Document:

Moody National REIT II, Inc. 8-K

 

Exhibit
10.11 

 

 

SPRINGHILL
SUITES BY MARRIOTT

RELICENSING
FRANCHISE AGREEMENT

 

	FRANCHISOR:	MARRIOTT INTERNATIONAL, INC.
	 	 
	FRANCHISEE:	MOODY NATIONAL YALE-SEATTLE MT, LLC
	 	 
	LOCATION:	1800 YALE AVENUE, SEATTLE, WA 98101

 

DATE: MAY
24, 2016

 

 

    

     

    

 

TABLE
OF CONTENTS

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

 

    i

     

    

 

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

 

    ii

     

    

 

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

 

    iii

     

    

 

RELICENSING
FRANCHISE AGREEMENT

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

RECITALS

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

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

C.            Guarantor
will provide the Guaranty.

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

1.            LICENSE

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

1.2          Franchisor’s
Reserved Rights.

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

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

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

2.            TERM

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

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

3.            FEES,
CHARGES AND COSTS

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

    

     

    

 

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

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

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

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

3.6          Timing
of Payments and Performance of Services.

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

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

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

    2

     

    

4.            HOTEL
CONSTRUCTION, RENOVATION AND MAINTENANCE

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

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

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

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

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

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

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

    3

     

    

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

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

5.            FURNITURE,
FIXTURES, EQUIPMENT, INVENTORIES AND SUPPLIERS

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

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

6.            ADVERTISING
AND MARKETING; PRICINGS, RATES AND RESERVATIONS

6.1          Franchisee’s
Local Advertising and Marketing Programs.

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

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

    4

     

    

6.2          Marketing
Fund.

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

1.          brand
strategy and brand development activities;

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

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

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

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

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

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

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

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

    5

     

    

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

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

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

6.4          Pricing,
Rates and Reservations.

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

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

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

    6

     

    

7.            ELECTRONIC
SYSTEMS

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

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

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

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

8.            HOTEL
OPERATIONS

8.1          Operator
of the Hotel.

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

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

    7

     

    

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

8.2          Employees.

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

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

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

8.3          Compliance
with the Standards.

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

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

    8

     

    

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

8.4          System
Promotion; No Diversion to Other Businesses.

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

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

9.            TRAINING,
COUNSELING AND ADVISORY SERVICES

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

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

10.          SYSTEM
AND STANDARDS; FRANCHISEE ASSOCIATION

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

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

    9

     

    

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

11.          PROPRIETARY
MARKS AND INTELLECTUAL PROPERTY

11.1        Franchisor’s
Representations Concerning the Proprietary Marks.

A.          Representations.
Franchisor represents that:

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

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

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

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

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

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

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

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

    10

     

    

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

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

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

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

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

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

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

B.          Ownership
of the System. Franchisee agrees that:

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

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

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

    11

     

    

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

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

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

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

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

12.          CONFIDENTIAL
INFORMATION; DATA PROTECTION LAWS

12.1        Confidential
Information.

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

    12

     

    

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

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

13.          ACCOUNTING
AND REPORTS; TAXES 

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

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

13.3        Accounting
Statements.

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

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

    13

     

    

13.4        Franchisor
Examination and Audit of Hotel Records.

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

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

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

13.5        Taxes.

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

B.          Withholding
Taxes. 

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

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

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

    14

     

    

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

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

14.          INDEMNIFICATION

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

15.          INSURANCE

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

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

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

    15

     

    

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

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

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

16.          FINANCING
OF THE HOTEL

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

17.          TRANSFERS

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

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

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

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

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

    16

     

    

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

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

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

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

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

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

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

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

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

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

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

    17

     

    

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

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

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

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

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

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

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

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

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

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

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

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

    18

     

    

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

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

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

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

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

17.5        Proposed
Transfer to Competitor and Right of First Refusal.

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

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

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

    19

     

    

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

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

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

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

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

17.7        Transfers
by Franchisor.

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

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

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

18.          PROSPECTUS
REVIEW

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

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

    20

     

    

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

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

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

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

19.          DEFAULT
AND TERMINATION

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

A.          Financial
Defaults. 

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

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

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

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

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

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

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

    21

     

    

 

B.           Non-Financial
Defaults.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

     22

    	 

    

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

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

G.           Franchisee
or Owner is in breach of or default under the lease described in Item 17 of Exhibit A.

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

19.4       Damages.

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

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

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

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

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

     23

    	 

    

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

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

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

20.          POST-TERMINATION

20.1       Franchisee
Obligations.

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

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

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

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

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

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

     24

    	 

    

 

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

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

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

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

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

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

21.          CONDEMNATION
AND CASUALTY

21.1        Condemnation.

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

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

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

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

     25

    	 

    

 

21.2        Casualty.

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

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

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

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

22.          COMPLIANCE
WITH APPLICABLE LAW; LEGAL ACTIONS

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

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

23.          RELATIONSHIP
OF PARTIES

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

     26

    	 

    

 

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

24.1        Governing
Law and Jurisdiction.

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

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

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

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

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

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

25.          NOTICES

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

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

     27

    	 

    

26.          REPRESENTATIONS
AND WARRANTIES

26.1        Existence;
Authorization; Ownership; Other Representations.

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

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

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

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

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

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

26.2        Additional
Franchisee Acknowledgments and Representations.

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

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

     28

    	 

    

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

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

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

27.          MISCELLANEOUS

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

27.2        Construction
and Interpretation.

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

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

     29

    	 

    

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

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

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

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

27.3        Reasonable
Business Judgment.

A.           Definition.
Reasonable Business Judgment means:

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

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

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

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

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

     30

    	 

    

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

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

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

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

{Signatures
appear on the following page}

     31

    	 

    

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

	 	FRANCHISOR:
	 	 
	 	MARRIOTT
INTERNATIONAL, INC.
	 	 
	 	By: 	/s/ Michael H. Rosenman	 (SEAL)
	 	Name:	Michael H. Rosenman
	 	Title:	Vice President, Owner & Franchise Services

	 	FRANCHISEE:
	 	 
	 	MOODY
NATIONAL YALE-SEATTLE MT, LLC
	 	 
	 	By: 	/s/ Brett C. Moody	 (SEAL)
	 	Name:	Brett C. Moody
	 	Title:	President 

     32

    	 

    

 

EXHIBIT
A

KEY TERMS

 

	1.	Trade
    Name(s):	SpringHill
    Suites by Marriott
	 	 	 
	2.	Approved
    Location:	1800
    Yale Avenue, Seattle, WA 98101
	 	 	 
	3.	Effective
    Date:	May 24, 2016
	 	 	 
	4.	Term:	Begins
                                       on Effective Date and ends on November 2, 2026

         

        If
        Franchisee has completed all of the requirements by the dates set forth in the Property Improvement Plan attached as Attachment
        One to Exhibit C to the satisfaction of Franchisor, Franchisor and Franchisee will enter into an amendment to this Agreement
        such that the Term will expire 15 years from the Effective Date (May 24, 2031).

	 	 	 
	5.	Franchisor:	Marriott
    International, Inc., a Delaware corporation
	 	 	 
	6.	Franchisee:	Moody
    National Yale-Seattle MT, LLC, a Delaware limited liability company
	 	 	 
	7.	Number
    of Guestrooms:	234
	 	 	 
	8.	Entity
    that will Operate the Hotel:	Moody National Hospitality
    Management, LLC
	 	 	 
	9..	Restricted
    Territory (SpringHill Suites only):	Not
    Applicable
	 	 	 
	10.	Application
    Fee:	$100,000
	 	 	 
	11.	Franchise
    Fees:	5.5%
    of Gross Room Sales
	 	 	 
	12.A	Marketing
    Fund Contribution:	2.5%
    of Gross Room Sales
	 	 	 
	12.B	Marketing
    Fund Contribution Cap:	The
    total Marketing Fund Contribution will not exceed 3.5% of Gross Room Sales for each month.
	 	 	 
	13.	Construction
    Start Deadline:	Not
    Applicable
	 	 	 
	14.	Opening
    Deadline:	Not
    Applicable

 

    A-1

     

    

 

	15.	Franchisor
    Notice Address:	Marriott
                                       International, Inc.

        10400
        Fernwood Road

        Bethesda,
        MD 20817

        Attn:
        Law Department 52/923.27

	 	 	 
	16.	Franchisee
    Notice Address:	Moody
                                       National Yale-Seattle MT, LLC

        6363
        Woodway Dr., Suite 110

        Houston,
        TX 77057

        Attn:
        David Gould

        Email:
        Marriott@moodynational.com

	 	 	 
	17.	Lease
    Provisions:	Franchisee
                                       represents and warrants that (i) Owner is the sole owner of the Hotel, (ii) the Hotel is
                                       leased to Franchisee under a lease between Franchisee and Owner and (iii) Franchisee
                                       has all rights and authority relating to the Hotel for the performance of Franchisee’s
                                       obligations under this Agreement. If the lease provides for Owner to perform any of Franchisee’s
                                       obligations under this Agreement, Franchisee will cause Owner to perform such obligations
                                       as required under this Agreement. The existence of the lease and its terms that require
                                       Owner to perform Franchisee’s obligations are not an assignment of such obligations
                                       to Owner and do not relieve Franchisee of any obligation under this Agreement. The lease
                                       will not limit or restrict Franchisor’s rights or remedies under this Agreement in
                                       any way.

         

        “Owner”
        means Moody National Yale-Seattle Holding, LLC, a Delaware limited liability company.

	 	 	 
	18.	System
    Hotel-specific terms:	Not Applicable
	 	 	 
	19.	PIP
    Walk-through Date:	October
    27, 2014
	 	 	 
	20.	Additional
    Terms:	Not Applicable

 

    A-2

     

    

 

ATTACHMENT
TWO

TO EXHIBIT A

            

OWNERSHIP INTEREST IN FRANCHISEE

 

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

        Houston,
        TX 77057
	100%

        Sole
        Member

	OWNERSHIP
    OF MN LANCASTER-AUSTIN MT, INC.
	Moody
    National Operating Partnership II, LP	6363
                                         Woodway, Suite 110

        Houston,
        TX 77057
	100%

        Sole
        Shareholder

	OWNERSHIP
    OF MOODY NATIONAL OPERATING PARTNERSHIP II, LP
	Moody
    National REIT II, Inc.	6363
                                         Woodway, Suite 110

        Houston,
        TX 77057
	99.99578185%

        General
        Partner

	Moody
    OP Holdings II, LLC	6363
                                         Woodway, Suite 110

        Houston,
        TX 77057
	0.004241815%

        Limited
        Partner

	Moody
    National LPOP II, LLC	6363
                                         Woodway, Suite 110

        Houston,
        TX 77057
	Special
    Unit Holder
	Contributing
                                         Limited Partners*

         
	 	 
	OWNERSHIP
    OF MOODY NATIONAL REIT II, INC.**
	Shareholders

         
	—	100%
	OWNERSHIP
    OF MOODY OP HOLDINGS II, LLC
	Moody
    National REIT II, Inc.	6363
                                         Woodway, Suite 110

        Houston,
        TX 77057
	100%

        Sole
        Member

	OWNERSHIP
    OF MOODY NATIONAL LPOP II, LLC
	Brett
    C. Moody	6363
                                         Woodway, Suite 110

        Houston,
        TX 77057
	100%

        Sole
        Member

	 	 	 	 

 

*Contributing
limited partners, if any, will receive a limited partnership interest in Moody National Operating Partnership II, LP, in exchange
for a contribution of property.

 

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

 

    A-3

     

    

  

EXHIBIT
B

DEFINITIONS

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

    B-1

     

    

 

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

 

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

 

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

 

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

 

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

 

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

 

“Design
Process” is defined in Section 4.4.

 

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

 

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

 

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

 

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

 

    B-2

     

    

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Franchise
Fees” is defined in Section 3.2.

 

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

 

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

 

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

 

    B-3

     

    

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Initial
Work” is defined in Section 4.2.

 

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

 

    B-4

     

    

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

    B-5

     

    

 

“Opening
Date” is defined in Exhibit C.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

    B-6

     

    

 

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

 

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

 

“Similar
Marks” is defined in Section 11.2.6.

 

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

 

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

 

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

 

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

 

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

 

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

 

“Term”
is defined in Section 2.1.

 

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

 

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

 

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

 

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

 

    B-7

     

    

 

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

 

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

 

    B-8

     

    

 

EXHIBIT
C

CHANGE OF OWNERSHIP

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

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

A.          “Opening
Date” means October 15, 2001.

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

C.          The
following are added to Section 26.2:

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

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

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

3.            Property
Improvement Plan.

A.          Property
Improvement Plan. Based on an inspection of the Hotel, the property improvement plan prepared by Franchisor attached to this
Exhibit C as Attachment One outlines the renovation requirements for the Hotel to continue to operate as a System Hotel
(the “PIP”). All renovations, furniture, fixtures and equipment will conform to the then-current System specifications
at the time such work is completed. Completion of the PIP does not satisfy Franchisee’s obligation to renovate the Hotel
under Section 4.3.

B.          Material
Change Review. If any material changes to the Hotel occur after the date stated in Item 19 of Exhibit A, then Franchisor
may re-inspect the Hotel (“Material Change Review”) and modify the PIP to address such material changes. Franchisee
will complete the modified PIP, including any additional requirements, to Franchisor’s satisfaction. Franchisee and its
contractors will cooperate fully with any inspections Franchisor conducts under a Material Change Review.

C.          PIP
Deadlines. Franchisee will perform each item in the PIP by the date stated in the PIP with respect to such item. Time is of
the essence, but the deadlines for completion of items in the PIP will be equitably extended for any delay caused by acts of nature,
terrorism, strikes, war, governmental restrictions or other causes beyond Franchisee’s control (excluding for the avoidance
of doubt, unavailability of financing). If Franchisee wishes to extend such deadlines, Franchisee will make a written request
giving the reasons for the delay. Franchisor may, in its sole discretion, extend such deadlines, but no extension will be granted
for more than six months. For any extension, Franchisor may require Franchisee to pay its then-current extension fee. The extension
fee will be paid to Franchisor with the request for the extension and is nonrefundable unless Franchisor declines to grant the
requested extension.

    	 	 C-1	 

     

    

 

D.          Permits
and Certifications. Franchisee will obtain all permits and certifications required for lawful renovation and operation of
the Hotel, including zoning, access, sign, building permits and fire requirements, and if requested, will certify that it has
obtained all such permits and certifications.

E.          Compliance.
Franchisee will ensure that the Hotel complies with Applicable Law, the Standards and Design Criteria, including the Fire Protection
and Life Safety Standards (even if such Standards exceed local code requirements).

F.          Franchisee’s
Responsibilities. Franchisee is responsible for the entire cost of renovating, equipping, supplying and furnishing the Hotel
as a System Hotel.

G.          Site
Visits. During renovation, Franchisor’s representatives may visit the job site at any time to observe the work, and
Franchisee, its contractors and subcontractors will cooperate fully with any such site visits. Upon request, Franchisee will submit
photos showing the progress of renovation to Franchisor. Franchisor may submit any deficiencies or discrepancies to Franchisee,
and Franchisee will promptly correct such items. If any site visits and inspections are necessary to ensure the Hotel complies
with the PIP, Franchisor may charge its then-current fee for the time spent inspecting the Hotel plus Travel Costs.

H.          Accessibility
Certification. Franchisee will not be deemed to have satisfied the requirements of the PIP until Franchisee delivers a certification
from its architect, licensed professional engineer, or recognized expert consultant on Accessibility Requirements in the form
attached to this Exhibit C as Attachment Two.

I.          Fire
Protection and Life Safety Certification. Franchisee will not be deemed to have satisfied the requirements of the PIP until
Franchisee has (i) delivered a certification in the form attached to this Exhibit C
as Attachment Three that verifies the Hotel complies with Franchisor’s fire protection and life safety Standards
and the fire protection and life safety systems of the Hotel are operational, or (ii) retained Franchisor and paid Franchisor
the then-current testing and inspection fee to test and inspect the fire protection and life safety systems of the Hotel, and
such testing and inspection verifies the Hotel complies with Franchisor’s fire protection and life safety Standards and
the fire protection and life safety systems of the Hotel are operational. Any such certification must be issued by a third party
licensed fire protection engineer, engineer, or recognized expert consultant on fire and life safety requirements that
has been approved by Franchisor. Franchisor may require that such certification be issued by a party that has not participated
in the design of the fire protection and life safety systems of the Hotel.

J.          Completion.
Franchisee will not be deemed to have satisfied the requirements of the PIP until Franchisor has confirmed completion.

 

    	 	 C-2	 

     

    

 

ATTACHMENT
ONE

TO EXHIBIT C

            

PROPERTY IMPROVEMENT PLAN

All
items must be completed within twelve (12) months after the Effective Date, unless otherwise noted with respect to a particular
item.

		1.0	ADA

 

		1.1	ADA
CERTIFICATION REQUIREMENT

		.1	As
required in the Agreement, the attached ADA Certification (see Attachment A) must be completed and submitted to Franchisor by
the Property Improvement Plan (PIP) completion date.

 

		2.0	TECHNOLOGY

		.1	Marriott’s
Guestroom Entertainment Platform: All hotels with expiring television contracts must install this new platform by November 30,
2016. If your television contract expires within the timeframe of your PIP, you must install the new Guestroom Entertainment platform
to be compliant. For information on how to install, visit Guestroom Entertainment on MGS or email guestroomentertainment@marriott.com.

		.2	Install
approved RFID/BLE locks on all doors including, but not limited to, guestrooms, exterior entrances, fitness, pool, back of house
and guest laundry. Age of lock will determine retrofit strategy or full replacement. Conduct a hotel site survey with lock vendor
to determine if any additional hardware (upgraded/new on Property Lock PC, handheld lock programmer/lock interrogator, etc.) is
needed to create and deliver Mobile Key. Install (1) Mobile Key Station (formerly known as KEYosk or Key Printer) near each elevator
bank on lobby level. 0-6 yrs. old: Retrofit required. 6-10 yrs. old: Recommended replacement, minimum retrofit required. 10+ yrs.
old: Required replacement, minimum retrofit required. – due by 12/31/2017

 

		3.0	SITE
/ BUILDING EXTERIOR

 

		3.1	BUILDING
EXTERIOR

		.1	Repair
exterior building finishes to a “like-new” condition.

		.2	Replace
trash receptacles with decorative trash receptacles to be compatible with main building interior.

		.3	Verify
the condition of all exterior windows, doors, frames, sills, and seal, and repair/replace as necessary to prevent wind, rain and
noise from leaking into building.

		.4	Replace
all exterior graphics and signage (i.e., monument, building, directional signs, and parking lot graphics) with current SpringHill
Suites by Marriott brand standard.

		.5	Reimage
exterior and paint exterior (must have approval from Franchisor before work begins) – due by 12/31/2018.

 

    	 	 C-3	 

     

    

 

		3.2	LANDSCAPING

 

		.1	Replace
all landscaping and submit comprehensive landscaping plan to Franchisor – due by 12/31/2018.

 

 

		3.3	BUILDING
INTERIOR

		.1	Complete
all requirements of an 18 year renovation per Springhill Suites Renovation Requirements and product specifications. Due in connection
with the next renovation and update required pursuant to Section 11.1.B. of the Agreement – due by 12/2018.

			MUST                                                                                                                                                     ORDER FFE BY: 6/1/2018

			MUST
                                                                                                                                                          BEGIN CONSTRUCTION BY: 10/1/2018

		.2	Must
implement the current SpringHill Suites by Marriott décor package or submit a custom décor package for Franchisor
review and approval prior to installation.

		.3	Expand
Exercise Room to include additional equipment (all equipment must meet SpringHill Suites by Marriott brand standard requirements).
This may require encroaching on adjacent room(s), expanding exterior wall, or relocating space to a new area of the Hotel. Plans
must be submitted to Franchisor for approval prior to beginning work. Expanded Fitness Rooms is now a standard in New Build prototypes.
SpringHill Suites by Marriott brand standards are under review by Franchisor for existing hotels. An expansion is required in
order to keep hotels competitive in their market – due by 12/31/2018.

 

		3.4	GUESTROOMS

		.1	Modify
existing divider wall between living and sleeping areas, by creating a short wall and adding an acrylic accent panel (due in conjunction
with next renovation - December 2018).

		.2	Convert
existing Double Double rooms to Queen Queen rooms – due by 12/31/2018.

 

		3.5	GUESTROOM
BATH

		.1	Convert
tubs to showers in 100% of King and 50% of Double/Double room types (due in conjunction with next renovation - December 2018).

 

		4.0	FIRE
PROTECTION AND LIFE SAFETY

 

		4.1	GENERAL

		.1	Provide
documentation that the fire alarm system has been inspected, tested, and approved within 6 months of the Effective Date.

		.2	Provide
documentation that the sprinkler system has been inspected, tested, and approved within 6 months of the Effective Date.

		.3	Provide
documentation that the fire alarm system is monitored by a 3rd party central station that receives signals transmitted from the
fire panel within 6 months of the Effective Date.

		.4	If
the property has an emergency generator on site, provide documentation that it has been recertified within 18 months of the Effective
Date.

		.5	Replace
any carbon monoxide detector older than 6 years in age or beyond the manufacturer’s recommended age within 6 months of the
Effective Date.

 

    	 	 C-4	 

     

    
 

ATTACHMENT
TWO

TO EXHIBIT C

            

ADA CERTIFICATION

(to
be completed by Franchisee’s architect, engineer, or ADA consultant)

 

In
connection with the SpringHill Suites Seattle Downtown/South Lake Union, WA (the “Hotel”), I hereby certify to Moody
National Yale-Seattle MT, LLC and to Marriott International, Inc. that:

 

I
have used professionally reasonable efforts to ensure that the Hotel complies with the requirements of the Americans with Disabilities
Act (“ADA”), and all other related or similar state and local laws, regulations, and other requirements governing
public accommodations for persons with disabilities in effect at the time that this certification is made; and

 

			In my professional
                                                                                                                                                              judgment, the Hotel does in fact comply with such requirements.

 

	 	By:	 
	 	 	 
	 	Print Name:	 
	 	 	 
	 	Firm:	 
	 	 	 
	 	Date:	 

    	 	 C-5	 

     

    

ATTACHMENT
THREE

TO EXHIBIT C

            

FIRE & LIFE SAFETY CERTIFICATION

 

(to
be completed by Franchisee’s third-party licensed fire protection engineer, engineer or fire and life safety consultant)

 

In
connection with the SpringHill Suites Seattle Downtown/South Lake Union, WA (the “Hotel”), I hereby certify to Moody
National Yale-Seattle MT, LLC and to Marriott International, Inc. that:

 

			I have used
                                                                                                                                                              professionally reasonable efforts to ensure that the Hotel complies with Marriott International, Inc.’s Fire
                                                                                                                                                              Protection and Life Safety Standards in effect as of the [EFFECTIVE DATE OF AGREEMENT] ; and

 

			In my professional
                                                                                                                                                              judgment, the Hotel does in fact comply with such standards.

	 	By:	 
	 	 	 
	 	Print Name:	 
	 	 	 
	 	Firm:	 
	 	 	 
	 	Date:	 

 

    	 	 C-6	 

     

    
 

AMENDMENT
TO FRANCHISE AGREEMENT

REQUIRED BY THE STATE OF WASHINGTON

Franchisor
and Franchisee, parties to the attached Franchise Agreement (the “Agreement”), agree to amend the Agreement (the “Amendment”)
as follows:

1.          The
Director of the Washington Department of Financial Institutions requires that certain provisions contained in franchise documents
be amended to be consistent with Washington law, including the Washington Franchise Investment Protection Act, RCW 19.100.010
to 19.100.940 (the “Act”), which provides certain rights to franchisees. In recognition of the Act, the parties agree
that:

a.           The
provisions of the Act may supersede the provisions in the Agreement relating to Franchisee’s relationship with Franchisor,
including provisions relating to renewal, termination and transfer of the franchise. If the Agreement contains a provision that
is inconsistent with the Act, the Act will control.

 

b.          The
Act provides that, if there is a conflict between the Act and a state law of another state designated as governing in the franchise
agreement, the provisions of the Act will control.

 

c.         The
Act contains limitations as to releases or waivers of a franchisee’s rights under the Act; except that the Act provides
that these limitations do not apply when a release or waiver is executed pursuant to a negotiated settlement after the franchise
agreement is in effect and where the parties are represented by independent counsel. If there are provisions in the Agreement
that unreasonably restrict or limit rights or remedies under the Act, those provisions may not be enforceable.

 

2.          Each
provision of this to the Agreement will be effective only to the extent that the jurisdictional requirements of the Washington
law applicable to the provision are met independently of this Amendment to the Agreement. This Amendment to the Agreement will
have no force or effect if such jurisdictional requirements are not met.

3.          Franchisor
reserves the right to challenge the applicability of any law that declares provisions in the Agreement void or unenforceable. 

{Signatures
appear on the following page}

    	 		 

     

    

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

	 	FRANCHISOR:	 
	 	 	 	 
	 	MARRIOTT
INTERNATIONAL, INC.	 
	 	 	 	 
	 	By:	 	(SEAL)
	 	Name:	 	 
	 	Title:	 	 
	 	 	 	 

	 	FRANCHISEE:	 
	 	 	 	 
	 	MOODY
NATIONAL YALE-SEATTLE MT, LLC	 
	 	 	 	 
	 	By:	 	(SEAL)
	 	Name:	 	 
	 	Title:	 	 

    	 	2	 

     

    

GUARANTY

This
Guaranty (“Guaranty”) is executed as of ___________, 2016 (“Effective Date”) by Moody National
REIT II, Inc. , a Maryland corporation, and Brett C. Moody (jointly and severally), (“Guarantor”) for the benefit
of Marriott International, Inc., a Delaware corporation (“Franchisor”).

In
consideration of and as an inducement to Franchisor to execute the SpringHill Suites by Marriott Franchise Agreement dated ____________,
2016 (as such agreement may be amended, the “Agreement”), between Franchisor and Moody National Yale-Seattle
MT, LLC, a Delaware limited liability company (“Franchisee”), for the hotel located at 1800 Yale Avenue, Seattle,
WA 98101, Guarantor agrees as follows:

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

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

3.          Obligations
of Guarantor.

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

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

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

    	 		 

     

    

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

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

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

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

9.          Existence;
Authorization; Prior Representations.

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

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

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

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

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

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

    	 	 2	 

     

    

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

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

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

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

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

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

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

{Signatures
appear on the following page}

    	 	 3	 

     

    

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

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

               

ADDRESS
FOR NOTICES TO GUARANTOR:

 

6363
Woodway Drive, Suite 110

Houston,
TX 77057

Marriott@moodynational.com

    	 	 4	 

     

    

 

MANAGEMENT
COMPANY ACKNOWLEDGMENT

 

This
Management Company Acknowledgment (this “Acknowledgment”) is executed on __________, 2016 (“Effective
Date”) by Marriott International, Inc., a Delaware corporation (“Franchisor”), Moody National Yale-Seattle
MT, LLC, a Delaware limited liability company (“Franchisee”) and Moody National Hospitality Management, LLC,
a Texas limited liability company (“Management Company”).

 

RECITAL

 

Management
Company has entered into an agreement (“Management Agreement”) with Franchisee to operate the hotel located
at 1800 Yale Avenue, Seattle, WA 98101 (the “Hotel”), under the SpringHill Suites by Marriott Franchise Agreement
dated __________, 2016 (as such agreement may be amended, the “Agreement”) between Franchisor and Franchisee.

 

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

 

1.          Franchisor’s
Consent. 

 

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

 

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

 

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

 

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

 

    

     

    

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

    2

     

    

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

    3

     

    

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

{Signatures
appear on the following page}

 

    4

     

    

 

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

	 	 	 	 
	 	FRANCHISOR:	 
	 	 	 
	 	MARRIOTT INTERNATIONAL, INC.
	 	 	 
	 	By:	 	(SEAL)
	 	Name:	 
	 	Title:	 
	 	 	 
	 	FRANCHISEE:	 
	 	 	 
	 	MOODY NATIONAL YALE-SEATTLE MT, LLC
	 	 	 
	 	By:	 	(SEAL)
	 	Name:	 
	 	Title:	 
	 	 	 
	 	MANAGEMENT COMPANY:
	 	 	 
	 	MOODY NATIONAL HOSPITALITY MANAGEMENT, LLC
	 	 	 
	 	By:	 	(SEAL)
	 	Name:	 
	 	Title:	 

 

ADDRESS
FOR MANAGEMENT COMPANY:

 

6363
Woodway Dr., Suite 110

Houston,
TX 77057

Marriott@moodynational.com 

 

    5

     

    

 

ELECTRONIC
SYSTEMS LICENSE AGREEMENT

 

This
Electronic Systems License Agreement (this “License Agreement”) is executed on ___________, 2016 (the “Effective
Date”) between Marriott International, Inc. (“Franchisor”) and Moody National Yale-Seattle MT, LLC
(“Franchisee”).

 

RECITALS

 

A.          As
of the Effective Date, Franchisor and Franchisee have entered into a SpringHill Suites by Marriott franchise agreement (the “Franchise
Agreement”) to operate the Hotel located at 1800 Yale Avenue, Seattle, WA 98101 under the System.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

    

     

    

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

    2

     

    

 

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

 

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

 

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

 

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

 

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

 

20.          Construction
and Interpretation.

 

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

 

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

 

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

 

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

 

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

 

    3

     

    

 

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

 

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

 

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

 

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

 

{Signatures
appear on the following page}

 

    4

     

    

 

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

	 	 	 	 
	 	FRANCHISOR:	 
	 	 	 
	 	MARRIOTT INTERNATIONAL, INC.
	 	 	 
	 	By:	 	(SEAL)
	 	Name:	 
	 	Title:	 
	 	 	 
	 	FRANCHISEE:	 
	 	 	 
	 	MOODY NATIONAL YALE-SEATTLE MT, LLC
	 	 	 
	 	By:	 	(SEAL)
	 	Name:	 
	 	Title:	 

 

 

    5

     

    

 

OWNER
AGREEMENT

 

This
Owner Agreement (“Agreement”) is executed on ________, 2016 (the “Effective Date”), by Marriott
International, Inc., a Delaware corporation (“Franchisor”), Moody National Yale-Seattle MT, LLC, a Delaware
limited liability company (“Franchisee”), and Moody National Yale-Seattle Holding, LLC, a Delaware limited
liability company (“Owner”).

 

RECITALS

 

A.          Franchisor
and Franchisee are parties to the SpringHill Suites by Marriott Franchise Agreement dated ____________, 2016 (the “Franchise
Agreement”) relating to the Hotel, a copy of which is attached as Exhibit C.

 

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

 

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

 

1.          ACKNOWLEDGMENTS
AND COMPLIANCE

 

1.1          Acknowledgments.
Owner acknowledges that:

 

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

 

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

 

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

 

1.2          Compliance;
Confidential Information.

 

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

 

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

 

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

 

2.          TERM.

 

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

 

    

     

    

 

3.          PROVISIONS
OF THE LEASE.

 

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

 

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

 

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

 

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

 

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

 

5.          RIGHTS
AND OBLIGATIONS ON TERMINATION OF FRANCHISE AGREEMENT

 

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

 

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

 

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

 

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

 

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

 

    2

     

    

 

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

 

6.          RIGHTS
AND OBLIGATIONS ON TERMINATION OF THE LEASE

 

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

 

7.          TRANSFERS

 

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

 

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

 

7.3          Transfers
by Franchisor.

 

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

 

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

 

    3

     

    

 

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

 

8.          DEFAULTS
AND TERMINATION

 

8.1          Immediate
Termination. 

 

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

 

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

 

8.2          Default
with Opportunity to Cure.

 

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

 

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

 

9.          POST-TERMINATION
OBLIGATIONS OF OWNER

 

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

 

10.          CONDEMNATION
AND CASUALTY

 

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

 

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

 

    4

     

    

 

11.          FINANCING
OF THE HOTEL 

 

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

 

12.          GOVERNING
LAW; INTERIM RELIEF; COSTS OF ENFORCEMENT

 

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

 

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

 

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

 

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

 

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

 

13.          NOTICES

 

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

 

    5

     

    

 

14.          REPRESENTATIONS
AND WARRANTIES

 

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

 

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

 

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

 

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

 

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

 

15.          MISCELLANEOUS

 

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

 

15.2        Construction
and Interpretation.

 

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

 

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

 

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

 

    6

     

    

 

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

 

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

 

15.3        Reasonable
Business Judgment.

 

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

 

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

 

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

 

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

 

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

 

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

 

{Signatures
appear on the following page}

 

    7

     

    

 

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

	 	 	 	 
	 	FRANCHISOR:	 
	 	 	 
	 	MARRIOTT INTERNATIONAL, INC.
	 	 	 
	 	By:	 	(SEAL)
	 	Name:	 
	 	Title:	 
	 	 	 
	 	FRANCHISEE:	 
	 	 	 
	 	MOODY NATIONAL YALE-SEATTLE MT, LLC
	 	 	 
	 	By:	 	(SEAL)
	 	Name:	 
	 	Title:	 
	 	 	 
	 	OWNER:
	 	 	 
	 	MOODY NATIONAL YALE-SEATTLE HOLDING, LLC
	 	 	 
	 	By:	 	(SEAL)
	 	Name:	 
	 	Title:	 

 

    8

     

    

EXHIBIT
A

OWNERSHIP INTERESTS IN OWNER

 

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

        Houston,
        TX 77057
	100%

        Sole
        Member

	OWNERSHIP
    OF MOODY NATIONAL OPERATING PARTNERSHIP II, LP
	Moody
    National REIT II, Inc.	6363
                                         Woodway, Suite 110

        Houston,
        TX 77057
	99.99578185%

        General
        Partner

	Moody
    OP Holdings II, LLC	6363
                                         Woodway, Suite 110

        Houston,
        TX 77057
	0.004241815%

        Limited
        Partner

	Moody
    National LPOP II, LLC	6363
                                         Woodway, Suite 110

        Houston,
        TX 77057
	Special
    Unit Holder
	Contributing
                                         Limited Partners*

         
	 	 
	OWNERSHIP
    OF MOODY NATIONAL REIT II, INC.**
	Shareholders

         
	—	100%
	OWNERSHIP
    OF MOODY OP HOLDINGS II, LLC
	Moody
    National REIT II, Inc.	6363
                                         Woodway, Suite 110

        Houston,
        TX 77057
	100%

        Sole
        Member

	OWNERSHIP
    OF MOODY NATIONAL LPOP II, LLC
	Brett
    C. Moody	6363
                                         Woodway, Suite 110

        Houston,
        TX 77057
	100%

        Sole
        Member

	 	 	 	 

*Contributing
limited partners, if any, will receive a limited partnership interest in Moody National Operating Partnership II, LP, in exchange
for a contribution of property.

 

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

 

    9

     

    

 

EXHIBIT
B

NOTICE ADDRESSES

 

To
Franchisor:

Marriott
International, Inc.

10400
Fernwood Road

Bethesda,
MD 20817

Attn:
Law Department 52/923.27

with
a copy to:

Marriott
International, Inc.

10400 Fernwood Road

Bethesda, MD 20817

Attn: Global Lodging Services

 

To
Owner:

Moody
National Yale-Seattle Holding, LLC

6363
Woodway, Suite 110

Houston,
TX 77057

Attn:
David Gould

Email:
Marriott@moodynational.com

To
Franchisee:

MOODY
NATIONAL YALE-SEATTLE MT, LLC

6363
Woodway Dr., Suite 110

Houston,
TX 77057

Attn:
David Gould

Email:
Marriott@moodynational.com

 

    10

     

    

 

EXHIBIT
C

FRANCHISE AGREEMENT

 

    11ex4-56.htm

Exhibit 4.56

 

 

ASSSIGNMENT AND MODIFICATION AGREEMENT

 

This assignment and modification agreement (the “Agreement”) is made by and among NewLead Holdings Ltd. (the “Issuer”), F&S Capital Partners Ltd. (the “Non Affiliate Debtholder”) and Atlas Long-Term Growth Fund, LLC (the “Investor”), on May 15, 2015. (The Issuer, the Non Affiliate Debtholder and the Investor are sometimes referred to in this Agreement singly as a “Party” or collectively as the “Parties”).

 

RECITALS

 

 

WHEREAS, the Issuer owes the Non Affiliate Debtholder $1,100,000 as evidenced by the Convertible Promissory Note (the “Note”) dated August 18, 2014; and

 

WHEREAS, the Issuer desires to fulfill part of the debt obligations owed to the Non Affiliate Debtholder in the principal amount of $300,000 portion of the Note (the “Debt”), as represented by the revised promissory note of even date (the “Atlas Note”), attached as Exhibit A; and

 

WHEREAS, the Issuer and the Non Affiliate Debtholder are willing to act as surety to the Investor for the fulfillment of the assignment of the Debt as a material inducement to the Investor; and

 

WHEREAS, to effectuate this understanding, the Parties agree to enter this Agreement;

 

 

NOW THEREFORE, in consideration of the mutual promises and agreements contained in this Agreement, and intending to be legally bound, the Parties agree as follows:

 

1.          Assignment of Debt. The Non Affiliate Debtholder hereby assigns USD$300,000 (United States Dollars three hundred thousand) of the Note to the Investor from the inception of the Debt (the “Assignment”) as represented by the Note.

 

1.1             The Issuer hereby accepts the Assignment;

 

1.2              The Investor will pay the Non Affiliate Debtholder cash consideration of $300,000 less $3,700 in legal, due diligence and administrative fees (“Purchase Price”). The Purchase Price shall be paid pro rata for each portion of the converted stock upon being accepted by the Investor’s brokerage firm and DTC.

 

1.3              The Issuer confirms that the Non Affiliate Debtholder had advanced funds to the Issuer and/or had provided the services to the Issuer represented by the Debt on or before August 18, 2014, and agrees, acknowledges, consents and stipulates, that full consideration has been rendered for said Debt and hereby waives any and all objections thereto.

 

1.4             THE ISSUER AGREES TO BE SOLELY LIABLE WITH FULL RECOURSE IN THE EVENT OF DEFAULT TO INVESTOR UNDER THIS AGREEMENT OR THE NOTE

 

1.5             The Non Affiliate Debtholder shall provide the option to the Investor to purchase the remaining balance of the Note in 2 additional tranches. The option to purchase the first tranche shall expire 120 trading days after the first conversion is accepted by the Investor’s brokerage firm. The option to purchase the third tranche shall expire 120 trading days after the option to purchase the second tranche has expired.

 

 

 

 

 

2.               Non Affiliate Debtholder’s Representation -The Non Affiliate Debtholder hereby represents and warrants the following:

 

2.1             The Non Affiliate Debtholder will if necessary assist the Investor in obtaining a legal opinion regarding the trading status of the Conversion Shares.

 

2.2             All funds advanced to Issuer by the Non Affiliate Debtholder and/or all services constituting the debt have been fully rendered for legitimate business purposes.

 

3.               Counterparts. This Agreement may be executed in any number of counterparts by original, facsimile or email signature. All executed counterparts shall constitute one Agreement not withstanding that all signatories are not signatories to the original or the same counterpart. Facsimile and scanned signatures are considered original signatures.

 

 

[SIGNATURES ON THE FOLLOWING PAGE]

 

 

 

 

 

IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as of the day and year first above written. 

 

 

	
 NewLead Holdings Ltd.
	
 Atlas Long-Term Growth Fund, LLC
	
 

	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 

	
                                                     
	                                                                  	
 

	
By: Michail S. Zolotas
	
 By:
	
 

	
Title: Chairman & CEO
	
 Title:
	
 

 

  

 F&s Capitol Partners Ltd.

	
 
	
 
	
 

	
                                                  
	
 
	
 
	
 

	
 By:
	
 
	
 
	
 

	
 Title:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00258-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00258-of-00352.parquet"}]]