exv10w1






EXHIBIT 10.1




AMENDED AND RESTATED




ADVISORY AGREEMENT




AMONG




MOODY NATIONAL REIT I, INC.,




MOODY NATIONAL OPERATING PARTNERSHIP I, L.P.,




MOODY NATIONAL ADVISOR I, LLC




AND




MOODY NATIONAL REALTY COMPANY, L.P.




 









 





TABLE OF CONTENTS




	 	 	 	 	 	 	 
	1.
	 	Definitions	 	 	1	 
	 
	 	 	 	 	 	 
	2.
	 	Appointment	 	 	8	 
	 
	 	 	 	 	 	 
	3.
	 	Duties Of The Advisor	 	 	8	 
	 
	 	 	 	 	 	 
	4.
	 	Authority Of Advisor	 	 	10	 
	 
	 	 	 	 	 	 
	5.
	 	Bank Accounts	 	 	10	 
	 
	 	 	 	 	 	 
	6.
	 	Records; Access	 	 	11	 
	 
	 	 	 	 	 	 
	7.
	 	Limitations On Activities	 	 	11	 
	 
	 	 	 	 	 	 
	8.
	 	Relationship With Director	 	 	11	 
	 
	 	 	 	 	 	 
	9.
	 	Fees	 	 	11	 
	 
	 	 	 	 	 	 
	10.
	 	Expenses	 	 	13	 
	 
	 	 	 	 	 	 
	11.
	 	Other Services	 	 	15	 
	 
	 	 	 	 	 	 
	12.
	 	Reimbursement To The Advisor	 	 	15	 
	 
	 	 	 	 	 	 
	13.
	 	Investment Opportunities	 	 	15	 
	 
	 	 	 	 	 	 
	14.
	 	Business Combination	 	 	15	 
	 
	 	 	 	 	 	 
	15.
	 	Other Activities Of The Advisor	 	 	16	 
	 
	 	 	 	 	 	 
	16.
	 	Term Of Agreement	 	 	17	 
	 
	 	 	 	 	 	 
	17.
	 	Termination By The Parties	 	 	17	 
	 
	 	 	 	 	 	 
	18.
	 	Assignment To An Affiliate	 	 	17	 
	 
	 	 	 	 	 	 
	19.
	 	Payments To And Duties Of Advisor Upon Termination	 	 	17	 
	 
	 	 	 	 	 	 
	20.
	 	Indemnification By The Company And The Operating Partnership	 	 	18	 
	 
	 	 	 	 	 	 
	21.
	 	Indemnification By Advisor	 	 	19	 
	 
	 	 	 	 	 	 
	22.
	 	Notices	 	 	20	 
	 
	 	 	 	 	 	 
	23.
	 	Modification	 	 	20	 






 









 






	 	 	 	 	 	 	 
	24.
	 	Severability	 	 	20	 
	 
	 	 	 	 	 	 
	25.
	 	Construction	 	 	20	 
	 
	 	 	 	 	 	 
	26.
	 	Entire Agreement	 	 	20	 
	 
	 	 	 	 	 	 
	27.
	 	Indulgences, Not Waivers	 	 	21	 
	 
	 	 	 	 	 	 
	28.
	 	Gender	 	 	21	 
	 
	 	 	 	 	 	 
	29.
	 	Titles Not To Affect Interpretation	 	 	21	 
	 
	 	 	 	 	 	 
	30.
	 	Execution In Counterparts	 	 	21	 






 









 






AMENDED AND RESTATED ADVISORY AGREEMENT




     THIS AMENDED AND RESTATED ADVISORY AGREEMENT, dated and effective as of the 14th
day of August, 2009 (this “Agreement”), is entered into by and among Moody National REIT I,
Inc., a Maryland corporation (the “Company”), Moody National Operating Partnership I, L.P.,
a Delaware limited partnership (the “Operating Partnership”), Moody National Advisor I,
LLC, a Delaware limited liability company (the “Advisor”), and, solely in connection with
the obligations set forth in Section 13 hereof, Moody National Realty Company, L.P., a Texas
limited partnership (“Moody National,” and collectively with the Company, the Operating
Partnership and the Advisor, the “Parties”). Capitalized terms used herein shall have the
meanings ascribed to them in Section 1 below.



WITNESSETH




     WHEREAS, the Company intends to qualify as a REIT, and to invest its funds in investments
permitted by the terms of Sections 856 through 860 of the Code;



     WHEREAS, the Company is the general partner of the Operating Partnership and intends to
conduct all of its business and make all Investments through the Operating Partnership;



     WHEREAS, the Company and the Operating Partnership desire to avail themselves of the
experience, sources of information, advice, assistance and certain facilities of the Advisor and to
have the Advisor undertake the duties and responsibilities hereinafter set forth, on behalf of, and
subject to the supervision, of the Board of Directors of the Company, all as provided herein;



     WHEREAS, the Advisor is willing to undertake to render such services, subject to the
supervision of the Board of Directors, on the terms and conditions hereinafter set forth;



     WHEREAS, the Parties previously entered into that certain Advisory Agreement, dated as of
March 29, 2009 and effective as of April 15, 2009 (the “Original Advisory Agreement”); and



     WHEREAS, the Parties desire to amend, restate and supersede the Original Advisory Agreement in
its entirety pursuant to this Agreement.



     NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements
contained herein, the Parties hereto, intending to be legally bound, hereby agree as follows:



     1. DEFINITIONS. As used in this Agreement, the following terms have the definitions
hereinafter indicated:



     Acquisition Expenses. Any and all expenses, exclusive of Acquisition Fees, incurred
by the Company, the Operating Partnership, the Advisor, or any of their Affiliates in connection
with the selection, acquisition, origination, making or development of any Investments, whether



 









 







or not acquired, including, without limitation, legal fees and expenses, travel and
communications expenses, costs of appraisals, nonrefundable option payments on property not
acquired, accounting fees and expenses, title insurance premiums, and the costs of performing due
diligence.



     Acquisition Fees. Any and all fees and commissions, exclusive of Acquisition
Expenses, paid by any Person to any other Person (including any fees or commissions paid by or to
any Affiliate of the Company, the Operating Partnership or the Advisor) in connection with making
or investing in Securities and Debt-related investments or the purchase, development or
construction of any Real Estate Asset, including real estate commissions, selection fees,
development fees, construction fees, nonrecurring management fees, loan fees, points or any other
fees of a similar nature. Excluded shall be (i) Origination Fees and (ii) development fees and
construction fees paid to any Person not affiliated with the Sponsor in connection with the actual
development and construction of a project.



     Advisor. Moody National Advisor I, LLC, a Delaware limited liability company, any
successor advisor to the Company, the Operating Partnership or any Person to which Moody National
Advisor I, LLC or any successor advisor subcontracts substantially all of its functions.
Notwithstanding the foregoing, a Person hired or retained by Moody National Advisor I, LLC to
perform property management and related services for the Company or the Operating Partnership that
is not hired or retained to perform substantially all of the functions of Moody National Advisor I,
LLC with respect to the Company or the Operating Partnership as a whole shall not be deemed to be
an Advisor.



     Affiliate or Affiliated. With respect to any Person, (i) any Person directly or
indirectly owning, controlling or holding, with the power to vote, ten percent (10%) or more of the
outstanding voting securities of such other Person; (ii) any Person ten percent (10%) or more of
whose outstanding voting securities are directly or indirectly owned, controlled or held, with the
power to vote, by such other Person; (iii) any Person directly or indirectly controlling,
controlled by or under common control with such other Person; (iv) any executive officer, director,
trustee or general partner of such other Person; and (v) any legal entity for which such Person
acts as an executive officer, director, trustee or general partner.



     Articles of Incorporation. The Articles of Incorporation of the Company, as amended
from time to time.



     Asset Management Fee. The term “Asset Management Fee” shall mean the fee payable to
the Advisor pursuant to Section 9(e).



     Average Invested Assets. For a specified period, the average of the aggregate book
value of the assets of the Company invested, directly or indirectly, in Investments before
deducting depreciation, bad debts or other non-cash reserves, computed by taking the average of
such values at the end of each month during such period.



     Board of Directors or Board. The persons holding such office, as of any particular
time, under the Articles of Incorporation, whether they be the Directors named therein or
additional or successor Directors.



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     Bylaws. The bylaws of the Company, as the same are in effect from time to time.



     Cause. With respect to the termination of this Agreement, fraud, criminal conduct,
misconduct or negligent breach of fiduciary duty by the Advisor, or a material breach of this
Agreement by the Advisor.



     Code. Internal Revenue Code of 1986, as amended from time to time, or any successor
statute thereto. Reference to any provision of the Code shall mean such provision as in effect
from time to time, as the same may be amended, and any successor provision thereto, as interpreted
by any applicable regulations as in effect from time to time.



     Company. The term “Company” shall have the meaning set forth in the preamble of this
Agreement.



     Contract Sales Price. The total consideration received by the Company for the sale of
a Real Estate Asset or a Securities and Debt-related Investment.



     Dealer Manager. Moody National Securities, LLC, or such other Person or entity
selected by the Board of Directors to act as the dealer manager for the Offering. Moody National
Securities, LLC is a member of the Financial Industry Regulatory Authority.



     Debt Financing Fees. The term “Debt Financing Fees” shall mean the fees payable to
the Advisor pursuant to Section 9(f).



     Dealer Manager Fee. 3.5% of Gross Proceeds from the sale of Shares in the Primary
Offering, payable to the Dealer Manager for serving as the dealer manager of such Offering.



     Director. A member of the Board of Directors of the Company.



     Disposition Fees. The term “Dispositions Fees” shall mean the fees payable to the
Advisor pursuant to Section 9(d).



     Distributions. Any distributions of money or other property by the Company to owners
of Shares, including distributions that may constitute a return of capital for federal income tax
purposes.



     Excess Amount. The term “Excess Amount” shall have the meaning set forth in Section
12.



     Expense Year. The term “Expense Year” shall have the meaning set forth in Section 12.



     GAAP. Generally accepted accounting principles as in effect in the United States of
America from time to time.



     Good Reason. With respect to the termination of this Agreement, (i) any failure to
obtain a satisfactory agreement from any successor to the Company or the Operating Partnership to
assume and agree to perform the Company’s or the Operating Partnership’s obligations under



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this Agreement; or (ii) any material breach of this Agreement of any nature whatsoever by the
Company or the Operating Partnership.



     Gross Proceeds. The aggregate purchase price of all Shares sold for the account of
the Company through all Offerings, without deduction for Sales Commissions, volume discounts, any
marketing support and due diligence expense reimbursement or Organization and Offering Expenses.
For the purpose of computing Gross Proceeds, the purchase price of any Share for which reduced
Sales Commissions are paid to the Dealer Manager or a Soliciting Dealer (where net proceeds to the
Company are not reduced) shall be deemed to be the full amount of the offering price per Share
pursuant to the Prospectus for such Offering without reduction.



     Indemnitee. The terms “Indemnitee and “Indemnitees” shall have the meaning set forth
in Section 20 herein.



     Independent Director. The term “Independent Director” shall have the meaning set forth
in the Articles of Incorporation.



     Investments. Any investments by the Company or the Operating Partnership in Real
Estate Assets and Securities and Debt-related Investments.



     Joint Ventures. The joint venture or partnership arrangements (other than with the
Operating Partnership) in which the Company or any of its subsidiaries is a co-venturer or general
partner which are established to acquire Real Properties.



     Listing. The listing of the Shares on a national securities exchange or the receipt
by the Company’s Stockholders of securities that are listed on a national securities exchange in
exchange for the Company’s common stock. Upon such Listing, the Shares shall be deemed Listed.



     Loans. Any indebtedness or obligations in respect of borrowed money or evidenced by
bonds, notes, debentures, deeds of trust, letters of credit or similar instruments, including
mortgages and mezzanine loans.



     NASAA REIT Guidelines. The Statement of Policy Regarding Real Estate Investment
Trusts published by the North American Securities Administrators Association on May 7, 2007, as may
be amended from time to time.



     Net Income. For any period, the Company’s total revenues applicable to such period,
less the total expenses applicable to such period other than additions to reserves for
depreciation, bad debts or other similar non-cash reserves and excluding any gain from the sale of
the Company’s assets.



     Offering. The public offering of Shares pursuant to a Prospectus.



     Operating Partnership. The term “Operating Partnership” shall have the meaning set
forth in the preamble of this Agreement.



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     Operating Partnership Agreement. The Operating Partnership Agreement by and among the
Company, Moody National LPOP I, LLC and Moody OP Holdings I, LLC.



     OP Unit. Units of limited partnership interest in the Operating Partnership.



     Organizational and Offering Expenses. Organizational and Offering Expenses means all
expenses incurred by or on behalf of the Company in connection with and in preparing the Company
for registration of and subsequently offering and distributing its Shares to the public, whether
incurred before or after the date of this Agreement, which may include but are not limited to,
total underwriting and brokerage discounts and commissions (including fees of the underwriters’
attorneys); any expense allowance granted by the Company to the underwriter or any reimbursement of
expenses of the underwriter by the Company; expenses for printing, engraving and mailing; salaries
of employees while engaged in sales activity; telephone and other telecommunications costs; all
advertising and marketing expenses (including the costs related to investor and broker-dealer sales
meetings); charges of transfer agents, registrars, trustees, escrow holders, depositaries and
experts; and expenses of qualification of the sale of the securities under Federal and State laws,
including taxes and fees, accountants’ and attorneys’ fees.



     Original Advisory Agreement. The term “Original Advisory Agreement” shall have the
meaning set forth in the recitals to this Agreement.



     Origination Fees. The term “Origination Fees” shall mean the fees payable to the
Advisor pursuant to Section 9(b).



     Person. An individual, corporation, partnership, trust, joint venture, limited
liability company or other entity.



     Primary Offering. The portion of an Offering other than the Shares offered pursuant
to the Company’s distribution reinvestment plan.



     Prospectus. A “Prospectus” under Section 2(10) of the Securities Act of 1933, as
amended (the “Securities Act”), including a preliminary Prospectus, an offering circular as
described in Rule 253 of the General Rules and Regulations under the Securities Act or, in the case
of an intrastate offering, any document by whatever name known, utilized for the purpose of
offering and selling securities to the public.



     Real Estate Assets. Any investments by the Company or the Operating Partnership in
unimproved and improved Real Property (including, without limitation, fee or leasehold interests,
options and leases) either directly or through a Joint Venture.



     Real Property. Real property owned from time to time by the Company or the Operating
Partnership, either directly or through joint venture arrangements or other partnerships which
consists of (i) land only, (ii) land, including the buildings located thereon, (iii) buildings only
or (iv) such investments the Board of Directors and the Advisor mutually designate as Real Property
to the extent such investments could be classified as Real Property.



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     Registration Statement. Registration Statement shall mean the Company’s registration
statement on Form S-11 (Registration Number 333-150612), as amended from time to time, to offer and
sell to the public on a continuous basis up to 110,526,316 Shares originally filed with the
Securities and Exchange Commission on May 2, 2008.



     REIT. A “real estate investment trust” under Sections 856 through 860 of the Code or
as may be amended.



     Sale or Sales. Any transaction or series of transactions whereby: (A) the Company or
the Operating Partnership directly or indirectly (except as described in other subsections of this
definition) sells, grants, transfers, conveys, or relinquishes its ownership of any Real Property
or portion thereof, including the lease of any Real Property consisting of a building only, and
including any event with respect to any Real Property which gives rise to a significant amount of
insurance proceeds or condemnation awards; (B) the Company or the Operating Partnership directly or
indirectly (except as described in other subsections of this definition) sells, grants, transfers,
conveys, or relinquishes its ownership of all or substantially all of the interest of the
Corporation or the Operating Partnership in any Joint Venture in which it is a co-venturer or
partner; (C) any Joint Venture directly or indirectly (except as described in other subsections of
this definition) in which the Company or the Operating Partnership as a co-venturer or partner
sells, grants, transfers, conveys, or relinquishes its ownership of any Real Property or portion
thereof, including any event with respect to any Real Property which gives rise to insurance claims
or condemnation awards; or (D) the Company or the Operating Partnership directly or indirectly
(except as described in other subsections of this definition) sells, grants, conveys or
relinquishes its interest in any Securities and Debt-related Investment or portion thereof
(including with respect to any Loan, all payments thereunder or in satisfaction thereof other than
regularly scheduled interest payments) and any event which gives rise to a significant amount of
insurance proceeds or similar awards; or (E) the Company or the Operating Partnership directly or
indirectly (except as described in other subsections of this definition) sells, grants, transfers,
conveys, or relinquishes its ownership of any other asset not previously described in this
definition or any portion thereof, but not including any transaction or series of transactions
specified in clauses (A) through (E) above in which the proceeds of such transaction or series of
transactions are reinvested by the Company in one or more assets within 180 days thereafter.



     Sales Commission. 6.5% of Gross Proceeds from the sale of Shares in the Primary
Offering payable to the Dealer Manager and reallowable to Soliciting Dealers with respect to Shares
sold by them.



     Securities and Debt-related Investments. Any investments by the Company or the
Operating Partnership in (i) real estate securities such as common stocks, preferred stocks and
options to acquire stock in REITs and other real estate companies and (ii) debt-related investments
such as (a) mortgage, mezzanine, bridge and other loans and (b) debt and derivative securities
related to real estate assets including mortgage-backed securities, collateralized debt
obligations, debt securities issued by real estate companies and credit default swaps.



     Shares. The shares of the Company’s common stock, par value $0.01 per share.



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     Soliciting Dealers. Broker-dealers who are members of the Financial Industry
Regulatory Authority, or that are exempt from broker-dealer registration, and who, in either case,
have executed participating broker or other agreements with the Dealer Manager to sell Shares.



     Special Committee. The term “Special Committee” shall have the meaning as provided in
Section 14(a).



     Special OP Units. The separate series of limited partnership interests to be issued
in accordance with Section 9(h).



     Sponsor. Any Person which (i) is directly or indirectly instrumental in organizing,
wholly or in part, the Company, (ii) will control, manage or participate in the management of the
Company, and any Affiliate of any such Person, (iii) takes the initiative, directly or indirectly,
in founding or organizing the Company, either alone or in conjunction with one or more other
Persons, (iv) receives a material participation in the Company in connection with the founding or
organizing of the business of the Company, in consideration of services or property, or both
services and property, (v) has a substantial number of relationships and contacts with the Company,
(vi) possesses significant rights to control the Company’s Investments, (vii) receives fees for
providing services to the Company which are paid on a basis that is not customary in the industry,
or (viii) provides goods or services to the Company on a basis which was not negotiated at
arm’s-length with the Company. “Sponsor” does not include wholly independent third parties such as
attorneys, accountants and underwriters whose only compensation is for professional services.



     Stockholders. The registered holders of the Shares.



     Termination Date. The date of termination of this Agreement.



     Termination Event. The termination or nonrenewal of this Agreement (i) in connection
with a merger, sale of assets or transaction involving the Company pursuant to which a majority of
the Directors then in office are replaced or removed, (ii) by the Advisor for Good Reason or (iii)
by the Company and the Operating Partnership other than for Cause.



     Total Operating Expenses. All costs and expenses paid or incurred by the Company, as
determined under GAAP, that are in any way related to the operation of the Company or its business,
including asset management fees and other fees paid to Advisors, but excluding (i) the expenses of
raising capital such as Organization and Offering Expenses, legal, audit, accounting, underwriting,
brokerage, listing, registration, and other fees, printing and other such expenses and taxes
incurred in connection with the issuance, distribution, transfer, registration and Listing, (ii)
interest payments, (iii) taxes, (iv) non-cash expenditures such as depreciation, amortization and
bad debt reserves, (v) incentive fees paid in compliance with the NASAA REIT Guidelines; (vi)
Acquisition Fees, Origination Fees and Acquisition Expenses, (vii) real estate commissions on the
Sale of Real Property, and (viii) other fees and expenses connected with the acquisition,
disposition, management and ownership of real estate interests, mortgages or other property
(including the costs of foreclosure, insurance premiums, legal services, maintenance, repair, and
improvement of property). The definition of “Total Operating Expenses” set forth above is intended
to encompass only those expenses which are required to be treated as Total Operating



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Expenses under the NASAA REIT Guidelines. As a result, and notwithstanding the definition set
forth above, any expense of the Company which is not part of Total Operating Expenses under the
NASAA REIT Guidelines shall not be treated as part of Total Operating Expenses for purposes hereof.



     2%/25% Guidelines. The term “2%/25% Guidelines” shall have the meaning set forth in
Section 12.



     2. APPOINTMENT. The Company and the Operating Partnership hereby appoint the Advisor to serve
as their advisor on the terms and conditions set forth in this Agreement, and the Advisor hereby
accepts such appointment.



     3. DUTIES OF THE ADVISOR. The Advisor undertakes to use its best efforts to present to the
Company and the Operating Partnership potential investment opportunities and to provide a
continuing and suitable investment program consistent with the investment objectives and policies
of the Company as determined and adopted by the Directors, and as amended from time to time with
the approval of the Stockholders. In performance of this undertaking, subject to the supervision
of the Directors and consistent with the provisions of the Articles of Incorporation and Bylaws of
the Company and the Operating Partnership Agreement, the Advisor shall, either directly or by
engaging an Affiliate:



          (a) serve as the Company’s and the Operating Partnership’s investment and financial advisor;




          (b) provide the daily management for the Company and the Operating Partnership and perform and
supervise the various administrative functions reasonably necessary for the management of the
Company and the Operating Partnership;




          (c) investigate, select, and, on behalf of the Company and the Operating Partnership, engage
and conduct business with such Persons as the Advisor deems necessary to the proper performance of
its obligations hereunder, including but not limited to consultants, accountants, correspondents,
lenders, technical advisors, attorneys, brokers, underwriters, corporate fiduciaries, escrow
agents, depositaries, custodians, agents for collection, insurers, insurance agents, banks,
builders, developers, property owners, real estate management companies, real estate operating
companies, securities investment advisors, mortgagors, and any and all agents for any of the
foregoing, including Affiliates of the Advisor, and Persons acting in any other capacity deemed by
the Advisor necessary or desirable for the performance of any of the foregoing services, including,
but not limited to, entering into contracts in the name of the Company and the Operating
Partnership with any of the foregoing;




          (d) consult with the officers and Directors of the Company and assist the Directors in the
formulation and implementation of the Company’s financial policies, and, as necessary, furnish the
Directors with advice and recommendations with respect to the making of investments consistent with
the investment objectives and policies of the Company and in
connection with any borrowings proposed to be undertaken by the Company or the Operating
Partnership;




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          (e) subject to the provisions of Section 4 hereof, (i) participate in formulating an
investment strategy and asset allocation framework, (ii) locate, analyze and select potential
Investments, (iii) structure and negotiate the terms and conditions of transactions pursuant to
which acquisitions and dispositions of Investments will be made; (iv) research, identify, review
and recommend acquisitions and dispositions of Investments to the Board and make investments on
behalf of the Company and the Operating Partnership in compliance with the investment objectives
and policies of the Company; (v) arrange for financing and refinancing and make other changes in
the asset or capital structure of, and dispose of, reinvest the proceeds from the sale of, or
otherwise deal with, Investments; (vi) enter into leases and service contracts for Real Estate
Assets and, to the extent necessary, perform all other operational functions for the maintenance
and administration of such Real Estate Assets; (vii) actively oversee and manage Investments for
purposes of meeting the Company’s investment objectives; (vii) select Joint Venture partners,
structure corresponding agreements and oversee and monitor these relationships; (viii) oversee
Affiliated and non-Affiliated property managers who perform services for the Company or the
Operating Partnership; (ix) oversee Affiliated and non-Affiliated Persons with whom the Advisor
contracts to perform certain of the services required to be performed under this Agreement; (x)
manage accounting and other record-keeping functions for the Company and the Operating Partnership;
and (xi) recommend various liquidity events to the Board of Directors when appropriate;




          (f) upon request, provide the Directors with periodic reports regarding prospective
investments;




          (g) make investments in, and dispositions of, Investments within the discretionary limits and
authority as granted by the Board;




          (h) negotiate on behalf of the Company and the Operating Partnership with banks or lenders for
Loans to be made to the Company and the Operating Partnership, and negotiate on behalf of the
Company and the Operating Partnership with investment banking firms and broker-dealers or negotiate
private sales of Shares or obtain Loans for the Company and the Operating Partnership, but in no
event in such a way so that the Advisor shall be acting as broker-dealer or underwriter; and
provided, further, that any fees and costs payable to third parties incurred by the Advisor in
connection with the foregoing shall be the responsibility of the Company or the Operating
Partnership;




          (i) obtain reports (which may, but are not required to, be prepared by the Advisor or its
Affiliates), where appropriate, concerning the value of Investments or contemplated investments of
the Company and the Operating Partnership;




          (j) from time to time, or at any time reasonably requested by the Directors, make reports to
the Directors of its performance of services to the Company and the Operating
Partnership under this Agreement, including reports with respect to potential conflicts of
interest involving the Advisor or any of its affiliates;




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          (k) provide the Company and the Operating Partnership with all necessary cash management
services;




          (l) do all things necessary to assure its ability to render the services described in this
Agreement;




          (m) deliver to, or maintain on behalf of, the Company copies of all appraisals obtained in
connection with the investments in any Real Estate Assets as may be required to be obtained by the
Board;




          (n) notify the Board of Directors of all proposed material transactions before they are
completed; and




          (o) effect any private placement of OP Units, tenancy-in-common or other interests in
Investments as may be approved by the Board.




     Notwithstanding the foregoing, the Advisor may delegate any of the foregoing duties to any
Person so long as the Advisor or any Affiliate remains responsible for the performance of the
duties set forth in this Section 3.



     4. AUTHORITY OF ADVISOR.



          (a) Pursuant to the terms of this Agreement (including the restrictions included in this
Section 4 and in Section 7), and subject to the continuing and exclusive authority of the
Directors over the management of the Company, the Directors hereby delegate to the Advisor the
authority to perform the services described in Section 3.




          (b) Notwithstanding the foregoing, any investment in Investments, including any financing of
such Investment, will require the prior approval of the Board, any particular Directors specified
by the Board or any committee of the Board, as the case may be.




          (c) If a transaction requires approval by the Independent Directors, the Advisor will deliver
to the Independent Directors all documents and other information required by them to properly
evaluate the proposed transaction.




          (d) The prior approval of a majority of the Independent Directors not otherwise interested in
the transaction and a majority of the Directors not otherwise interested in the transaction will be
required for each transaction to which the Advisor or its Affiliates is a party.




          (e) The Board may, at any time upon the giving of notice to the Advisor, modify or revoke the
authority set forth in this Section 4; provided, however, that such modification or revocation
shall be effective upon receipt by the Advisor and shall not be applicable to investment
transactions to which the Advisor has committed the Company or the Operating Partnership prior to
the date of receipt by the Advisor of such notification.




     5. BANK ACCOUNTS. The Advisor may establish and maintain one or more bank accounts in its own
name for the account of the Company or the Operating Partnership or in the



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name of the Company and
the Operating Partnership and may collect and deposit into any such account or accounts, and
disburse from any such account or accounts, any money on behalf of the Company or the Operating
Partnership, under such terms and conditions as the Directors may approve, provided that no funds
shall be commingled with the funds of the Advisor; and the Advisor shall from time to time render
appropriate accountings of such collections and payments to the Directors and to the auditors of
the Company.



     6. RECORDS; ACCESS. The Advisor shall maintain appropriate records of all its activities
hereunder and make such records available for inspection by the Directors and by counsel, auditors
and authorized agents of the Company, at any time or from time to time during normal business
hours. The Advisor shall at all reasonable times have access to the books and records of the
Company and the Operating Partnership.



     7. LIMITATIONS ON ACTIVITIES. Anything else in this Agreement to the contrary
notwithstanding, the Advisor shall refrain from taking any action which, in its sole judgment made
in good faith, would (a) adversely affect the status of the Company as a REIT, (b) subject the
Company to regulation under the Investment Company Act of 1940, as amended, or (c) violate any law,
rule, regulation or statement of policy of any governmental body or agency having jurisdiction over
the Company or its Shares, or otherwise not be permitted by the Articles of Incorporation or Bylaws
of the Company, except if such action shall be ordered by the Directors, in which case the Advisor
shall notify promptly the Directors of the Advisor’s judgment of the potential impact of such
action and shall refrain from taking such action until it receives further clarification or
instructions from the Directors. In such event, the Advisor shall have no liability for acting in
accordance with the specific instructions of the Directors so given. Notwithstanding the
foregoing, the Advisor, its directors, officers, employees and members, and partners, directors,
officers, members and stockholders of the Advisor’s Affiliates shall not be liable to the Company
or to the Directors or Stockholders for any act or omission by the Advisor, its directors,
officers, employees, or members, and partners, directors, officers, members or stockholders of the
Advisor’s Affiliates taken or omitted to be taken in the performance of their duties under this
Agreement except as provided in Section 20 of this Agreement.



     8. RELATIONSHIP WITH DIRECTORS. Subject to Section 7 of this Agreement and to restrictions
advisable with respect to the qualification of the Company as a REIT, directors, officers and
employees of the Advisor or an Affiliate of the Advisor or any corporate parents of an Affiliate,
may serve as a Director and as officers of the Company, except that no director, officer or
employee of the Advisor or its Affiliates who also is a Director or officer of the Company shall
receive any compensation from the Company for serving as a Director or officer other than
reasonable reimbursement for travel and related expenses incurred in attending meetings of the
Directors and no such Director shall be deemed an Independent Director for purposes of satisfying
the Director independence requirement set forth in the Articles of Incorporation.



     9. FEES.



          (a) Acquisition Fees. The Advisor shall receive an Acquisition Fee payable by the
Company as compensation for services rendered in connection with the investigation, selection and
acquisition (by purchase, investment or exchange) of Investments. The total Acquisition Fees
payable to the Advisor or its Affiliates shall equal 1.5% of the cost of all




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Investments, including
Acquisition Expenses and any debt attributed to such investments. With respect to investments in
and origination of Loans, the Company will pay the Advisor an Origination Fee in lieu of the
Acquisition Fee. With respect to the acquisition of Real Estate Assets through a Joint Venture,
the Acquisition Fee payable by the Company to the Advisor shall equal 1.5% of the Company’s
allocable cost of such Real Estate Assets, including Acquisition Expenses and any debt attributed
to such Investments. The Advisor shall submit an invoice to the Company following the closing or
closings of each Investment, accompanied by a computation of the Acquisition Fee. The Acquisition
Fee payable to the Advisor shall be paid at the closing of the transaction upon receipt of the
invoice by the Company.




          (b) Origination Fees. As compensation for the investigation, selection, sourcing and
acquisition or origination of Loans, the Company shall pay an Origination Fee to the Advisor for
each such acquisition or origination equal to 1.5% of the amount funded by the Company to acquire
or originate the Loan, including any Acquisition Expenses related to such investment and any debt
used to fund the acquisition or origination of the Loan. The Company will not pay an Origination
Fee to the Advisor with respect to any transaction pursuant to which the Company is required to pay
the Advisor an Acquisition Fee. Notwithstanding anything herein to the contrary, the payment of
Origination Fees by the Company shall be subject to the limitations on Acquisition Fees contained
in the Company’s Articles of Incorporation. The Advisor shall submit an invoice to the Company
following the closing or closings of each Loan, accompanied by a computation of the Origination
Fee. The Origination Fee payable to the Advisor shall be paid at the closing of the transaction
upon receipt of the invoice by the Company.




          (c) Limitation on Total Acquisition Fees, Origination Fees and Acquisition Expenses.
Pursuant to the NASAA REIT Guidelines, the total of all Acquisition Fees, Origination Fees, and
Acquisition Expenses shall not exceed 6.0% of the “contract purchase price,” as defined in the
Articles of Incorporation, of all Investments acquired.




          (d) Disposition Fees. If the Advisor provides a substantial amount of services, as
determined by the Independent Directors in connection with a Sale except for Investments that are
traded on a national securities exchange, the Company shall pay a Disposition Fee to the Advisor
equal to up to one-half of the brokerage commission paid but in no event an amount greater than
3.0% of the Contract Sales Price. Any Disposition Fee payable under this Section 9(d) may be paid
in addition to real estate commissions paid to non-Affiliates, provided that the total real estate
commissions (including such Disposition Fee) paid to all Persons by the Company for each Investment
shall not exceed 6.0% of the Contract Sales Price.




          (e) Asset Management Fee. The Advisor shall receive the Asset Management Fee as
compensation for services rendered in connection with the management of the Company’s assets. The
Asset Management Fee shall be calculated monthly and consists of a monthly fee of one-twelfth of
1.0% of the aggregate cost (before non-cash reserves and depreciation) of all Investments the
Company owns, including Acquisition Fees, origination fees,
acquisition origination expenses and any debt attributable to such Investments. With the
exception of any portion of the Asset Management Fee related to the disposition of Investments,
which shall be payable at the time of such disposition, the Asset Management Fee shall be payable
on the first of each month.




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          (f) Debt Financing Fees. The Advisor shall receive a Debt Financing Fee as
compensation for services rendered in connection with the coordination of debt financing obtained
by the Company. The total Debt Financing Fee payable to the Advisor or its Affiliates shall equal
1.0% of the amount available under any loan or line of credit obtained by the Company, and will be
in addition to the Acquisition Fees paid to the Advisor. The Advisor may pay some or all of the
Debt Financing Fee to third parties if the Advisor subcontracts with such third parties to
coordinate financing obtained by the Company. No Debt Financing Fees will be paid in connection
with (i) the refinancing of a Real Estate Asset already refinanced for which the Advisor received a
Debt Financing Fee and (ii) loan proceeds from any line of credit until such time as the Company
has invested all net Offering proceeds. The Advisor shall submit an invoice to the Company
following the closing or closings of each debt financing obtained by the Company, accompanied by a
computation of the Debt Financing Fee. The Debt Financing Fee payable to the Advisor shall be paid
at the closing of the debt financing upon receipt of the invoice by the Company.




          (g) Organizational and Offering Expenses. The cumulative Organizational and Offering
Expenses paid by the Company will not exceed 15.0% of Gross Proceeds from the sale of Shares in the
Primary Offering.




          (h) Operating Partnership Interests. The Advisor has made a capital contribution of
$1,000 to the Operating Partnership in exchange for OP Units. In addition, an Affiliate of the
Advisor has received OP Units constituting a separate series of limited partnership interests (the
“Special OP Units”). Upon the earliest to occur of the termination of this Agreement for
Cause, a Termination Event or a Listing, all of the Special OP Units shall be redeemed by the
Operating Partnership in accordance with the terms of the Operating Partnership Agreement.




          (i) Exclusion of Certain Transactions. In the event the Company or the Operating
Partnership shall propose to enter into any transaction in which a Director or an officer of the
Company, and the Advisor, or any Affiliate of the Company, the Operating Partnership or the Advisor
has a direct or indirect interest, then such transaction shall be approved by a majority of the
Board of Directors and also by a majority of the Independent Directors.




     10. EXPENSES.



          (a) In addition to the compensation paid to the Advisor pursuant to Section 9 hereof, the
Company or the Operating Partnership shall pay directly or reimburse the Advisor for all of the
expenses paid or incurred by the Advisor in connection with the services it provides to the Company
and the Operating Partnership pursuant to this Agreement, including, but not limited to:




               (i) Organizational and Offering Expenses only upon such time as the minimum offering amount as
described in the Prospectus for the Company’s current Offering has been achieved; provided,
however, that within 60 days after the end of the month in which the
current Offering terminates, the Advisor shall reimburse the Company to the extent the
Organizational and Offering Expenses borne by the Company exceed 15% of the Gross Proceeds raised
in the Completed Offering;



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               (ii) Acquisition Expenses incurred in connection with the selection and acquisition of
Investments subject to the aggregate 6% cap on Acquisition Fees, Origination Fees and Acquisition
Expenses set forth in Section 9(c);



               (iii) the actual cost of goods and services used by the Company and obtained from entities not
affiliated with the Advisor;



               (iv) interest and other costs for borrowed money, including discounts, points and other
similar fees;



               (v) taxes and assessments on income of the Company or Investments;



               (vi) costs associated with insurance required in connection with the business of the Company
or by the Directors;



               (vii) expenses of managing and operating Investments owned by the Company, whether payable to
an Affiliate of the Company or a non-affiliated Person;



               (viii) all expenses in connection with payments to the Directors for attending meetings of the
Directors and Stockholders;



               (ix) expenses associated with a Listing, if applicable, or with the issuance and distribution
of Shares, such as selling commissions and fees, advertising expenses, taxes, legal and accounting
fees, listing and registration fees, and other Organization and Offering Expenses;



               (x) expenses connected with payments of Distributions in cash or otherwise made or caused to
be made by the Company to the Stockholders;



               (xi) expenses of organizing, revising, amending, converting, modifying, or terminating the
Company or the Articles of Incorporation;



               (xii) expenses of maintaining communications with Stockholders, including the cost of
preparation, printing, and mailing annual reports and other Stockholder reports, proxy statements
and other reports required by governmental entities;



               (xiii) administrative service expenses (including (a) personnel costs; provided, however, that
no reimbursement shall be made for costs of personnel to the extent that such personnel perform
services in transactions for which the Advisor receives Acquisition Fees,
Origination Fees, Asset Management Fees, property management fees or real estate sales
commissions, and (b) the Company’s allocable share of other overhead of the Advisor such as rent
and utilities); and



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               (xiv) audit, accounting and legal fees.



          (b) Expenses incurred by the Advisor on behalf of the Company and the Operating Partnership
and payable pursuant to this Section 10 shall be reimbursed no less than monthly to the Advisor.
The Advisor shall prepare a statement documenting the expenses of the Company and the Operating
Partnership and the calculation of the Asset Management Fee during each quarter, and shall deliver
such statement to the Company and the Operating Partnership within 45 days after the end of each
quarter.




     11. OTHER SERVICES. Should the Directors request that the Advisor or any director, officer or
employee thereof render services for the Company and the Operating Partnership other than set forth
in Section 3, such services shall be separately compensated at such rates and in such amounts as
are agreed by the Advisor and the Independent Directors, subject to the limitations contained in
the Articles of Incorporation, and shall not be deemed to be services pursuant to the terms of this
Agreement.



     12. REIMBURSEMENT TO THE ADVISOR. The Company shall not reimburse the Advisor at the end of
any fiscal quarter in which Total Operating Expenses for the four consecutive fiscal quarters then
ended (the “Expense Year”) exceed (the “Excess Amount”) the greater of 2% of
Average Invested Assets or 25% of Net Income (the “2%/25% Guidelines”) for such year. Any
Excess Amount paid to the Advisor during a fiscal quarter shall be repaid to the Company or, at the
option of the Company, subtracted from the Total Operating Expenses reimbursed during the
subsequent fiscal quarter. If there is an Excess Amount in any Expense Year and the Independent
Directors determine that such excess was justified based on unusual and nonrecurring factors which
they deem sufficient, then (i) the Excess Amount may be carried over and included in Total
Operating Expenses in subsequent Expense Years and reimbursed to the Advisor in one or more of such
years, provided that there shall be sent to the Stockholders a written disclosure of such fact,
together with an explanation of the factors the Independent Directors considered in determining
that such excess expenses were justified. Such determination shall be reflected in the minutes of
the meetings of the Board of Directors. The Company will not reimburse the Advisor or its
Affiliates for services for which the Advisor or its Affiliates are entitled to receive Acquisition
Fees, Origination Fees, Asset Management Fees, property management fees or real estate commissions.
All figures used in the foregoing computation shall be determined in accordance with generally
accepted accounting principles applied on a consistent basis.



     13. INVESTMENT OPPORTUNITIES. In the event that Moody National identifies an investment
opportunity that is a stabilized and income-producing commercial real property, for which the
Company has sufficient uninvested funds, the investment opportunity will first be offered to the
Company. Unless the Board of Directors determines not to proceed with such investment, the
investment opportunity will not be presented to any other real estate investment fund, program or
Joint Venture owned, managed, advised or sponsored by Moody National or its Affiliates; provided,
however, that any such investment opportunity shall not be required to be presented to the
Company during any period in which the Company does not have sufficient available funds, or a
reasonable opportunity of obtaining available funds, with which to make the investment.



     14. BUSINESS COMBINATION.



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          (a) Business Combination with Advisor. The Company shall consider becoming a
self-administered REIT once the Company’s assets and income are, in the view of the Board of
Directors, of sufficient size such that internalizing the management functions performed by the
Advisor is in the best interests of the Company and the Stockholders. If the Board of Directors
should make this determination in the future, the Company shall pay one-half, and the Advisor shall
pay the other one-half, of the costs of an independent investment banking firm. This firm shall
jointly advise the Company and the Advisor on the value of the Advisor. After the investment
banking firm completes its analyses, the Company shall require it to prepare a written report and
make a formal presentation to the Board of Directors. Following the presentation by the investment
banking firm, the Board of Directors shall form a special committee (the “Special
Committee”) comprised entirely of Independent Directors to consider a possible business
combination with the Advisor. The Board of Directors shall, subject to applicable law, delegate
all of its decision-making power and authority to the Special Committee with respect to matters
relating to a possible business combination with the Advisor. The Special Committee also shall be
authorized to retain its own financial advisors and legal counsel to, among other things, negotiate
with representatives of the Advisor regarding a possible business combination with the Advisor.




          (b) Conditions to Completion of Business Combination with Advisor. Before the Company
may complete any business combination with the Advisor in accordance with this Section 14, the
following three conditions shall be satisfied:




               (i) the Special Committee formed in accordance with Section 14(a) hereof receives an opinion
from a qualified investment banking firm, separate and distinct from the firm jointly retained by
the Company and the Advisor to provide a valuation analysis in accordance with Section 14(a)
hereof, concluding that the consideration to be paid to acquire the Advisor is fair to the
Stockholders from a financial point of view;



               (ii) the Board of Directors determines that such business combination is advisable and in the
best interests of the Company and the Stockholders; and



               (iii) Such business combination is approved by the Stockholders entitled to vote thereon in
accordance with the Company’s Articles of Incorporation and Bylaws.



     15. OTHER ACTIVITIES OF THE ADVISOR. Nothing herein contained shall prevent the Advisor or
any of its Affiliates from engaging in or earning fees from other activities, including, without
limitation, the rendering of advice to other Persons (including other REITs) and the management of
other programs advised, sponsored or organized by the Advisor or its Affiliates; nor shall this
Agreement limit or restrict the right of any director, officer, member, partner, employee, or
stockholder of the Advisor or its Affiliates to engage in or earn fees from any other business or
to render services of any kind to any other partnership, corporation, firm, individual, trust or
association and earn fees for rendering such services. The Advisor may, with respect to any
investment in which the Company is a participant, also render advice and service to each and every
other participant therein, and earn fees for rendering such advice and service. Specifically, it
is contemplated that the Company may enter into joint ventures or other similar co-investment
arrangements with certain Persons, and pursuant to the agreements governing such



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joint ventures or
arrangements, the Advisor may be engaged to provide advice and service to such Persons, in which
case the Advisor will earn fees for rendering such advice and service.



     The Advisor shall report to the Directors the existence of any condition or circumstance,
existing or anticipated, of which it has knowledge, which creates or could create a conflict of
interest between the Advisor’s obligations to the Company and its obligations to or its interest in
any other partnership, corporation, firm, individual, trust or association. The Advisor or its
Affiliates shall promptly disclose to the Directors knowledge of such condition or circumstance.
If the Advisor, Director or Affiliates thereof have sponsored other investment programs with
similar investment objectives which have investment funds available at the same time as the
Company, it shall be the duty of the Directors (including the Independent Directors) to ensure that
the Advisor and its Affiliates adopt the method approved by the Independent Directors, by which
investments are to be allocated to the competing investment entities and to use their best efforts
to ensure that such method is applied fairly to the Company.



     16. TERM OF AGREEMENT. This Agreement shall continue in force for a period of one year from
the date of the Prospectus pursuant to which the initial Offering is made, subject to an unlimited
number of successive one-year renewals upon mutual consent of the Parties. It is the duty of the
Directors to evaluate the performance of the Advisor annually before renewing the Agreement, and
each such renewal shall be for a term of no more than one year.



     17. TERMINATION BY THE PARTIES. This Agreement may be terminated (i) immediately by the
Company or the Operating Partnership for Cause or upon the bankruptcy of the Advisor, (ii) upon 60
days written notice without Cause and without penalty by a majority of the Independent Directors of
the Company or (iii) upon 60 days written notice with Good Reason by the Advisor. The provisions
of Sections 18 through 31 survive termination of this Agreement.



     18. ASSIGNMENT TO AN AFFILIATE. This Agreement may be assigned by the Advisor to an Affiliate
with the approval of a majority of the Directors (including a majority of the Independent
Directors). The Advisor may assign any rights to receive fees or other payments under this
Agreement to any Person without obtaining the approval of the Directors. This Agreement shall not
be assigned by the Company or the Operating Partnership without the consent of the Advisor, except
in the case of an assignment by the Company or the Operating Partnership to a corporation, limited
partnership or other organization which is a successor to all of the assets, rights and obligations
of the Company or the Operating Partnership, in which case such successor organization shall be
bound hereunder and by the terms of said assignment in the same manner as the Company and the
Operating Partnership are bound by this Agreement.



     19. PAYMENTS TO AND DUTIES OF ADVISOR UPON TERMINATION.



          (a) After the Termination Date, the Advisor shall not be entitled to compensation for further
services hereunder except it shall be entitled to receive from the Company or the Operating
Partnership within 30 days after the effective date of such termination all unpaid reimbursements
of expenses and all earned but unpaid fees payable to the Advisor prior to termination of this
Agreement, subject to the 2%/25% Guidelines to the extent applicable.




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          (b) The Advisor shall promptly upon termination:




               (i) pay over to the Company and the Operating Partnership all money collected and held for the
account of the Company and the Operating Partnership pursuant to this Agreement, after deducting
any accrued compensation and reimbursement for its expenses to which it is then entitled;



               (ii) deliver to the Board of Directors a full accounting, including a statement showing all
payments collected by it and a statement of all money held by it, covering the period following the
date of the last accounting furnished to the Board of Directors;



               (iii) deliver to the Board of Directors all assets, including all Investments, and documents
of the Company and the Operating Partnership then in the custody of the Advisor; and



               (iv) cooperate with the Company and the Operating Partnership to provide an orderly management
transition.



     20. INDEMNIFICATION BY THE COMPANY AND THE OPERATING PARTNERSHIP. The Company and the
Operating Partnership shall indemnify and hold harmless the Advisor and its Affiliates, including
their respective directors (the “Indemnitees,” and each an “Indemnitee”), from all
liability, claims, damages or losses arising in the performance of their duties hereunder, and
related expenses, including reasonable attorneys’ fees, to the extent such liability, claims,
damages or losses and related expenses are not fully reimbursed by insurance, and to the extent
that such indemnification would not be inconsistent with the laws of the State of Maryland, the
Articles of Incorporation or the provisions of Section II.G of the NASAA REIT Guidelines. In
addition, the Company and the Operating Partnership shall indemnify and hold harmless the officers
of the Company and the Advisor and its Affiliates from all liability, claims, damages or losses
arising in the performance of their duties hereunder, and related expenses, including reasonable
attorneys’ fees, to the extent such liability, claims, damages or losses and related expenses are
not fully reimbursed by insurance, and to the extent that such indemnification would not be
inconsistent with the laws of the State of Maryland or the Articles of Incorporation.
Notwithstanding the foregoing, the Company and the Operating Partnership shall not provide for
indemnification of an Indemnitee for any loss or liability suffered by such Indemnitee, nor shall
they provide that an Indemnitee be held harmless for any
loss or liability suffered by the Company and the Operating Partnership, unless all of the
following conditions are met:



          (a) the Indemnitee has determined, in good faith, that the course of conduct that caused the
loss or liability was in the best interest of the Company and the Operating Partnership;




          (b) the Indemnitee was acting on behalf of, or performing services for, the Company or the
Operating Partnership;




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          (c) such liability or loss was not the result of negligence or misconduct by the Indemnitee;
and




          (d) such indemnification or agreement to hold harmless is recoverable only out of the
Company’s net assets and not from the Stockholders.




     Notwithstanding the foregoing, an Indemnitee shall not be indemnified by the Company and the
Operating Partnership for any losses, liabilities or expenses arising from or out of an alleged
violation of federal or state securities laws by such Indemnitee unless one or more of the
following conditions are met:



          (a) there has been a successful adjudication on the merits of each count involving alleged
securities law violations as to the Indemnitee;




          (b) such claims have been dismissed with prejudice on the merits by a court of competent
jurisdiction as to the Indemnitee; or




          (c) a court of competent jurisdiction approves a settlement of the claims against the
Indemnitee and finds that indemnification of the settlement and the related costs should be made,
and the court considering the request for indemnification has been advised of the position of the
Securities and Exchange Commission and of the published position of any state securities regulatory
authority in which securities of the Company or the Operating Partnership were offered or sold as
to indemnification for violation of securities laws.




     In addition, the advancement of the Company’s or the Operating Partnership’s funds to an
Indemnitee for legal expenses and other costs incurred as a result of any legal action for which
indemnification is being sought is permissible only if all of the following conditions are
satisfied:



          (a) the legal action relates to acts or omissions with respect to the performance of duties or
services on behalf of the Company or the Operating Partnership;




          (b) the legal action is initiated by a third party who is not a Stockholder or the legal
action is initiated by a stockholder acting in such stockholder’s capacity as such and a court of
competent jurisdiction specifically approves such advancement; and




          (c) the Indemnitee undertakes to repay the advanced funds to the Company or the Operating
Partnership, together with the applicable legal rate of interest thereon, in cases in which such
Indemnitee is found not to be entitled to indemnification.




     21. INDEMNIFICATION BY ADVISOR. The Advisor shall indemnify and hold harmless the Company and
the Operating Partnership from contract or other liability, claims, damages, taxes or losses and
related expenses including attorneys’ fees, to the extent that such liability, claims, damages,
taxes or losses and related expenses are not fully reimbursed by insurance and are incurred by
reason of the Advisor’s bad faith, fraud, misfeasance, intentional misconduct, negligence or
reckless disregard of its duties; provided, however, that the Advisor



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shall not be held responsible
for any action of the Board of Directors in following or declining to follow any advice or
recommendation given by the Advisor.



     22. NOTICES. Any notice, report or other communication required or permitted to be given
hereunder shall be in writing unless some other method of giving such notice, report or other
communication is required by the Articles of Incorporation, the Bylaws, or accepted by the Party to
whom it is given, and shall be given by being delivered by hand, by facsimile transmission, by
courier or overnight carrier or by registered or certified mail to the addresses set forth herein:



	 	 	 
	To the Directors and to the Company:

	 	Moody National REIT I, Inc.

6363 Woodway, Suite 110

Houston, Texas 77057

Facsimile: (713) 977-7505

Attention: Brett C. Moody
	 
	 	 
	To the Operating Partnership:

	 	Moody National Operating Partnership
I, L.P.

6363 Woodway, Suite 110

Houston, Texas 77057

Facsimile: (713) 977-7505

Attention: Brett C. Moody
	 
	 	 
	To the Advisor:

	 	Moody National Advisor I, LLC

6363 Woodway, Suite 110

Houston, Texas 77057

Facsimile: (713) 977-7505

Attention: Brett C. Moody






     Any Party may at any time give notice in writing to the other Parties of a change in its
address for the purposes of this Section 22.



     23. MODIFICATION. This Agreement shall not be changed, modified, terminated, or discharged,
in whole or in part, except by an instrument in writing signed by the Parties hereto, or their
respective successors or assignees.



     24. SEVERABILITY. The provisions of this Agreement are independent of and severable from each
other, and no provision shall be affected or rendered invalid or unenforceable by virtue of the
fact that for any reason any other or others of them may be invalid or unenforceable in whole or in
part.



     25. CONSTRUCTION. The provisions of this Agreement shall be construed and interpreted in
accordance with the laws of the State of Maryland.



     26. ENTIRE AGREEMENT. This Agreement contains the entire agreement and understanding among
the Parties hereto with respect to the subject matter hereof, and supersedes all prior and
contemporaneous agreements, understandings, inducements and conditions, express or implied, oral or
written, of any nature whatsoever with respect to the subject matter hereof. The express terms
hereof control and supersede any course of performance or usage of the trade



-20-









 







inconsistent with any
of the terms hereof. This Agreement may not be modified or amended other than by an agreement in
writing.



     27. INDULGENCES, NOT WAIVERS. Neither the failure nor any delay on the part of a Party to
exercise any right, remedy, power or privilege under this Agreement shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, remedy, power or privilege preclude
any other or further exercise of the same or of any other right, remedy, power or privilege, nor
shall any waiver of any right, remedy, power or privilege with respect to any occurrence be
construed as a waiver of such right, remedy, power or privilege with respect to any other
occurrence. No waiver shall be effective unless it is in writing and is signed by the Party
asserted to have granted such waiver.



     28. GENDER. Words used herein regardless of the number and gender specifically used, shall be
deemed and construed to include any other number, singular or plural, and any other gender,
masculine, feminine or neuter, as the context requires.



     29. TITLES NOT TO AFFECT INTERPRETATION. The titles of Sections and Subsections contained in
this Agreement are for convenience only, and they neither form a part of this Agreement nor are
they to be used in the construction or interpretation hereof.



     30. EXECUTION IN COUNTERPARTS. This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original as against any Party whose signature appears
thereon, and all of which shall together constitute one and the same instrument. This Agreement
shall become binding when one or more counterparts hereof, individually or taken together, shall
bear the signatures of all of the Parties reflected hereon as the signatories.



[Remainder of page intentionally left blank]




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     IN WITNESS WHEREOF, the Parties hereto have executed this Amended and Restated Advisory
Agreement as of the date and year first above written.



	 	 	 	 	 
	 	Moody National REIT I, Inc.

 	 
	 	By:  	/s/ Brett C. Moody
 	 
	 	 	Brett C. Moody 	 
	 	 	Chief Executive Officer and President 	 
	 
	 
	 	Moody National Operating Partnership I, L.P.



By: Moody National REIT I, Inc.,

       Its General Partner

 	 
	 	By:  	/s/ Brett C. Moody
 	 
	 	 	Brett C. Moody 	 
	 	 	Chief Executive Officer and President 	 
	 
	 
	 	Moody National Advisor I, LLC



By: Moody National REIT Sponsor, LLC

 	 
	 	By: Moody National REIT Sponsor SM, LLC

 	 
	 	By:  	/s/ Brett C. Moody
 	 
	 	 	Brett C. Moody 	 
	 	 	Member 	 
	 
	 
	 	Moody National Realty Company, L.P. solely in connection with the obligations
set forth in Section 13



By: Moody Realty Corporation

 	 
	 	By:  	/s/ Brett C. Moody
 	 
	 	 	Brett C. Moody 	 
	 	 	President 	 
	 



Signature Page to Amended and Restated Advisory Agreement