Property and has good right and lawful authority to mortgage and pledge
the same.

 

C.       Freedom
from Encumbrances. The Mortgaged Property is free from any and all liens and encumbrances save and except only the Permitted
Exceptions, and Maker does warrant and will defend title to the Mortgaged Property against any and all claims or demands by third
parties whatsoever save and except only the Permitted Exceptions.

 

D.       Maintenance
of Lien Priority. Maker shall take any and all steps as are necessary to preserve and protect the validity and priority of
the liens on the Mortgaged Property created hereby. Maker shall execute, acknowledge and deliver such additional documents or
instruments as Noteholder may deem necessary in order to preserve, protect, continue, extend or maintain the liens and security
interests created hereby as first liens on the Mortgaged Property. Any and all costs and expenses incurred in connection with
the protection, preservation, continuation, extension or maintaining of the security interest and the liens herein created as
valid first and subsisting liens shall be paid in full by Maker.

 

E.       Value
of the Mortgaged Property. Maker acknowledges that the value of the Mortgaged Property, as established by an appraisal submitted
to Maker and provided to Noteholder, is substantially in excess of the Indebtedness secured hereby. Maker acknowledges that but
for the Mortgaged Property having a value in excess of the amount of the Indebtedness, Noteholder would not make the loan evidenced
by the Note and advance the funds hereunder. Maker agrees that Noteholder shall at all times have the benefit of the Mortgaged
Property as the security for the Indebtedness even though the value thereof may now or in the future exceed the amount of the
Indebtedness secured hereby.

 

F.       Representations,
Warranties and Covenants of a Limited Partnership. Maker hereby represents, warrants and covenants that:

 

(1)       Maker
is a Delaware limited liability company created under that certain Certificate of Formation filed with the Delaware
Secretary of State on November 4, 2013 and there are no amendments thereto and is governed by that certain Operating
Agreement made and entered into to be effective as of November 4, 2013 (the “Operating Agreement”), as amended by
First Amendment to Operating Agreement dated _____________ , 2017, and as of the date
 hereof
there are no other operating agreements or amendments thereto.

 

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(2)       The
only member of Maker is Duke Construction Consulting, LLC. The sole member of Duke Construction Consulting, LLC is 4MCH, LLC.
The members of 4MCH, LLC are the Carter E. Moody Trust, the Chloe G. Moody Trust, the Catherine A. Moody and the Duke
C. Moody Trust.

 

(3)       Brett
Moody, as President of Maker, is authorized to execute and deliver the Note, this Deed of Trust and any and all other documents
or instruments which Noteholder may now or at any time and from time to time hereafter require to be executed on behalf of Maker
in connection with the Note, this Deed of Trust or the Indebtedness, including but not limited to any and all renewals, extensions,
modifications, increases, consolidations and rearrangements of the Note or this Deed of Trust, and no signature or any other action
of any other person or entity shall be required to bind Maker.

 

(4)       Maker
shall not modify, amend or terminate the Operating Agreement in any way adverse to Noteholder nor, except for a Permitted Transfer
(as defined below), permit any interest of any limited or general partner to be sold, transferred, conveyed, encumbered or otherwise
become the subject of any Transaction (as defined below).

 

(5)       Except
for a Permitted Transfer, Maker shall not permit any interest of any Constituent Owner (as defined below) to be sold, transferred,
conveyed, encumbered or otherwise the subject of any Transaction.

 

(6)       Maker
is and shall continue to be (a) duly organized and existing under the laws of the State in which it is formed and (b) duly qualified
to transact business in each state where the conduct of its business requires it to be qualified.

 

G.       Construction
and Materials. Maker hereby warrants, represents and covenants that all persons and entities who have provided labor or materials
to or for the benefit of the Mortgaged Property by, through or under Maker or otherwise at Maker’s direction or request
at any time prior to the date of this Deed of Trust have been timely paid in full.

 

H.       Hazardous
Waste. Maker hereby represents and warrants that, after due and diligent inquiry, Maker is not aware of any facts or
circumstances which may give rise to any litigation, proceedings, investigations, citations or notices of violations
resulting from the use, presence, generation, manufacture, storage, discovery or disposition of, on, under or about the
Mortgaged Property or the transport to or from the Mortgaged Property of any Hazardous Materials (as defined below) (other
than permitted legal amounts). Maker hereby represents and warrants that, to the best of its actual knowledge, except as may
be disclosed in any environmental reports delivered to Noteholder prior to the date hereof, the Mortgaged Property is not in
violation of and Maker covenants and agrees not to use or permit the use of the Mortgaged Property for any purpose which
would be in violation of any federal, state or local health or environmental statute, regulation, rule, ordinance or
publication which is presently in effect or that may be promulgated in the future, as such statutes, regulations, ordinances
and publications may be amended from time to time relating to Hazardous Materials, including, without limitation, with
respect to industrial hygiene or to health or environmental conditions on, under or about the Mortgaged Property (including,
but not limited to, soil and ground water conditions) or with respect to the owners or occupants thereof. The foregoing
representations and warranties shall survive foreclosure under this Deed of Trust and shall constitute continuing
representations and warranties to Noteholder, and its successors and assigns, as to conditions existing prior to foreclosure
or a deed in lieu of foreclosure only. The term “Hazardous Materials” as used in this Deed of Trust shall include
but not be limited to:

 

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(1)       petroleum,
petroleum based products and oil;

 

(2)       asbestos
of any form which is or could become friable, urea formaldehyde foam insulation, transformers or other equipment which contain
dielectric fluid containing levels of polychlorinated biphenyls (pcb);

 

(3)       tanks,
whether empty, filled or partially filled with any substance, material, chemical or other waste;

 

(4)       any
substance, material, chemical or other waste including, without limitation, any explosive, flammable substances, explosives or
radioactive materials, hazardous or toxic waste, hazardous or toxic materials, hazardous, toxic or radioactive substances, contaminants
or pollutants and any of the preceding which are defined as or included in the definition of “Hazardous Substance”,
“Hazardous Waste”, “Hazardous Material” or “Toxic Substance” or other similar or related terms
under any applicable local, state or federal statute, regulation, ordinance or publication including but not limited to the following,
as such statutes, regulations, ordinances and publications may be amended from time to time:

 

(a)       Resource
Conservation and Recovery Act of 1976 (commonly referred to as the Solid Waste Disposal Act), 42 U.S.C. sec. 6901 et as amended
by the Superfund Amendments and Reauthorization Act of 1986, Pub.L. No. 99-499, 100 Stat. 1613;

 

(b)       Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, 42 U.S.C. sec. 9601 et seq.; 

 

tpl Clean Air Act,
42 U.S.C. sec. 7401 Pt sen.;

 

(d)       the
Water Pollution Prevention and Control Act (commonly referred to as the Clean Water Act) 33 U.S.C. sec. 1251 et

 

(e)       Hazardous
Materials Transportation Act, 49 U.S.C. sec. 1801 et seq.;

 

(f)       Federal
Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. sec. 136 et m.;

 

 (g)      Toxic Substances Control Act, 15 U.S.C. sec. 2601 et seq.; 

 

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(h)      Safe
Drinking Water Act, 42 U.S.C. sec. 300(f) et seq.;

 

(i)       the
Texas Water Code, including, without limitation:

 

(i)       the
Texas Water Quality Act, Texas Water Code Ann. sec. 26.01 - 26.407;

 

(ii)       the
Texas Hazardous Substances Spill Prevention and Control Act, Texas Water Code Ann. sec. 26.261-26.268; and

 

(iii)       the
Texas Underground and Above Ground Storage Act, Texas Water Code Ann. sec. 26.341 - 26.359; and the Texas Health and Safety
Code, including, without limitation:

 

(i)       the
Texas Solid Waste Act, Texas Health and Safety Code Ann. sec. 361.001-361.510;

 

(ii)       the
Texas Clean Air Act, Texas Health and Safety Code Ann. sec. 382.001-382.141; and

 

(iii)       the
Texas Low-Level Radioactive Waste Disposal Authority Act, Texas Health and Safety Code Ann. sec. 402-001-402.094.; and

 

(5)       any
other material, substance, chemical or other waste, exposure to which is prohibited, limited or regulated from time to time
by any federal, Texas or local statute, regulation, ordinance or publication or may pose a hazard to health or is related to
the industrial hygiene or environmental conditions of the Mortgaged Property or any other adjacent or nearby
property.

 

NOTWITHSTANDING
ANY NON-RECOURSE LANGUAGE IN THE NOTE OR THIS DEED OF TRUST, Maker hereby agrees to INDEMNIFY AND HOLD HARMLESS
Noteholder, and all of its directors, officers, employees, attorneys, contractors and agents, and any successors and assigns,
their directors, officers, employees and agents (individually and collectively the “Indemnitees”), from and
against any and all loss, damage, expense or liability (including reasonable attorneys fees and investigatory expenses)
incurred arising out of the use, occurrence, generation, storage, transportation or disposal of Hazardous Materials on or
about the Mortgaged Property by Maker, its present tenants or any future tenants, any prior owner, operator or tenant of the
Mortgaged Property, or any third party, including, without limitation, (i) all foreseeable and unforeseeable consequential
damages, directly or indirectly arising out of the use, occurrence, generation, storage, transportation or disposal of
Hazardous Materials by Maker, past, present or future tenants, owners or operators of the Mortgaged Property, or any third
party, and (ii) the cost of any required or necessary repair, cleanup or detoxification, claimed, threatened or
asserted against any such Indemnitee; SUCH INDEMNITY AND HOLD HARMLESS SPECIFICALLY INCLUDES ANY LOSS, DAMAGE, EXPENSE OR
LIABILITY CAUSED BY OR ATTRIBUTABLE TO THE ORDINARY OR SIMPLE NEGLIGENCE, AS OPPOSED TO THE GROSS NEGLIGENCE, OF ANY OF THE
INDEMNITEES AND FOR ANY ACTION OR OCCURRENCE FOR WHICH THE INDEMNITEES MAY INCUR STRICT LIABILITY, but such indemnity and
hold harmless shall not apply with respect to any Hazardous Substances caused by acts or omissions occurring on the Mortgaged
Property after any foreclosure of this Deed of Trust or conveyance in lieu thereof or to the extent that such loss, damage,
expense or liability is caused by or attributable to such Indemnitee’s gross negligence or willful misconduct
(including, without limitation, that of Noteholder). Maker’s obligations pursuant to the foregoing indemnification and
agreement to hold harmless shall survive any termination of the estate created by this Deed of Trust whether as a result of
the exercise by Noteholder of any default remedies available to it at law or in equity or otherwise. Maker acknowledges and
agrees that as a condition precedent to making the loan to Maker evidenced by. the Note secured by this Deed of Trust,
Noteholder has required that Maker provide to the Indemnitees the indemnification and agreement to hold harmless set forth
herein, and that Noteholder would not consummate the loan without this indemnification and agreement to hold harmless and
that the indemnification and agreement to hold harmless contained herein is a material inducement for Noteholder’s
agreement to make the loan. Further, Maker agrees that the foregoing indemnification and agreement to hold hamiless is
separate, independent of and in addition to its undertakings as Maker under the Note, as Maker under this Deed of Trust, as
Maker under the Absolute Assignment of Leases and Rents and any and all other documents, agreements and undertakings executed
by Maker in favor of Noteholder pursuant to the Note. Maker agrees that a separate action may be brought to enforce the
provisions of this indemnification and agreement to hold harmless, which shall in no way be deemed to be an action on the
Note or under this Deed of Trust, whether or not Noteholder would be entitled to a deficiency judgment following a
foreclosure sale of the Mortgaged Property.

 

    10 

    

    

 

		VI.	ADDITIONAL
                                         COVENANTS OF MAKER

 

As
long as any of the Indebtedness remains unpaid, Maker covenants and agrees that:

 

A.       Payment
of Indebtedness. Maker shall pay the Indebtedness promptly when due and payable.

 

B.       Payment
of Taxes and Other Assessments. Maker will pay any and all taxes, assessments and other governmental, municipal or other public
dues, charges, fines, or impositions imposed or levied upon the Mortgaged Property or on the interest created by this Deed of
Trust, or any tax or excise on rents or other tax, however described, assessed or levied by any state, federal or local taxing
authority as a substitute, in whole or in part, for taxes assessed or imposed on the Mortgaged Property or on the interest created
by this Deed of Trust, and at least ten (10) days before said taxes, assessments and other dues, charges, fines or impositions
are due and payable and shall exhibit receipts therefor to Noteholder. If any tax or assessment is levied, assessed or imposed
on Noteholder as a legal holder of the Note or any interest in the documents securing, evidencing or relating to the Note by any
governmental authority, then unless all such taxes or assessments are paid by Maker as they become due and payable and
in the opinion of the General Counsel for Noteholder, such payment by Maker is lawful and does not place Noteholder in violation
of any law, Noteholder may, at its option, declare the Indebtedness immediately due and payable, but in this event no prepayment
premium shall be due or payable.

 

    11 

    

    

 

C.       Insurance.
Maker shall keep the Mortgaged Property insured against any and all loss or damage by fire, windstorm, extended coverage
perils, flood (in the event any of the Mortgaged Premises is within a 100-year flood plain and flood insurance is available
pursuant to the United States Flood Disaster Protection Act of 1973 or any similar or successor statute or successor
governmental authority), vandalism, malicious mischief and such other hazards, casualties or other contingencies and in such
amounts (but in no event less than the greater of the amount of the Indebtedness from time to time secured hereby or the full
replacement value thereof) as from time to time may be reasonably required by Noteholder, and maintain, or cause to be
maintained, rents or rental value insurance coverage, in an amount at least adequate to cover twelve (12) months’
principal and interest installments on the Note and together with twelve (12) months’ property taxes and insurance
premiums, with respect to the Mortgaged Property covering the risk of loss due to the occurrence of any of the foregoing
hazards, in each case and in such amounts, in such manner and in such companies as Noteholder may reasonably approve, and all
such policies shall contain a waiver of subrogation and provide that any losses payable thereunder shall (pursuant to
standard Noteholder clauses without contribution, including one providing that such insurance as to the interest of
Noteholder shall not be invalidated by any act or omission or neglect of Maker, to be attached to each policy) be payable to
Noteholder. The term “full replacement value” shall mean actual replacement value (exclusive of value of land,
excavation and earthwork, site preparation, sewer inlets and cisterns, foundations, and concrete paving). Maker shall cause
duplicate originals of any and all such insurance policies to be deposited with Noteholder or certificates of insurers under
such policies evidencing same. Maker will also carry public liability insurance, in such form, amounts and with such
companies as Noteholder may from time to time reasonably require, with Noteholder included thereon as a named insured. Any or
all of such policies may be provided under a blanket policy or policies provided such blanket policies allocate the amount of
insurance required hereunder to the Mortgaged Property. Maker shall cause duplicate originals of any and all such insurance
policies to be deposited with Noteholder, or certificates of the insurers under such policies evidencing same. At least ten
(10) days prior to the date the premiums on any such policy or policies shall become due and payable, Maker shall furnish to
Noteholder evidence of the payment of such premiums. Each of such policies shall contain an agreement by the insurer that the
same shall not be canceled or modified without at least ten (10) days’ prior written notice to Noteholder. In the event
of loss under any such policy, Maker shall give immediate written notice to the insurance carrier and to Noteholder. With
respect to all insurance policies except public liability insurance, Noteholder is hereby authorized, but not required, on
behalf of and at the expense of Maker, whether or not an Event of Default has then occurred, to make proof of loss, to
collect for, adjust or compromise any losses under any insurance policy on the Mortgaged Property, to appear in and prosecute
any action arising from any of such insurance policies and to apply, at Noteholder’s option, the loss proceeds (less
expenses of collection) on the Indebtedness, in any order and whether due or not, or to the restoration of the Mortgaged
Property, or to be released to Maker, but any such application or release shall not cure or waive any default. In the event
of a sale pursuant to the foreclosure provision hereunder, or any conveyance of all or any portion of the Mortgaged Property
in extinguishment of the Indebtedness, complete title to all insurance policies on or related to the Mortgaged Property, and
the unearned premiums of same shall pass to and vest in the purchaser or Noteholder of the Mortgaged Property.

 

    12 

    

    

 

D.       Escrow
for Taxes and Insurance. The requirements for escrows for taxes and insurance have been conditionally waived by Noteholder
so long as no Termination of Escrow Waiver Event occurs. A “Termination of Escrow Waiver Event” means one or
more of the following has occurred: (i) an Event of Default has occurred and is continuing; (ii) the taxes and/or insurance on
all or any portion of the Mortgaged Property have not paid prior to delinquency; and (iii) Maker does not own the Mortgaged Property
or the subject loan has been assumed by a borrower without Noteholder’s prior written approval, which approval may be given
or withheld in Noteholder’s sole and absolute discretion. If a Termination of Escrow Waiver Event occurs, thereafter Maker
shall pay, in addition to the installments payable under the Note, on the same day as such installments are due and payable, a
sum equal to 1/12th of the estimated annual taxes, hazard and rental insurance premiums, and special assessments, if any, next
due on the Mortgaged Property, to be held by Noteholder in escrow. If the amount so paid is not sufficient to pay such taxes,
insurance premiums and assessments prior to delinquency, then Maker will immediately deposit with Noteholder amounts sufficient
to pay the same. Funds deposited by Maker pursuant to this provision shall be used to pay such taxes, insurance premiums and assessments
when due, provided that Maker has furnished Noteholder with all tax statements, premium notices and other such notices at least
thirty (30) days prior to the date that any such taxes, premiums and assessments may be due. If there is an Event of Default under
the provisions of the Note or of this Deed of Trust, Noteholder may elect, at any time after default, to apply the funds accumulated
under this provision against the Indebtedness in any manner or order. No interest shall accrue or be allowed on any payments under
the provisions of this paragraph. Noteholder shall not be required to deposit or hold monies in an account special or separate
from its general funds. Maker expressly releases Noteholder from any and all liability to Maker arising out of the maintenance
by Noteholder of an escrow as provided herein or for payment of any sums out of such escrow. Maker further indemnifies Noteholder
against claims arising out of payment of taxes or insurance premiums where Maker has failed to provide Noteholder with tax statements
and premium notices as required hereby. The maintenance by Noteholder of an escrow for taxes and insurance shall not relieve Maker
of its obligations under this Deed of Trust respecting taxes and insurance on the Mortgaged Property.

 

A
charge of $200.00 per month for administration expenses shall be assessed against Maker for each successive month that all paid
tax receipts and insurance policies are not delivered to Noteholder within thirty (30) days after notice to Maker of failure to
deliver such documents.

 

E.      Patriot
Act.

 

(1)
      As of the date of this Deed of Trust, Maker is, and during the term of this Deed of Trust
shall remain, in full compliance with any and all of the applicable laws and regulations of the United States of America that
prohibit, regulate or restrict financial transactions, including, but not limited to, conducting any activity or failing to
conduct any activity, if such action or inaction constitutes a money laundering crime, including any money laundering crime
prohibited under the Money Laundering Control Act, 18 U.S.C. sec. 1956, 1957, or the Bank Secrecy Act, 31 U.S.C. sec. 5311 et
s q. and any amendments or successor statutes thereto and any applicable rates or regulations promulgated
thereunder.

 

    13 

    

    

 

(2)       Maker
represents and warrants that (i) neither Maker, nor any of its partners, or any officer, director, member, manager, or employee,
is or will become named as a “Specially Designated National and Blocked Person” as designated by the United States
Department of the Treasury’s Office of Foreign Assets Control or as a person, group, entity or nation designated in Presidential
Executive Order 13224 as a person who commits, threatens to commit, or supports terrorism; (ii) Maker is not owned or controlled,
directly or indirectly, by the government of any country that is subject to any United States embargo; (iii) Maker is not acting,
directly or indirectly, for or on behalf of any person, group, entity or nation named by the United States Treasury Department
as a “Specially Designated National and Blocked Person,” or for or on behalf of any person, group, entity or nation
designated in Presidential Executive Order 13224 as a person who commits, threatens to commit or supports terrorism; and that
Maker is not engaged in this transaction directly or indirectly on behalf of, or facilitating this transaction directly or indirectly
on behalf of, any such person, group, entity or nation; (iv) no funds will be used to make any payments due hereunder or pursuant
to the Note which were obtained directly or indirectly from a “Specially Designated National and Blocked Person” or
otherwise derived from a country that is subject to any United States embargo; and (v) to Maker’s knowledge, no current
or future tenant of any portion of the Mortgaged Property, nor any officer, director, member, manager, partner or Constituent
Owner of such tenant, is or will be named a “Specially Designated National and Blocked Person”; provided, however,
that, in the event that a tenant of any portion of the Mortgaged Property is a publicly-traded company whose shares are listed
on a national stock exchange, such representation and warranty shall not apply to shareholders of such tenant.

 

(3)       Maker
acknowledges that it understands and has been advised by legal counsel on the requirements of the applicable laws referred to
above, including, without limitation, the Money Laundering Control Act (18 U.S.C. sec. 1956, 1957); the Bank Secrecy Act (U.S.C.
sec. 5311 et seq.) and the applicable rules or regulations promulgated thereunder; and the Foreign Assets Control Regulations
(31 C.F.R. sec. 500 et seq.).

 

(4)       Maker
shall notify Noteholder immediately upon receipt of any information indicating a breach of this Section 6(E) or if Maker
or any officer, director, partner, manager, member, employee or Constituent Owner is custodially detained on charges relating
to money laundering, whereupon Noteholder shall be entitled to take any and all actions necessary so that Noteholder is in compliance
with all anti-money laundering regulations. Any and all loss, damage, liability, penalty, fine or expense (including, without
limitation, reasonable attorneys’ fees and investigatory expenses) incurred by Noteholder in connection therewith, including,
but not limited to, attorney’s fees, shall be included in the Indebtedness secured hereunder and shall immediately be due
and payable by Maker to Noteholder.

 

F.       Waste,
Demolition, Alteration or Replacement. Maker will cause the Mortgaged Property and every part thereof to be maintained,
preserved and kept in safe and good repair, working order and condition, will not commit or permit waste thereon, will not
remove, demolish or alter the design or structural character of any building now or hereafter erected on the Mortgaged
Premises, without the prior written consent of Noteholder, and will comply with any and all laws, rules and
regulations of any governmental authority with reference to the Mortgaged Property and the manner and use of the same, and
will at any time and from time to time make all necessary and proper repairs, renewals, additions and restorations thereto so
that the value and efficient use thereof shall be fully preserved and maintained. Maker agrees not to remove any of the
fixtures or personal property included in the Mortgaged Property without the prior written consent of Noteholder unless
immediately replaced with like-kind property of at least equal value. Maker shall act as necessary to continue or cause the
continuance of such income producing activity as is presently conducted upon or contemplated for the Mortgaged Property.

 

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G.       Inventory
of Personal Property. Upon the request of Noteholder, Maker shall deliver to Noteholder an inventory describing and showing
the make, model, serial number and location of any and all fixtures and personal property owned by Maker and from time to time
used exclusively in the management, maintenance and operation of the Mortgaged Property (other than inventory or property, if
any, expressly excluded from the operation of this Deed of Trust by separate written agreement), with a certification by Maker
that said inventory is a true and complete schedule of such fixtures and personal property owned by Maker and used in the management,
maintenance and operation of the Mortgaged Property and that such items specified in the inventory constitute all of the fixtures
and personal property required in the management, maintenance and operation of the Mortgaged Property, and, except as previously
disclosed and agreed to in writing, that such items are owned by Maker free and clear of security interests, liens, conditional
sales contracts or title retention arrangements. Maker hereby grants to Noteholder a security interest in all such items of fixtures
and personal property owned by Maker under the terms and conditions of this Deed of Trust.

 

H.       Financial
Statement. For purposes of this Deed of Trust, April 30th of each and every year is the “Financial Statement
Due Date”. The requirement for certified financial statements has been conditionally waived by Noteholder so long as
no Termination of Certified Statement Waiver Event occurs. A “Termination of Certified Statement Waiver Event”
means the occurrence of one or more of the following: (i) an Event of Default has occurred and is continuing; or (ii) on or
before the Financial Statement Due Date, Maker has failed to deliver to Noteholder (A) annual operating information relating to
the Mortgaged Property for each calendar year (or, with respect to the year in which this Deed of Trust was executed by Maker,
the portion of the year for which Maker owned the Mortgaged Property) in the form required by the most recent version of the CRE
Finance Council Investor Reporting Package, or such other form as required by Noteholder from time to time, signed by the Manager,
which includes the certification that, to the best of Maker’s knowledge, during the period of time covered by the particular
statement, (B) no activity has been conducted upon the property in violation of any state, federal or local law, ordinance or
regulation pertaining to toxic or hazardous materials, industrial hygiene or environmental conditions, (C) the Mortgaged Property
complies in all material respects with the Americans with Disabilities Act of 1990, as it may be amended from time to time, or
any state-level equivalent statute (collectively, the “ADA”) and (D) a detailed listing of all tenants leasing space
in the Mortgaged Property (such as for any gift shops, restaurants or kiosks but expressly excluding hotel guests) which listing
evidences the rate, the Willi, the amount of space, annual rent, any other reimbursements paid by each tenant, and, where appropriate,
sales information provided by such tenant on the form attached hereto as Exhibit C attached hereto and incorporated herein
for all purposes (or such other form a required by Noteholder from time to time) signed by the Manager. If a Termination
of Certified Statement Waiver Event occurs, thereafter Maker shall furnish to Noteholder on or before Financial Statement Due
Date until the Indebtedness secured hereby has been fully paid, annual financial statements prepared by or for Maker pertaining
to Maker’s operation of the Mortgaged Property, each such statement prepared in accordance with generally accepted accounting
or management principles customarily used in the commercial real estate industry, consistently applied. The financial statements
referenced herein shall also contain Maker’s certification that, during the period of time covered by the particular statement,
to Maker’s knowledge, (y) no activity has been conducted upon the Mortgaged Property in violation of any state, federal
or local law, ordinance or regulation pertaining to Hazardous Materials, industrial hygiene or environmental conditions and (z)
the Mortgaged Property complies in all material respects with the ADA.

 

    15 

    

    

 

If
Maker does not deliver the financial statements as and when required by this paragraph, there shall be added to the Indebtedness
and Maker agrees to pay upon demand Two Hundred and 00/100 Dollars ($200.00) for each calendar month or part thereof until the
required financial statements are delivered to Noteholder.

 

I.       Restrictions
upon Sale, Transfer or Mortgaging the Mortgaged Property or the Interest in Maker. Except for Permitted Transfers, Maker agrees
and covenants not to sell, lease, trade, transfer, assign, exchange, convey, mortgage, pledge or encumber all or any part of the
Mortgaged Property, and all holders of any ownership interest in Maker (each a “Constituent Owner” and all the “Constituent
Owners”) agree that they shall not do or permit any of the foregoing to occur with respect to their respective ownership
interests in Maker, absolutely or as security for a debt or other obligation, whether done in a direct or indirect method or enter
into any contractual arrangements to do so. Maker further agrees that the foregoing restriction shall be effective and remain
in full force and effect throughout the term of this Deed of Trust and shall be applicable to Maker, all partners of Maker and
their respective heirs, administrators, executors, successors and/or assigns. Further, Maker agrees that the waiver of this restriction
as to any one transfer, conveyance or encumbrance shall not waive or forfeit the right of Noteholder to enforce the restriction
as applicable to any other transaction. Maker agrees that this covenant and all remedies of Noteholder pursuant hereto shall be
absolute and unconditional irrespective of whether or not any transfer, conveyance or encumbrance might diminish the value of
the security for the Indebtedness or increase the likelihood of an Event of Default or increase the likelihood of Noteholder having
to resort to any other security for the Indebtedness after default or add or remove liability of any party for the payment or
performance of the Indebtedness. Maker further covenants and agrees that to give written notice to Noteholder in the event there
occurs any transaction which would violate the terms and conditions of this provision. The term “Transaction” shall
include any voluntary or involuntary act or omission of Maker or any Members. If, as a result of the breach of this Section
6(I), Noteholder elects to declare the entire amount of the Indebtedness immediately due and payable, Maker shall have a period
of twenty (20) days to pay the full sum of the Indebtedness, including, without limitation, principal and interest and such failure
shall give rise to an Event of Default under the terms and conditions of this Deed of Trust for which Noteholder may require Trustee
to sell the Mortgaged Property as provided for herein. Notwithstanding the provisions of this Section 6(I), the definition
of “Permitted Transfers” shall include, and Noteholder’s consent shall not be required in connection
with, (i) a natural person’s transfer by will or applicable state intestacy laws or (ii) one or a series of Transactions
involving not more than forty-nine percent (49%) of the stock, the limited partnership interests or non-managing membership interests
(as the case may be) in Maker or any Constituent Owner; provided, however, no such Transaction shall result in the change
of control in Maker or any Constituent Owner, and as a condition to each such Transaction, Noteholder shall receive not less than
thirty (30) days prior written notice of such proposed Transaction. As a condition of consenting to the Transaction and waiving
its right to disapprove such particular Transaction (but not any future Transaction), Noteholder may, in its sole and absolute
discretion, make one or more of the following requirements:

 

    16 

    

    

 

(A)       that
the rate of interest contained in the Note be increased to a rate acceptable to Noteholder;

 

(B)       that
a transfer fee, in an amount determined by Noteholder, be paid;

 

(C)       that
a principal payment be made against the Note;

 

(D)       that
the proposed transferee execute an assumption agreement or other document as Noteholder may reasonably require; or

 

(E)       that
any other requirement deemed appropriate by Noteholder be satisfied.

 

Notwithstanding the above provisions
of this Section I, Maker shall be permitted to make one transfer of all of the Mortgaged Property and assignment of the Note and
Deed of Trust, to a Moody National Companies real estate investment trust of which Guarantor is CEO and Chairman of the Board.
The transfer described in this paragraph shall be a Permitted Transfer.

 

J.       Delivery
of Substitute Note. Maker will, if the Note is mutilated, destroyed, lost or stolen, deliver to Noteholder, in substitution
therefor, a new promissory note containing the same terms and conditions as the Note with a notation thereon of the unpaid principal
and accrued but unpaid interest. Maker shall be furnished with satisfactory evidence of the mutilation, destruction, loss or theft
of the Note, and also such security or indemnity as may be reasonably requested by Maker; provided, however, that if the original
Noteholder named herein is the then noteholder under this Deed of Trust, an unqualified indemnity from the original noteholder
named herein shall be deemed to be satisfactory security or indemnification.

 

K.       Compliance
with Covenants, Conditions, Restrictions and Recorded Documents. Maker shall, and shall cause the Mortgaged Property to fully
and timely comply with any and all covenants, conditions, restrictions and recorded documents benefiting, burdening or imposed
on the Mortgaged Property or any portion thereof or the owner of all or such portion of the Mortgaged Property.

 

L.       ERISA. As
of the date hereof and throughout the term of this Deed of Trust (1) Maker is not and will not be an “employee
benefit plan” as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”), which is subject to Title I of ERISA; (2) the assets of Maker do not and will not constitute
“plan assets” of one or more such plans for purposes of Title I of ERISA; (3) Maker is not and will not be a
”governmental plan” within the meaning of Section 3(3) of ERISA; (4) transactions by or with Maker are not and
will not be subject to state statutes applicable to Maker regulating investments of fiduciaries with respect to governmental
plans; and (5) Maker shall not engage in any transaction which would cause any obligation or action taken or to be taken
hereunder (or the exercise by Noteholder of any of its rights under this Deed of Trust or any of the other Loan Documents to
be a non-exempt (under a statutory or administrative class exemption) prohibited transaction under ERISA. Maker further
agrees to deliver to Noteholder such certifications or other evidence of compliance with the provisions of this section as
Noteholder may from time to time request.

 

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M.       Performance
of Loan Agreement. The funds advanced and secured by this Agreement shall be requisitioned and used solely for loan fees,
development and construction costs and interest on the Note and for such other purposes described in and strictly in accordance
with the Loan Agreement. The terms, provisions and conditions of the Loan Agreement as they pertain to the disbursement of all
or a portion of the proceeds of the Note are hereby incorporated herein and made .a part hereof by this specific reference and
are to remain in full force and effect as terms, provisions and conditions hereof. In the event that Maker shall fail to comply
with the Loan Agreement beyond all notice and cure periods provided therein, Noteholder may at its option cause the entire Indebtedness
secured by this Agreement to become immediately due and payable, and in the event of such Event of Default of Maker hereunder
or under the Loan Agreement and whether or not Noteholder shall cause the Indebtedness to become immediately due and payable,
Trustee, at the written request of Noteholder or Noteholder is hereby invested with full and complete authority to enter upon
the Mortgaged Premises, to employ watchmen to protect the Mortgaged Premises from depredation or injury and to preserve and protect
the personal property and equipment therein. All sums advanced by Noteholder (exclusive of the advances of the principal of the
indebtedness secured hereby) in accordance with the Loan Agreement shall be secured hereby as a further charge and lien upon the
Mortgaged Property and secured hereby, and shall be due and payable within ten (10) business days of receipt of written demand.

 

N.       Approvals;
Condemnation. Maker represents and warrants to Noteholder that Maker (a) has obtained all necessary site permits and building
permits, governmental and otherwise, necessary for the construction of the Improvements, as defined in the Loan Agreement, and
the occupancy and operation of such Improvements and the remainder of the Mortgaged Premises (except for the certificates of occupancy)
thereto, and the conduct of its business and all required zoning, building code, land use, environmental and other similar permits
have been obtained, and all of them are in full force and effect as of the date hereof and, to the knowledge of Maker, none of
them are subject to any pending or anticipated revocation, suspension, forfeiture, or modification, and (b) to Maker’s best
knowledge and belief there is no proceeding pending (or notice of such proceeding received by Maker) for the total or partial
condemnation of, or affecting, the Mortgaged Premises.

 

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0.       Single
Purpose Entity/Separateness. Maker represents, warrants and covenants as follows:

 

(a)       Limited
Purpose. The sole purpose conducted or promoted by Maker is to engage in the following activities:

 

(i)              to
acquire, own, hold, lease, operate, manage, maintain, develop and improve the Mortgaged Premises (or an undivided interest therein)
and to contract for the operation, maintenance, management and development of the Mortgaged Premises;

 

(ii)            
to enter into and perform its obligations under the Loan Documents;

 

(iii)          
to sell, transfer, service, convey, dispose of, pledge, assign, borrow money against, finance, refinance or otherwise deal with
the Mortgaged Premises to the extent permitted under the Loan Documents; and

 

(iv)          
to engage in any lawful act or activity and to exercise any powers permitted to limited liability companies organized under the
laws of the State of Delaware that are related or incidental to and necessary, convenient or advisable for the accomplishment
of the above mentioned purposes.

 

(b)       Limitations
on Debt, Actions. Notwithstanding anything to the contrary in the Loan Documents or in any other document governing the
formation, management or operation of Maker, Maker shall not:

 

(i)             
guarantee any obligation of any person or entity, including any affiliate, or become obligated for the debts of any other person
or entity or hold out its credit as being available to pay the obligations of any other person or entity;

 

(ii)            
engage, directly or indirectly, in any business other than as required or permitted to be performed under this Section;

 

(iii)          
incur, create or assume any debt other than (A) the loan evidenced by the Note and (B) unsecured trade payables incurred in the
ordinary course of its business that are related to the ownership and operation of the Mortgaged Premises and which shall (1)
not exceed two percent (2%) of the outstanding balance of the loan evidenced by the Note, (2) not be evidenced by a note, (3)
be paid within 60 days, and (4) otherwise expressly be permitted under the Loan Documents;

 

(iv)           
make or permit to remain outstanding any loan or advance to, or own or acquire any stock or securities of, any person or entity,
except that Maker may invest in those investments permitted under the Loan Documents;

 

(v)            
to the fullest extent permitted by law, engage in any dissolution, liquidation, consolidation, merger, sale or other transfer
of any of its assets outside the ordinary course of Maker's business;

 

(vi)          
buy or hold evidence of indebtedness issued by any other person or entity (other than cash or investment-grade securities);

 

(vii)         
form, acquire or hold any subsidiary (whether corporate, partnership, limited liability company or other) or own any equity interest
in any other entity;

 

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(viii)         
own any asset or property other than the Mortgaged Premises (or an undivided interest therein) and incidental personal property
necessary for the ownership or operation of the Mortgaged Premises; or

 

(ix)            
take any action under any bankruptcy or debtor relief law without the unanimous written approval of all members of Maker.

 

(c)       Separateness
Covenants. In order to maintain its status as a separate entity and to avoid any confusion or potential consolidation with
any affiliate, Maker represents and warrants that in the conduct of its operations since its organization it has observed, and
covenants that it will continue to observe, the following covenants:

 

(i)              
maintain books and records and bank accounts separate from those of any other person or entity;

 

(ii)             
maintain its assets in such a manner that it is not costly or difficult to segregate, identify or ascertain such assets;

 

(iii)            
comply with all organizational formalities necessary to maintain its separate existence;

 

(iv)            
hold itself out to creditors and the public as a legal entity separate and distinct from any other entity;

 

(v)             
maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other person or
entity and not have its assets listed on any financial statement of any other Person or entity; except that Maker's assets may
be included in a consolidated financial statement of its affiliate so long as appropriate notation is made on such consolidated
financial statements to indicate the separateness of Maker from such affiliate and to indicate that Maker's assets and credit
are not available to satisfy the debts and other obligations of such affiliate or any other person or entity;

 

(vi)            
prepare and file its own tax returns separate from those of any person or entity to the extent required by applicable law, and
pay any taxes required to be paid by applicable law;

 

(vii)          
allocate and charge fairly and reasonably any common employee or overhead shared with affiliates;

 

(viii)         
not enter into any transaction with affiliates except on an arm's-length basis on terms which are intrinsically fair and no less
favorable than would be available for unaffiliated third parties, and pursuant to written, enforceable agreements; 

 

(ix)            
conduct business in its own name, and use separate stationery, invoices and
checks;   

 

(x)              
not commingle its assets or funds with those of any other person or entity; 

 

    20 

     

    

 

(xi)           not
assume, guarantee or pay the debts or obligations of any other person or entity;

 

(xii)         
correct any known misunderstanding as to its separate identity;

 

(xiii)        
not permit any affiliate to guarantee or pay its obligations (other than limited guarantees and indemnities set forth in the Loan
Documents);

 

(xiv)        
not make loans or advances to any other person or entity;

 

(xv)         
pay its liabilities and expenses out of and to the extent of its own funds;

 

(xvi)        
maintain a sufficient number of employees in light of its contemplated business purpose and pay the salaries of its own employees,
if any, only from its own funds;

 

(xvii)      
maintain adequate capital in light of its contemplated business purpose, transactions and liabilities; provided, however, that
the foregoing shall not require any equity owner to make additional capital contributions to Maker; and

 

(xviii)    
cause the managers, officers, employees, agents and other representatives of Maker to act at all times with respect to Maker consistently
and in furtherance of the foregoing and in the best interests of Maker.

 

Failure
of Maker to comply with any of the foregoing covenants or any other covenants contained in this Agreement shall not affect the
status of Maker as a separate legal entity.

 

VII.
       OBLIGATION TO MAINTAIN AND COMPLY WITH FRANCHISE AGREEMENT.

 

As
a material inducement to Noteholder to enter into the loan secured by this Deed of Trust, Maker agrees to maintain and keep in
full force and effect that certain Residence Inn By Marriott Relicensing Franchise Agreement between Maker, as franchisee, and
Marriott International, Inc. (together with its successors and assigns, “Marriott” or “Franchisor”),
as franchisor, with an effective date of or about the date hereof with respect to the Mortgaged Property (sometimes therein
referred to as 7807 Kirby Rd., Houston, Texas 77030) for operation of a Residence Inn by Marriott (as amended with the consent
of Noteholder, the “Franchise Agreement”). Maker agrees to fulfill or perform each and every covenant of the
Franchise Agreement so as to keep it at all times in full force and effect and free from default, and not to enter into any new
franchise agreement nor make any modification, consent to any modification of, or cancel, terminate or consent to the surrender
of the Franchise Agreement without the prior written consent of Noteholder which consent shall not be unreasonably withheld, conditioned
or delayed. Nothing contained in this Deed of Trust or in any other Loan Document shall preclude Noteholder from taking any action
to cure or remedy any default of Maker under the Franchise Agreement, or any act, omission or occurrence which but for the passage
of time, the giving of notice, or both, would be a default under the Franchise Agreement and any amounts expended by Noteholder
in connection with such cure or remediation including, without limitation, reasonable attorney's fees and expenses, shall be an
advance under and secured by this Deed of Trust and shall
be included in the Indebtedness and shall be paid by Maker to Noteholder on demand. The preceding sentence shall not be construed
to obligate Maker to cure any such actual or potential defaults in Maker's obligations under the Franchise Agreement. Maker agrees
to provide Noteholder with written notice of all written notices of default and all written notices of termination under the Franchise
Agreement within five (5) business days after receipt by Maker.

 

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VIII.       
FF&E REPLACEMENT RESERVE.

 

A.         
Maker shall establish and maintain in an account to be held by Noteholder at all times while the Note is outstanding, a reserve
for furnishings, fixtures and equipment, which account shall include interest, if any, and dividends, if any, accrued thereon
(the “FF&E Replacement Reserve”), for payment of certain replacement for furnishings, fixtures and equipment
expenses, incurred by Maker in connection with the Hotel that constitutes a part of the Improvements (collectively, the “FF&E
Replacements”). The FF&E Replacement Reserve constitutes Collateral as such term is defined in this Deed of Trust
and Maker intends that Noteholder shall hold and have a perfected security interest in the FF&E Replacement Reserve in first
lien position.

 

B.         
In addition to the monthly payments due under the Note, commencing in November 2019, and continuing monthly thereafter until the
Note and all other indebtedness secured hereby is fully paid and performed, Maker shall pay to Noteholder a deposit to the FF&E
Replacement Reserve in the amount equal to CIR Percentage (defined below) of all gross revenue from the Mortgaged Property (the
“Gross Hotel Revenues”) for the month just ended, which deposits shall be made monthly on or before the fifteenth
(15th) day of the following calendar month. The term “CIR Percentage” means two percent (2%) during
the period from November 1, 2019 through October 31, 2020, three percent (3%) during the period from November 1, 2020 through
October 31, 2021 and four percent (4%) from and after November 1, 2022.

 

C.         
All sums in the FF&E Replacement Reserve shall be held by Noteholder in the FF&E Replacement Reserve to pay the
costs and expenses of FF&E Replacements and as additional collateral for the Indebtedness. Provided there is no uncured
Event of Default or an event which, with notice or the passage of time, or both, could result in an Event of Default by Maker
under the Note, this Deed of Trust or any of the other Loan Documents, Noteholder shall, to the extent funds are available
for such purpose in the FF&E Replacement Reserve and Noteholder has approved such disbursements in writing in advance in
Noteholders reasonable discretion (provided, however, any FF&E Replacements being made in accordance with franchise
standards shall be deemed approved), disburse to Maker the amount paid or incurred by Maker in perfatining such FF&E
Replacements within ten (10) business days following: (a) the receipt by Noteholder of a written request from Maker for
disbursement from the FF&E Replacement Reserve and a certification from Maker that the applicable portion of the FF&E
Replacements for which a disbursement is requested has been completed or which will promptly completed; (b) the delivery to
Noteholder of invoices, receipts or other evidence satisfactory to Noteholder, verifying the cost of performing the FF&E
Replacements; (c) for disbursement requests in excess of $25,000.00, the delivery to Noteholder of affidavits, lien waivers
or other evidence reasonably satisfactory to Noteholder showing that all materialmen, laborers, subcontractors and any other
parties who might or could claim statutory or common law liens and
are furnishing or have furnished material or labor to the Hotel or other Mortgaged Property have been paid all amounts due for
labor and materials furnished to the Property; (d) for disbursement requests in excess of $25,000.00, delivery to Noteholder (unless
expressly waived in writing by Noteholder for a particular request or group of requests) of a certification from an inspecting
architect or other third party acceptable to Noteholder describing the completed reconstruction or replacement of such FF&E
Replacements and verifying the completion of reconstruction or replacement of such FF&E Replacements and the value of the
completed reconstruction or replacement of such FF&E Replacements; (e) if applicable, at the completion of any such work,
delivery to Noteholder of a new certificate of occupancy for the portion of the improvements covered by reconstruction or replacement
of such FF&E Replacements, if said new certificate of occupancy is required by law, or if not, a certification by Maker that
no new certificate of occupancy is required; (f) such pictures of the of such FF&E Replacements as are reasonably required
by Noteholder; and (g) receipt by Noteholder of an administrative fee in the amount of $250.00.

 

    22 

     

    

 

 

D.         
Noteholder shall not be required to make advances from the FF&E Replacement Reserve more frequently than once in any thirty
(30) day period. In making any payment from the FF&E Replacement Reserve, Noteholder shall be entitled to rely on such request
from Maker without any inquiry into the accuracy, validity or contestability of any such amount. The FF&E Replacement Reserve
shall be held by Noteholder in an unsegregated account without interest. The FF&E Replacement Reserve is solely for the protection
of Noteholder and entails no responsibility on Noteholder's part beyond the payment of the costs and expenses described in this
Section in accordance with the terms hereof and beyond the allowing of due credit for the sums actually received. In the event
that the amounts on deposit or available in the FF&E Replacement Reserve are inadequate to pay the cost of the FF&E Replacements,
Maker shall pay the amount of such deficiency. Upon assignment of the Note by Noteholder, any funds in the FF&E Replacement
Reserve shall be turned over to the assignee and any responsibility of Noteholder, as assignor, with respect thereto shall terminate.
Upon the occurrence and during the continuation of an Event of Default under the Note, this Deed of Trust or any other Loan Document,
Noteholder may, but shall not be obligated to, apply at any time the balance then remaining in the FF&E Replacement Reserve
against the Indebtedness secured hereby in whatever order Noteholder shall reasonably determine. No such application of the FF&E
Replacement Reserve shall be deemed to cure any Event of Default by Maker or Event of Default under the Note, this Deed of Trustor
any other Loan Document, until Maker replaces such funds in the FF&E Replacement Reserve.

 

E.          
Within fifteen (15) days after full payment of the Indebtedness secured hereby in accordance with its terms or at such earlier
time as Noteholder may elect, the balance of the FF&E Replacement Reserve then in Noteholder's possession shall be paid over
to Maker and no other party shall have any right or claim thereto. Maker shall furnish FF&E Replacement Reserve accounting
information relating to the Mortgaged Property to Noteholder, in form and content satisfactory to Noteholder, which shall include,
without limitation, a reconciliation of cash flows for the period covered, not later than one hundred twenty (120) days after
the end of the end of each calendar year. Such FF&E Replacement Reserve accounting will contain Maker's certification that,
during the period of time covered by the particular statement (A) no funds have been expended for items not generally considered
to be “furnishings, fixtures and equipment” in the sense of normal accounting terminology for hotel properties, and
(B) the CIR Percentage of Gross Hotel Revenues has been deposited in the FF&E Replacement Reserve to the extent required by
this Mortgage.

 

    23 

     

    

 

F.       As
used in this Section, the term “Gross Hotel Revenues” shall mean the gross revenues of any and all kind or
nature attributable to the operations of the Hotel, from cash, barter and credit transactions and computed on an accrual
basis (before commissions and discounts for credit cards, prompt or cash payments), including the proceeds of any business
interruption insurance or other loss of income insurance attributable thereto, and excluding only sales or room taxes, or
tips payable to Hotel employees.

 

IX.        
TERMINATION OF TRUST

 

If
Maker shall well and truly pay, or cause to be paid, all of the Indebtedness and does keep and perform each and every covenant,
duty, condition and stipulation herein imposed on Maker, in the Note contained, or in any other Loan Document, then this Deed
of Trust and the grants and conveyances contained herein shall become null and void, and the Mortgaged Property shall revert to
Maker and the entire estate, right, title and interest of Trustee and Noteholder will thereupon cease; and in such case Noteholder
shall, upon the request of Maker and at Maker's sole cost and expense, deliver to Maker proper documents acknowledging satisfaction
of this Deed of Trust; otherwise, this Deed of Trust shall remain in full force and effect.

 

X.         
EVENTS OF DEFAULT

 

A.          
Acts Constituting Default. Maker will be in default under this Deed of Trust upon the occurrence of any of the following
events or conditions, or the happening of any other event of default as defined elsewhere in this Deed of Trust (herein individually
referred to as an “Event of Default”):

 

(1)            Maker
fails to make when due any payment of principal or interest or any installment of principal and interest under the Indebtedness.

 

(2)            Maker
fails to keep or perform any of the covenants, conditions or stipulations contained in this Deed of Trust, the Note or in any
of the other Loan Documents; provided, however, that the remedy for any such Event of Default defined in this Section X(A)(2)
shall be subject to the provisions of Section X(B) below and, further provided, however, that no default pursuant to
this Section X(A) shall be deemed to have occurred until Maker has been provided written notice of such matter constituting
the Event of Default and thirty (30) days having lapsed, or in the event that such matter is not reasonably capable of being cured
within such thirty (30) day period so long as is reasonably necessary to cure such matters not to exceed an additional sixty (60)
days and only so long as Maker is diligently pursuing such cure.

 

(3)            Any
warranty or representation made in this Deed of Trust by Maker is untrue in any material respect.

 

    24 

     

    

(4)            Any
person, corporation or other entity that (a) owns all or any part of the Mortgaged Property; (b) is liable for the payment of
all or any part of the Indebtedness; or (c) is a guarantor of all or any part of the Indebtedness (i) admits in writing its inability
to pay its debts generally as they become due, (ii) files a petition or answer in bankruptcy as a debtor or seeks reorganization
or an arrangement or otherwise to take advantage of any state or federal bankruptcy or insolvency law, (iii) makes an assignment
for the benefit of creditors, (iv) files a petition for or consents to the appointment of a receiver for its assets or any part
thereof or (v) without such party's consent has a petition filed in any bankruptcy or insolvency proceeding or an order, decree
or judgment entered by a court of competent jurisdiction appointing a receiver of the Mortgaged Property or approving a petition
filed against such party seeking reorganization or an arrangement of the party or its assets or debts under any bankruptcy or
insolvency law and such petition, order, decree or judgment is not dismissed, vacated, set aside or stayed within forty-five (45)
days from the date of entry.

 

(5)            Except
for Permitted Transfers, Maker sells, trades, conveys, transfers, mortgages, assigns, exchanges, pledges or encumbers (including,
without limiting these provisions or any similar references in this Deed of Trust, the granting of a security interest in) the
Mortgaged Premises, the Collateral or any portions thereof or interests therein, or, except for Permitted Transfers, Maker or
any shareholder, partner, member, trustee or beneficiary of Maker or a Constituent Owner sells, trades, conveys, transfers, mortgages,
assigns, exchanges, pledges or encumbers (including, without limiting any of the provisions of this subparagraph, the granting
of a security interest in) any part of its interest in Maker or any Constituent Owner, except for Permitted Transfers, or any
such event occurs involuntarily to Maker or such shareholder, partner, member, tnistee or beneficiary of Maker or any shareholder,
partner, member, trustee or beneficiary of any Constituent Owner, all without the prior written consent of Noteholder.

 

(6)            The
authority and right of Maker to do business in the State of Texas is terminated, withdrawn or cancelled and Maker fails to reinstate
within thirty (30) days after it becomes aware of such termination, withdrawal or cancellation.

 

(7)            Maker's
existence as a legal entity for any reason, by operation of law or otherwise, is modified in any way adverse to Noteholder or
terminates and is not reinstated within sixty (60) days thereafter.

 

(8)            A
default beyond the passage of any applicable notice and cure periods occurs under the Guaranty.

 

B.            Curable
Non-Monetary Default. Upon any Event of Default (other than a default in payment of principal or interest under the
Indebtedness, which is capable of cure (sometimes a “Curable Non-Monetary Default”) and provided that the granting
of such cure period does not jeopardize the lien of this Deed of Trust or the value of the Mortgaged Property, then
Noteholder shall not hold a foreclosure sale or terminate Maker's license, if any, to collect rents pursuant to any
assignment of rents for such Curable Non-Monetary Default until after Noteholder provides Maker with written notice of such
Curable Non-Monetary Default and such Curable Non-Monetary Default remains uncured on the earlier of (1) the thirtieth (30th)
day (or such longer number of days, up to a maximum of ninety (90) days, as may be reasonably necessary to cure the Curable
Non-Monetary Default, provided that Maker continuously and diligently pursues such cure) after such written notice, or (2)
any comparable cure period permitted by any applicable tenant leases, insurance policies or any other contracts. In no event
shall Noteholder be precluded from accelerating the Indebtedness, commencing and pursuing any judicial or non-judicial
foreclosure action or exercising any other right or remedy at law or in equity including, without limitation, any other right
or remedy provided in this Deed of Trust or in any of the other Loan Documents during such 30-day cure period; provided,
however, that in the event Noteholder accelerates the Indebtedness solely due to such Curable Non-Monetary Default and such
Curable Non-Monetary Default is cured within such 30-day period, then the Indebtedness shall be reinstated pursuant to a
written reinstatement agreement to be executed by the parties within thirty (30) days of such cure, such agreement to be in a
form satisfactory to Noteholder. As a condition to such reinstatement, Maker shall pay Noteholder's reasonable
attorney's fees and expenses in connection with preparation and negotiation of the reinstatement agreement and the premium
for a so-called “T-38” title endorsement (or any such successor or similar endorsement if the so-called
“T-38” is no longer offered) to the Title Policy.

 

    25 

     

    

 

XI.          RIGHTS
OF NOTEHOLDER UPON DEFAULT

 

A.            Acceleration
of Indebtedness. Upon the occurrence of an Event of Default or at any time thereafter, Noteholder may, at its option and without
demand or notice to Maker, accelerate the maturity of the Note and declare the Indebtedness secured hereby immediately due and
payable. Unless otherwise provided herein, Maker hereby waives presentment for payment, protest and demand, notice of protest,
demand, dishonor and default, notice of intent to declare the Indebtedness immediately due and payable and notice of the declaration
that the Indebtedness is immediately due and payable, and any and all rights Maker may have to a hearing before any judicial authority
prior to the exercise by Noteholder of any of its rights under this Deed of Trust or any other agreements securing or executed
in connection with the Indebtedness, all to the extent authorized by law.

 

B.            
Operation of Property by Trustee. Upon the occurrence of an Event of Default, or at any time thereafter, in addition to
all other rights herein conferred on Trustee, Trustee (or any person, firm or corporation designated by Trustee) may, but will
not be obligated to, enter upon and take possession of any or all of the Mortgaged Property, exclude Maker therefrom and hold,
use, administer, manage and operate the same to the extent that Maker could do so. If the Mortgaged Property includes any type
of business enterprise, Trustee may operate and manage such business without any liability of Noteholder to Maker resulting therefrom
(excepting failure to use ordinary care in the operation and management of the Mortgaged Property); and Trustee or Trustee's designee
may collect, receive and receipt for all proceeds accruing from such operation and management, and, at Maker's expense, make repairs
and purchase needed additional property, and exercise every power, right and privilege of Maker with respect to the Mortgaged
Property. When and if the expenses of such operation and management have been paid and the Indebtedness has been paid, the Mortgaged
Property shall be returned to Maker (providing there has been no foreclosure sale). This provision is a right created by this
Deed of Trust and cumulative of, and is not in any way to affect, the right of Noteholder to the appointment of a receiver given
Noteholder by law or otherwise.

 

    26 

     

    

 

C.            
Judicial Proceedings. Upon the occurrence of an Event of Default, or at any time thereafter, or upon the breach of any
covenant, ten-n or condition herein contained, Noteholder, in lieu of or in addition to causing Trustee to exercise
the power of sale hereafter given, may proceed by suit for a foreclosure of its lien on the Mortgaged Property, or to sue Maker
for damages on, arising out of said default or breach, or for specific performance of any provision contained herein, or to enforce
any other appropriate legal or equitable right.

 

D.            Foreclosure
Sale.

 

(1)           Mechanics
of Sale. Upon the occurrence of any Event of Default, or at any time thereafter, Trustee, when requested to do so by Noteholder,
shall sell the Mortgaged Premises at public auction to the highest bidder for cash, between the hours of 10:00 a.m. and 4:00 p.m.
on the first Tuesday in any month. Such sale shall be held at the area of the courthouse in the county in which the Mortgaged
Premises, or any part thereof, is situated, which area has been designated for such purpose by the county commissioners court
of such county, but if no such area has been so designated as of the time of the posting of the notice for such sale as hereinafter
provided, then such sale shall be conducted at the door of the courthouse of such county. Such sale shall be conducted only after
Trustee or Noteholder has caused the (a) advertisement of the time, place and terms of sale and the description of the Mortgaged
Premises by posting, or causing to be posted, at least twenty-one (21) consecutive days prior to the date of said sale, written
or printed notices thereof at the door of the courthouse of the county in which the Mortgaged Premises, or any part thereof, is
situated, which notice may be posted by Trustee or by any person acting for him, and which notice shall state the earliest time
between 10:00 p.m. and 4:00 p.m. on the sale date that the sale will occur, and shall further state that the sale will be conducted
at the door of the courthouse of the county in which the Mortgaged Premises, or any part thereof, is located, unless a location
for such sale has been designated by the county commissioners court of such county, in which case, no specific designation of
area shall be required in said notice; and (b) filing, at least twenty-one (21) days preceding the date of such sale, of a copy
of the aforesaid notice in the office of the County Clerk of the county in which the sale is to be made. Such sale shall commence
not later than three (3) hours after the time designated in said notice for the sale to occur. Noteholder shall, at least twenty-one
(21) days preceding the date of such sale, serve or cause to be served written or printed notice of the proposed sale as described
in this paragraph by certified mail on each party obligated to pay the Indebtedness (each an “obligor”), according to
the records of Noteholder by the deposit of such notice, enclosed in a postpaid wrapper, properly addressed to such obligor at
obligor's most recent address as shown by the records of Noteholder in a post office or official depository under the care and
custody of the United States Postal Service. Trustee may postpone the sale of all or any portion of the Mortgaged Premises without
public announcement, and from time to time thereafter may further postpone such sale without public announcement. Maker hereby
authorizes and empowers Trustee to sell the Mortgaged Premises, as a unit or in lots or in parcels, as Trustee shall deem expedient.
If the Mortgaged Premises is located in more than one (1) county, the notices shall be (y) posted at the courthouse door and (z)
filed with the County Clerk of each county in which the Mortgaged Premises is located (designating the county in which the sale
will be held) and the Mortgaged Premises may be sold at the door of the courthouse of any one (1) of such counties.

 

    27 

     

    

 

(2)            Collateral.
On the happening of any Event of Default or at any time thereafter, Noteholder or Trustee shall have and may exercise
with respect to the Collateral all rights, remedies and powers of a “Secured Party” under the TBCC with reference
to the Collateral or any other items in which a security interest has been granted herein, including, without limitation, the
right and power to sell at public or private sale or sales or otherwise dispose of, lease or utilize the Collateral and any
part or parts thereof in any manner to the fullest extent authorized or permitted under the TBCC after default by Maker,
without regard to preservation of the Collateral or its value and without the necessity of a court order, and apply the
proceeds thereof first toward the payment of all costs and expenses and reasonable attorneys' fees incurred by Noteholder or
Trustee, and second the balance toward the payment of the Indebtedness whether or not then due, and in such order or
manner as Noteholder may elect. Upon an Event of Default, Noteholder shall have, among other rights, the right to take
possession of the Collateral and to enter upon any premises where the same may be situated for the purpose of repossessing
such items, without being guilty of or liable for trespass and without liability for damages occasioned thereby, and to take
any action deemed appropriate or desirable by Noteholder, at its sole option and discretion, to repair, restore or otherwise
prepare the Collateral for sale or lease or other use or disposition as authorized herein. To the fullest extent permitted by
law, Maker expressly waives any notice of sale or any other disposition of the Collateral and any rights or remedies of Maker
or the formalities prescribed by law relative to the sale or disposition of the Collateral or to the exercise of any other
right or remedy of Noteholder existing after a default. To the fullest extent that such notice is required and cannot be
waived, Maker agrees that if such notice is mailed postage prepaid to Maker at the address shown herein at least five (5)
days before the time of the sale or disposition, such notice shall be deemed reasonable and shall fully satisfy any
requirement for giving said notice.

 

Maker
agrees that either Trustee or Noteholder may proceed to sell or dispose of both the real and personal property covered herein
in accordance with the rights and remedies granted under this Deed of Trust with respect to the real or personal property covered
hereby. Maker hereby grants Noteholder the right, at its sole option and discretion, after default by Maker to transfer at any
time to itself or its nominee the Collateral or any part thereof and to receive the monies, income, proceeds and benefits attributable
to the same and to hold the same as Collateral or to apply such amounts on the Indebtedness, whether or not then due, and in such
order and manner as Noteholder may elect. Maker covenants and agrees that all recitals and any document transferring, assigning,
leasing or making any other disposition of the Collateral or any part thereof shall be full proof of the matters stated therein
and no further proof shall be required to establish the legal propriety of the sale or other action taken by Noteholder or Trustee
and that all prerequisites of sale shall be presumed conclusively to have been performed or to have occurred. All rights to a
marshalling of the assets of Maker, including, without limitation, such rights with respect to the Collateral and the Mortgaged
Premises, are hereby waived.

 

(3)            Maker's
Warranties After Sale. Maker hereby authorizes and empowers Trustee to execute and deliver to the purchaser or purchasers
of any of the Mortgaged Property sold in foreclosure sales good and sufficient deeds of conveyance thereto by fee simple title,
with covenants of general warranty, subject to any Permitted Exceptions and the title of such purchaser or purchasers when so
made for itself and on behalf of Trustee, Maker, its successors and assigns binds itself to warrant and forever defend such title.

 

    28 

     

    

 

(4)            Application
of Proceeds. The proceeds of any and all foreclosure sales of the Mortgaged Property shall be applied as follows: (a) to the
payment of all necessary actions and expenses incident to the execution of said sale or sales, including, without limitation,
a reasonable fee to Trustee not exceeding five percent (5%) of the gross proceeds of the sale or sales of the Mortgaged Property;
(b) to the payment of the Indebtedness in such order as determined by Noteholder, to the amount of the accrued interest and principal
legally due thereon and all other sums secured hereby, and to the payment of attorneys' fees as in the Note provided; and (c)
the remainder, if any, shall be paid to Maker or such other person or persons entitled thereto by law.

 

(5)           
Multiple Sales. Upon the occurrence of any Event of Default or at any time thereafter, Noteholder shall have the option
to proceed with foreclosure in satisfaction of said Event of Default, either through the courts or by directing Trustee to proceed
with foreclosure as provided for in this Deed of Trust, but without declaring the entire Indebtedness due, and provided that if
any sale is made because of such Event of Default, such sale may be made subject to the unmatured part of the Note and Indebtedness
secured by this Deed of Trust, and such sale, if so made, shall not in any manner affect the unmatured part of the Indebtedness
secured by this Deed of Trust, but as to such unmatured part of the Indebtedness this Deed of Trust shall remain in full force
and effect as though no sale had been made under the provisions of this Section 9(D)(5). Multiple sales may be made under
the provisions of this Section 9(D)(5) without exhausting the right of sale for any remaining part of the Indebtedness
whether then matured or unmatured, the purpose hereof to provide for a foreclosure and sale of the Mortgaged Property for any
matured part of the Indebtedness without exhausting any power of foreclosure and the power to sell the Mortgaged Property for
any other part of the Indebtedness, whether matured at the time or subsequently maturing.

 

(6)            Waiver
of Appraisement Laws. Maker waives the benefit of any and all laws now existing or hereafter enacted providing for (a) any
appraisement before sale of any portion of the Mortgaged Property (commonly known as Appraisement Laws), or (b) any extension
of time for the enforcement of the collection of the Indebtedness or any creation or extension of a period of redemption from
any sale made in collecting the Indebtedness (commonly known as Stay Laws and Redemption Laws).

 

(7)            Prerequisites
of Sales. In the event of any foreclosure sale of the Mortgaged Property, all prerequisites to the sale shall be presumed
to have been performed, and in any conveyance given hereunder, all statements of facts, or other recitals therein made as to the
nonpayment of money secured or as to the request of Trustee to enforce the trust established by this Deed of Trust, or as to the
proper and due appointment of any substitute trustee, or as to the advertisement of sale, or time, place and manner of sale, or
as to any other preliminary fact or thing, shall be taken in all courts of law or equity as prima facie evidence that the
facts so stated or recited are true.

 

XII.      
USE OF INSURANCE PROCEEDS

 

A.
          Holding of Proceeds. Notwithstanding the provisions of Section
6(C) hereof, any insurance proceeds paid to Noteholder will be first applied in payment of the expenses, if any,
incurred by Noteholder in the collection of said insurance proceeds and second the balance, if any, will be held and
disbursed by Noteholder in accordance with the following provisions:

 

    29 

     

    

 

(1)          (a)
Should there exist an Event of Default at the time of a casualty or should there occur at any time thereafter an Event of Default;
(b) should fifty percent (50%) or more of the rentable square feet of the Mortgaged Property be damaged; (c) should any insurance
proceeds be remaining after the completion of all restoration work; (d) should Maker fail to comply with the requirements for
disbursing the insurance proceeds; or (e) should, in Noteholder's judgment, the Mortgaged Property be unable to be restored prior
to the maturity date of the Note, then in any of the said events, Noteholder may, at its option, apply the insurance proceeds
on the Indebtedness, in any order and whether due or not, or to the restoration of the Mortgaged Property, or to be released to
Maker, but any such application or release shall not cure or waive any default.

 

(2)          If
the insurance proceeds have not been disbursed under the provisions of Section 10(A)(1) above, or if under Section 10(A)(1)
Noteholder elects to permit the insurance proceeds to be used for restoration of the Mortgaged Property, the proceeds will
be held and disbursed as follows:

 

(a)           Should
the insurance proceeds be less than $25,000.00, Maker shall immediately commence and complete the work of restoring the damaged
property and Noteholder will disburse the portion of the insurance proceeds to pay actual costs to replace, repair and restore
the damaged property to Maker upon (i) completion of the restoration work to a condition satisfactory to Noteholder, (ii) submission
of a written report by Maker that all restoration work has been completed and (iii) receipt by Noteholder of such evidence as
Noteholder may require that all mechanics and materialmen performing work or supplying materials for the restoration work have
been fully paid.

 

(b)           Should
the insurance proceeds equal or be in excess of $25,000.00, but less than $100,000.00, Maker shall cause plans and specifications
(“Plans”) for the restoration of the damaged property to be submitted to Noteholder for approval. Upon receipt of Noteholder's
approval, Maker shall forthwith commence and complete the restoration of the damaged property in accordance with the approved
Plans. Noteholder will disburse the portion of the insurance proceeds to pay the actual costs to repair and restore the damaged
property to Maker upon (i) completion of the restoration work to a condition satisfactory to Noteholder, (ii) submission of a
written report by Maker that all restoration work has been completed and (iii) receipt by Noteholder of such evidence as Noteholder
may require that all mechanics and materialmen performing work or supplying materials for the restoration work have been completely
paid.

 

(c)           If
the insurance proceeds are equal or in excess of $100,000.00 (i) Plans for the restoration of the damaged property and a cost
estimate will both be prepared by an architect employed by Maker and acceptable to Noteholder. The Plans and cost estimates will
be submitted to Noteholder for approval. Upon receipt of Noteholder's approval, Maker will promptly commence and diligently pursue
the restoration work in accordance with the approved Plans; (ii) if prior to the commencement of, or at any time during the restoration
work, Noteholder shall determine that the total cost of the restoration work shall exceed the balance of the
insurance proceeds held in its possession, Maker shall immediately pay, in cash, to Noteholder the amount of such excess costs.
Until the amount of said excess costs is paid to Noteholder, Noteholder shall not be obligated to disburse any of the insurance
proceeds held by it. The insurance proceeds and the amount of excess costs paid by Maker are hereinafter called “Construction
Funds”. The amount of such excess costs paid by Maker shall be disbursed prior to the disbursement of any of the insurance
proceeds held by Noteholder; and (iii) the Construction Funds will be made available to Maker as restoration repair work progresses
pursuant to certificates of the architect approved by Noteholder, submitted not more than once every thirty (30) days. There shall
be delivered to Noteholder such other evidences as Noteholder may reasonably request, from time to time, during the restoration
work, as to the progress of the work, the compliance with the approved Plans, the total cost of restoration work to date of request,
the total cost needed to complete the restoration work, lien waivers or evidence of no liens against the Mortgaged Property. If
at any time during the course of the restoration work, Noteholder learns of facts concerning the restoration work which is materially
adverse to Noteholder, or payment or nonpayment of mechanics and materialmen, or inaccuracy of any information furnished with
respect to it, Noteholder may withhold the disbursement of funds until such time as it is prudent to continue to disburse the
Construction Funds or may determine not to make any further disbursements of the Construction Funds and instead to apply all such
funds remaining to the payment of the Indebtedness then outstanding, whether due or not at such time, without any prepayment premium,
and in such order as determined by Noteholder.

 

    30 

     

    

 

(3)            Noteholder
shall not be required to hold any funds received by it described in this Section 10(A) in any account special or
separate from Noteholder's general account. No such funds shall be required to be placed in any interest bearing account, and
any interest earned thereon shall constitute additional insurance proceeds to be applied as provided in this Deed of
Trust.

 

B.             Intentionally
reserved.

 

X111.
   SPECIAL CONDITIONS 

 

This
Deed of Trust is expressly made subject to the following special conditions:

 

A.             Successor
Trustees. At the option of Noteholder, without cause or notice, successor or substitute trustees may be appointed by any officer,
agent or attorney-in-fact of Noteholder, without procuring the resignation of the former Trustee and without any formality other
than a designation in writing of such successor or substitute trustees , who shall thereupon become vested with and succeed to
all the powers and duties given to Trustee herein named, the same as if the successor or substitute trustees had been named original
Trustee herein; and such right to appoint successor or substitute trustees shall exist as often and whenever Noteholder desires.

 

B.             Jury
Trial Waiver. MAKER RECOGNIZES THAT DISPUTES ARISING OUT OF THE LOAN TRANSACTION SECURED BY THIS DEED OF TRUST ARE LIKELY
TO BE COMPLEX AND WISH TO STREAMLINE AND MINIMIZE THE COST OF THE DISPUTE RESOLUTION PROCESS BY AGREEING TO WAIVE ITS RIGHT TO
JURY TRIAL. MAKER HEREBY VOLUNTARILY, KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
SUIT, PROCEEDING, OR COUNTERCLAIM THAT RELATES TO OR ARISES OUT OF ANY OF THE LOAN DOCUMENTS OR THE ACTS OR FAILURE TO ACT OF
OR BY MAKER IN THE ENFORCEMENT OF ANY OF THE TERMS OR PROVISIONS OF THIS DEED OF TRUST OR THE OTHER LOAN DOCUMENTS.

 

    31 

     

    

 

C.             Waiver
and Election. The exercise of any right or remedy by Noteholder shall not be considered as a waiver of any right or remedy
nor shall any acceptance by Noteholder of Maker's partial payment or partial performance of the obligations under the Note or
hereunder, nor shall any failure or delay by Noteholder in exercising any of its rights or remedies as to any Event of Default
which may occur, operate as a waiver by Noteholder of its rights or remedies with respect to the occurrence of any other or further
Event of Default or to the recurrence of the same Event of Default. The filing of a suit to foreclose the Deed of Trust granted
by this Deed of Trust, either on any matured portion of the Indebtedness or for the entirety of the Indebtedness, shall never
be considered an election so as to preclude foreclosure under power of sale after a dismissal of the suit; nor shall the filing
of the necessary notices for foreclosure, as provided in this Deed of Trust, preclude the exercise by Noteholder of any other
right or remedy including, without limitation, the prosecution of a later suit thereon.

 

D.             Landlord-Tenant
Relationship. Any foreclosure sale of the Mortgaged Property (in whole or in part) under this Deed of Trust or any conveyance
in lieu thereof shall, without further notice, establish the relationship of landlord and tenant at sufferance between the purchaser
and Maker and any person or entity claiming an interest in the Mortgaged Property through Maker or otherwise occupying any portion
of the Mortgaged Property, and upon failure to surrender possession thereof, Maker and all such persons and entities may be removed
by a writ of possession upon suit by the purchaser.

 

E.             Usury.
Notwithstanding any provision in this Deed of Trust to the contrary, it is expressly provided that in no event should
the aggregate amounts, which by applicable law are deemed to be interest with respect to this Deed of Trust, the Note or any
of the other Loan Documents ever exceed the Maximum Nonusurious Rate (as defined in the Note). In this connection, it is
expressly stipulated and agreed that it is the intention of Noteholder and Maker to contract in strict compliance with
applicable usury laws of the State of Texas and/or of the United States (whichever permits the higher rate of interest) from
time to time in effect. Nothing in this Deed of Trust, the Note or any other Loan Document shall ever be construed to create
a contract to pay, as consideration for the use, forbearance or detention of money, interest at a rate in excess of the
Maximum Nonusurious Rate. If under any circumstances the aggregate amounts contracted for, charged or paid with respect to
the Note, which by applicable law are deemed to be interest, would produce an interest rate greater than the Maximum
Nonusurious Rate, Maker and any other person obligated to pay the Note, stipulates that the amounts will be deemed to have
been paid, charged or contracted for as a result of an error on the part of Maker, any other such person obligated for the
payment of the Note and Noteholder, and upon discovery of the error or upon notice thereof from Maker or the party making
such payment, Noteholder or the party receiving such excess payment shall, at its sole option, refund the amount of such
excess payment or credit the excess payment against any other amount due under the Note. In addition, all sums paid or agreed
to be paid to the holder of the Note for the use, forbearance or detention of monies shall be, to the extent permitted by
applicable law, amortized, prorated, allocated and spread through the term of the Note. At all times, if any, as Title Four
of the Texas Finance Code, as amended (“Title Four”) or other applicable law shall establish the Maximum
Nonusurious Rate, then the Maximum Nonusurious Rate for purposes herein shall be the “weekly ceiling” (as
defined in Title Four or such other applicable law) from time to time in effect; provided, however, that Noteholder may at
any time and from time to time, as to current or future balances, implement any other ceiling under such Title Four or revise
the index, formula or the provisions of law used to compute the Maximum Nonusurious Rate by notice to Maker, if and to the
extent permitted by, in the manner in, such Title Four or other applicable law.

 

    32 

     

    

 

F.             Enforceability.
If any provision hereof is presently or at any time becomes invalid or unenforceable, the other provisions hereof shall remain
in full force and effect, and the remaining provisions hereof shall be construed in favor of Trustee and Noteholder to effectuate
the provisions hereof.

 

G.             Application
of Payments. If the trust or liens established by this Deed of Trust are invalid or unenforceable as to any part of the Indebtedness
or if such lien or liens are invalid or unenforceable as to any part of the Mortgaged Property, the unsecured or partially unsecured
portion of the Indebtedness shall be completely paid prior to the payment of the remaining and secured or partially secured portion
of the Indebtedness, and all payments made on the Indebtedness, whether voluntary or under foreclosure or other enforcement action
or procedures, shall be considered to have been first paid on and applied to the full payment of that portion of the Indebtedness
which is not secured or not fully secured by the lien or liens created herein.

 

H.             Meaning
of Particular Terms. Whenever used, the singular number shall include the plural, the plural the singular and the use of any
gender shall include all genders. The words “Maker” and “Noteholder” shall include their successors and assigns,
and the word “Trustee” shall include his or her successors and substitute trustees. For convenience of drafting, the
following groups of words, and derivations thereof, are used interchangeably and any reference to one or more shall include the
others notwithstanding anything seemingly to the contrary: (1) the words “act”, “omission” and “occurrence”
and (2) “instrument” and “document”.

 

I.              Advances
by Noteholder. If Maker shall fail to comply with the provisions with respect to the securing of insurance, payment of taxes,
assessments and other charges, the keeping of the Mortgaged Property in repair or any other term or covenant herein contained,
Noteholder may, but shall not be obligated to, incur such expenses as deemed necessary by Noteholder, and make advances to perform
such provisions, terms or covenants, and where necessary enter the Mortgaged Property for the purpose of performing same. Noteholder
is further empowered, but not obligated, to make advances for any expenditure deemed advisable by Noteholder for the preservation
of the Mortgaged Property or for the continuation of the operation thereof. Maker agrees to repay any and all sums so advanced
or expended, and all expenses incurred by Noteholder in connection with the exercise of any of its rights under this Deed of Trust,
upon demand, with interest from the date such advances or expenditures are made, determined on the same basis as matured principal
in the Note and all sums so advanced or expended, with interest, shall be secured hereby.

 

    33 

     

    

 

J.              Release
or Extension by Noteholder. Noteholder, with notice, may release any part of the Mortgaged Property or any person liable for
the Indebtedness without in any way affecting the trust or the liens hereof on any part of the Mortgaged Property not expressly
released and may agree in writing with any party with an interest in the Mortgaged Property to extend the time for payment of
all or any part of the Indebtedness or to waive the prompt and full performance of any term, condition or covenant of any document
securing, evidencing or relating to the Indebtedness.

 

K.            
Partial Payments. Acceptance by Noteholder of any payment of less than the amount due on the Indebtedness shall be deemed
acceptance on account only, and the failure to pay the entire amount then due shall be and continue to be a default herein; and
at any time thereafter and until the entire amount due on the Indebtedness has been paid, Noteholder shall be entitled to exercise
all rights conferred on it by the terms of this Deed of Trust upon the occurrence of such an Event of Default.

 

L.             Titles
not to be Considered. All section, subsection, paragraph or other titles contained in this Deed of Trust are for reference
purposes only and this Deed of Trust shall be construed without reference to said titles.

 

M.            Construction
of Deed of Trust. This Deed of Trust may be construed as a mortgage, deed of trust, chattel mortgage, fixture filing, conveyance,
assignment, security agreement, pledge, financing statement, hypothecation or contract or any one or more of them, in order to
fully effectuate the trust and lien hereof and the purposes and agreements herein set forth.

 

N.            Additional
Taxes and Indemnification. Maker agrees that if any state, federal or municipal government, or any of its subdivisions having
jurisdiction, shall levy, assess or charge any tax, assessment or imposition upon this Deed of Trust or the credit or indebtedness
secured hereby or the Note or the interest of Noteholder in the Mortgaged Premises or upon Noteholder by reason of any of the
foregoing (excepting therefrom any income tax on interest payments on the principal portion of the Indebtedness secured hereby),
then Maker shall pay all such taxes to or for Noteholder as they become due and payable, and provided further that in the event
of passage of any law or regulation permitting, authorizing or requiring the tax, assessment or imposition to be levied, assessed
or charged, which law or regulation prohibits Maker from paying the tax, assessment or imposition, to or for Noteholder, then
all sums hereby secured shall become immediately due and payable at the option of Noteholder. Maker agrees to exhibit to Noteholder
at any time upon request, official receipts showing payment of all taxes, assessments and charges which Maker is required or elects
to pay hereunder. Maker agrees that if the government of the United States or any department or bureau thereof shall at any time
require revenue stamps to be affixed to the Note or this Deed of Trust, Maker will upon demand pay for stamps in the required
amount and deliver them to Noteholder and Maker agrees to INDEMNIFY and HOLD HARMLESS Noteholder from and against any and all
losses, damages, liabilities or expenses (including, without limitation, reasonable attorneys' fees and investigatory expenses)
on account of such revenue stamps, whether such loss, damage, liability or expense arises before or after payment of the Note
and any termination of the estate created by this Deed of Trust whether as a result of the exercise by Noteholder of any default
remedies available to it at law or in equity or otherwise; SUCH INDEMNIFICATION AND AGREEMENT TO HOLD HARMLESS SPECIFICALLY INCLUDES
ANY LOSS, DAMAGE, EXPENSE OR LIABILITY CAUSED BY OR ATTRIBUTABLE TO THE STRICT LIABILITY OR THE ORDINARY OR SIMPLE NEGLIGENCE,
AS OPPOSED TO THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, OF AN INDEMNITEE, but such INDEMNIFICATION and AGREEMENT TO HOLD HARMLESS
shall not apply to the extent that such loss, damage, expense or liability is caused by or attributable to Noteholder's gross
negligence or willful misconduct.

 

    34 

     

    

 

0.
           INDEMNIFICATION. MAKER AGREES TO INDEMNIFY AND HOLD
HARMLESS NOTEHOLDER FROM AND AGAINST ANY AND ALL LOSSES, DAMAGES AND EXPENSES, INCLUDING, WITHOUT LIMITATION, REASONABLE ATTORNEYS'
FEES AND INVESTIGATORY EXPENSES, INCURRED IN CONNECTION WITH ANY SUIT OR PROCEEDING IN OR TO WHICH NOTEHOLDER MAY BE MADE A PARTY
FOR THE PURPOSE OF PROTECTING THE TRUST AND LIEN OF THIS AGREEMENT, INCLUDING LOSSES, DAMAGES AND EXPENSES RESULTING FROM NOTEHOLDER'S
STRICT LIABILITY OR NEGLIGENCE, EXCEPT TO THE EXTENT CAUSED BY THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF NOTEHOLDER. Maker's
obligations pursuant to the foregoing indemnification and agreement to hold harmless shall survive any termination of the trust
or estate established by this Deed of Trust, whether as a result of the exercise by Noteholder of any default remedies available
to it at law or in equity or otherwise.

 

P.             Additional
Documents. Maker agrees that upon request of Noteholder Maker shall execute, acknowledge and deliver all such additional documents
and further assurances of title and will do or cause to be done all such further acts and things as may be necessary to fully
effectuate the intent of this Deed of Trust. Maker within ten (10) days upon request in person or by mail will furnish a duly
acknowledged written statement setting forth the amount of the debt secured by this Deed of Trust, the date to which interest
has been paid and stating either that no offsets or defenses exist against the debt secured hereby, or, if such offsets or defenses
are alleged to exist, the nature thereof.

 

Q.            Disclosure.
Maker agrees to disclose to Noteholder upon request, the then ownership of the beneficial interest in any trust which
then holds legal title to the Mortgaged Property and shall cause the owner(s) of such beneficial interest to furnish
sufficient evidence to Noteholder for it to determine the identity of all of the parties which compose such
owner(s).

 

R.             Subrogation.
In the event that the Note is given for money advanced in the payment of a sum owing upon another note or indebtedness,
Maker hereby acknowledges that it has requested and does hereby request Noteholder to advance the money necessary to pay such
Note or Indebtedness, whether or not a release or transfer of said other note or indebtedness has been or will be executed by
the owner and holder thereof, and Maker hereby agrees that Noteholder and Noteholder's successors and assigns shall be, and
are hereby, subrogated to any and all of the rights, liens, remedies, equities, superior title and benefits held, owned,
possessed or enjoyed at any time by any owner or holder of said other note or indebtedness, to secure payment to Noteholder
of the Note hereby secured and, accordingly, any such other note and indebtedness, and all liens securing same are hereby
extended to the maturity date of the Note hereby secured in order to additionally secure such Note. Nothing in this Section
11(Q) shall alter any obligation of Maker hereunder or under the Note.

 

    35 

     

    

 

S.             Time.
Time is of the essence of this Deed of Trust.

 

T.             Multiple
Counterparts. This Deed of Trust may be executed in multiple counterparts, each of which shall be an original document and
which, taken together, shall constitute one and the same agreement.

 

U.             Governing
Law. THIS DEED OF TRUST AND THE OTHER LOAN DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER
SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS (WITHOUT GIVING
EFFECT TO TEXAS' PRINCIPLES OF CONFLICTS OF LAW), EXCEPT TO THE EXTENT (a) OF PROCEDURAL AND SUBSTANTIVE MATTERS RELATING ONLY
TO THE CREATION, PERFECTION, FORECLOSURE AND ENFORCEMENT OF RIGHTS AND REMEDIES AGAINST THE MORTGAGED PROPERTY, WHICH MATTERS
SHALL BE GOVERNED BY THE LAWS OF THE STATE IN WHICH THE MORTGAGED PROPERTY IS LOCATED (“APPLICABLE STATE LAW”), AND
(b) THAT THE LAWS OF THE UNITED STATES OF AMERICA AND ANY RULES, REGULATIONS, OR ORDERS ISSUED OR PROMULGATED THEREUNDER, APPLICABLE
TO THE AFFAIRS AND TRANSACTIONS ENTERED INTO BY NOTEHOLDER, OTHERWISE PREEMPT APPLICABLE STATE LAW OR VIRGINIA LAW; IN WHICH EVENT
FEDERAL LAW SHALL CONTROL.

 

V.             Notices.
All notices required to be given hereunder shall be in writing and shall be deemed served and received on the date of deposit
in United States mail and sent certified mail, return receipt requested, postage prepaid, and addressed to the applicable party
at the addresses specified in the introductory paragraph of this Deed of Trust, or such other addresses as may from time to time
be designated by written notice given as herein required. The parties hereto agree that a single notice sent to Maker at its address
set forth herein (or designated in accordance with this Section 11(T)) shall be deemed notice to all parties constituting
Maker. Personal delivery to a party or to any officer, trustee, partner, agent or employee of such party at its address herein
shall constitute receipt. Rejection or other refusal to accept or inability to deliver because of changed address of which no
notice has been received shall also constitute receipt. Notwithstanding the foregoing, no notice of change of address shall be
effective until thirty (30) days after the date of receipt thereof

 

W.           Deficiency
Statute. To the maximum extent permitted by law, the following shall be the basis for the finder of fact's determination of
the fair market value of the Mortgaged Premises as of the date of the foreclosure sale in proceedings governed by Sections 51.003,
51.004 and 51.005 of the Texas Property Code (as amended from time to time): (1) the Mortgaged Premises shall be valued in an
“as is” “where is” and “with all faults” condition as of the date of the foreclosure sale,
without any assumption or expectation that the Mortgaged Premises will be repaired or improved in any manner before a resale of
the Mortgaged Premises after foreclosure; (2) the valuation shall be based upon an assumption that the foreclosure purchaser desires
a resale of the Mortgaged Premises for cash promptly (but no later than twelve (12) months) following the foreclosure sale; (3)
all reasonable closing costs customarily borne by seller in commercial real estate transactions should be deducted from the gross
fair market value of the Mortgaged Premises, including, without limitation, brokerage commissions, title insurance, a survey of
the Mortgaged Premises, tax prorations, attorneys' fees, and marketing costs; (4) the gross fair market value of the Mortgaged
Premises shall be further discounted to account for any estimated holding costs associated with maintaining the Mortgaged Premises
pending sale, including, without limitation, utilities expenses, property management fees, taxes and assessments (to the extent
not accounted for in item (3) above), and other maintenance, operational and ownership expenses; and (5) any expert opinion testimony
given or considered in connection with a determination of the fair market value of the Mortgaged Premises must be given by persons
having at least five (5) years experience in appraising property similar to the Mortgaged Premises and who have conducted and
prepared a complete written appraisal of the Mortgaged Premises taking into consideration the factors set forth above.

 

    36 

     

    

 

X.            COLLATERAL
PROTECTION INSURANCE NOTICE.

 

PURSUANT
TO THE COLLATERAL PROTECTION INSURANCE NOTICE PROVISIONS OF TEXAS FINANCE CODE, SECTION 307.052, and without limiting any of Maker's
obligations in Section VI.C. or elsewhere in this Deed of Trust:

 

(a)           MAKER
IS REQUIRED UNDER THIS DEED OF TRUST:

 

(i)            TO
KEEP THE MORTGAGED PROPERTY INSURED AGAINST DAMAGE IN THE AMOUNTS SPECIFIED BY NOTEHOLDER IN SECTION 6.3 HEREOF;

 

(ii)          
TO PURCHASE THE INSURANCE FROM AN INSURER THAT IS FULLY LICENSED AND AUTHORIZED TO DO BUSINESS IN THE STATE OF TEXAS; AND

 

(iii)     
    TO NAME NOTEHOLDER AS THE PERSON TO BE PAID UNDER THE POLICY IN THE EVENT OF A LOSS;

 

(b)           MAKER
SHALL, IF REQUESTED BY NOTEHOLDER, DELIVER TO NOTEHOLDER A COPY OF THE POLICY AND PROOF OF THE PAYMENT OF PREMIUMS; AND

 

(c)            IF
MAKER FAILS TO MEET ANY REQUIREMENT LISTED IN PARAGRAPHS (a) OR (b) OF THIS SECTION, NOTEHOLDER MAY OBTAIN COLLATERAL PROTECTION
INSURANCE ON BEHALF OF MAKER AT MAKER'S EXPENSE.

 

X.            CONSENT
TO JURISDICTION. TO INDUCE NOTEHOLDER TO MAKE THE LOAN AS EVIDENCED BY THE NOTE, MAKER IRREVOCABLY AGREES THAT, SUBJECT
TO NOTEHOLDER'S SOLE AND ABSOLUTE ELECTION, ANY RECEIVERSHIP, OTHER ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATED TO THIS
DEED OF TRUST WHICH ARE REQUIRED TO BE LITIGATED IN THE STATE IN WHICH THE MORTGAGED PROPERTY IS LOCATED, WILL BE LITIGATED
IN COURTS HAVING SITUS IN THE COUNTY IN WHICH THE MORTGAGED PROPERTY IS LOCATED AND ALL OTHER ACTIONS SHALL BE LITIGATED IN
COURTS HAVING SITUS IN HARRIS COUNTY, TEXAS. EXCEPT FOR ACTIONS REQUIRING LITIGATION IN THE COUNTY IN WHICH THE MORTGAGED
PROPERTY IS LOCATED, MAKER HEREBY CONSENTS AND SUBMITS TO THE JURISDICTION OF ANY COURT LOCATED WITHIN HARRIS COUNTY, TEXAS,
WAIVES PERSONAL SERVICE OF PROCESS UPON MAKER, AND AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY REGISTERED MAIL
DIRECTED TO MAKER AT THE ADDRESS STATED HEREIN.

 

    37 

     

    

 

Y.             Conditional
Recourse Limitations. Without limiting in any way the obligations of Guarantor under the Guaranty and except as provided in
the Guaranty, Noteholder's sole recourse against Maker shall be against the Mortgaged Property described in this Deed of Trust
and such other Loan Documents, and Noteholder shall not be entitled to recover any deficiency judgment against Maker if the foreclosure
or recovery of such Mortgaged Property is not sufficient to pay the amount owed by Maker. Notwithstanding the foregoing limitation
of liability, Maker shall be fully liable for (a) the amount of any loss or damages suffered by Noteholder as a result of fraud
or material misrepresentation made by Maker in connection with the Note or any document securing, evidencing or relating to the
payment of the Note or the apparent purpose of which is to deprive Noteholder of the security for the Note; (b) failure to pay
when due taxes, assessments, charges for labor or materials or any other charges which can create liens on any portion of the
Mortgaged Property (less any money held by Noteholder in an escrow account established as a reserve for such payment); (c) the
amount of any loss or damages suffered by Noteholder as a result of the misapplication of (i) proceeds of insurance covering any
portion of the Mortgaged Property, (ii) proceeds of the sale or condemnation of any portion of the Mortgaged Property or (iii)
rentals and security deposits received by or on behalf of Maker subsequent to the date on which Noteholder gives written notice
of the posting of foreclosure notices or the exercise of Noteholder's assignment of rents; (d) failure to maintain, repair or
restore the Mortgaged Property in accordance with any document securing, evidencing or relating to the payment of the Note (less
any money held by Noteholder in an escrow account established as a reserve for such payment); (e) for any act or omission knowingly
or intentionally committed or permitted by Maker which results in the material waste, damage or destruction to the Mortgaged Property,
but only to the extent such events are not covered by insurance proceeds which are received by Noteholder; (f) the return to Noteholder
of all unearned advance rentals and security deposits paid by tenants of the Mortgaged Property or any guarantors of the leases
of such tenants which are not rightfully refunded to or which are forfeited by such tenants or guarantors; (g) the return of,
or reimbursement for Maker's personal property taken from the Mortgaged Property by or on behalf of Maker; (h) any liability of
Maker pursuant to the provision contained in this Deed of Trust pertaining to hazardous or toxic materials or substances; (i)
any liability of Maker pursuant to the Certificate and Indemnity Regarding Hazardous Substances executed by Maker and delivered
to Noteholder in connection with the indebtedness evidenced by the Note; (j) any damages, liabilities, costs and expenses incurred
by Noteholder due to any intentional delay caused by Maker in deeding over the Mortgaged Property to Noteholder or failure to
cooperate in a consensual foreclosure within ninety (90) days of Noteholder's request; (k) the amount of any loss or damage suffered
by Noteholder as a result of the failure to maintain or alter the Mortgaged Property in compliance with the ADA; and (1) for any
and all court costs and reasonable attorneys' fees incurred in connection with the enforcement of one or more of the above items
(a) through (k), inclusive.

 

[REMAINDER
OF PAGE INTENTIONALLY BLANK.]

 

    38 

     

    

  

IN
WITNESS WHEREOF, Maker has executed and delivered this Deed of Trust, Security Agreement and Financing Statement on the date set
forth in the acknowledgment below, to be effective as of date first written above.

 

	 	MAKER:	 
	 	 	 	 
	 	RI
    II MC-HOU, LLC,	 
	 	a
    Delaware limited liability company	 
	 	 	 	 
	 	By:	/s/
    Brett C. Moody	 
	 	Name:	Brett
    C. Moody	 
	 	Title:	President	 

 

THE
STATE OF TEXAS

COUNTY OF HARRIS

 

BEFORE
me, the undersigned Notary Public, on this day personally appeared Brett C. Moody, the President of RI II MC-HOU, LLC, a Delaware
limited liability company, known to me to be the person whose name is subscribed to the foregoing instrument and acknowledged
to me that he executed the same for the purposes and consideration therein expressed on behalf of said limited liability company.

 

Given
under my hand and seal of office this 5th day of September, 2017.

 

NOTARY
PUBLIC – State of Texas

 

Signature/Notary Page to Deed of Trust, Security Agreement
and Financing Statement 

 

     

     

    

 

EXHIBIT
A

 

Mortgaged
Premises

 

Unrestricted
Reserve “A”, in Block 1, of RESIDENCE INN MEDICAL CENTER, in Harris County, Texas, according to the map or plat thereof,
recorded under Film Code No. 674452, of the Map Records of Harris County, Texas.

 

Exhibit A Deed of Trust, Security Agreement and Financing Statement 

 

     

     

    

 

EXHIBIT
B

 

Permitted
Exceptions 

 

1.           
Restrictive Covenants as set forth in Film Code No. 674452, of the Map Records of Harris County, Texas.

 

2.            The
following matters reflected on the recorded plat filed under Film Code No. 674452, of the Map Records of Harris County, Texas:

 

		(a)	An
                                         easement for drainage purposes extending 15 feet on each side of the centerline of all
                                         natural drainage courses.

 

		(b)	Building
                                         set back line(s) 25 feet in width along the front property line.

 

		(c)	Houston
                                         Lighting and Power Company easement, 10 feet in width along the Southeasterly property
                                         line, together with an aerial easement 5 feet wide from a plane 20 feet above the ground
                                         attached thereto; and as set out in instrument(s), filed under Harris County Clerk's
                                         File No(s). D953829.

 

Exhibit B Deed of Trust, Security Agreement and Financing Statement

 

     

     

    

 

EXHIBIT
C

 

Foiifi
of Annual Detailed Listing of Tenants and Lease and Rental Information

 

(This
form must be submitted with each loan application except where entire property is owner-occupied.)

 

	Loan
    Application of:	 	 	Property
    Address :	 	 
	 	 	 	 	 	 

 

	Name
    of Lessee or Tenant and guarantor, if any (Where applicable, list national tenants first, then regional then local.)	Type
    of Business	Date
    Lease Expires	Guaranteed
    Minimum Annual Rent	Actual
    Annual Overage Rent (If any)	Number
    of Sq. Ft. Leased	Guaranteed
    Rent per Sq. Ft.	Has
    Lease Been Signed?
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	Total	 	 	 	 	 	 	 

 

Number
of units not leased____ . Total square feet not leased _____ . Do tenants pay any part of expenses?_____ (Explain if yes).

 

Remarks:
_______________________________________________________________________________________ 

 

The
above information is correct and this information is to be made a part of our mortgage loan application. We agree to assign all
of the above leases and any additional leases to American National Insurance Company as additional security.

 

	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	Date:
    	 	20			By:	 
	 	 	 	 	 	President	 

 

Exhibit C Deed of Trust, Security Agreement and Financing Statement

 

     

     

    

 

RP-2017-405008

#
Pages 44

09/13/2017
01:50 PM

e-Filed
& e-Recorded in the

Official
Public Records of

HARRIS
COUNTY

STAN
STANART

COUNTY
CLERK

Fees
$184.00

 

RECORDERS
MEMORANDUM

This
instrument was received and recorded electronically and any blackouts, additions or changes were present at the time the instrument
was filed and recorded.

 

Any
provision herein which restricts the sale, rental, or use of the described real property because of color or race is invalid and
unenforceable under federal law. THE STATE OF TEXAS

COUNTY
OF HARRIS

I
hereby certify that this instrument was FILED in File Number Sequence on the date and at the time stamped hereon by me; and was
duly RECORDED in the Official Public Records of Real Property of Harris County, Texas.MOODY NATIONAL REIT II, INC. 8-K

EXHIBIT 10.10

 

 

PROMISSORY NOTE

 

		$22,550,000.00	April 29, 2019

 

FOR VALUE RECEIVED,
MOODY NATIONAL OPERATING PARTNERSHIP II, LP, a Delaware limited partnership (“Borrower”), hereby promises to
pay to the order of RI II MC-HOU, LLC, a Delaware limited liability company (together with any and all of its successors and assigns
and/or any other holder of this Note, “Lender”), without offset, in immediately available funds in lawful money
of the United States of America, the principal sum of TWENTY-TWO MILLION FIVE HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS ($22,550,000.00)
(or the unpaid balance of all principal advanced against this Note, if that amount is less), together with interest on the unpaid
principal balance of this Note from day to day outstanding as hereinafter provided.

 

Section 1.                Payment
Schedule and Maturity Dates. Principal and interest on this Note shall be payable as follows:

 

(a)       On
April 29, 2019, Borrower shall pay $7,824,082.00 toward the principal sum.

 

(b)       Beginning
on May 15, 2019 and occurring on the 15th day of each month thereafter through and including October 15, 2019, Borrower shall pay
$2,000,000.00.

 

(c)       The
entire principal balance of this Note then unpaid, together with all accrued and unpaid interest and all other amounts payable
hereunder, shall be due and payable in full on December 15, 2019 (the “Maturity Date”).

 

Section 2.                Interest Rate. Interest on
the outstanding principal balance of, and all other sums owing under this Note, which are not past due, shall accrue and be
payable at a per annum rate which is equal to the lesser of (i) the Maximum Lawful Rate (as defined below), or (ii) the Note
Rate (as defined below). Interest shall be computed for the actual number of days which have elapsed, on the basis of a
360-day year. The term “Note Rate” shall mean three percent (3.00%) per annum. The term “Maximum
Lawful Rate” shall mean the maximum lawful rate of interest which may be contracted for, charged, taken, received
or reserved by Lender in accordance with the applicable laws of the State of Texas (or applicable United States federal law
to the extent that such law permits Lender to contract for, charge, take, receive or reserve a greater amount of interest
than under Texas law). If any amount payable by Borrower hereunder is not paid when due, such amount shall thereafter bear
interest at the Past Due Rate (as defined below) to the fullest extent permitted by applicable law. Accrued and unpaid
interest on past due amounts (including interest on past due interest) shall be due and payable on demand, at a rate per
annum (the “Past Due Rate”) equal to the lesser of (y) eighteen percent (18%), or (z) the Maximum Lawful
Rate.

 

Section
3.               Prepayment. Upon five
(5) days advanced written notice to Lender, Borrower may prepay all or any portion of the principal amount of this Note
without penalty. In connection with any such prepayment of principal, Borrower acknowledges and agrees that interest
shall always be calculated and paid through the last day of the month in which the prepayment occurs. Any prepayments shall
be applied to amounts owed under this Note in the order set forth in Section 5 below.

 

Section
4.                Late Charges. If Borrower shall fail to make any payment under the terms of this Note (other than the payment
due at maturity) within five (5) days after the date such payment is due, Borrower shall pay to Lender on demand a late
charge equal to five percent (5%) of the amount of such payment. Such five (5) day period shall not be construed as in any
way extending the due date of any payment or the Maturity Date. The late charge is imposed for the purpose of defraying the
expenses of Lender incident to handling such delinquent payment. This charge shall be in addition to, and not in lieu of, any
other amount that Lender may be entitled to receive or action that Lender may be authorized to take as a result of such late
payment.

 

    

    

    

 

Section
5.                Certain Provisions
Regarding Payments. All payments on this Note shall, at the sole option of Lender, be applied at any time and from time
to time and in any order, to the following: (a) the payment or reimbursement of any expenses, late charges, costs or
obligations (other than the principal hereof and interest hereon) for which Borrower shall be obligated or Lender entitled
pursuant to the provisions hereof, (b) the payment of accrued but unpaid interest hereon, and (c) the payment of all or any
portion of the principal balance then outstanding hereunder. Remittances shall be made without offset, demand, counterclaim,
deduction, or recoupment (each of which is hereby waived) and shall be accepted subject to the condition that any check or
draft may be handled for collection in accordance with the practice of the collecting bank or banks. Acceptance by Lender of
any payment in an amount less than the amount then due on any indebtedness shall be deemed an acceptance on account only,
notwithstanding any notation on or accompanying such partial payment to the contrary, and shall not in any way (a) waive or
excuse the existence of an Event of Default (as hereinafter defined), (b) waive, impair or extinguish any right or remedy
available to Lender hereunder, or (c) waive the requirement of punctual payment and performance or constitute a novation in
any respect. Payments received after 2:00 p.m. shall be deemed to be received on, and shall be posted as of, the following
Business Day. Whenever any payment under this Note falls due on a day which is not a Business Day, such payment may be made
on the next succeeding Business Day.

 

Section 6.                Events of Default. The occurrence
of any one or more of the following shall constitute an “Event of Default” under this Note:

 

(a)           Borrower fails to pay when and as due and payable any amounts payable by Borrower
to Lender under the terms of this Note.

 

(b)           Borrower
fails to timely perform, observe or keep any covenant, agreement or condition in this Note and (other than a monetary payment under
(a) above) and such failure continues uncured for a period of thirty (30) days after notice from Lender to Borrower.

 

Section 7.                Remedies. Upon the
occurrence of an Event of Default, Lender may at any time thereafter exercise any one or more of the following rights, powers
and remedies:

 

(a)           Lender
may accelerate the Maturity Date and declare the unpaid principal balance and accrued but unpaid interest on this Note, and all
other amounts payable hereunder, at once due and payable, and upon such declaration the same shall at once be due and payable.

 

(b)           Lender
may set off the amount due against any and all accounts, credits, money, securities or other property now or hereafter on deposit
with, held by or in the possession of Lender to the credit or for the account of Borrower, without notice to or the consent of
Borrower.

 

(c)           Lender
may exercise any of its other rights, powers and remedies at law or in equity.

 

Section 8.               Remedies Cumulative. All
of the rights and remedies of Lender under this Note are cumulative of each other and of any and all other rights at law or
in equity, and the exercise by Lender of any one or more of such rights and remedies shall not preclude the simultaneous or
later exercise by Lender of any or all such other rights and remedies. No single or partial exercise of any right or remedy
shall exhaust it or preclude any other or further exercise thereof, and every right and remedy may be exercised at any time and from time to
time. No failure by Lender to exercise, nor delay in exercising, any right or remedy shall operate as a waiver of such right or
remedy or as a waiver of any Event of Default.

 

    

    

    

 

Section 9.                Costs and Expenses of
Enforcement. Borrower agrees to pay to Lender on demand all reasonable costs and expenses incurred by Lender in seeking
to collect this Note, including court costs and reasonable attorneys’ fees and expenses, whether or not suit is filed
hereon, or whether in connection with bankruptcy, insolvency or appeal. Nothing in this Note shall affect the right of Lender
to serve process in any manner otherwise permitted by law and nothing in this Note will limit the right of Lender otherwise
to bring proceedings against Borrower in the courts of any jurisdiction or jurisdictions.

 

Section 10.             Heirs, Successors and
Assigns. The terms of this Note shall bind and inure to the benefit of the heirs, devisees, representatives, successors
and assigns of the parties. The foregoing sentence shall not be construed to permit Borrower to assign the Note.

 

Section 11.              General Provisions. Time
is of the essence with respect to Borrower’s obligations under this Note. If more than one person or entity executes
this Note as Borrower, all of said parties shall be jointly and severally liable for payment of the indebtedness evidenced
hereby. Borrower and each party executing this Note as Borrower hereby severally (a) waive demand, presentment for payment,
notice of dishonor and of nonpayment, protest, notice of protest, notice of intent to accelerate, notice of acceleration and
all other notices (except any notices which are specifically required by this Note), filing of suit and diligence in
collecting this Note or enforcing any of the security herefor; (b) agree to any substitution, subordination, exchange or
release of any such security or the release of any party primarily or secondarily liable hereon; (c) agree that Lender shall
not be required first to institute suit or exhaust its remedies hereon against Borrower or others liable or to become liable
hereon or to perfect or enforce its rights against them or any security herefor; (d) consent to any extensions or
postponements of time of payment of this Note for any period or periods of time and to any partial payments, before or after
maturity, and to any other indulgences with respect hereto, without notice thereof to any of them; and (e) submit (and waive
all rights to object) to non-exclusive personal jurisdiction of any state or federal court sitting in the state and county in
which payment of this Note is to be made for the enforcement of any and all obligations under this Note; (f) waive the
benefit of all homestead and similar exemptions as to this Note; (g) agree that their liability under this Note shall not be
affected or impaired by any determination that any title, security interest or lien taken by Lender to secure this Note is
invalid or unperfected; and (h) hereby subordinate any and all rights against Borrower and any security for the payment of
this Note, whether by subrogation, agreement or otherwise, until this Note is paid in full. A determination that any
provision of this Note is unenforceable or invalid shall not affect the enforceability or validity of any other provision and
the determination that the application of any provision of this Note to any person or circumstance is illegal or
unenforceable shall not affect the enforceability or validity of such provision as it may apply to other persons or
circumstances. This Note may not be amended except in a writing specifically intended for such purpose and executed by the
party against whom enforcement of the amendment is sought. Captions and headings in this Note are for convenience only and
shall be disregarded in construing it. This Note and its validity, enforcement and interpretation shall be governed by the
laws of the State of Texas (without regard to any principles of conflicts of laws) and applicable United States federal law.
Whenever a time of day is referred to herein, unless otherwise specified such time shall be the local time of the place where
payment of this Note is to be made. The term “Business Day” shall mean any day other than a Saturday,
Sunday or other day on which commercial banks are authorized to close under the Laws of Texas. The words
“include” and “including” shall be interpreted as if followed by the words “without
limitation.”

 

    

    

    

 

Section 12.              No Usury. Interest on the
debt evidenced by this Note will not exceed the maximum rate or amount of nonusurious interest that may be contracted for,
taken, reserved, charged, or received under law. Any interest in excess of that maximum amount will be credited on the unpaid
principal of this Note, if the principal has been paid, refunded. On any acceleration or required or permitted prepayment,
any excess interest will be cancelled automatically as of the acceleration or prepayment or, if the excess interest has
already been paid, credited on the principal or, if the principal has been paid, refunded. This provision overrides any
conflicting provisions in this Note. Borrower hereby agrees that as a condition precedent to any claim seeking usury remedies
or penalties against Lender, Borrower will provide written notice to Lender, advising Lender in reasonable detail of the
nature and amount of the violation and Lender shall have sixty days after receipt of such notice in which to correct such
usury violation, if any, by either refunding such excess interest to Borrower or crediting such excess interest against the
Note then owing by Borrower to Lender. To the extent that Lender is relying on Chapter 303 of the Texas Finance Code to
determine the Maximum Lawful Rate payable on the Note or any other portion of the Indebtedness, Lender will utilize the
weekly ceiling from time to time in effect as provided in such Chapter 303, as amended. To the extent United States federal
law permits Lender to contract for, charge, take, receive or reserve a greater amount of interest than under Texas law,
Lender will rely on United States federal law instead of such Chapter 303 for the purpose of determining the Maximum Lawful
Rate. Additionally, to the extent permitted by applicable law now or hereafter in effect, Lender may, at its option and from
time to time, utilize any other method of establishing the Maximum Lawful Rate under such Chapter 303 or under other
applicable law by giving notice, if required, to Borrower as provided by applicable law now or hereafter in effect. In no
event shall the provisions of Chapter 346 of the Texas Finance Code (which regulates certain revolving credit loan accounts
and revolving triparty accounts) apply to the Note.

 

16.       Further
Assurances and Corrections. From time to time, at the request of Lender, Borrower will (i) promptly correct any defect, error
or omission which may be discovered in the contents of this Note or in the execution or acknowledgement thereof; (ii) execute,
acknowledge, deliver, record and/or file (or cause to be executed, acknowledged, delivered, recorded and/or filed) such further
documents and instruments (including, without limitation, further deeds of trust, security agreements, financing statements, continuation
statements and assignments of rents) and perform such further acts and provide such further assurances as may be necessary, desirable,
or proper, in Lender’s opinion, (A) to carry out more effectively the purposes of this Note and the transactions contemplated
hereunder, (B) to confirm the rights created under this Note, and (C) to protect and further the validity, priority and enforceability
of this Note; and (iii) pay all costs in connection with any of the foregoing.

 

17.       Rate
Change for Failure to Provide Financial Information. Borrower shall provide Lender from time to time with current financial
information for Borrower, as such financial information is reasonably requested by Lender. in the event Borrower shall fail to
provide such financial information to Lender whether pursuant to a request from Lender, Borrower and Lender acknowledge and agree
that the Note Rate shall increase by one percent (1.00%).

 

18.       Debtor
and Creditor Relationship. Notwithstanding any prior business or personal relationship between Borrower and Lender, or any
officer, director or employee of Lender that may exist or have existed, the relationship between Borrower and Lender is solely
that of debtor and creditor, Lender has no fiduciary or other special relationship with Borrower, Borrower and Lender are not partners
or joint venturers, and no term or condition of this Note shall be construed so as to deem the relationship between Borrower and
Lender to be other than that of debtor and creditor.

 

APPLICABLE
LAW. THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS AND ANY APPLICABLE LAWS
OF THE UNITED STATES OF AMERICA.

 

    

    

    

WAIVER OF JURY TRIAL.
BORROWER AND LENDER (BY ACCEPTANCE OF THIS NOTE) WAIVE TRIAL BY JURY IN RESPECT TO ANY DISPUTE AND ANY ACTION ON SUCH DISPUTE.
THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE BY BORROWER AND LENDER, AND BORROWER AND LENDER HEREBY REPRESENT THAT
NO REPRESENTATIONS OF FACT OR OPINION HAVE BEEN MADE BY ANY PERSON OR ENTITY TO INDUCE THIS WAIVER OF TRIAL BY JURY OR TO IN ANY
WAY MODIFY OR NULLIFY ITS EFFECT. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES ENTERING INTO THIS NOTE. BORROWER AND
LENDER ARE EACH HEREBY AUTHORIZED TO FILE A COPY OF THIS SECTION IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER OF JURY
TRIAL. BORROWER FURTHER REPRESENTS AND WARRANTS THAT IT HAS BEEN REPRESENTED IN THE SIGNING OF THIS NOTE AND IN THE MAKING OF THIS
WAIVER BY INDEPENDENT LEGAL COUNSEL, OR HAS HAD THE OPPORTUNITY TO BE REPRESENTED BY INDEPENDENT LEGAL COUNSEL SELECTED OF ITS
OWN FREE WILL, AND THAT IT HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.

 

BALLOON PAYMENT.
THIS NOTE IS PAYABLE IN FULL ON DECEMBER 15, 2019 . YOU MUST REPAY THE ENTIRE PRINCIPAL BALANCE OF THE NOTE AND UNPAID ACCRUED
INTEREST THEN DUE. THE LENDER IS UNDER NO OBLIGATION TO REFINANCE THE NOTE AT THAT TIME. YOU WILL, THEREFORE, BE REQUIRED TO MAKE
PAYMENT OUT OF OTHER ASSETS YOU MAY OWN, OR YOU WILL HAVE TO FIND A LENDER WILLING TO LEND YOU THE MONEY AT PREVAILING MARKET RATES,
WHICH MAY BE CONSIDERABLY HIGHER OR LOWER THAN THE INTEREST RATE ON THIS NOTE. IF YOU REFINANCE THIS NOTE AT MATURITY, YOU MAY
HAVE TO PAY SOME OR ALL CLOSING COSTS NORMALLY ASSOCIATED WITH A NEW LOAN EVEN IF YOU OBTAIN REFINANCING FROM THE SAME LENDER.

 

ENTIRE AGREEMENT.
THIS NOTE CONTAINS THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS
OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES.

 

(remainder of page intentionally left blank;
signature page follows)

 

    

    

    

 

IN WITNESS WHEREOF,
Borrower has duly executed this Note under seal as of the date first above written.

 

	 	BORROWER:
	 	 	 
	 	MOODY NATIONAL OPERATING PARTNERSHIP II, LP, a Delaware limited partnership
	 	 	 
	 	By: Moody National REIT II, Inc., a Maryland corporation, its general partner
	 	 	 
	 	By:	/s/ Brett C. Moody
	 	Name:   Brett C. Moody
	 	Title:     CEO

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